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Brexit – the end of the beginning?

What is there about Brexit that hasn't been said? Not a great deal perhaps, but it's still worth trying to cut through this year's clamour and take a look at where we are and where we are headed.

November 2019

A phrase you hear over and over again from the Brexit camp is 'getting Brexit done'. What exactly does this mean? To hear some people talk, once we leave the EU, that's it, normal service will be resumed and politicians can go back to tackling all the many other issues affecting 'the people'. This talk is disingenuous at best. While it is true that technically, when we leave the EU, we will have 'Brexited', that will only be the end of phase one. Most of the issues which have beset the Brexit debate will remain on the table during phase two which will centre on the negotiation of the ongoing relationship between the EU and the UK.

The ghost of Brexit past

Even those with the most vivid imaginations would have struggled to predict the twists and turns of the Brexit rollercoaster during 2019 (although we did try). Theresa May's deal voted down three times, a vote of confidence after the first vote, a resignation after the third; Boris Johnson becoming PM and losing his parliamentary majority almost immediately; three Brexit extensions all going down to the wire; Parliament asserting its right to participate in the process and preventing a no deal, agreeing what it didn't want while singularly failing to agree what it did want; Boris Johnson's last minute deal which was pulled when Parliament demanded more time to scrutinise it; and, finally (probably) for this year, a general election.

The ghost of Brexit present

Through the October madness of 'deal or no deal' followed by the 'will there, won't there be a general election' period and now the election campaign itself, there has been relatively little discussion of what's actually on offer and the Bill that is supposed to implement it in the UK.

Boris Johnson's deal

Boris Johnson rubbed out Theresa May's red lines to secure a last minute revised exit deal with the European Union, something many commentators and the EU itself said would be impossible. The backstop, the EU's solution to the seemingly insoluble problem of avoiding a hard border on the island of Ireland as well as down the Irish Sea, and the sticking point for the hard Brexiteers, has gone. The revised Northern Ireland Protocol provides that:

  • Northern Ireland will remain aligned to a limited set of single market rules to cover goods, VAT and excise in respect of goods, state aid rules and some agricultural rules.
  • Northern Ireland will remain part of the UK's customs territory in order to enable it to benefit from UK trade agreements, however, EU customs duties will apply to goods entering Northern Ireland where there is a risk they will enter the single market.
  • The Protocol will continue to apply unless it fails to get democratic support from the Northern Ireland Assembly (which collapsed in January 2017 and has not been restored since). The Assembly will be asked whether it supports the continuing operation of the Protocol as regards regulatory alignment on goods and customs, the single electricity market, VAT and state aid, four years after the end of transition and every four years after that (or eight years if there is a cross-party majority). If the Assembly discontinues support, the Protocol will cease to apply two years later. An alternative democratic consent process is provided for if the Assembly is not operating.

With the changes to the Northern Ireland Protocol, the provisions requiring the UK to maintain a regulatory level playing field have moved from the Withdrawal Agreement to the non-binding political declaration which is a statement of intent around the future relationship and which now places an increased emphasis on a free trade deal. In all other areas, the revised Withdrawal Agreement is the same as Theresa May's.

The changes were hailed as a great victory by the ERG because the UK's 'walkaway' position on a trade deal is now no deal and trade on WTO terms, rather than the position under the previous deal which would have kept the UK in the customs union and subject to legally binding level playing field provisions in areas including employment, state aid and antitrust while the backstop remained in place. These differences were enough to allow the Withdrawal Agreement Bill (WAB) which would give effect to the deal in the UK, to pass its first reading in the Commons.

The Withdrawal Agreement Bill

Confusingly (as if Brexit weren't confusing enough), we now have a number of pieces of legislation floating around with very similar names. The Withdrawal Agreement with the EU is an international treaty and is essentially the exit mechanism dealing with the financial settlement, Northern Ireland and citizens' rights among other things. The EU Withdrawal Act (EUWA) is UK legislation passed in 2018 to deal with making Brexit work in the UK, including by setting out what happens to EU and UK law after Brexit. We also have the Withdrawal Agreement Bill (WAB) which may become the Withdrawal Agreement Act or WAA (say it out loud and make of that what you will). Technically, the WAB has failed following the dissolution of Parliament for the general election but something very like it, if not identical, will need to be introduced in the next session.

The WAB is designed to:

  • Implement the aspects of the EU-UK Withdrawal Agreement which need to have effect in UK law.
  • Delay the effect of much of the EUWA until the end of transition, effectively maintaining the status quo and making it feel as though we are still in the EU.
  • Provide powers for the House of Commons to approve the negotiating objectives of the future relationship.
  • Give Parliament oversight over new EU workers' rights which could diverge from UK protections.

It was the WAB which passed its first reading on 22 October 2019. Immediately afterwards, Parliament rejected the government's timetable for passing the WAB, meaning it could not pass before 31 October and, under the Benn Act, the government had to request a third Article 50 extension.

When the WAB is presented to Parliament again, it can, in theory, be amended during its progress but the amendments cannot change the terms of the EU-UK Withdrawal Agreement. With a new Speaker in place and depending on the makeup of the new Parliament, it is hard to predict at this point how easy the WAB's passage will be when it is re-introduced.

The ghost of Brexit yet to come

General election

Brexit is yet to come unless something very surprising happens at the general election on 12 December. Most of us are familiar with the possibilities but nobody is willing to predict the result.

According to the opinion polls, the Tories are, at the time of writing, around 7 to 12% ahead of Labour. While it is hard to translate that into seats, Electoral Calculus predicts the Tories will romp home with a majority of 34 although others, while still predicting a Conservative victory, translate the poll lead into a much smaller Tory majority. Having shed many of the Brexit 'moderates' in the party, the WAB could be passed and Brexit could happen on 31 January. It's worth saying that this would present a timing challenge but the Conservatives estimate that the WAB could go through in 37 days.

If Labour win, they have said they will negotiate a revised deal which they will put to a confirmatory referendum. This opens up the possibility that many Labour MPs (although not Jeremy Corbyn) might then campaign to remain against their own deal, always assuming they can get one before the EU loses patience and lets us crash out.

The Lib Dems have pledged to revoke Article 50 without a further referendum. Nobody thinks the Lib Dems are going to get a majority at the next election (possibly not even the Lib Dems) but it is conceivable they could hold the balance of power in a hung parliament.

So far this election campaign feels peculiarly lacklustre and low in energy - perhaps because of the time of year, perhaps because the electorate is weary of politics, perhaps because the candidates are already exhausted. This may change in the final stages, after all, the 2017 election did not go as initially predicted. In the 2017 election, a remarkable number of seats were won by under 1000 votes and are potentially up for grabs; a quarter of seats have small majorities of less than 10%; and 51 seats are 'ultra-marginal' with a 2017 majority of less than 2%. Tactical voting could make a big difference to the eventual outcome if the electorate embraces it (which it has historically been reluctant to do) and might result in another hung Parliament with either a Tory/Brexit Party or some kind of Labour/Lib Dem/Nationalist Parties alliance. If that is the outcome, another referendum might well be the only way to move forward.

Transition

Let's assume that the polls are, for once, correct and the Tories gain a healthy majority; the WAB passes and we Brexit on 31 January.

The Withdrawal Agreement allows for a transition (or implementation) period which in essence postpones the effect of Brexit in order to allow the future relationship to be agreed. The initial period will run until the end of 2020. Under the Withdrawal Agreement, the transition period can be extended once for up to two years by mutual agreement before 1 July 2020. Parliament's role in extending transition is limited to the power to veto a request to extend. Under the WAB it does not have the power to propose an extension, nor to require the government to do so.

When originally agreed, the initial transition period was expected to be two years but the Brexit delays have reduced this by more than half. Boris Johnson has repeatedly said in recent weeks that there will be no extension to the transition period and a trade deal will be done by that time. Cynics might suggest that this promise, like the one to leave the EU on 31 October, is not to be treated as sacred, however, the Conservatives point to the speed at which a second deal was done despite the general assumption that it would be impossible.

Either way, it seems remarkably optimistic to expect a hugely complicated trade deal to be done with the EU in less than a year. On past evidence, it could take that long for Parliament to agree the principles on which the deal should be negotiated (depending on the outcome of the election). It is true that the UK starts from a place of convergence but the average EU trade deal takes 48 months to negotiate and it must be approved by each Member State and, in some cases, by their constituent parts.

And then?

What happens at the end of the initial transition period? If the future relationship is all done and dusted, then we proceed on the basis of what has been agreed. If, however, there is no agreement by that time and the government does not seek an extension, then we are, once again, looking at a no deal scenario and WTO terms for trade. Alternatively, it is also possible that a series of agreements or aspects of the future relationship may be agreed one by one and that there will be some sort of hybrid regime in place for a period of time.

But what if?

If there is no Tory majority, all bets are off. Unless the Lib Dems get in and revoke Article 50, we will undoubtedly require another extension to Article 50 or face crashing out of the EU without a deal. The EU clearly wants a deal but its patience is wearing thin. It is likely to agree an extension in the event of a new approach from a Labour government, or a second referendum, but may be prepared to cut its losses if the UK elects a hung parliament unable to agree a second referendum or anything else to do with Brexit.

This time next year, we should know more. But then we've said that before.

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Brexit
Debbie Heywood


Debbie is visited by the ghosts of Brexit past, present and yet to come.

"Brexit is yet to come unless something very surprising happens at the General Election on 12 December."