It would be nice to go into some of the details of the Brexit agreement, but one point seems not to have gotten the attention it warrants. PlutoniumKun pointed out yesterday that May was putting a lot of emphasis on the draft status of the deal. Later in the day, Barnier remarked that there was a lot of work to be done. In reading the text, Clive noted that key sections, particularly regarding the Irish border, were so fudgy as to be ambiguous and therefore create confusion and disputes.
However, it seems clear that both sides expect more negotiation to happen….which makes it hard to understand the approval timetable. The plan was for the EU to sign off on the draft on November 25, and for it to go to Parliament in early December. Or is it possible that the EU would issue conditional approval, pending clarification of some issues? There is time for another round of negotiation before the EU Council meeting in December, if nothing else to clean up the text. But it’s not hard to expect that any tidying will wind up favoring the EU more than the UK.
Richard North does his usual fine job of unpacking the agreement, and describes how the key sections work together to produce what he depicts as a Brexit In Name Only. But that’s not quite right, since North is an expert on goods, and he appears to have ignored the services side. The EU is taking a bite out of the City, as we predicted. From Reuters:
The United Kingdom and the European Union have agreed a deal that will give London’s vast financial center only a basic level of access to the bloc’s markets after Brexit.
The agreement will be based on the EU’s existing system of financial market access known as equivalence – a watered-down relationship that officials in Brussels have said all along is the best arrangement that Britain can expect.
The EU grants equivalence to many countries and has so far not agreed to Britain’s demands for major concessions such as offering broader access and safeguards on withdrawing access, neither of which is mentioned in the draft deal.”It is appalling,” said Graham Bishop, a former banker and consultant who has advised EU institutions on financial services. The draft text “is particularly vague but emphasizes the EU’s ability to take decisions in its own interests…. This is code for the UK being a pure rule taker.”
Back to North. He pieces though how the UK is in a “single customs territory” through the end of the transition period, with lots of detailed provisions about goods standards, adherence to environmental and labor regimes, and so on, which North seems bothered about. I’m perplexed at his upset: if the UK is going to stay in the Single Market through the end of the transition period, it should seem obvious that it still has to hew to EU rules and compliance requirements. I find it odd that the draft lists them, as opposed to making a comprehensive statement, since it runs the risk of missing something important.
Ostensibly in an attempt to clarify issues, there is a technical explanatory note and the Commission has published some additional fact sheets, with one on the protocol. These seem to confirm (unless I am very much mistaken) that the protocol reaches past the transition period and stays unless in force until it is superseded, in whole or in part, by a subsequent agreement.
This, effectively, is the “backstop”, and the fact sheet makes it clear that the single EU-UK customs territory is established “from the end of the transition period until the future relationship becomes applicable”. That effectively means the whole of the UK is locked into a customs union, after the end of the transition period, until a permanent solution to the border problem is agreed.
Yet, getting rid of these provisions is not going to be easy. The way it works, apparently, is that at any time after the transition period, the EU or the UK may consider that the Protocol, in whole or in part, is no longer necessary.
That party must then notify the other, setting out its reasons. This kicks in a “Joint Committee” – established in Article 164 of the Withdrawal Agreement – which considers the notification and may seek an opinion from institutions created by the Good Friday (Belfast) Agreement 1998.
Following discussions in the Joint Committee, the EU and the UK may decide jointly that the Protocol, in whole or in part, is no longer necessary to achieve its objectives.
The way this Joint Committee is set up, it is required to adopt its decisions and make its recommendations “by mutual consent”, which means that the EU has a veto on when (or if) the UK can drop out of the customs union, with a final appeal to an arbitration panel. On matters of Union law, however, the ECJ has jurisdiction to make rulings, which are binding on the arbitration panel.
Any which way you look at it, this accumulation of issues raises many important questions. It is hard to see that the UK has secured the ability unilaterally to remove the “backstop” and, as the agreement stands, it is possible to see a scenario where the UK is locked in perpetuity into a customs union with the EU.
Put it another way, it is a bit too obvious that the EU got the upper hand. As Politico put it in Fog of Brexit war can’t hide Brussels’ win: “Brussels is happy. Westminster is in chaos.”
We’ll have to pause for now with the draft to turn to the events of the day. May is set to meet with Parliament and take questions, which will likely get plenty heated. As we indicate in Links, Blair has denounced the deal as not a compromise but a capitulation, and pundits and pols of other persuasions are also using the “c” word.
Resignations are coming faster than after Chequers, where it took David Davis and Boris Johnson a few days to decide to stomp out. Shailesh Vara, the Northern Ireland minister, admittedly quite junior, resigned promptly. More important, Dominic Raab, May’s Brexit minister, resigned this morning:
Today, I have resigned as Brexit Secretary. I cannot in good conscience support the terms proposed for our deal with the EU. Here is my letter to the PM explaining my reasons, and my enduring respect for her. pic.twitter.com/tf5CUZnnUz
— Dominic Raab (@DominicRaab) November 15, 2018
I had thought Raab resigning would pose a problem for May, particularly if he made clear he would actively oppose the deal. The initial reaction is similar to mine:
— Bénédicte Paviot (@BenedictePaviot) November 15, 2018
Mr. Market seems to think so too:
Pound falls 1.1% to 1.28 US dollars and was 1.2% lower at 1.13 euros after #Brexit Secretary Dominic Raab’s resignation
— BBC News (UK) (@BBCNews) November 15, 2018
May is also expected to face a vote of no confidence today, but she seems very likely to survive it, which as vlade argues, would strengthen her in the short term. However, it might also give as sense the scale of Tory votes against the deal, meaning whether there are more than the 51 Stand4Brexit signatories.
The Blairite wing of Labour, which was where May could have hoped to find votes to make up for the Tories she will lose. In fact, Labour MPs appear to need to oppose Brexit as a matter of survival. As Fintan O’Toole pointed out in the New York Review of Books:
The Labour Party’s members are overwhelmingly opposed to Brexit: a poll in September showed that 86 percent of them say they want a second referendum. In a recent large-scale national survey for Channel 4 News, 75 percent of Labour voters said they want the UK to retain a close relationship with the EU. Surveys show that in Labour’s old industrial heartlands, where working-class voters strongly backed Brexit in 2016, opinion is swinging sharply toward a rethink.
Corbyn had roughed up May in Monday’s Question Time, calling May out for crossing her own red lines and winding up where “we are going to spend years with less say over our laws or how our money is spent”. He also tried and failed to get May to say whether “the sovereign right of the UK Parliament to unilaterally withdraw from any backstop.” Corbyn has not yet taken an official stance, but it seems that if the Corbyn and Blairite factions can cooperate enough to vote down the deal, they could control the next phase. As much as the formal rules and timetable don’t appear to allow enough time to do that, expect the EU to get very creative if they see a way to cut a path for the UK to back out of Brexit.
Of course, this is the last thing the Ultras want to enable, but they may be overly confident that there isn’t enough time to steer out of a nosedive before the March 29 deadline. And there is also the Tory loathing for letting a Corbyn-led Labour form a government, or even earn enough Brexit kudos to set them up to do that. As a result:
You’ll hear a lot about a ‘Government of National Unity’ in the coming weeks. It’s an attempt to thwart a Labour government being elected and nothing else, and it will made up of politicians backing the very policies that plunged this country into this abject mess.
— Owen Jones🌹 (@OwenJones84) November 15, 2018
Also, as much as I was taken with vlade’s scenario that Parliament will first vote down May’s agreement, then be cowed by the markets falling out of bed and find some face-saving device for approving it on a second vote, some market analysts beg to differ. BlondMonday (hat tip Scott):
- Much talk of a TARP style crash in FTSE or GBP that would “focus minds”
- But politicians really don’t care about that. For TARP, markets were broken and had to be fixed. This time, there’s no such pressure. Markets are merely a pressure valve that will be employed by all elements to support their argument
- Markets aren’t centre stage. It’s businesses that matter.
- If you run a business, and find that this December, as you look into the new year, you aren’t sure who will be Prime Minister, whether or how we might have left the EU, and no end in sight to the uncertainty, you will have no choice but to activate the contingency plan
It seems unlikely that May will be able to secure Corbyn’s support, which says the odds of her getting Parliamentary approval seem remote, unless Labour comes to believe the EU won’t cut them breaks if May’s agreement founders (that appears to be a strong assumption of the Blarite faction). This is all very much in play, so reader sightings and views very much appreciated.
Update 5:55 AM: More resignations:
BREAKING: Two more resignations following Theresa May’s #BrexitAgreement
Brexit minister Suella Braverman and aide to education minister Anne-Marie Trevelyan both resign.
— Sky News (@SkyNews) November 15, 2018
Update 6:45 AM: Financial Times’ live blog is headed Brexit deal in crisis – live updates. Summary:
Dominic Raab, the UK’s Brexit secretary, and Esther McVey, work and pensions secretary, have both resigned over the draft Brexit agreement, throwing Theresa May’s plans into chaos.
The prime minister is due to address MPs today after cabinet gave its blessing to the 583-page text last night. However, the departure of two cabinet members so soon raises serious doubts about whether the government’s strategy can hold.
23 mins ago:
Labour MP Chris Leslie has a pithy, if not exactly complimentary, summary of the debate so far.
“Not a single member or right honorable member has supported the plans the PM has set out,” Mr Leslie says, pointing out “‘we’ve been going for an hour now”.
12 mins ago:
So far very few MPs have had a good word to say about the Brexit deal.
7 mins ago (“Senior Tories come to May’s aid”):
The former Home secretary Amber Rudd – a staunch Remainer – gives the PM some relief by pointing out to MPs that the poorest people in the country will be hardest hit by a no deal.
Sir Nicholas Soames, another senior Tory, joins in by congratulating Mrs May on getting a deal in the most difficult of circumstances.
The Guardian also has a live blog. A tidbit from there:
Mark Francois, a Tory Brexiter and a member of the European Research Group, says there are 84 Tories who will vote against the deal, and the numbers are rising. The agreement was “dead on arrival”, he says. He urges May to accept the political reality.
The prime minister says when a deal gets brought back it will be for MPs to consider it, and their duty to deliver on the vote of the British people.
Update 7:50 AM: One more resignation, Ranil Jayawardena of the Ministry of Justice:
— Matt Chorley (@MattChorley) November 15, 2018
Update 8:20 AM: Guardian tally of resignations:
Four ministers have resigned, and two parliamentary private secretaries (PPSs – unpaid ministerial bag carriers, who are not members of the government but who are expected to support the government in all votes)
All of these MPs voted leave apart from Shailesh Vara, who voted remain.
Dominic Raab, Brexit secretary
Esther McVey, work and pensions secretary
Suella Braverman, Brexit minister
Shailesh Vara, Northern Ireland minister
Ranil Jayawardena, MoJ PPS
Anne-Marie Trevelyan, education PPS
As the Evening Standard reports, Nikki Da Costa, director of legislative affairs in Downing Street (an official, not an MP) has also resigned.
Nicola Sturgeon harangued Scottish secretary David Mundel to resign.