Chapter 11The Negotiations

Once the European Council had agreed its negotiating guidelines the two sides could get down to work. As stressed in the previous chapter, it was in the interests of the UK that this happen as soon as possible, since time was limited. But in fact negotiations did not begin for another seven weeks, and the reason that it took so long had nothing to do with the European Union. On 18 April 2017 Theresa May astonished everyone by calling a snap general election. Her stated reason was that this would strengthen her hand in negotiations with the EU, giving her a bigger majority in Parliament and undermining the efforts of opposition parties to destabilize her approach to Brexit. There was also the point that unless a snap election was held the next election would be due to take place no later than May 2020, less than a year after Brexit: Mrs May expressed the fear that the instability associated with an impending election might hand a negotiating advantage to the EU. As she said to the Sun newspaper, ‘When I became Prime Minister, I thought the most important thing to do for the country was to have a period of stability.’¹ Some observers hoped that the election would bolster her position, not so much vis-à-vis the EU as vis-à-vis the more extreme elements in her own party: with her bigger majority she would be better able to ignore them. And many commentators thought that her decision was simply a rational and opportunistic response to the collapse of Jeremy Corbyn’s Labour Party in opinion polls.

On 8 June 2017, for the third time in three years, the big screen was once again set up in my college’s Old Library. Everyone assumed that there would be a Conservative landslide, even though the Tory campaign, with its repetitive promises of ‘strong and stable leadership’, had been poor. And so it came as a shock when the first exit polls announced that there would be a hung parliament. The Conservative Party lost its majority, and while Mrs May eventually formed a new government, this was only with the support of the Democratic Unionist Party. The implications for the Brexit negotiations were varied and complicated. On the one hand, it would be difficult to argue that the election results provided a clear mandate for the hard Brexit policy enunciated by the Prime Minister at Lancaster House. Mrs May also faced a more powerful opposition than she had done before the election. Both considerations seemed to point towards a potentially softer Brexit, although it was far from clear that the Labour Party under Jeremy Corbyn would be willing to push hard for such an outcome. But on the other hand, the fact that the Conservative Party had lost its majority made its backbench MPs more powerful. A small number of these were hard-core Remainers, but more were hard-core Brexiteers. And then there was the new dependence on the Democratic Unionist Party, which as previously noted had been the only one of the five major political parties in Northern Ireland to support the Leave campaign. Some in Ireland hoped that the DUP might push for a solution that avoided a hard border in Ireland, but it was also clear that it would oppose any solution that in its view undermined the union of Great Britain and Northern Ireland.

The first issue that had to be resolved was the agenda for the negotiations. As we saw in the previous chapter, the EU wanted negotiations to proceed in a clear sequence: divorce issues first, future relationship second. The UK was not happy about this and in May 2017 David Davis promised ‘the row of the summer’ over the issue. ‘How on earth do you resolve the issue of the border with Northern Ireland and the Republic of Ireland unless you know what our general borders policy is, what the customs agreement is, what our trade agreement is?’ he asked. ‘It’s wholly illogical.’ But when the two sides met for the first time on 19 June 2017 the UK accepted a timetable that was sequenced in the manner that the EU had asked for. It was now locked into a process which required it to make ‘sufficient progress’ on the three key divorce issues – citizens’ rights, the financial settlement, and the Irish border – before talks could move on to discussing transitional arrangements and the future EU–UK relationship.

Citizens’ Rights

The insistence of the European Council that the first priority in the Brexit negotiations should be to secure the futures of EU citizens living in the UK, and British citizens living in the EU, is easy to understand. There are more than 3 million EU citizens living in the UK, and they did not move there as immigrants but as European citizens exercising their right to move freely within the European Union. The EU therefore aimed to ensure that they and their families – current and future – would continue to have the same level of legal protection after Brexit as they currently enjoy, for life. This included the right to permanent residence after five years, and the right to be treated equally as compared with UK citizens. In the EU’s view any EU citizen living legally in the UK before Brexit should be considered legally resident there, even if they did not have documents to prove this, and EU citizens’ rights had to be legally enforceable by the European Court of Justice. There should be reciprocal rights for the more than 1 million UK citizens residing in other EU member states. So-called frontier workers, residing in an EU member state but working in the UK, should also have their rights protected by the agreement.²

The UK agreed with much but not all of this.³ It agreed that those living in the UK before a given cut-off date should be able to continue to live there, but it did not agree that the cut-off date necessarily be the date of Brexit – presumably for fear that there would be a stampede of Europeans seeking to enter Britain over the course of the next two years.⁴ It did not want the ECJ to oversee the rights of European citizens in the UK after Brexit. And it argued that future family members of EU citizens resident in the UK – for example, future spouses – should only be allowed to come to live in the UK if a minimum income requirement was satisfied. This would obviously restrict a very basic freedom that EU citizens living in other EU member states, including the UK, currently enjoy: the right to live with whomever they marry, regardless of their financial circumstances. As Directive 2004/38/C of 29 April 2004 puts it, ‘The right of all Union citizens to move and reside freely within the territory of the Member States should, if it is to be exercised under objective conditions of freedom and dignity, be also granted to their family members, irrespective of nationality.’⁵ The logic behind the UK position was that its own citizens are only allowed to bring non-EU family members into the UK if minimum income requirements are fulfilled: this is not inconsistent with EU law since the freedom referred to above applies to EU citizens living in other countries, not EU (and therefore UK) citizens living in their own country. And it would seem strange if EU citizens living in the UK after Brexit enjoyed more rights than UK citizens. The EU response to this argument was that no EU citizen currently living in the UK should lose rights that they currently enjoy under EU law just because of Brexit.

Despite these differences it proved relatively easy for negotiators to make ‘sufficient progress’ on citizens’ rights. In particular, a speech given by Theresa May in Florence on 22 September 2017 opened the way for a creative compromise regarding the role of the ECJ.⁶ She announced that the agreement regarding citizens’ rights would be incorporated into UK law and that EU citizens could have those rights enforced by UK courts. But those courts should in turn be able to ‘take into account the judgments of the European Court of Justice’. The eventual agreement reflected this proposal: since the rights of EU citizens ‘followed on’ from the rights they had enjoyed under EU law UK courts should have ‘due regard’ to the rulings of the ECJ when arriving at their own decisions. They should also be able to ask the ECJ to clarify issues of European law when they felt that this was necessary.⁷

The UK accepted too that the cut-off date should be the date on which Brexit took place. However, in a subsequent note to the European Council the Commission expressed the view that if a transition were eventually to be agreed the cut-off date should be the end of the transition, since otherwise EU citizens would not enjoy the same rights during the transition period as before: this was a matter to be negotiated in the second phase when transitional arrangements were discussed. Finally, both sides agreed that the question of whether future spouses should be allowed to join their partners would be determined by national law, implying that the UK could impose financial requirements as it had originally wanted to do. This represented a climb-down by the EU, although the Commission continued to believe that the issue should be addressed in the second phase of talks, and would ‘inevitably be linked to the level of ambition of the future partnership between the EU and the United Kingdom’.⁸

‘It’s All About the Money’

If I had a euro for every time I heard a British politician, journalist or commentator telling us in 2017 that the Brexit negotiations were ‘all about the money’, I would be a rich man. And making ‘sufficient progress’ on the financial settlement was indeed more difficult. The UK government viewed money as one of its main bargaining chips: if it were not to pay the money demanded by the EU this would leave a sizeable hole in the EU budget. Surely this would help in securing a favourable trade deal in the future? But on the other side of the table there was complete unanimity that the UK should live up to its financial commitments: otherwise other net contributors to the EU budget like Germany would have to pay more, or net beneficiaries like Poland would have to receive less. And the EU side did not view a financial settlement as a quid pro quo for anything else: it was simply ensuring that the commitments of the past were lived up to. This was why, as with the other divorce issues, money had to be satisfactorily addressed before any discussion of the future relationship could begin: there was to be no question of the British being allowed to link the two issues. This interpretation was rejected by many in the UK, where that red campaign bus had promised that financial transfers to Brussels would stop. The UK should not pay any more money after Brexit unless Britain got something back in return.

The European position on the financial settlement was that there should be a single agreement, covering not only UK obligations under the terms of the 2014–20 EU budget, but the UK’s share of all EU liabilities, such as those relating to pensions. On the other hand, the UK also had claims to a share of EU assets, and these should be taken account of when calculating its total net liability. The EU approach was thus to determine on a priori grounds which assets and liabilities should be taken account of, and only then to calculate the final figure that would be owed by Britain. UK politicians were much more focused on the amount that would be owed. During the summer of 2017 there was much discussion of the possibility that the UK might owe as much as €60 to €100 billion – this was denounced by many in London as being far too much, and the British media carried reports that the government there would not be willing to pay more than €40 billion. Such a cap would obviously have been inconsistent with the EU approach that focused on what it saw as legal obligations.

In her Florence speech Theresa May said that she did not want other member states ‘to fear that they will need to pay more or receive less over the remainder of the current budget plan as a result of our decision to leave. The UK will honour commitments we have made during the period of our membership.’ This was a step forward by the British, and was taken to mean that at a minimum the UK would pay the roughly €20 billion remaining out of its contribution to the budget ending in 2020. However, the EU view was that the UK had other existing commitments and liabilities, and in any event a few lines in a speech were not what was required: as a senior EU official later told the Financial Times, ‘The British don’t realize that we cannot simply look at what the Prime Minister said in a speech. We have to look at what is actually being put on the table in Brussels. And on the latter we have seen no movement.’⁹

Mrs May also faced opposition at home. Six days before the Florence speech her own Foreign Secretary, Boris Johnson, wrote an article resurrecting the referendum campaign’s £350 million a week claim, and arguing that the UK should not pay for EU Single Market access. By the end of the fifth round of negotiations, on 12 October 2017, the UK was still not willing to confirm exactly which commitments Mrs May had been referring to in Florence. The initial hope had been that the European Council, due to meet that month, would be able to recommend that ‘sufficient progress’ had been made on the divorce issues, and that the talks could therefore proceed to the second phase in which transitional arrangements and the future trade relationship would be discussed. But with negotiations on the financial settlement still deadlocked the EU’s chief negotiator, Michel Barnier, announced that he would not be recommending to the October Council that negotiations move to the second stage. The announcement came as a blow to the British government since the next Council meeting was only scheduled for December – this meant that there would be two months less in which to negotiate a final deal.

By this stage the two-year Article 50 timetable, and the phased nature of the negotiations, was placing severe time pressure on the British government. Faced with the possibility that companies based in the UK would soon start relocating staff to the EU, it accepted that a transition period was necessary, and that the sooner this was agreed to give businesses some certainty the better. And so former Remainers in the UK government, like the Chancellor Philip Hammond, argued in favour of going further on the financial settlement, while hard-line Brexiteers opposed this. Nor did it help the cause of the pragmatists that David Davis was still arguing that the UK should only spell out what financial commitments it was willing to meet once the second phase of negotiations had begun. The British government might have agreed to a two-phase negotiation, but the notion that the financial settlement should be a quid pro quo for a favourable deal, rather than a reflection of pre-existing liabilities, was a hard one to shake off.¹⁰

In the end the pragmatists won: if the December European Council were to decide that sufficient progress had not been made this would be a catastrophe for the British government. By the end of November reports appeared in the press that the UK had agreed to honour its financial commitments as defined by the EU. Officials were working hard to present the figures in as favourable a light as possible, making it easier for Mrs May to sell the deal back home: as one told the Financial Times ‘They [the British] have promised to cover it all, we don’t care what they say their estimate is … We’re happy to present it.’¹¹

A transition seemed assured, or at least so London thought. But then it turned out that it really wasn’t all about the money after all.

The Irish Backstop

In principle it should have been easy to resolve the third divorce issue, namely the Irish border. Everybody agreed what the objective should be: to keep the border invisible and frictionless. But there was a problem: the UK government wanted to keep all of its trade with all of the EU as frictionless as possible, despite leaving both the customs union and the Single Market. The fact that it believed that this might be possible suggested that it had not yet fully grasped the issues involved. Alternatively it suggested that what the British actually wanted to do was to use the Irish border issue as a Trojan horse. If the European Union were to accept the principle that there not be border checks in Ireland, for political reasons, then London would be able to argue further down the line that the same arrangements should be put in place to facilitate frictionless trade between the UK and the rest of the EU, despite the UK being free to set its own rules and strike trade deals with the rest of the world. In this manner the UK would be able to have its cake and eat it.¹²

David Davis gave some credence to this view in early July 2017 when he was reported in the Financial Times as telling worried business leaders that the Irish border should be the negotiating priority for the summer, since it could be a ‘test border’ for the rest of the EU.¹³ A few weeks earlier senior DUP figures had told Sky’s Faisal Islam that they were comfortable with leaving both the customs union and Single Market, since they believed that ‘the EU will feel obliged to guarantee a softer border with Ireland, and that the Republic is the European Union negotiator’s Achilles Heel.’¹⁴ The EU side, for its part, was clear that any solution for Northern Ireland should not serve as a precedent for other EU–UK borders, and that it should not undermine the integrity of the Single Market: it would be intolerable if American chlorinated chicken, for example, could cross the border from Northern Ireland to Ireland unhindered, and from there pass freely into the rest of the EU.

How did the British think that border controls could be avoided? A constant theme throughout 2017 was the potential of technology to make border controls redundant. Exactly what technologies were involved was unclear, and the list varied over time: cameras and automatic number-plate recognition; blockchain; even airships were at one stage mentioned as a possibility, although the Legatum Institute which promoted the idea and was influential among Brexiteers conceded that Irish weather conditions might pose a problem.¹⁵ Perhaps such technological solutions might not be completely watertight, but there were frequent suggestions in the British media that in any event the EU should be willing to tolerate a bit of smuggling in the interests of the Irish peace process. According to Tim Shipman even government ministers had spent months ‘assuming that the nature of the post-Brexit border could be resolved through fudge, remote technology to track consignments of goods and a casual blind eye turned to smuggling.’¹⁶

As we saw in the previous chapter, the EU negotiating guidelines had called for ‘flexible and imaginative solutions’ to avoid a hard border, but there is a limit to anything. And it did not help the British case when in August 2017 the EU’s anti-fraud office found that UK customs authorities had repeatedly ignored warnings that criminals were illegally bringing Chinese textiles and footwear into the EU via Britain, costing the EU and member states billions of euros in lost customs and VAT revenue.¹⁷ Finally, there was the point highlighted in the previous chapter: cameras or any other physical infrastructure along the Irish border were liable to be destroyed by terrorists.

On 15 August 2017 the British government issued a position paper on how to secure the cakeist objective of ‘the freest and most frictionless trade possible in goods between the UK and the EU’ while at the same time allowing the UK ‘to forge new trade relationships with our partners in Europe and around the world’.¹⁸ Customs procedures could be streamlined, including by the use of technology; alternatively the UK could seek a ‘new customs partnership’ with the EU. Under such a partnership the UK would continue to levy EU tariffs on goods imported into Britain but destined for EU markets. It would on the other hand levy its own tariffs on goods whose final destination was the UK. Thus a consignment of beef from the US would pay different tariffs depending on whether the beef was to be sold in the UK or the EU. Presumably if some of the beef were to be sold in the UK and some in the EU different tariffs would be levied on each bit of the consignment. Exactly how it would be possible, in a free market economy, to track all imported goods to their final destinations so as to ensure that the correct tariffs were paid remained unclear. Nor was it clear how the proposal would avoid the need for border controls to check that goods being shipped from Britain to France, say, complied with EU regulations: was the beef hormone-free or not, for example? The British government recognized that the approach was ‘innovative and untested’; EU officials were widely quoted as saying that it represented ‘magical thinking’.

The following day the UK government published a second position paper, this time on how to avoid a hard border between Northern Ireland and Ireland. This repeated the previous day’s proposals, but also made the further suggestion that smaller traders could be exempted from border controls altogether. How this could happen without encouraging smuggling was not explained. While welcoming aspects of the paper, such as the acknowledgement that technological fixes such as cameras at the border would not work, and that the aim should be ‘to avoid any physical border infrastructure in either the United Kingdom or Ireland, for any purpose’, the Irish Foreign Minister Simon Coveney described the new customs partnership proposals as ‘totally unworkable’.¹⁹ The fact that the Northern Irish border proposals had been published by the British government immediately after its proposals on the broader trade relationship, and largely reflected those, heightened suspicions that the British were trying to use the Irish issue to advance their cakeist ambitions. It was also an obvious attempt on their part to circumvent the two-phase negotiation structure, and indeed the British government repeatedly argued during 2017 that it would be impossible to resolve the Irish border issue without dealing with the future trade relationship. This made sense from their point of view since they hoped that the Irish issue would provide them with negotiating leverage. But for the very same reason the EU was determined to stick to what had been agreed: divorce issues first, future relationship second.

In early September Michel Barnier said that he was worried by the UK’s Northern Irish proposals: ‘The UK wants the EU to suspend the application of its laws, its Customs Union, and its Single Market at what will be a new external border of the EU. And the UK wants to use Ireland as a kind of test case for the future EU–UK customs relations. This will not happen.’²⁰ On 21 September 2017 the European Commission published its own guiding principles for the negotiations on Northern Ireland: they stated that the aim should be not only to avoid a hard border, including any physical border infrastructure, but to ‘respect the proper functioning of the internal market and of the Customs Union as well the integrity and effectiveness of the Union legal order’.²¹

By this stage the relationship between Dublin and London had deteriorated significantly. The Irish were increasingly frustrated by what they saw as a lack of seriousness on the part of the British: Theresa May’s government repeatedly offered reassuring platitudes, but showed no sign of coming up with plausible proposals regarding how to avoid the re-introduction of a hard border. The British for their part were irritated with the EU insistence that the sequence of negotiations that had been agreed in June be adhered to, and that sufficient progress be made on the Irish border issue before talks on the future trade relationship could begin. They were especially irritated with the Irish, who were of course influential in determining the EU negotiating strategy on the border issue, and who were defending their country’s interests far more stubbornly than the British had anticipated. The UK government clung to the hope that the Irish could be isolated on the issue: British diplomats engaged in a widespread campaign across Europe designed to undermine support for the Irish government and its new Taoiseach Leo Varadkar, who had succeeded Enda Kenny as leader of Fine Gael and head of government in June 2017. If anything, such attempts to split the 27 merely strengthened the bloc’s solidarity.

Nor did such tactics endear Theresa May to the Irish government, who were of course fully aware of what she was up to. On 21 November, as reports emerged that the UK was prepared to double its financial offer to the EU, Simon Coveney warned, ‘Anybody who thinks that just because the financial settlement issue gets resolved … that somehow Ireland will have a hand put on the shoulder and be told, “Look, it’s time to move on.” Well, we’re not going to move on.’²² Three days later Donald Tusk warned Mrs May that if she wanted to move to the second phase of negotiations, she needed to ‘sort out your problem with Ireland’. Her response was telling: ‘One country cannot hold up progress.’ The UK was a ‘much bigger and much more important country than Ireland’.²³ The problem for Mrs May was that Ireland was a member of the European Union, and the UK was on its way out. Whether the Prime Minister liked it or not this meant that Irish views counted for more in Brussels than British ones.

The Irish – and EU – view was that guarantees were needed at this stage that would ensure that there would be no hard border in Ireland, irrespective of whatever trade deal the British and the EU would agree at a later stage. Mrs May’s Lancaster House red lines suggested that such a trade deal would involve border checks somewhere: it was vital that these not occur along the border between Northern Ireland and the Republic. And so Ireland and the EU required a ‘backstop’ solution that would prevent this from happening even if the British continue to insist on those red lines. As Leo Varadkar put it in Gothenburg on 17 November, the British had ‘unilaterally taken the customs union and Single Market off the table’; Ireland therefore wanted ‘taken off the table any suggestion that there will be a physical border, a hard border, new barriers to trade on the island of Ireland’ before the negotiations moved to phase two.²⁴ If the Irish were to get a backstop this was the moment to insist on it since this was the time of maximum leverage: like all other member states Ireland had a veto over whether or not talks could progress to the second stage, and the British were desperate to start talking about transitions and trade deals.

Views in Dublin and Brussels regarding how to avoid a hard border had crystallized nine days before the Gothenburg meeting, and they will not come as a surprise to any reader who has made it this far in the book.²⁵ Simon Coveney spelled out the issues succinctly on 14 November 2017:

The Government in London has repeatedly outlined three ambitions which simply cannot all be delivered. These are, firstly, that the UK leaves the Single Market and customs union; secondly, that all parts of the UK jump together, so to speak; and thirdly, that they want no return to any hard or visible border on this island. Well, we fully share that final objective, which, to be blunt, is the most important – it’s the bedrock for peace and stability on this island. We just don’t see, and the EU doesn’t see, how it is compatible with the other two ambitions.²⁶

The only way to avoid a hard border was for either the UK as a whole, or just Northern Ireland, to remain, de facto, in the EU’s customs union, Single Market and VAT regime. There were other good reasons why this had to happen as well.²⁷ As you will recall, the Good Friday Agreement had promoted North–South cooperation, and all sides were agreed that this should continue. In September 2017 British officials reported to their negotiating counterparts that there were 156 distinct areas of North–South cross-border cooperation: these included health, as we have seen already, but also waterways, electricity supply, education, transportation, agriculture, tourism and a host of other policy areas including, to take just one example, greyhound and pigeon racing. The question then became: to what extent was this cooperation dependent on EU law? A ‘mapping’ exercise soon made it clear that the answer was: a lot. An EU official’s explanation to Tony Connelly is worth quoting at length since it gets to the heart of the matter:

North–South cooperation mostly covers things like health, waterways, and so on. The mapping meant combing through every single possible example that you can think of: child cancer, heart surgery, waterways management, education. If you take the health area alone, it’s easy to explain the single-market dimension. Not only do you have all the equality of rights, but things like single standards for medical devices, the approval of medicines, mutual recognition of qualifications, ambulance services, etc. All of this is completely aligned at the moment.

The conclusion was that regulations needed to remain ‘aligned’ on both sides of the border for cooperation under the terms of the Good Friday Agreement to continue: there could be no ‘regulatory divergence’.²⁸

British hopes that Ireland could be isolated on the issue were dashed on 1 December when Donald Tusk visited the Irish Taoiseach in Dublin. He reassured the Taoiseach that

the EU is fully behind you and your request that there should be no hard border on the island of Ireland after Brexit. The Irish request is the EU’s request. Or as the Irish proverb goes: ‘Ni neart go cur le chéile’ [there is no strength without unity]. The United Kingdom’s decision to leave the EU has created uncertainty for millions of people in Europe. Perhaps, nowhere is this more visible than here. The border between Ireland and Northern Ireland is no longer a symbol of division, it is a symbol of cooperation. And we cannot allow Brexit to destroy this achievement of the Good Friday Agreement.

It is the UK that started Brexit and now it is their responsibility to propose a credible commitment to do what is necessary to avoid a hard border … I asked Prime Minister May to put a final offer on the table by 4 December so that we can assess whether sufficient progress can be made at the upcoming European Council … I will consult the Taoiseach if the UK’s offer is sufficient for the Irish government. Let me say very clearly: if the UK’s offer is unacceptable for Ireland, it will also be unacceptable for the EU. I realize that for some British politicians this may be hard to understand. But such is the logic behind the fact that Ireland is an EU member while the UK is leaving. This is why the key to the UK’s future lies – in some ways – in Dublin, at least as long as Brexit negotiations continue.²⁹

The British had no choice but to concede. On 8 December they issued a Joint Report with the EU that included agreements between the two sides on all three divorce issues. The Joint Report’s Paragraph 49 on Ireland is reproduced below:³⁰

The United Kingdom remains committed to protecting North–South cooperation and to its guarantee of avoiding a hard border. Any future arrangements must be compatible with these overarching requirements. The United Kingdom’s intention is to achieve these objectives through the overall EU–UK relationship. Should this not be possible, the United Kingdom will propose specific solutions to address the unique circumstances of the island of Ireland. In the absence of agreed solutions, the United Kingdom will maintain full alignment with those rules of the Internal Market and the Customs Union which, now or in the future, support North–South cooperation, the all-island economy and the protection of the 1998 Agreement.

In other words, the UK hoped to solve the Irish border issue by negotiating a future trade relationship that would do away with the need for borders. If this proved impossible, for example because of Mrs May’s Lancaster House red lines, then the UK would propose ‘specific solutions’ for Northern Ireland – this allowed them to continue the search for the technological solutions that they favoured. But if this also proved impossible, as everyone outside the UK expected it would be, then Ireland had a backstop guarantee: the UK would ensure that all of the rules necessary to maintain not only North–South cooperation and the protection of the Good Friday Agreement, but also the all-Ireland economy and the ‘overarching’ requirement to avoid a hard border, would remain aligned with those of the EU. De facto, this seemed to imply that Northern Ireland would stay within the EU customs union and Single Market for goods after Brexit, although taken on its own the language was ambiguous: it seemed to leave open the possibility that it was the UK as a whole that would remain fully aligned with EU regulations.

The UK also agreed to respect Ireland’s rights and obligations flowing from its membership of the EU (Paragraph 45). This ruled out the suggestion that Ireland and the EU should be willing to turn a blind eye to cross-border smuggling. The British further agreed (Paragraph 46) that the Irish backstop should not be viewed as a precedent for the broader UK–EU trade relationship, and would be ‘specific to the unique circumstances on the island of Ireland’. On the face of it this seemed more consistent with a Northern-Ireland-only than with a UK-wide interpretation of Paragraph 49. London also agreed that the December commitments should be upheld ‘irrespective of the nature of any future agreement between the European Union and United Kingdom’.

But the Joint Report also included a paragraph (50) that had been inserted at the very last moment at the insistence of the Democratic Unionist Party:

In the absence of agreed solutions, as set out in the previous paragraph, the United Kingdom will ensure that no new regulatory barriers develop between Northern Ireland and the rest of the United Kingdom, unless, consistent with the 1998 Agreement, the Northern Ireland Executive and Assembly agree that distinct arrangements are appropriate for Northern Ireland. In all circumstances, the United Kingdom will continue to ensure the same unfettered access for Northern Ireland’s businesses to the whole of the United Kingdom internal market.

In other words, if the Irish backstop were to be triggered, and Northern Ireland regulations remained aligned with those of the EU’s customs union and Single Market, the UK guaranteed that it would not allow new ‘regulatory barriers’ to develop between Northern Ireland and Britain unless the Northern Ireland Executive and Assembly agreed to this.³¹ Importantly, this was not a commitment made by the EU to the UK, but a commitment made by the UK to itself (or perhaps more accurately to the DUP). The EU therefore subsequently argued that it was up to the UK to decide whether or not it wanted to honour its Paragraph 50 commitment to itself; what mattered from an EU perspective was that it honour its Paragraph 49 commitment to the EU, which was in the eyes of the latter to maintain regulatory alignment between Northern Ireland and the EU.³² But the two paragraphs taken together seemed to many British commentators at the time to imply that in the absence of any other solution, the UK as a whole would have to remain inside the customs union and Single Market. This would obviously involve Mrs May dropping her Lancaster House red lines. Remainers were as pleased by this prospect as Leavers were furious.

The more important point was that the UK had cornered itself into a logically untenable position. The EU would insist that it uphold its backstop commitment to Ireland, no matter what. Given that, the UK was faced with a choice. It could choose to uphold its Paragraph 50 commitment to the DUP, in which case it would be forced to drop the Lancaster House red lines; or it could uphold those red lines, in which case it would be forced to drop its Paragraph 50 commitment to the DUP. It could not uphold both commitments at once without reneging on its Paragraph 49 commitment to Ireland and the EU, and so it was going to have to choose. But none of the choices were particularly appealing.

If the government reneged on Paragraph 50 there was the risk that the DUP would bring it down. If it reneged on the Lancaster House red lines there was the risk that hard-line Tory Brexiteers would bring it down. And if it reneged on Paragraph 49 there was not merely the risk, but according to the EU the certainty, that the UK would crash out of the EU in March 2019 without any deal at all. The logic was simple: the first phase divorce issues had to be satisfactorily dealt with, or there could be no Withdrawal Agreement. And that in turn would mean a chaotic rupture in UK relations with the EU, since without a Withdrawal Agreement there could be no transition period.

Figure 11.1
The Coveney trilemma

As Simon Coveney had pointed out in November, there were three things that the UK could not do at once: uphold Paragraph 49, uphold Paragraph 50 and uphold Lancaster House. It could do any two out of these three things, but not all three (Figure 11.1). It would have to choose. The year that followed was dominated by the ways in which the UK tried to respond to this logical trilemma.

2018

The year 2018 saw continued progress on many aspects of the negotiations. The European Council issued negotiating guidelines for the second phase of the negotiations (15 December 2017) and the transition period (29 January 2018).³³ The EU wanted this transition period to be time-limited, ending on 31 December 2020, the end of the current budgetary cycle. The UK would remain inside the customs union and Single Market during this period, and would continue to be bound by all relevant EU regulations. The only practical difference would be that it would no longer participate in EU decision-making. It is hard to see how you could have a situation in which a non-member helped shape EU policies, but nevertheless David Davis wanted the ‘right to object’ to new EU legislation. The UK also asked the EU to consider a longer transition period, which made sense since 21 months was hardly enough time to negotiate a new free trade arrangement.

In March the two sides agreed a transitional arrangement on EU terms: it would end on 31 December 2020; the UK would have no influence on EU decision-making; and EU citizens would continue to enjoy their free movement rights in the UK during the transition. The agreement was widely denounced by Brexiteers who argued that the UK would be no more than a ‘vassal state’ or a ‘colony’ of the EU during the transition, implementing laws over which it had no say.³⁴ But of course the problem would only arise in the first place if a transition period were agreed, and a transition period would only be agreed if there were a withdrawal deal. And that would require the UK upholding the commitments it had made on all three divorce issues in the December Joint Report.

The initial signals were worrying. Just two days after the Joint Report had been agreed David Davis took to the airwaves to say that the agreement on Ireland was not legally binding, but was merely a statement of intent. He also said that the UK would not be paying any money to the EU unless it got a trade deal. On the same day the Sunday Telegraph reported that prime ministerial aides had reassured Brexiteers that the agreement was ‘meaningless’ and had just been inserted to get Ireland to sign off on the document.³⁵ Needless to say, such comments caused considerable irritation in Brussels and Dublin, and leaders sought ways to ‘David Davis-proof’ the advances that they thought had been made the previous week. On 13 December 2017 a European Parliament resolution noted that Davis’s comments risked ‘undermining the good faith that has been built up in the negotiations’, and stated that the UK had to ‘fully respect’ its Joint Report commitments which had to be made ‘fully enforceable’.³⁶ Two days later the European Council’s negotiation guidelines stressed that ‘negotiations in the second phase can only progress as long as all commitments undertaken during the first phase are respected in full and translated faithfully into legal terms as quickly as possible.’ It probably shouldn’t have been necessary to point this out, but it evidently was.

Translating the Joint Report commitments on Ireland into legal terms proved difficult, however. On 19 March 2018 the two sides issued a colour-coded Draft Withdrawal Agreement: green meant that the two sides agreed; yellow meant that they agreed on the objective but were still working on the drafting; and white meant that the EU had proposed a text with which the UK still disagreed.³⁷ The vast majority of the text was green, including the sections on citizens’ rights (where the EU had dropped its insistence that future spouses be covered) and the financial settlement. On the Irish border issue, however, all that the two sides were able to agree was that ‘a legally operative version of the “backstop” solution for the border between Northern Ireland and Ireland, in line with paragraph 49 of the Joint Report, should be agreed as part of the legal text of the Withdrawal Agreement, to apply unless and until another solution is found.’ There was some progress here: the backstop would reflect the UK’s paragraph 49 commitments to the European Union, not its paragraph 50 commitments to itself, and the backstop would be the default solution that would apply ‘unless and until’ a better solution was found. It was thus open-ended rather than time-limited and was to have the force of law, which was obviously crucially important from an Irish point of view. But there was as yet no agreement between the negotiators about exactly what form the backstop should take.

The European Union had already (on 28 February) suggested a text for the backstop protocol that should have come as no surprise to anyone who had been paying attention to the issues. Northern Ireland and the European Union would form a ‘common regulatory area’, and Northern Ireland would remain part of the customs territory of the EU. It is hard to see how else a hard border could be avoided, but seeing things spelled out in this manner caused outrage in many British quarters, and not only among Brexiteers. Mrs May rejected the text on the same day that it was issued: speaking in Parliament she said that it threatened the ‘constitutional integrity’ of the United Kingdom, and that ‘no UK Prime Minister could ever agree’ to it.³⁸ It remained unclear, however, how else the UK government would fulfil its commitment to providing a legally enforceable backstop based on the December agreement.

The EU’s proposed backstop was sometimes referred to as creating a ‘border in the Irish sea’, a somewhat surreal image. The proposal would indeed involve checks on goods entering Northern Irish ports from Britain to ensure that they satisfied EU regulations, and if necessary to levy customs duties on them. There were already some checks in place on goods being brought into Northern Ireland from Britain: all livestock had to be imported through Larne Harbour, and both animals and paperwork were inspected there.³⁹ Michel Barnier therefore repeatedly called for the issue to be ‘dedramatized’, but with little success.

On 23 March 2018 the European Council issued its negotiating guidelines for the future relationship.⁴⁰ This was good news for the UK, since it gave Michel Barnier a mandate to finally start discussing the future EU–UK trade relationship. But the guidelines also contained several unwelcome statements of the obvious. First, the two sides could not negotiate a new trade deal before Brexit: the most that could be done in accordance with Article 50 would be to reach an ‘overall understanding of the framework for the future relationship, that will be elaborated in a political declaration accompanying and referred to in the Withdrawal Agreement’. An ‘overall understanding’ regarding the contents of a ‘political declaration’ was a lot less than the new trade deal many in the UK had initially hoped it could agree.

Given the Lancaster House red lines, the only possible future trading relationship was some sort of a free trade agreement, and as we saw in Chapter 10 even that would only happen if there were sufficient guarantees regarding a level playing field. The guidelines also stated that ‘In the overall context of the FTA, existing reciprocal access to fishing waters and resources should be maintained’. EU member states can export fish to each other tariff-free, but have also signed up to a system managing fish stocks, and granting fleets from across the Union access to all EU fishing waters. There was to be no question of the UK being able to pick and choose: if it wished to continue to export fish tariff-free to the EU it would have to grant EU fleets continued access to British waters. Indeed, given the political sensitivity of the issue, the negotiating guidelines seemed to make such access a condition, not just of tariff-free British fish exports, but of a free trade agreement more generally, giving the EU (it hoped) maximal leverage on the issue.

And there was a clear statement regarding the UK’s cakeist ambitions more generally:

Being outside the customs union and the Single Market will inevitably lead to frictions in trade. Divergence in external tariffs and internal rules as well as absence of common institutions and a shared legal system, necessitates checks and controls to uphold the integrity of the EU Single Market as well as of the UK market. This unfortunately will have negative economic consequences, in particular in the United Kingdom.

In other words, the Lancaster House red lines meant that there would have to be border controls somewhere. And the implication was that since they could not be between Northern Ireland and Ireland they would have to be between Northern Ireland and Britain. During the subsequent six months UK politics was largely dominated by the question of how to wriggle off this logical hook. By and large Conservative Remainers sought to avoid border controls between Northern Ireland and Britain by softening the Lancaster House red lines, proposing UK-wide relationships with the EU which would make border controls anywhere unnecessary. A Northern-Ireland-only backstop could then be safely agreed since it would never need to be used. The EU negotiating guidelines gave Remainers some hope, since they stated that if the UK red lines were to ‘evolve’ then so would the EU’s offer regarding a future relationship. Conservative Leavers, on the other hand, continued to insist that technology could solve the problem; in some instances they argued that the Irish backstop be abandoned altogether. Remainers pointed out that this would mean the UK crashing out without any deal at all. Leavers replied that this would not be a catastrophe, and that a clean break would have its own advantages. Mrs May’s problem was to try to find a way of bridging this gap within her own party, and not surprisingly this is what she ended up focusing on. The problem for her was that solutions sufficiently cakeist to be acceptable to both factions tended to be unacceptable to the EU, which was after all the party with which she was actually negotiating.

On 7 June 2018 the UK government proposed that instead of a Northern Irish backstop there be a temporary, UK-wide backstop: if a backstop was required the UK as a whole would apply the EU’s common external tariff, in effect joining a customs union with it. This was consistent with an all-UK reading of the Paragraph 49 backstop commitment, but as we have seen the EU rejected such a reading: Paragraph 46 had said that the backstop should be specific to the unique circumstances of Ireland, and in any case, if Paragraph 49 had been intended to imply a UK-wide commitment, then why had London insisted on Paragraph 50?⁴¹ The suggestion was immediately rejected by Ireland and the EU: not only should the backstop be Northern Ireland-specific, but the UK government had previously agreed that it should be open-ended, applying ‘unless and until another solution’ had been found. A temporary, UK-wide backstop represented unacceptable backsliding on the part of the British. Nor did the proposal deal with the question of regulatory standards, although it did at least acknowledge that this would need to be addressed.⁴²

As noted above, an alternative approach was for the UK to seek a future EU–UK relationship that would make the Northern Irish backstop, whatever form it might take, redundant. After all, a frequently stated UK objective was to keep trade with the EU ‘as frictionless as possible’. But there was a problem here, and also a paradox: the UK had from the beginning argued that negotiations about the future trade relationship should begin as soon as possible. It had chafed against the EU insistence on dealing with the divorce issues first, even though it had agreed to this on the very first day of negotiations. It was now finally possible to begin negotiations on the future relationship, but in order to negotiate the UK needed a negotiating position. And because of the divisions within the Conservative Party it had not yet agreed on one.

A future trade relationship that made the Northern Irish backstop redundant would, as previously stressed, require abandoning some or all of the Lancaster House red lines, but which ones exactly? One suggestion floated by journalists, policy wonks and academics became known as the ‘Jersey’ scheme since it mirrored current arrangements for that island. The UK as a whole would remain a member not only of the EU customs union, but also of the Single Market – but only for goods.⁴³ This would allow the UK to control migration from the EU, but the cost to Britain would be that it would lose privileged access to EU markets for capital and services. As part of the deal it would naturally have to accept the jurisdiction of the European Court of Justice, make financial contributions to the EU budget (in the same way that Norway does), and so on. This made the scheme unacceptable to Brexiteers even though it would allow them to restrict the free movement of people.

The idea was rejected out of hand by the EU on the basis that it involved cherry picking, and indeed it did: as we have seen the EU had from the very beginning stressed the indivisibility of the four freedoms. However, if the EU wanted to cherry pick these are probably the cherries it would have chosen. The EU runs a trade surplus with the UK when it comes to goods, and the proposal would allow trade in goods to continue unhindered as at present. The UK, on the other hand, is a service-based economy, and its service exports to the EU, including those of the City of London, would not be protected under the scheme. The EU’s counter-argument was that many modern manufactured goods such as the iPhone involve a large service component, and that when companies such as Rolls-Royce export physical products they often bundle these with services such as maintenance. In a modern economy it is not easy to separate trade in goods and services, and so the EU argued that the proposal would not work.

On 6 July 2018 Theresa May summoned her Cabinet to her country residence at Chequers in an attempt to decide on a common British negotiating stance on the future relationship. According to several newspapers Ministers were told that if they resigned in protest at what was agreed they could take a taxi home or walk to the nearest train station: their official cars would no longer be available to them. The Prime Minister managed to get her Cabinet to approve a more cakeist version of the Jersey scheme, which it was hoped would ensure that the backstop – which the meeting agreed would be part of the Withdrawal Agreement – would never be needed.⁴⁴ The UK would mirror EU regulations for goods, insofar as this was necessary to maintain frictionless trade.⁴⁵ But rather than propose an EU–UK customs union, the Chequers Plan resurrected the ‘new customs partnership’ that we encountered earlier, now relabelled a ‘facilitated customs arrangement’. The UK would collect EU tariffs on imports destined for EU markets, but would set its own tariffs on goods whose final destination was the UK. Despite this revival of what the EU had earlier described as ‘magical thinking’ the Chequers Plan was clearly a step in the direction of a softer Brexit, recognizing as it did that regulatory alignment was in fact necessary for frictionless trade. David Davis therefore resigned, but only a couple of days later, meaning that he avoided having to take a taxi home. This prompted Boris Johnson to follow suit, and open warfare now erupted between Brexiteers, determined to bring the Chequers Plan down (and, Johnson hoped, Theresa May with it), and Remainers who wanted to keep it alive.

The fact that Chequers seemed to signal the beginning of a potential shift towards greater British realism led EU officials and politicians to be restrained in their criticism of the proposals. Everyone outside the UK understood that they were never going to be acceptable to the EU, but the hope was that they might at least form the basis for negotiations. But then on 16 and 17 July a series of manoeuvres in the House of Commons halted the impression of forward momentum. Hard-line Brexiteers forced through a series of amendments to the government’s Trade Bill whose obvious purpose was to make the Chequers Plan unworkable. One made it illegal for the UK to collect customs tariffs for the EU unless the EU did the same for the UK; this made the ‘facilitated customs arrangement’ unworkable, but since it had been unworkable anyway that was perhaps not such a problem. But another ruled out the possibility of the UK being part of the EU VAT area, which as we have seen would on its own be enough to ensure a hard border in Ireland. And a third stated that ‘It shall be unlawful for Her Majesty’s Government to enter into arrangements under which Northern Ireland forms part of a separate customs territory to Great Britain.’ This ruled out the EU’s Northern Irish backstop.⁴⁶

By the end of August EU officials no longer felt they could be silent about the shortcomings of the Chequers Plan. In early September Michel Barnier came out strongly against the proposals: the EU could not ‘relinquish control of our external borders and the revenue there to a third country – that’s not legal’; the British proposal was not practical, since for example ‘sugar is transported by the tonne in 25-kilo sacks, so you cannot trace every sack to its destination. That would only be possible with insane and unjustifiable bureaucracy. Therefore, the British proposal would be an invitation to fraud if implemented.’ And there were services embodied even in ‘every litre of milk and every apple’.⁴⁷ Hard-line Brexiteers who were also opposed to Chequers, but for very different reasons, were delighted.

On 3 September Barnier and his deputy negotiator, Sabine Weyand, appeared in front of the House of Commons Exiting the European Union Committee. Barnier told the committee that he was ‘very concerned about Ireland’: given that there would be no hard border on the island, and given the UK government’s decision to leave the customs union and Single Market, there needed to be checks on goods coming into Ireland. Otherwise there would be ‘a breach in the single market and customs union’, with the EU unable to ‘guarantee the safety of goods entering into the European Union and circulating in it’. Furthermore, ‘on the ground’ it was impossible to distinguish between customs checks and regulatory checks, since these were ‘intrinsically linked in the technical physical organization of what happens when things are checked on that border for the single market’: this practical issue had not even been covered by the Chequers proposal.

Weyand gave three concrete examples of why border checks would be needed to protect the Single Market and customs union, which nicely summarize one of the main themes of this book:⁴⁸

Here we are talking very practically about – imagine – an import of shrimps from an Asian country where they treat shrimps with antibiotics, which are prohibited in the EU because they can lead to blindness. Now this shipment arrives in Liverpool and is destined for the market in Northern Ireland and also the EU27. At what moment and how do we check that there are no residues of prohibited antibiotics? …

The second example is bicycles imported from China on which the EU levies anti-dumping duties.^fn1 Maybe the UK in the future decides not to have such anti-dumping duties because you want to have your own system on this, so how can we ensure that bicycles, arriving in Liverpool again or somewhere else, do not end up undermining the anti-dumping duties that the EU is levying? How can we avoid that this becomes an entry point into the single market? …

The third issue – and a very important one – is VAT. How can we ensure that VAT is levied correctly? That is a major source of revenue for all our member states and is also a major source of fraud in the EU but also in the UK. Therefore, we will need to have a system where we can protect the integrity of the single market and the customs union, in a situation where we do not have a hard border between Ireland and Northern Ireland. It is on these very precise and concrete issues that we need to find a solution.

Unfortunately for the British government, in the EU’s view Chequers did not provide such a solution.

And that is where things stood in mid-September 2018. The UK accepted that there should be a backstop, but on the basis of its 7 June all-UK customs proposals. The EU insisted that the backstop involve Northern Ireland remaining in the customs union and Single Market. Without agreement on this outstanding divorce issue the UK would crash out of the EU without a transition deal, or any other deal, on 29 March 2019. As for the future relationship: the EU still argued that UK red lines meant that nothing more than a free trade agreement would be possible. The UK government argued that its Chequers proposals would maintain frictionless trade while allowing it to strike its own free trade deals, and avoid the need for a backstop. And Tory Brexiteers such as Jacob Rees-Mogg agreed with Michel Barnier that the Chequers Plan was unworkable while denouncing it as an affront to British sovereignty.

On 9 September 2018 Boris Johnson, who was widely expected to make a bid for the leadership of the Tory party, denounced the humiliation of Theresa May’s Chequers Plan, blaming it on

Northern Ireland, and the insanity of the so-called ‘backstop’. We have opened ourselves to perpetual political blackmail. We have wrapped a suicide vest around the British constitution – and handed the detonator to Michel Barnier … We have been so mad as to agree, last December, that if we can’t find ways of producing frictionless trade between Northern Ireland and the Republic of Ireland, then Northern Ireland must remain in the customs union and the Single Market: in other words, part of the EU. And that would mean a border down the Irish Sea. That outcome is completely unacceptable … We are now proposing our own version of the backstop: that if we can’t find ways of solving the Irish border problem, then the whole of the UK must remain in the customs union and Single Market … It means we can’t do any real free trade deals. It means we are a vassal state.⁴⁹

Johnson’s use of the suicide bomber metaphor was widely condemned, but he was not wrong to suggest that the Irish border issue, and the trilemma it implied, had been the key driver of British government policy since the December 2017 Joint Report. Not surprisingly, his ‘solution’ was to deny that there was a trilemma and to suggest that technology could eradicate the need for borders. He also argued that the backstop should be scrapped.

The Endgame

On 19 September 2018 Theresa May wrote an article for the leading German newspaper Die Welt, in which she defended her Chequers proposals and attacked the EU’s backstop: the UK had ‘evolved its position’ and now the EU needed to do the same.⁵⁰ The piece didn’t go down well among EU leaders, whom she was due to meet in Salzburg that evening. Mindful of the fact that Mrs May was facing a potentially difficult Tory Party conference in Birmingham at the end of the month, they were still trying to be publicly polite about a plan they regarded as unrealistic and unworkable, and they didn’t appreciate being told that the choice was, effectively, Chequers or nothing. Nor did it help when Mrs May continued to lecture them in this vein at a pre-summit dinner that night, or when she informed Leo Varadkar the following morning that she did not think that agreement could be reached on the Irish border issue before the next EU Council meeting, due to be held in October. It seemed to those present as though the UK was trying to run down the clock in the hope of forcing the EU to soften its stance on the backstop at the last moment. And feelings were further heightened when a report, later strongly denied, claimed that Liam Fox was planning to scrap European food standards in connection with a UK–US trade deal.⁵¹

The other 27 EU leaders therefore decided that it was time for some straight talking about the Chequers Plan. Donald Tusk said on their behalf that ‘the suggested framework for economic cooperation will not work. Not least because it risks undermining the Single Market.’ A ‘solid, operational and legally binding Irish backstop’ was a prerequisite for a Withdrawal Agreement, and the October Council would be a ‘moment of truth’ for the negotiations.⁵² Tusk’s message was echoed by Emmanuel Macron and other leaders. The British reaction was furious: the following day Mrs May complained that Tusk had not explained in any detail why the Chequers plan would undermine the Single Market, or offered any alternative. This was unacceptable: ‘I have treated the EU with nothing but respect. The UK expects the same … At this late stage in the negotiations, it is not acceptable to simply reject the other side’s proposals without a detailed explanation and counter proposals.’ Nor would the UK accept Northern Ireland’s staying in the customs union, since from a British point of view this would mean ‘breaking up our country.’⁵³

The claim that the EU had not explained its objections to Chequers, or provided any alternative, must have irritated EU negotiators: Tusk responded by pointing out that the UK had been aware of the EU’s objections for many weeks.⁵⁴ British newspapers described the summit as a disaster, an ambush and a humiliation, but Mrs May’s robust response may have helped her in the short term. The DUP leader, Arlene Foster, praised her toughness, and the Prime Minister made it relatively unscathed through a Conservative party conference that was otherwise notable for Boris Johnson’s successor, Jeremy Hunt, comparing the EU to the USSR.⁵⁵

However, while Mrs May might not acknowledge it, the Chequers plan was dead as a basis for the future relationship between the UK and EU. As we have seen it had attracted widespread Brexiteer hostility for having moved too far in the direction of what the EU regarded as a simple recognition of reality. May’s problem was that if she wanted a deal with the EU she would have to go even further. In particular, if she wanted the future relationship to be such as to avoid border controls between both Britain and Northern Ireland, and Northern Ireland and Ireland, she would need to relax her Lancaster House red lines even more. The question was how far this relaxation would go. For example, the UK might seek to remain in the EU Single Market and join a new EU–UK customs union: this would solve the Irish border issue making the backstop redundant, and in general maintain the existing economic status quo. But such a ‘Norway plus’ option would also mean accepting all four freedoms, paying into the EU budget, having no say over EU regulations, and not being able to strike independent trade deals with the rest of the world.⁵⁶

Nor was the Jersey plan acceptable to the EU as we have seen. However, over the summer reports had started to emerge describing a less cakeist version of the Jersey model, which for want of a better term I will label ‘Jersey minus’: the UK as a whole would stay in a customs union with the EU, while Northern Ireland only would remain inside the Single Market for goods. The plan’s main attraction was that it seemed to be consistent with an impressive number of red lines. It allowed the UK to end the free movement of people, the crucial red line for Mrs May.⁵⁷ Unlike the Jersey plan it did not involve British (as opposed to Northern Irish) cherry picking: Britain would not be in the Single Market for goods only, a crucial red line for the EU. Britain would only be in a customs union, which was consistent with the UK’s June backstop proposal. The EU was hostile to an all-UK backstop, but had not a priori ruled out the possibility that the future relationship might incorporate a customs union between the EU and the UK as a whole. And the plan would be sufficient to avoid a hard border in Ireland, thus satisfying Dublin’s major red line. Finally, while there would still need to be checks to ensure that goods entering Northern Ireland from Britain conformed with EU regulations, there would be no need for checks to make sure that rules of origin were being complied with, or that tariffs were being paid – since the entire UK would be in a customs union with the EU. Proponents of this plan pointed to the fact that the amendment passed by the House of Commons in July 2018, referred to earlier, ruled out the possibility of Northern Ireland and Britain being in separate customs territories; it did not rule out the possibility of purely regulatory checks in Northern Irish ports.⁵⁸

This option would however still involve regulatory checks between Britain and the EU. Border controls would mean the end of frictionless trade between the two, and all the disruption that this would entail. Large companies relying on pan-European supply chains would in some cases pull out of the UK, while others might try to set up supply chains solely within it. Small companies would be faced with customs-related expenses that would be difficult for them to bear. And there would be major delays at British and European ports implying higher costs and greater inconvenience, but also making it difficult for trade in perishable food items, to take an obvious example, to continue as before. The main attraction of the ‘Jersey minus’ option lay not in the nature of the future relationship that it promised, but in the number of negotiating red lines with which it was consistent.

With the Conservative party conference out of the way, the negotiations accelerated. On 5 October Sabine Weyand proposed that the two teams enter what became known as a ‘tunnel’: they would work intensively in a ‘safe space’ and keep briefings to EU member state diplomats to a minimum so as to avoid the possibility of leaks.⁵⁹ By the end of the following week negotiators had agreed a draft withdrawal text. The essence of the agreement can be inferred from newspaper reports and a statement made by Theresa May to the House of Commons on 15 October.⁶⁰ The EU was still insisting on an ‘all weather’ Northern Irish backstop – which Mrs May rather confusingly referred to as the ‘backstop to the backstop’. But it was willing to make a commitment to establishing a customs union, including the UK as a whole, as part of the future relationship. The problem for the British was that whereas the Northern Irish backstop would be part of the legally binding Withdrawal Agreement, the commitment to a future customs union would only be made in the accompanying Political Declaration. And as the Attorney General Geoffrey Cox pointed out to the British Government on 11 October, while the Withdrawal Agreement was legally binding, the Political Declaration was merely aspirational.⁶¹ On 14 October David Davis’ replacement as Brexit Secretary, Dominic Raab, was dispatched to Brussels to inform Barnier that the UK could not accept the existing document. The plan all along had been to conclude a withdrawal agreement before the European Council due to be held on 17 and 18 October, but that was not to be.

Undaunted, the negotiators re-entered the tunnel, and on 13 November Tony Connelly broke the news that a deal had been reached, handing Mrs May an unexpected concession.⁶² The EU now accepted that the backstop would involve a UK-wide customs union with the EU, just as the UK had demanded, although Northern Ireland would also have to remain in regulatory alignment with the Union; in other words the backstop looked very much like the ‘Jersey minus’ option. The deal made several member states nervous, since it was not at all what had been envisaged at the start of the process. A potential element of the future relationship between the EU and UK as a whole was now included in the legally binding Withdrawal Agreement, rather than in the Political Declaration. As we have seen, the Union had always insisted that any future trade relationship, even a mere free trade deal, could only be negotiated after Brexit and would need guarantees of a level playing field. Now, even if such negotiations were to fail the UK would be guaranteed a customs union arrangement with the EU. Level playing field guarantees were indeed included in the Withdrawal Agreement but they had been negotiated in a hurry. And the existence of the backstop seemed to preclude the EU’s making access to British fishing waters a condition for a free trade deal – though it could still link access to fishing waters to tariff-free trade in fish. Sabine Weyand had to reassure worried EU diplomats that the EU would retain its negotiating leverage in future trade talks, and that the UK would eventually have to ‘swallow a link between access to products and fisheries’.⁶³

Mrs May’s Cabinet approved the Withdrawal Agreement on 14 November, and the Withdrawal Agreement and accompanying Political Declaration on the future relationship (agreed in principle on 22 November) were formally endorsed at an EU Summit on 25 November. A deal had finally been struck: a triumph for all the negotiators involved.

The backstop was contained in a protocol to the Withdrawal Agreement.⁶⁴ The preamble to the protocol recalled ‘the commitment of the United Kingdom to protect North-South cooperation and its guarantee of avoiding a hard border, including any physical infrastructure or related checks and controls,’ and noted that ‘any future arrangements [in the plural] must be compatible with these overarching requirements.’ It also recalled the December 2017 Joint Report and its three scenarios for avoiding a hard border: the purpose of the Protocol was to flesh out the third of these scenarios, which was ‘to apply unless and until an alternative arrangement implementing another scenario’ was agreed.

The two sides were to use their ‘best endeavours’ to agree by the end of 2020 a future relationship that would supersede the Protocol while avoiding a hard border (Article 2.1). Such an agreement would have to spell out which parts of the Protocol it superseded (Article 2.2). If extra time were needed, the decision could be taken before 1 July 2020 to extend the transition period (Article 3). Since the UK had initially sought a longer transition period than the EU had been willing to grant this was another important concession secured by Mrs May. If the transition period came to an end before such a future relationship had been agreed the provisions of the Protocol (i.e. the backstop) would come into effect. While the backstop was designed to be temporary, it would apply ‘unless and until’ it was superseded by a subsequent agreement (Article 1.4). It would involve the EU and UK establishing a customs union, described as a ‘single customs territory’ (Article 6.1). Fishery products would not be covered by the provisions of the customs union unless the two sides reached an agreement about mutual access to fishing waters. An Annex set out the level playing field rules that would apply were the customs union to come into effect: for example, the two sides agreed so-called ‘non-regression’ clauses guaranteeing that a wide range of environmental protections, and labour and social standards, would not be reduced below the level prevailing at the end of the transition period (Annex 4, Articles 2 and 4). There were also limits on the UK’s freedom of action in areas such as state aid.

As part of the UK Northern Ireland would become part of the single customs territory, but it would also remain subject to the EU’s Union Customs Code.⁶⁵ This is an EU-wide system harmonizing the way in which customs and regulatory controls at external borders are carried out. In addition, the 69-page-long Annex 5 spelled out the many Single Market regulations that would need to be applied in Northern Ireland for a hard border to be avoided. For instance, Directive 2009/48/EC concerning the safety of childrens’ toys, limiting for example the amount of lead or mercury that these can contain, would continue to be enforced there.⁶⁶

In the EU’s view the Withdrawal Agreement was supposed to serve three functions: phasing out UK membership of the EU in a smooth manner; protecting arrangements such as the Good Friday Agreement; and acting as a bridge towards whatever future relationship the EU and UK would ultimately agree on. The Northern Ireland-only backstop was consistent with the second of these purposes, but a UK-wide customs arrangement went beyond what was required. It could therefore only be justified legally if it served as a ‘bridge to the future.’ The preamble to the Protocol therefore mentioned the common objective of both sides to establish a close future relationship which would ‘build on the single customs territory’, and this language was repeated in the Political Declaration which set out both sides’ aspirations for that relationship.⁶⁷

The Political Declaration spoke not only of an ‘ambitious, broad, deep and flexible partnership’ (paragraph 3), but also of the UK’s desire to end the freedom of movement and develop an independent trade policy (paragraph 4). Since ending free movement would mean exiting the Single Market and the return of border formalities, and since the Withdrawal Agreement implied that in such circumstances the backstop would apply, it was unclear how both aspirations could be fulfilled. The UK would certainly not be able to conclude free trade agreements with third countries involving tariff concessions.⁶⁸

The Political Declaration recognized that the nature of the future relationship ‘might evolve over time’ (paragraph 5), and involve areas of cooperation not considered in the document (paragraph 3). Together with the fact that the Declaration was non-binding, this implied that the November deal left open a host of possible future relationships. These ranged all the way from UK-wide membership of the Single Market and a new customs union to a British free trade deal with the EU, in which case a Northern Ireland-only backstop would kick in. But attention in Britain soon focussed on the backstop arrangement itself, despite the fact that it was only meant to be a temporary solution to the Irish border problem, and might never come into effect in the first place. And it became clear that the last minute concessions obtained by May were not helping her politically: on the contrary.

The remaining Northern Ireland-only aspects of the backstop were too much for the DUP and many Tories to swallow, dashing earlier hopes that it was customs barriers between Northern Ireland and Britain that posed the primary political problem for unionists: regulatory barriers, it seemed, were unacceptable too. The Irish government pointed out that up to 60% of the trade between Northern Ireland and Britain passed through Dublin, but to no avail.⁶⁹ Proponents of the deal also emphasized that under the backstop there would be no regulatory barriers facing Northern Irish firms exporting into Britain, and that Northern Ireland would, uniquely, enjoy frictionless access to both EU and British markets. Northern Irish business and agricultural interests were delighted but the DUP remained hostile.⁷⁰ Even worse from Mrs May’s point of view, some Brexiteers were just as exercised about the fact that the entire UK would be in the single customs territory, and would thus be prevented from doing trade deals with third countries (or at least trade deals involving tariff concessions). What if Britain ended up being ‘trapped’ in such a customs union forever?

Mrs May’s Brexit Minister, Dominic Raab, was one of those most exercised by the notion of an ‘all weather’ backstop that would apply ‘unless and until’ other means had been found to avoid a hard border in Ireland.⁷¹ Article 20 of the Irish Protocol allowed either side to notify the other party that in its view the Protocol was no longer required to ‘maintain the necessary conditions for continued North-South cooperation, avoid a hard border and protect the 1998 Agreement in all its dimensions’. If the EU and UK decided ‘jointly’ that the Protocol was ‘no longer necessary to achieve its objectives’ then it would cease to apply. But that meant that the EU would have to agree, which made sense from its point of view: a backstop that could be unilaterally terminated by the other side would not be a backstop.

The day after the British Cabinet approved the Withdrawal Agreement Raab resigned. His resignation letter cited not only concerns about ‘the integrity of the United Kingdom’ but also the UK’s inability to exit the backstop unilaterally.⁷² Raab was followed by six other members of the government, including the Work and Pensions Secretary Esther McVey. It was announced that the House of Commons would vote on the withdrawal deal on 11 December. However, both Labour and an increasing number of Tories were opposed to it. Tory Brexiteers hated the deal for the same reasons as Raab; Tory Remainers hated it because it seemed so inferior, from their point of view, to continued membership of the EU. On 9 November, before the deal had even been agreed, the Transport minister, Jo Johnson, had resigned and called for a second referendum: the people should in his view be asked if they still wanted to leave, and if so, whether they wanted to leave on the basis of ‘vassalage’ (i.e. the Withdrawal Agreement) or ‘chaos’ (i.e. without any withdrawal agreement at all).⁷³ Calls for a ‘People’s Vote’ became ever more insistent.

The government argued that the Withdrawal Agreement was the only way of leaving the EU while avoiding a chaotic ‘no deal’ Brexit. The only alternatives to the agreement were no deal or no Brexit. The European Union concurred with this assessment: there could be no question of revisiting a deal that had finally been struck after a long and difficult negotiation. But the DUP and several Tory MPs argued that renegotiation of the Withdrawal Agreement was precisely what was required. More realistically perhaps, another group of MPs argued that the non-binding Political Declaration should be renegotiated instead, signposting the way towards a ‘Norway plus’ future relationship.⁷⁴ Proponents of a second referendum wanted the House of Commons to vote down the Withdrawal Agreement as a necessary first step leading ultimately to their preferred outcome. They were heartened by the European Court of Justice’s ruling that the UK could unilaterally revoke Article 50 and stay in the Union, so long as the decision had been taken according to the UK’s ‘constitutional requirements’ and was ‘unequivocal and unconditional’, bringing the withdrawal process to an end.⁷⁵ And some hard-core Brexiteers argued that ‘no deal’ was nothing to be feared. It became increasingly clear that the deal would not obtain the support of the House of Commons.

On 10 December Theresa May dramatically announced that the House of Commons would not, after all, be voting on the Withdrawal Agreement the following day. She strongly defended the need for arrangements that would avoid a hard border, since the people of Northern Ireland did not want one: ‘if this House cares about preserving our Union, it must listen to those people, because our Union will only endure with their consent.’ She also reminded the House of her success in ensuring that the customs element of the backstop was now UK-wide, and that the transition period could be extended: this would give more time to work out ways of avoiding the backstop. But she recognized that concerns about the backstop were such that if a vote were to be held, the deal would be rejected: she would therefore ‘discuss’ the House’s concerns with European leaders, and also explore ways of ensuring that ‘any provision for a backstop has democratic legitimacy and … enable the House to place its own obligations on the government to ensure that the backstop cannot be in place indefinitely.’ How such arrangements might be consistent with the UK’s obligations under the Withdrawal Agreement was not spelled out.⁷⁶

The Prime Minister proceeded to meet with other European leaders as she had promised. Despite clear signals that the EU would not renegotiate the Withdrawal Agreement, that had after all been approved by 28 governments just two weeks previously, on 11 December she asked Donald Tusk if the Irish backstop could be limited to a year. Not surprisingly the request was rejected out of hand, but the fact that it had been made in the first place deeply angered the Irish government.⁷⁷ As Leo Varadkar put it, ‘We can’t have a situation whereby any negotiating party – and this is true for any treaty or agreement – comes back every couple of weeks following discussions with their parliament looking for something extra … You can’t operate international relations on that basis’.⁷⁸

Matters soon became even more complicated. The following day Mrs May faced a no-confidence vote by her own MPs which she won by 200 votes to 117. While making her pitch to her party she told MPs that she would seek a ‘legally binding’ solution to the backstop issue that the DUP would be able to support. But the DUP wanted to be able to unilaterally leave the backstop arrangement, which from an EU point of view would mean that the backstop was no longer a backstop. Unless she were subsequently to row back on this commitment it was hard to see how the UK could leave the EU with a withdrawal deal in hand. And without a withdrawal deal there would be no transition period.⁷⁹

After the vote the Prime Minister said that she would be ‘seeking legal and political assurances’ that could ‘assuage’ the concerns of MPs regarding the backstop.⁸⁰ But whereas the member states and Commission were happy to provide clarifications about what had been agreed they were unwilling to do anything that might unpick the withdrawal deal’s compromises. Indeed, talk of ‘legal’ assurances just made them suspicious of British intentions: care had to be taken to ensure that any texts that might be agreed between the parties, even purely clarificatory ones, could not be used to undermine the backstop at a later date.⁸¹

At a European Council on 13 and 14 December, May therefore tried a different tack. Instead of agreeing an end date to the backstop, perhaps leaders could agree on a binding deadline by which the future relationship had to be agreed (which would effectively cap the time spent in the backstop)? The suggestion made little sense, given that trade negotiations are long and complex, and given that the UK still seemed unclear about what it wanted from the future relationship. As Leo Varadkar said, ‘For us to make a legal commitment to have a done deal at a particular moment or time, that is not possible because it is not in our gift to deliver that, we cannot promise anything that is not in our power to deliver … We can commit to our best endeavours and say we will work towards a target date … It is not possible to say that we will definitely meet that date.’⁸²

Mrs May met with her fellow leaders for an hour, arguing for ‘legal guarantees’ that the UK would not be ‘trapped’ in the backstop. But it was unclear to her colleagues what exactly she wanted. She accepted in theory that the Withdrawal Agreement could not be renegotiated, but it sounded to some as though that was exactly what she wanted to do. Furthermore, it was unclear that any further concessions made by the EU would suffice to get the House of Commons to accept the deal. After all, the concessions made to David Cameron in February 2016 had not prevented a vote to leave the EU, and the concessions made to Mrs May in November 2018 had apparently not been enough to gain the support of the UK parliament. In the end the EU agreed that it would start preparations for the future trade negotiations immediately after the Withdrawal Agreement had been signed so that no time would be wasted. It expressed its ‘firm determination to work speedily on a subsequent agreement that establishes by 31 December 2020 alternative arrangements, so that the backstop will not need to be triggered’, and reiterated that the backstop, if it were to be triggered, would only apply ‘temporarily, unless and until it is superseded by a subsequent agreement that ensures that a hard border is avoided’. The EU would in such circumstances ‘use its best endeavours to negotiate and conclude expeditiously a subsequent agreement that would replace the backstop, and would expect the same of the United Kingdom, so that the backstop would only be in place for as long as strictly necessary.’⁸³

It was hard to see what more Mrs May could have brought back from the summit, but her previous talk of ‘legal assurances’ meant that the summit was seen in Britain as yet another failure.⁸⁴ Such talk probably also reinforced the impression that the deal which she herself had negotiated, and which she was trying to get the Commons to pass, was unsatisfactory. Just as David Cameron had conceded in 2016 that the free movement of EU citizens was a problem, by seeking reforms of free movement that were in fact unobtainable, so she seemed to be seeking the unobtainable (i.e. the renegotiation of the Withdrawal Agreement), in the process undermining her own political position domestically.

On 17 December Mrs May announced that the House of Commons would vote on the Withdrawal Agreement in the week beginning Monday 14 January. The following day the British government announced that it was ramping up its ‘no deal’ planning, much to the horror of the UK’s major business organizations. What would happen next was anyone’s guess.