5 March 2019

The Irish backstop isn’t the only problem with the Brexit deal

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The Irish backstop is the spectre that has long haunted the Brexit negotiations. This afternoon, Brexit Secretary Stephen Barclay and Attorney General Geoffrey Cox head to Brussels to seek changes or clarifications on that part of the deal that the government hopes will give the deal it life in the House of Commons.

It is understandable that the backstop has been the focus of so much attention. Its presence in the deal limits the prospect of Brexit delivering a light touch, equivalence-based and truly intergovernmental trade agreement.

But what would we be left with if the backstop were suddenly to disappear overnight?

Ditching it would certainly be a tremendous advance, but one which would only provide a partial relief. Three quarters of the main text would still remain, and it is far from devoid of problems. This is particularly, but not exclusively, the case in areas where decisions made now carry enduring consequences and liabilities into the post-transitional period.

There is of course the money. Some might say £39 billion is a price worth paying to finally deliver on Brexit. That assumes, however, that the UK doesn’t get further stung by other long-term commitments, the Reste à Liquider (RAL). As the Commission observes, “the agreement is not about the amount of the UK’s financial obligation, but about the methodology for calculating it”. This bodes ill for a debt that runs into uncertain billions, and where the UK has always had a disproportionately heavy burden by share, and MEPs a propensity to spend.

The issue of the asset share is particularly painful. The UK does get its money back from the European Investment Bank, but only the initial capital. In terms of physical assets, the UK seems to have quietly given up on asking for its due share of EU chattel. The notable exception relates to Euratom goods based in the UK that are radioactive, and therefore carry a disposal liability.

The Commission’s line has been that the EU now has its own legal personality and therefore individual member states have no call on them. This defence — only, incidentally, deployable since the Lisbon Treaty — would last 60 seconds if the French were negotiating. It is not even clear that HMG has even asked for a copy of the EU asset register, which thanks to diligent questioning by MEP Rupert Matthews we know does indeed exist.

We might have more confidence if we were reassured the EU institutions were properly getting to grips with sound financial management. As an unhappy pointer, no part of the deal addresses EU whistleblowing cases involving UK nationals, some of which, like that of Robert McCoy, have been ongoing for fifteen years. The Treasury line is that such cases are entirely an internal matter: this is a mistake, and the deal was a chance to correct that.

The fisheries clauses are, frankly, scandalous. The CFP continues to run as before during transition, only now without the UK (or even just a Scottish minister) around the table. A malicious meeting could see an attempt to hoover up UK assets, and an unfair share being assigned to UK trawlermen. If you don’t think such meetings happened, then reflect that the CFP was itself set up on the back of one just before the UK was able to send someone to the table.

Recent papers for Veterans for Britain by Major General Tim Cross on procurement, and Colonel Richard Kemp on trends, demonstrate the serious risks arising from the gravity well of EU defence integration. Both the transitional and the end draft deal foresee the UK being closely associated with the EU institutions. One safeguard has prudently now been added, presumably by the Defence Secretary himself, that provides short term firewalling for the UK’s defence industry. But the medium term risks remain from what can only described as an EU ‘Defence Backstop’, and poorly-set thresholds for UK affiliation.

The same hazard applies to Justice and Home Affairs (JHA). The level of willingness within parts of the Home Office to glue themselves to EU integration in this field is baffling. Every office wall within the department should have a list of the Danish opt-outs bluetacked to it. The ratio of the Danes using their opt outs in JHA compared to us runs to around 17:1, and they have even walked away from Europol. Certain operational bilaterals aside, we hardly need to sign up now.

All this is even before we get into the transitional role of the European Court of Justice, and the risks arising from legislation that is sluicing from the pipeline when we have an obligation to implement it but have lost any control of the tap.

Ultimately, the biggest problem is perhaps not the Withdrawal Agreement itself, but the end state it leads to. The Political Declaration sets out a silhouette, but one where drafters have already in critical places left departments too closely aligned with the EU regulatory process to allow genuine breakout. It neglects even to admit redeemable costs from red tape and gold plating inherent in the existing system. It fails to cure the legislative Stockholm Syndrome.

These flaws might normally be addressed as talks progress. I’m not so sure the political will exists, except amongst the more exceptional ministers. So much energy and capital and focus has been expended on the transition, that there is a prospect of a number of departments failing to move on now and fix the crooked frame. Whitehall will of course crack on, even as ministers await the end of their ungridded term in office pending a successor Prime Minister. In such a scenario, it would be like the end of some bareknuckle match, where exhausted boxers lean on each other in the ring, as around them the support staff quietly and as best they can get on with dismantling the stage.

In any event, all of this presupposes that the option of ditching the full backstop is actually pursued, let alone agreed to by the other parties. It is not even certain that such a prospect would gain support in the Treasury, which some reliable reports suggest has long been pursuing a form of Customs and Regulatory Union that the backstop so conveniently delivers.

The real danger with the backstop fix is that, instead of doing the decent thing and binning it, negotiators will simply turn to tweaking it. I suspect a current focus of attention is its Article 18.

This little-appreciated segment contains a partial suspension clause. It is couched in such a way as to be deployable in two circumstances. The first in effect is designed to allow the Commission to suspend the deal in a given area, to prevent Ulster from gaining competitive advantage over EU 27 competitors – the very boon that the province was supposed to be getting in the first place. The second cause for triggering it is if there is civil disturbance.

It is this latter element that makes Article 18 the “Rioters’ Charter”. Defining the exit route by the amount of visible civil strife the treaty generates already makes it a poor safeguard. Going back to this clause now, and fiddling around adding new contingencies, threatens only to add fuel.

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Dr Lee Rotherham is Director of think tank The Red Cell, and is a former adviser to the Conservative front bench.