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Analysis

PM’s deal is awful in many more ways than just the backstop

by Luke Lythgoe | 02.01.2019

Theresa May is making out that if the “backstop” is tweaked her Brexit deal will be good to go. But the terms of the insurance mechanism to keep the Irish border open are not the only reason this deal is miserable. It will leave the UK poorer, less powerful and stuck in rounds of Brexit talks for years to come.

May’s efforts to secure reassurances from the EU that we won’t be indefinitely stuck in the backstop – a bare bones customs union, following the bloc’s trade and other rules without a say on them –  continued over the Christmas period, according to The Times. But even if she gets something, it won’t amount to much – and any concessions should not be allowed to obscure the fact that the deal is terrible in many other ways.

For starters, it would leave us poorer. It will gum up manufacturing because it won’t give frictionless trade with the EU. It will also do next to nothing to help our huge services sector, which makes up 80% of the UK economy.

The Treasury’s own figures say the government’s deal will leave our economy 3.9% smaller than it otherwise would be by 2033 – equivalent to over £100 billion every year – with less trade, lower wages and less money for public services. Several independent analyses have arrived at similar conclusions.

The deal also turns us from a rule-maker, with an influential voice at the EU’s top table, into a rule-taker. We will follow all EU single market and trade rules without a say during the 21-month “transition” and during any extension of it. And to get any future trade deal that even partly reduces friction, EU countries will push for us to follow even more rules.

Which leads onto the third big problem with the deal: we’ll be stuck in negotiations for years to come. The uncertainty which has so damaged the UK since the Brexit vote and which has led to a plunge in investment won’t go away.

The deal as it stands today only agrees the terms of our exit from the EU, with details about the future left vague. So on March 30, the various factions of the Conservative Party will plunge into another series of fights over what sort of Brexit they want – and until that infighting is over, the EU won’t want to negotiate seriously with us. Even then, we will be in a weak position because every single EU country can probably veto a future deal.

What’s more, since the talks could well go on beyond the next general election, scheduled for 2022, there could be a new government and the whole basis for the negotiations could change again.

May’s deal is bad for our peace, power, prosperity and the people of this country. In contrast, the deal we have inside the EU is good for all these things and more. MPs must not be duped into thinking the backstop is the only thing bad about this deal. They must reject it and push for a People’s Vote instead.

Edited by Hugo Dixon

9 Responses to “PM’s deal is awful in many more ways than just the backstop”

  • OK but that’s not the real issue. The choice is between accepting Mrs May’s deal, poor as it is, and rejecting it with all the attendant risks. The probability of a hard Brexit would rise, with all the havoc and misery that would cause not least for millions of EU citizens here and British in the EU. Is it responsible to gamble on the chance of a People’s Vote in such grave circumstances? Passionate Remainer as I am, with a heavy heart I now believe we should accept the deal on offer for fear of something much worse.

  • When asked by Hitlers staff what they should do, when the D-day landings took place, Field Marshall Rundstedt said “Make peace, you fools”.

    So what’s so dreadful about being a rule-taker ? There are another 27 nations who are unlikely to accept rules that disadvantage them and I can’t think of any “rules” that the Commission has come up with which have been so utterly dreadful. In fact, much of the law governing workers rights originated in the EU, not the least of which is equal pay and annual leave. See here :

    https://www.independent.co.uk/news/uk/home-news/brexit-latest-news-10-ways-eu-protects-british-workers-rights-in-danger-european-union-a7531366.html

  • Robert – That is the game May is playing. Running down the clock so she can say if you don’t vote fir my deal, you are getting a crash landing no deal . It is blackmail. I am not accepting that at all. I want all the opposition to Brexit united to stop this act of self harm. Corbyn has to get off the fence and push for a second vote. Unless the government revokes A50 it is the best chance we have of preventing the idiots from taking the country out of the EU. I do not trust May or her miserable party and we must keep the pressure up.

  • The disadvantages listed in this article are consequences of brexit – not of “May’s deal”. The truth is that this deal is about as good as it gets and we must not get into the “have cake and eat it ” nonsense peddled by the Leave campaign. The trouble with brexit is brexit which is why we must build up the “people’s vote” campaign. However it is crucial to have a clear route to avoiding the catastrophe of “no deal” before voting down May’s deal.

  • No deal is a bluff. It would be illegal under international treaty law leaving the UK a pariah state like North Korea – so who would trust us in future trade deals then?

    That’s why Mrs May’s deal is the only legal alternative to our present EU membership – it is a divorce agreement which deals with our future ongoing pension and development commitments under the present EU treaty by satisfying those commitments under a divorce treaty. It also ensures us a transition period. But we become a rule taker and it’s difficult to see how a future EU trade deal would depart much from this system which would also restrict our ability to trade independently. So what is the point of this Brexit?

    We also have an international treaty agreement known as the Good Friday agreement which we also won’t be at liberty to breach over the border arrangements either – in its own right – regardless of the backstop in May’s EU agreement, although that reinforces it.

    The only way we could leave with “no deal” is with a “managed” or “legal no deal” which would be new treaty obligations entered into to ensure we at least honour our future pension and development obligations under the present treaty and the banking system still operates with an estimated £20 Trillion of uncleared derivatives either side of the UK/EU border which could become unrecoverable without a working legal treaty. At the same time it would be a good idea to include treaty agreements for the planes still to fly and for medicines still to be available – but of course we could leave out a trade deal and customs arrangement with no transition period – which are included in Mary’s deal. That would be the closest realistic thing to walking away with “no deal” – a “managed” or “legal no deal”.

    But there’s no evidence that the government is negotiating this version of a treaty and there’s no time left to do it. “No deal” is therefore a bluff meant to frighten MPs and the public. It’s a nonsense and the EU know it – as does the shameless UK government which still expects to be taken serially with this bluff when the government are exposed hiring shipping companies with no ships as contingency.

    If May’s deal is rightly voted down, the only options left will be to opt to extend Article 50 negotiations for a People’s Vote referendum, or to withdraw Article 50(2) notice and cancel Brexit for now. Instead we could defer Brexit to a possible future referendum following a national debate about the realistic Brexit options and the failure of our political system that got us into this sorry state in the first place. This would also give us time to repair our outdated electoral law which allowed the 2016 referendum to be corrupted.

  • @John Handford
    I agree completely about the impracticability of “no deal”. However the legal position is that in the absence of a parliamentary procedure to stop it that is exactly what will happen on March 29. No-one has yet explained to me what this parliamentary procedure is, let alone how it will be implemented without evidently the support of either the government or the official opposition.

  • I am concerned about the time issue above all else; and the specific time is the May elections for the EU parliament. If, as I am assuming all here agree, we find a way eventually to stay in the EU (or to see a suitable enlargement of an outer ring of membership), we need to be part of that vote.
    As I understand it, we cannot cancel Article 50 unless we are committed to long term membership; that is a reasonable demand on the face of it from the 27. But, with a government not prepared to do that (and an opposition similarly against it), that is not going to be possible under the current structure, within the time constraint of 29th March.
    So, we need the 27 to agree to a new position, which is far from guaranteed on the UK side, but let’s test the theory.
    Step 1 is to vote down the PM’s deal .. as you stated, we would be in for multiple years – and ever worsening terms – under her deal, as every MS follows the Walloon v. Canada process.
    Step 2 is a vote in the House to request a continuation of interim membership, including participation in the EU elections (and the allocation of ongoing responsibilities in Brussels for UK delegates). While this is far from definite, an open vote, i.e. where a defeated government has no other solution to a chaotic WTO exit, one would like to think this could pass in the House.
    But why would the EU accept such an interim position as that? Here Step 3 is the important issue; we use the impossibility of a conclusion to the derivatives clearing in time for March 29 to effectively turn the time issue the other way. (Of course, one would hope that this threat was not openly discussed or revealed, but was sufficiently understood, at least by the ECB, to make sure we had time to eventually settle matters.)
    All too difficult – and liable to lead to a mistrust and at a risk of a financial crisis? Yup, all of that – but I do not hear any other solution that would stop us being blocked out for all time?

  • @Denis Loretto

    There are plenty of routes out of the impasse. For one thing not all Brexit legislation has been passed yet , including the keystone Withdrawal and Implementation (WAI) Bill which implements all the other Brexit legislation, repeals the 1972 act of union and enacts Mrs May’s divorce treaty into domestic law.

    Should parliament be in deadlock without the passing of the above legislation or have amended legislation to require a further referendum etc, then we will not have fulfilled our “constitutional requirements” for leaving the EU which is a requirement of Article 50(1). Rather than apply to the ECJ for a ruling about the standing of such a legal disarray come the 29th of March 2019, asking for an extension or simply withdrawing Article 50(2) notice using prerogative powers (this is constitutional as it does not take away rights of citizens) would then be an option for the executive. I can’t really see the government allowing or causing or even being able to cause “no deal” and national harm in such circumstances. Parliament is sovereign after all.

  • Good to see in depth discussion as opposed to the superficial nonsense coming from some members of Parliament. It is a pity that those of us who voted to remain have been pushed aside in order to pander to the extremists of both sides of the argument. Jeremy Corbyn’s pusillanimous luke warm attitude doesn’t help either.

    May’s proposal has to be opposed – as I believe it will be, and it must return to parliament for a decision. It cannot in the final course of events, agree to a no deal, and I do not believe this could happen in any case. A people’s vote? maybe this is the only sensible outcome.