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Will Johnson be forced to make yet more concessions?

by Hugo Dixon | 14.10.2019

The Prime Minister faces unpalatable options this week: lose the DUP and ERG by making yet more concessions to get a deal with the EU; or lose moderate Tories by trying to crash out of the EU with no deal at all.

The scraps of information emerging from the government’s negotiations with the EU are not encouraging. Boris Johnson has already made three biggish concessions in his desperation to get a deal, but they are not enough. First, he said Northern Ireland would follow the EU’s agrifood rules. Then he agreed it would follow the bloc’s manufacturing rules. Finally, last week he said the UK would collect tariffs on goods that entered Northern Ireland from Great Britain.

All this is a massive pill for the DUP to swallow, as it effectively turns Northern Ireland into a “vassal province” of the EU – following its rules without a vote on them. So Johnson has tried to sweeten the pill by promising that Northern Ireland businesses will be able to reclaim any tariffs that are paid so long as the goods they bring in from Great Britain stay in Northern Ireland.

What comes to Northern Ireland stays in Northern Ireland?

It’s this “rebate” idea that the EU negotiators are taking aim at. How can they be sure that any goods brought into Northern Ireland will stay there? What is to stop a car dealer, for example, importing a car from Nissan in Sunderland and reclaiming the 10% tariff the EU charges – but then driving it across the border into the Republic of Ireland and from there to anywhere in the EU? After all, Johnson has promised the Irish prime minister there will be no border controls in Ireland.

The problem doesn’t just apply to finished goods. It applies to inputs. Say a manufacturer brings sugar into Northern Ireland and uses it to make fizzy drinks and then sends those to the Republic and other EU countries. How are the authorities going to stop the company reclaiming the tariffs on the sugar? Unless they do, won’t the Northern Ireland fizzy drink maker get an unfair advantage vis-a-vis competitors elsewhere in the EU?

Solving these problems and coming up with a legally-binding text before the European Council on Thursday seems extraordinarily unlikely. That’s why the EU is suggesting that, if the Prime Minister wants a deal done and dusted by then, he should forget about the rebate idea and just keep Northern Ireland in the EU’s customs union.

But it is hard to see Johnson agreeing to that. His DUP allies would scream betrayal. And the ERG “Spartans”, the hardest of hardline Tories, would refuse to back him too. His chances of getting such a deal through Parliament would then be vanishingly small. Why would he even bother to burn his bridges with his hardline supporters if he can’t get MPs to support his plan?

What about kicking the can?

Another option would be to play for time. The Prime Minister might be able to persuade the other leaders to keep talking about his proposal – and agree some legally-binding variation of it in the next couple of months. Even Raoul Ruparel, the former Theresa May advisor who has done a lot to explain the proposal, accepts that it will need time to iron out the details.

But there are problems with that too. For a start, the EU would probably require intrusive procedures and hefty fines to minimise the risk that goods which received rebates ended up in the bloc. By the time the whole bureaucratic rigmarole was put in place, the rebate scheme might not be terribly attractive for Northern Ireland businesses – and the DUP would be furious.

Then there’s the fact that Johnson has said until the cows have come home that we are leaving the EU at the end of October “do or die”. If he now asks for extra time to negotiate a cockamamie scheme, Nigel Farage will say he can’t be trusted and have his guts for garters in a subsequent election. Johnson will start to look like Theresa May, who was endlessly kicking the can.

No deal not so great

The snag is that not doing a deal is also deeply unappealing. The Prime Minister has been given “explosive” warnings about the risk of terrorist atrocities in Northern Ireland and the mainland by Michael Gove and the national security advisor if there’s no deal, according to the Sunday Times.

Quite apart from that, Johnson knows he will split his Cabinet and his party if he fights an election on a “no deal” platform. A number of Tory moderates are aghast at the damage to the country and the economy from tearing us out of the EU without a deal.

What’s more, it’s not even certain that he could persuade Jeremy Corbyn to let him fight an election. The Labour leader is one of the few senior figures in his party who actually wants one. Most of the others are coming round to the idea that it would be best to have a referendum first.

So the Prime Minister is stuck between the devil and the deep blue sea. What on earth is he to do? Faced with a set of really bad choices, might he conclude that a People’s Vote is his least bad option?

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Edited by James Earley

Categories: UK Politics

3 Responses to “Will Johnson be forced to make yet more concessions?”

  • The DUP are the polite face of some very unpleasant terrorists. I have no idea why they figure so prominently in the proceedings. They are a minority party representing a minority electorate and it’s time they were given the heave-ho. Johnson doesn’t need them, anyway, his brilliant sacking of 21 MPs means that no matter if he has the DUP on board, their 10 votes are useless. Get rid of them asao and maybe we can move on.

  • Well done Hugo, you’ve hit the nail on the head again. It never was physically possible to put a round peg in a square hole.

    Leaving aside this end-game which appears to be leading to an extension and a referendum (at least we all believe so), one has to always come back to asking the question about the original motivation of the Brexiters.

    For me it’s quite clear that their real motives have never been declared in public. That would be a little bit stupid. Anyway it’s all about greed.
    It seems inevitable that these people will profit from numerous possibilities. Let’s try:

    – Tax avoidance – yes that’s a good one. The EU Anti-tax Avoidamce Directive, introduced in Jauary 2019, but clearly not yet implemented by the Tory UK Government.
    – Membership on the boards of US businesses which have an interest in buying up distressed or failed UK businesses?
    – Ditto membership on boards of UK companies bought up.
    – Buying up farmland from the 50% of farmers which have gone out of business? That would be great for growing genetically modified maize and other crops!
    – Taking substantial stockmarket positions on areas of businesses which will gain (some) but many which would fail, or betting on falls in the value of sterling. Some great ideas so far.

    Quite a nice list so far. Far fetched? Well if the Tory party was really so interested in the country’s welfare we wouldn’t be shooting ourselves in the foot and destroying a quantifiable range of business activities by slowing down the movement of trade and allowing the automatic imposition of taxes by the EU on our products and services.

    Hey ho!

    Let’s get those pro-EU citizens up to speed with their photo identity documents ready for the next election.

    The rollercoaster just goes on …….

  • There was no plan for what to do with “taking back control” after leaving “Yurrup”, Or what doing that actually meant, what the objectives were, the moment when brexit was puked all over the country. After three years and endless unpleasantness about it that still is the case; Theresa May and Boris Johnson didn’t have a clue what the future for the UK, never mind England on its own, was going to look like. My sincere congratulations with a demolition job well done, dear brexiteers!