Sunday 26 May 2019

defeated by brexit • part vii

A deal of sorts

  • The poisoned chalice of Brexit secretary was taken up by Dominic Raab, who had little room for manoeuvre
  • Theresa May’s Chequers proposals were brutally dismissed by EU leaders after she presented to them in Salzburg
  • A deal was finally agreed that included a backstop. It was rejected three times by the British parliament

By Chris Cook

When Dominic Raab took up his new post as Brexit secretary in July 2018, he was in for a frustrating time. The negotiations already had a clear shape. A draft Withdrawal Agreement was in place. The cabinet had signed off on Chequers. Rails were laid down.

“By the time Dom got there, it was pretty much locked in,” one of his cabinet colleagues told me.

Raab would have little room for manoeuvre, or initiative. Having endured the testy division between Olly Robbins and David Davis, the previous Brexit secretary, Theresa May took care to make her new minister’s position clear. Raab, a rather intense former civil service lawyer, was not in charge.

In a statement, the prime minister said: “I will lead the negotiations with the European Union, with the secretary of state for exiting the European Union deputising on my behalf. Both of us will be supported by the Cabinet Office Europe Unit… [led by Robbins].”

Dominic Raab soon found he was second fiddle to Olly Robbins and the prime minister

Raab was isolated within government, and his relationship with officials was much poorer than Davis’s had been. Davis was quite well liked. Raab was not. He was notoriously exacting in what he wanted from civil servants. At the same time, DExEU, the department for exiting the European Union, was struggling to cope with its diminishing role. A department that was never quite functional started to come apart. Of the seven officials assigned to Raab’s private office in July, five had moved on by November.

Meanwhile, the desire for an orderly solution meant that the UK was edging towards a deal. May had, by now, been convinced not to risk No Deal. (It is worth noting that this was not yet clear even to her cabinet. As late as February 2019, a delegation of ministers – Amber Rudd, Greg Clark, David Gauke and David Mundell – felt compelled to see the prime minister to warn her that they might resign if No Deal became policy.)

Senior Brexiters, though, were growing sceptical about May’s government. They say that by this point there was pressure on pro-leave MPs to resign. Suella Braverman, who had joined DExEU as a minister only in January 2018, says there was little reason to be cheerful for someone in her position after the Chequers meeting: “I found it very, very difficult. I was always torn.” She stayed on only because “it wasn’t the final deal, so anything could have happened”, she says. “And I thought it was just a bit premature for me to go.”

Suella Braverman felt 'torn' in the wake of the Chequers paper

Raab was, she says, “always very loyal about the prime minister, very supportive in our team meetings … Never any kind of two-facedness. No other agenda. And bear in mind that he had been relegated after July to just explicitly … legislation and domestic preparedness. Dominic was definitely second fiddle to Olly, to the prime minister.”

Even so, Raab still had to go through rounds of talks with the EU chief negotiator Michel Barnier. His mission at this point was to try to press the EU on a few fronts, most of them within the draft Withdrawal Agreement text.

The single most important change that Britain wanted was to the backstop. Raab was tasked with persuading the EU that the Northern Ireland-specific backstop should be supplemented by a UK-wide customs union.

Britain had, in June 2018, published a paper proposing an all-UK temporary customs union as its preferred backstop option. This would, Britain hoped, reduce the need for so-called east-west checks between Great Britain and Northern Ireland. That paper also proposed something else that Raab would pursue: a clear guarantee that backstop agreements could not be everlasting. Either the UK would need to have a right to exit the backstop unilaterally, or it should come with a time limit.

Raab also wanted to attach some conditions to the financial settlement. If the UK did not get a good trade deal at the end of the process, there should be some recompense for the settlement, assessed at £39bn, that it had already agreed.

David Davis and Theresa May insisted that nothing was agreed until everything was agreed

Braverman says: “The fact was that David Davis and Theresa May … [said] that ‘nothing was agreed until everything was agreed’, which implies we were going to pay this money in return for a free trade agreement. And the legal text fell far short of that. There was no connection between the money and getting the free trade agreement in return. There was no conditionality … It was just us stumping up the cash with no guarantee of anything in return.”

Over the summer, Barnier sought to help ease the problem of the Northern-Ireland-only backstop – to “de-dramatise” it, in his words. It was not about splitting the UK, but “technical controls on goods [entering Northern Ireland], no more, no less”. After all, he pointed out, the UK already checked livestock moving by boat from Great Britain to the six counties.

At the same time, however, the UK was trying to press for its preferred solution to the final trading position, which at this point was the proposal agreed by the cabinet at Chequers.

Chequers, remember, had two components. The first was a proposal for a “common rulebook” requiring the UK to shadow EU regulation in key areas. This was intended to minimise regulatory friction.

The second component was something very close to the New Customs Partnership – and the NCP was something that the EU had already told officials was dead in the water. The EU’s scepticism was not a secret.

Sabine Weyand, left, and the EU's negotiating team

Sabine Weyand, the EU’s nominal deputy negotiator, was clear from July that they would not negotiate using Chequers as the basis of talks. She told other member states that Chequers proposed that Britain would get some of the rights of EU members combined with the independent right to strike free trade agreements, which would undermine the integrity of the EU’s regulatory zone.

Stephen Kinnock, a Welsh Labour MP, reported that, during a meeting with British MPs, Barnier was clear: “I can tell you absolutely, unequivocally, without a shadow of a doubt that Chequers is dead in the water. Michel Barnier made it crystal clear that Chequers is completely unacceptable to the EU.”

Britain, however, was presenting Chequers as a real, live option – possibly because to do otherwise would cause more cabinet resignations. The EU’s response to Chequers at this time was delicate: to carefully avoid destabilising the UK government while also making clear to London that there was absolutely no chance of accepting the plan.

Dominic Raab, flanked by Olly Robbins, faces the European negotiating team headed by Michel Barnier

I have seen documents which explain that this was well understood in London. But the unreality of the time was caught on camera in London. Robbins knew all about the EU’s true position on Chequers, but when speaking in front of cameras during a meeting staged for a BBC documentary crew, he told the prime minister: “They’ve been completely clear, prime minister, that the white paper [Chequers] was a game changer there.

“There’s a real sense over the summer that the argument you’ve been making for some time, that the rest of Europe’s agenda does have a bearing on Brexit and vice versa, is beginning to get some traction.”

Soon afterwards May and her team took the plan to the European Council. The meeting was held in the Austrian city of Salzburg – where the Chequers plan was destroyed.

Isolated: Theresa May was told to wait outside while EU leaders discussed her Chequers proposal

The Salzburg meeting was a dramatic moment; May came forward to present her proposals on the future partnership to the European Council. She was allowed to personally present her argument to the EU’s other national leaders – even if she would be asked to wait outside the room while decisions were made.

The prime minister was wooden. She used her allotted time to make a case based largely on an op-ed she had already published – a somewhat prickly comment piece in Die Welt, the German national newspaper. It offered little in the way of realistic solutions, and the verdict on an idea the EU had already rejected was crushing.

President Macron with Michel Barnier and Donald Tusk. All three were highly critical of Theresa May's proposal

The EU’s problems with Chequers were well known. It would give Britain rights without responsibilities. It would, Barnier told the council, undermine the single market.

One big issue raised at this time by Barnier was the idea of “embedded services”. Even if the UK adopts the common rulebook on, say, car parts, what if the warranties that underpin the car sales – a service – are not properly regulated?

A friend of the prime minister said: “What she had been told was going to happen, not just by Tim Barrow and Olly … was that ‘it’s sorted; we’re not going to agree, but it’ll be handled diplomatically’. Then [Emmanuel] Macron and Barnier wound the council up, saying: ‘We’re giving too much away.’ Then [Donald] Tusk went completely OTT in his comments to the media.”

May was incensed that she was given no warning about what the Polish president of the European Council would go on to say. He had been speaking to the prime minister shortly before he went on to tell reporters: “There are positive elements in the Chequers proposal but the suggested framework for economic cooperation will not work, not least because it risks undermining the single market.”

It got worse. Tusk posted photos of himself eating cake on social media: “A piece of cake, perhaps? Sorry, no cherries.” A double joke, about having your cake and eating it, too, and cherry-picking (“Not very tactful, given the prime minister’s diabetes,” one of her friends acidly noted to me).


Donal Tusk's gloating Instagram post: 'A piece of cake, perhaps? Sorry, no cherries.'

The summit was seen as a disaster. European leaders took the chance to pour vitriol on the whole Brexit endeavour. Macron, the president of France, said: “Those who explain that we can easily live without Europe, that everything is going to be all right, and that it’s going to bring a lot of money home, are liars.”

One senior adviser to May reflected the UK view that Britain was being used as a useful punching bag. Macron’s position, this person said, was “all about the Front National; ‘It’s the far right versus me’.” People with knowledge of Tusk’s thinking have said he was affronted by the article in Die Welt, and the prime minister’s conduct in the meeting. That, to him, is where things went wrong.

The shock of Salzburg was a serious blow. The UK’s original plan had been to conclude a deal by October 2018 so that the British and European parliaments would have time to ratify the agreement and pass any required legislation. In September, there seemed little hope of that.

May flew back to London. The next morning, she delivered an angry speech in Downing Street. “She was genuinely angry,” a friend said. No wonder. Britain still had a backstop problem – and Chequers was dead.

Arlene Foster, the DUP leader, was well aware that her party would not always hold the balance of power

At this point, an official involved in the negotiations told me, turning the backstop from a Northern Ireland-only process to a UK-wide one was Britain’s “number-one ask” of the EU. “That was just an absolute red line for us; we always thought they would move.” Barnier had never rejected the idea, Commission sources say. He just needed to understand how it would work.

May’s hand may have been strengthened by parliament: by this point, MPs had already passed a clause in legislation which sought to ban the UK from a Northern Ireland-only customs arrangement.

In the end Britain got what it wanted, but it required a lot of effort.

Weyand, the EU’s most important negotiator, is against Britain joining a customs union with the EU. She is likely to be the EU’s next senior official in charge of trade and believes it would be an inelegant solution to Brexit. The danger is structural unfairness – giving the UK zero-tariff and low-hassle access to EU markets. What if UK products outcompeted European ones with poorer environmental protection and weaker regulation?

There was a personal wrinkle here, too: in July, Barnier told representatives of other governments that he had got the impression that Raab was personally less worried by the prospect of a Northern Ireland-only backstop than the prime minister.

Dominic Raab should not be allowed in the same room as Michael Barnier again, an official joked

In October 2018, the EU accepted that there might need to be a UK-wide backstop customs union. But it was a half-hearted acceptance. It did not commit to a UK-wide arrangement – only that it would commit to try. And if it failed, the Northern Ireland-only backstop would kick back in (the construction was known, in London, as “the backstop to the backstop”). Officials sent the proposal back to London. The prime minister – as they expected – rejected it.

So on Sunday 14 October, Raab went to Brussels. The plan, agreed with the prime minister, was to firm up the wording on the temporary nature of the backstop and to nail down that the default backstop needed to be UK-wide.

Raab went off-book. The talks ended with an official’s tongue-in-cheek report back to Downing Street, during the journey home, that Raab should “not be allowed in a room with Barnier again”. Officials say that, rather than maintaining focus, he had asked for a lot more than they had thought wise.

The problem was not what he requested. It was that officials had wanted to keep pressure on a few points and his approach, in their view, made the gap between the two sides seem bigger than it was.

Despite that failed meeting, the point was conceded in the end.

On 14 November, the European Commission and the UK government published a draft Withdrawal Agreement, together with three protocols – one of which concerned a UK-wide backstop.

In the event that the UK and EU cannot agree a deal which obviates the need for a border in Ireland, there would be a customs union covering the whole of the UK and Northern Ireland. This would reduce the need for east-west customs checks. And this state of affairs would apply until a new deal that removed the need for customs checks could be negotiated. This is what Britain wanted.

Theresa May meets farmers in Northern Ireland to mark a year before Britain was due to leave the EU

But there was more. In Northern Ireland, product standards for goods, agriculture, the environment and electricity markets would continue to apply – and remain under the oversight of the European Court of Justice. Northern Ireland, in effect, would be inside the single market for goods.

Furthermore, if Great Britain were to be in the backstop customs union with the EU, Brussels would also demand “level playing field” provisions. This was how they would protect the single market. Britain would continue to obey existing EU law under a variety of headings. It would, for example, be obliged not to undercut the EU on environmental, labour, competition or state aid law.

This arrangement would apply unless and until the EU and UK agreed something else which met the needs of the border.

And what of plans for the future relationship? This was set out in the accompanying “political declaration”, a vague document summarising objectives for future talks. The two parties sought to: “create a free trade area, combining deep regulatory and customs cooperation, underpinned by provisions ensuring a level playing field for open and fair competition”.

The parties would also “build and improve on the single customs territory provided for in the Withdrawal Agreement which obviated the need for checks on rules of origin”.

This is a pledge with two meanings.

The British government still said it wanted Chequers – and this description of a “single customs territory” could be read as an undertaking to create a Chequers-style system whereby Britain outside the EU has a half-in, half-out customs relationship with Europe.

The British flag is raised before Theresa May arrives in Brussels

But the Commission did not agree to the document on those grounds. In their reading, it describes something close to a customs union. That is the reading that a great many British eurosceptics have made of it, too.

Disputes over the interpretation of the treaty would be resolved by a joint panel. But if a dispute relates to the interpretation of EU law, or whether the UK has complied with European Court of Justice judgments made before the end of transition, then the court will have the final say – something that is anathema to some Brexiters.

The final text also showed up the division within the government. Braverman points to Article 132 of the Withdrawal Agreement, which created the option of an extension to the implementation period. She, a Brexit minister in DExEU, had been told in September that the extension idea was being looked at “very, very tentatively” as a possible way of avoiding the need for a backstop if talks needed a little more time.

But this idea “wasn’t policy, didn’t have a cabinet mandate [and] definitely hadn’t been discussed by ministers in DExEU. Then, suddenly, the next we hear about it is the legal text in November”.

The final text made clear the implementation period could be extended by up to two years at the request of either party. “So there’s a big leap from what’s been announced publicly as a very tentative possibility to a legally binding text in a treaty,” Braverman says. “And I think that’s a great example of how cabinet and ministerial decision-making was completely bypassed.”

Raab resigned.

He did not like the differential treatment of Great Britain and Northern Ireland within the backstop – nor its potential to become a permanent arrangement.  “I cannot support an indefinite backstop arrangement, where the EU holds a veto over our ability to exit”, he wrote.

Braverman followed him out.

But Britain had a deal.

Theresa May came back to parliament with an agreement that delivered a Brexit.

For fishing and farming the agreement represented, for now, complete extrication from EU structures. Britain would be outside the Common Agricultural and Fishing Policies. A future government could change this but the decision would be in British hands.

Britain's fishing industry would be outside the EU Fisheries Policy under the Chequers proposals

Banking and services, too, would be outside the EU net. The UK would not have MEPs or an EU commissioner. It would not participate in EU policy-making. There would be no continued budget contribution. Immigration to the UK would be under UK control.

Right now, the UK remains committed to delivering Chequers – an entirely dead prospectus. The prime minister still has not chosen whether to be in a customs union or out, but her chosen text put Britain on rails leading to one and there is a customs union in the backstop.

The structure of the deal, however, was a political catastrophe. It worked for almost no MPs. Remainers thought the deal ceded control to the EU with nothing in return. Brexiters felt it was a betrayal.

A customs union would mean a very limited independent trade policy. This means there is little support from free-market Brexiters, who wanted to be able to engage in trade deals around the world. There is also a significant democratic problem – an EU-UK customs union would mean a big country will have an external trade policy largely devised outside its control.

Some Brexiters are exercised that there is no time limit on the backstop, nor any right to leave the backstop unilaterally. They fear it could become a permanent trap. But this deal also does not work for Labour MPs who do want a permanent customs union. They know this document is not intended to lead to that.

To make the backstop customs union work with no border on the island of Ireland, the UK has agreed to harmonise large swathes of regulation in Northern Ireland with the EU. And to make the customs union work UK-wide, Britain will need to align with the EU on a range of laws as well. Tories keen on deregulation did not like that.

The Dublin to Belfast motorway. Britain agreed that swathes of Northern Irish legislation would be harmonised with that of the EU

At the same time, Great Britain will not get the full benefit of alignment with the EU because it will be outside the single market for goods. This is also a deal which does nothing for the City. So MPs who support a super-close alignment to Europe so that Britain would enjoy frictionless trade with Europe – particularly in services – found themselves with nothing to vote for.

The all-UK customs union within the backstop was supposed to solve the “union” problem – to stop customs checks between Northern Ireland and Great Britain. But the agreement still makes Northern Ireland a separate place on regulation. East-west checks will be needed on products entering Northern Ireland from Britain. A problem for unionists.

If the deal were implemented and Britain were at risk of falling into the backstop, it is plausible that, at some point, a London government would opt to allow checks between Northern Ireland and Great Britain so that the backstop would only apply in Northern Ireland. It is quite unlikely that the DUP, the Northern Irish unionist hardliners propping up May’s government, will hold the balance of political power for ever. And the DUP knows it.

Simon Coveney, Ireland's deputy PM. Ireland does not want the UK to leave with No Deal so was willing to agree an extension of the Brexit deadline

May had no plan to persuade MPs. What she did have was a weapon that she had found to be devastatingly effective: a ticking clock. If MPs did not agree to it, the two-year Article 50 clock might run out – and the precipice of No Deal would beckon. She delayed the first so-called “meaningful vote” until mid-January. But when it was brought to parliament, she set records with the size of her defeat.

Some MPs did not believe that No Deal was a problem; the prime minister had kept telling them, after all, that No Deal would be better than a bad deal. Others believed that this was the moment when the EU would fold. Still others simply thought it was too lousy a deal to support. These are the dynamics that led to a crushing defeat for the government, by 432 votes to 202, on 16 January 2019. No prime minister has ever been beaten so badly. But she tried again.

On the second effort, on 12 March, it was another disaster – 391 votes to 242. At the third time of asking, on 29 March, it went down by 344 votes to 286. There have been micro-dramas and serials: Geoffrey Cox, the attorney general, briefly seemed poised to issue helpful legal advice on whether the UK could end the backstop unilaterally. But he did not: the fundamental problems besetting the deal remain.

The EU has moved in one regard: the Article 50 period has been extended, and the 29 March date to leave the EU sailed past. It may be extended again. Britain remains locked in political crisis and Ireland does not want a No Deal exit that – even temporarily – causes border problems. The extension was granted; it works for the EU.

MPs in the current parliament have shown no appetite for an exit without a negotiated settlement. So the UK may be held semi-voluntarily in this pen for the foreseeable future.

Theresa May asks for a 'short' extension of the deadline in Brussels. She was given until 31 October 2019

Meanwhile, the temperature of its political life is rising and rising. A crisis of diplomacy is now a crisis of democracy.

For now, though, the negotiation is done.

Theresa May used to say that Brexit means Brexit. No one knew what she meant.

Now we do.

Photographs by Getty Images, Alamy

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