Brexit’s tangled webs

Parliament gives protection from a no-deal exit, but little else

Athird postponement and the spectacle of a prime minister declining to sign a letter requesting a legally binding deferment and sending Brussels a separate signed letter explaining why an extension was bad for both the UK and the European Union (EU), underline the increasingly tangled web that is the Brexit process. The British Parliament, meeting on a Saturday (October 19) for the first time in 37 years, has punctured hopes of settling the vexed issue of the terms of Britain’s withdrawal from the EU. After the financial markets’ hopeful euphoria last week, British MPS voted 322 to 306 to thwart the deal that Prime Minister Boris Johnson had negotiated with the EU. Saturday’s vote, moved by an expelled Tory minister Oliver Letwin, stipulated that Parliament would withhold approval of the PM’S deal until the Bill for implementing Brexit had been passed. The Letwin amendment sought to forestall the possibility of an approval of Mr Johnson’s deal being followed by a failure to pass the Withdrawal Bill, which could have provided the PM with an opportunity to fulfil his openly stated wish to pull the UK out of Europe without a deal. Although the Benn Act of September mandated against that possibility, it says much for Parliament’s lack of trust in Mr Johnson that it thought fit to pass more legislation to ensure this does not occur.

A good part of that distrust concerns the fine print of the deal Mr Johnson, an unelected PM heading a minority government, negotiated. As with his predecessor Theresa May’s twice-rejected deal, it was the issue of a customs border between Northern Ireland and the Republic of Ireland (an EU member-state) — the only land border between the UK and EU — that proved the sticking-point. Free access of people and goods though this border has been crucial in maintaining the peace of the Good Friday Agreement of 1998, which ended the Irish civil war. Ms May’s withdrawal plan involved keeping the UK in the EU — with guarantees on citizens’ rights, fishing rights, compensatory payments, and so on — while the new trade relationship was being discussed. The problem was the “Irish backstop”, which would have continued the arrangement if the new trade agreement was not finalised by the 2020 deadline. Since the likelihood of a new trade deal being in place by then was low, this meant the UK would have to stay in the EU without any say on rules and regulations after 2020. Mr Johnson’s deal sought to address this post-2020 anomaly by the device of keeping Northern Ireland de jure in the UK but de facto in the EU (a position Ms May had declined). A customs border would be drawn in the Irish Sea instead. This arrangement involved the UK collecting customs for the EU and requiring suppliers between the UK and Northern Ireland filling in fiendishly complex VAT (value-added tax) documents to ensure that goods shipped between the two territories would not be smuggled into the Irish Republic. Analysis suggests that the deal would have condemned Irish businesses (especially small ones) to the kind of procedural problems Indian businesses faced after the introduction of GST (goods and services tax), with VAT refunds contingent on companies providing proof that the goods shipped for domestic markets had not been exported, and so on. This week is expected to see the government attempt another vote on the deal. It is possible to confidently predict more turmoil.