Juliet Sa­muel:

Ir­rel­e­vant rows over the Che­quers pro­posal dis­tract from the real loom­ing cri­sis: the Ir­ish back­stop

The Daily Telegraph - - Front Page - JULIET SA­MUEL FOL­LOW Juliet Sa­muel on Twitter @Ci­tysamuel; READ MORE at tele­graph. co.uk/opin­ion

There is only one Brexit is­sue that will be re­solved, one way or an­other, by March next year, and for all the plot­ting, it’s not Che­quers. It’s North­ern Ire­land.

Per­haps the Brex­i­teers re­alise this, qui­etly. Their hun­dred-page white pa­per, a mooted al­ter­na­tive to Che­quers, is on ice, but the Euro­pean Re­search Group did re­lease one pol­icy pa­per this week on the thorny prob­lem of the Ir­ish bor­der. Whether the UK and EU can re­solve this ques­tion will de­ter­mine whether or not we are re­ally fac­ing the house price apoc­a­lypse fore­cast by Mark Car­ney, in­so­far as the Bank of Eng­land is ever cor­rect about any­thing.

The rea­son why North­ern Ire­land will mat­ter above all else this au­tumn is that it is the only out­stand­ing is­sue on which the UK will sign a legally bind­ing doc­u­ment be­fore March next year. Al­most all other mat­ters, ex­cept those on which Bri­tain has al­ready given up – like the money – will be re­solved later on, prob­a­bly af­ter Theresa May has stepped down.

It may well be ab­surd that the po­lit­i­cal re­la­tion­ship be­tween 60 mil­lion peo­ple over here and 550 mil­lion over there should be de­ter­mined by the dif­fi­cul­ties fac­ing 1.8 mil­lion in North­ern Ire­land, but that’s nei­ther here nor there. The EU has found North­ern Ire­land to be a very use­ful wedge and it in­tends to keep push­ing it.

Con­cil­ia­tory-sound­ing noises about Che­quers from Brus­sels in­di­cate only that the EU might be will­ing to give our Govern­ment some face-sav­ing po­lit­i­cal cover while chain­ing us tightly to its pre­ferred le­gal text. Nat­u­rally, I hope I am wrong about this.

In­so­far as Che­quers mat­ters, it is be­cause it con­tains a po­ten­tial al­ter­na­tive to the Ir­ish “back­stop”. It would see the UK avoid a hard bor­der by agree­ing to obey EU rules for goods and in­tro­duc­ing a whole new, rather com­pli­cated tax col­lec­tion scheme to avoid the need for cus­toms checks. This es­sen­tially splits the dif­fer­ence be­tween the EU and UK po­si­tions. It sur­ren­ders all UK sovereignty over goods reg­u­la­tions while also re­ly­ing on a new, untested ad­min­is­tra­tive sys­tem to solve the rest.

For all its sup­pos­edly kind words though, Brus­sels – and the gov­ern­ments that back it – has not budged. It is still try­ing to force the UK to choose be­tween keep­ing the whole coun­try in much of the sin­gle mar­ket and cus­toms union, or forc­ing North­ern Ire­land to stay in and sev­er­ing it from Bri­tain. In other words, Brus­sels says, there can be no full in­de­pen­dence from the EU for the whole of the UK. It is not an op­tion.

This can’t help but stir a rather bloody-minded feel­ing in the chest of most Bri­tons. And this is where the ne­go­ti­a­tions are cur­rently stalled and have been for months. Noth­ing has changed for al­most a year, ex­cept that time is grow­ing shorter.

The Brex­i­teers are of course right to point out the glar­ing hypocrisy of Michel Barnier’s po­si­tion. In front of the Brexit se­lect com­mit­tee, Mr Barnier was at pains to em­pha­sise how un­ob­tru­sive the checks be­tween Bri­tain and North­ern Ire­land would be if the UK agreed to sur­ren­der the prov­ince. The EU, he said, is ready to “sim­plify” the checks and use “tech­ni­cal means” to make them easy and seam­less. The Brex­i­teers ar­gue in re­sponse that such “sim­ple” checks might just as well be in­tro­duced in North­ern Ire­land and the Re­pub­lic to han­dle the cur­rent bor­der, rather than creat­ing a new bor­der down the Ir­ish Sea.

The pa­per they re­leased this week was, in fact, the ERG’S first se­ri­ous at­tempt to grap­ple with these is­sues (too lit­tle, too late, un­for­tu­nately). It ad­mits for the first time that sat­is­fy­ing EU con­cerns about the bor­der re­quires le­gal and tech­no­log­i­cal changes that have to be care­fully planned and could take some time to in­tro­duce. The EU, of course, ar­gues that it would be much eas­ier to carry out such checks dur­ing the ferry cross­ing from Ire­land to Bri­tain than to do so on an in­vis­i­ble land bor­der.

Both re­quire sig­nif­i­cant changes from the sta­tus quo, how­ever, and Brus­sels con­ve­niently ig­nores that its plan would break the Good Fri­day Agree­ment by shift­ing the bal­ance of sovereignty in North­ern Ire­land with­out hold­ing a vote in the prov­ince.

The Brex­i­teers’ prob­lem is that they have left it all too late and don’t have the num­bers to get their way. They are ca­pa­ble of trig­ger­ing a vote of no con­fi­dence in Mrs May among Tory MPS, but can­not pos­si­bly win it. Their only re­course would be to vote down the fi­nal deal, a highly risky move and one that the Prime Min­is­ter might head off by turn­ing the mat­ter into a par­lia­men­tary no-con­fi­dence vote. This means it would trig­ger a gen­eral elec­tion if she lost it – the stuff of night­mares for most Tories and the DUP.

The up­shot is that it is Mrs May and not any back­bench MPS, how­ever vo­ra­ciously they plot, who will de­cide how to han­dle the Brexit im­passe. She is not in an easy po­si­tion. Brex­i­teers will scoff at Mr Car­ney’s warn­ings and it’s true that the Bank of Eng­land has a rather patchy fore­cast­ing record. Some even boast that the sharp fall in house prices Mr Car­ney pre­dicts would do us good, but they have mis­un­der­stood. Bri­tain needs a fall in house prices driven by the sup­ply side – lots more houses be­ing built – not by a credit crunch in the mort­gage mar­ket.

Aside from that, the coun­try is not in the best of fi­nan­cial health. To bal­ance the na­tional books, we rely on a con­stant in­flow of for­eign cap­i­tal, to the tune of 4 per cent of GDP per year, a gar­gan­tuan amount in his­tor­i­cal terms.

We have seen that the EU is pre­pared to sac­ri­fice the eco­nomic in­ter­ests of whole na­tions for the sake of its le­gal or­der. If it thinks it can sweat the UK into obe­di­ence by re­fus­ing to co­op­er­ate af­ter March next year and trig­ger­ing a fi­nan­cial shock, it might well de­cide to take the pain that would cause on the con­ti­nent (and in Ire­land).

It may be that Bri­tain could do a messy deal at that point. Per­haps the Govern­ment could of­fer to pay up the full Brexit bill in re­turn for min­i­mal co­op­er­a­tion on avi­a­tion rights and such­like, to al­lay the fi­nan­cial tremors. But given how weak our Govern­ment is and how di­vided Par­lia­ment, it’s hard to see how no deal strength­ens the UK’S po­si­tion. It’s more likely to frac­ture an al­ready frag­ile po­lit­i­cal land­scape. And the main per­son who stands to gain from that is Jeremy Cor­byn.

Brus­sels says that there can be no full in­de­pen­dence from the EU for the whole of the UK. It is not an op­tion

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