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