Has PM delivered on her promise of UK taking back control?
As politicians and the public pore over Theresa May’s long-awaited deal, does the Withdrawal Agreement match assurances she gave?
‘As many Brexiteers feared, this “backstop” will remain in place ‘unless and until they are superseded, in whole or in part, by a subsequent agreement’’
IN THE course of her negotiations, the Prime Minister has made a series of assertions and promises about the Brexit deal.
In speeches delivered over the past year-and-a-half, she repeatedly vowed to “take back control of our borders, laws and money”.
Here we measure the deal published last night against Mrs May’s promises.
Payments to EU What May promised: an end to “vast annual payments” in her Tory conference speech in October 2018.
What she delivered: Britain will honour all of its commitments to the current EU budget, meaning that member states will not be left to fill the gaps.
The UK will pay a divorce settlement of approximately £39billion and a further £14billion to cover extra liabilities such as outstanding loan payments. The National Audit Office has said in some scenarios the bill could reach more than £50billion by the time UK commitments are fully exhausted. This bill covers the UK until the transition period expires on Dec 31 2020. However, the deal says the UK and EU have the right to jointly extend the transition period, in which case it would need to continue making payments to the EU for as long as the transition continues. To extend the status quo transition, as Philip Hammond has suggested, could require a net contribution of up to €15billion (£13billion) a year more than at present, since the UK would lose its “Thatcher” rebate.
These payments would sink if the UK entered a lesser relationship. For guidance, the Bruegel Foundation estimates a net “Norway” level of payment at €4.5billion (£3.9billion) down to €500million (£434million) for a Swiss-style relationship.
Customs and trade What May promised: A customs “partnership” – but not a customs union – allowing UK-EU trade that is “as frictionless as possible,” Mrs May said in her Mansion House speech on March 2 2018.
What May delivered: A Single Customs Territory, which does not allow the UK to set its own tariffs on goods. Setting tariff rates is the key leverage in trade negotiations.
Applying a common external tariff is a key difference between a customs union and a free trade area. This customs territory shares an external tariff. Sharing this tariff leaves the UK closely integrated in terms of trade policy with the EU and significantly limits its ability to have an independent trade policy.
The UK will also be covered by the EU’S trade defence regime – which protects against external states dumping goods on the market and harming domestic production.
The UK and EU have committed to cooperate when it comes to the umpire of global trade – the World Trade Organisation. This might have significant consequences for joint UK-EU responses to US trade policy.
It does, however avoid UK companies facing complex rules of origin for their goods whereby set amounts of a product have to be sourced from certain areas.
Turkey is the only non-eu member state with an EU customs union. There is an inbuilt asymmetry to the agreement that allows Turkey to negotiate trade deals with third countries only after the EU has already signed deals with them. These countries also are not obligated to enter negotiations with Turkey after closing an EU deal.
Irish border What May promised: An open border, with no new customs infrastructure on the 310-mile land border and no trade barriers between Northern Ireland and the rest of the UK, Mrs May said in her Mansion House speech.
What May delivered: The UK has agreed to a “backstop” clause that would see Northern Ireland remain in a customs union, applying the full EU customs code and the EU single market rules for goods. Great Britain will remain in the same all-uk customs union, but will not follow single market rules, which will create frictions between “Dover and Calais”. But together, Great Britain and Northern Ireland will remain in a “single customs territory” with the EU, as set out in Article 6.
As many Brexiteers feared, this “backstop” state of affairs will remain in place “unless and until they are superseded, in whole or in part, by a subsequent agreement”, according to Article 1 of the Irish protocol.
However, this is balanced with an assertion that the arrangements are “intended to apply only temporarily” and a commitment that both sides “shall use their best endeavours” to reach a “subsequent agreement”.
The protocol then sets out three options to be considered in July 2020 as the end of the transition approaches – either conclude a deal, “extend” the transition period (with payments to be agreed) or trigger the Irish backstop.
The entire arrangement is managed by “a joint consultative working group” and, under Article 20, the UK can “notify” the EU if it believes the backstop is no longer necessary, but cannot unilaterally pull out of the deal.
“Within six months of such a notification, the joint committee shall meet at ministerial level to consider the notification,” but the article goes on to say that the backstop shall cease to apply if the EU and UK “decide jointly ... the protocol shall cease to apply, in whole or in part.”
EU law and the ECJ What May promised: The end of European Court of Justice rule in the UK, with laws drawn up “not in Luxembourg but in courts across this country”. “We will not have truly left the EU if we are not in control of our own laws,” Mrs May said in her Lancaster House speech on Jan 17 2017.
What May delivered: The EU pushed hard for its European Court of Justice to be the ultimate arbiter for all aspects of the Withdrawal Agreement, but Mrs May rejected this. Instead, the UK and EU built an unprecedented legal model, which is based on the bloc’s Association Agreement with Ukraine but with key differences.
The model ensures that neither the UK’S Supreme Court nor the European Court of Justice has the final say in legal disputes over the interpretation of the agreement.
This is achieved via an independent arbitration panel. However, disputes involving matters of EU law must be referred to the ECJ. In certain cases, such as those involving EU citizens’ rights, the UK must also take “due regard” of ECJ case law.
Transition What May promised: A transition period of approximately two years to allow a smooth exit, which can be extended if more time is needed to secure a trade deal, Mrs May said in her Florence speech on Sept 22 2017.
What May delivered: After March 2019, the UK will enter a transition period due to end around December 2020 during which it remains part of the EU’S single market and customs union.
In return, the UK must follow EU rules such as free movement and send payments to Brussels. It must accept new EU rules without having a say in them. Britain will no longer attend meetings of the European Council and will lose its 73 MEPS who represent UK interests in the European parliament.
‘The detail is due to one of the EU’S biggest concerns throughout Brexit: that the UK might suddenly have a bonfire of regulations’
Critics such as Jacob Rees-mogg, a leading Brexiter, say this will render the country a “vassal state” that is effectively under EU rule for as long as the transition period lasts.
In December 2020, Britain will have the option of extending the transition period to allow more time to negotiate the future UK-EU trade deal, as well as ensure there is no friction on the Irish border.
But this would require yet more payments to the European budget and ongoing “rule-taker” status.
Citizens’ rights What May promised: An end to free movement and legal guarantees on the rights of EU citizens living in the UK as well as British citizens on the continent
What May delivered: The 3million or so EU nationals living in Britain will be allowed to claim “settled status” in the UK, retaining almost all the rights they had before Brexit. They will have to register with the Home Office, which has pledged to keep official blocks to a minimum.
EU nationals arriving in the UK up until the end of the transition period will be able to claim “settled status” if they reside for a further five years, locking in free movement rights until the end of 2020, or longer if transition is extended. They will retain most family reunion rights and will keep their “settled status” for up to five years, if they move away from the UK.
The UK has agreed a special governance mechanism for this deal which will require UK cases to be referred to the European Court of Justice for eight years after the end of the UK’S transition.
Competition What May promised: Regulatory standards as high as those set by the EU to allow a “level playing field”.
What she delivered: A legal commitment to apply EU regulatory standards in the UK to avoid undercutting the EU market.
These are wide ranging. It includes a commitment to ensure “good governance” on tax, and on state aid rules so industries cannot be given a leg up through government backing. It also stops the UK from going back on environmental standards.
There is also a crucial piece of wording that says these standards can be modified at a future date, by way of a joint committee.
What exactly a level playing field means varies sector by sector. The detail is due to one of the EU’S biggest concerns throughout Brexit: that the UK might suddenly have a bonfire of regulations in order to seize competitive advantage.
There is unlikely to be a data Armageddon, which was a major fear for the technology and finance sectors.
EU law is set to continue to be applied to UK data until an agreement is reached on whether or not UK data standards will be good enough to satisfy Brussels.
Fishing What May promised: Britain will become an independent coastal state after Brexit. “The UK will regain control over our domestic fisheries management rules and access to our waters,” she said at Mansion House.
What May delivered: Britain will remain in the Common Fisheries Policy (CFP) during the transition period, with the EU setting and enforcing quota limits on fish.
The fishing industry is divided as to whether this will prove to be a sensible decision.
The NFFO, the UK’S fishing lobby, said last night that staying in the CFP during transition would prevent a sudden shock to the industry.
It added that the divorce settlement was “very much aligned with what the UK fishing industry have pressed for.”
But grassroots campaign Fishing for Leave fears the EU will exploit the transition period to impose yet more punitive rules and quota limits on the UK fishing industry.
During the transition period, the UK will be allowed to attend consultations and negotiations on fishing and make “comments” but cannot directly influence policy.
EU member states had requested that their rights to fish in UK waters were outlined in the withdrawal agreement.
But the withdrawal agreement fishing rights will be negotiated as part of a separate agreement that needs to be concluded by July 2020.