Rounds up the latest from the Brexit negotiations
Where are Brexit negotiations being held? The obvious answer is Brussels, of course – but you’d be wrong.
Talks between the UK and EU have barely crept forward in the past few weeks, because the real negotiations have been going on in London, between members of Theresa May’s own cabinet. So far, they’re not going well.
The government went into the second phase of Brexit talks with what looked like three clear options on future customs arrangements, which will have a big role to play in post-brexit trade as well as what happens along the Irish border.
Starting from the bottom of the list, the ‘backstop’ if no other solution can be found is for Northern Ireland to remain aligned with the Republic – a proposal that is for a variety of reasons unacceptable to the DUP, the SNP, the Scottish Conservatives and Brexiteers.
The other two options are of the government’s own design. The first, dubbed ‘Max Fac’ for maximum facilitation, suggested that technological solutions could be found to carry out the vast majority of customs checks in an automated fashion, and keep trade flowing.
However, while fans of Max Fac argue it would reduce friction for goods to a minimum, it wouldn’t be “frictionless”. The need for infrastructure of some kind at the Irish border is also a sticking point.
The second option, which was thought to be Theresa May’s preferred solution, is for a ‘customs partnership’. This never-before-attempted proposal would effectively see the UK have one foot inside and one foot outside the EU customs union. Goods from third countries would be tracked within the UK, and EU tariffs applied by British customs authorities so that the borders at the Channel and in Ireland remained open.
Just last month, Downing Street told journalists it believed this option was “intellectually perfect”, but others question whether it could ever be delivered. When the customs partnership was first put on paper last year, the EU dismissed it as “magical thinking”. But the greater concern in Number 10 is the criticism this week, describing the plan as “untried” and “crazy”. That came from Boris Johnson.
Matters came to a head at a meeting of the so-called Brexit ‘war cabinet’ - a subcommittee of senior ministers who act as the first filter for Brexit policy before it even gets to the full Cabinet. It took place two days after the resignation of staunch Remainer Amber Rudd as Home Secretary, and her replacement by Brexit convert Sajid Javid, upsetting what had been a delicate balance that gave the Prime Minister some security.
According to reports, Javid torpedoed the customs partnership plan, speaking up for Brexiteers who believe it would all but keep the UK in the EU. Debate was heated, with claims that the Business Secretary Greg Clark – who has been giving out assurances left and right to exporting firms that they will face no customs costs or barriers – was close to tears.
Following the showdown with her own ministers, Mrs May was forced to ask Whitehall officials to go back to the drawing board, with just 10 months until the UK leaves the EU. Last weekend, there was something of a fightback by the government - Mr Clark was sent onto the Andrew Marr Show to warn that failure to secure a good customs relationship would cost thousands of jobs.
Most observers agree that neither Max Fac or a customs partnership – or some combination of the two – will be ready to implement by the end of the post-brexit transition in December 2020. Nor has the EU shown enthusiasm for either plan, although seeing how politically dangerous things have become for Mrs May at home, figures like Leo Varadkar have tried to shore her up by sounding more willing to consider a customs partnership.
The next round of negotiations (in Brussels) is at the end of May, and in June the Prime Minister has to go to a European leaders’ summit with some kind of proposal. If the real talks are still going on in the Cabinet room, it won’t be a good sign.