May’s four options risk a bad-tempered Brexit

The failure to ink a deal with Brussels for “sufficient progress” in the Brexit talks earlier this week has left Theresa May in a deep, multidimensional political bind.

A badly-weakened Prime Minister must find a formula to satisfy the demands of her Democratic Unionist allies, the Irish government, the EU and the Brexiteers in her own party. So what are her options now?

Agree to regulatory alignment for all of the UK

One certain way to avoid a hard border between Northern Ireland and the Republic would be to agree that the UK will maintain deep “regulatory alignment” with Europe for all its constituent parts.

At a stroke, this would remove DUP objections that Northern Ireland was being treated differently from the rest of the UK and it would satisfy Dublin’s demand for regulatory convergence to avoid the need for a hard border. In search of a halfway house, No10 is now trying to argue that – as Mrs May noted in her Florence speech – the UK is seeking to remain partially aligned in some sectors, such as agriculture and electricity, that directly affect the Good Friday Agreement.

However, Europe does not buy this solution. Even allowing for the “unique” circumstances thrown up by the Agreement, EU diplomats involved in the talks have told The Daily Telegraph that Mrs May is being “delusional” if she thinks partial alignment of this kind can remove the need for a North-south border. To do that, the UK would need to remain in the customs union and large parts of the single market in all but name.

However, as leading Brexiteers have made clear, such a move would massively constrain Britain’s ability to conduct an independent trade policy after Brexit, which they consider to be the main upside of leaving the EU. It could leave open the option of doing deals on services, but these are notoriously difficult to do.

Confront the DUP and force them to compromise

Given that option one would dash the hopes of Brexiteers in her party and very likely force a leadership challenge, Mrs May could try to force the DUP to accept a compromise – at least for now.

To sweeten the deal, Mrs May could offer Arlene Foster, the DUP leader, more money, or perhaps even a pocket “veto” in the second phase of the talks if the DUP felt the Government had reneged on its central promise not to undermine Northern Ireland’s constitutional integrity.

Alternatively, Mrs May could simply try to call the DUP’S bluff, challenging it to accept the deal on offer or bring her down and open the door to a government led by Jeremy Corbyn – a man the Unionists consider to be an IRA sympathiser.

For Charles Grant, the head of the Centre for European Reform, this remains the likeliest option: “A fudge for now to get past the hurdle of this week, and then a deal in phase two that still creates a border, but a greatly reduced border – and probably means that Northern Ireland cannot benefit from trade deals with America.”

But as was clear yesterday, such special treatment risks other devolved assemblies – notably in Scotland – to demand similar treatment. Even allowing for the fact Northern Ireland already has a unique constitutional arrangements by dint of the Good Friday Agreement, this eventual “solution” would inevitably raise questions about the constitutional settlement in the UK, with UK regions themselves pushing for more “divergence” from what will be seen as English-imposed hard Brexit.

Re-open negotiations with the EU and Dublin

Alternatively, Mrs May could go back to Brussels and ask for a substantial renegotiation of the text rejected by the DUP earlier this week. If successful, this could bring her closer to the preferred British option, which is to fudge the border issue using technology and a zero-tariff trade deal.

Unfortunately, the odds of this being successful look close to zero. This row has been caused by Dublin’s absolute determination to stand its ground on the issue and – beyond some cosmetic tinkering – it shows no signs of backing down now.

“Ireland feels it has done its compromising already,” said one senior EU diplomat, noting that Europe was also “quite enjoying” the spectacle of all 27 members uniting to enable Dublin to force London to agree to its terms.

“It is amazing what happens when you stick together,” one EU negotiator observed, arguing that London was beginning to learn how hard life could be in isolation, and the EU would have no compunction in waiting Mrs May out.

No deal – go for a hard Brexit

The nuclear option: Mrs May could simply walk away, leaving Ireland and the EU to contemplate the necessity of imposing a border on the North, forcing them to come back with more accommodative terms.

This is the option posited by some hardline Brexiteers, but in reality it is far from clear Mrs May has the political strength in Westminster to force through such a radical step, which also would traduce Britain’s joint responsibility to uphold the Good Friday Agreement.

It would also risk backfiring by making the EU take an even harder line, leaving the UK to face the reality of a “bad-tempered” Brexit – which Mrs May has herself always been very clear she has every intention of avoiding.