Saturday 12 October 2019

THE NEW DEAL LOOKS LIKE THE OLD DEAL IN DISGUISE

The events of last week were not quite as spontaneous as you might have thought. This article in the Irish Times gives the inside story.  Even while Johnson was making his speech to conference on October 2nd outlining his new proposals (ones he probably knew would never be accepted) and blustering about leaving on October 31st come what may, Downing Street were privately letting it be known in Dublin that Britain definitely wanted a deal.

I have always thought no deal was unthinkable and so it appears it is - even for Johnson.

However, if he thought all the sabre rattling and threats were going to work he was mistaken. The EU have not budged one iota and eventually, as time ticked away, Johnson has had to make all the concessions - and this will probably continue over the weekend. Our negotiators will be giving away the shop in Brussels in order to get a deal.  He is falling back onto the EU's original idea of a NI only backstop. Sky News have the bones of the plan HERE

NI will effectively be in both the EU customs union AND a UK customs union. It will be like the overlap in a Venn diagram. Goods coming from non GB countries would be subject to EU tariffs. Goods from GB would be subject to UK tariffs but ONLY if intended for NI consumers or businesses. The full EU tariff is paid initially and the difference is claimed back later. It will create a mountain of paperwork in audit trails and won't be popular with business in the province but this is essentially what is being suggested.

Johnson is carefully following in Theresa May's footsteps and repeating all her mistakes. He is now negotiating a deal without bothering to get an agreed mandate at home beforehand, which then risks being rejected when it returns to parliament.  Shouting that no deal is better than a bad deal has now stopped. The only difference is that he did it louder and more aggressively but it still didn't work.

The plan essentially creates an internal border to trade between NI and GB. Something Theresa May, in May 2018 said:

“The draft legal text the Commission have published would, if implemented, undermine the UK common market and threaten the constitutional integrity of the UK by creating a customs and regulatory border down the Irish Sea, and no UK Prime Minster could ever agree to it. I will be making it crystal clear to [European Commission] President Juncker and others that we will never do so.”

She obviously does not know Boris Johnson who far from having it forced on him by the EU is now negotiating precisely that.  He will dress it up very differently of course.  It will be interesting to see if she votes for the plan.

I understand from someone's tweet that Barclay did not take any firm or finalised proposals to his meeting with Barnier, which does not bode well for Johnson.  We are good at putting hare-brained ideas forward but less keen on signing up to the hard, legal reality as interpreted by the EU Commission. Questions of governance and dynamic alignment will come up and cause Johnson problems. We will have to see what transpires but I think this might break the deal.

Personally, I wouldn't trust Johnson to negotiate anything lasting.

Barnier got the approval of the EU27 to negotiate and he would not have done so if he thought any new agreement would be very far from the old one. He told EU ambassadors the UK had accepted there cannot be a customs border on the island of Ireland. So much for the "abundant technical fixes" - there isn't even one.

It is little different to what May rejected a year ago and looks like a bit of sleight of hand to trick the DUP and the Spartans, but who knows it might work.

What is clear is that the UK has done most if not all of the conceding. Barnier reportedly told the EU27 that Britain has accepted that it cannot erect customs posts on land. The EU say they are negotiating an agreement that "fully respects their principles". 

Way back at the end of July, our new prime minister said the backstop had to go. He also implied he wouldn't negotiate anything unless they agreed to remove the backstop. The implication was that he would wait for EU leaders to come to him. We know how that worked out don't we?  He has scuttled round Europe sounding tough but acting weak. If he does end up with a slightly rejigged May's deal, she will be rather upset. I saw her writing notes as he made a statement in the House last week and she will be first to point out any hypocrisy.

How will the DUP react?  Yesterday afternoon Arlene Foster released a statement that included this:

"Anything that traps Northern Ireland in the European Union, whether single market or customs union, as the rest of the UK leaves will not have our support."

I rather suspect Ms Foster will spot that what is being negotiated is almost exactly the same as the one rejected by them and May in 2018 - to rousing cheers from her Unionist MPs and the Spartans.  Much will then depend on the exit mechanism so that they don't think it 'traps' them in the EU. The NI Secretary has already ruled out one community being able to veto the deal so this will not please the DUP.

Another problem for Johnson is the reaction of Scotland and the SNP who may well say if it's good enough for NI then it's good enough for Scotland. If the principle of an internal border in the UK is conceded once, it can be conceded again. A precedent will have been set and Scotland could remain in the single market and the customs union. The problems would be slightly different over land of course but they will argue for it I'm sure.

As for Farage, he has already tweeted:
And this one just before:
So, Johnson will have a job selling the plan to the DUP, the Spartans, The Tory party, The Brexit Party and parliament and the country as a whole.  Men like Andrew Bridgen, Steve Baker and Mark Francois are going to look might silly trooping through either lobby. If they support him they will look like hypocrites and if not, they will look like fools for putting him in No 10.

All we need is another referendum where Johnson will have something solid and tangible to defend and compare with the status quo instead of painting fantasy unicorns on a blank canvas - or the side of a bus. The man who does not do details will have to know every jot and tittle. It will work in our favour.

And on another important issue, industry has noticed Johnson's direction of travel away from regulatory alignment with the EU and are very unhappy about it. A number of industry bodies including ones from aviation, chemicals, automotive, food and pharmaceuticals have written to Michael Gove and Stephen Barclay about it (HERE).  Johnson has railed against fictitious EU regulations for years and thinks industry is behind him. They are not and never were. Harmonisation of rules and regulations increases the size of the market, makes for fair competition and lowers costs. It is a desirable thing. These industries are worried they will be excluded from the standards making bodies.

The government is also apparently seeking to remove any references in the political declaration on level playing field issues such as environmental, employment, social and some tax policies which will make it more difficult to get opposition Labour MPs on board as well as making a future deep UK-EU trade deal virtually impossible.

Will Johnson succeed and take us out at the end of October?  The odds are still against him.