Although fraught with obstacles, a Brexit Deal is still on the cards

Last week’s rejection of May’s Chequers plan was widely viewed as rendering ‘no deal’ more likely, but that’s not necessarily the case, argues Oliver Patel, Research Associate at the UCL European Institute.

Theresa May’s Chequers plan was emphatically rejected by the EU last week. This was predictable, given that it violates the EU’s principal red line: preserving the integrity of the single market. May’s response was resolute, claiming that the UK would not change its approach and that it was down to the EU to break the impasse.

Although these events are widely viewed as rendering ‘no deal’ more likely, this is not necessarily the case. What is often poorly grasped is that there only needs to be a deal on withdrawal issues before Brexit day. A subsequent deal on the future relationship, covering issues like trade and security, will not be finalised until long after Brexit.

The withdrawal deal has two components: the withdrawal agreement and the political declaration on the future relationship. The withdrawal agreement will be a legally binding international treaty, whereas the political declaration will not. The vast majority of the withdrawal agreement has already been agreed (80% according to Michel Barnier). For a deal to be reached, the remaining 20% needs to be finalised, as well the text of the political declaration.

What needs to be done in the negotiations?

The Irish border remains the key stumbling block in wrapping up the withdrawal agreement. Both sides agree that there must be a backstop, which is a legal guarantee ensuring that there is no hard border in Ireland in any circumstance. Although they reject each other’s proposals for the backstop, May indicated that the UK will present new proposals imminently. The backstop issue has long been the most important factor in determining whether there is a Brexit deal, and it can’t be fudged any longer.

The other pillar of the Brexit deal, the political declaration, is less tricky. Fortunately for May, the EU doesn’t have to agree with the Chequers proposals for a deal to be struck, which is why the Salzburg Summit didn’t necessarily render no deal more likely. The Chequers proposals concern the future relationship, and because the political declaration on that future relationship will not be legally binding, it can be vague and aspirational. It could contain fluffy language on the importance of pursuing a close economic relationship, whilst in reality fudging the difficult decisions to the post-Brexit transitional period, when the future relationship would actually be negotiated. So, if the UK and the EU can reach agreement on the Irish border backstop, there will almost certainly be a deal.

Will the deal be approved by parliament?

If there is a deal, what happens next is down to the UK parliament, which will vote on it. Labour will vote to reject any deal which Theresa May brings back, as this is their clearest route to power. Assuming that the majority of Labour MPs, as well as the SNP, Lib Dems and others all vote against the deal, what really matters is how the Conservative and DUP MPs vote. As May’s minority government has a working majority of just thirteen, it doesn’t take much of a rebellion to scupper a vote. Here are the potential scenarios:

a. The deal is rejected because sufficient Brexit-supporting Conservative and DUP MPs vote against it

Any Irish border backstop which the EU accepts may be unpalatable to many Conservatives. It will either represent a separation of Northern Ireland from the UK’s customs territory or closely align the entire UK with the EU Customs Union and Single Market. The DUP’s ten MPs would also reject a backstop which significantly separated Northern Ireland from the rest of the UK. Also, if the political declaration indicates a soft Brexit, with the UK as a rule-taker, dozens of Conservatives have said they would vote against it.

b. The deal is rejected because sufficient Remain-supporting Conservative MPs vote against it

They may reject the deal if the political declaration is too vague, being reluctant to sanction Brexit without sufficient guarantees about what the future holds. They may also reject the deal if the political declaration implies a harder form of Brexit than the Chequers proposals. A small number maybe even reject it to try and force a second referendum.

c. The deal is approved because the vast majority of Conservative and DUP MPs vote in favour of it, with very few rebelling

If the political declaration is vague, this will probably be good enough for the Brexit-supporting MPs. Also, if the backstop implies something like a UK-EU Customs Union, the DUP could probably accept it, and perhaps even Brexit-supporting Conservatives, gambling that it would never be implemented.

A vague political declaration and a comprehensive withdrawal agreement may also be good enough for most Remain-supporting Conservatives, as well as many Conservative MPs with less ideological views on Brexit, who would be reluctant to rebel and risk bringing down their government.

What should Theresa May do?

In the end, the EU won’t budge. They know that no deal is not a credible option for the UK. If she wants a deal, May will have to compromise on the Irish border backstop. The best she can hope for is that EU leaders allow Brexit to proceed with a vague political declaration, thereby enabling details on the future relationship to be fudged.

Whichever way May turns, trouble lies ahead. At the forefront of her mind will be which side of her Party is more likely to take the risks associated with rejecting the deal. The answer to this question lies with the fact that the Brexiteers have the most to lose. If they reject the deal, they could risk the whole endeavour, as a general election or second referendum could follow. As such, calling the Brexiteers’ bluff and appeasing the Remain-supporters may be the smart move. This could be done by accepting a backstop which kept the UK in a customs union with the EU, and closely aligned with some EU regulations. This would probably be accepted by Conservative Remainers and moderates, as well as the DUP. This backstop (and by extension withdrawal agreement), accompanied with a vague political declaration, may just be enough. Although the Brexiteers have the numbers to reject the deal, they might not have the nerve.

Oliver Patel is a Research Associate at the UCL European Institute.

This article was originally published by the Huff Post and is reposted with permission.

Note: The views expressed in this post are those of the author, and not of the UCL European Institute, nor of UCL.

Photo by Number 10 on Flickr.

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