The key pitfalls on the road to Brexit- Guardian

The key pitfalls on the road to Brexit

The road to Brexit was never going to be easy. Here’s a guide to the trickiest obstacles...

Toby Helm

Wed 14 Feb 2018 22.05 AEDT Last modified on Wed 14 Feb 2018 22.12 AEDT

The committee stage of the European Union withdrawal bill begins in the House of Lords later this month. Ten days have been allocated for what will be fiery debates. Cross-party groups of peers will vote on a range of amendments that could torpedo the prime minister’s plans for Brexit.

Some pro-EU Tories will back amendments saying the UK should stay in the single market and customs union for good. Other amendments would delete the commitment to a firm date for Brexit (currently set as 29 March 2019).

There will also be calls for a second referendum on the final deal. The most likely trouble will be over the customs union. If the Lords pass any of these amendments, the Commons, where there is also a majority for a soft Brexit, may follow suit and May’s authority will be seriously damaged.

A defeat for May, which sees parliament commit to permanent membership of the customs union, is much more likely if Labour officially changes tack and backs the policy. Currently, Labour supports staying in both the customs union and single market during the transition period only.

Much of Jeremy Corbyn’s shadow cabinet, including shadow Brexit secretary Sir Keir Starmer, want him to back permanent customs union membership, not least to solve border issues in Northern Ireland. Corbyn has called a special shadow cabinet “away day” for later this month to decide. If he shifts on the customs union, Labour MPs and pro-EU Tories will join the SNP and Lib Dems in votes in the Commons in April or May. Defeat on the customs union will show May does not have parliament’s backing and cannot deliver hard Brexit.

A crunch summit of the 28 EU leaders is supposed to sign off on a final arrangement on a two-year transition, or implementation period, after Britain leaves in 2019. The other 27 EU leaders are also due to agree a mandate for negotiating the post-transition relationship between the UK and the EU.

But there is a growing belief in Brussels and London that neither may be achieved, delaying the entire Brexit timetable. May wants a transition in which trade between the UK and EU carries on as it does now, until 2021, with the UK continuing to accept EU rules and paying for market access.

Rightwing Tory MPs, led by Jacob Rees-Mogg, below, are throwing in late objections, wanting assurances that there will be no new Brussels laws in the transition period that could damage the UK. Michel Barnier, the EU chief negotiator, is resisting that idea.

Business leaders have set the end of March as the deadline by which the government must be clear on the transition arrangements, warning that if it fails to deliver clarity, companies will activate contingency plans.

The British Chambers of Commerce is increasingly vocal, as members despair over cabinet divisions. In a letter to May last week, director general Adam Marshall said: “Directly affected companies are poised to activate contingency plans. Many others, worryingly, have simply disengaged.”

Japan’s ambassador to the United Kingdom, Koji Tsuruoka, said after a meeting in Downing Street last week: “If there is no profitability of continuing operations in the UK … then no private company can continue operations.”

Toyota, Nissan, Honda? If they left, the impact on jobs would be devastating.

The Conservatives are expected to be routed in London, and other big Remain-supporting cities, at local elections in May. Voting will be taking place against a background of the key votes in both houses of parliament on Brexit bills.

Already, Tory MPs are warning that unless the PM has asserted greater authority by 3 May and shown she is winning, then the “men in grey suits” could be dispatched to No 10 to call for her to go, or enough Tory MPs will call for a confidence vote, if and when bad results come in.

Boris Johnson and Michael Gove are already said to be thinking about what to do if there is a May meltdown. A former Tory cabinet minister said recently that he feared a wipeout in big cities, adding: “MPs think in two ways: what can I do to save my seat, and what’s in it for me? People will begin to manoeuvre over the leadership. There will be a degree of panic.”

Which deal?

Summer

By the summer, negotiations must be well underway on the long-term relationship between the EU and the UK. Relationships on items ranging from agriculture to the environment, security and drugs licensing, will have to be recast. The UK must make up its mind what it wants.

A relationship like Canada’s, which excludes services? Or like Norway’s, effectively still in the single market but outside the EU? There is no clarity beyond May’s call for a “deep and special partnership”. She wants “frictionless trade” with the EU but has no clear plan on how to achieve that.

European officials are tearing their hair out. The Irish government will want to see firm proposals on how the UK intends to avoid a return to a hard border between Northern Ireland and the Republic, if it ends up outside the customs union. If Dublin is not satisfied, it could scupper any deal.

Brexit: the impossible job? A guide to the roadblocks facing the PM

European leaders have to agree the shape of any deal and aim to do so by an October summit. To get agreement, they must agree by what is called a “stong majority”. Unanimity is not required - but, by that stage, consensus should be emerging. The deal also has to go to the European Parliament where it has to be approved by a simple majority of MEPs. If any large bloc of member states is unhappy – for example, if MEPs from central and eastern European states and other countries fear the implications of the deal for movement of workers – they could block it.

Under the Article 50 agreement, the deal does not need to be ratified by all individual member states, as a new Treaty does.

Watch out for the Irish, though, as if the package is not to Dublin’s liking, it could persuade other countries to stand in its way in the European Council.

MPs decide

By December

MPs will be able to vote on any final deal once it has been signed off by EU heads of government. But some EU leaders and UK ministers now think that all that will be achieved will be “heads of agreement” that fail to define the future relationship in detail.

This would mean the talking has to go on into the transition, when the focus should be on new trade deals. If a skeleton deal is put to the vote at Westminster, it may well not meet with the approval of either house. If a vote were lost on the deal – rejected as either damaging or too limited, or not good for jobs – May would be gone.

What then? Would the EU agree to delay Brexit day? The Institute of Government says: “It is unlikely a parliamentary No vote could stop Brexit altogether. For this to happen, the UK would need to attempt to revoke its article 50 notification.” All bets would be off.