The December 2020 deadline and the return of ‘no deal’

14 May 2020

In the fifth instalment in this series, Roger Liddle presents the risks associated with the UK government's 'no deal' strategy in the Brexit negotiations

Roger Liddle
Editorial credit: Alexandros Michailidis / Shutterstock.com

For the previous instalment in this series, please click here

This government’s ‘No deal’ policy was announced by Michael Gove in a Today programme interview shortly after the general election was agreed by the Opposition parties in a Commons vote, around the same time as Nigel Farage’s Brexit party announced its withdrawal of candidates from the contest in Conservative-held seats; conspiracy theorists may detect a linkage. It was then included in the Conservative manifesto (which matters in terms of moral pressure on Conservative MPs and in limiting the powers of the House of Lords by constitutional convention). The new policy is now legislated for in the 2020 EU Withdrawal Act which obtained Royal Assent at the end of January.

All this is despite the fact that the provisions of the October Withdrawal Agreement which Boris Johnson agreed with the EU still stand. It has been subsequently ratified as an international treaty by both European and Westminster parliaments with the provisions allowing for the extension of the transition period by two years by mutual agreement to remain unchanged. In the present Covid crisis, what adds urgency and drama to what is at stake is that Article 132 of the Treaty requires any request for an extension to be agreed by July 1st this year. For all the government’s domestic posturing, that Treaty provision still stands and there is nothing but a lack of political will for a government with a substantial majority in the House of Commons to change UK law in order to take advantage of it.

Yet instead of acknowledging this reality, the government has stepped up the bluster. To quote their Lordships’ Select Committee, “the Government has now indicated that if the broad outline of an agreement is not clear by June, it may move away from the negotiations and focus on domestic preparations for the end of the transition period”[1]. In other, plainer words, Britain would be back in the territory of preparing for “no deal”. The government have invented a new euphemism for this, dubbing it “an Australia style trading relationship with the EU”. Australia trades with the EU “on WTO terms”: the state of grace that Nigel Farage and other hard line Brexiteers have long espoused. There is apparently no difference between trade between regions some 11,000 miles apart and trade across the English Channel and Irish border, between nation states that are part of a single  continent which has spent more than half a century peacefully removing barriers to trade in order to create the wealthiest and most integrated single market in the world.

“No deal” is not perhaps as challenging a scenario as it would have been twelve months ago. The Withdrawal Agreement at least provides guarantees of rights for EU citizens living in Britain and UK citizens living on the Continent. There is also the point that Gavin Barwell made to great effect in the Lords debate. As Barwell put it “in terms of economic significance ……there is not a huge difference between the deal the government are seeking and no deal”.  The Johnson government has already signalled by seeking a Canada-style free trade agreement, that its negotiating objectives involve the “end of frictionless trade”. They now accept that the version of Brexit they espouse will inevitably involve new bureaucracy and new burdens of cost to UK importers and exporters: the only question for debate now is whether and how these burdens could be minimised by an ambitious FTA. The Brexiteers are to be congratulated for their honesty in now accepting these realities. We are a world away from the airy optimism of David Davis’s “Canada plus plus” rhetoric when he was Brexit Secretary. The question is whether because of disputes over ‘level playing field’ issues (see below), a ‘Canada minus minus’ outcome can be avoided.

The Barwell judgement assumes of course that business would have time to prepare for “no deal”. In the Covid crisis emergency of 2020, this may be an optimistic assumption. The more business is unprepared for the new trading arrangements, the greater the likelihood of massive disruption at the ports due to queues of lorries having their paperwork checked. That disruption could of course be mitigated by promises of ‘goodwill on both sides’: in other words, not doing the checks with the thoroughness that in theory UK and EU law require. Unfortunately, “goodwill” on the part of our former EU partners cannot be taken for granted.  One of the biggest risks here is that, if negotiations become difficult or even breakdown, Brexiteers will seek to ramp up the pressure not to adhere to the financial settlement agreed in the Withdrawal Treaty. That would poison the EU-UK relationship for many years to come.

[1] Para 27 HL Paper 32

In the next instalment in this series, available here, Roger Liddle reviews the implications of the new Northern Ireland protocol.