Brexit Endgame. What Theresa May would like to emerge (eventually) from the Salzburg summit
The Salzburg summit that occurs today is a curious affair on a number of fronts. Although it has largely been billed in the UK media as a meeting that has been convened predominantly to discuss Brexit, for many of those present the other subject on the agenda – migration and what the EU will do to reduce the external human pressure on its borders – is considerably more important.
Despite this, but again in a rather coded fashion, the gathering is likely to prove significant in the political choreography which will occur over the next two months as the EU-27 and the UK seek to find the most mutually acceptable means of completing a package. This will include the final legal text on the UK withdrawal from the EU, a similarly binding document which details how the transition period until 31 December 2020 will operate in practice and the, at this point political rather than legal, ‘future framework’ agreement, which should set out, albeit at a high level, how the EU and UK will interact after 1 January 2021 passes. This enterprise is consuming the entire energy of the UK Government.
So, what is it that Mrs May would like to feel that she has secured by the weekend, even if, as it will be, it is more in the form of private assurances and informal hints than in the official communique?
Resolving the Irish border backstop
After a sizeable stretch of virtual deadlock, there does appear to be the dialogue required to pull off a compromise that will satisfy all parties. The initial EU stance was that Northern Ireland would, if all else failed in the discussion over the end state, have to stay in the single market and the customs union to avoid a ‘hard border’ between the north and south of Ireland.
As this implied a de facto internal border between the rest of the United Kingdom and the Province, it was totally unacceptable to London (not least because it would be an affront to the DUP whose support is so fundamental for the minority Conservative administration). The UK hence responded that the better backstop would be if the whole of the UK remained in the customs union in the (unlikely) event that there was no settlement between it and the EU-27, which rendered a hard border as unnecessary. As the EU had no more enthusiasm for the UK idea that the UK had for the EU plan, an impasse set it.
This looks likely to be broken shortly. Michel Barnier and Dominic Raab have each sought to embrace a means of ‘de-dramatising’ the border question, moving it from the red-hot matter of sovereignty to more pedestrian matters of practicality. Talks in recent weeks have focused on what assurances the UK can offer that goods which the EU-27 does not want to enter its territory (almost all of which are in the agri-foods space) could be spotted in advance before they crossed over via Ulster (or anywhere else in the UK for that matter). Allowing UK officials to oversee this procedure would also lower the temperature. The DUP will not love any such solution but, as it is also deeply committed to avoiding a hard border, it does not really have room for fundamental objection.
The indications are that all the matters of substance have been settled here. The outstanding feature is language and Mrs May wants the EU-27 to be helpful and signal that it has retreated from its previous proposition.
Chequers, even if it is not really Chequers
The Prime Minister enters the final stretch of the Brexit negotiations in a politically paradoxical place. In order to claim that the end result of the future framework constitutes a triumph for her personally, there has to be a collective effort by the EU-27 to acknowledge that the agreement is ‘based on’, ‘built from’, ‘rooted in’, or any other similar language, the Chequers Plan that she drove through a less than ecstatic Cabinet and parliamentary Conservative Party back in July. Anything that is very clearly short of that outcome (in presentational terms at least) would leave her in a highly vulnerable place. She might still see a ‘not Chequers’ blueprint ratified in the House of Commons but it would be challenging and her days in Downing Street thereafter would be strictly numbered.
On the other hand, a result that was absolutely identical to the Chequers Plan would not only be an improbable one but it would create a different domestic political problem, possibly a fatal one. A large enough tally of ‘hard Brexit’ Conservative MPs (including David Davis, the ex-Brexit Secretary, and Boris Johnson, the former Foreign Secretary) have insisted that they would not vote for a final withdrawal bill which was the Chequers Plan. Finding a means by which they could credibly row back from that assertion would be very awkward all round. Hence, there has to be something in the future framework which is either very obviously distinct from Chequers and which looks more like a conventional Free Trade Agreement, or ambiguity has to be inserted to the effect that whether the end state is closer to Switzerland or Canada as a model is still to be decided.
The EU-27 leaders are well aware of this dilemma. In a way, though, it is also a mutual opportunity. The words which they issue this week are likely to be Chequers-friendly, and designed to assist Mrs May as she prepares for a potentially explosive Conservative Party conference in Birmingham which starts on 30 September, while at the same time nothing close to a commitment will be entered into.
In truth, the forthcoming bargain will deviate with Chequers in two key respects (with a third divide destined to appear later during the transition period dialogue as the future framework moves from being a political to a legal document).
The first is the Facilitated Customs Arrangement, which the Prime Minister has proposed, under which the UK would collect both its own tariffs on non-EU-27 countries and those on behalf of the EU-27. This notion, devised to soften the Irish border issue, is deeply disliked by the European Commission. It is unlikely to happen (which would please the Brexit lobby among Conservative MPs). Yet, if Mrs May can show that an alternative formula has been found to manage the Irish border, then dropping this provision would not be a disaster for her.
The second is her proposal for the UK to remain in a single market for goods with a ‘common rulebook’ with the EU. This is likely to be rejected in favour of a not radically dissimilar but different option. This might also be a blessing in disguise in terms of Westminster politics.
Finally, but this can be set aside until the detailed negotiations later, there is the matter of how much the UK should pay the EU for its privileged trading status with it and for membership of the agencies it wants to remain part of. The outlines of what a final accord will look like is, nevertheless, becoming far clearer to both sides. Once again, the debate is moving on from the content of the deal to the political presentation of it.
After Barnier
There is one other issue which will be so unspoken in Salzburg that it would be better described as telepathic. It is the identity of the individual who will lead for the EU-27 once ‘phase two’ of the negotiations start after the political withdrawal next year.
It will not be Mr Barnier, who will either be President of the European Commission (which looks less likely but could yet happen if the front-runner falls over) or in retirement. About the best Christmas present that Mrs May could receive from the EU-27 would be a pledge that his successor would be very different.
The ideal contender would be (a) from a smaller member state to act as a counterweight to France and Germany, (b) come from a northern EU state which has extensive trade ties with the UK, and (c) be a former senior minister of an EU country and not a former EU Commissioner. The identity of the key individual concerned will certainly have an impact on the atmospherics around the final settlement.
No one in London will be rushing to build a statue of Mr Barnier once 29 March 2019 has been reached. The Irish Government, by contrast, would have reason to see one erected on its border.
Tim Hames
Director General, BVCA
