Govt capitulation today could guarantee no-deal

It is hard to fully comprehend the scale of the stupidity seizing Downing Street today. After a few days of bad headlines and a handful of resignations by people no-one had ever heard of, Theresa May is dismantling the white paper she published last week and accepting terms which would all-but guarantee no-deal Brexit. It is cowardice on a Olympic scale.

No.10 confirmed this afternoon that it would be backing all the amendments put down by hard Brexiters to the customs bill, saying they were compatible with the Chequers agreement it was defending last week. 

"I would not have gone through all the work I did to ensure we reached that agreement only to see it changed in some way through these bills," Theresa May told the Commons today. "They do not change that Chequers agreement."

She is wrong. One amendment prohibits the "collection of certain taxes or duties on behalf of territory without reciprocity". The white paper, on the other hand, states that Britain will collect tariffs on behalf of the EU at its own borders, but "is not proposing that the EU applies the UK’s tariffs and trade policy at its border".

These things simply cannot be put together. One prohibits non-reciprocal arrangements and the other describes them. The government is literally going to pass a law against its own Brexit plan and then, for good measure, insist the former does not "change" the latter. Indeed, you'll notice that, once again, 'nothing has changed'. Up is down and black is white. Nothing means anything. 

But the reciprocity issue is not even the most lunatic of the propositions on offer. Far more dangerous is the proposal on the Irish backstop proposal. This makes it unlawful for the government "to enter into arrangements under which Northern Ireland forms part of a separate customs territory to Great Britain".

This amendment effectively makes it impossible for the government to secure a Brexit deal. 

The Brexit deal, when it comes back, will actually be two documents: a withdrawal agreement and a set of commitments on the 'future relationship'. The first is a legal text. It'll be agreed by negotiating teams, taken back to the UK and European parliaments as a motion, then signed as a treaty, translated into primary legislation, and finally passed as law in the UK. This covers the divorce payment, citizens rights, transition and, crucially, the Irish problem.

The Irish backstop, which the UK signed off on last December, says that if all else fails and no other arrangements are made, a hard border in Ireland will be avoided by ensuring Northern Ireland and the Republic of Ireland have the same customs arrangements and regulatory structure. This would entail Northern Ireland having a seperate customs territory to Great Britain - the exact scenario the amendment rules out.

The 'future relationship' document, on the other hand, is political. It doesn't have any legal standing. It will say, in pretty vague terms, what the UK and EU want to achieve in their future relationship. This'll then be turned into concrete action after Brexit day, when the negotiations begin on what the trading arrangements would look like.

Some believe that the real function of the Chequers statement was to use this sequencing structure to force through a deal. May knew that the EU would never agree a customs partnership or single market in goods, which was the basis of her Chequers statement. But they didn't need to. They just needed to not reject it before Brexit Day.

That allowed her to pretend to hard Brexiters and the DUP that she had established a future relationship which would avoid the need for checks at the border. The backstop would never be needed. Now she could sign the deal, secure Brexit, and punt off all the problems into the 'future relationship' talks after it had taken place.

The amendment throws all of that into disarray. 

Many Westminster insiders have treated it as irrelevant, because May already pledged not to form a customs border between Great Britain and Notthern Ireland. But there is a difference between promises and legislation. Putting that on the statute books would make it impossible for May to agree to the backstop while reassuring everyone that it would be irrelevant because of the future relationship.

It would strip everything down to law instead of politics: It is illegal to pursue an agreement putting a customs border in the Irish sea and this international treaty puts a customs border in the Irish Sea.

The government would be passing a law against its own negotiating strategy. That is surely not a tenable state of affairs. No sane political culture could throw up such an outcome.

It is incredible to think we have a government so gutless it would even consider this - especially when the ERG doesn't even have the numbers to defeat them. And it is also extraordinary that Brexit hardliners should pursue it. They are effectively starting a guerilla war against even the possibility of a deal.

Ian Dunt is editor of and the author of Brexit: What The Hell Happens Now?

The opinions in's Comment and Analysis section are those of the author and are no reflection of the views of the website or its owners.

Week in Review: Trump's survival-of-the-fittest worldview shows perils of Brexit

Many Brexiters seemed triumphant when Donald Trump gave his interview to the Sun newspaper last night. It is extraordinary that people who have defined themselves tirelessly as patriots over the last few years should be so unmoved by the sight of a foreign leader bullying a British prime minister on home territory.

It is simply unprecedented, in terms of diplomatic protocol and basic human courtesy, for a visiting head of state to attempt to behave this way when visiting the UK, or indeed at any other time. But, as ever, those who speak loudest about their love of country are the ones who can be least relied on to act upon it.

The relationship between Theresa May and the US president is utterly toxic. She is hideously obsequious around him. Even on Thursday she constantly held out her hand for him to hold, seemingly unaware of how much damage had been done to her reputation by this image the first time it happened.

She makes the same mistakes, over and over again. Her decision to offer him a state visit almost as soon as she first met him was a disaster, connecting her to him by a moral umbilical cord and setting up the dominos for what took place this week, when she ends up giving him all the honours of a state visit, including a meeting with the Queen, while he disrespects her, and by extension the country.

It’s not even clear why May does it. Having signed up to EU rules on goods, any US trade deal will be of very little breadth or depth. But still she continues - fawning over him just so he can belittle her again.

But there is one thing to be salvaged from Trump’s brazen behaviour and the fact that so many hard Brexit Tories support it: it shows what hard Brexit actually entails.

Of course, Trump wants Britain pursuing the hardest possible Brexit because signing up to US standards - especially on agricultural goods - is a precondition of a trade deal with him. That’s useful not just for US exports but as an opportunity to suck Britain into the US’ regulatory and standards orbit.

But his intention goes deeper. Trump’s actions are always against the rules-based international liberal order and in favour of international strongmen, like himself, Putin and even the lunatic homicidal man-child Jim Jong-un. In Brexit terms, that means sabotaging the democratic, continental level system for regulations practiced by Brussels.

But it does not stop there. Trump arrived in London from a Nato summit, where he had worked actively to destabilise the alliance. He attempted to demean and cajole Angela Merkel - he is always more hateful towards powerful women. First he claimed Germany was controlled by Russia and then he ended up pointing at her and stating "you, Angela" after a discussion on military spending. For much of the summit, there was a sense that the military alliance - arguably the strongest and most successful in the history of mankind, and certainly the greatest existing bulwark against Russian imperialism - would lose its leading advocate nation.

Although it is rarely mentioned, Trump is doing precisely the same thing at the World Trade Organisation (WTO). The US is withholding judges from the appellate court on a technicality, a move which slowly sucks the life-blood from the organisation and will eventually leave it unable to come to judgements on disputes.

Wherever there is a structure which holds back nation states, he tries to undermine and dismantle it. The world he aims for is one of the survival of the fittest, one in which large nations boss around smaller nations.

That is the future waiting for a medium-sized nation like Britain outside the EU, especially if it is not protected by the European eco-system of standards and regulations. There is no sovereignty and no control. We would be accepting sub-standard US goods by default, according to a treaty stitched up in some backroom by negotiators, and plunked down in front of the Commons in one package. The EU has democratic faults - although these are routinely exaggerated - but at least the rules and regulations are proposed by elected domestic leaders in the Council and then scrutinised by elected MEPs in the parliament.

Trump’s wanton rudeness may have been greeted warmly by hard Brexiters but it will hopefully send another message to those unsure of how to feel about the current state of Brexit negotiations, including the more pragmatic Brexit-supporting Tory MPs. This is the harsh world we approach on our current path. It is one in which we are routinely humiliated and bullied by larger nations. It is not tolerable and no British patriot should wish it on the country.

Ian Dunt is editor of and the author of Brexit: What The Hell Happens Now?

The opinions in's Comment and Analysis section are those of the author and are no reflection of the views of the website or its owners.

If this is all the government has for its Brexit white paper, we're in trouble

So that's it. After two years the government has finally published a Brexit white paper. It runs to 104 pages but is full of so much muddled thinking, desperation and fantasy that they could have done it in five and saved us all a lot of time.

To jumble up the Brexit jargon, it is cakeism-minus. They have a cake, they have eaten it, some of it is still magically on the plate, and the rest is being vomited up on the floor.

At the heart of the Brexit white paper proposals - and of the whole future relationship negotiation really - is a simple question: who is in charge? The EU wants to remain the boss of how trade operates. The UK wants to have all the benefits of that trade, but also shared management rights. It won't accept the consequences of taking back control.

Theresa May has belatedly recognised the contradiction and accepted  a "common rulebook" which "would underpin the free trade area for goods". In reality, it is not a "common" rulebook at all. It is a European rulebook, which the UK will follow.

They go out of their way to pretend otherwise. The myth that this is some kind of partnership of equals features throughout the document, with constant references to how these plans would "reassure the UK and the EU that goods in circulation in their respective markets meet the necessary regulatory requirements". It's all nonsense. What this amounts to is that we are accepting that the EU retains its boss status when it comes to goods.

May hasn't signed up to the "common rulebook" on services, even though we're a services-based economy and this is the trade we're most reliant on. But even here, the pretend language of equality is smeared all over the document.

Take something called 'equivalence'. This is a mechanism the EU uses sometimes to say that bit of a non-EU country's economy is up to roughly the same standards as its own and they can therefore lower barriers to trade. It has one with the US, for example, on the use of clearing houses in derivatives trading.

The trouble with equivalence is that it is completely unreliable. At any time the EU can decide it's going to take it away and then, within weeks, the whole thing evaporates. That is not an acceptable status quo for a large modern economy. The white paper acknowledges this, saying the existing equivalence regimes "are not sufficient to deal with a third country whose financial markets are as deeply interconnected with the EU's". So they propose a "bilateral mechanism"  to discuss changes in the rules, with an expansion of "existing autonomous frameworks for equivalence".

In other words: cakeism. Autonomy and equivalence at the same time, mixed up in some magic new recipe they have not bothered to describe. Without any trade knowledge, you'd know that doesn't make any sense just by looking at the words. But the paper does not seem to have made any real progress in thinking through how these incompatible demands would operate in practice. It's not even really clear what they hope to achieve by it. The government acknowledges it can't have full passporting rights for financial firms, but doesn't state eactly what kind of rights it thinks can be secured.

It then tries to smuggle some other bits of the single market into the agreement. This is what the EU calls cherry-picking. It is a very fair description.

In aviation, where the UK has become a continental leader on the basis of the EU's liberal regime, it wants to maintain "reciprocal liberalised access" - or, in other words, to keep things exactly as they are right now. In energy, it holds open the possibility of staying in the internal energy market "to preserve existing efficient trading practices". And in nuclear industries, it wants a "close association" with Euratom, the regulator it foolishly left when it sent the Article 50 letter.

The pretence of an equal relationship reaches unprecedented levels when it comes to the section on arbitration - the description of a joint body for settling disputes. They try to pretend that this will be a new global political force, with the prime minister meeting EU figures biannually to "coordinate responses to new global crises". But the real business of the thing will happen at the technical joint committees underneath, which will discuss the new rules coming in and how they'll be implemented.

"The UK and the EU would notify each other through the joint committee of any proposed and adopted legislative proposals," the paper insists. But in truth this relationship will be one-way, as it is for countries like Switzerland or Norway, which also take on EU rules. Sure, they can wriggle around a bit on a technical level at the point of implementation. But no-one pretends this is an equal relationship.

Another section of this joint committee structure would deal with issues on equivalency. In both cases it sets up a complex process for what to do if a rule goes against the agreement, although it pretends this is also equal, and that there would be "a decision between the UK and the EU about whether the relevant rule change should be added to the agreement".

In reality it won't work this way. The EU will pass the rules and the UK will sign up to them. If they do not, there is an initial discussion, then a joint committee ruling on whether it's in the scope of the agreement, then a consultation, then "rebalancing measures" - a fine, in other words - and then finally, if all else fails, that part of the agreement would be "suspended".

Norway also has this power, under part 102 of the EEA agreement. It never uses it. The consequences are too stark. And that's because this is not an equal partnership - the EU simply has a bigger market than you. The attempt to ignore this fundamental truth is at the heart of most of the delusions in the paper.

Sprinkled about the document are occasional admissions of what the UK is signing up to. "While the UK would not have a vote on relevant rule changes," it says, "its experts should be consulted." That is a very significant step down from the days when we actually formed the rules ourselves. It also seeks to stay in several EU agencies, on things like aviation, chemicals and medicines, but "without voting rights".

Where problems arise, the authors of the report either refuse to acknowledge them or are unaware that they exist.

The EU's existing free trade agreements with countries like Canada, for instance, are protected by a Most Favoured Nation clause. This means that wherever they offer someone else a superior deal, they have to update it to make it just as good.

A section of the white paper on mutual recognition of professional qualifications skirts over this without addressing it. "The UK's arrangements with the EU should not be constrained by existing EU FTA [free trade agreement] precedents," it says. Do they recognise that this is precisely the problem? Anything offered to the UK must be offered to Canada, South Korea and others too. If they know this, they do not mention it, let alone grapple with it.

Once we get to the sections on the customs partnership, the white paper meanders into the most tedious form of sci-fi possible. Long sections describe the "tariff revenue formula" for how the UK would impose the EU's tariff requirements at its border, then work out where products were going on the continent, either as a "finished good" or "at the point at which the good is substantially transformed into a UK product". Good luck with that.

"Where the good’s destination is later identified to be a lower tariff jurisdiction," the paper says, "it would be eligible for a repayment from the UK government equal to the difference between the two tariffs." The sheer logistical complexity of this operation is beyond comprehension. The demand it makes of companies is similarly not worth thinking about. And even if it wasn't, why would the EU trust a foreign power operating completely outside of its legal jurisdiction to take control of its tariff collection? What exactly do they gain for all the lost revenue and lack of control it would entail? It is never explained.

But not content with applying one bonkers customs system, the paper then goes ahead and invents another. It takes the so-called max-fac model favoured by Brexiters, in which imaginary technical solutions are found to customs controls, and applies them to the rest of the world.

Quite quickly this descends into badly-written cyberpunk. "This could include exploring how machine learning and artificial intelligence could allow traders to automate the collection and submission of data required for customs declarations," it says at one point, as if the civil servant writing it got bored and just thought they'd chuck in as much crazy nonsense as possible.

"There will need to be a phased approach to implementation of this model," it states at the end. Yes, indeed there will. One that lasts from now until whatever point in the future they invent this stuff.

As a starting negotiating position, the Chequers statement was a real step forward. But to write it all down in a white paper as if it were a finalised model is fanciful and embarrassing.

If a paper like this was going to be published, they should have done so just before they triggered Article 50. That was the right time for it. It is the kind of thing you would expect to read as an opening position statement. But it is not acceptable for this to be height of their thinking now, with just weeks of negotiating time left.

It skirts over issues it needs to address instead of grappling with them. It pretends to be describing a relationship of equals when it is really acknowledging that the EU will make the rules. And it is criminally vague and deluded on matters which at this stage should be dealt with in specific and detailed terms.

Ian Dunt is editor of and the author of Brexit: What The Hell Happens Now?

The opinions in's Comment and Analysis section are those of the author and are no reflection of the views of the website or its owners.

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