The Brady Amendment and Withdrawal Agreement aren’t as incompatible as they may appear

The Brady Amendment and Withdrawal Agreement aren’t as incompatible as they may appear

Following the passing of the Brady Amendment demanding “alternative arrangements” to the Irish backstop on Tuesday, the Prime Minister is grappling with the issue of finding “alternative arrangements” which are compatible with the existing Withdrawal Agreement.

At first sight, the odds of success are poor. The EU and its institutions have firmly entrenched themselves in the current backstop framework, ostensibly to support Ireland and the maintenance of the Good Friday Agreement (a highly dubious claim), but practically as a mechanism to ensure that it has the upper hand in future trade negotiations with the UK.

As such, Parliament has rightly sent the Prime Minister back to Brussels to re-negotiate to improve our hand. She will likely follow the plan suggested by Kit Malthouse, which relies on an alternative border protocol included in A Better Deal. Realistically, while this ruse succeeded in uniting the Conservatives, I believe it stands no chance of being accepted by the EU.

However, it should not be forgotten that the Withdrawal Agreement itself does allow for the backstop to be avoided until December 2022 via an alternative arrangement, namely via an extension of the transition period to act as “front-stop”, thereby eliminating the backstop requirement.

As such, a scenario is described in the Withdrawal Agreement text, giving Theresa May a clear chance of saving her deal and improving our future negotiating position, while also respecting the deal as drafted. What is missing is an incentive for both sides to make this work.

As such, my proposal to the Prime Minister is as follows:

  1. The UK should agree a paid extension to the transition period to 2021 or 2022 as allowed under the Withdrawal Agreement. This will give ample time for border technologies and processes to be deployed and tested by both parties and of course additional time to prepare for our exit.
  2. Beyond this date, should the EU (read Ireland) declare that they are unhappy with the deployed border arrangements then the transition would continue while they are enhanced, but on the basis that no charge was levied on the UK for continuing transitional benefits. Furthermore, freedom of movement would cease. This would serve to give the UK substantial ongoing economic benefits (at the EU’s expense), should the EU seek to exploit the Irish situation for political purposes.

The resulting deal would remove the contentious backstop, guarantee no hard border in Ireland, maintain the unity of the United Kingdom and ensure fair play from both sides during the “future relationship” negotiations.

For the Irish, it grants them what they superficially seek – namely an ongoing device to solve the border issue – but one that ensures that it will not be deployed for a prolonged period, unlike the current backstop. Both President Macron and the European Parliament have slipped up by revealing that they see the backstop as the device to cement their negotiating hand. Added to this, while the trajectory of our future relationship with the EU remains uncertain, both a Canada Plus trade deal and a bespoke customs union for goods seem the most likely outcomes, and both would require unanimity from the 27 member states.

Without a financial disincentive as described above, Spain and Ireland may be tempted to blackmail the UK in the final stages of negotiation just as we saw from the Walloons and the ratification of the Canadian trade deal. The device above effectively isolates them within the EU and forces the club to act in good faith in its negotiations with the UK, hopefully avoiding a repeat of the negotiating issues we have seen in the last two years.

So where would this revised deal leave both parties?

For the EU, this proposal puts them in a difficult public position. It is “reasonable” as it provides extra cash and maintains the Withdrawal Agreement framework. It also retains a device – albeit a costly one – to ensure a trade deal is not signed until the border issue is signed off. They would receive an additional £10-20 billion from the UK depending on the length of the formal extension agreed, which would be welcomed by the Germans who are already nervous about the funding demands on them in the next budget period. Moreover, if they are seen to squeal about the arrangements post-2022, they will reveal their hand and show the world that they do not believe they can conclude a trade deal with the UK in the next four years; a message they will be reluctant to send member states and international parties.

From the British perspective, we will have secured a smooth transition and avoided the limbo of the backstop. This outcome would be well received by international investors who would likely be deterred by the curious legal arrangements described in the current backstop and which effectively put the UK in the sin-bin. Secondly, by committing money, technology and urgency to the Irish border debate now, we are sending the EU the strong message that this issue is a priority that we want to solve straight away.

To the Prime Minister’s credit, the concept of an extended transition was raised in mid-October but dismissed by Brexiteers when “no-deal” was the assumed default. Good ideas often get lost in lengthy negotiations and this is a prime example. She now needs to return with a fresh team in negotiations to bring about change. This framework allows her to do so within the construct of the Withdrawal Agreement, therefore ensuring the EU is forced to sit up and listen to her proposal.

I conclude with one final suggestion: the extended transition period payment should only be made when the trade deal is ratified. We have failed to exploit the value of the existing £39 billion bill; the same mistake must not be repeated.