UK and EU agree new Brexit deal with revised Northern Ireland Protocol and Political Declaration

UK and EU agree new Brexit deal with revised Northern Ireland Protocol and Political Declaration

Despite repeated insistence from Brussels that the draft Withdrawal Agreement negotiated by Theresa May and Northern Irish backstop were sacrosanct and could not be re-opened, the European Union has this morning agreed to a new Protocol on Ireland/Northern Ireland (and consequential technical adaptations to Articles 184 and 185 of the Agreement) along with a new text for the Political Declaration setting out the framework for the future relationship between the EU and UK.

European Commission President Jean-Claude Juncker is recommending that the European Council adopt the new text.

The new Protocol on Ireland can be read here.

The new Political Declaration can be read here.

The EU’s Chief Negotiator, Michel Barnier, has just explained at a Brussels press conference that the replacement for the previous Irish backstop “rests on four main elements”. These are:

1. Regulations

Northern Ireland will remain aligned with Single Market regulations on goods. Checks and procedures on such goods will take place at ports and airports in Northern Ireland and not on the border. The UK authorities will therefore assume responsibility for applying the EU rules in Northern Ireland.

2. Customs duties

Northern Ireland will remain a part of the UK’s customs territory, so it will be included in any future trade deals struck by the Government after Brexit. However, it will also remain an entry point into the EU’s customs zone. UK authorities will apply UK tariffs to products entering Northern Ireland as long as they are not destined for onward transportation across the border. For goods at risk of entering the single market, the UK will collect EU tariffs on behalf of the bloc.

3. VAT

EU rules on Value Added Tax and excise duties will apply in Northern Ireland, with the UK responsible for their collection. However, revenues derived will be retained by the UK. The UK will also be able to apply VAT exemptions and reduced rates in Northern Ireland that are applied in Ireland.

4. Consent

Northern Ireland Assembly members will vote whether to continue to apply the arrangements after an initial four-year period following them coming into effect at the start of 2021. Significantly, that vote will be conducted on a simple majority head count at Stormont and will not require the support of a majority of unionists and a majority of nationalists under the contentious “petition of concern” mechanism (meaning the DUP would not have the chance to exercise a veto). If the vote is carried, the arrangements will be extended for another four years. However, if it transpires that a majority of unionists and a majority of nationalists do ultimately vote in favour of the move, then the extension period will be for eight years. If members vote to come out of the EU arrangements there would be a two-year cooling off period before that happened.

Especially significant is the change to the stated direction of travel as far as the future relationship is concerned, as set out in Open Europe’s essential explainer of the changes that the Prime Minister has secured:

“The Withdrawal Agreement no longer includes a customs union as the default basis for the future UK-EU relationship, which was included under the backstop. The potential future UK-EU relationship is only addressed in the non-binding Political Declaration, which points to a free trade agreement rather than a customs union, but this is a matter which will remain open to negotiation in the transition period, presumably after a UK General Election. Consequently, the level playing field obligations that accompanied the proposed UK-EU customs union under the backstop have been removed in the revised Withdrawal Agreement and to the Political Declaration as an issue for further negotiation in the context of the future UK-EU relationship.”

Boris Johnson welcomed “a great new deal that takes back control”, unlike the deal agreed by the May administration, under which “Brussels maintained ultimate control and could have forced Britain to accept EU laws and taxes for ever”. He emphasised that his deal means “we will leave the EU Customs Union as one United Kingdom and be able to strike trade deals all around the world” and added that it “established a new relationship with the EU based on free trade and friendly cooperation”.

However, after the deal was announced the Democratic Unionist Party said an earlier statement saying it could not yet back the Prime Minister’s Brexit plans “still stands”. That statement, issued at 6.45am, said that the party “could not support what is being suggested on customs and consent issues, and there is a lack of clarity on VAT”. 

Meanwhile, Jeremy Corbyn has urged the rejection of “an even worse deal than Theresa May’s” which risks “triggering a race to the bottom on rights and protections: putting food safety at risk, cutting environmental standards and workers’ rights, and opening up our NHS to a takeover by US private corporations”.

Brexit Party leader Nigel Farage has said that Parliament should reject the new deal, which he called “just not Brexit” as it would bind Britain to the EU in too many ways. He indicated that he would prefer an extension to the October 31st Brexit deadline to be followed by a general election.

At 1pm the DUP issued a lengthy statement explaining its opposition to the deal, which is worth quoting in its entirety, given their pivotal position:

“Following confirmation from the Prime Minister that he believes he has secured a “great new deal” with the European Union the Democratic Unionist Party will be unable to support these proposals in Parliament.

“The Democratic Unionist Party has worked since the referendum result to secure a negotiated deal as we leave the European Union. We have been consistent that we will only ever consider supporting arrangements that are in Northern Ireland’s long-term economic and constitutional interests and protect the integrity of the Union.

“These proposals are not, in our view, beneficial to the economic well-being of Northern Ireland and they undermine the integrity of the Union. Our main route of trade on an East –West basis will be subject to rules of the European Union Customs Union, notwithstanding that Northern Ireland will remain part of the UK Customs territory.

“All goods would be subject to a customs check regime regardless of their final destination. The default position, even for goods travelling from one part of our country to another, is that they are considered under the EU Customs code unless otherwise agreed. We recognise that only those goods ultimately destined for the Republic of Ireland would be subject to tariffs but the reality remains that the EU would have a veto on which goods would be exempt and which would not under the Joint Committee arrangements. This is not acceptable within the internal borders of the United Kingdom.

“Consumers in Northern Ireland would face the prospect of increased costs, and potentially less choice due to checks being implemented in order to facilitate the European Union. Throughout all the discussions on these issues we have been clear that Northern Ireland should not be subjected to administrative burdens which will be entrenched for the future.

“On VAT Northern Ireland will again be bound into arrangements that the rest of the United Kingdom will not. There is a real danger that over time Northern Ireland will start to diverge across VAT and Customs and without broad support from the democratic representatives of the people of Northern Ireland.

“While some progress has been made in recognising the issue of consent, the elected representatives of Northern Ireland will have no say on whether Northern Ireland should enter these arrangements.

“The Government has departed from the principle that these arrangements must be subject to the consent of both unionists and nationalists in Northern Ireland. These arrangements would be subject to a rolling review but again the principles of the Belfast Agreement on consent have been abandoned in favour of majority rule on this single issue alone.

“These arrangements will become the settled position in these areas for Northern Ireland. This drives a coach and horses through the professed sanctity of the Belfast Agreement.

“For all of these reasons it is our view that these arrangements would not be in Northern Ireland’s long term interests. Saturday’s vote in Parliament on the proposals will only be the start of a long process to get any Withdrawal Agreement Bill through the House of Commons.”