What does the UK-EU deal say and is it good for Britain?

What does the UK-EU deal say and is it good for Britain?

After a dramatic week of of last-minute negotiations between Brussels, London, Belfast and Dublin, the UK and the EU have finally reached agreement on ‘phase one’ of the Brexit talks. Theresa May and David Davis flew to Brussels in the early hours of Friday morning where Jean-Claude Juncker decreed that “sufficient progress” had been made on the first phase of talks, all before most people in the UK had even got up.

The European Commission has now formally recommended that the European Council of member state leaders should give the authorisation for talk to progress at the summit next week, with Donald Tusk putting forward a new set of draft negotiating guidelines for member states to agree to ahead of the summit which begins on Thursday.

Here, BrexitCentral takes you through the key points of the 15-page agreement issued jointly by the UK and the EU, along with additional insight from the two other EU documents which have appeared today, and whether Leave supporters can be happy with what they’ve seen.

[CORRECTION: This article originally stated that UK citizens had been granted the right of onward movement within the EU, which is incorrect and has been amended below.]

Citizens’ Rights: a win for the UK but timing unresolved

The most important thing to note on citizens’ rights is that it has been agreed. This has always been an issue of fundamental human concern and now it is agreed it should finally put an end to the stream of irresponsible scare stories which have created wholly unwarranted uncertainty for the three million EU citizens living in the UK and over one million UK citizens living in the EU.

In terms of the specific substance of the agreement, while there has been a fair amount of compromise from both sides, the resulting agreement is probably closer to the UK’s original proposals than the EU’s (here is how the two sides originally lined up back in June, although the EU subsequently toughened its stance on various issues including onward movement rights and healthcare).

The UK has largely won out in its battle over security, with the agreement allowing both sides to conduct systematic criminality and security checks on EU citizens applying for settled status, against the EU’s original demands. EU laws will continue to apply with regards to the treatment of criminals for any crimes committed prior to the date of the UK’s withdrawal, but the EU has accepted that any crimes or security issues arising afterwards will be subject to national law, which will make it easier for the UK to deport serious EU criminals after Brexit.

The UK scored a victory on healthcare, with the EU agreeing that UK citizens living in the EU will not lose access to the European Health Insurance Card (EHIC) scheme and other existing schemes for healthcare reimbursement. In return, the UK has largely accepted the EU’s demands on the export of benefits, (although it should be noted that both of these arrangements are a significant net financial loss for the UK at present).

The UK has also secured significant compromises over family reunion rights – one of the most contentious issues in the citizens’ rights negotiation. The EU’s original demands were that any EU nationals living in the UK should be able to bring any future spouses or children into the UK to enjoy the same rights with no restrictions, a more favourable arrangement than for UK nationals themselves which critics had said would grant “super-rights” to a privileged caste of EU citizens above and beyond everyone else in the UK.

The EU has now agreed that this will only apply to people who are already family members of a settled EU citizen on the UK’s date of withdrawal, and will only apply to children born after the date of withdrawal if both of their parents are either settled EU citizens or UK nationals, or if a single parent also satisfies that criteria. In other cases, standard UK law (or the relevant domestic EU27 law) will apply.

However, in the Commission’s commentary on the agreement, they state:

“In the Commission’s view, the reunification right referred to in the previous paragraph shall also cover future partners or spouses of Union citizens and United Kingdom nationals, who are not yet partners or spouses at the ‘specified date’, as defined above. This important matter should be dealt with in the second phase of the negotiations and will inevitably be linked to the level of ambition of the future partnership between the EU and the United Kingdom.”

While this makes clear that the Commission hopes to revisit the issue during the trade talks, it is nonetheless a significant concession that the EU is prepared to accept a solution much closer to the UK’s position as “sufficient” for progress at this stage.

There has also been agreement on a number of other issues of mutual benefit, such as smooth and streamlined administrative procedures for applying for settled status with appropriate grace periods built in, and the mutual recognition of professional qualifications, including those started but still ongoing at the time of the UK’s withdrawal.

EU citizens have been granted ‘right of return’ – they will be able to leave the UK and return several years later without losing their settled status – although the final agreement on a cut-off date of five years is significantly closer to the UK’s original proposal of two years than the EU’s proposal of right of return for life. However, the EU has not granted the onward movement rights for UK citizens already living in the EU – the ability for UK citizens to move to another EU27 country and continue enjoying the same rights under the Withdrawal Agreement – which the UK was seeking in exchange. The EU has previously held that onward movement rights fall under the category of ‘future relationship’ so it is possible that this may be secured in a later phase of the negotiations.

The major issue left unresolved over citizens’ rights is what day is treated as the UK’s day of departure – referred to simply as the “specified date” throughout the document. In the Commission’s commentary, they state:

“the ‘specified date’ should, in the Commission’s view, be defined not as the date of the United Kingdom’s withdrawal, but as that of the end of the transitional period.”

This demand will be anathema to many Leavers, but the UK’s negotiators will have their work cut out if they are to succeed in persuading the EU to compromise on this key decision, given the pattern of the negotiations so far.

European Court of Justice: an uncomfortable compromise but red line largely intact

The role of the European Court of Justice in enforcing citizens’ rights has been a key flashpoint in the negotiations ever since it appeared in the EU’s negotiating guidelines in April, despite having been set out as a key UK red line for months before that. The EU’s demand for indefinite ECJ jurisdiction over EU citizens in the UK was clearly unacceptable, as it could have lasted for well over a century, given that the scope of the agreement will also include the children of EU citizens, and would have been completely unprecedented in post-colonial legal history.

Instead, the two sides have reached a compromise, set out in paragraph 38 of the joint document. There are two key components, one permanent:

“This Part of the Agreement establishes rights for citizens following on from those established in Union law during the UK’s membership of the European Union; the CJEU is the ultimate arbiter of the interpretation of Union law. In the context of the application or interpretation of those rights, UK courts shall therefore have due regard to relevant decisions of the CJEU after the specified date.

and one temporary:

“The Agreement should also establish a mechanism enabling UK courts or tribunals to decide, having had due regard to whether relevant case-law exists, to ask the CJEU questions of interpretation of those rights where they consider that a CJEU ruling on the question is necessary for the UK court or tribunal to be able to give judgment in a case before it. This mechanism should be available for UK courts or tribunals for litigation brought within 8 years from the date of application of the citizens’ rights Part.”

[Emphasis added; N.B. CJEU refers to the Court of Justice of the European Union, of which the European Court of Justice is the senior constituent court.]

The temporary component is sub-optimal but tolerable. It essentially means that the ECJ will maintain direct but narrow jurisdiction over citizens’ rights as set out in the Withdrawal Agreement for a period of 8 years after the UK’s departure. In a sense, it is similar to a statute of limitations which sets a legal deadline after which no new cases can be brought, although the Withdrawal Agreement will of course continue to be directly enforceable in UK domestic law.

Going forward, UK courts will have to pay ‘due regard’ to ECJ decisions on a permanent basis, which will end the direct jurisdiction of the Court but is not a formulation that Leavers will be particularly thrilled by, even if it is just within the bounds of the red line on the issue.

In addition to these legal measures, paragraph 40 mandates the creation of a superquango in the UK to monitor the implementation of citizens’ rights:

“The implementation and application of the citizens’ rights Part will be monitored in the Union by the Commission acting in conformity with the Union Treaties. In the UK, this role will be fulfilled by an independent national authority; its scope and functions, including its role in acting on citizens’ complaints, will be discussed between the parties in the next phase of the negotiations and reflected in the Withdrawal Agreement.”

The “scope and functions” which the Commission has in mind for this superquango are made clear in the accompanying commentary:

“To ensure reciprocity and mirror the role of the Commission, the Commission considers that the independent national authority should have the power not just to receive to receive complaints by EU citizens resident in the United Kingdom who consider that their rights under the Withdrawal Agreement have been infringed, but also initiate appropriate legal actions before United Kingdom courts on their behalf.”

Irish border: an improved outcome but traps for the UK remain

The EU’s decision to include the Irish border in the first phase of the negotiations was contentious from the start, given that the EU was also refusing to discuss the single most difficult issue with the Irish border – how trade moves across it – in the first phase of the negotiations. So it proved to be, with the sudden escalation of demands from Dublin last month catching both UK and EU negotiators largely by surprise.

Subsequent concerns from the Democratic Unionist Party that the original draft could result in Northern Ireland being pulled away from the United Kingdom economically and politically then dramatically thwarted the two sides’ attempts to sign off on an agreement on Monday this week. Leader Arlene Foster reportedly demanded six substantive changes to the original wording before she was prepared to give the agreement her support in the early hours of Friday morning.

Significantly, the agreement on the Irish border contains a direct acknowledgement that the UK is leaving “the European Union’s Internal Market and Customs Union”. This should put the final nail in the coffin of the spurious claims from Remainer MPs who have been arguing throughout this week that the only way to reach a solution on the Irish border is to remain in the EU single market and Customs Union – clearly this is not necessary when the exact opposite is in the official agreed text.

While the text as agreed certainly makes Northern Ireland’s position in the UK more secure, it does have troubling implications for the UK’s negotiating position with the EU as a whole. Paragraph 49 is the area of greatest concern:

“The United Kingdom remains committed to protecting North-South cooperation and to its guarantee of avoiding a hard border. Any future arrangements must be compatible with these overarching requirements. The United Kingdom’s intention is to achieve these objectives through the overall EU-UK relationship. Should this not be possible, the United Kingdom will propose specific solutions to address the unique circumstances of the island of Ireland. In the absence of agreed solutions, the United Kingdom will maintain full alignment with those rules of the Internal Market and the Customs Union which, now or in the future, support North-South cooperation, the all-island economy and the protection of the 1998 Agreement.”

The problem for the UK is that this is likely to be very much the thin end of the wedge. The UK’s view is that this will only apply to a limited number of sectors, but it is clear that Dublin and Brussels already see this as a far more wide-ranging principle than it is being interpreted in London.

The fact that it is only intended to be a contingency plan if all other solutions fail does not help the UK at all. It is very much a double-edged sword because it completely negates the WTO or ‘no deal’ option for the UK by preventing the UK from following the principal strategy which would make the WTO option a success – namely diverging from or improving the mass of inefficiently crafted and economically damaging single market regulations.

What little the EU has said about the future trading relationship so far has centred around its obsession with continuing to control the UK after Brexit as part of any trade deal. The way that this last-minute ‘solution’ to the Irish border question plays into the EU’s hands so neatly in this regard gives added significance to the insider account from RTE’s Tony Connelly, which revealed how the leaked Irish report from early November – the trigger for the dramatic upping of stakes by Dublin – was choreographed by Dublin and Brussels directly.

Either way, it leaves the UK in a significantly more precarious position as it tries to avoid being forced into a highly restrictive trading arrangement by the EU in the next phase of talks. Such a deal would nullify the key benefits of Brexit, keeping the UK in the single market in all but name and severely curtailing the UK’s ability to conduct deep and far-reaching trade agreements with new partners around the world.

Financial Settlement: the best of a bad job

This area was never going to be a triumph for the UK – the EU’s rigid sequencing of talks has enabled it to essentially blackmail the UK into surrendering its greatest asset in the negotiations while giving nothing meaningful in return. But with the EU refusing to even ‘talk about talks’ before the UK triggered Article 50 back in March, it is hard to see how this particular issue could have played out in a significantly different way. However, it is worth considering a number of mitigating factors which sugar the pill slightly for the UK.

The final bill, according to a senior UK source, is between £35-£39bn – a huge amount of money by any standard, but nonetheless vastly smaller than the numbers typically briefed out by the EU which ranged anywhere from £60bn to a colossal £100bn, and indeed substantially smaller than the vast majority of UK pundits predicted. (For what it’s worth, I said that “€40bn [£35bn] is looking like the area where a mutually acceptable deal could ultimately be done” back in August.)

In the context of existing UK contributions to the EU budget, this is the net amount the UK would have contributed anyway by 2022, and would be continuing to contribute every three years had we voted to stay in. By 2030, the ‘Remain bill’ would have been over £130 billion.

Moreover, the UK is not paying this money entirely for nothing. A substantial part of the financial settlement is to cover the UK’s pre-existing commitments to the EU’s seven-year budget period from 2014 to 2020, the Multiannual Financial Framework (MFF). However, the agreement confirms that the UK will continue to receive pre-agreed funding back from the MFF for the same period it continues to contribute towards it (until the end of 2020). Once this is taken into account, the leftover Brexit bill payment is barely more than the net cost of a single year of Britain’s EU membership.


No-one was ever going to be happy with everything in the deal, whether a Leaver or a Remainer, on the UK side or on the EU’s. That is the unavoidable nature of negotiations and compromise. The EU’s rigid structuring of talks has been a constant source of frustration for the UK thus far but there was little to be gained from the UK challenging it at this stage of the negotiations.

Making “sufficient progress” involved the UK jumping through increasingly arbitrary hoops thrown up into the air by the EU, but it has ultimately been achieved without any major red lines being crossed, although the arrangements for the future role of the ECJ are somewhat sub-optimal and major concerns persist about the potential for Clause 49 concerning the Irish border to compromise the UK significantly at a later stage in the negotiations.

While this deal makes an overall ‘no deal’ outcome less likely, it also makes a ‘no Brexit’ outcome far less likely, and puts to bed many of the claims from Remainers that a deal was impossible to do without the UK remaining in the single market or Customs Union, or even at all. The next crucial step in the process is for Theresa May to sit the Cabinet down and secure agreement on a Brexit approach which looks to maximise the opportunities of Brexit. The deal struck may not be perfect, but it still leaves the UK with the power to take its destiny into its own hands – if it has the determination to do so.

What’s next: Transitional arrangements

Transitional arrangements are briefly referenced in the joint agreement document, but it is in Donald Tusk’s draft negotiating guidelines that the EU’s position is set out, although it must be noted that these are fresh EU proposals rather than something the UK has already agreed to. The first point to note is that the EU is committing to (at least) a three-phase structure of the negotiations, with the second phase “related to transition and the framework for the future relationship”.

Substantive trade talks will still not begin now until the third phase, for which the EU will issue a new set of guidelines at a future European Council summit. In any case, the relevant EU guidelines are unlikely to be ready to receive formal approval from member states at this moment in time, while Theresa May has yet to hold the crunch Cabinet meeting in the UK to decide what direction the UK will pursue in the trade negotiations – a model tightly bound to the EU (EEA minus) or one that allows Britain to strike off on its own (Canada plus) – although she is firmly under pressure to do so within the next week now that the phase one agreement has been struck.

The EU is also demanding the full resolution and legal codification of outstanding issues from phase one over the next few months before the talks will move on to full trade talks, with the guidelines stating that: “negotiations in the second phase can only progress as long as all commitments undertaken during the first phase are respected in full and translated faithfully in legal terms as quickly as possible.”

In terms of transitional arrangements themselves, the EU’s position is that a transition will simply be the perpetuation of the status quo, except that the UK “will no longer participate in or nominate or elect members of the EU institutions.” This includes remaining in the Single Market, Customs Union, and subject to the authority of “all existing Union regulatory, budgetary, supervisory, judiciary and enforcement instruments and structures”, including the ECJ, for the duration of the transitional period, as well as incorporating any new EU laws enacted during this time.

As mentioned above, the Commission’s preferred time for the “specified date” upon which the Withdrawal Agreement becomes active is the end of the transition period. Under these proposals, the UK’s effective date of departure becomes the final day of the transitional period (likely to be either 31st December 2020 or 29-31 March 2021). Essentially all that would happen on the 30th March 2019 would be that the UK would lose its voting rights in EU institutions, British MEPs would leave the European Parliament, and the words “United Kingdom” would be scrubbed off various brass plates around Brussels, Strasbourg and elsewhere.

The EU’s position is significantly at odds with the UK’s stated positions on transitional arrangements to date, and is likely to dismay many Leave supporters in the UK. The two points of consolation for Leavers is the EU’s view that any transition “must be… clearly defined and limited in time”, and a potential olive branch from EU officials later in the day that the UK could be granted formal approval to negotiate trade deals with other countries during the transitional period. The UK now needs to formalise its own position on transitional arrangements and decide what issues it needs to prioritise fighting with the EU over as soon as possible.