Brexit Update 1st February 2019

By February 14, 2019 Brexit Updates

Top 3 developments 

    • Parliament votes in favour of seeking “alternative arrangements” to the backstop and avoiding a no-deal exit.
    • May has begun a renegotiation period, seeking greater consensus among MPs with a view to seeking concessions from the EU
    • EU rebuffs the potential renegotiation of the Irish Backstop

UK Update

Summary of this week’s vote 

Following the rejection of the Prime Minister’s proposed Brexit deal two weeks ago, Parliament voted to determine the broad outlines of the UK’s Brexit strategy. The Speaker selected a total of seven amendments which were debated with two (non-binding) amendments subsequently accepted by Parliament: the Spelman amendment and the Brady amendment.

Carline Spelman’s amendment was accepted by 318 to 310 votes, confirming that Parliament does not want to leave the EU without a deal. It is important to note that the amendment is not binding, i.e. unless an agreement is found with the EU or Article 50 is extended, the UK will still leave the EU by the end of March.

Sir Graham Brady’s amendment was accepted by 317 to 301 votes and requires the Prime Minister to seek to reopen the Withdrawal Agreement in order to replace the Northern Ireland Backstop with (unspecified) “alternative arrangements”. Brady’s amendment, which received support from the Government, is now seen as a clear win for the PM as it managed to unite the Conservative Party. However, it leaves the Prime Minister with the difficult task of requesting a reopening of the Withdrawal Agreement – a scenario so far been rejected by the EU27. It is noteworthy that the Government has not been willing to specify publicly what alternative arrangements it will seek from the EU.

Apart from these two amendments, Parliament approved the original motion in which the Prime Minister committed to protect workers’ rights and work across parties in the negotiation process. Renegotiation with the EU27 is due to begin, with negotiations also involving conversations with backbench MPs and Jeremy Corbyn. May also promised MPs that they would be able to vote again on Brexit in two weeks’ time, with February 14th being the selected next steps.

Corbyn and May Rendezvous

Jeremy Corbyn and Theresa May finally met on Wednesday to discuss Brexit renegotiations, after both the Spelman and Brady amendments were accepted. The Labour leader told May that it was “not acceptable” for the Prime Minister to keep the no deal option on the table now that the Spelman amendment has been voted through. However, after the meeting the Prime Minister tweeted that “the only way to avoid No Deal is to vote for a deal”. The meeting occurred to discuss the Labour Party’s position on the Brexit negotiations and what aspects of the deal would need to be changed to secure Labour’s support. Whilst it is noteworthy that both party leaders met this week, considering Corbyn’s initial refusal to after her last defeat, it is unclear whether this dialogue will have a significant effect on negotiations as May is also meeting with Labour MPs separately.

It is likely that the Prime Minister is keeping no deal on the table to act as an incentive for MPs to vote for her deal. Now there is a Parliamentary majority against a no deal Brexit, the Prime Minister will hope that, with time ticking, MPs will vote through the deal to avoid the predicted chaos of a no deal Brexit. The probability of the deal being voted through by Parliament is subject to the concessions that the Prime Minister is able to extract from EU27 leaders. Corbyn has predicted that the Prime Minister would return to Parliament next month “with nothing”.

Will EU be my valentine?

May has spent the second half of the week in talks with members of her own party, the DUP and Labour as she attempts to agree a new negotiating stance with Brussels over the Irish backstop. The Prime Minister is attempting to woo these MPs in order find out what aspects of the backstop will need to be changed to secure their vote and to sway them in favour of the deal. According to reports this week, Theresa May is preparing to entice Labour MPs to support her Brexit deal with a cash injection into deprived areas that voted Leave, including former mining communities. Senior government sources acknowledged that the cash injections were under consideration but emphasised that they were not finalised. There is a prediction that she will still need the support of around 20 Labour MPs to guarantee the deal passing through Parliament.

The Prime Minister is due to make a statement to Commons on 13th February on the concessions, if any, that she has been able to gain from the EU27 leaders. If she is unsuccessful MPs will be able to table more amendments to the agreement, holding a vote on February 14th. Will the lack of time remaining until Brexit D-day, and despite the introduction of the Spelman amendment and February recess being cancelled, a no-deal scenario is looking all the more likely if the Prime Minister is unable to gain some real concessions from the EU in order to appease the Commons.

Malthouse of Cards

An interesting development in Westminster this week was the emergence of the ‘Malthouse Compromise’, or ‘Plan C’ as it has been named. The plan is named after the Housing Minister Kit Malthouse MP, who successfully united pro-EU MPs like Nicky Morgan MP and ERG affiliates like Jacob Rees Mogg MP to support a compromise agreement which they believe could gain a Parliamentary majority. Although the compromise is tilted much further towards Remainers and the EU, it shows that there is some flexibility from hard-line Brexiteers about getting a deal over the line.

Essentially the plan proposes to extend the transition period until 2021 (instead of December 2020 as per the current Withdrawal Agreement) and removes the backstop in favour of an arrangement that is focused on using technology to maintain an open Irish border. The idea is to give the EU and the UK more time to negotiate a free trade deal, which if agreed would mean that a backstop would not be needed. However, it is incredibly optimistic to think that the UK and EU could negotiate a free trade deal in that period of time. It took 7 years for the EU-Canada free trade deal to be negotiated and whilst the UK and EU are already economically aligned, it will be difficult to negotiate a free trade deal before 2021.

The most important question to ask however, is will the EU support this compromise? Unfortunately, the most likely answer is no. It will be interesting to see whether Number 10 throws its weight behind this proposal next week, as it has yet to publicly comment about this compromise.

EU Update

Renegotiating the backst… no, non, nein
The news that the UK will seek to reopen the Withdrawal Agreement was met with an unsurprising answer from Brussels: no. After a phone call with Theresa May on Tuesday, European Council president Donald Tusk was quick to comment that “The EU position is clear and consistent. The Withdrawal Agreement is not open for renegotiation”, adding that “we found out what the U.K. doesn’t want but we still don’t know what the U.K. does want.” Also, European Parliament’s Brexit coordinator, Guy Verhofstadt criticised the UK again for not being clear about what it actually wants from the deal.

These statements should be read as a clear rebuttal of the view held by some in the UK that because of the Commons was able to able to unite around the desire to get rid the Irish backstop, the ball is now in Brussels’ court. The bottom line remains: as long as Theresa May comes to Brussels with the same position as before, she will get the same answer.

EU gears up no-deal Brexit preparation
Despite the British parliament hoping to rule out a no-deal Brexit with the Spelman amendment being accepted earlier this week, many in Brussels have the feeling that this week’s events, instead of a first step out of the impasse, increased the likelihood of a no-deal Brexit. Jean-Claude Juncker commented that we were moving closer to a “disorderly” Brexit. His former Chief of Staff and current Secretary of the European Commission Martin Selmayr was reported to have said in a meeting with EU ambassadors that a no-deal Brexit however is “not the end of the world”, urging the bloc to stay united and not cave to the mounting pressure.

In the meantime, preparations for such a scenario continued this week. The day after the Commons vote, the Commission announced a new set of emergency measures for students, UK projects and social security. It assured the 21,000 current participants of the EU’s Erasmus exchange program (comprising of both EU citizens in the UK and Brits on the Continent) can complete their stays without interruption. For other beneficiaries of EU funding in the UK, the picture looks less rosy: the commitment to UK beneficiaries, such as researchers and farmers, will be contingent upon the British government contributing to the EU budget for the rest of the year. Other measures the Commission put forward aim to ensure that EU states continue including periods of work, insurance and residence in Britain when calculating social benefits such as pensions for their own citizens.

Upcoming Key Dates

  •  7th February: 50 days to go until Brexit
  • 13th February: May makes a statement to Commons
  • 14th February: Brexit motion tabled
  • 13th March: Spring Statement
  • 29th March 2019: UK planned exit from the European Union
  • 30th March 2019: UK planned transition period.
  • 31st December 2020: UK planned exit from the transition agreement

 

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