MPs head towards showdown

Throughout the long and tortuous negotiation with Brussels over the terms of the UK’s withdrawal from the EU, Mrs May has always known that she has had two very different tasks.

The first of these has been to persuade the EU to agree to a form of words which she is able to claim meets the UK’s needs and red lines.  The second and more difficult task is to persuade the House of Commons to accept the resulting deal.

The first part she has achieved, though her critics might observe that it is seldom difficult to conclude negotiations if you give the other side nearly everything they ask for.  The second part, the debate in the House of Commons and the scrutiny of the deal by her fellow MPs, is scheduled for early next week, on Tuesday 11 December.  And nothing in the week that has elapsed since our last article suggests that she is any closer to securing the House’s approval.

It almost looks, in fact, as though Mrs May has largely accepted that she will fail.   The timing of international events has been less than kind to her, as she had to spend the latter part of last week in Buenos Aires attending a G20 summit meeting when she would no doubt have preferred to be at home, but even so, there has been very little government propaganda promoting the deal in her absence.

We have seen almost no official spokesmen singing its praises, and very few leaders of industry speaking in support of it, not even as “the least worst option”.  Her “Letter to the Nation” rallying the public to her cause was hardly reported on and appears to have had almost no impact.  The one heavyweight voice to have entered the fray was the Bank of England, but their official forecast of the dangers of rejecting the deal – including a prediction that no deal could lead to “the worst recession since the 1930s” – was widely dismissed as a re-run of Project Fear, and, as my colleague Gabriel Stein observed in his excellent article (here), has possibly damaged the Bank’s credibility more than it enhanced Mrs May’s.

Instead, Mrs May has now seen the leaders of every other party in the Commons – including the DUP, on whom her government relies for their day to day working majority – confirm that they will instruct their party to vote against the deal.  And while party discipline is not watertight these days, there is no sign that the government can entice enough rebels from the opposition benches to vote with them to overcome the rebels on their own side that they know will vote against the deal – now swelled by yet another ministerial resignation, as Sam Gyimah became the tenth of Mrs May’s ministers to desert her late last week.

In our article last week, we observed that many MPs had criticised the deal suspiciously fast, and we wondered how many of them had had a chance to actually read it before giving their verdict.   The passing of another week has given them, and others, a chance to rectify this – but the more one studies the deal in detail, the worse it looks.

The main problem with Mrs May’s deal is that it is actually two agreements.  The first part of the deal is the so-called Divorce Settlement:  it covers the UK’s withdrawal as the country leaves the Union and sets the terms for a “Transition Period”.  The second part of the deal is a Political Declaration, which sets out, in remarkably brief and vague terms (the actual text for this part of the deal is just 26 pages long, less than 5% of the whole document), what both sides aspire to for the final trade agreement which will come into effect when the transition period ends.

The first part of the deal is unattractive enough, as the terms that Mrs May has agreed to put the UK in a position of subservience and suspended animation – open for the EU to sell to, paying for access to EU markets for its goods exports, denied access to the EU for its services exports, playing by rules the country has no say over, unable to sign its own trade deals but not guaranteed to be part of the EU’s any more, a most unattractive destination for inward investment and unable to find closure or even an exit from the servitude (which is only with the EU’s consent).  Economically the country will be hobbled and politically the sores will not even begin to heal.

This was the grounds that Dominic Raab, a lawyer specialising in international law, resigned on.  As he observed, the terms of the deal that Mrs May has agreed to give the UK no way of unilaterally exiting the transition arrangements.  As such, the deal resembles a lobster pot in that once in it, there is no obvious way that the UK can escape from it – and Mrs May’s refusal to disclose the full text of the Attorney General’s legal advice on the deal suggests that she is well aware of this.

But it is the second part of the deal where the real dangers lie.  This, the blueprint for the crucial trade agreement that will define the UK’s permanent future relationship with the EU once the transition period is ended, is in diplomatic terms a non-event – it is merely a statement of intent, and contains little more than pious hopes and platitudes without any substance behind them.  And what nobody, from Mrs May downwards (indeed especially not Mrs May) has admitted is that if Parliament approves the deal and Mrs May signs it, the UK loses what little negotiating power it still, just, retains and the incentive for the EU to actually conclude any trade agreement at all in the second part of the deal becomes vanishingly small.

This is because until they do, until they release the UK from the transition period, the terms of the first part of the deal, with all their one-sidedness, will continue to hold.  Last week the EU stated for the first time that they were open to extending the transition “if necessary”;  this was presented as a great concession to reality and a conciliatory gesture towards the UK but since the terms of the transition period are so heavily slanted in their favour, it is entirely in their interest for it to continue as long as possible.

And the fact that it will not be in the UK’s interest will be of no consequence at all for the EU, as the UK will by then be a third party for whom they will have no duty of care whatsoever.

Seasoned trade negotiators talk of 10 years to agree and ratify any trade agreement, especially one as complex and large as the one the UK will seek.  We would say that this is quite possibly a minimum – indeed we see no reason for the EU to prefer a formal trade agreement to the terms that May has negotiated for the transition period, which could in theory continue indefinitely.

And the EU has form for spinning things out.  The people of North Cyprus were promised that if they consented to Cyprus entering the EU, then Brussels would try to heal the division on the island.  So the North Cypriots did consent – and more than 14 years later the EU has made no progress on reuniting the two halves of the island and has to all appearances given up trying.

As for the negotiations with Turkey, the EU has prevaricated and delayed shamelessly.  Turkey first applied to join the EEC (the predecessor to the EU) over 30 years ago, agreed a customs union with it in 1995 and was officially recognised as a candidate for full membership in 1999.  But since then Brussels has had second thoughts, and after much foot-dragging, in June of this year effectively declared that they were no longer in negotiations with Ankara on the matter.

In both cases the pattern is the same:  the applicant gives the EU something now (the North Cypriots gave their consent, Turkey agreed to the terms of the customs union), in the hope of receiving something thereafter – which then fails to materialise.  The parallels with Mrs May’s deal are worryingly close …

It is not very surprising then that, the more MPs look at Mrs May’s deal, the more the vote against it hardens.  It is, in every sense, a bad deal for the country.  The unanswered question though is what would happen if, as looks increasingly likely, Mrs May is defeated and cannot get approval for it in the House.

It is possible that Mrs May will simply re-present her deal and having seen the havoc (not least in financial markets) that a rejection entailed, MPs might decide to back it “for fear of worse”.  But if she still fails – and for many MPs, a bad deal will still be a bad deal, even when served up for the second time – then the UK’s options narrow sharply.

We can dismiss any thoughts of the UK being able to renegotiate the deal:  the EU have repeatedly and very firmly said this is not an option, and who can blame them, given how favourable the current terms are for them.  Quite apart from the fact that, with 27 member states that they are responsible to, even if the Commission wanted to reopen the discussion, they would be very wary of doing so as member states would all pitch in with their own special issues (for example Spain’s attitude towards Gibraltar).

This leaves only two options, as Donald Tusk has helpfully confirmed:  either the UK leaves next March without a deal, or it finds a way, perhaps via a second referendum, to not leave at all.  Neither of these bodes well for the country:  the first risks causing an existential shock to the UK’s economy, the second risks doing irreparable damage to its democracy.

The choices in front of the House of Commons are all unappetising in the extreme.   After nearly three years of lies, fantasies and poor leadership, the political chickens are coming home to roost.