December 21, 2020
BREXIT UPDATE 61: BREXIT, COVID AND THE PRICE OF FISH
What has happened to the Internal Market Bill, which, as the UK government admitted – indeed almost boasted — broke international law, albeit “in a very limited and specific way”? (see Brexit Updates 59 and 60).
As was widely predicted, the Bill easily passed its Third Reading in the House of Commons. But – as was equally widely predicted — when the Bill went on November 10 to the House of Lords (where the government does not have a majority), the government suffered a heavy defeat, with peers voting by large majorities to remove two of the controversial clauses (other clauses were taken out without a vote).
A month later, on December 7, the Bill returned to the Commons, where MPs voted to put the clauses back in again. The Bill had entered a process known as “Ping-Pong”, in which a Bill (maybe a Bill that has gone into this stage should be re-named a Ball?) is batted to and fro from Commons to Lords and back again. According to a BBC explainer:
“There is no limit to this process other than the impending end of the Parliamentary year. And a bill which is not agreed upon falls, when the music stops” (Here the Ping-Pong metaphor seems to have got mixed up with the party game of Musical Chairs).
But before the Bill/Ball could be Ping-Ponged back to the Lords to have its controversial clauses taken out again, the government — despite its victory in the Commons – made a conciliatory gesture to the EU, offering to take out the clauses in question if a final agreement could be reached on the Northern Ireland Protocol. And, after a meeting in Brussels on December 8 between the Joint (UK/EU) Committee, in the persons of Michael Gove and the European Commission’s Vice-President, Maros Sefkovic, a new agreement was reached and the government withdrew the offending clauses from the Bill.
According to the new agreement, exit declarations on goods travelling from Northern Ireland to Great Britain will no longer be required. “Instead the UK will collect data through other transport sources and share it with the EU”. In the words of an Institute for Government explainer, in relation to goods travelling in the opposite direction, from GB to NI (a subject about which Johnson had expressed great anxiety in speeches in the Commons, during which he claimed that the EU was insisting that all GB-NI goods were at risk of going further than NI into the EU and so all goods must have tariffs):
“The protocol states that goods moving GB-NI that are ‘not at risk’ from subsequently moving into the EU, and not subject to commercial processing, will not have to pay customs duties. The decision on the criteria of ‘not at risk’ was deferred to the Joint Committee.”
And the explainer goes on “Traders will need to register for a trusted trader scheme to benefit from tariff-free access”.
The reasons that the UK government removed the Northern Ireland clauses are very clear (it is less clear why the clauses were inserted in the first place): a) it was very likely that the Commons and Lords would keep Ping-Ponging the Bill/Ball to and fro till the end of the parliamentary year, when the Bill/Ball would automatically fail; b) the US President-elect, Joe Biden (who has emphasised his Irish ancestry), had made it abundantly clear that there would be no US trade deal with the UK if the controversial NI clauses remained in the Internal Market Bill, because they were regarded as detrimental to the Northern Ireland peace process. This is because the clauses undermined the principle of an EU/UK border in the Irish Sea, thus making it more likely that an internal land border between Ireland and Northern Ireland would have to be imposed. As was pointed out in Brexit Update 1, at the basis of the fragile and hard-won Northern Ireland peace process is an open border between Ireland and Northern Ireland; without this open border, the peace process would start to unravel.
So, even if there is a No Deal Brexit, it looks as though the long-running and arcane issue of the Northern Ireland “backstop” has finally been resolved. Ironically, the problem has been solved by adopting the very first proposal put forward by the EU in relation to the issue (see Brexit Update 1): to keep Northern Ireland within the EU Customs Union and Single Market, thus creating the EU/UK border in the Irish Sea, between Northern Ireland and Great Britain, instead of between Ireland and NI. Theresa May could not agree to this, because her government depended on the Protestant Unionist DUP and because of her reliance upon the right-wing Brexiteers, who do not want to lose any part of the UK to the EU. Johnson does not need the DUP; but — despite his large majority – he does not want to offend the right-wing Brexiteers who put him into office and have recently, it has been rumoured, been considering the prospect of replacing him on account of his inept handling of the COVID crisis. So he has been trying to pretend that he has not agreed to a border in the Irish Sea. This seems to be the main reason for the controversial NI clauses in the Bill. Nonetheless, despite the revisions to the Northern Ireland Protocol, the Irish Sea border clearly remains (thus, even though there will be no exit declarations on goods passing from NI to GB, the UK will still have to “collect data and share it with the EU” and traders will have to register for the “trusted trader” scheme).
Will there be a No Deal Brexit?
It was thought at first that resolving the Northern Ireland Protocol issues would, as the BBC put it , “clear one potential obstacle to a trade deal”. But, though the Protocol stands whatever the outcome of the free trade agreement talks, resolving the Northern Ireland problem does not seem at present to have brought the two sides closer to a deal on the other issues. Indeed, Stephen Bush of the New Statesman has suggested that one reason for the controversial clauses and their subsequent removal could have been to get the Northern Ireland question done and dusted before a No Deal Brexit. However, he did also suggest in the same article that the opposite could be the case: that the UK government could be preparing for a capitulation in order to secure an agreement on a free trade deal:
“We can’t be sure what is happening here: is the UK removing an important barrier to a free trade agreement, or is the UK removing an important and dangerous variable in the event of a no-deal Brexit? Are we seeing the political management of a planned no-deal exit play out or are we witnessing the collapse of a fact-free, bravado-heavy approach to forcing a deal? Either remains possible at this stage.”
The three major issues to be resolved are 1) the “level playing-field”; 2) how future disputes about the agreement will be resolved; 3) fishing rights.
The “level playing-field” refers to questions such as workers’ rights and environmental rules. Johnson has emphatically rejected a “Norway-style” deal, according to which the UK would stick closely to EU rules on these issues, in favour of a “Canada-style” deal, in which the UK would be free to diverge from EU regulations. ( Johnson has made it clear that, if he can’t get a “Canada-style” deal, he will go for an “Australia-style deal” . Australia doesn’t yet have a free trade agreement with the EU –though it has been trying to negotiate one since 2018 — so this is code for No Deal but sounds better). (See Brexit Update 57). But Canada, unlike the UK, is thousands of miles away from the EU, which does not want a “buccaneering”, “swashbuckling” UK as a nearby competitor undercutting EU states.
The most difficult problem is fish, which accounts for only a very small percentage of the economies of both the UK and the EU but which is of major political and symbolic significance. Historical national maritime rivalries come into play here, particularly between France and England. A free trade agreement has to be agreed by all the EU states; but President Macron of France needs the votes of French fishing communities, which want to keep fishing in plentiful British waters; whereas Johnson feels he has to honour the pledges he gave to English Leave-voting fishing towns and villages which switched last year from Labour to Conservative on the issue of Brexit, because they want to keep British waters for British fishermen. Moreover, having effectively conceded to the EU by agreeing to a border in the Irish Sea (despite all his attempts to disguise this), Johnson cannot afford to antagonise the right wing Brexiteer MPs by capitulating on fish. It is hard to see either side backing down.
Brexit and COVID
Nicola Sturgeon, the First Minister of Scotland and head of the Remain-supporting SNP, tweeted yesterday:
“It’s now imperative that PM seeks an agreement to extend the Brexit transition period. The new Covid strain — & the various implications of it – mean we face a profoundly serious situation, & it demands our 100% attention. It would be unconscionable to compound it with Brexit.”
A mutation of COVID (more infectious though not more dangerous) is spreading through London and the south-east, causing those areas to be put into “Tier 4”, which is back into full lockdown. Not only European states, but Middle Eastern states, Canada and India have imposed a travel ban on the UK (including freight lorries). But ironically it is precisely because of this major escalation in the COVID crisis that the prospect of a No Deal Brexit appears to most Brits as of secondary importance. If there had been no COVID, a No-Deal Brexit – which seems the most likely outcome — would have been regarded by many as a disaster. As it is, if it happens, it won’t make much difference.