A stock image of the EU flag and British flag
A stock image of the EU flag and British flag

This morning we learnt the Prime Minister has agreed a new deal with the EU. It’s a new Withdrawal Agreement (the legal terms of our exit) and a new Political Declaration (the non-binding aims covering the future negotiation we’d need to have on our future trading relationship).

These look like the main differences from Theresa May’s deal:

NORTHERN IRELAND

The backstop (which kept the UK in the customs union and NI in the EU single market if we don’t agree a new trade deal with the EU) is gone, and has been replaced by new permanent arrangements.

The agreement says Northern Ireland is in the UK Customs Territory, but in reality it isn’t.

Effectively Northern Ireland is in the EU Customs regime. Goods coming into NI from Britain or Ireland would be subject to EU customs, unless it could be proved they’re not going to leave NI or enter the supply chain as a manufacturing component.

There would be no checks on the border between Northern Ireland and Ireland, but a border between Great Britain and the Island of Ireland would be created. That means extra checks for manufacturers who export from the north west to the Republic or NI.

GREAT BRITAIN

The changes are all in the Political Declaration rather than the Withdrawal Agreement, which means they’re less certain as they’re now non-binding.

We are no longer seeking a ‘close economic relationship with the EU’.

There is no mention of maintaining comparable employment rights, environmental standards or product regulation. There is also no wording even offering the discretion to do this, which the Theresa May deal had.

The so-called ‘level playing field’ is therefore gone.

It’s a very tough deal for manufacturing, with rules of origin details now being required and substantial regulatory checks at borders. Just in time supply chains would be severely disrupted.

On services it’s the same as the old deal, i.e. not very much at all.

On security and law and order cooperation it’s also broadly the same.


VERDICT

This looks to me worse than Theresa May’s deal. It is a softer Brexit for Northern Ireland but a hard Brexit for England, Scotland and Wales. And it stores up trouble down the road.

The Scottish nationalists will almost certainly demand what Northern Ireland would get under this deal for their own border with England, in the event they voted for independence.

And it would allow the Conservative Party to pursue an agenda of moving the UK economy from a Western European model to one much more like the United States – deregulated, low corporate taxes, fewer public services and employment rights etc. That is why the UK government cannot agree to broadly maintaining European standards, as it would prevent a UK-US trade deal.

GETTING IT DONE?

One key point to remember is that if this deal is passed, Brexit is not ‘done’. This is simply an exit agreement. If it were passed, we would enter a transition period until the end of 2020 and begin negotiating the future trade deal with the EU based on the Political Declaration. That looks very ambitious. On average trade deals take around 7 years to agree, though hopefully this would be less.

I’ll be back in Westminster on Saturday when MPs will vote on these proposals. If the deal is not passed on Saturday, thankfully the provisions of the Benn Act mean we will not crash out without any deal at all. I am increasingly of the view that the only way to get public consent and resolve this is to give the people the final say on any agreement.

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