The backstop - back it or stop it?

8 Apr 2019

 

The Commons is deadlocked. Cross party talks are stalling. The collective patience of the nation is running low. What’s causing all the chaos? Not fishing rights, not economics, not even immigration. It’s all over an issue that was hardly even mentioned until memories of referendum night had faded into the distant past of our negotiation filled memories. The Northern Irish border. 

 

The border is almost 500 kilometres long and there are over 200 crossing points. A frictionless border is crucial for economic prosperity. 23,000 people regularly commute across the border to work, and many businesses rely on frequent and easy crossing of goods and services. The arrangements, introduced in the 1990s following a Northern Irish peace accord, are only possible because both the UK and Ireland are members of the EU single market and customs union - therefore eliminating checks and tariffs on goods moving between the two countries. 

 

Despite the never-ending blame game, neither the UK nor the EU want a hard border in Northern Ireland. Even if the UK leaves without a deal, no one really knows what the border would look like. Goods would undoubtedly have to be checked and tariffs would be introduced, but some debate whether either the UK or the EU would really be willing to build physical infrastructure on the border.

 

What is the solution? It seems fairly certain, although not inevitable, that the UK will leave the EU in some way, shape, or form. That leaves three somewhat politically credible solutions. The option favoured by hard brexiteers such as the ERG is a technological solution.

 

If we slide towards the centre of the Brexit scale we hit the backstop – this is the option favoured by the government. The third option is to stay in the single market and customs union. This is the simplest on paper, as it pretty much just maintains current border arrangements, but some argue that the close relationship with the EU doesn’t honour the referendum results.

 

In order from hard to soft, let’s look at these three ideas a bit closer:

 

There are a whole range of views on how technological solutions to the Irish Border issue could work, from the absolutely absurd to somewhat credible.  We’ll focus on one particular idea, known as the Malthouse compromise, that was thought up by a group of Tory MPs in meetings chaired by Housing Secretary Kit Malthouse. The plan involves renegotiating the backstop and replacing it with a technological solution, combined with an extension to the implementation period, also known as the transition period, until 2021.  

 

The extension of the implementation period, “until no later than Dec 2021”, would allow more time for negotiations on the UK’s future relationship with the EU, with the end goal of working out bold new trading arrangements that avoid causing any friction at the border. It also allows more time to develop any technology needed in conjunction with, or instead of, this new relationship.

 

Pictured: Discussion of checkpoints on the Irish border has brought back memories of the tense history in the region.

 

The ERG argue that May’s backstop proposal gives “the EU an effective veto over a possible Free Trade Agreement such as SuperCanada”. This is because with a backstop, the UK is not able fully detach itself from EU institutions without the permission of the EU. We’ll come back to this problem later when exploring May’s backstop in more detail.

 

Many saw the 2016 election as the British people voting to ‘take back control’ from Brussels, and believe a backstop arrangement in which we retained most EU laws would fail honour that commitment. A technological solution avoids that problem, as it claims to act as a fallback option that allows the UK to walk away from negotiations at any point, pursuing the hardest of hard brexits.

 

There are a lot of reasons why the Northern Irish border is suitable for technological solutions. The first is that most cross-border trade is repetitive. This means there are already simplified customs procedures available within the UCC, the set of rules that decide how things travel in, out, and around the customs union, that can help maintain a frictionless border. Another is that when the UK leaves the EU, it will initially have identical laws and standards surrounding goods. Although the UK may choose to chop and change things later, this will likely happen gradually, meaning both sides have time to adapt as things happen.  

 

Put like that, it sounds like a great idea, but unfortunately there are several fundamental flaws in attempting to solve the border issue using a technological solution. Although it might be popular amongst Brexiteer circles in Westminster, the EU have insisted that it’s not possible, and that the Withdrawal agreement cannot be opened for renegotiation. This is a major issue as to work, it would require full EU and UK cooperation.

 

In his blog, political commentator Ian Dunt describes the Malthouse compromise as “grossly misleading and full of lies”. In reality, it is debatable whether any of the technology needed to ensure the smooth running of a border really exists. This makes the claims that this solution could be used as an insurance policy sound pretty unreasonable. As a long term innovation to improve cross border trade it could work great, but there just isn’t enough certainty or clarity to seriously consider this option as immediate protection against a hard border.

 

If technological solutions won’t work, why is there so much controversy surrounding the existing backstop?

 

Northern Irish unionists criticise the backstop as they think it could create friction at the border between Northern Ireland and Great Britain. The DUP in particular are against the backstop for this reason, with the leader Arlene Foster calling it “toxic”. This creates a political nightmare for Theresa May who, as doesn’t have a Tory majority, relies on support from the DUP to get her Brexit deal through Parliament. The DUP’s worries stem from the fact that the backstop leaves Northern Ireland in a slightly closer relationship with the EU than it does the rest of the UK. Some believe any divisions across the UK, no matter how small, could disturb the delicate balance of peace in Northern Ireland.

 

Another political blow to May’s deal was the Attorney General’s legal advice. This document acted as the final nail in the backstop’s coffin when it said “It is difficult to conclude otherwise than that the Protocol is intended to subsist even when negotiations have clearly broken down.”. This highlights that if the backstop is ever used, the UK and EU must bilaterally agree to end it. Critics argue that this leaves the UK at a disadvantage in future trade negotiations as the EU could compel the UK to remain in the backstop indefinitely, meaning the UK could no longer use the threat of no deal to encourage the EU to offer greater concessions.

 

Brexiteers also dislike the backstop as it may leave the UK permanently tied close to the EU. This would leave Britain unable to strike new trade agreements out with the EU, and we would still have to pay significant contributions towards the EU budget. 

 

However, there is a lot to be said for the backstop. The most obvious benefit is that it has been agreed by both the EU27 and the UK Government. It doesn’t require any more long-winded negotiations that not only drive the nation collectively mad, but also put other concessions given by the EU at risk. The backstop would be possible to implement as soon as we leave the EU and would guarantee that there is no hard border in Northern Ireland.  

 

The backstop also has the advantage that it rules out the possibility of a ‘no-deal’ Brexit. Government forecasts estimate that a no-deal Brexit would make the UK economy 9.3% smaller after 15 years compared with if the UK remained in the EU. By mitigating this economic risk, the backstop would instill confidence in businesses, encouraging investment which will in turn benefit the UK economy. It will also safeguard jobs as businesses are less likely to relocate in response to damaged trading relationships, keeping unemployment low.

 

 Pictured: The extremely complex Irish border is over 300 miles long and contains hundreds of crossings.

 

One final thought on the backstop that is often forgotten is that it’s likely it would never even be used. It’s meant as an insurance policy. Britain hopes to negotiate an ambitious trade deal during the implementation period that ensures trade remains frictionless, while taking more control over immigration and laws. We only use the backstop if those negotiations fail. Just as no one actually intends on using their car insurance, the backstop is, as it says on the tin, a backstop.

 

But why bother changing things when our current arrangements already work? A Norway style agreement would involve the UK leaving the EU but staying in the EU Single Market and Customs Union. In less technical terms, it basically just means we leave, but stay closely tied with EU institutions. This option is good for business, as membership of the Single Market gives UK businesses access to a market of 500 million people. That’s a huge economic benefit.

 

Another clear benefit of a Norway style deal is border arrangements can pretty much just continue as normal, so there is no risk of a border along the Island of Ireland or along the Irish sea. It’s also a great option for Northern Irish businesses that work cross border with the Republic of Ireland, as there won’t be any increased border checks.

 

Some allege that a Norway deal doesn’t honour the will of the British people. However, this is misleading - during the referendum, a number of high profile leave campaigners actually supported the single market. Even leading Brexiteer Owen Paterson tweeted: “Only a madman would actually leave the [single] Market”. This is really significant as it highlights that some leave voters may have supported leave with the preconception that we would remain in the single market, making claims that a Norway deal is betraying the public highly inaccurate.

 

It’s also important to keep in mind that the referendum result was close – 52% voted leave and 48% voted remain. A Norway deal could be quite a nice compromise, as it follows through with the promise of leaving the EU, but also acknowledges that there are a large number of people who want to stay closely linked with the EU.

 

However, it does have its downsides. In a Norway style agreement, the UK would still have to pay significant amounts of money to the EU. Campaign group ‘Open Britain’ estimates that the total sum would amount to 94% of our current contribution. The UK would also lose its veto on EU rules, but would have to follow over 90% of them. This means we would have less influence over the rules that govern us, and decisions could therefore be made against the UK’s interest. However, despite not having a vote, EFTA members such as Norway do get a seat at the table in most EU discussions.

 

With a Norway deal, we would also have to accept freedom of movement. Although we could break free from the restrictive EU laws on fishing and farming subsidies, we’d still be stuck in many of the EU institutions that people voted to leave.

 

In terms of forging political consensus, none of the solutions are straightforward. Despite MPs across Parliament indicating their support for a Norway style agreement, it just doesn’t command a majority. However, the EU would probably support this approach. In contrast, the EU have said very strongly that they would not support a technological solution, as it increases the risk of non-compliant goods entering into the EU market. The so-called Malthouse compromise was also crushed in the commons. Finally, despite the EU signing up to it, MPs have repeatedly voted down May’s deal and the backstop. There really is no right answer.

 

 

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