The U.K. and European Union are reported to have reached a provisional agreement over Brexit but before anyone gets too excited – or indeed, disappointed – there are big hurdles to overcome to get the draft deal approved on all sides.
Now, U.K. Prime Minister Theresa May has to get her Cabinet of ministers and then a majority of parliament to approve the draft deal – or what has, in typically bureaucratic fashion, been called a “technical agreement” between the U.K. and EU.
That’s not likely to happen smoothly with both ends of the political spectrum — both pro-EU members of her cabinet and parliament as well as hard Brexiteers – expected to be unhappy with the terms of the draft deal.
As JPMorgan economist Malcom Barr put it in a note Tuesday after news of a draft deal emerged, now “the dance of the deal begins.”
Theresa May reportedly showed members of her Cabinet the draft deal, which is believed to stretch to more than 500 pages, late Tuesday evening. She wants their support ahead of a crunch meeting with ministers on Wednesday.
We do not know at this stage when and what details of the draft agreement will be made available, although media reports have suggested the draft agreement focuses a lot on new proposals over the Irish/Northern Irish border and an arrangement to keep the U.K. within the EU ‘s customs union after Brexit, for a certain amount of time.
Theresa May met members of her Cabinet on Tuesday evening reportedly to show them the draft agreement and allow them to read new wording on the thorny issue of the Irish border “backstop.”
Essentially, the argument centers on how to prevent the border between Northern Ireland and Ireland from becoming a “hard” border with physical border checks. Such an eventuality would have far-reaching consequences on the economy and societies in both countries and could even jeopardize the Good Friday peace agreement.
The U.K. and EU both signed up to the “backstop” last year as a way to maintain a frictionless border in the case of no deal. But while the EU said that Northern Ireland could stay within the EU’s customs union in order to achieve this, the U.K. and Northern Ireland’s staunchly pro-U.K. Democratic Unionist Party, have rejected the idea of any deal that severs Northern Ireland from the United Kingdom.
As such, the draft deal on the table reportedly keeps the whole of the U.K. within the customs union for a certain (but as yet unknown) amount of time. Problematically for the prime minister, there has been strong criticism from Brexiteers and the DUP about any deal that does that.
The DUP, Labour party and Brexiteers within May’s Conservative party have been quick to question the deal. Former foreign secretary Boris Johnson said Tuesday evening that Theresa May has sold out the country and that he would vote against the agreement.
“This is just about as bad as it could possibly be. What you’ve got is not only the U.K. remaining within the (EU) customs union forever and a day, so we can’t really do free trade deals to take back control of our laws. We remain in a regulatory alignment with the EU, accepting EU rules but unable to shape them.”
The draft deal also includes commitments over citizens’ rights after Brexit, a proposed 21-month transition period after the U.K.’s departure on March 29, 2019, and details of the so-called £39 billion ($50.7 billion) “divorce bill,” the BBC reported Wednesday.
May will hold a cabinet meeting at 2:00 p.m. London time (9:00 a.m. ET) on Wednesday in a bid to persuade her closest ministers to back the draft “technical agreement” with the EU.
A Number 10 spokesman said Cabinet would meet Wednesday “to consider the draft agreement the negotiating teams have reached in Brussels and to decide on next steps.”
Some have “deep reservations” about the deal, according to the BBC’s political editor Laura Kuenssberg.
Getting her Cabinet’s approval is just one hurdle. If they succeed there, the government has to put the deal before parliament. Members of May’s own Conservative party, and scores of members of the opposition Labour party and anti-Brexit Liberal Democrats have vowed to oppose the deal.
Members of Northern Ireland’s Democratic Unionist Party (DUP) – on whose backing Theresa May relies in parliament – are also a potential threat to the deal if they believe that it means Northern Ireland is potentially treated any differently from the rest of the U.K.
That could still prove to be a big stumbling block to getting her cabinet and parliament to approve the draft agreement.
For May to get her cabinet to back the draft deal could be a game of persuasion; but for her to get parliament to back the deal (a vote would likely be held in December at this rate), it will come down to sheer numbers and whether May can get enough members of parliament (MPs) to back the deal.
Mujtaba Rahman, managing director of Europe at consulting firm Eurasia Group, said in a note late Tuesday that Brexit has reached a certain “moment of truth.”
Rahman said that May needs to win the backing of four “pivotal” ministers – Dominic Raab, the Brexit Secretary, Foreign Secretary Jeremy Hunt, Home Secretary Sajid Javid and Michael Gove, the Environment Secretary.
Even with their support, the outlook doesn’t look good, the analyst said. “Even if May clears the Cabinet hurdle today, several ministers doubt that the proposed deal will get through the (House of) Commons. For now, the parliamentary numbers are heavily stacked against her,” he said.
Others believe the Cabinet could reject the draft. “It cannot be ruled out that members of parliament (and/or the cabinet at its 14 November, 2 p.m. GMT meeting) at first reject the deal,” Carsten Nickel, deputy director of research at Teneo Intelligence, said in a note late Tuesday.
“Ultimately, however, there is no majority for no deal in parliament. While cabinet resignations are certainly possible, and a Tory confidence vote cannot be ruled out, it remains unlikely that a majority of Tory MPs opts for ousting May,” he said.
If May can get her Cabinet’s backing, that paves the way for a special summit with the EU dedicated to Brexit at the end of November.
Indeed, whatever obstacles Theresa May overcomes at home, it’s easy to forget that the other 27 members of the EU have to agree the deal too.
“There remains a risk of further stumbling blocks arising between now and an extraordinary EU leaders’ summit scheduled for November 25,” Rahman said in his note. “Member states, led by France, will be looking to see particularly whether their concerns over maintaining a ‘level playing field’ are addressed in the draft.”
