“Breaking up is hard to do” EU president Donald Tusk said in a press conference on Friday morning and he couldn’t have been more right. Only last week I was commenting on how Theresa May faced so complex a Gordian knot that even she couldn’t potentially get out of in negotiating the Brexit deal.
Flash forward a week and my glumness has been replaced by a fresh sense of optimism, tempered by the knowledge that there is still much to do before we get out the exit door.
So lets use what I said last week as a guide to illustrate our progress so far…..
Strand One: The Divorce bill
£50 billion. That is how much the UK has potentially agreed to pay and while many people will be keen to point out that it is a shedload of money, my question is: What did you expect?
This is a multi-national organisation with many strands that the UK has been involved in for the better part of 40 years and potentially would have been involved in for another 40 if we hadn’t voted to leave in 2016. No one expected we’d do what we did, so all of the agreements were made in advance.
The total amount encompasses the cost of exiting pre-existing legal arrangements, European union pensions (the pensions of those people from Britain working within the EU legislative machine), existing financial liabilities (.i.e. things we’ve already agreed to pay) and those financial liabilities which are contingent on us leaving the EU (which is the de facto exit bill).
We were always going to have to pay. If we didn’t pay then the UK would become a pariah in international circles, we would always be known as ‘the country which doesn’t pay’, a reputation which would jeopardise any future trade deals with countries throughout the world. The most surprising thing is the difference in figures between those being quoted in the media and the agreed deal. Wild speculation may sell newspapers but in today’s hare trigger opinion society, the media seems to have forgotten the value of facts.
Strand Two: Soft Border, Hard Border
So the status quo will be maintained in Northern Ireland, with a soft border between it and the Republic of Ireland, thus maintaining the 20 year old Good Friday agreement. While I don’t agree with maintaining a soft border, I can appreciate the sentiments behind it in that no one wants a return to the Troubles.
Going back to what I was saying about not agreeing with the soft border, I feel I need to qualify what I said: A soft border allows goods, services and people to flow backward and forward between the Republic Of Ireland, which remains a member of the EU and Northern Ireland, which ceases to be a member of the EU in March 2019. My concern is that Northern Ireland will become a ghettoised market in which companies will exploit softer regulations in order to benefit their bottom line.
If the UK’s regulations need to be stringent in order to encourage competition, trade agreements, safeguard the UK’s business interests and the allow for the entry of new business, then businesses might just move to Northern Ireland to take advantage of the perceptibly laxer regulations.
A key part of this is that the UK will ensure “full alignment” with the existing rules of the EU’s customs union and single market that uphold the Good Friday agreement, so in a sense we are hamstrung into keeping the EU’s economic foothold in Northern Ireland.
However, the important condition which was secured by the DUP (and caused the delay in getting the Brexit agreement) is that no new regulatory barriers will be allowed between Northern Ireland and the rest of the UK without the permission of Stormont in the interest of upholding the Good Friday agreement. So hopefully this ghettoised market won’t happen.
Strand three: Everyone is right. Yay!
This agreement is a vital stepping stone in paving the way for future trade talks yes, but in other ways it represents a first step: A first step in establishing mechanisms by which a member state may leave the EU and still maintain retain a good relationship with the body which it leaves.
In this way we maintain our right to leave the organisation and it reinforces its status as a functioning organisation by providing us the mechanism to do so, thus maintaining its right.
Other countries looking to leave the EU will now know a little more about how that process will be implemented and have some guidance on the potential cost implications. It sets a precedent that can be followed in other instances.
Strand Four: Party Politics
An agreement like this, what ever its shortcomings represents a vital victory for Theresa May at a time when her popularity seems to shift week to week. Ever since she perceptibly ‘lost’ the election (even though she didn’t) the Conservative party has been in a state of damage control, which in some ways parallels the Labour parties implosion after the Brexit vote.
Using this victory as a springboard is essential, if she lets that victory grow stagnant then all the credibility she has gained in what was the most exhausting set of negotiations of her premiership will dissolve. As any good football manager will tell you, a number of victories in succession can define a season, in the same way as a number of defeats can.
Any positive legislation, or results can be added to this initial victory to create a base of credibility that can undo the damage done following the general election. It also serves to cement her place as the undisputed leader of the Conservative party. All Labour can do at this point is nothing but support the prime minister, for fear of being labelled anti-Brexit and thus not acting in the interests of the British people.
What is essential though is that the role of the DUP in facilitating the passage of this deal is kept in the background, otherwise the repeated questions about how much power the DUP holds could resurface.
Strand Five: Home Advantage
A settlement opens up the next phase of negotiation, letting the Prime Minister and the government focus on commencing trade negotiations with other countries. But it also serves to allow the Prime Minister to return to the politics of the UK and leave the next phase to the ministers and officials appointed to Brexit positions.
Chief among these individuals will be David Davies, who will be tasked with building on the good relations achieved in the past weeks and months. The Prime Minister can now tackle the infighting in her own party and galvanise them against Jeremy Corbyn’s Labour.