In the below article, Patrick Minford writes in a personal capacity.
In the latest discussions on the Brexit Withdrawal Agreement and Political Declaration (WAPD), two views have emerged about the UK’s future choices. One, which I will call the lawyer view, is that once signed, the WAPD binds the UK indefinitely; this view is held by many of my friends and Brexit allies who are largely lawyers and as such tend to believe that the letter of the law will prevail. The other, which I will call the realist view, is that it can be ‘evolved’, to use a word popular with some politicians, in line with the mutually evolving interests of the two sovereign parties, the EU and the UK. The latter view is the one generally adopted in the economic analysis of international treaties, as the following quotation from a recent paper in a leading economic journal makes very clear.
At the national level, such conflicts [over payment for/usage of public goods] between individual and collective rationality can be resolved by the intervention of the government (Demsetz, 1967). At the international scale, however, there is no supranational authority that could coerce states into adopting efficient policies if they run counter to national interests. Filling the void are international agreements. Under the terms of the Vienna Convention on the Law of Treaties, a state that ratifies a multilateral treaty chooses partially to surrender its sovereignty and to subject its policies in a specific domain to the rules and prescriptions of the treaty. In so doing, sovereign states agree to coordinate their policies in mutually beneficial ways. By the very nature of sovereignty, however, the agreement is fundamentally non-binding and states can always withdraw from it. Therefore, the fact that public good provision is implemented through an international agreement should not change a country’s incentives to contribute per se — unless the treaty alters the country’s incentives to cooperate in other ways. (Wagner, 2016)
The point of economic analysis of treaties therefore is that a sovereign state only continues as a party to any treaty if it remains in its interests to do so. Therefore one must analyse treaty development over time with reference to how these sovereign interests evolve; and how at any time the sovereigns reach an accommodation based on their mutual interests. The basic reason, as explained in the quotation, is that there is no supranational power that enforces treaties in the way that a national state, with a monopoly of force, enforces domestic law.
The realist view is therefore asserting that once the UK is out of the EU, how it deals with the WAPD is a matter of subsequent choice and negotiation with the EU, which also has freedom of the same sort. Anyone supporting the lawyer view must therefore demonstrate that the WAPD remains an agreement that it is in the interests of both sides to maintain in the same form. It is not sufficient to say that because it has been signed it is indefinitely binding; this would only be sufficient if there was a supranational power that could enforce this, and I shall assume it as obvious that indeed there is no such power. In a recent posting on the Lawyers for Britain website my old friend and longtime Brexit ally, Martin Howe, argues that the Treaty of Utrecht binding Spain into Gibraltar’s status illustrates that treaties bind long-term. However, in fact this well illustrates the point about self-interest. Spain, like the UK, has had a strong interest in Gibraltar not accidentally becoming a casus belli, much as the Falklands, with a population similarly determined to remain British, became, at great expense to both the UK and Argentina. Ceaseless ongoing diplomacy on both sides to accommodate mutual complaints has found the Treaty a useful figleaf.
In the rest of this piece I will discuss what the interests of the UK and EU are and how, if at all, they might evolve, and with them the UK/EU future Treaty relationship. This type of analysis is a branch of game theory, which can involve highly complicated mathematics, as in the paper cited, but fortunately not in this case here.
Current UK and EU interests and the Withdrawal Agreement
Based on economic analysis within a rather standard World Trade model and other models described in Should Britain leave the EU? An economic analysis of a troubled relationship by Minford et al (2015) I suggest the following broad interests of the EU and the UK:
The EU: for the EU the status quo is optimal. The UK contributes 10% of the EU budget. Its food and manufacturing industries sell to UK consumers at 20% above world prices because the Customs Union places trade barriers of this tariff-equivalent value against products from the rest of the world. EU regulations prevent UK practices that would reduce UK costs and so undercut EU competition, driving down margins. Unskilled EU workers can be exported to the UK labour market where their wage is supplemented by the UK taxpayer by about 20%.
The UK: for the UK the optimal policy is abolition of protection against the non-EU; this ‘free trade’ policy eliminates the 20% premium paid to EU producers of food and manufactures and it also lowers consumer prices, pushing up productivity via trade competition. At the same time the UK would want to sign a Free Trade Agreement with the EU that keeps the current free access with zero tariffs between them; nevertheless it turns out that any tariffs or equivalent that are imposed will benefit the UK and be paid by EU traders, because UK prices of both imports and exports are set by world prices, so UK tariffs must be absorbed by EU exporters while EU tariffs must similarly be absorbed by EU importers. It follows that although the UK would be willing on the ‘good neighbour’ principle to sign an EU-UK FTA, it would strictly speaking be better off under WTO rules with no deal.
These descriptions of economic interests take no account of current political pressures. A natural question is: given its interests why on earth did the UK Government sign up to the WAPD? This effectively makes the status quo the most achievable agreement, given that the backstop endows the EU with effective veto power over anything it dislikes; under the backstop the UK effectively stays in the EU as now until the EU deems there to be an agreement.
The only way to account for this is in terms of the votes in Parliament. With a part of the Tory party led by Philip Hammond having a Remainer view of UK interests – that is wanting protection for reasons of preserving current jobs (notice not gaining the most jobs in the long term as would occur under free trade etc), following vested interests like the CBI – the Government of Mrs. May seems to have assumed that only the ‘soft Brexit’ WAPD could get through Parliament. Similarly, it assumed that Parliament would not support No Deal, because this too would sacrifice some current jobs to a free trade strategy under WTO rules; as a result the Government did not prepare for No Deal and so lost its only bargaining counter with the EU so that the WAPD failed to favour UK interests. As a result, the WAPD too cannot get through Parliament because the ERG Conservatives and DUP votes oppose it.
Now Mrs May is trying to get Labour votes to push through some even ‘softer’ WA, with a PD promising EU customs union in some shape or form. Hence the EU have not had any difficulty achieving a WAPD that favours its interests, because of parliamentary politics. Add to this that the EU was in any case determined – due to its own politics – to show that exiting countries get a bad deal, to discourage others. It is clear that the politics of the divorce situation was bound to produce a bad deal from the UK viewpoint. One does not need to go further and accuse Mrs May of being a closet Remainer, which she may well be, to account for what has been agreed.
The Economic Analysis puzzle
How those Remainer ideas took hold in the face of strong economic arguments to the opposite effect, as set out above, for the long-run gains of Brexit, is rather baffling. As I explained in a recent paper in World Economy, Remainers and their economist allies (e.g. Breinlich et al, 2016) used ‘gravity theory’ to argue that leaving the EU would be damaging to the UK and that gains from free trade with the rest of the world would be small. However, the ‘gravity models’ they used did not obey the canons of good general equilibrium modelling, in which all causal factors are simultaneously analysed for the effect of a major policy change like Brexit. All the gravity models were ‘partial equilibrium relationships’ in which trade, GDP, FDI and productivity were separately related without any overall inter-linking.
This approach was originally – in 2016 – also adopted by the Treasury; but at the end of 2017 the Treasury for this reason finally abandoned it, in favour of a full general equilibrium model, the GTAP model, bought in from the Purdue University Trade Modelling Project. This was used to reevaluate Brexit in the Cross-Whitehall Civil Service Report of that time. Given the strong Whitehall bias against Brexit the new model was given assumptions that produced similar negative results to the previous ones. These consisted of a) few and limited FTAs with the non-EU world; and b) large border barriers, even with an EU FTA, between the UK and the EU.
However, plausible alternative assumptions reverse the Brexit effect on GDP under a WTO No Deal for example from highly negative (-7%) to firmly positive (+3%).These assumptions are that the UK uses FTAs with the non-EU to eliminate all trade barriers on goods against them while also gaining wide market access; and that it signs an FTA with the EU that prevents any new barriers, or if it goes to WTO rules then only tariffs spring up at the border, other interferences being illegal under WTO obligations.
As this debate has unfolded between our critique and the Treasury, academic economists espousing the previous gravity methods have stayed strangely quiet while the Treasury dropped their methodology. Meanwhile we published another paper in which we tested a full ‘Computable General Equilibrium’ (CGE) model with gravity mechanisms against a plain Classical CGE trade model without them, to see how well each matched the UK trade facts. Using an elaborate and thorough Indirect Inference test we found that the gravity version was strongly rejected while the Classical one fitted the facts. Furthermore when we did the Brexit policies on the Gravity version the effects were much the same as with the Classical, our main tool; this was because Brexit gives gains with the rest of the world while not much disturbing our relations with the EU and so stirring up the negative gravity effects. Therefore it is clear that the anti-Brexit claims based on the gravity approach are invalid.
Unfortunately in the present fevered atmosphere, calm academic debate cannot take place; it is reminiscent of wars of religion where each entrenched side only wants to hear confirmation of its prejudices. One of the side benefits of Brexit occurring is that people may move on to normal technical discussions about optimal UK policies.
The way forward in Parliament
There are now three main parliamentary scenarios. In two of them, one or another WAPD – Mrs May’s or some even softer one agreed with Labour – gets through Parliament. The UK then leaves the EU in these two scenarios, initially for the transition period, as soon as either gets through.
In the third, there is no WAPD agreed and the possibility strengthens of a second referendum with Remain on the ballot paper, leading to either no Brexit or a renewed demand for Brexit. This third scenario is one in which Brexit uncertainty continues for a year or more, with unknown political consequences, given that the Leave voters in the first referendum would feel betrayed. This third scenario will only be welcomed by Remainers determined to reverse the democratic referendum decision. From a Brexit viewpoint, the only hopeful outcome would be a new Conservative leader and government determined to change the WAPD and get it through Parliament before exit. But how could this be achieved without an election to change Parliament’s composition? Also, what would be the odds on the Conservatives winning such an election, given the fury of the populace with the Conservatives for failing to deliver Brexit? Such hopes look forlorn.
Scenarios 1 and 2, if Brexit occurs: What of UK and EU interests post-Brexit?
In this section I ask what, given we have a WAPD as described, opposed widely by Brexiteers, is likely to occur if, as seems probable, Mrs. May steps down and is succeeded by a Brexiteer Conservative leader? Such a leader is likely to agree with my account above of UK interests. If so, what can such a leader do, if saddled with the WAPD?
Under the realist view espoused by economic analysis, this leader’s government moves to re-open bargaining with the EU. This would be done via normal diplomatic processes, in which the EU would face a possible general lack of UK political cooperation in a wide array of areas, including key ones like security and military matters; also the WTO option would be reactivated as a ‘walk away’ trade strategy, should the EU be unwilling to move away from its status quo aims.
The UK having left the EU after resolving basic administrative issues such as citizens’ rights, aviation/transport/visa agreements, there would probably be little appetite to revisit these issues; and the focus should be on the trade relationship quite narrowly. Nevertheless were it to be widened, the new government would make active preparations for a breakdown in these areas.
At the same time the UK would proceed to negotiate FTAs with non-EU countries, informing them of their aims on EU relations. These would be widely welcomed, as we already know.
How would the EU/UK bargaining go from here? We can think of the ‘game’ now as a series of proposals and counter-proposals. Start from the opening WAPD ‘proposal’ for the status quo. This violates UK interests radically, breaching its basic ‘red lines’. The UK counter-proposal is to walk away to WTO rules and No Deal. This UK counter-proposal damages EU interests radically, as we have seen: they face world prices in the UK market and tariffs in both directions are paid by EU traders. In order to counter this the EU now offers an FTA: Canada+ which consists not just of zero barriers on goods (Canada) but also the plus of mutual recognition in services where EU interests are served by free trade, given a wide reliance on UK service industries. The UK wants either Canada or Canada+ more or less indifferently as its service industries are all highly competitive around the world. As noted earlier, while No Deal gives strictly better gains, the UK is likely to agree to this proposal for the sake of neighbourly relations.
The bargaining round, which may well take a few years to play out, is therefore likely to be resolved by Canada+. We can essentially rule out any other resolution because all other alternatives leave one side unacceptably badly off – beyond its red lines – or can be improved on by one side without making the other worse off.
What I mean by ‘unacceptably’ is literally that it will not accept it in the long run, when by walking away or co-operating it can avoid it. The EU can avoid No Deal by co-operating. The UK can avoid the status quo by walking away.
All this is illustrated in the following diagram: the top line shows how the UK ranks all options, with No Deal the best; the second line shows the EU rankings, with the status quo the best. Each side’s red lines of unacceptability are marked out on each side. Any resolution must be inside these. Canada+ within these is better than Canada for the EU and an equals with it for the UK. So Canada+ gets chosen.
Notice that all this diplomacy is carried out between ‘consenting sovereigns’. Neither will bring in outsiders because no outside power has jurisdiction or indeed wants it. In so far as third parties have preferences, they tend to favour the UK as they typically want to agree FTAs with the UK. As for the WTO, it allows states to negotiate FTAs freely; and in general favours all agreements that in net terms reduce trade barriers, just as will occur under the EU-UK renegotiation.
The need for a new Conservative leader and government
In order for this new diplomacy based on the UK’s true economic interests, not sandbagged by Remainers within the tent like Hammond and Co., there plainly needs to be a new Conservative leader and government, fully seized of the Brexit case for free trade and so on. The current leadership/government has proved that it has neither the understanding nor the will to pursue the UK’s true interests. Without it changing no progress along the lines discussed here is possible.
It is now very likely that the Conservative Party will change its leadership, if only for reasons of pure survival. With the agreed extension, the Conservatives face carnage in the local elections and if the European elections take place, annihilation in those. This will inform the party of how unpopular its failure to deliver Brexit has made it. Its best hope then is for Mrs. May to go and for a new leader to chart a new direction, while making it clear that the new government rejects and regrets the old government’s failed Brexit agenda.
What are the implications of the realist view for parliamentary votes?
MPs now have some time for reflection during their Easter recess. They need to ponder the effects of their votes. Any MP that wants to avoid the chance of that third scenario of possibly No Brexit needs to consider voting for one or other WAPD. With either of them, Brexit occurs and the renegotiation can be launched under a new Prime Minister.
An ERG Brexiteer will prefer Mrs May’s original WAPD since it does not contain extra ‘soft’ commitments put in to satisfy Labour. These become yet another element to be renegotiated. In principle that too will be jettisoned; but it adds complication.
A DUP Brexiteer will remain nervous about the backstop in Mrs May’s WAPD; and could be less nervous with a softer one including a customs union because with that the backstop does not come into play. Nevertheless a DUP MP should reflect that none of these will survive renegotiation and should not therefore be unduly concerned. What it really needs from Mrs May and her potential successors is a guarantee that whatever is renegotiated it will never include differential treatment for Northern Ireland, or indeed any other devolved part of the Union. But they should feel confident on this: the Conservatives have been robustly and consistently a unionist party.
It should be noted by both these groups that in opposing any WAPD they are playing the role of ‘useful idiots’ to Remainers who want no Brexit, leading to a second referendum.
When one turns to Labour MPs and Mrs May, both involved in negotiations over a softer WAPD, they should reflect that their new WAPD causes both sides difficulties – Mrs May because it infuriates most Conservatives, Labour because it will infuriate the substantial Labour group that wants a second referendum rather than any sort of Brexit; but at the same time achieves no extra long-term ‘softness’ in the outcome, as the added-on soft elements will simply be the first to go in the inevitable renegotiation.
Reflection on all sides should therefore have the effect of terminating the May-Labour negotiation while logically inducing ERG and DUP Brexiteers to push the May WAPD over the line.
The realist view of post-Brexit affairs clearly implies that the UK, once it is out of the EU will behave like any other sovereign power and see that its foreign relationships evolve to suit its interests. So far, these have been stitched up in talks with the EU due to a Remainer group of Tories who have opposed the Government’s Brexit policies in favour of industrial vested interests, in alliance with Labour opponents, and undermined its bargaining position vis-à-vis the EU which was in any case politically determined not to agree a good trade deal. No sovereign state could put up with this sort of stitch-up in the long term. This piece has described how a new government, fully seized of the UK interest in free trade and domestically set regulation, besides control of borders and the ending of budget transfers to the EU, will have both the incentive and the scope to achieve a logical renegotiation that reaches an EU agreement tolerable to both sides.
Under this view the key aim for Brexiteers should be to get the WAPD in some form – it does not much matter what form – over the line, so that Brexit definitely happens as demanded in the referendum. Policy in the future will then evolve to meet UK interests.
Theresa May has been making a habit of saying different things – sometimes diametrically opposite things – to different people in her increasingly strident attempts to bludgeon down resistance against her toxic Withdrawal Agreement. To Remainers she has been saying that voting against her deal will lead to a no-deal exit; while at the same time telling Brexit supporters that voting against her deal will lead to no Brexit, or at least to a long extension.
The latest example of this kind of tactic came when it was reported in The Times on Friday 5th April that “Senior ministers told their Labour counterparts yesterday that Theresa May’s Brexit deal with the European Union already includes a customs union ‘in all but name’.”
This is the very same deal which Theresa May has spent the last few months assuring Brexit supporters would not require the UK to be in a customs union with the EU and would allow the UK to pursue an independent trade policy.
It is this persistent but transparent duplicity – transparent in the sense that a two-year old child could see through it – which has destroyed the credibility of the Prime Minister and eliminated any trust in her on the part of her country, her party, or for that matter the EU leaders with whom she tries to negotiate.
So which is right? In this instance of the customs union and her deal, what senior ministers told the Labour Party is true and what the Government has been telling Conservatives and Brexit supporters is not. As I explain here, the backstop Protocol is a customs union, so if we cannot do a long-term deal with the EU, then we will automatically fall into it and will be stuck there until the EU lets us out. And the Political Declaration which sets out certain aspects of our long-term relationship requires the UK to submit to a customs arrangement built on the backstop, and rules out a conventional Canada-style Free Trade Agreement. Moreover, the legal linkage between the Withdrawal Agreement and the Political Declaration means that the EU will be legally entitled to require the UK to enter the backstop and stay there indefinitely if the UK tries to secure a long term agreement which departs from the Political Declaration.
State aid controls
There is another aspect of the Withdrawal Agreement which it seems the Government has not been so keen to explain to the Labour Party – that is its provisions on State aid controls. These controls would fully apply during the transition period, but then the UK would be compelled to carry on applying EU rules on State aid even after we have left the transition period as part of the backstop. The European Commission would “supervise” the way the UK’s Competition and Markets Authority carries out its task. We would continue to be bound by the judgments of the European Court of Justice on the ever-expanding scope of EU State aid rules.
Paragraph 79 of the Political Declaration requires the UK to incorporate into our long-term agreement with the EU State aid rules “built on” those in the backstop. So we would be unable to escape from these rules even if we negotiate our way out of the backstop. My advice to the Labour Party is “read the small print before signing anything”.
But deep worry about a foreign power exercising these State aid controls over the UK should not be confined to socialists intent on subsidising and nationalising industries. They strike directly against pro-competitive tax policies introduced by the Conservative Government. On 2nd April, the European Commission announced a finding that the UK’s “controlled foreign company” tax rules breach EU State aid rules. This has been greeted with a Sunday Times headline: “Brussels lands FTSE giants with £1bn tax bill”.
The absurdity of this situation is that if Theresa May had not chosen to exercise prerogative powers in a legally questionable and constitutionally unacceptable way to extend Article 50, we would have left the EU on 29th March and the European Commission would have been powerless to make a finding against the UK on 2nd April.
As it is, the Commission will be able to pursue us on this issue for as long as we stay in an Article 50 extension. If we were to agree to Theresa May’s Withdrawal Agreement then the Commission could carry on pursuing us throughout the transition period and indeed would be entitled to bring a case against us in the ECJ up to four years after the end of the transition period.
It is impossible to understand why a term so detrimental to the UK’s national interest was ever agreed, in what must amount to the most incompetently conducted negotiation in the history of the world.
Can we get out of a customs union?
The Attorney General Geoffrey Cox QC seems to have become something of an advocate for staying in a customs union with the EU, as a possible route for leaving the EU. In an interview with Laura Kuenssberg on 3rd April, Geoffrey Cox claimed that if, “in some considerable years time”, we wanted to leave that customs union then “There’s nothing to stop us removing ourselves from that arrangement, so we can’t look at these things as permanent straitjackets upon this country.”
This is a very important claim, and it needs to be looked at very carefully before it can be accepted.
A normal customs union treaty, like all trade treaties, would contain a notice clause – so we could leave a normal customs union agreement if we wanted to. But the problem is and remains the Withdrawal Agreement and its backstop Protocol which, as Geoffrey Cox rightly acknowledges, allows the EU to lock us in indefinitely.
If the Prime Minister’s proposal were to strip the backstop Protocol out of the Withdrawal Agreement and replace it with a customs union agreement with a notice clause, then what Geoffrey Cox says would be true.
However, it seems that that is not what the Prime Minister is proposing. She apparently wants to keep the legally-binding Withdrawal Agreement and backstop Protocol, and, to appease Jeremy Corbyn, to add an explicit commitment by the UK to enter into a long-term customs union agreement on top of that.
And why, in those circumstances, would the EU agree to include a normal notice clause in the customs union agreement? That would provide to the UK an escape route from the Irish backstop which would be blindingly obvious to the EU. So instead of a normal notice clause, they will insist on a clause which reinstates the backstop Protocol if the UK drops out of the Customs Union agreement. The EU will argue that this is necessary to protect the peace process etc. etc., if the UK ever decides to leave the Customs Union.
There does not seem any legal way of preventing the EU from insisting on this. Our negotiating position will be incredibly weak, given that if we do not agree to the terms on which they insist for the future relationship agreement then we will drop automatically into the backstop Protocol and stay there indefinitely.
From the EU’s perspective, it is hard to see why they would ever give up the backstop Protocol if we are foolish enough to agree to it becoming binding. It will act as a permanent dog leash with which the EU can restrain the UK’s international trade policy and competitiveness, which sill sit behind any trade agreement we do with the EU.
If the Attorney General wishes to persist in making claims that “there’s nothing to stop us removing ourselves from” a customs union, then he needs to explain exactly how we can escape from the backstop trap.
This illustrates the fact that the real poison in the deal which Theresa May has negotiated with the EU is the legally-binding Withdrawal Agreement and its backstop Protocol with no unilateral exit clause. For inexplicable reasons, she seems determined to persist in inflicting this unprecedented treaty on the United Kingdom, regardless of the form of the future relationship with the EU.
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29th March, at 11pm, was Brexit hour: the point at which – so the British people had been promised for the past two years – we would finally be leaving the EU. As we all know, that did not happen.
For longer than those two years – indeed, for almost three – Vote Leave, having led the campaign for Brexit and the referendum having been won on 23rd June 2016, has been subjected to a sustained campaign of what can only been seen as attempted retribution and harassment. Many of Vote Leave’s former employees found it hard to get jobs after the referendum, and some later lost the jobs that they had succeeded in landing. Vote Leave’s donors, out of the blue and 18 or more months after the event, were hit by HMRC with millions of pounds of tax bills, because they had patriotically donated (precisely as had been envisaged by the referendum law, which said nothing at all about taxing those donations) to the Leave campaign.
Both the Electoral Commission and the Information Commissioner conducted interminable, repeated investigations in an apparent effort to find something – anything – wrong with Vote Leave’s conduct; and thus, however unfairly and glancingly, to seemingly do their bit to delegitimise the result. Numerous marginal figures published – indeed continue to publish – wild conspiracy theories, such as Vote Leave’s alleged (and entirely fantasised) connection with Cambridge Analytica, Russian bots and the like. All were refuted decisively (but the mud stuck, of course). On top of all this, the Charity Commission attacked those charities which had, since June 2016, dared go anywhere near seeking to discuss how to make Brexit work for the UK.
The Leave side of the campaign was, from the beginning, always the underdog. All major political parties; most media; the larger businesses and their trade associations; the metropolitan consensus – all were in favour of Remain. The Remain side spent at least 50% more than the Leave side, in and just before the campaign – some £19 million (or £28 million if you count David Cameron’s infamous taxpayer-funded leaflet from the Government), compared to Leave’s £13 million.
Vote Leave always had to scramble for money, and looked in the main to self-made businessmen and entrepreneurs to support them – people who by definition could demonstrate they had a realistic view of how business and the economy truly worked – while Remain relied on donations from rent-seeking large corporations and US banks; the major political parties; and, interestingly, the children of self-made businessmen (who bequeathed them vast wealth, including non-taxed Trust Funds) – the Lisbet Rausings, the David Sainsburys… Few of these demonstrated any understanding of the true drivers of economic growth and business success.
Since the referendum was won, up to this point Vote Leave has had to raise and spend over £1 million spend in defending itself, in particular from unending attacks from the regulators. The money was spent primarily on legal fees and on outside forensic investigators, hired to disprove wild allegations. Disproving those allegations did not help us: each time we refuted one wild claim, a different one popped up, fed by irresponsible and untrue allegations from sources that ranged from the usual dubious types, through to those as apparently respectable as parliamentary Select Committees. At the same time, one after another Leave entity found itself complaining of the opaque and confusing electoral law – the Political Parties, Elections and Referendums Act (PPERA) – whose lack of clarity allows the regulator to find, at whim, any campaigner guilty of this or that offence; slapping arbitrary – large or small – fines on those it decides to find guilty.
Being sure that one has properly obeyed electoral law becomes, with PPERA, a crapshoot. This was illustrated by the decision of Lord Justice Leggatt to find against the Electoral Commission in his judgement last year, when he agreed with a claim by a Remainer group that – contrary to the advice Vote Leave was clearly sent during the referendum by the Electoral Commission, in May of 2016 – a donation from one campaign to another must be counted, confusingly, as an expense to the donor as well as an expense to the recipient. If Leggatt’s judgement is left to stand, it says that the Electoral Commission was completely wrong in how it, the alleged authority, interpreted PPERA, and that it was completely wrong in the advice that it gave to Vote Leave. If, on the other hand, Leggatt’s judgement gets overturned, it means that one of the most senior judges in the country allowed himself to get totally confused as to what PPERA said.
Either way, it confirms that PPERA is not fit for purpose – and that thus, no campaigner can rely on the courts to protect them from the Electoral Commission’s overweening behaviour. The consequences of PPERA’s ambiguities have been severe for Vote Leave: it has allowed any ill-wisher to claim, as some now gleefully do, that we broke the law – even though Vote Leave had been, throughout the referendum, run with excruciating care and focus on proper good governance and compliance, as Gisela Stuart pointed out so eloquently on The Andrew Marr Show yesterday.
The ICO had, over the previous almost three years since the referendum, attempted numerous different claims against Vote Leave before then, writing no less than 46 times to us. Each time we had decisively rebutted those claims. This new allegation was best interpreted as a sign of how desperate the regulators appeared to be to pin something, anything, on Vote Leave. In a Kafkaesque decision, the Information Commissioner ignored sense and reality and found a way, despite Vote Leave’s clear proffered evidence that our website had secured the necessary permissions, to claim we had broken the rules, fining us no less than £40,000 for not having retained data – data that their best practice told us should have been (and it was) deleted.
Lord Justice Leggatt’s decision showed how uncertain anyone can be of success in fighting back against regulators’ findings. The law is uncertain; the regulators’ powers are considerable; the judiciary would have a natural and understandable desire to support the statutory regulator. Were Vote Leave to have taken all its cases through to the bitter end, and had we then lost, our calculations told us that the Directors would be landed with a total bill of as much as £1.3 million. If we won, we would recover only a portion of those costs, and would still be faced with the possibility of the regulator taking the matter further into the Appeal Court – as they have done with Leggatt – thus driving the cost to Vote Leave, of proving that we carefully kept within the law, to even higher levels.
Vote Leave’s donors, despite the vindictive tax bills, had been saintly, post-referendum, in supporting Vote Leave over almost three years, as we scrambled to pay that £1 million in legal costs, forensic investigations and other defensive activities. Over time, however, they became reluctant to throw good money after bad, particularly as other urgent Brexit needs developed. They had seen the referendum’s mandate – to leave the EU – diluted and potentially wrecked. With regulators, tax authorities and the courts, the donors had seen questionable decision after questionable decision going against Vote Leave. The totally inappropriate and highly questionable “gift tax” charges by HMRC were charges that had never been laid on donors in previous referendums; they bore all the marks of a vindictive punishment on these donors, for their having dared go up against the Establishment in their patriotic support of the Leave side of the referendum.
From Vote Leave’s side, the weight of forces was clearly, just as it had been in the referendum, against us. The Electoral Commission, in fighting us, could run up whatever bills it chose. It has its own large legal department; it hired the ‘Treasury Devil’, Sir James Eadie – the QC the government reserves for its most high-profile cases; it hired the City firm of Fieldfisher with numerous solicitors who appeared in court alongside Sir James, flanked as he was by two junior barristers. Vote Leave consisted solely of four individuals – three directors and Matthew Elliott – all of whom had worked since 2016 for no pay of any sort; all of whom had considerable responsibilities elsewhere; all of whom felt they were being pulled away, by this constant Remainer attack, from doing more productive work on behalf of achieving Brexit.
With donors who are justly resentful of what is happening, and dubious of the value of fighting on, we were forced to conclude that the £1.3 million would be challenging to raise. At the same time, we could see that given our experience thus far, a positive result from spending all that money was uncertain, despite our clear case that Vote Leave had fought a fair campaign and had taken every possible step to make sure we did not break any law (far more careful steps, we believe, than were taken on the Remain side – but then, being of the Establishment, it seems that Remain didn’t have to take such care as we did).
The way the law works as to how regulators have to conduct themselves means that both the Information Commissioner and the Electoral Commission were required to give Vote Leave a few weeks’ notice of their intention to fine us, giving Vote Leave time to put in representations to the regulators as to why their initial findings were, in our view, wrong. In both cases, we did that: for the Electoral Commission, we put in a 400-page rebuttal of their case, and for the Information Commissioner, we also offered a lengthy rebuttal. It is remarkable that readings of the Final Reports of both regulators shows that they took more or less zero account of the points in our rebuttals.
To be quite clear: we have paid the fines, after years of fighting this matter, because the weight of forces, in particular the financial burdens and risks, were heavily against Vote Leave. We absolutely deny that we had a ‘common plan’ with BeLeave. That excellent and individualistic campaign, run by the talented, creative and insistently independent Darren Grimes – praised by all for his campaign, including as it happens being profiled during the referendum by the BBC – had its own entirely different messages from Vote Leave’s. Claims that we have ‘admitted’ breaking the law are Remainer fantasies.
So, regulators are free to find as they will, against whom they like, aided by unclearly drafted legislation, and ignoring representations by those they regulate; acting as policemen, judge, jury and executioner altogether. The only way to challenge their rulings is through impossibly expensive court procedures. Regulators can incur whatever costs they like in pursuing their chosen target. Their investigations can repeat on the same point and can go on for years.
All this means something is wrong with referendum law in particular, but also is wrong with the way in general that regulation is set up in this country. Every month, or even week, it seems, Britain is called upon to establish a new regulator for this or that. In every case, there is an understandable reason why the regulation is being called for. But nobody gives much thought to the downside of what is becoming a massively regulated society: what costs does regulation impose? What kind of person, with what kind of bias, becomes a regulator? What loss to democracy is there, when unelected regulators increasingly take the place of Parliament and the judiciary?
In the case of Vote Leave, the question comes sharply into focus when talk continues of there being a second referendum on Brexit. If a second referendum were (disgracefully in my view) to come into being, which crazy civilian would ever be prepared to become a Director of the Leave side in that referendum, when the potential, indeed likely, penalty for winning would be that for three or more years after that second referendum, one would be defending oneself from attack after attack, up to and including referral to the police, on a law where no-one can agree on what it says?
Who would donate to the Leave side, when one’s reward would be to receive a tax bill on top of that donation (as well as a full expectation that even if your side won, the result would be suborned later on)? Who will be prepared to be employed by that Leave campaign, when it can be expected that finding a job after that will be difficult, and attack after attack will be made on your personal character?
At Vote Leave, we concluded on 29th March that we had done what we could; it would be inappropriate to carry on with the legal fight. We have paid the regulators’ fines, but purely because that was far less expensive than to fight the matter in court.
Parliament needs to be extremely careful, when and if it ever writes legislation for a referendum on any matter of this sort, to come up with a far clearer law – to legislate that donations to the referendum will not be taxed; to specify clearly when and how donations can be made from one campaign to another; to spell out that a donation is not an expense (any other interpretation would be madness); and, above all, to provide better protection – akin to what is afforded in electoral law – to those who, honourably and patriotically, answer the call of the Government to run a campaign which argues a case opposite to the Establishment’s bias. Such protections were not, it is now clear, afforded to those who answered, in 2015, the call of the Government to fight the Leave side of the last referendum.
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The threat of an Article 50 extension is causing anxiety for some sincere and committed Brexiteers. Some say they should back Theresa May’s deal to “get Brexit over the line”.
But the deal won’t deliver Brexit. Worse than that, it’ll lock us in to not delivering Brexit for many years to come.
If the deal goes through, the next day we will not have left the EU in anything but name. For at least 21 months of “transition” – extendable up to four years – we will have to obey the EU’s laws and rules, and be subject to the Commission and the ECJ as now. The big difference is that we will no longer have a vote or voice in the EU institutions. So no vote or veto against EU law changes which damage the City, or against the Commission’s use of State Aid controls to suppress our competitiveness.
The Brexit process will not be “over”, or “done and dusted” by signing the deal. Those 21 months – or longer – will be filled with the turmoil of ongoing negotiations about our future relationship. We will be negotiating against a real “cliff edge” at the end of the transition – unlike the largely mythical and Project Fear 3.0 “cliff edge” we face now. If we do not submit to the detailed terms offered by the EU for our long-term relationship, we will automatically fall over the cliff edge into the backstop Protocol.
The threat of this happening will put huge negotiating power – blackmail power – into the EU’s hands, since the backstop locks us out of having an independent trade policy and divides the United Kingdom.
Some people say the negotiations are like a game of football where we have done badly in the first half. They hope maybe we can do better in the second half under a new captain. But these negotiations are more like a game of chess: our current leadership has sacrificed all the major pieces and left the remaining pieces in positions where check-mate is inevitable in a few moves. The most competent and Brexit-committed future Prime Minister could not magically get us out of that situation.
Being locked in the backstop
The Attorney General rightly reiterated his advice that if negotiations with the EU drag on or break down, then under international law the UK risks being locked indefinitely in the backstop. The key danger was spelt out in the last paragraph of his advice: if through no demonstrable failure to exercise good faith “but simply through intractable differences” the negotiations deadlock, then there would be “no internationally lawful means of exiting the Protocol’s arrangements, save by agreement”.
The fundamental problem is that there is no need for the EU to engage in bad faith conduct in order for us to be locked in indefinitely: they just need to negotiate hard for terms we can’t stomach.
But some arguments have been flying around that we might be able to get out by showing the EU is acting in “bad faith”, or because there had been a “fundamental change of circumstances” under Article 62 of the Vienna Convention on the Law of Treaties.
The “Star Chamber” group took the best public international law advice, and concluded that these arguments have little substance. Leading public international law experts such as Professor Philippe Sands QC and Sir David Edward (the former British ECJ judge) have publicly expressed similar views.
Professor Guglielmo Verdirame of King’s College London takes a different view from other experts. He says that it is “not fanciful” that the EU might be found in bad faith if it “persistently and unreasonably” refused to conclude an agreement.
Let’s assume that he is right and that other distinguished public international lawyers are wrong. After an unknown period of time stuck in the backstop, and depending on the behaviour of the EU, the UK might have a case which is “not fanciful”. That case would then go to an international arbitration panel which would take months or years to rule. Before coming to a decision that panel is required to refer any issues of EU law to the ECJ in Luxembourg for a binding ruling. If Prof Verdirame is right, it is “not fanciful” that the UK might win: but if the arbitration panel rules against the UK, then we are completely and utterly snookered.
If the best advice I can give a client about a case is that it is “not fanciful” that he might win it, the client would need to be mad to go ahead with it – particularly if the downside of losing is huge, and other lawyers thought that the chances of winning are near zero.
The upshot is that if we agree the deal, we will be locked into the backstop and there will be no way out of it which is under our own national control. These theoretical legal arguments do not change the dynamics of the negotiations in practice. We would still have to negotiate with the EU on the basis that we are certain to have to go into the backstop if no deal is agreed before then, and that we would then have no reliable way out of it except with the EU’s agreement. The prospect of hanging the whole fate of the country on the roulette wheel of presenting some novel legal arguments to an international arbitration doesn’t help in the real world.
But what happens if Mrs May’s deal is defeated for a third time?
What has spooked some Brexiteers is President Tusk’s talk about a possible 21-month extension to our EU membership under Article 50. Such talk is cheap – it does not commit the EU’s leaders to grant an extension. Tusk is clearly trying to influence the political process within the UK. People shouldn’t be naive and fall for it.
There are big obstacles against a long Article 50 extension actually happening. All 27 EU member states need to agree it unanimously. If the EU offer it at all, it needs to get through our Parliament with whatever conditions the EU attach to it – and these conditions could require Parliament to pass primary legislation.
The leaked ‘Room Document’ prepared by officials for the forthcoming European Council meeting makes it clear that if an extension goes past 2nd July at the latest, then the UK must as a matter of EU primary treaty law (which cannot be changed in the time available) hold European Parliament elections in May. This is a big downside for the EU, as is the prospect of the UK as a full voting member state causing trouble for the next two years.
But what if the worst happens and an extension is agreed? That would be an appalling betrayal of the referendum result by arrogant parliamentarians who would rightly be held to account for their actions.
But the actual legal consequences would be much less damaging than the May deal. We would be hugely better off than under the deal. We would have effectively the same transition period as under the deal, with the big difference that we would still have a vote and voice in the EU institutions. But the biggest difference is that we would not be locked into the backstop at the end of 2020 or into the other very damaging parts of the deal which have been overlooked in the furore over the backstop.
It is understandably difficult for people to follow the different parts of this complex deal, what is in the Withdrawal Agreement itself, what is in the backstop Protocol, and what is in the Political Declaration attached to the deal. At Lawyers for Britain we have published a master chart which shows where the main problems are and has links to more detailed explanations.
There are some very bad parts of the deal apart from the backstop Protocol. We would have to carry on paying vast sums of money after 2020 which we do not owe under international law. The EU law which the deal applies to us even after the transition period is over would carry on having direct effect and supremacy in our courts over UK law for the indefinite future – something that leaving the EU was meant to end.
And the overlooked Political Declaration contains very damaging provisions. People think that because it is not legally binding, it can just be ignored and we can negotiate with the EU afresh. That is not true. Article 182 of the Withdrawal Agreement commits the UK as well as the EU to use best endeavours to negotiate an agreement in line with the Political Declaration. This means that if we ask for something in the future agreements that contradicts the Political Declaration, the EU can legitimately say that we are not complying with our obligation to negotiate what is in the Political Declaration and therefore the EU has no obligation in turn to give us an agreement which departs from it. Result: we are locked into the backstop with no way out, and no way to complain.
Although much of the contents of the Political Declaration are mere outlines, it does contain prescriptive provisions which are contrary to UK interests. The most damaging is probably Paragraph 23 on tariffs, which is simply not compatible with us negotiating the Canada-style Free Trade Agreement with the EU favoured by most Brexiteers. Instead, it requires “ambitious customs arrangements… that build and improve on the single customs territory” in the backstop. Dominic Raab resigned over the inclusion of this wording in the Political Declaration.
Paragraph 124 of the Political Declaration pre-commits the UK to carry forward the unequal disputes procedures of the Withdrawal Agreement, under which the ECJ will maintain jurisdiction via a backdoor (but effective) mechanism under which the ECJ’s rulings on EU law issues will bind the neutral arbitration panel. This extraordinary mechanism is totally contrary to international treaty practice under which sovereign states do not submit themselves to the courts of the other treaty party, and has so far only been imposed by the EU on the desperate former Soviet republics of Ukraine, Moldova and Georgia.
Paragraph 75 states that: “Within the context of the overall economic partnership the Parties should establish a new fisheries agreement on, inter alia, access to waters and quota shares”. This does not contain detail but is a concession in principle by the UK on there being fishery quota sharing as part of the economic partnership with the EU. The EU will undoubtedly leverage this concession to demand continued access to UK fishing waters for EU boats and the UK will be in a very weak negotiating position to resist the EU’s demands.
Mrs May trumpets the end of free movement of persons as her great achievement. But Paragraphs 50 to 59 of the Political Declaration commit the parties to establish “mobility arrangements” to replace free movement, and “to consider addressing social security coordination in the light of future movement of persons”. The precise content of these arrangements is not spelt out, but in view of its weak negotiating position up against the backstop, the UK may well be hard pressed to resist pressure to expand these arrangements.
If we are subjected to an Article 50 extension instead of the deal, none of these damaging provisions or negotiating constraints would apply to us, leaving a future Prime Minister in a position to negotiate with a free hand.
Conclusion – the choice
The threats of an Article 50 extension have created a dilemma which worries many committed Brexit supporters. I understand those worries. An emotional response is to just grab onto the deal, even if it is horrible, in order to “get Brexit delivered”.
But at this critical time it is vital that our MPs should vote not just on emotion but after looking very carefully at the legal as well as the political consequences of the courses of action.
The deal does not deliver Brexit except in name. Not only does in not deliver Brexit, it also makes it impossible for a future Prime Minister to deliver a real Brexit as well, for many years to come or indefinitely. The momentary relief from some Leave supporters at nominally leaving the EU is sure to turn to anger, disillusionment and blame when it becomes clearer and clearer that Brexit has not been delivered, and that the Conservative Party in particular – including the Brexiteers – has failed to deliver real Brexit and has delivered a locked-in fake Brexit instead.
But if the deal is rejected, the most likely outcome is that we get out on 29th March with the referendum objectives achieved of taking back control of our laws, our borders, our trade and our money. Please see the excellent article by Christopher Howarth which explains why it is so difficult for Remainers to force through an Article 50 extension in the remaining few days if the deal is rejected again.
It was bound to get rough as we approach the point of actually leaving the EU. Now is not the time to lose our nerve and back a gravely damaging deal which would betray Brexit supporters and be very bad for the country. Contrary to the Prime Minister’s contention that it is patriotic to support her deal, the patriotic thing to do is to throw it out again.
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We are now entering the final stage of Article 50 negotiations with the EU. The meaningful vote is due by or before 12th March, setting a deadline less than two weeks from today; and the Attorney General, Geoffrey Cox, will take centre stage in the Brexit endgame. As the EU have stubbornly refused to reopen the Withdrawal Agreement itself, Cox’s aim is to secure a legally-binding protocol on the backstop. The hope is that this will enable him to update his legal advice, which currently sets out that the backstop could exist “indefinitely” if negotiations on the future UK-EU trade deal break down.
History shows that when the EU’s refusal to renegotiate collides with the reality of domestic politics in a member state, Brussels has shown flexibility to facilitate ratification. Crucially, the legal instruments favoured by Brussels – protocols, addendums – have legal force even if the treaty itself remains untouched. At Open Europe, I have recently published a briefing which outlines historical examples of the EU revisiting a trade deal which was supposedly done and dusted. None are perfect analogies for the backstop impasse, but they illustrate wider points: that the EU is more flexible than it seems, and that it isn’t over until it’s over.
In 2009, the Republic of Ireland secured legally binding guarantees which enabled it to ratify the Lisbon Treaty. This included a commitment to a protocol, later annexed to the Lisbon Treaty, which clarified that the Treaty did not compromise Ireland’s sovereignty in several sensitive areas – abortion policy, tax policy and military neutrality. Whilst this did not directly contradict the provisions of the Treaty itself, it shut down unfavourable consequences of the Treaty which Irish voters feared. Although the UK’s case is a question of ratification by MPs, not voters, there is a parallel here. Many Brexiteer MPs object to the backstop not so much because of its substantive provisions, but because they fear the UK could end up ‘trapped’ there permanently. The EU may insist this is not its intention, but only by putting this commitment into stronger legal terms can they hope to win enough MPs over.
Ireland also convinced the Council to agree to legally-binding terms that the reduction in the number of EU Commissioners, established as a default by Article 17 of Lisbon, would not go ahead. Then Taoiseach Brian Cowen said at the time: “Ireland wanted firm legal guarantees. We got them.” If Theresa May can stand up and tell her backbenchers something similar on the temporary status of the backstop, there is hope for the deal yet.
Another example of EU flexibility came in 1992, when Denmark voted down the Maastricht Treaty. In the quest to unblock Maastricht’s passage, the Danes secured guarantees even stronger than those of the Irish. Though Maastricht itself was unaltered, its potential future effect in Denmark changed markedly. In particular, the European Council legally recognised two unilateral Danish guarantees recognising that any further integration in two areas – Justice and Home Affairs, and EU Citizenship – would be put to referendums in Denmark. This provided the Danish people with commitments in international law that they wouldn’t be sold out by a pro-integration government.
The Danish example bears parallels to today’s conundrum too. A key reason why the DUP (and indeed other Northern Ireland Unionists) oppose the backstop is because it can be superseded “in whole or in part” – raising fears that a future UK government might abandon Northern Ireland behind in the customs union while Great Britain leaves. Bluntly, the DUP does not trust London, which is why it poured scorn on the unilateral commitments offered by the UK to Northern Ireland in January. However, if the EU were to give legal recognition to these and other unilateral commitments, this would lend them much more weight. It did so for Denmark; it can do so for the UK.
There are two other examples of the EU offering legal guarantees to get a deal over the line. In 2016, a Joint Interpretative Instrument on the EU-Canada deal helped overcome the objections of the Wallonian regional parliament in Belgium. In the same year, another legal instrument – an addendum – was used after voters in the Netherlands rejected the EU-Ukraine Association Agreement in a non-binding referendum. These examples are less directly analogous to the backstop, but add further weight to the broader point that the EU can be flexible when it needs to be.
Many argue that the EU can’t, won’t or shouldn’t offer the same kind of concessions for the UK as it would for a non-departing member state. But this is an unreasonable argument which makes a virtue of inflexibility – and also flies in the face of the evidence that the EU is prepared to at least consider additional guarantees for the UK. The key question will be what guarantees Cox can obtain from the EU, and what legal effect they will have. Even Brexiteer MPs are now recognising that substance matters more than form, and are no longer insisting on a reopening of the Withdrawal Agreement. It remains to be seen what the new legal scrutiny group, fronted by Sir Bill Cash and Dominic Raab, will make of ‘Cox’s codicil.’ But if the EU is willing to show the same flexibility that it has done in the past, then a smooth, timely Brexit is still possible.
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Brexit is so close that I can almost taste it. If Parliament continues on its current path, the UK will leave the EU in just six weeks.
The drama around the Withdrawal Agreement and the various defeats the Government has faced in the House of Commons – along with the Irish border and future trading relationship questions – have dominated the news and eaten up our attention.
But when I voted to leave the EU I was not only thinking of trade and borders: I saw an opportunity to look to the best of British traditions and make them central to our future. And chief among the great British traditions that we wandered away from during our membership of the EU is respect for civil liberties.
As far as I’m concerned protection of civil liberties is the greatest of British traditions, dating back well over 800 years and affirmed by Magna Carta in 1215. Various other Acts and Bills have reaffirmed those liberties over the centuries, culminating in the European Convention on Human Rights (ECHR) which the UK signed in 1950, and the Human Rights Act 1998 which changed how ECHR rulings are implemented in the UK.
The ECHR has attracted a lot of criticism over the years, as the interpretation of the convention by the European Court of Human Rights (ECtHR) has expanded to interfere in more and more things, such as preventing the deportation of criminals including terrorists.
At the same time as the ECHR has led to many instances of being too soft on ‘human rights’, our membership of the EU has meant that some of our traditional civil liberties have been neglected.
Our relationship with the ECHR will not change when we leave the EU, but nevertheless Brexit represents an opportunity to renew our commitment to those civil liberties that have been laid down in law since 1215. And in my view it is of extreme importance that we reform the way extradition to EU countries works.
At present, the European Arrest Warrant (EAW) governs extradition between the UK and other EU countries. The EAW assumes that all justice systems across the EU are of equal quality, and that fundamental rights and liberties will be respected. This is, of course, nonsense.
There are two extracts from two very important pieces of British historical text that are relevant to how we handle extradition today.
Magna Carta said:
“No free man shall be seized or imprisoned, or stripped of his rights or possessions, or outlawed or exiled; nor will we proceed with force against him except by the lawful judgement of his equals or by the law of the land. To no one will we sell, to no one deny or delay right or justice.”
And the 1689 Bill of Rights said:
“…excessive bail ought not to be required, nor excessive fines imposed, nor cruel and unusual punishments inflicted.”
But over the last two decades the EU has expanded to take in a series of countries that routinely deny these civil liberties in their justice systems, putting British citizens and residents at risk of their traditional British civil liberties being denied.
These violations of civil liberties laid down in Magna Carta and the Bill of Rights are best measured by violations of two articles of the ECHR: Article 3 (prohibition of torture) and Article 6 (right to a fair trial). My report, published by Due Process, found that the top violators of these two rights over the last few years included countries such as Bulgaria, Croatia, Greece, Hungary and Poland.
But by far the worst in the EU in recent years was Romania, with numbers of violations comparable to Russia. There are a number of problems with Romania’s justice system; there are no jury trials, for example. But recent revelations about the role of the SRI, the Romanian intelligence service, in the prosecutor’s office have been shocking. Some experts have argued that these secret protocols amount to a ‘police state’ – and that’s what the EAW system leaves each and every one of us vulnerable to.
The Government has said that it wants to replicate the functions of the EAW from outside the EU. The EAW undoubtedly makes extraditions much easier, but at the cost of civil liberties. Continuing the UK’s membership of such a system would be a grave mistake.
It’s time for those of us who campaigned and voted to leave the EU to speak up, loud and clear, for the kind of future we want for our country. Not just on trade, borders and immigration, but in terms of the great British traditions we ought to restore. When the UK finally exits the EU, we should renew our commitment to civil liberties.
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The Attorney General, Geoffrey Cox, has been tasked with coming up with a legal solution to the ‘backstop’ that the Government hope will persuade or bamboozle the DUP and Conservative backbench MPs into backing the Prime Minister’s EU deal largely as it is. We do not know what he will come up with, but there is a range of options from a legally impotent ‘codicil’ to a full replacement of the backstop with alternative arrangements as mandated by the Commons’ vote on Sir Graham Brady’s amendment.
If the Attorney General concludes a legal agreement the Government may bring back a new ‘meaningful vote’ to approve the deal next Wednesday. To understand the importance of this we need to go through his options. But before starting, lets recap as to what the ‘backstop’ is and why it is a problem.
The problem with the backstop
The ‘backstop’ is the ‘Protocol on Ireland/Northern Ireland’ attached to the Withdrawal Agreement. The Withdrawal Agreement, if approved, would become an international treaty and the Protocol would have the same legal force as the main text.
The backstop would commit the UK to placing Northern Ireland in a Customs Union with the EU. Among other things, it commits the UK to keeping EU regulations in Northern Ireland, to EU policing of ‘state aid’ to prevent the UK Government using public money to Northern Ireland’s advantage and to following the EU VAT regime in the province.
These provisions are controversial on many levels. Firstly, imposing EU law on Northern Ireland over which they have no say is undemocratic. Secondly, as these provisions do not apply to the rest of the UK, it opens up the probability of an internal UK border. Goods going from mainland Great Britain to Northern Ireland will cross a regulatory and customs border. GB goods would require an archaic ‘A.UK movement certificate’, a paper form requiring a physical wet stamp (Article 4 of Annex 3 to the Protocol) which would in all probability not work. Creating an internal border with Northern Ireland on the other side has obvious economic (60% of NI’s exports/imports are with GB) and political problems for Unionists and is potentially in contravention of the principle of consent agreed in the Belfast Agreement.
No exit clause
So far so dreadful. The Protocol would divide the UK, lock Northern Ireland in a Customs Union following EU law under the European Court of Justice and subject UK trade with the EU to an archaic paper based system that is already obsolete.
If that is not bad enough, the real killer problem is that there is no way out. If the UK ended up in the backstop there is no exit unless the EU wished to let us leave.
The only route out of the backstop is contained in Article 20 of the backstop – the ‘review clause’. This states that if the UK notifies the Joint EU/UK committee of a desire to leave the “union and the United Kingdom decide jointly” on the outcome – i.e. the EU can say no. To make matters worse, the EU could only decide to let the UK out if the conditions in Article 1 (3) of the backstop are fulfilled: These are “the necessary conditions for continued North-South cooperation, avoid a hard border and protect the 1998 Agreement in all its dimensions.” These are all disputed and vague terms that are designed never to be met.
If the review clause is designed to keep the UK cemented in the backstop, it fulfils another vital task. It prevents the UK using the Vienna Convention on the Law of Treaties to denounce the backstop and escape. If there were no review clause, the UK could use Article 56 of the convention to give notice and walk away. The presence of the clause closes off that option.
Why did the Prime Minister agree the Backstop?
It is clear to me that no MP could in any good conscious agree a treaty that divides the UK permanently with no exit. So why did the Prime Minister and her advisers agree to it?
To the Downing Street Europe Unit, that dreamt up this horror, it is actually rather clever and fulfils many of their main objectives.
The central objective and current planning assumption in Downing Street remains the adoption of the Chequers Customs Partnership. This Chequers plan is based on technology and practices that do not exist that would create a virtual Customs Union between the UK and EU with associated regulatory alignment. This involves a complex system for tracking goods around the UK to ensure they do not enter the EU.
This plan is currently unworkable and will probably never be workable. It is also highly undesirable as it would lock the UK into EU rule-taking and prevent the UK having its own trade policy. But that is of little concern in Downing Street.
For Downing Street whether Chequers works or not is of little concern: the immediate aim is to remain in a Customs Union with EU rule-taking. The backstop was vital to get them there. With the backstop, Downing Street has a method of permanently cementing the UK into a Customs Union for Northern Ireland which they could then build on during the implementation period to get to Chequers/CU for the entire UK. For them, the permanence of the backstop is its primary quality and purpose. The UK at the end of the implementation period must stay in an all-UK Customs Union so the future framework will by necessity be a Customs Union.
Very clever, notwithstanding the fact that a Customs Union was ruled out in the Conservative Manifesto, would leave the EU in charge of our trade policy and our legislation without any UK say. No doubt it may even have crossed some of their minds that this would be a good platform to re-join the EU in a few years – in order to give us back our say etc. We now know this was all cooked up behind the backs of the FCO and DExEU.
So what might the Attorney General have asked for?
If the Attorney General believes he has been tasked with finding an exit to the backstop, he has an immediate problem. If he replaces or gains an exit from the backstop, he will unravel the entire strategy Downing Street has been working on for the last two years. If he does not, MPs are unlikely to be impressed and vote down the deal again. So here are his options:
1. Treaty Change
The text of the draft treaty could be opened up and replaced with something in line with the Conservative manifesto. Depending on what is changed, changing the treaty text is the only 100% legally fail-proof way of altering the meaning of the agreement. Options might include:
- Change Article 20 of the backstop – the review clause – and the linked objectives in Article 1 (3). If this article were changed to make the decision to leave one that either party could take, that would allow a guaranteed UK exit.
- Add a sunset clause. A new termination date could be added in the treaty text. For this it would be important the date was not too far in the future so as to be effectively permanent. In truth, there is no reason for it to be any later than the end of the implementation period, but that would be to misunderstand its real purpose.
Verdict: Potentially Potent—————————————————
2. A new Protocol
If the parties were keen to preserve their backstop unamended, they could agree a new Protocol. Protocols in EU treaties have the same legal force as the main text and derive their legal potency from it. Unfortunately, the existing text of the backstop is so clear in its objectives that there would seem to be little a new Protocol could say that would not cut straight across it – i.e. create an exit – or be irrelevant. If they do conflict and one declares it is superior, will the European Court of Justice find in the UK’s favour?
One weak idea might be to add a Protocol that puts a greater obligation on the EU to deliver a trade agreement that would replace the backstop. This is hardly an ideal solution. A legal commitment to deliver Chequers would arguably make the deal worse and effectively just replace one backstop with another backstop.
Verdict: Unlikely to be Potent———————————-
3. An ‘interpretive instrument’
Under international law, parties to a treaty that is imprecise can agree an additional ‘interpretive instrument’ that would set out in more detail how they intend it to operate. These are accepted under Article 31 of the Vienna Convention. The important point to note here is that the draft Withdrawal Agreement is actually very clear. It has a commencement clause (Article 185) and a review mechanism (Article 20 of the backstop) that gives the EU a veto. It would be impossible to interpret these clauses away.
If an interpretive instrument could not interpret an exit where one does not exist, it could potentially strengthen the “best endeavours” clause in Article 184 on achieving a new trade deal (based on the Political Declaration) to replace the backstop. This, however, would only make matters worse. As long as the backstop is there, any future trade agreement will be a Customs Union. Creating a further UK commitment to deliver a deal based on the Political Declaration and the parameters of the backstop would further tie the hands of any future Prime Minister seeking to negotiate a genuine trade agreement.
Verdict: Minimal legal value as it cannot overrule the treaty text
4. Amend the Political Declaration
The Withdrawal Agreement comes with a Political Declaration that is of itself not legally binding. The EU itself has said that it would be open to changing the Political Declaration – a tell-tale sign that this is a reasonably futile gesture. [The current one referenced in Article 184 is dated DD/MM/2018]
The Political Declaration sets out the broad parameters of a future trade agreement. While the wording is vague, it is clear that the current Withdrawal Agreement + the Political Declaration means a Customs Union. Indeed it is not well disguised. Paragraph 23 of the declaration refers to “single customs territory.”
So could the Political Declaration be amended to help allay concerns over the backstop? There are multiple problems. Firstly, the Political Declaration is not legally binding; it cannot touch the text of the backstop (and nor would we want it to be legally binding, given that it takes us to somewhere we don’t want to go). What it could do is redouble a joint commitment to move on with trade talks to come up with a replacement.
The problem with any potential replacement to the backstop is that the backstop itself sets a test that can only be met by agreeing a Customs Union. Article 1 (3) of the backstop as interpreted by the EU and Irish Government (with UK connivance) leads you to an all-UK Customs Union or a separation of Northern Ireland from the UK.
The Attorney General could insert lots of fine wording on sensible minimal border procedures, based on the Malthouse Compromise, into the Political Declaration. We could agree to move forwards on them at speed, using ‘best endeavours’ (Article 184) so they can be implemented at the end of the implementation period with no need for the backstop. We could put all of this in the non-binding declaration, but it would come straight up against the actual text of the backstop. The UK could still not leave unless the EU agrees and the Irish have made it perfectly clear that they would not accept any change at all. It would lead us back to a Customs Union.
Verdict: Almost worthless and could potentially make matters worse
5. A Council Conclusion including basic ‘assurances’ or comfort wording
In addition to amendment of the existing Withdrawal Agreement or text, the EU might seek to make the Attorney General accept some lesser form of life. Perhaps a standard Council Conclusion including basic ‘assurances’ or some other comfort wording.
The point to note here is that political agreements are not binding in EU law or international law. There is little these could add if the existing wording remains as is.
Verdict: Of no value whatsoever
6. No change, but the Attorney General changes his legal advice anyway
The Attorney General is supposed to be an independent legal adviser to the Government. This principle is long standing. The appearance of partiality by A-G Hastings led to the 1924 Campbell case and the fall of a Labour Government. More recently we have had the appearance of politically influenced advice in the run-up to the Iraq war.
In this case, the Attorney General has already put his thoughts down in public in the House of Commons and privately in a memo to the Prime Minister that was subsequently released. In this private advice, the Attorney General was emphatic that there was no escape from the backstop. It would not be credible if he decided to change this advice while leaving the Withdrawal Agreement untouched. A lawyer who negotiates a new agreement and then gives his opinion on the outcome of the negotiation is no longer impartial. He has himself for a client…
Verdict: Worse than useless———————————————–
We do not know what the Attorney General will come back with – but I will have a guess.
The key priority from Downing Street is for a minimal change that looks as if they have solved the backstop permanence problem while leaving them open to use it to build a permanent Customs Union.
On past performance, the EU is open to interpretive instruments as a way of avoiding tricky problems with treaties. An “interpretive instrument” was given to Belgium to help overcome Wallonian objections to CETA. The Dutch Government gained an interpretive instrument in a Council Conclusions annex, having voted down the EU-Ukraine agreement in a referendum. None of these made any difference.
So potentially they could agree an interpretive instrument that seeks to reinterpret the review clause and add in more commitments to future trade talks. In addition to that, Cox may seek to change the Political Declaration to add new options for the Northern Irish Border based on the Malthouse Compromise. They could even grant a modicum of treaty change – the date on the political declaration in Article 184…. Perhaps some new wording in Article 1 of the backstop setting a more manageable test.
This will then get packaged up and given a grand and meaningless name – a codicil. To add more theatre, the Attorney General will then try the same trick David Cameron tried and ‘lodge it at the UN’. This has no legal importance, and does not, as with David Cameron’s renegotiation, make a document a ‘treaty’ (see David Lidington here). So there we would have it, a legally worthless document announced with fanfare – game set and match…
Not so fast
Let’s stand back a moment. The Withdrawal Agreement was defeated by 230 votes, the largest in history for a government. It was defeated for good reason. It will cost £39bn, potentially split up the UK, prevent us having a trade policy, make the UK a rule-taker for years to come and puts the ECJ in charge of rules applied to the UK, penalties and even the calculation of the £39bn.
Of this deal, the backstop is undoubtedly the worst and most permanent feature – but not the only one. Taking this into account, the Commons voted to support Sir Graham Brady’s amendment that “requires the Northern Ireland backstop to be replaced with alternative arrangements to avoid a hard border”.
These should be the tests we set when looking at the Attorney General’s package:
- Does it replace the backstop with something reasonable? If it does not replace it, does it come to a guaranteed end in the near future or allow the UK the right of unilateral exit? If there is a technical legal way out, is it drafted in a way we think the UK Government would actually be able or willing to use it?
- Does the new agreement still tie the UK into remaining in a Customs Union / Chequers using the backstop as a means to get there? Or could a new Prime Minister be free to negotiate a genuine Free Trade Agreement?
- Taken as a whole, is what remains of the Withdrawal Agreement once the backstop is removed – essentially the £39bn for two years’ negotiating time – worth the money? Is there an alternative free trade deal on the table we want and need the implementation period to negotiate and implement?
The post As the Attorney General explores solutions to the backstop, how potent will Cox’s codpiece be? appeared first on BrexitCentral.
From various quarters, whispers or even open calls are growing for an extension to the UK’s Article 50 period which finishes, unless extended, on 29th March 2019. Most of those talking about an Article 50 extension seem to assume that the UK only has to ask for such an extension, and it will be granted unto us.
However, the European Union is not the beneficent Lord mentioned in the gospel according to St Matthew Chapter 7, Verse 7 (the Sermon on the Mount), and confidence that the EU will just grant any extension that the UK asks of them is likely to prove very misplaced.
The so-called “Cooper-Boles amendment”, which was defeated in the House of Commons on 29th January by 321 to 298 votes, seems to be based on such an assumption. This sought to pave the way for a Bill which would impose a legal duty on the Prime Minister to “seek an extension of the period of two years specified in Article 50(3) of the Treaty on European Union to a period ending on 31 December 2019”, or to such other date as the House of Commons might decide on a future motion.
The legalities of an Article 50 extension
But let us look at the legalities both of how an Article 50 extension can be granted, and the legal effects of such an extension. It is important to understand both in order to assess the likely reaction of the European Union and its Member States to an Article 50 extension request from the UK.
The governing provision is the closing words of Article 50(3) of the Treaty on European Union:
“3. The Treaties shall cease to apply to the State in question from the date of entry into force of the withdrawal agreement or, failing that, two years after the notification referred to in paragraph 2 [i.e. 29 March 2019], unless the European Council, in agreement with the Member State concerned, unanimously decides to extend this period.”
The effect of an extension, if granted, is to postpone the UK’s date of exit from the European Union, so that the whole panoply of rights and obligations of EU membership would continue to apply to the UK as a Member State during the extended period. So the UK’s obligation to pay into the EU budget would automatically be extended. But most importantly in view of its political repercussions, both the right of the UK to be represented by MEPs in the European Parliament and its obligation to choose them by direct elections would continue to apply to the UK.
On the face of it, this means that if an extension takes us past May, the UK must then hold a fresh round of European Parliament elections. There is a little bit of wriggle room, in that if the extension period terminates before the new European Parliament assembles on 2nd July 2019, such elections could be avoided as pointless. But if the extension is beyond that date, it is very difficult so see how the elections could be avoided.
That would mean that Nigel Farage would be re-elected to the European Parliament, probably in present circumstances as part of an increased phalanx of members of his new Brexit Party. And the EU’s internal legal advice is apparently that once elected, the UK MEPs would be entitled to remain members of the European Parliament for the rest of their five-year terms, regardless of when the UK leaves the EU. This would completely up-end the political agreements which have been reached for the sharing out of the seats which (it had been assumed) would be vacated by the UK in the European Parliament.
This is a huge spanner in the works for any Article 50 extension longer than three months. No doubt the ‘creative law-bending’ departments of the EU would be hard at work to think of ways round this problem, but at the moment it looks like a formidable difficulty.
But another problem arises if an extension is for three months or less – say to 29th June. It is not possible to treat such an extension as a “more of the same” extended negotiating period. This is because the current European Parliament term will end on 18th April 2019 prior to the European Parliament elections. Article 50(2) requires that the European Parliament must consent to any Withdrawal Agreement before the EU can conclude it.
So, at most, an extension to the Article 50 period which stops short of 2nd July would allow merely an extra three weeks for an agreement to be finalised and concluded.
As to how an Article 50 extension is granted, it should be noted that this requires the unanimous consent of each EU27 Member State within the European Council. This is actually a more stringent rule than for an Article 50 agreement to be concluded, which can be done by Qualified Majority Vote (QMV).
The effect of this requirement is to place enormous power in the hands of each individual Member State which may have demands it wants to make. If the UK comes crawling along, begging for an Article 50 extension, what better time to dig in and extract some useful concessions?
What terms will be imposed on an Article 50 extension?
Let us then turn to the question of whether, and on what terms, an Article 50 extension might be agreed if the UK asks for it. As is evident from Article 50(3) quoted above, such an extension is not simply a matter of choice for the UK, but requires the unanimous consent of all EU27 Member States.
First, the EU collectively is unlikely to agree to any Article 50 extension unless there is a clear purpose to it, other than just buying time for yet more turmoil and negotiation. Secondly, as mentioned already, the EU will be very reluctant indeed to agree any extension beyond 2nd July 2019 because of the consequences for the European Parliament elections.
But, thirdly, quite apart from what the EU as a whole may have concerns about, each individual Member State may have demands of its own.
As reported in the Financial Times on 1st February: “The Spanish are gearing up for a Gibraltar fight when there is an extension request,” said one senior EU diplomat. “It could be dangerous.”
And Germany also could have its demands. When my colleague Dr Gunnar Beck and I gave evidence in Berlin to the European Union Committee of the Bundestag, the subject of a possible Article 50 extension was raised by a number of the German legal experts giving evidence to the Committee. First, it was the general view that there would be great difficulties in extending it by more than a couple of months, because that would mean that the May 2019 European Parliament elections would need to be held in the UK. None of the German legal experts could think of a convincing way round this problem, since the election of MEPs in each Member State is mandated by the European treaties.
However, one of the German experts made an important point. He pointed out that the UK Government is using the fact that there is no mechanism to make the UK pay the ‘divorce bill’ unless a Withdrawal Agreement is ratified as a negotiating lever. He advised the Committee that Germany should require, as a precondition of agreeing to any Article 50 extension, that the UK should agree unconditionally to abide by the obligations to pay money into the EU budget which are set out in Part Five of the Withdrawal Agreement, and to submitting to the jurisdiction of the ECJ to set the amount of these payments, regardless of whether or not a Withdrawal Agreement was subsequently ratified.
One does not know whether the German Government will take up this suggestion, but it would be quite logical for it to do so. Germany will end up paying the lion’s share of the shortfall in the EU budget caused by the UK’s departure. Under the draft Withdrawal Agreement, the UK would have to pay a sum which has been widely estimated at £39 billion, but in fact is likely to end up considerably higher, particularly since Theresa May caved in to the EU’s demand that the ECJ should be given jurisdiction to decide the amount instead of a neutral international tribunal.
Under international law, the UK would have some legal obligations, but they would be very much lower (for background on this, see what I and Charlie Elphicke MP wrote here on the EU’s financial claims).
So taking advantage of the UK’s moment of weakness when it supplicates for an Article 50 extension, and taking the chance to lock in the EU’s legal entitlement to this enhanced sum come what may, would be quite the logical thing for Germany to insist on.
This illustrates a wider point about any application to extend Article 50.
By asking for a favour when up against the clock, the UK would once again put itself in a very weak negotiating position, where it would be subject to being blackmailed for further concessions.
It would also let the EU off the hook and remove the negotiation pressure on the EU to revise the terms of the Withdrawal Agreement.
Asking for an Article 50 extension would be a terrible, terrible idea.
The post Why seeking an extension to Article 50 would be a terrible idea appeared first on BrexitCentral.
As the vote on Theresa May’s deal grows near, some people seem to be looking desperately for means of escape from the backstop Protocol – or worse still, persuading themselves that means of escape exist or can be invented which will prove to be a mirage.
The Attorney General’s advice to the Cabinet explained the position with stark clarity. If the UK ratifies the Withdrawal Agreement, we cannot prevent the backstop coming into force, nor escape from it once it is in force, except with the agreement of the EU – and if there is a breakdown in negotiations then it will “endure indefinitely” with no legal route of escape.
Despite the clarity of the advice, some Members of Parliament seem to be convincing themselves – or maybe are being convinced by others – that there could be other routes out of the backstop if only the right amendment is framed in Parliament. It is vital that Parliament should not vote based on a mistaken understanding or wishful thinking about the legal situation. So some of these ideas need to be examined very carefully.
We can get out of the backstop Protocol by arbitration
There is a clause in the Withdrawal Agreement which commits the UK and the EU to use “best endeavours” and “good faith” to agree a future trade treaty which would replace the backstop. 10 Downing Street were publicly arguing that this could be enforced against the EU by arbitration. Conservative Party Chairman Brandon Lewis described the “best endeavours” obligation as a “very high legal bar” in a teleconference call with Conservative Party activists.
But the Attorney General’s advice to Cabinet explains with great clarity why it is “highly unlikely” that the EU would conduct themselves in such a way as to be vulnerable to an adverse arbitration finding. The clause does not require the EU to set aside its own interests or propose terms which the UK would like or find acceptable; “all they would have to do to show good faith would be to consider the UK’s proposals, even if they ultimately rejected them. This could go on repeatedly without such conduct giving rise to bad faith or failure to use best endeavours”.
So the Government and Party machines have been pushing in public legal arguments which the Government’s internal advice reveals they know to be rubbish. It is regrettable that Theresa May’s desperate political struggle to sell her deal to a sceptical Parliament, Party and country has gone beyond the realms of normal political spin and exaggeration into the territory of relying on misrepresentation of the legal consequences of the deal.
Now that this illusion about good faith arbitration has been put to bed by the publication of the Attorney’s advice, it is worrying that credence is apparently being given to other mistaken legal perceptions.
Vienna Convention and fundamental change of circumstances
An amendment to the Government’s motion has been tabled by Sir Edward Leigh. This “notes that the Vienna Convention on the Law of Treaties makes it absolutely clear that a sovereign state can abrogate any part of a treaty with an international body in case of a fundamental change of circumstances since the Treaty was agreed; notes that making the Northern Ireland backstop permanent would constitute such a fundamental change of circumstances; and therefore calls for an assurance from the Government that, if it becomes clear by the end of 2021 that the European Union will not agree to remove the Northern Ireland backstop, the United Kingdom will treat the indefinite continuation of the backstop as a fundamental change of circumstances and will accordingly give notice on 1 January 2022 to terminate the Withdrawal Treaty …”
In fact Article 62 of the Vienna Convention makes it absolutely clear that a fundamental change of circumstances cannot be used to excuse a State from complying with its treaty obligations, except in the most limited and extreme circumstances which certainly do not apply here. If the negotiations between the UK and the EU deadlock in the way envisaged in the Attorney General’s advice, that doesn’t even count as “a change of circumstances”: it is just one possible way in which the terms of the treaty pan out, not a change in circumstances external to the treaty. Even if you call it a change of circumstances, it cannot be relied upon to excuse non-compliance with the treaty because it is “foreseen by the parties” at the time of conclusion of the treaty.
The Attorney General’s advice (rightly) does not even mention this Vienna Convention argument as a possible route out of the deadlock, because it is a complete non-starter. It is a matter of puzzlement and considerable concern that Sir Edward Leigh and his colleagues have somehow been given the impression that a notice of termination could be given on this ground on 1 January 2022 as suggested by the text of their amendment.
Can there be a Parliamentary lock on the UK entering the backstop Protocol?
This suggestion arises from remarks by the Prime Minister on the BBC Today programme on 6th December, and the tabling of an amendment by Sir Hugo Swire and others which is billed as giving Parliament control over the coming into force of the backstop Protocol.
The wording of this amendment is long and involved, but the fundamental problem is that the United Kingdom under the treaty has no “lock” against the backstop coming into force. For international law purposes, Parliament is an organ of the United Kingdom and therefore cannot exercise any greater powers than are allocated to the UK under the treaty.
Confusion is caused on this point by the domestic law doctrine that Parliament can make or unmake any law, including in cases where that would cause the UK to be in breach of its international treaty obligations. But breaching international treaty obligations is a grave matter and it is therefore extremely doubtful if Parliament were given a theoretical right to block the Protocol that it would ever be exercised.
The amendment asks that Parliament be able to approve the commencement of the powers implementing the backstop. Parliament has that power anyway, since an Act of Parliament will be required to give effect to the Protocol inside the United Kingdom. In theory as a matter of UK law, Parliament could refuse to pass that Act. But if the backstop comes into force as a matter of international law, Parliament would have no choice but to legislate and to approve commencement of the powers, unless it were willing to put the UK into overt breach of its obligations under international law.
The amendment also calls for a legal duty on the UK Government “to have an agreed future relationship” or other replacement arrangements for the Protocol one year after it comes into force, and an assurance by the EU that “both parties intend to agree” by that date.
That is an assurance which the EU can easily give, and no doubt will give in a stage-managed and choreographed way, but which is completely meaningless in practice. Saying that they intend to agree does nothing to stop the EU from holding out for terms which are totally unacceptable to the UK, and blaming the failure to reach agreement on the UK’s intransigence in not submitting to their demands. Likewise, a legal duty on the UK Government to agree a future relationship by a certain date is completely meaningless, since it would only be possible to reach an agreement if the EU were to offer acceptable terms.
Unfortunately what this amendment contains is a mixture of legal nonsense in the form of meaningless or unenforceable legal duties and assurances, coupled it would appear with a good dose of wishful thinking or even self-delusion.
The UK has a ‘choice’ about whether to enter the backstop
The Prime Minister claimed in her interview on BBC Radio 4’s Today on 6th December that it was “not automatic” for the backstop to come into effect, and that the UK has a “choice”. This is only true in the sense that the backstop will indeed automatically come into effect, unless the EU is willing to do an acceptable deal with us before the end of the transition period, or unless the transition period is extended.
The limited element of “choice” which the UK has is whether to extend the transition period in order avoid the backstop coming into force for a time. That defers but does not solve the problem of the backstop automatically kicking in, at great cost in terms of money and greater cost in terms of keeping the UK under EU laws in a state of vassalage for a longer period. The UK would have no vote or veto on regulatory changes to EU rules which could cause severe damage to the UK financial services industry, and the risk of this kind of damaging regulatory attack against UK interests would go up and up the longer the transition period is extended.
Even the choice to extend the transition period is not unfettered. Under Article 132, a decision to extend the transition period is by the Joint Committee. This means that the EU and the UK must both agree to the extension within that Committee. Under Art.132(3) that decision must deal with a number of matters including establishing the amount of the UK’s contribution to the EU budget.
That is rather like having an “option” to buy a house which does not specify the price, allowing the seller to charge what it likes if the option is exercised. If the UK were for whatever reason desperate to extend the transition period and so defer (but not avoid) the backstop, the EU would have us completely over a barrel on the financial payments.
The UK now has a “choice” to avoid the backstop, by a very simple means. That is to reject Theresa May’s deal.
The Grieve amendment allows Parliament to take control of Brexit
It has been widely reported in the media that Dominic Grieve’s amendment would allow Parliament to take control of the negotiations with the EU after Theresa May’s deal is rejected, or even “stop Brexit”. This is not the case and these suggestions may be attempts to induce Brexit-supporting MPs to back the deal out of misplaced fears of what a Remain-dominated Parliament might do.
The amendment does not change any law. It simply waives a rule in the Standing Orders of the House of Commons which would prevent amendments being made to motions before the House when the Government reports its future intentions. But a resolution of the House of Commons does not, except where specified by statute or in very special circumstances, have any legal force. It cannot amend any law. It cannot direct the Government in the exercise of its foreign relations powers as a matter of law. Any effect it has in that context is political only.
Leaving on 29th March 2019 without a deal is the default course of action which is now hard-coded into the law. Any alternative route – whether a different deal with the EU, an extension of the Article 50 period, a referendum, or (most radically) a withdrawal of the Article 50 notice – would require the active cooperation of the Government in all cases, and in almost all eventualities the passage of a Bill through both Houses to Royal Assent between now and 29th March 2019.
Therefore Brexit-supporting MPs who do not think that this deal is in the national interest should not be deterred from voting against it by the Grieve amendment, or by implausible claims by the Prime Minister that rejection of her deal might lead to “no Brexit.”
Members of Parliament would be well advised not to accept any assertions about the legalities of the deal which emerge directly or indirectly from the government machine, without first obtaining independent legal advice.
The post Exposed: the legal myths being promoted about the backstop and the Withdrawal Agreement appeared first on BrexitCentral.
The Government is already on the rack over its refusal to publish the legal advice provided on the Brexit deal by Attorney General, Geoffrey Cox, despite a parliamentary motion ordering it to be done.
Cox will make a statement on the matter in the House of Commons later today (Monday 3rd December), during which he will doubtless be questioned about the leak in the Sunday Times of a letter he wrote in which he admitted that the UK would be trapped “indefinitely” in a customs union with the EU if the backstop comes into effect.
But ministers now face further questions as it emerges that a confidential analysis of the Withdrawal Agreement by the House of Commons’ own expert legal team comes to the same conclusion as President Trump – that Theresa May’s Brexit deal would prevent the UK from entering trade deals with countries such as the US.
The bombshell is contained in a 27-page legal note prepared by the House of Commons EU Legislation Team, which is headed by Arnold Ridout, its Counsel for European Legislation. A highly respected specialist in EU Law, he has previously worked for the EC Commission’s Legal Service and advised the European Secretariat of the Cabinet Office and prior to taking up his current role in 2014, he was Deputy Legal Adviser to the House of Lords EU Select Committee.
The note – marked ‘not for general distribution’ and obtained by BrexitCentral – is dated 26th November and states that the UK-EU customs union which would come into effect if the backstop is triggered “would be a practical barrier to the UK entering separate trade agreements on goods with third countries”.
This is in direct contradiction to the Prime Minister who has insisted that her deal will allow the UK to have an entirely independent trade policy. Indeed, she told the House of Commons just last Monday how “for the first time in 40 years, the UK will be able to strike new trade deals and open up new markets for our goods and services”.
The legal note – titled The Withdrawal Agreement: Legal and Governance Aspects – also appears to suggest that the Prime Minister’s claim (also repeated last Monday) that her deal “takes back control of our laws” by ending “the jurisdiction of the European Court of Justice in the UK” with “our laws being made in our Parliament, enforced by our courts” does not entirely stand up to scrutiny.
In its summary of “Continued application of EU law”, the note states:
- EU law will apply during the TIP [transition or implementing period], but essentially without formal UK participation in its making;
- EU law will apply after the TIP to protect the rights of EU citizens in the UK. This could extend for some considerable period.
- EU law also will apply after the TIP in relation to the Separation Issues and the Financial Settlement. Again, this could extend for a considerable period.
- EU law will apply extensively, particularly in Northern Ireland, under the “Backstop” found in the Ireland/Northern Ireland Protocol.
- EU law in relation to goods, turnover taxes, agriculture and fisheries as well as veterinary and phytosanitary rules will apply in the Sovereign Base Areas of Cyprus.
- After the end of the TIP the CJEU will continue to determine the interpretation of EU law applicable under the WA by the mandatory reference procedure from the arbitration panel.
Moreover, if the backstop has been triggered and the UK-EU customs union established, it adds that:
“The UK will conform to specific EU legislation on customs, including with respect to third countries. To provide a ‘level playing-field’ the UK commits to non-regression (from the law as it stands at the end of the TIP) on EU environmental protection, labour and social standards, state aid and competition and state-owned undertakings in respect of administration of tax…. On the UK side of the customs union, in the ‘United Kingdom in respect of Northern Ireland’, specific additional EU legislation applies on customs, certain VAT and excise, and certain technical standards relating to goods”.
Another section in the document which caught my eye concerns what happens when the proposed Joint Committee (of representatives of both the EU and UK) which supervises the Withdrawal Agreement and the backstop cannot reach a consensus on certain issues:
“Both UK and EU are represented on the Joint Committee, so no decision may be made without the UK’s agreement. This may not be the same thing as the two parties having equal power, as the aims of the parties will matter. If the Joint Committee is unable to reach a decision, in some circumstances, that will block next steps. The party that wants those next steps to occur, will then be at a practical disadvantage. By way of example, i) the Joint Committee sets the limits of state aid that can be authorised by the UK for agriculture. If limits are not agreed, state aid may not be authorised.”
In other words, in those circumstances the UK would not be free to set levels of subsidy for UK agriculture, but the EU would remain free to adjust its Common Agricultural Policy however it liked. EU products would therefore have open access to the UK market via the customs union, while Brussels could stop us subsidising agriculture at all unless it was agreed in the Joint Committee.
And given that the proceedings of the Joint Committee will be confidential, the document concludes that “the absence of transparency would impact on any proposal for Parliamentary scrutiny of the UK participation in the working of the JC”.
Meanwhile, many readers will have concerns about the potential for the UK being disadvantaged over the working of the arbitration panel appointed for the purposes of dispute resolution. It will comprise five people: two nominated by each party and a chairperson from a list agreed by both, and also be encouraged to try to take decisions by consensus, but can decide by majority.
As the legal note explains:
“This raises the prospect of a decision adverse to the UK on the view of the EU appointed panel members and the jointly appointed chairperson outvoting the view of the UK appointed panel members.”
Reacting to the contents of the document, Conservative MP Marcus Fysh, who sits on the International Trade Select Committee and European Scrutiny Committee, told BrexitCentral:
“This document identifies and explains many of the very serious legal problems for the UK that would emerge from the Prime Minister’s proposed Withdrawal Agreement, should it be approved. It is wishful thinking and irresponsible to accept the Government’s spin of this damaging legal reality, or to think it could be used as a basis for successful further negotiation. I don’t believe any MP in possession of these facts could in good conscience ignore them and support the Withdrawal Agreement.
“The EU and UK have a great future as friends, but this is not the way to achieve it. Let’s waste no more time, prepare for all eventualities, and work constructively for an advanced but regular Free Trade Agreement which respects the independence and integrity of our jurisdictions while making trade and community relations smooth, effective and efficient. We have set out how to do this, contrary to the Government’s attempt to say otherwise, and there is no reason a plan and schedule for ratification of such an agreement cannot be agreed by the end of March so conditions remain smooth from the end of March until that happens. That is the way to preserve the faith the people of the UK have in their politics, and we need a Government that will ask for it.”
You can view the leaked document for yourself below or by clicking here to see it as a pdf.
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