Brexit breakdown: EU demands UK withdraws Bill

Is this the end of the road for Brexit trade talks? The EU says it will take legal action if the UK doesn’t withdraw certain provisions from the Internal Market Bill by the end of the month. Michael Gove responded bluntly on Thursday afternoon: “I made it perfectly clear to Maroš Šefčovič (EU Commission Vice President) that we would not be withdrawing this legislation.” So that’s that, at least for now.

The EU Commission was facing pressure last night to suspend talks until the UK backs down. It hasn’t done this yet, perhaps because the negotiations are already frozen. The eighth round of talks in London produced no results. EU negotiator Michel Barnier’s statement that “significant differences remain in areas of essential interest” and that “the UK is refusing to include indispensable guarantees of fair competition in our future agreement” could have been copied and pasted from several weeks ago.

Lord Frost, the government’s chief negotiator, insists that the talks will go ahead next week as planned. He said: “We remain committed to working hard to reach agreement by the middle of October, as the Prime Minister set out earlier this week. We have agreed to meet again, as planned, in Brussels next week to continue discussions.”

But, with a deeply indignant European Commission, the opportunities for a grand compromise are scarce. If Downing Street’s intention was for the Internal Market Bill published this week to bring Brussels back to the table prepared to make major concessions, it appears to have failed dramatically. Diplomats from all 27 member states joined the extraordinary UK-EU Joint Committee meeting this afternoon, when usually there would be just seven attendees. The message was that they are serious about protecting the Northern Ireland Protocol in its current form.

One interpretation of the government’s actions by its critics is that the stand off is a result of confusion at the heart of government. Another is that Boris Johnson has given up on achieving a deal. Unwilling to compromise over state aid, the government is now focussed on preparing the country for a “no deal” exit, and considers the lack of a deal to be justification for eliminating the customs between Northern Ireland and Great Britain which were established in the Withdrawal Agreement.

As Mujtaba Rahman, a plugged-in former UK Treasury and European Commission official put it: “The EU will study the legislation then act. But it’s hard to see trade negotiations with the UK in these circumstances. The eventual UK hope of a Canada deal… isn’t the world we’ll be in if the government goes down the path of forcing the EU to re-up contingency plans for the North-South border.”

The consequences of such a move go far beyond UK-EU trade. Removing checks in the Irish Sea may force the EU to implement a border on the island of Ireland, which many fear could bring a return to violence in Northern Ireland.

Then the government will have to contend with the damage to Britain’s reputation as a good-faith negotiator, which could be raised by other countries as an extraction tool in trade negotiations. And, perhaps most damagingly, it would likely increase support for Scottish independence, with Nicola Sturgeon highlighting the cost of suddenly cutting ties with the UK’s largest trading partner.

However, there is a chance that the Bill will be mutilated in the House of Lords. ITV’s Robert Peston has reported that some Lords are willing to disregard the Salisbury Convention on this occasion, arguing that as the 2019 Conservative manifesto said the Withdrawal Agreement was “a great deal” that would be “signed, sealed and delivered”, any legislation to renege on it cannot be considered a manifesto promise.

Notably, Lord Howard, a former Conservative leader and ardent Brexiteer, rose to oppose the Bill on Thursday, saying: “How can we reproach Russia, or China, or Iran when their conduct falls below internationally accepted standards, when we are showing such scant regard for our treaty obligations.” Lord Lamont, a former Conservative chancellor and another ardent Brexiteer, said the Bill is “impossible to defend.”

He added: “I think the government had an arguable case, but that case was destroyed the moment Brandon Lewis (Northern Ireland Secretary) said the means the government was going to use to change the Northern Ireland Protocol was in breach of international law.”

If Howard and Lamont can’t get behind the government on this, it is difficult to envisage the Bill getting through the Lords in a timely fashion. Several Tory MPs have already been critical of the government’s position.

Cue yet another constitutional crisis – this time in the middle of a pandemic.