What’s in Theresa May’s Brexit deal and why is it so unpopular?

Twice this year the UK parliament has voted down the Brexit deal 

Parliamentary approval is one of the conditions necessary for its terms to take effect. Without it, the default legal position is that the United Kingdom will leave the European Union without an agreement.

The turmoil in the House of Commons forced the government to seek a delay to its scheduled departure. In response, the EU has offered the UK a choice of two short extensions to the original exit date of March 29 – which depend on whether or not the deal is ratified.

The agreement deals with the terms of the UK’s exit and sets out a framework for future relations.

What are the main arguments?

Theresa May insists the deal is in the UK national interest and delivers on the result of the June 2016 referendum. Its supporters argue it’s a sensible compromise, while the EU and many in business say it’s vital to avoid a chaotic exit.

The controversial Irish “backstop” – the mechanism designed to guarantee an open border on the island of Ireland – was one of the main reasons MPs rejected the agreement. Many “leavers” also argue that the deal leaves the UK too closely entangled with the EU and some say they would prefer no deal at all.

Many “remainers”, meanwhile, say the agreement is far worse than current membership terms and fails to deal properly with future relations. Some would like to offer the public the chance to overturn the result of the 2016 referendum. The main Labour opposition says the deal does not meet its six Brexit tests, which include a customs union with the EU.

What does the Brexit deal contain?

The long Withdrawal Agreement (on the terms of the UK’s exit) and shorter Political Declaration (on the future relationship) were the result of nearly two years of negotiations between London and Brussels. The deal was approved by the government and the other 27 EU countries in November.

A transition period

The legally-binding Withdrawal Agreement would establish a “transition or implementation period” to run after Brexit until the end of 2020, during which many existing arrangements would stay in place.

Although no longer an EU member, the UK would still have to conform to EU rules during this period. The transition can be extended “for up to one or two years”, with a decision taken by mutual consent before July 1, 2020.

• Critics of the deal argue that far from taking back control — a key pro-Brexit referendum slogan — the UK would be surrendering it to the EU. It would be outside the EU’s institutions with no formal say over rules it would have to follow.
• The advantage, however, it that this avoids a “cliff-edge” Brexit, giving people and businesses time to adapt to the UK outside the EU. It also allows more time to reach a final deal.

Money and rights

The accord settles the “divorce” issues to untangle the UK’s 46-year membership of the EU, largely confirming terms agreed earlier on two priority areas: money and citizens’ rights.

It establishes a mechanism for calculating the financial settlement — money the UK owes the EU to settle its obligations. No figure is mentioned but estimates have put it above €40 billion. It includes contributions to be paid during the planned transition period — to run until the end of 2020. If the period is extended, more payments will be due.

• Many Brexiteers hate the financial settlement because it still involves large sums being paid to Brussels and brings no guarantees regarding the future relationship.
• However, the EU made it clear from the outset that it’s about settling the bill for commitments undertaken — and it’s been argued that to renege on these would seriously damage the UK’s international reputation.

On citizens’ rights, under the deal, EU nationals in the UK and Britons in the EU – plus family members – would retain residency and social security rights after Brexit. Freedom to move and live within the EU and UK would continue during the transition period. People would be allowed to stay when it ends and apply for permanent residence after five years.

However, the right for British citizens settled in an EU country to move freely after Brexit within the bloc – as they currently can – remains up in the air and subject to a possible future agreement. This concerns those who want to retain as many of the UK’s existing EU benefits as possible.

What the deal means for EU citizens living in the UK

What the deal means for Britons living in the EU

Q:Will I be able to carry on living in an EU country after Brexit?

A: Yes, the draft agreement safeguards your existing rights of residency up until the end of the transition period, which as it stands is December 31, 2020. This is a reciprocal arrangement with the EU under the agreement. This also applies to family members, although there are rules as to who is a family member.

Q:What about after the transition period?

A: If you want to continue living in an EU country after that you will have to apply for permanent residence status in your host country. To do that you will have had to have lived in the host country for five years by the end of the transition period.

Q:What if, by the end of the transition period I haven’t lived in the EU country for five years?

A: Don’t worry. You will still be able to acquire the right to permanent residency by completing five years living in your host country, as long as your five years started before the end of the transition period.

Q:Will my permanent resident status be conferred automatically, with no further action on my part?

A: No, you will have to apply for your new permanent residence status in your host country no later than six months before the end of the transition period. The application process may vary between member states.

Q:Will I be able to continue working in the EU host country?

A: Yes, in general, you will have the same rights working in the EU as you have now.

Q:Will I be able to leave and re-enter my host country as I please?

A: Yes, as long as you hold a valid passport. However, there is a question mark over moving on to a country other than the host nation you are living in after Brexit. That is not covered in the document. Until the end of the transition period, you can move between member states freely.

Q:Once I have permanent residence status can I lose it?

A: Yes, if you subsequently spend more than five years away from your host country.

The controversial backstop

This part of the withdrawal agreement in particular brought about its defeat in January, thanks to hostility among Conservative Eurosceptics and Northern Irish unionists.

The Withdrawal Agreement envisages a “backstop” mechanism to guarantee an open frontier between Northern Ireland in the UK, and EU member the Republic of Ireland. This is seen as necessary given the different tariffs and regulatory standards likely to result from the UK’s decision to leave the EU’s single market and customs union.

The backstop is described as a kind of insurance policy, should future talks fail to produce a free trade agreement. It would ensure no physical border infrastructure, allaying the risk of a return to the divisions that existed prior to a 1998 peace accord which put an end to decades of political violence.

Under the deal, the whole of the UK would remain in a “single customs territory” – seen as a temporary customs union – with the EU until at least July 1, 2020. This could be extended or terminated, but only by mutual agreement. Tariff arrangements would be the same as now.

• This has infuriated many Brexiteers as it would prevent the UK from applying trade deals with other countries if tariffs are removed.
• The UK government argues that neither the UK nor the EU wants the backstop and so it is unlikely to last.

 

Northern Ireland would also stay aligned to some EU rules, including in some areas of the single market. This would avoid checks at the Irish border — but would mean some controls between Northern Ireland and the rest of the UK.

• Tory Brexiteers and Northern Ireland’s Democratic Unionist Party (DUP) – which has been propping up May’s government — hate anything which sets Northern Ireland apart from the rest of the United Kingdom. They have not been placated by attempts to minimise differences and cite May’s own insistence on “no border down the Irish Sea”.

The UK, including Northern Ireland, and the EU also commit themselves to a “level playing field” over tax, the environment, social policy, state aid and competition. The UK would have to align with future EU changes.

Although independent bodies are given a role, the European Commission and the European Court of Justice retain major powers of oversight concerning Northern Ireland — and to some extent for the UK as a whole.

To exit the backstop, either side can propose such a move to a Joint Committee — which can consult joint UK-Ireland institutions. The UK cannot unilaterally leave — although the government argues that changes agreed with the EU mean the UK cannot be trapped in the backstop indefinitely.

• The lack of ability to leave the backstop unilaterally has particularly enraged the pro-Brexit camp. They have argued that UK independence is seriously compromised if customs union membership is indefinite.
• The government has said that this would be highly unlikely as neither side would want it. The EU is anxious to stop the UK exploiting backstop arrangements to engage in unfair competition via “back-door” customs union membership.

Why is the Irish border issue so complex?

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What ‘alternative arrangements’ are there to the Irish backstop?

Below are some alternative suggestions to the backstop being put forward. Theresa May has cited several, in her bid for “a significant and legally binding change to the withdrawal agreement”.

A UK-EU customs union

This is the preferred option of the UK’s main opposition Labour Party. However, Theresa May has been reluctant to pursue cross-party support for a “soft Brexit” that could split her own party.

A unilateral exit mechanism

The withdrawal agreement prevents the UK from leaving the backstop unilaterally. To do so, either side would have to go to a Joint Committee which can consult joint UK-Ireland institutions.

Brexiteers have always hated this, as the UK could not leave the backstop without EU approval. They argue this compromises UK independence and want the country to be able to leave of its own accord.

A time-limited backstop

Critics of the withdrawal agreement also loathe the fact that the backstop is open-ended. They say this could lead to indefinite customs union membership.

In January Poland’s foreign minister broke ranks with the rest of the EU by suggesting a five-year limit to the backstop.

After MPs voted to seek a new deal, Theresa May told parliament that “alternative arrangements” might include “a unilateral exit mechanism or a time limit to the backstop”.

Brussels has long argued that such proposals mean the backstop would fail in its essential mission as an insurance policy.

The Malthouse Compromise

This proposal comes from both pro and anti-European wings of the ruling Conservatives, which the government is reportedly considering. It is based on a report by Brexiteer economists.

An “extendable backstop” would see Northern Ireland treated on the same terms as the rest of the United Kingdom, and allow the UK to set its own tariffs and regulations. Technology would mean checks and formalities could take place away from the Irish border, ensuring an open frontier.

Maximum facilitation

The “Max Fac” model – also a Brexiteer favourite – was considered but rejected by the British government during the negotiations. New technology and customs procedures involving “trusted trader” schemes and numberplate recognition would be used instead of border checks.

The EU has said that technology is untried and untested. It could be considered – a kind of backup to the backstop – but the whole point of a backstop is that it is a cast-iron guarantee in all circumstances.

A customs association

A report by the think-tank EconPol Europe calls for the UK and EU to drop the backstop and work towards an ambitious customs union, to avoid a damaging hard Brexit.

It calls on both sides to drop their “red lines” and create a new European Customs Association (ECA) under which neither the EU nor the UK could pursue independent trade policies.

Possible EU proposals

Although Brussels is playing hardball at the moment, the Financial Times has reported that alternative options are being worked on behind the scenes. The aim is to rescue the Brexit deal without overturning its core substance.

Ideas under consideration reportedly include:

• A road map to establish “alternative arrangements” to the backstop – or a menu of options attached to the withdrawal treaty.
• Elaborating on plans to ultimately replace the backstop with alternative arrangements. This could include an explanation of how technology could be tested to maintain an open border.
• A backstop covering only Northern Ireland, not the whole of the UK. The proposed UK-EU customs union would be replaced and listed among possible “alternative arrangements” to replace the Northern Ireland-only version.

Could the EU accept any of the above?

Some of these proposals have already been categorically ruled out by Brussels. It was difficult to envisage any solution that could get a majority in the British parliament.

Can technology remove the need for the Irish backstop?

Legal disputes and other matters

Although a joint UK-EU committee and an arbitration panel would try to resolve disputes, the UK would remain under the jurisdiction of the European Court of Justice (ECJ) during the transition. Afterwards, its rulings would no longer have direct effect in the UK but it would retain influence.

One contentious issue — that of fishing rights — is left to be dealt with on another day. The agreement says the EU and UK should do their best to strike a separate deal on access to UK waters for EU fishing boats.

A protocol on Gibraltar — the British territory on the southern tip of Spain – seeks to ensure in particular that citizens’ rights are respected. Another, on Cyprus, aims to preserve the current situation — keeping the British military base in the EU’s customs territory.

Political Declaration

The 26-page Political Declaration accompanies the Withdrawal Agreement and sets out the basis for future relations, including trade. Euronews has previously examined it in more detail here.

This document is not legally binding but defends the core principles dear to each side: the integrity of the single market and customs union for the EU, and sovereignty for the UK. At the same time, it says future ties should be as close as possible.

What changed before the second vote?

Previous votes in the House of Commons, on January 15 and on March 12, saw an unlikely alliance of Brexit supporters and opponents come together to reject the deal by emphatic margins.

The EU refused to renegotiate the withdrawal agreement itself following the first parliamentary vote – even though the House of Commons voted to send the government back to Brussels to seek “alternative arrangements” to the backstop.

The night before the March 12 vote, Theresa May and European Commission President Jean-Claude Juncker announced to revisions to try to reassure sceptics:

• A “joint interpretative instrument” allowing the UK to seek arbitration and an exit from the backstop, if the EU deliberately tries to keep the UK permanently inside it by failing to negotiate a new trade deal in good faith.
• A “joint UK-EU statement” added to the Political Declaration which deals with future relations. This commits both sides to seeking alternative arrangements for the Irish border to replace the backstop by December 2020.
• A “unilateral declaration” by the UK, with EU approval, saying nothing would stop Britain from taking steps to leave the backstop if relations broke down.

On the morning of the second vote the government’s chief legal adviser, the Attorney General Geoffrey Cox – whose advice is influential with Brexiteers – issued a new legal opinion. He said the legal changes reduced the risk that the UK could be held indefinitely in the backstop against its will.

However, crucially he also wrote that the revised divorce deal did not give the UK the legal means to exit the backstop unilaterally if “intractable differences” arose.

It wasn’t enough to change the minds of Northern Ireland’s DUP and leading members of the Conservatives’ anti-EU European Research Group (ERG). Most again rejected the revised deal, which consequently suffered a second defeat.

Brexit deal given a final lifeline

The EU has offered the UK a choice of two possible extensions to Article 50, which sets out the process for leaving the EU:

• April 12: the date the UK is set to leave if MPs do not approve the deal. In that event, the UK has until then to say what it intends to do: perhaps request a further delay which would mean having to take part in EU elections, or leave the EU without a deal.
• May 22: the date the UK will leave the EU if its parliament approves an exit deal. This is to allow time for ratification, and is the day before voting begins in the European Parliament elections.

The delay is a bitter blow to Theresa May, who had repeatedly said the UK would leave the EU on March 29.

Theresa May is hoping to hold a third parliamentary vote on the deal, and has renewed appeals to MPs to back it.