British MPs inflicted a crushing defeat on the much-maligned deal struck between Theresa May’s government and the EU in a historic vote in the House of Commons on Tuesday.
The vote, postponed more than a month ago because of the scale of opposition, saw the government lose by 432 to 202 - a margin of 230.
An unlikely alliance of Brexit supporters and those who want to remain inside the EU came together to defeat the prime minister. Many “leavers” argue that it leaves the UK too closely entangled with the EU and say they would prefer no deal at all. Many “remainers” say it is far worse than current membership terms and would like to offer the public the chance to overturn the result of the 2016 referendum.
The long Withdrawal Agreement (on the terms of the UK’s exit) and shorter Political Declaration (on the future relationship) were the result of 18 months of negotiations. The deal has been approved by leaders of the other 27 EU countries, and Brussels says it’s the only route towards an orderly Brexit. Parliamentary approval in the UK is needed for it to be implemented.
The prime minister insists the agreement is in the national interest, delivers on the result of the June 2016 referendum, and the only alternative is no deal or no Brexit. Supporters say it is a sensible compromise, and many in business argue it’s vital to avoid a chaotic exit.
Following the defeat, the path ahead is shrouded in uncertainty. But as things stand, by law the UK is set to leave the EU on March 29, 2019 – deal or no deal.
Time, money and rights
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.
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.
The controversial backstop
For long a sticking point during the Brexit talks, no sooner was the ink on the draft deal dry than the arrangements it puts in place for the Irish border resurfaced – again threatening to derail the whole process.
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 — but says ditching it is impossible.
- The UK attorney general’s legal advice — which the government was forced to publish — raises potential legal problems concerning a UK-wide shared customs territory with the EU.
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.
- Brexiteers including Northern Irish unionists – who have 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 attorney general’s legal advice highlights that goods passing from Great Britain into Northern Ireland would be subject to checks.
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. But the UK cannot unilaterally leave.
- This point has particularly enraged the pro-Brexit camp, as the UK could not leave the backstop unless the EU agrees. This, they argue, seriously compromises UK independence and could lead to indefinite customs union membership.
- The British government says this would be highly unlikely as neither side would want it. The EU is anxious to stop the UK exploit backstop arrangements to engage in unfair competition via “back-door” customs union membership.
- The attorney general’s legal advice points out that whatever the intentions, the backstop “would endure indefinitely” under international law until a new agreement took its place.
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.
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.