Chequers is an ingenious attempt to balance three main concerns. First, to maintain frictionless trade. In rough terms, the proposal to do so by signing up not to alignment in some manufacturing areas, but to harmonisation and a common rule book in all of them, as well as in agri-food, leans in the direction of an EEA-type, Norwegian-flavoured solution. Second, to regain more control elsewhere – for example, over financial services and, at least to some degree, over our borders. That part of Theresa May’s plan has the flavour of the more distant relationship enjoyed by Canada. Finally, the complex customs proposal provides a potential means of escaping the backstop. The Prime Minister is like a juggler trying to keep three balls in the air.
The EU’s response at Salzburg, driven by Emmanuel Macron, was to give Chequers two fingers – and then point back to its previous positions. It doesn’t trust a third party to apply its tariffs, so May’s proposed Facilitated Customs Arrangement was shredded. It dismissed Chequers’ attempt to carve up freedom of movement for goods, capital, services and labour as a threat to the unity of the internal market. And it worries away about the plan being a cover for a plot by those perfidious Anglo-Saxons to undercut EU social and economic standards. So back it has gone to pushing the two options it has already proposed: a very close relationship, like Norway’s, or a more distant one, like Canada’s – but with none of what it dismisses as the cherry-picking of Chequers.
Of these two options, a Canadian-flavoured relationship ought to be the easier to establish. This is because it boils the negotiating problems down to a single big one: the accompanying backstop proposal to separate Northern Ireland from the UK, by effectively keeping it in the Single Market as well as the Customs Union. If a clear end-date can be found for the backstop, and agreement can be reached on customs, everything else, pretty much, will fall into place. The Prime Minister will no longer have a basis for complaining that a Canada-style settlement would divide the United Kingdom. No wonder that the European Research Group and other Brexiteering Tories cheered Donald Tusk last week when he referred to a Canada Plus Plus Plus deal: he was deliberately talking their language.
All this takes us to whatever may be happening now.
As during the run-up to the Chequers meeting and document, there are rumours of developments one way and the other. One version of events is that May is preparing to concede no end-date for the backstop, and the EU that the whole UK, rather than Northern Ireland alone, can in effect remain in the Customs Union. The exact terms might allow Britain to conduct free trade deals with non-EU countries on paper, but it would stymy them in practice. Another claim is that the Prime Minister is holding out for a clear exit process and date. We have no way of knowing. What we do know is that the Democratic Unionist Party is in much the same place as it was during the run-up to last December’s Withdrawal Agreement.
It fears that Northern Ireland will be amalgamated in the Single Market with the Irish Republic; that the rest of the UK will eventually escape the customs union arrangement, but that it will not; and that it will therefore not gain the benefit of any eventual trade deals with non-EU countries. In short, it sees Northern Ireland being gradually absorbed into a United Ireland. As last December, it has been shown no draft texts. ConservativeHome is told that DUP MPs feel talked down to during meetings with Julian Smith. Certainly, the Government is pressing for concessions from the party over regulatory barriers in the Irish Sea. One Cabinet Minister told this site that a “four-way solution” is required – the DUP being the fourth player, along with the UK, the EU and the Irish Republic.
So it comes about that the DUP abstained yesterday on the Agriculture Bill, which it would usually have supported. It is threatening to vote down parts of the Budget. Downing Street may be playing a game of chicken with the party, gambling that support for a deal from Labour MPs will offset opposition from the party (and the European Research Group), or that Northern Ireland’s Unionists will ultimately not risk a general election and a Corybn government. On the one hand, such a calculation may be right. Arlene Foster and her colleagues were unhappy last year about the backstop, even after they had eventually been shown drafts of the Withdrawal Agreement, but they went along with it. On the other, it may be misreading the DUP, not to mention the ERG.
Which brings us to what Labour MPs may do.
Claims that up to 30 of them may vote with the Government on Brexit are, in the ERG’s view, exaggerated – briefed out by a few anti-Corbyn backbenchers who are unrepresentative of the whole. More broadly, the Prime Minister is getting her ducks in a row, or trying to. The Cabinet Committee on Brexit Strategy and Negotiations, the so-called War Cabinet, no longer meets. She has taken instead to consulting informal groups of senior Cabinet Ministers. One meets today. This site was told that another met on Monday. Dominic Raab postponed a visit to Brussels this week. The EU put off publishing proposals for ways forward. Downing Street is trying to lower expectations of an EU Council Agreement next week, perhaps because the EU, to build pressure, is attempting to ramp them up.
So gripping is the drama with the DUP, and so pervasive are rumours about the Government’s stance on the backstop and the Customs Union, that an important piece of the jigsaw is being overlooked. Even if an end-date can be agreed for the backstop, and an exit-date for the UK from the continued customs union arrangement, where would that leave the rest of Chequers? To put it very crudely, will May take a Canadian or a Norwegian route – or stick to her plan? Within the last few days, one Cabinet Minister has told this site that some friction in goods is now inevitable; another, that there can and must and will be no such friction at all. Both can’t be right. Perhaps the difference can be blurred in a vague political declaration presented to Parliament alongside a precise, final Withdrawal Agreement.
But the less clear the declaration is, the greater the chance, surely, of MPs voting a deal down, as they ask: why should we hand over £40 billion for nothing? So if the full Cabinet discusses a pre-summit plan next week, and the Prime Minister won’t back off Chequers – or even proposes further alignment, say in social and environmental matters – what will its Canada-leaning members do? (We can’t help suspecting that near the heart of May’s policy is private guarantees that have been given about just-in-time supply chains.) The media persistently repeats claims of a coming Cabinet showdown. But the easiest course for Penny Mordaunt, Esther McVey, Andrea Leadsom, etc to take is to keep kicking cans down roads, though a decision to stick with a customs union indefinitely could change that.