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So shameless are her about-turns, so broken some of her promises, that it is tempting to conclude that Theresa May has no consistent Brexit policy at all.  As the details of the 585-page Withdrawal Agreement begin to become clear (it has taken us the best part of a week to read it, and we have consequently withheld judgement on its contents until now), we question this widely-believed, frequently-proclaimed view.

The agreement plus the slender, seven-page Political Declaration reveals two main policy aims, unwavering since May became Prime Minister and began the Brexit negotiations, and shaped by the reflexes of two great departments of state.

First is the Treasury’s conviction that the bird in the hand of, say, cars and aerospace is worth those in the bush of, for example, GM foods or AI.  The former industries want frictionless trade to keep their just-in-time supply chains going as at present and, if a knock-on effect is that the technologies of the future must stay chained to EU regulation, then so be it.  In a sense, one can scarcely blame the department for prioritising the jobs of today over those of tomorrow (though these will be no less real).  We are all tempted to prize what we have above what we might have.  The Withdrawal Agreement shows up the biggest winner in Cabinet from the present policy: Philip Hammond.

Second is the Home Office’s desire, furthered by having one of its graduates in place as Prime Minister, that immigration must be controlled and reduced.  We agree wholeheartedly.  Take no notice of those who claim that the referendum result had nothing much to do with voter desire to reduce migration, a coalition of people big enough to include some Leavers.  Research suggests otherwise, as does common sense.  It may well be that, if this deal passes through Parliament (which we doubt), control of EU immigration is honoured more in the breach than the observance, and that access to Britain for EU workers and migrants is traded off against access to the EU for our goods and services.

None the less, transition must come to an end sooner or later and, when it does, freedom of movement will come to an end.  Whatever else one may say of the deal, this is a remarkable negotiating achievement.  Buttressed by the referendum result, May has done what David Cameron failed to do (destroying his renegotiation in the attempt) and what we, frankly, thought she wouldn’t be able to do – namely, prise one of the EU’s four freedoms apart from the others.  So much, too, for the Remain experts and eggheads who claimed that this wouldn’t happen because “the EU is a rules-based organisation”.  A big slice of the EU Commission will hate this part of the deal.  They will fear that the Salvinis and Kurz’s and Orbans of the EU27 will see May’s big win as a precedent, and they may well be right.

What migration is to some in the Commission, so fish will be to some of the 27.  Again, it may well be that, if the deal somehow makes it through Parliament, access to our waters for EU boats is bargained off against access to the EU’s markets for our goods.  If or when it does, the positions of David Mundell and Ruth Davidson look untenable.  Fishermen from all parts of the UK want their waters back, and any future concessions on EU access to them could scarcely come at a worse time for Scottish Conservatives, bang in the run-up to Scottish Parliamentary elections.  None the less, the anger among the 27 that more has not been squeezed out of May on fishing is real.  The deal isn’t universally popular on the EU as well as the UK side of the table.

All this should give pause for reflection.  A dominant narrative in our culture is that British politicians are useless – one shared by some on the right, especially at the crossover point where the Conservative and UKIP activists meet, and some on the left, notably in the Remain coalition for which belief that the Government has bungled the negotiation has become an article of faith.

On the contrary, the deal shows, as its outlines come into view, that the Prime Minister has got much of what she wanted – including on money.  It is true that the bill will come to even more than £40 billion or so if transition is extended, which it may well be.  But the principle has been agreed.  The set date at which any new transition will end must soon be declared.  After that, our money will stay at home.  A Prime Minister Boris Johnson would be able to tip all of it into the bottomless pit of the NHS if he so desired.

These wins, in turn, have implications for an even bigger meme: that Britain is a washed-up, failing country.  Rather, May’s wins are a sign of the power that drove them: that of the third biggest economy in the EU (second by some measurements), which its other members and the Commission are ultimately wary of antagonising, with formidable armed forces – at least compared to most of our neighbours – and strength in depth when it comes to employment, the arts, innovation, sport, top-flight universities and global soft power.

But there is a catch.

The aims that we describe, namely trade with minimum friction and control of EU migration, are not May’s public aims.  They overlap with them, but are not identical.  She speaks of bringing back control of our borders, money, and laws – the core demand of Vote Leave’s victorious campaign.  When it comes to the last, her deal stands on slippery ground.

The price that the Prime Minister has paid for her gains is membership of a customs union underpinned by a backstop.  Again, she has pulled off a negotiating win in so doing.  The Northern Ireland backstop should never have been in last December’s joint report.  It was basically an aspect of the future relationship – our terms of trade with our EU neighbours – rather than of EU withdrawal.  Up to a point, May has turned the backstop on its head, so to speak, extending it to the whole UK and getting it written into the Withdrawal Agreement (though, as we will see, matters aren’t quite that simple, and what this new backstop means is fiercely disputed).

None the less, membership of a customs union would spit in the face of the logic of Brexit.  It would blight the opportunity to strike meaningful free trade deals worldwide.  And in so doing, as Greg Hands explained in a superlative piece on this site, it would deliver the worst of all worlds.  “The example of Turkey shows a frightening asymmetry, “he wrote.  “When the EU implements a trade agreement, Turkey must open up its markets to the third-party exporter…, but better access for Turkish exporter to the third country doesn’t happen…unless Turkey separately negotiates it. As he argued, membership of a customs union means that the EU would control our trade policy – our tariff and quota policy in particular – and thus hold the fate of many domestic industries, such as steel and ceramics, in its hands. It would also determine our trade preferences for the developing world.  This is unsustainable.

The Government claims that this fear is misplaced – because, sooner or later, we will be out of the backstop, even if transition is extended.  The EU, it says, dislikes the backstop as much as we do.  We dislike it because it would keep us in this customs union, and because the alignment with EU laws and norms which it would bring with it is greater than we want, and would ultimately be ruled upon by the ECJ.

The EU dislikes it, Ministers say, because the proposed alignment with those norms and laws is less than it would like, and because it would give us tariff-free, quota-free access to their markets as part of the deal (these Ministers are shy of adding that this arrangement would suit the EU because it runs a trade surplus with us).

But while the EU may have reason to dislike any backstop, the story of this negotiation so far is that it dislikes one less than it dislikes a fully-fledged free trade deal.  After all, the backstop would lock us into a customs union, with higher alignment to the EU’s laws and norms than we desire.  And it is temporary only in the sense that it is intended to be tso. When May suggested otherwise yesterday, she was playing fast and loose with the facts.  We will have no unilateral right to quit the backstop if we sign up to it.  She also compared it to an insurance policy.  But it would be an odd sort of insurance policy which pays out each year in perpetuity.

And while the EU would lose leverage, under the terms of the Withdrawal Agreement, because the alignment it would sign up to is lower than it would like, so we would, too – by committing to pay the £40 billion or so as part of that agreement.

In short, we run the risk of being stuck in the backstop for good, with the EU refusing us permission to leave it.  This was at the heart of last week’s Cabinet row, of Dominic Raab and Esther McVey’s resignations, of Michael Gove’s agonising – and which now dominates the manoeuvres and backpedalling of the so-called Gang of Five.  True, Parliament is sovereign, and can do what it likes.  It could tear up a solemn commitment to the backstop enshrined in treaty.  But that would come with a very heavy cost to our international reputation and trustworthiness as a business partner.  We would be set to pay a penalty of lost investment, wealth and jobs.

Then there is a further twist.

We wrote earlier that what this new proposed UK-wide backstop would deliver is fiercely disputed.  It has been compared to a swimming pool, with a shallow end and a deep end.  Northern Ireland would be in the latter, bound not only to the new customs union but to many Single Market rules.  Great Britain would be in the former, signed up to fewer of them.  The core of the matter currently being debated, in relation to the new UK-wide backstop, is whether the original “backstop to the backstop” – the old Northern Ireland-only one – survives, buried away deep in the agreement.

Open Europe believes that it may.  It writes in its assessment that “Article 6, Annex 2 of the Protocol states that the EU may impose tariffs or other restrictions on the movement of goods into or out of its customs territory “in cases of non-compliance by the United Kingdom…where it considers this necessary to protect the integrity of the single market.” This implies that there could be certain circumstances in which the EU could demand East-West checks for customs purposes. Overall there is ambiguity and disagreement about the interpretation of some key passages, a fact reinforced by conversations with officials close to the drafting.”

What it would mean for Northern Ireland, uniquely within the UK, to be in the same customs territory as the EU is being argued back and forth among the experts.  But there can no doubt that, were the backstop itself to drop away, Northern Ireland would none the less be bound to Single Market rules from which the rest of the UK would be free.  And also to the consequences of being in the EU’s customs territory.  And all without having the democratic representation to help shape those customs territory and Single Market rules.

Some say, rightly, that Northern Ireland is already very different from Great Britain, with its particular devolution settlement and, say, abortion laws.  But these differences exist within a United Kingdom framework, for all the north-south co-ordinating bodies set out under the terms of the Belfast Agreement.  This agreement proposes a fundamental shift, preserving Northern Ireland, to some degree, in the EU legislative order if the rest of the UK drops out of it.  This has grave implications not only for the province but for Scotland.  The SNP will argue that Northern Ireland has Single Market and Customs Union advantages denied to Scotland by English Tories.  The agreement could thus put rocket boosters under the SNP’s independence campaign.

We offer our assessment of the agreement of the deal with humility.  We admit to not having studied parts of it, such as the controversial sections concerning defence and security co-operation.  We remind our readers that bits of it are so dense as to have launched a thousand quarrels among the experts.  Perhaps comfort can be drawn from the knowledge that all will become clear sooner or later:  “whatsoever ye have spoken in darkness shall be heard in the light; and that which ye have spoken in the ear in closets shall be proclaimed upon the housetops”.

All in all, it seems to us that the Prime Minister, in signing up to this agreement, has achieved a series of tactical wins, some of no small order, wrapped in a larger strategic defeat.  That band of dissenting Cabinet Ministers, large enough to encompass such senior ones and former Remainers as Sajid Javid and Jeremy Hunt, are right to believe that the proposed backstop provision threatens to leave us trapped permanently within a high alignment customs union, and that it thus fails to pass the test of taking back control of our laws.  That is also the significance of the late change in the Political Declaration, made without his knowledge, that drove Dominic Raab to resign.

Furthermore, the agreement would clearly push Northern Ireland from the UK’s ambit towards the EU’s – and a united Ireland.  Much has been written about the nationalist and republican reaction to Brexit.  What would the unionist and loyalist reaction to this partition be?  Either way, the implications for Scotland are baleful.  No Unionist should vote for this agreement.

There are alternatives.  May has spurned two.  The first is the Canada-type deal about which David Davis writes on this site today.  Had the Prime Minister not turned, in proposing Chequers, against the mutual recognition model she had pushed only a few months earlier at Lancaster House, it might be government policy now.  The second is the Nick Boles Norway-to-Canada scheme.  We believe it is problematic, but worth exploring.  Downing Street has deliberately spurned the chance to do so.  Neither is negotiatable, do you say?  To which the answer comes back: but this agreement doesn’t seem to be passable.  Those partisans who claim there are no alternatives are like a man who murders another.  And then says not only that he didn’t do it, but that his victim was never alive in the first place.

Conservative MPs face a scabrous choice – between the short-term problem of the EU rejecting, or at least publicly rebuffing, the managed No Deal Deal, complete with a two year transition that would end in the run-up to the next election, that some Cabinet Ministers are now floating; or the medium-term peril of the country being trapped in a high aligment customs union which it has no unilateral right to leave, together with a clear and present danger to “our precious union”.  Our judgement is that the threats of the second outweigh those of the first.

We have all been taken to this pass by the third main element of May’s policy.  She may once have believed that No Deal is better than a Bad Deal.  But she clearly no longer does so.  By failing to prepare for No Deal adequately, she has prepared a gun to hold to her Party’s head, and to Parliament’s: it’s my deal – or even greater disruption than would otherwise be the case.  She is stoking the very chaos against which she warns.

189 comments for: Tactical wins, strategic defeat. May’s deal binds us to the backstop. And threatens the future of “our precious union”

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