Over recent weeks, speculation has grown that a deal will be concluded between the EU and the UK on the Northern Ireland Protocol. It feels like we are now very much in the end game of the negotiations with a flurry of activity at political level over the coming days to finalise a deal. The Prime Minister, Rishi Sunak, was in Northern Ireland last week talking to political leaders there. The Foreign Secretary, James Cleverly, met EU Vice President Sefcovic and then Sunak had discussions in the margins of the Munich Security Conference last weekend with EU Commission President Ursula von der Leyen. And EU Ambassadors were briefed on details of the negotiations last Friday. That has, in the past, been a sign that Brexit deals are close to final sign off. It is likely that the new arrangements could be announced in the coming days but there are two factors that could cause the deal to come unstuck or be delayed.
These relate to whether the deal is acceptable to Unionist parties in Northern Ireland, particularly the Democratic Unionist Party (DUP) and the European Research Group (ERG) – the main grouping for staunch Brexiteers within the Conservative Party.
On the content of the deal, the most significant element will be the effective removal of a trade boundary between Great Britain and Northern Ireland. Goods destined for end consumers in Northern Ireland will not be subject to routine checks, while those destined for Ireland will have full controls applied. This removes the most visible and detrimental impact of the protocol for people in Northern Ireland: the reduced availability of certain products in shops. The other significant element is likely to be an agreement that both sides will make efforts in the event of a dispute to resolve things without needing to go to the European Court of Justice (ECJ). This falls short of the original UK ask for the removal of the Court but is symbolically significant. It is less clear whether the deal will contain anything on VAT or State Aid apart from potentially a commitment to keep discussing them. There could be some further concessions as a result of the discussions over the weekend. That could include, for example, movement on seed potatoes and pet travel, two relatively minor issues but with symbolic importance, that the Commission could move on to sweeten any deal.
The question of whether the deal will be politically acceptable is more complicated. The DUP have already taken to the airwaves to say they are unhappy with some aspects of what they have seen so far, especially around the role of the ECJ. The Prime Minister is aiming to make the case that this deal addresses all or almost all of the concerns in order to reduce the scale of the opposition. This is in part to test whether the DUP is willing to move – in particular whether they would be willing to return to take their places in the Northern Ireland Assembly and Executive. The second group that Rishi Sunak has to be wary about is the ERG. It was the activities of this group, led ironically at the time by Chris Heaton-Harris and Steve Baker MP, now both Ministers in the Northern Ireland Office, that scuppered previous Brexit compromise deals in the past. To date, the ERG has been less vociferous but that does not mean they will support this new deal. One other potential opponent that has already sent out signals that he might oppose a deal is former Prime Minister, Boris Johnson. If he were to take a firmer position opposing the deal, that could raise the stakes for his successor.
As a new Prime Minister elected after a period of political upheaval, Rishi Sunak has attempted to retain the support of the different factions in the Conservative Party in Parliament. On this issue however, it is likely that there will be significant opposition from some backbench MPs in his own Party, though maybe not at the same level as during past negotiations The key question is whether Sunak is prepared to continue to try to win over as many potential opponents as possible and to face down a smaller rump of objectors on the Conservative backbenches. One factor that might affect the willingness of Conservative MPs to oppose the PM’s deal is the dire state of the Party’s poll ratings with an election likely in late 2024. Put simply, divided parties do not win elections. To complicate things further, the opposition Labour Party have offered their support to the Prime Minister should there be a vote on any deal in the House of Commons. This means the Government would almost certainly win any vote, but relying on the Opposition to get something through isn’t without its problems.
And the benefits of doing a deal? These remain as we set out here :
- The first is the upcoming 25th Anniversary of the Good Friday Agreement. There has been speculation that US President Biden could visit Northern Ireland to mark this anniversary. Reaching a deal on the Protocol would be a huge boost to that happening.
- The second is around wider EU/UK relations. While collaboration between EU and UK on issues such as supporting Ukraine after Russia’s invasion has been extremely positive, there are many other areas where the EU and UK could work better together including in energy, WTO reform, China etc.
- The third is around Northern Ireland as a destination for inward investment. If the problem around the Protocol is resolved, Northern Ireland would be in the unique position of having access to both the UK and EU single markets and therefore an important destination for investment.
So a frantic few days ahead. Please do not hesitate to reach out to us, if you believe your organisation could be affected by changes to the Protocol or the UK’s evolving relationship with the EU.