Theresa May has reassured Brits that no Brexit deal “wouldn’t be the end of the world” as talks with the EU enter their final phase.
Her comments came after the Government stepped up its preparations for no agreement being reached with Brussels before the UK leaves the EU on March 29 2019.
Brexit Secretary Dominic Raab last week released the first of more than 80 technical documents highlighting what various sectors of the economy need to be prepared for in the case of ‘no deal’.
The release came days after the EU’s chief negotiator Michel Barnier warned there were still disagreements between the two sides in key areas.
But does this mean ‘no deal’ has now become more likely?
With time running out for an agreement to be reached, the two sides at odds in key areas, and hard Brexiteers determined to flex their muscles, it could be that ‘no deal’ is indeed on its way.
What Has Been Agreed – And What Hasn’t?
No matter how much the EU and UK talk up what has been agreed – citizens’ rights, the financial settlement, a 19month transition period – the thorniest issues remain unsolved.
On the future trading relationship, the UK effectively wants to split the single market. While it would follow EU rules and regulations in goods and agri-foods, it would diverge in services and free movement of people. This position has been repeatedly ruled out by EU leaders, with German Chancellor Angela Merkel saying on numerous occasions there can be no “cherry-picking” of the single market.
At a press conference last week, Barnier was clear that this proposition was yet to win support in Brussels:
“I say this very frankly because I owe the truth to you; on the question of the economic relation there are still areas of disagreement because what is in the white paper contradicts in some areas, and some points, things which are my guidelines, the guidelines of the European Council.”
Unless the EU or the UK shifts positions, an agreement cannot be reached.
Will Either Side Shift Position?
The problem facing Theresa May is she has already angered Brexiteers in her party with the current negotiating position, with some feeling the UK has given away too much by agreeing to follow EU rules on goods and agri-foods.
Boris Johnson and David Davis quit the Cabinet in protest at the so-called Chequers Agreement, and some Tories have called for a vote of no confidence in their party leader. If May was to concede further to the EU, she could find herself facing a leadership challenge.
But on the other side, with anti-EU sentiment on the rise in Europe, Brussels is walking a fine line between not giving the UK too generous a deal (which would make it appealing for other countries to follow suit), and not wanting to appear vindictive, potentially harming EU companies who want to trade with Britain on good terms.
How Much Time Is Left To Secure A Deal?
About 12 weeks. The UK and EU had originally planned to reach an agreement on the future trading deal by the European Summit scheduled for October 18 and 19. But the UK and Brussels admitted last week the talks could continue into November.
Recognising that time is running out, it was agreed last week that negotiations would now take place “continuously” in order to achieve a breakthrough.
But Will A Deal Get Through Parliament?
Once the deal is agreed by EU leaders, MPs in Westminster will have their say on the agreement. The current options open to them is to either endorse the deal or vote it down. If it is voted down, the UK could go back to the negotiating table to try to get a different agreement. Yet this is not guaranteed, as Brussels may not want to reopen talks. In that scenario, and with time almost up, the UK could be leaving the EU without any deal in place.
A group of Tory MPs, including former Brexit Minister Steve Baker, have already hinted they would vote down the deal if it gives too much power to Brussels. But they are unable to kill the agreement unless Labour also decide not to support it.
One option open to Labour leader Jeremy Corbyn is to order his MPs to abstain on the vote, meaning the Government would have to work hard to secure support from its own party.
Is The UK Prepared For No Deal?
This is the key question. The 24 technical notices published last week were the first batch of more than 80 being released in the coming weeks to prepare for no agreement being reached.
Yet far from immediately breaking free from Brussels, the UK is pledging to honour EU rules in a number of areas such as medicines and animal welfare.
Yet there were some warnings in the documents about how life would get more difficult for businesses who export to the EU, with extra red tape being put in place if they want to carry on trading as they do now.
This will have a knock-on impact on customers, who could see an increase in costs as businesses spend more on administration, as well as tariffs.
All eyes will be on the notices relating to how food will be delivered into the country in case of a ‘no deal’ with some industry experts warning that new IT systems needed to track the movement of such goods do not appear to be ready for March 2019.