UK Still In Limbo Over Brexit Deal 100 Days Before Divorce Date

After months of talks throughout the year, the United Kingdom almost had an EU divorce deal locked down, but it then crawled back into a nerve-wrecking uncertainty, as the UK parliament made it clear it would not pass the agreement, and talk of no deal or even a second referendum intensified

MOSCOW (UrduPoint News / Sputnik - 02nd January, 2019) After months of talks throughout the year, the United Kingdom almost had an EU divorce deal locked down, but it then crawled back into a nerve-wrecking uncertainty, as the UK parliament made it clear it would not pass the agreement, and talk of no deal or even a second referendum intensified.

Now, with only 100 days to go until the country has to leave the European Union on March 29, Prime Minister Theresa May has to grapple with the threat of a potential no-confidence motion from the opposition Labour party, deny reports of her government urgently preparing for a people's vote, and convince lawmakers to back her.

MARCH DRAFT MET WITH SKEPTICISM IN UK

One of the key Brexit developments this year was the publication of a draft agreement in March. It set out a 21-month transition period that is expected to start immediately after the UK exit and end on December 31, 2020.The draft deal ensured that the United Kingdom would be part of the EU trade deals during the transition period but would at the same time be able to negotiate its own trade agreements.

The March draft deal also suggested that the United Kingdom would remain within the Common Fisheries Policy (CFP), which allows other EU countries to fish in UK waters and sets quotas for how much they can catch, until the end of the transition period. The country would not, however, be able to directly influence its rules in the final year of the transition. Several Conservative lawmakers and one member of the Democratic Unionist Party (DUP) signed a letter urging the government to give up on this deal because of the CFP arrangement. The deal was slammed in Scotland, where the fishing industry is particularly prominent, by politicians from across the political spectrum.

On yet another divisive issue, the draft deal delivered a solution that proved just as problematic for the United Kingdom � UK negotiators agreed to include the European Union's suggestion on the Irish border backstop, pending another proposal from London. The bloc's suggestion was for Northern Ireland to remain in its customs union and partly in its single market unless a better option for avoiding a hard border presented itself.

A solution that keeps only Northern Ireland within the EU customs union could lead to more checks between Northern Ireland and the rest of the United Kingdom. May has stressed vehemently that there would be no border in the Irish Sea.

A border arrangement on Ireland was always going to be difficult to negotiate due to the island's stormy history. The 1998 Good Friday Agreement put an end to decades of a violent conflict in Northern Ireland between those who wanted the region to remain part of the United Kingdom and those who did not. Northern Ireland's now balanced relationship with both Dublin and London is what is at stake at Irish border discussions on Brexit.

However, Dublin and Brussels have been using the Irish border issue as leverage against the United Kingdom, Ray Bassett, former Irish ambassador to Canada and now Senior Fellow on EU Affairs at Policy Exchange think tank, told Sputnik.

"The basis of the Good Friday Agreement was that we'd all work together, but in the present scenario that's not happening. The Irish government is against compromising with the United Kingdom which is certainly against the spirit in which that agreement was put together. If you don't keep consent, no agreement works," Bassett, who was part of the Irish negotiating team during the drafting of the Good Friday Agreement, argued.

CHEQUERS OFFENDS EU, PROVOKES RESIGNATIONS IN UK

In July, the UK government agreed on a new Brexit plan that contained a counterproposal for the European Union's Irish border solution. The new document got its name from the prime minister's country residence, Chequers, where the government gathered to hammer out the details of the new deal.

London suggested setting up a special customs arrangement for the European Union and the United Kingdom that would help avoid a hard border on either side of Northern Ireland. There would be "a free trade area for goods," but also a set of new rules for the services and digital market.

The plan was not universally liked by the UK government and led to David Davis resigning as Brexit secretary and Boris Johnson stepping down as foreign minister. Johnson later attacked the plan viciously in the press, calling it "deranged."

Brussels gave the new plan a frosty welcome, specifically to the provision suggesting that the United Kingdom would use EU policies and tax rates on goods it received and that were set to move on to the bloc, but also apply its own rules to the goods that were expected to remain in the country.

Michel Barnier, the EU's chief Brexit negotiator, went so far as to call the offer illegal, stressing that the European Union could not willingly abandon control of its external borders.

The EU summit held in Salzburg in September only served to highlight the problem � the European Union did not like the deal, while the United Kingdom did not want to give up on it. EU Council President Donald Tusk said that while the deal was a step in the right direction, it could not work in its current state and French President Emmanuel Macron called it unacceptable. Essentially what the European Union was trying to convey to the United Kingdom was that the Chequers deal would not do.

In response, upon her return from Austria, May made a fiery speech demanding respect from the European Union.

At this point, talk of a "no deal" Brexit was growing louder, but work on the draft agreement continued and on November 13, negotiators from both sides reached a tentative deal.

NOVEMBER BREAKTHROUGH USHERS IN COMMONS DRAMA

The UK cabinet approved the draft agreement the next day, November 14, but the acceptance appeared somewhat shaky. Brexit secretary Dominic Raab stepped down almost immediately. His under-secretary, Suella Braverman, announced her resignation later that day and a number of other officials followed suit.

In the parliament, the deal was met with a barrage of criticism, not only from opposition parties, but from Conservative lawmakers as well.

A number of Conservatives even submitted letters requesting a no-confidence vote in the prime minister � a total of 48 requests would have to be sent to the chairman of the 1922 Committee for the vote to happen. Rumors of a potential motion of no confidence swirled around for a few days, but nothing came of them.

The DUP, which agreed to back May's minority government after the 2017 elections resulted in a hung parliament, slammed the deal and urged May to look for a better one. The party backs Northern Ireland's union with the rest of the United Kingdom, so the idea of checks in the Irish Sea is not easily palatable to them. The DUP, which has 10 seats in the House of Commons, indicated it would not support the deal in the December 11 vote.

Labour leader Jeremy Corbyn labeled the draft deal a "huge and damaging failure" and called on the government to withdraw it.

The Irish border remained a thorny issue. Under the new deal, Brussels gave in to the United Kingdom on a UK-wide customs solution for a backstop, rather than insisting on a customs union with Northern Ireland only. However, Northern Ireland would still have to adhere to some of the EU rules on the single market, which might lead to checks of some goods between the region and the rest of the United Kingdom. May has repeatedly reiterated that the backstop would be temporary and might not even come into play, but this did little to appease critics.

As the time for a deal to come before the EU27 leaders approached, another part of the United Kingdom that shared a border with the European Union � Gibraltar, a UK overseas territory located on the southern coast of Spain � overshadowed the Northern Ireland issue. In run-up to the EU summit on November 25, Madrid threatened to block the European Union's endorsement of the deal unless it was assured of its right to have a say in the talks on Gibraltar. A crisis was narrowly avoided as Madrid gave in by the end of that week, saying it was satisfied with the guarantees it received.

On the day of the summit, a package consisting of a withdrawal agreement and a political declaration laying out the framework for future EU-UK relationship was endorsed by the European Union. The deal now faced the ultimate test in the House of Commons.

The vote on the deal, scheduled for December 11, was to be preceded by a week of debates in the parliament. At the outset of the debates, lawmakers asked for legal advice on Brexit to be released. The government resisted but was defeated twice: once when lawmakers rejected a compromise solution, where the dispute would be referred to a parliamentary committee, and then another time when they voted to override the government on the publication. Incidentally, this made May's government the first in the UK history to be found in contempt of parliament.

The legal advice appeared to confirm some of the worst fears voiced by critics, namely the possibility of the United Kingdom being trapped in "protracted and repeating rounds" of talks if it entered the backstop. The attorney general further warned that the United Kingdom risked effectively remaining in a customs union with the European Union indefinitely.

"The legal judgment has shown just how much of a betrayal and a stitch up this is of the original intentions of the referendum ... I think this is all going towards a situation where we don't leave. This has been deliberately engineered between Mrs. May, the government and the European Union over the last two years ... to reach a withdrawal agreement that is so appalling that nobody wants it, but then tell you that there is no alternative to that agreement apart from staying in the European Union, and then use that as a device to make sure we don't leave," Gerard Batten, who leads the UK Independence Party (UKIP), told Sputnik.

A day before the House of Commons was set to vote on the deal, May told the parliament she was postponing it. The prime minister admitted that the agreement, in its current state, was likely to get defeated "by a significant margin." May further stressed that she had heard the concerns of lawmakers and would try to get reassurances from her EU colleagues.

The parliament was enraged, with representatives of the opposition chastising May and her deal.

Corbyn said the government was in "disarray," adding that if the prime minister could not renegotiate the deal, she should "make way" for those who can. The next day � the day the vote was supposed to happen � the Scottish National Party (SNP), the Liberal Democrats, Plaid Cymru and the only Green Party lawmaker in Commons signed a letter to Corbyn urging Labour to file a motion of no confidence in the prime minister and pledging to support it.

The math would not be in Labour's favor, however. Even with the support of the four opposition parties, Labour would likely only come out with 308 votes, falling short of a majority in a 650-seat House of Commons.

May spent the day after her fateful announcement meeting with Dutch Prime Minister Mark Rutte, German Chancellor Angela Merkel, President of the European Commission Jean-Claude Juncker and President of the European Council Donald Tusk. While she was away, trouble was brewing within her own party at home.

On the morning of December 12, Sir Graham Brady, the chairman of the 1922 Committee, said that he had collected the necessary number of letters requesting a vote of no confidence in May's leadership of the Conservative Party. The vote was to take place later in the day, so the prime minister had to cut her other engagements short and stay in London.

A day of hectic activity ensued. Two Conservative lawmakers, Andrew Griffiths and Charlie Elphicke, were reinstated after their suspension over sexual misconduct suspicions, enraging Labour. UK media, meanwhile, were frantically updating their tallies of lawmakers who said they would back May.

The beleaguered prime minister addressed the party before the vote, promising that she would not lead the Conservatives into the 2022 general election.

Late at night, Brady announced that May had won by 200 votes against 117. While a new no-confidence vote against her cannot be triggered for one year, the margin of a victory demonstrated the depth of the division within the ruling party. May was now back to struggling to find a compromise between what the House of Commons wants and what Europe is willing to give.

The European Union stood firm as May fought to salvage her deal, with EU officials reiterating that there would be no renegotiation and no new legally binding additions to the agreed documents. The leaders of the European Parliament groups said in a statement that the existing agreement was "fair and balanced and the only deal possible."

"It is therefore one not open to renegotiation," the statement said in bold.

The European Council issued its conclusions on December 13, reiterating that it was ready to start negotiating the future partnership as soon as the United Kingdom left the European Union. If the agreement was reached on Northern Ireland as part of the future relationship deal by the end of the transition period, the backstop would not need to enter force.

The European Council reaffirmed that the backstop was simply a safety net, and even if it was applied it would only be temporary, with the European Union using "its best endeavours" to leave the backstop.

May underlined at her press conference after the European Council meeting that the formal conclusions had a legal character, but admitted that UK lawmakers would want more and promised to hold further talks.

The president of the European Commission conceded that there was "room" for clarifications, but this is unlikely to satisfy the House of Commons. Meanwhile, staunchly pro-European Macron told reporters ahead of the European Council summit that the deal could not be renegotiated.

The UK pound trading chart tells the story of this year's Brexit talks with all its breakthroughs and disappointments. It starts with the general upswing in the first four months of the year, buoyed by the promise of a deal in March, the ominous climb down from May to August, and a tentative return to growth starting in September, punctuated by dips here and there. In early December, the news of May's plans to abandon the Commons vote sent the pound crashing down to the lowest level in almost two years.

Brexit is already costing the UK economy, but a Brexit without a deal could push it to its knees, the Bank of England said in late November, forecasting that the consequences of no deal could be worse than the 2008 crisis, with the national GDP potentially falling by up to 8 percentage points in 2019.

If the United Kingdom were to leave the EU customs union and single market � a scenario that's referred to as a hard Brexit � EU-UK trade would have to be governed by the World Trade Organization's (WTO) rules. The established supply chains that manufacturers rely on could be disrupted if new customs checks and tariffs were applied.

Some other key deliveries could be derailed. UK Health Secretary Matt Hancock admitted in October that the government was talking to pharmaceutical companies about covering additional costs of stockpiling the most important medicines in anticipation of a potential hard Brexit.

In addressing business leaders in November, Prime Minister May stressed that her deal would provide the reassurance the business leaders were seeking.

However, the December vote of no confidence left the UK business community largely unimpressed.

"This vote was a chaotic detour that needs to be put to good use. Politicians must finally stop the endless infighting of the past 30 months and come together to secure a workable Brexit deal. Companies and the country have had enough of chaos," Carolyn Fairbairn, the director general of the Confederation of British Industry, which unites dozens of trade associations, said after May was confirmed to have won.

The possibility of the United Kingdom leaving the European Union without a deal � which would also see the country return to WTO rules � has also been scaring off foreign companies. Japanese carmaker Toyota warned that it would have to temporarily shut down production in the United Kingdom if there was a hard Brexit, while US car manufacturer Ford said a no-deal scenario could force it to reconsider the extent of its presence in the country. Aviation giant Airbus said in June, amid growing fears of a no-deal Brexit, it might rethink its plans to build aircraft wings in the United Kingdom.

The shortage of skilled workers is another strong concern for UK employers. The Chartered Institute of Personnel and Development (CIPD) non-profit said in its fall report that retaining staff and filling vacancies had become more difficult over the year.

Seven in 10 organizations in the United Kingdom employ at least one staff member from an EU or non-EU country, and the share of these employers is particularly high in the public sector, the survey found.

The CIPD survey found that 48 percent of organizations that employ EU citizens thought that more EU nationals were talking about job insecurity because of Brexit.

This anxiety over Brexit extends not only to workers, but to students as well. Experts told Sputnik that UK universities were facing a significant decline in overseas applications due to fears over Brexit and the potential changes it could bring to the country's migration policy.

"We're already seeing a dwindling interest from overseas candidates, and combined with fierce competition for domestic students, this is creating serious financial challenges for UK universities," Sara Shaw, the partner and head of the education Practice at Odgers Interim, told Sputnik.

James Pitman, the UK managing director at Study Group, told Sputnik that students were compelled to apply elsewhere because the "'hostile environment' has driven a plethora of restrictive processes and barriers."

However, the November deal is good news for those EU citizens already living in the United Kingdom and UK nationals currently residing in Europe. Under this agreement, they all can stay and continue to study or work. All EU nationals who arrive in the United Kingdom before the end of the transition period will have the same rights that EU citizens have now. The problem with the progress made on citizen's rights is that these arrangements would no longer be applicable in the event of a no deal, leaving millions in limbo.

Some UK lawmakers, however, would rather see no deal than one they think is bad, while a number of others would prefer a second referendum. Nevertheless, Downing Street has denied that a UK-wide people's vote is being considered amid May's last ditch attempts to secure legal guarantees from Brussels. Over the weekend, following the last European Council of the year, the prime minister clashed with one of her predecessors, Labour's Tony Blair, over his call for a new referendum. May accused Blair of undermining her government's Brexit talks in what was "an insult to the office he once held and the people he once served."

Blair hit back by criticizing May of attempting to "steamroller MPs into accepting a deal they genuinely think is a bad one with the threat that if they do not fall into line, the government will have the country crash out without a deal."

On December 17, May promised to resume the debate on the deal in Commons in the week of January 7, and hold the vote the following week, which gives the prime minister roughly a month to salvage the agreement. May stressed that a second referendum would only boost uncertainty.

Corbyn submitted a motion of no confidence in the prime minister shortly after she revealed the new timeline, but it is up to the Downing Street to allow the time for such a vote in the parliament. However, Labour had a more powerful option of launching a binding motion of no confidence in the government, which could trigger a general election, but chose not to do it at the time.

Meanwhile, a government spokesman announced on December 18 that the United Kingdom would start fully implementing plans for a no deal Brexit.

And so, the United Kingdom will enter the new year none the wiser about the same question it had throughout 2018: Will it have a deal when it leaves in March 2019? In fact, some might even be thinking of the tiniest possibility of not leaving at all. The European Court of Justice did, after all, rule helpfully in December that the United Kingdom could unilaterally take back its notification of withdrawal.