Brexit: Government publishes backstop plan after last-ditch compromise between Theresa May and David Davis

Agreement ends threat of Brexit secretary resigning – for now

Benjamin Kentish

Political Correspondent

Thursday 07 June 2018 14:37 BST

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David Davis wants post-Brexit relationship with Europe that 'recognises the history' and 'stands the test of time'

The government’s proposal for a Brexit “backstop” has been published and controversially includes a specific time limit after a last-ditch compromise between Theresa May and David Davis.

The contentious plan was amended at the last minute to say the proposed arrangement should not extend beyond December 2021 – a year after the end of the Brexit transition period.

The prime minister and the Brexit secretary agreed the wording of the document minutes before a meeting of the Brexit war cabinet.

Mr Davis had insisted there must be a specific time limit, with reports suggesting he was prepared to resign over the matter. The initial Downing Street draft of the document is understood not to have included the 2021 deadline.

The row relates to a backstop plan that would see the UK temporarily remain in parts of the EU customs union if no other way is found to avoid a hard border in Northern Ireland.

The document published on Thursday makes clear the government “expects” such an arrangement to be temporary, but includes no clear commitment to this end.

It states: “The UK is clear that the temporary customs arrangement, should it be needed, should be time limited, and that it will be only in place until the future customs arrangement can be introduced. The UK is clear that the future customs arrangement needs to deliver on the commitments made in relation to Northern Ireland.

“The UK expects the future arrangement to be in place by the end of December 2021 at the latest. There are a range of options for how a time limit could be delivered, which the UK will propose and discuss with the EU.”

The biggest issues facing UK on leaving EU

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1/8The biggest issues facing UK on leaving EU

The biggest issues facing UK on leaving EU

Post-Brexit immigration

workers sorting radishes on a production line at a farm in Norfolk. One possible post-Brexit immigration scheme could struggle to channel workers towards less attractive roles - while another may heighten the risk of labour exploitation, a new report warns.

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The biggest issues facing UK on leaving EU

Customs union

A key point in the negotiations remains Britain's access to, or withdrawal from, the EU customs union. Since the referendum there has been hot debate over the meaning of Brexit: would it entail a full withdrawal from the existing agreement, known as hard Brexit, or the soft version in which we would remain part of a common customs area for most goods, as Turkey does? No 10 has so far insisted that “Brexit means Brexit” and that Britain will be leaving the customs union, but may be inclined to change its position once the potential risks to the UK’s economic outlook become clearer.

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The biggest issues facing UK on leaving EU

Northern Ireland-Irish border

Though progress was made last year, there has still been no solid agreement on whether there should be a hard border between Northern Ireland and the Republic of Ireland. To ensure borderless travel on the island, the countries must be in regulatory alignment and therefore adhere to the same rules as the customs union. In December, the Conservative Party’s coalition partners, the DUP, refused a draft agreement that would place the UK/EU border in the Irish Sea due to its potential to undermine the union. May has promised that would not be the case and has suggested that a “specific solution” would need to be found.

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The biggest issues facing UK on leaving EU

Transition period

Despite protests from a small number of Conservative MPs, the Government and the EU are largely in agreement that a transitional period is needed after Brexit. The talks, however, have reached an impasse. Though May has agreed that the UK will continue to contribute to the EU budget until 2021, the PM wants to be able to select which laws made during this time the UK will have to adhere to. Chief negotiator Michel Barnier has said the UK must adopt all of the laws passed during the transition, without any input from British ministers or MEPs.

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The biggest issues facing UK on leaving EU

Rights of EU citizens living the UK

The Prime Minister has promised EU citizens already living in the UK the right to live and work here after Brexit, but the rights of those who arrive after Brexit day remains unclear. May insists that those who arrive during the transition period should not be allowed to stay, whereas the EU believe the cut-off point should be later.

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The biggest issues facing UK on leaving EU

Future trade agreement (with the EU)

Despite this being a key issue in negotiations, the Government has yet to lay out exactly what it wants from a trade deal with the EU. Infighting within the Cabinet has prevented a solid position from being reached, with some MPs content that "no deal is better than a bad deal" while others rally behind single market access. The EU has already confirmed that access to the single market would be impossible without the UK remaining in the customs union.

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The biggest issues facing UK on leaving EU

Future trade agreements (internationally)

The Government has already begun trying to woo foreign leaders into prospective trade agreements, with various high profile state visits to China, India and Canada for May, and the now infamous invitation to US President Donald Trump to visit London. However the UK cannot make trade agreements with another country while it is still a member of the EU, and the potential loss of trade with the world's major powers is a source of anxiety for the PM. The EU has said the UK cannot secure trade deals during the transition period.

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The biggest issues facing UK on leaving EU

Financial services

Banks in the UK will be hit hard regardless of the Brexit outcome. The EU has refused to give British banks passporting rights to trade within the EU, dashing hopes of a special City deal. However according to new reports Germany has suggested allowing trade on the condition that the UK continues paying into the EU budget even after the transition period.

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The agreement was reached after Ms May held separate meetings in her Commons office with Mr Davis and other Brexiteer ministers Boris Johnson and Liam Fox on Thursday morning. A Downing Street spokesperson said none of the ministers had threatened to resign during the meetings, which they described as “constructive”.

The Brexit secretary had earlier refused to rule out resigning over the matter. Asked on Wednesday if he could keep his job if the proposal was published without his approval, he said: "That’s a question, I think, for the prime minister, to be honest.”

A source close to Mr Davis said the backstop plan had been amended to add “much more detail” about the time limit.

They said: “Obviously, there’s been a back and forth on this paper, as there always is whenever the government publishes anything.

“The backstop paper has been amended and now expresses, in much more detail, the time-limited nature of our proposal – something the prime minister and David Davis have always been committed to.”

However, the time limit is not legally binding and is expressed an an expectation rather than a commitment, leading to suggestions it was a largely symbolic gesture made by Ms May to appease Brexiteers in her cabinet.

While the prime minister has staved off the threat of Mr Davis quitting, she will still have to convince EU leaders to agree to the backstop proposal. The EU has previously insisted such an arrangement must not be time limited, although the lack of legal weight in the UK's proposal could convince Brussels to accept the plan.

The European Parliament's Brexit lead, Guy Verhofstadt, swiftly poured cold water on the plan, writing on Twitter: "Difficult to see how UK proposal on customs aspects of IE/NI backstop will deliver a workable solution to avoid a hard border and respect integrity of the [single market/customs union]. A backstop that is temporary is not a backstop, unless the definitive arrangement is the same as the backstop."

The government paper proposes that, if no other arrangement for the Northern Ireland border is agreed, there should be no “tariffs, quotas, rules of origin (or) customs processes” applied to UK-EU trade for as long as the backstop is in place.

The UK would be free to make new trade deals during this time.

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