U.S. Markets closed

After Another Week of Brexit Bluff and Bravado, What’s Next?

Robert Hutton
After Another Week of Brexit Bluff and Bravado, What’s Next?

(Bloomberg) -- Can Boris Johnson get a Brexit deal? Is he even trying to? Will he delay Brexit? Will he take Britain out without a deal?

The U.K. is finishing the week with more questions about Brexit than answers. Here’s what we know.

What’s London Proposing Now?

Johnson wants to take the U.K. out of the European Union’s customs union, but leave Northern Ireland in the bloc’s single market for manufactured and agricultural products. This would require two frontiers: A regulatory one in the Irish Sea between Britain and Northern Ireland and a customs border between Northern Ireland and the Republic of Ireland.

But both countries are committed to avoiding any infrastructure on the land boundary they share. To get around that, the U.K. wants to rely on technology and trusted trader programs to police the border.

The problem is that physical checks on goods traversing the two countries will still have to take place somewhere. Johnson’s plan would also require the agreement of Stormont, the Northern Ireland Assembly -- which hasn’t met for almost three years.

Could It Get Through Parliament?

Probably. In January, a majority of MPs supported what was known as the “Brady Amendment,” which proposed a similar, technical solution to the Irish border problem and the Democratic Unionist Party, which props up Johnson’s administration, has welcomed the plan.

Significantly, several of the so-called “Spartans” -- Tory Members of Parliament who have refused to vote for any previous Brexit deal -- have also got on board. There were signs at the Conservative Party conference this week that they fear losing Brexit altogether if Johnson can’t get a deal by Oct. 31. This seems to have pushed them into line.

On the other wing of the party, most of the MPs that Johnson expelled last month should still vote for a deal. Among them will almost certainly be Rory Stewart, who has quit the Conservative Party and plans to leave Parliament and run for London Mayor.

What’s the EU Response?

Unimpressed. The EU says it will stand with Ireland, whose prime minister, Leo Varadkar, has ruled out any kind of hard border.

Dublin has given Johnson 10 days to move further, or it says it will shift the discussion to the question of whether to extend Britain’s EU membership again.

Mark Rutte, prime minister of the Netherlands, said Saturday on Twitter that he spoke to Johnson on the phone and that “important questions remain about the British proposals.”

Is This Johnson’s Final Offer?

Yes -- if you believe what Johnson’s officials said in press release on Tuesday evening. No -- if you believe what Johnson said in a letter to the EU on Wednesday, when he described his proposal as a “broad landing zone.”

According to two people familiar with his plans, he is open to the idea of keeping Northern Ireland and possibly the whole U.K. in the EU’s customs union for a strictly time-limited period. But the Irish have rejected that idea.

What Happens Now?

Johnson plans to meet Varadkar next week and hold talks with other EU leaders. Meanwhile his negotiator David Frost is involved in technical talks in Brussels, trying to find a way through.

What Has to Happen for a Deal?

The two sides will need to reach agreement on the issues of customs checks and consent. On the first, Ireland would have to accept what it has said it won’t -- a land border -- and put Varadkar at risk of being thrown out of office.

Or Johnson would have to throw the DUP overboard, and accept a border in the Irish Sea. In doing so, he would risk losing the support of the Spartans, meaning he couldn’t get his plan through Parliament. Though it’s just possible the Spartans would turn out to be more committed to Brexit than they are to the cause of Ulster Unionism.

On the Stormont lock, Dublin has made clear it won’t accept a deal that gives the DUP an effective veto, while the DUP is unlikely to allow Northern Ireland to be treated differently to the rest of the U.K. without one. How talks can get past that block is unclear.

What If There Isn’t a Deal? Will Johnson Seek an Extension?

No, if you believe what Johnson has been saying for months, and what he told the Conservative conference. Yes, if you believe what Johnson’s government told a Scottish court on Friday morning. No, if you believe Johnson’s tweet on Friday evening:

Johnson and his ministers have repeatedly said they will both obey the Benn Act -- which requires them to seek an extension to talks if they don’t have a deal -- and they won’t seek an extension. One solution would be to get a deal, another would be to find a loophole in the law.

So Will Brexit Happen on Oct. 31?

It’s looking increasingly unlikely. One official said on Friday that even if the U.K. and EU did reach a deal, a short extension would be needed just to get everything in place for Britain’s departure. Then there’s still the Benn Act and the threat of more litigation. Don’t be surprised if Brexit doesn’t draw to a conclusion at the end of the month.

--With assistance from Peter Flanagan in Dublin

(Updates with Mark Rutte’s comment in EU response section.)

--With assistance from Ruben Munsterman.

To contact the reporter on this story: Robert Hutton in London at rhutton1@bloomberg.net

To contact the editors responsible for this story: Tim Ross at tross54@bloomberg.net, James Amott, Zoe Schneeweiss

For more articles like this, please visit us at bloomberg.com

©2019 Bloomberg L.P.