BREXIT UPDATE 59: The Internal Market Bill: The Brexit Drama Resumes

It’s so long since I last posted a Brexit Update and the row that has now broken out is so complicated that it is useful to start with a recapitulation of the plot so far in relation to Boris Johnson’s deal with the EU.

Boris’s Deal:  the Plot so Far

Boris Johnson succeeded Theresa May in July 2019 on the promise that he would renegotiate the Northern Ireland Protocol (the formal term for the “backstop”) and get the Withdrawal Deal through Parliament — but that, if he were to fail, he would take the UK out of the EU on Halloween, October 31, “do or die”, deal or no deal.  It was widely assumed that his negotiations with the EU were a sham and that he intended to leave without a deal.

To prevent this, Parliament passed an anti-No-Deal Act (generally known as the “Benn Act”, but by Johnson and his supporters as the ”Surrender Act”) that stipulated that Johnson must either gain Parliament’s approval of  a new deal, in the form of a parliamentary motion,  by 11pm on October 19, or request the EU for a three-month extension.  The Benn Act was passed in early September 2019.  It was thought virtually impossible that Johnson would manage to negotiate the new Protocol in five weeks, by October 19, especially as the EU had always been adamant that it would not re-open the Withdrawal Agreement, which includes the Protocol.

But to everyone’s surprise, Johnson managed to reach a deal by October 19.  It was essentially a Northern Ireland-only Protocol, leaving Northern Ireland in both the Single Market and the Customs Union, thus creating a border in the Irish Sea (between NI and the British mainland) between the EU and the UK, instead of the Irish border between Ireland and NI that everyone agrees must be kept open.  But Johnson pretended that it wasn’t a Northern Ireland-only Protocol, by turning it into what was dubbed a “Schrodinger’s Cat Backstop”, with reference to the quantum physics concept of Schrodinger’s Cat, which is alive and dead at the same time.  As I wrote in Brexit Update 47:

“Northern Ireland is both inside the EU Customs Union and outside it at the same time.  Legally, Northern Ireland is outside the EU Customs Union and within the UK’s Customs Union, but practically and operationally Northern Ireland is inside the EU’s customs orbit.”

Johnson brought this deal to the House of Commons on October 19; but there were fears among MPs that, even if the motion proposing the deal were passed on that day, he could still achieve a No Deal exit on October 31 by delaying the process of legislation (the deal had to return to Parliament in the form of a Bill and go through all the legislative stages before becoming law).  So MPs opposed to No Deal made a clever chess move, in the form of the Letwin Amendment (proposed by the Tory Remainer Sir Oliver Letwin), which stipulated that Parliament withheld approval of the deal unless and until it had gone through all its legislative stages first. (See Brexit Update 48:  “The Letwin Amendment”).   The Letwin Amendment passed.  So – as the Benn Act had stated that he must either get his deal approved by Parliament by 11pm on October 19 or ask for a three-month extension — Johnson was forced — with extreme reluctance and personally dissociating himself from the request – to send a letter asking the EU for a three month extension, until January 31, 2020.

The deal then came to the House of Commons in the form of a Bill; and it passed its Second Reading comfortably, by 30 votes.  The DUP did not vote for the Bill, because– despite all the sleight-of-hand pretences – it clearly separated Northern Ireland from the rest of the UK . But the Bill was able to pass comfortably with the help of right wing Tory Brexiteers and rebel Labour votes from Labour MPs in Leave-voting areas.

But the crucial vote on that day was a Programme Motion put forward by the government that stipulated that the legislation on the Bill had to be rushed through in only three days.  This Programme Motion was narrowly defeated, because – though it was clear that in the end the Bill would pass — MPs understandably felt they should be given longer than three days to scrutinise it.   But Johnson reacted to the defeat of the Programme Motion by “pausing” the Bill and seeking a General Election, on the spurious grounds that the evil Remainer Parliament was determined to thwart the passing of his deal, because it did not want the UK to leave the EU.

All the clever chess moves such as the Letwin Amendment had in fact played into Johnson’s Machiavellian strategy that depicted him as supporting the people’s democratic vote for Brexit against the evil, elitist Remainer Establishment of Parliament and the Courts (even the Supreme Court’s decision that his prorogation of Parliament was illegal played into the strategy).  All along, Johnson had wanted to be perceived by the public to be forced by Parliament into seeking an extension — and then to have his deal blocked by a Parliament that didn’t want to leave the EU.  The impression he and his chief aide, Dominic Cummings, had given of wanting a No Deal Brexit turned out to have been a kind of poker-game bluff.  (See Brexit Update 49: “Johnson’s Macchiavellian Strategy”).

Though Labour, rightly sensing a trap, initially resisted voting for an early General Election, in the end Johnson got it, because it was supported by the SNP and the Liberal Democrats, for their own reasons.  Even if Labour had voted against the government’s Bill for a December 12 General Election, the Bill would have passed; so Labour ended up voting for it.  Johnson campaigned on the brilliantly simple, magical, but fraudulent slogan “Get Brexit Done”, asking the public to send him back with a large majority so that he could pass his “oven-ready” deal through Parliament.  Labour’s suicidal shift (which was led by Keir Starmer) to support for a second Brexit referendum played straight into the Johnson/Cummings strategy; and Labour was disastrously defeated.

What is the Current Row About?

On October 31, 2019 (the day that he had vowed he would take the UK out of the EU) Johnson said, during the General Election campaign:

“We had a fantastic deal on the table; the House of Commons voted it through, but then they voted again for delay.  This Parliament is just not going to vote Brexit through; there are too many people who are basically opposed to Brexit, who want to frustrate it.  We have an oven-ready deal; put it in the microwave as soon as we get back….and get it done.”

But now the government has put forward an Internal Market Bill that seeks to make changes to this “fantastic” and “oven-ready” deal on which Johnson fought and won the General Election.  Johnson now claims that the Withdrawal Agreement lacks clarity and contains “ambiguities” in “key areas”.   His spokesman said that the deal, which had been agreed “at pace in the most challenging political circumstances”, had been signed “on the assumption that subsequent agreements to clarify these aspects could be reached”.[1]

The aim of the Bill is to set out the rules that will govern the internal market between the regions of the UK – England, Scotland, Wales and Northern Ireland — after the end of the transition period on December 31 this year.  Ever since the UK joined the EU, this market has been governed by EU law.  The purpose of the Bill is to lay down the new UK rules.

It seems that the Bill has a centralising effect on the devolved governments of the UK, reducing their ability to take their own decisions.  The Bill appears to stipulate that, even though these regions can still set their own local standards, they have to accept goods and services from all other parts of the UK, whether these goods and services comply with the local standards or not. (see footnote 6 below).  This has caused outrage among these regional governments.

The points of contention between the UK and the EU are on a) Northern Ireland; b) state aid (in relation to Northern Ireland and the other devolved regions of the UK).

  1. a) Northern Ireland.

The Internal Market Bill is extremely technical and arcane; but, in the words of an Institute for Government explaining article, clause 42

“gives UK ministers the power to disapply or modify exit summary declarations (and any other exit procedures) for goods moving NI-GB and, in doing so, to disregard domestic laws or international obligations, including any under the Northern Ireland protocol.”  (See footnote 6 below).

Johnson has written an article in the Daily Telegraph (Saturday September 12) defending the Internal Market Bill and accusing the EU in his turn of putting an extreme interpretation on the Protocol  that might lead the EU, in the event that the UK leaves without an agreement, to put a “blockade” in the Irish Sea. According to him, it is the EU that is rewriting the Withdrawal Agreement:

“We are now hearing that, unless we agree to the EU terms, the EU will use an extreme interpretation of the Northern Ireland protocol to impose a full-scale trade border down the Irish Sea.  We are being told that the EU will not only impose tariffs on goods moving from Great Britain to Northern Ireland, but that they might actually stop the transport of food products from GB to NI.  I have to say that we never seriously believed that the EU would be willing to use a treaty, negotiated in good faith, to blockade one part of the UK, to cut it off; or that they would actually threaten to destroy the economic and territorial integrity of the UK.”[2]

So Johnson seems to be claiming that the Bill is some kind of pre-emptive move to forestall a “full-scale trade border down the Irish Sea” (though he refers only to traffic “from Great  Britain [ie England, Scotland and Wales]  to Northern Ireland….from GB to NI” whereas clause 42 refers to “goods moving NI-GB”).  He has also said that the Bill will “protect the peace process” in Northern Ireland[3]; but the Irish European Affairs Minister has called the Bill “a unilateral and provocative act” aimed at sabotaging the peace process.[4]

The concern seems to be that, if the principle that the Irish Sea is the EU/UK border is in any way weakened, this will strengthen the possibility that an EU/UK  border will have to be imposed between Ireland and Northern Ireland – which would destroy the peace process.

  1. b) State aid

On state aid to businesses, it seems that the Protocol includes provisions that stipulate that EU state aid law will apply to businesses in Northern Ireland that trade with the EU.  This is designed to ensure a “level playing field”, so that Northern Ireland businesses would not be unfairly advantaged in relation to EU businesses, as a result of receiving more generous state aid (and it appears that businesses in the rest of the UK could still find themselves bound by EU state law if they are connected with NI/EU trade.) It seems that clause 43 of the Bill, in the words of the Institute for Government explaining article: “gives ministers the power to make regulations to determine how the state aid law is applied, including in a way that modifies the protocol itself or is incompatible with international law”. (see footnote 6 below).

According to the ITV’s analyst Robert Peston, one of the most astute commentators on Brexit, the real reason for the new Bill’s state aid clauses – which actually contradict traditional Tory ideology that restricts state intervention — is Dominic Cummings’s obsession with turning the UK into a giant technological power-house that can compete with the US and China:

“If the government of Boris Johnson has an ideology, it is that of Dominic Cummings and his Vote Leave crew.  And Cummings’s passionate conviction is that Johnson’s government MUST have the discretion to invest without fetter in hi-tech, digital, artificial intelligence and the full gamut of the so-called fourth industrial revolution.” (emphasis in original)[5]

The Brexit Drama Resumes

The clause that has created the most outrage is clause 45, which states that regulations made under these preceding clauses will “have effect notwithstanding any relevant international or domestic law with which they may be incompatible or inconsistent”.[6]  There was further outrage when the Northern Ireland Secretary, Brandon Lewis, admitted in the House of Commons that “yes, this does break international law, in a very specific and limited way”.[7] The most senior government lawyer, Sir Jonathan Jones, has resigned in protest against the Bill.[8]

After an emergency meeting in London between the Cabinet minister Michael Gove and the European Commission Vice-President, the European Commission issued an angry and forthright statement insisting that “if the Bill were to be adopted, it would constitute an extremely serious violation of the Withdrawal Agreement and of international law”.  The statement also says that the European Vice-President

“called on the UK government to withdraw these measures from the draft Bill in the shortest time possible and in any case by the end of the month.  He stated that, by putting forward this Bill, the UK has seriously damaged trust between the EU and the UK.  It is now up to the UK government to re-establish that trust.”

And the statement ends with a threat of legal action:  “the Withdrawal Agreement contains a number of mechanisms and legal remedies to address violations of the legal obligations contained in the text – which the European Union will not be shy in using.”[9]

The European Parliament has said that, if the Bill becomes law, the European Parliament will refuse to ratify any trade agreement between the EU and the UK.[10]

The UK government is refusing to back down; nonetheless, trade talks are still continuing. Opinion is divided in the UK as to whether the impression that Johnson is giving that he wants to leave without a deal is another massive bluff or whether this time he really means it.  The Bill will undergo its Second Reading in the House of Commons on Monday.  It is difficult to see how it can pass the House of Lords, where the government does not have a majority.  Lord Howard, a former Tory leader, has asked: “How can we reproach Russia or China or Iran when their conduct falls below internationally accepted standards when we are showing such scant regard for our treaty obligations?”[11]  And there is also a growing Tory backbench rebellion.[12]  Despite the magic slogan “Get Brexit Done”, the Brexit saga – with its extraordinary mixture of high drama, farce and mind-numbingly arcane bureaucratic and legal minutiae — rides again.

[1] https://fr.reuters.com/article/us-britain-eu-johnson-idCAKBN1XA1T3

https://www.bbc.co.uk/news/uk-politics-54003483

[2] https://www.theguardian.com/politics/2020/sep/11/brussels-could-carve-up-uk-if-tories-reject-brexit-bill-says-johnson

[3] https://www.irishtimes.com/news/world/uk/boris-johnson-defends-contentious-bill-as-necessary-to-protect-peace-in-the-north-1.4350811

[4] https://www.theguardian.com/uk-news/2020/sep/11/ireland-accuses-boris-johnson-of-trying-to-sabotage-peace-process-brexit

[5] https://www.itv.com/news/2020-09-07/the-reason-why-boris-johnson-is-jeopardising-an-eu-free-trade-deal

[6] https://www.instituteforgovernment.org.uk/explainers/internal-market-bill

https://publiclawforeveryone.com/2020/09/09/the-internal-market-bill-a-perfect-constitutional-storm/

https://www.ft.com/content/c606c934-4a72-11ea-95a0-43d18ec715f5

[7] https://www.theguardian.com/politics/2020/sep/08/government-admits-new-brexit-bill-will-break-international-law

[8] https://www.bbc.co.uk/news/uk-politics-54072347

[9] https://ec.europa.eu/commission/presscorner/detail/en/statement_20_1607

[10] https://www.politico.eu/article/european-parliament-issues-warning-over-uk-bill/

[11] https://www.bbc.co.uk/news/uk-politics-54105455

[12] https://news.sky.com/story/pm-faces-growing-unrest-over-internal-market-bill-as-backbenchers-draw-a-line-in-the-sand-12069315