Concessions, cash and an Ulster ‘triple lock’: IfG boils down Brexit phase one deal

Think-tank analysis identifies concessions on residency rights, a £39bn bill on the ‘never-never’, and hand-tying assurances on Northern Ireland in draft agreement

Credit: PA

By Jim.Dunton

08 Dec 2017

Securing the UK’s progression to the next phase of negotiations on an orderly divorce from the European Union has required concessions on citizenship rights, acceptance of decades of vagueness on the final separation bill and free-trade limiting guarantees on Northern Ireland, according to the Institute for Government.

The 15-page phase-one agreement, approved by Theresa May and European Commission president Jean-Claude Juncker and now awaiting sign off by the European Council, is set to open the door to talks on the UK’s future trade relationship with the EU post March 2019.

IfG programme director Jill Rutter, who leads on Brexit-related issues for the think-tank, said that while the entire document was a work of compromise, the elements of the agreement designed to preserve the status of current relations between Northern Ireland and the Irish Republic appeared to be the most constraining aspect of the deal for Westminster.


Rutter said both sides appeared to have moved their stances on citizen’s rights. She said the UK had managed to secure “a much simpler and cheaper procedure” for granting settled status to non UK-passport holders that included “a lot of language designed to reassure on Home Office handling”. But the cost has been concessions on future family reunification and on continued, but time-limited, oversight by the European Court of Justice. 

On finance, Rutter said the deal provided “a methodology” for working out the final bill, but no certainty on how close it would be to the current official estimate of “between £35-£39bn”.

“It may take until the middle of the century to work out how much we ended up paying,” she said. “The big win for the UK is that it is avoiding any upfront payment – we pay when the obligations fall due. We continue contributions as now – and can benefit from programmes started in this financing period. We also get some assets back.”

Rutter said that the assurances on the future of Northern Ireland’s relationship with both the Irish Republic and its status within the UK had required a triple-lock of reassuring language that seemed destined to limit Westminster’s scope for agreeing new free trade deals.

“On the face of it, this looks as though the UK has conceded a very significant limitation in its room for manoeuvre on future regulatory divergence and trade deals,” she said.

“The passages on Ireland, which nearly derailed the deal this week, are full of reassurances directed at both the government in the republic and the Unionists in the north (and the majority in the north who voted remain). 

“One of the government’s problems in settling the Irish issue is what Philip Hammond called its ‘end-state’ discussion. This formulation constrains the end-state,” Jill Rutter

“So we have language about supporting north-south and east-west cooperation; upholding the Good Friday Agreement and – bizarrely in an international document – a reiteration of the UK’s commitment to maintain the constitutional position of Northern Ireland in the UK.”

The triple-lock, as Rutter referred to it, initially seeks to achieve a trading relationship with the EU with no hard borders on market access and customs. Should that fail, plan B would see the UK “propose specific solutions to address the unique circumstances of the island of Ireland”. 

The fallback plan C position would be for the UK to maintain “full alignment with those rules of the internal market and customs unions which, now or in the future, support north-south cooperation, the all-island economy and the protection of the 1998 Agreement”.  

Also forming part of the reassurance drive was a guarantee to Northern Ireland that the whole of the UK would align with whatever the plan C arrangements were, although the proposals would allow Northern Ireland Executive or the Northern Ireland Assembly to agree that “distinct arrangements” were appropriate.

In an evident bid to calm the Democratic Unionist Party jitters that sidelined the phase one deal earmarked for approval on 4 December, the agreement also contains the line: “In all circumstances, the United Kingdom will continue to ensure the same unfettered access for Northern Ireland's businesses to the whole of the United Kingdom internal market.”

Rutter said the raft of reassurances appeared “rather tortured” and begged questions over whether the government fully understood what it was signing up to.

“One of the government’s problems in settling the Irish issue is what Philip Hammond called its ‘end-state’ discussion. This formulation constrains the end-state,” she said.

“Michael Gove was the point person for selling the deal to Leavers on the Today programme. His interpretation is: ‘We want to achieve the same ultimate goal, for example high standards of animal health in order to ensure there is no hard border on the island of Ireland – but we have the capacity to achieve that same goal by different means…’ 

“That was an approach the UK already offered in its position paper in the summer, but it is far from clear that the EU is as signed up to the view that equivalence – not adoption of EU rules – will be enough. Particularly if the UK is signing deals with countries with very different regulatory models, like the United States.”

Rutter said the key to solving the Ireland issue would be the UK’s ability to secure a frictionless free trade deal – which would need to be “much, much better” than the Canada-style deal seen as the likely outcome from a negotiated Brexit.

“The UK may have reconciled itself to the Ireland solution by still believing it can have its cake and eat it,” she said.

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