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Financial Times / Biz - Money

UK ministers close to agreement on Irish border ‘backstop’

  • Cabinet closer to agreeing how to avoid a hard border in Ireland
  • UK may stay tied to the EU customs union if new arrangement not ready by 2021
  • Plan needs support of Eurosceptic MPs and Brussels

Theresa May’s cabinet is moving closer to adopting a plan that could keep Britain tied to the EU customs union after 2021, as part of a “backstop” to avoid a hard border in Ireland.

The plan won the reluctant approval of Eurosceptic ministers, including foreign secretary Boris Johnson on Tuesday, according to officials briefed on a cabinet subcommittee meeting. Downing Street insisted no final decision had been taken.

Under the proposal, if technology for a new customs arrangement is not ready by the end of the post-Brexit transition period in January 2021, the entire UK would continue to apply the EU’s common external tariff.

What is the ‘Irish backstop’?

The UK and the EU agreed in principle last December that there should be a legal guarantee of no hard border in Ireland, if all other ways of avoiding one — such as securing a trade deal or special policies for Northern Ireland — had failed.

Under the proposal, the UK would “maintain full alignment with those rules of the internal market and customs union which support north-south co-operation, the all-island economy and the Good Friday Agreement”.

The backstop, which still needs to be set out in a formal legal text, is vital because it will be written into the treaty that takes the UK out of the EU.

The EU has said it wants to make “substantial progress” on agreeing the details of any backstop before next month’s European Council.

What would it mean in practice?

Michel Barnier, the EU’s chief Brexit negotiator, interpreted December’s “full alignment” commitment as meaning that, unless alternative solutions are found, Northern Ireland would have to remain part of the single market and the EU’s customs territory.

But Mrs May said that “no British prime minister” could accept such a division of the UK and she has yet to offer an alternative.

British officials say the UK will put forward its own draft legal text for the backstop before next month’s summit.

But they admit that if Mrs May does not want “full alignment” only in Northern Ireland, the whole of the UK would have to remain aligned with the EU in certain areas, including customs.

Will the backstop even be necessary?

Mrs May has insisted that the UK can avoid a hard border in Ireland through an EU-UK free trade agreement, which would include a customs agreement.

But British ministers are still squabbling over what kind of customs deal they want with the EU and HMRC has warned that whatever option they choose, the technology will not be ready by the end of the post-Brexit transition period in 2021.

Karen Bradley, Britain’s Northern Ireland secretary, told MPs on Wednesday: “We don’t want the backstop to happen. We want to solve the issue of the Irish border through the overall EU-UK relationship.

“Option B is that we resolve it through both the UK-EU relationship but with specific provisions for the unique circumstances of Northern Ireland,” she added. “The backstop is not where anyone wants to be.”

Would the Eurosceptics accept a backstop solution?

The Daily Telegraph first reported Mrs May’s stopgap solution on Thursday.

Jacob Rees-Mogg, the Tory MP who heads the Eurosceptic European Research Group, told the newspaper: “We have gone from a clear end-point, to an extension, to a proposed further extension with no end-point.

“The horizon seems to be unreachable. The bottom of the rainbow seems to be unattainable. People voted to leave, they did not vote for purgatory.”

But Eurosceptics may see positives in the plan, including that it could avoid the need for the UK to formally request an extension of the Brexit transition period to give it more time to develop new customs technology.

Downing Street insisted this week that it would not ask for an extension, which the EU would demand to be a continuation of all aspects of EU membership, including full single market membership, free movement and budget contributions.

Would Brussels agree?

EU officials have made clear that the UK would be welcome to stay in the customs union if it accepts related conditions. The EU27 countries sell more to the UK than Britain sells to the rest of the bloc and would be delighted to minimise friction at the border.

But Mr Barnier is also anxious that the Irish backstop question does not become entangled in the separate negotiations on a future UK-EU trade agreement. If the UK and the EU agreed a fallback customs union plan in the withdrawal treaty, it would pre-empt negotiations on a trade deal which are not supposed to begin in earnest until after Britain leaves in March 2019.

British officials, however, argue that this is a problem of Mr Barnier’s own making.

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