1 February 2019

Open Europe’s Director Henry Newman gave evidence to the House of Lords EU select committee on January 29. He discussed No Deal Brexit preparations in both the UK and the EU27, alongside Professor Anand Menon from King’s College London and Tim Durrant from the Institute for Government. You can view a recording of the proceedings here.

Newman started by saying that the “chances of leaving without a deal remain reasonably high, but lower than leaving with a version of the negotiated deal we currently have.”

Generally speaking, he said, a No Deal situation would have a “profound effect” in terms of political fallout, and

a breakdown of negotiations… would have effects for foreign policy and defence…This message is not received enough on the continent.

On the Government’s and civil service preparations for No Deal, Newman commented that there has been “an enormous amount of time spent” on contingency plans, but added that there was a limit to how the UK could prepare on its own, as many issues require agreements with the EU. He also pointed out that some departments like the Treasury were better prepared, but there was a lack of plans at the local level.  When asked about preparations for businesses, he said that the Government should be clear about the tariffs it intends to apply in case of No Deal.

On the issue of the UK Government seeking to make changes to the Irish backstop in the Withdrawal Agreement, Newman said that there are various mechanisms which would be legally binding, including an exchange of letters or a notice declaring how the Withdrawal Agreement can be interpreted. He added, “We can do a huge amount without reopening the Withdrawal Agreement. To give it political or presentational weight, we can call it a ‘mini-treaty’.” He commented on the UK’s approach towards the backstop, “The strategy of avoiding the backstop at all costs is a complete mistake… Strategically, the UK should say that we will go to the backstop and negotiate from there, as it provides some assurance.” Meanwhile, on the EU side, “There are legitimate concerns about whether the EU envisages alternative solutions” to the Irish backstop. He added that the solution in the ‘Malthouse Compromise’ plan to renegotiate the backstop is unlikely to be acceptable to the EU, as it would mean “a wholesale abandonment of their entire negotiating strategy.”

Newman also pointed out that the EU’s position on what would happen to the Irish border in case of a No Deal Brexit scenario was unclear, particularly in the areas of animal/health checks on goods and the single energy market. He added,

The reason for the EU’s lack of clarity on the Irish border question is political.

On the concept of a ‘managed No Deal’ he said, “A Managed No Deal in the sense of… a transition period without a Withdrawal Agreement or a backstop… seems far-fetched.”

Asked about a possible extension of Article 50, he said that the view in the EU27 has probably shifted and would support it, as the EU would not like to be seen as if they were creating a No Deal outcome by refusing a potential extension. But he added that some EU member states may want to seek a longer extension in order to avoid the UK coming back and asking for slightly more time.