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Phase two of Brexit talks promises a tough 2018 for the UK

by / 0 Comments / 01/12/2017

Earlier this week reports circulated around Westminster suggesting that the UK and the EU had reached a deal over the Brexit Bill, increasing the chances of the EU 27 agreeing to move on to phase two of the talks at the upcoming December summit.


 

Phase one of the negotiations exposed an aggressive war of words and at times provocative remarks that will beset the next year as Britain tries to secure a trade deal with the European Union. It has also shown how the EU plan to stick to its tried and tested method of negotiating, creating a game of 11th-hour deals and dramatic shows of brinkmanship.

Despite the rhetoric from both sides concerning the chances of a ‘no deal’, it is more likely that key decisions have been made to move the talks past this impasse.

The divorce bill has been the focus of great debate, with the issue being instantly a cause for political concern. The precise figure has, according to reports, not been agreed. What is clear is that Britain may have to pay more than previously suggested; between 40-60 billion euros. The final bill will not be known until the end of the negotiations. However, for Theresa May this will require some serious spinning. She faces a perplexing conundrum.

No voter can back the idea of such a bill. For a leaver, they were promised money back from the EU to invest in the NHS and the public services. And for a remainer, how can you back a bill for a divorce you never wanted?

The government will struggle to sell this to either side of the public debate; however, it will be in the Tory Party where the real battle matters. The government needs to persuade backbench rebels that they are not ‘paying for nothing’ and that a trade deal is more likely as a result of the divorce bill. The exact figure of the bill not being revealed will help the government escape frightening headlines.

The Ireland border issue still runs the risk of scuppering the advancement of phase two, as does the argument over whether the ECJ will hold jurisdiction over EU citizens in the UK.  The latter is the first test of how much sovereignty the UK will regain from the European Union.

For many Brexit MPs the idea that the EU courts are still having overriding control over some citizens in the UK is unpalatable (the most likely scenario is a jurisdiction panel being formed, to preside over any legal disputes concerning EU citizens in the UK).

Nevertheless, in true EU style just as the deal looked unlikely, at almost the final hour it now looks as though a deal has been agreed.

What will matter to the UK Government is avoiding being perceived to have blinked first. As for the public and crucially businesses, the movement on to phase two is encouraging.

But the trade deal in phase two has the capital for the most damage or success. Over the next year a reform to the immigration system in the UK will have to be written into law, together with an advantageous trade deal with the EU.

Some politicians suggest the final negotiations will have to be completed by either autumn or winter of next year to allow the EU and UK parliaments to scrutinise the deal. Christmas may be delivering a temporary sigh of relief for the UK but 2018 will not be any easier.

How the leavers react to the divorce bill will only be a precursor of what’s to come. For the government, the negotiations next year will be under even greater scrutiny from the public, given that there’s more to lose and also more to gain.