I had thought for some time that, in the Brexit negotiations, the question of the border in Ireland would be quietly fudged and kicked into the next phase of the process. In the event, it was noisily fudged and kicked into the next phase of the process. For, despite all the drama, nothing much has changed. Or, at least, the UK government is talking as though nothing has changed.
The crucial paragraphs in the Phase 1 agreement published on 8 December are these:
The United Kingdom remains committed to protecting North-South cooperation and to its guarantee of avoiding a hard border. Any future arrangements must be compatible with these overarching requirements. The United Kingdom’s intention is to achieve these objectives through the overall EU-UK relationship. Should this not be possible, the United Kingdom will propose specific solutions to address the unique circumstances of the island of Ireland. In the absence of agreed solutions, the United Kingdom will maintain full alignment with those rules of the Internal Market and the Customs Union which, now or in the future, support North-South cooperation, the all- island economy and the protection of the 1998 Agreement.
In the absence of agreed solutions, as set out in the previous paragraph, the United Kingdom will ensure that no new regulatory barriers develop between Northern Ireland and the rest of the United Kingdom, unless, consistent with the 1998 Agreement, the Northern Ireland Executive and Assembly agree that distinct arrangements are appropriate for Northern Ireland. 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.
There are essentially 3 reasons why customs borders exist:
- To impose tariffs and quotas;
- To confirm the imports’ countries of origin;
- To ensure compliance with regulations and standards.
A free trade agreement with the EU would only get us over the first of these. To avoid the second would require continued membership of the EU Customs Union (or the negotiation of something similar). To avoid the third we would need to stay in the European Economic Area and abide by the rules of the single market.
This gives the government a problem. If it is serious about its guarantee of no border checks, it can’t fulfil its stated aim of leaving the Single Market and Customs Union. Yet, almost every day, a government minister repeats that the UK will do just that. The problem with this is that the moment the UK leaves the customs union, there have to be border checks. There is really no getting around this.
There is no high-tech solution to make the border disappear. The idea that border checks will take place somewhere discreet, far away from the border, is also nonsense. The law-abiding would comply but the point of border checks is to discourage the would-be law breakers. As officials from Norway and Switzerland explained to MPs in November, even the most technologically advanced countries with the most friendly relationships with their neighbours still have border checks. When you move from one customs regime to another, there is a visible border.
Even if we suspend disbelief and pretend that it would be possible to construct an invisible border, the government hasn’t made any plans to put the necessary systems and infrastructure in place. It has left it way too late to have anything ready for March 2019 and it is doubtful that the work could be completed by 2021. The technological solutions suggested would be expensive and would take time to implement. The National Audit Office isn’t convinced that the systems already in development will be ready in time for Brexit so there isn’t much likelihood of new ones being delivered on time.
Furthermore, the government hasn’t put any money aside for new customs systems and infrastructure. The £3bn extra spending for Brexit preparations, announced with much fanfare in November, has, according to the Office for Budget Responsibility, all been allocated as resource spending (RDEL):
Of the scorecard RDEL measures, the largest increases relate to 2018-19 and 2019-20, where a cumulative £3 billion has been allocated to Brexit preparation and another £3 billion for the NHS. The 2019-20 ‘efficiency review’ announced in Budget 2016 has also been scaled back. These measures explain most of the total increase in RDEL spending in those years. From 2020-21 onwards, increases to RDEL plans are more modest.
RDEL is day-to-day spending, so it would cover things like training, extra staff, consultants, legal fees and, possibly, some upgrades to existing systems. There is, however, no capital spend allocated. So nothing for new systems, CCTV, number-plate recognition, satellite tracking or new lorry parks.
Not only are the government’s statements about leaving the Single Market and Customs Union incompatible with its guarantees on the Irish border, they are also inconsistent with what it is actually doing. The infrastructure question also applies to the borders at the UK’s ports in Kent. So far, no plans have been made or funds made available to create any new border infrastructure. The government may be talking about leaving the Customs Union and Single Market but it is behaving as though very little will change.
This doesn’t give the UK much room for manoeuvre in the trade negotiations. There is a narrow range of options which would enable the UK to keep some of its red lines and avoid the need for border checks.
Sam Lowe was initially joking when he suggested the Jersey Option but something like it might be where we eventually end up:
This started out as a joke but now I want credit when the ‘Jersey option’ actually gets seriously proposed. https://t.co/R1Ber3czkM
— Samuel Lowe (@SamuelMarcLowe) December 5, 2017
Is this going to be a bit like Jersey being in the European Customs Union and de-facto the single market for goods despite not being in the EU? #fudge
— Samuel Lowe (@SamuelMarcLowe) December 4, 2017
Being inside the Customs Union and in the Single Market for goods, as Jersey currently is, would get around all the physical problems associated with Brexit. If the UK then stayed outside the Single Market for services it would probably be able to avoid free movement and the application of EU law to areas like employment protection. The Channel Islands, for example, do not have TUPE laws.
A crazy idea? Well George Peretz reckons it might be an option at least for the transitional period because it also has the advantage of preserving the UK’s trade agreements it has with other countries through the EU. A similar principle underpins the Institute for Public Policy’s “shared market” approach, published today, which combines regulatory alignment with a UK-EU customs union.
The problem with these options is that they would prevent the UK from negotiating trade deals, at least on goods, with other countries outside the EU. This is something that the government is still insisting it wants to do.
But we can’t be in a customs union and have separate trade deals. Or, to put it anther way, as soon as we have trade deals with other countries we have border checks in Ireland and we need a customs infrastructure that we haven’t even started planning for yet.
There is, then, no way that the UK government can have everything it says it wants. Something has got to give. The options available therefore look something like this.
If we want trade agreements with third countries, there will have to be some customs checks on the Irish border. Even if we want to maintain our most important red line, control of immigration, which was the most important issue for Leave voters, there is only a narrow range of options which allow it to co-exist with the guarantee of no hard border. Perhaps the Jersey Option, or something like it, isn’t as absurd as it sounds.
The Guardian’s Brussels correspondent Jennifer Rankin reported today that Michel Barnier showed this slide to EU leaders. It explains how each of the UK’s red lines rule out the various options for a post-Brexit trade relationship with the EU.
By sticking to all the red lines we end up with a Canada or Korea style trade deal, both of which would result in a hard border in Ireland.
But would the EU agree to such a deal knowing it would mean a hard border?
As I said, something has to give.