On the UK team

Remain-supporting Theresa May managed to cling to her role as prime minister throughout the withdrawal agreement negotiations, but there were a number of changes to the UK negotiating team.

Here are the major players on the UK side:

• Theresa May: As prime minister, May had effectively been head of the UK Brexit negotiations since day one. But as time went on, her role became increasingly hands-on as various UK negotiators came and went. Best Theresa May quote? The immortal “Brexit means Brexit,” repeated over and over again like a yogi’s mantra.
• David Davis: Initially appointed secretary of state for exiting the European Union to appease the hardline Brexiteers in the Conservative Party, Davis fell on his sword in July 2018. Best quote? The enigmatic “Nothing is agreed until everything is agreed.”
• Dominic Raab: Replacing David Davis in July 2018, Raab remained Brexit secretary until the negotiations were concluded in November 2018 — at which point, he promptly quit in protest over the deal he’d helped negotiate. (How big a role he played is up for debate. Many speculated that he was Brexit secretary in name only, because Theresa May effectively took back control of negotiations.) Best Raab quote? In his resignation letter, he wrote “I cannot reconcile the terms of the proposed deal with the promises we made to the country… .”
• Stephen Barclay: Appointed as Brexit secretary one day after Raab’s resignation, Barclay’s role was said to be more focused on domestic preparations, now that UK–EU negotiations on the withdrawal deal had been completed. Key quote? Referring to the withdrawal deal he issued a firm, “This is the only deal on the table.”
• Oliver Robbins: Robbins has been a constant presence as Theresa May’s Europe adviser, and was closely involved in negotiations. Best quote? As a behind-the-scenes operator, there are none. However, the Telegraph described Robbins as “the unelected civil servant who has usurped the Brexit secretary and seized control of the negotiations,” which sounds a bit sinister.
• Sir Tim Barrow: As Britain’s ambassador to the EU, Barrow has been an important link between the two parties. Like any good diplomat, Barrow has wisely kept his mouth shut in front of the cameras, but he did hand-deliver Theresa May’s formal Article 50 letter to the EU in March 2017.

On the EU team

The UK’s Brexit secretaries came and went like buses, but the EU’s negotiating team remained as steady and constant as the sunshine in Tenerife. Let’s look at the key players on the European side:

• Michel Barnier: The appointment of Barnier — a fan of greater European integration — as chief negotiator for the EU showed that the UK could expect no favors from the EU. Best Barnier quote? “There are extremely serious consequences of leaving the single market, and it hasn’t been explained to the British people. We intend to teach people what leaving the single market means.” He also famously said, “I can’t negotiate with myself,” when negotiations still hadn’t started three months after Theresa May formally triggered Article 50 (see Chapter 1 for a breakdown of Brexit and EU terminology, like Article 50).
• Donald Tusk: As president of the European Council, Tusk has been extremely vocal about the UK’s decision to leave the EU. Best quote? Hard to choose between “I have been wondering what the special place in hell looks like for those who promoted Brexit without even a sketch of a plan how to carry it out safely” and “Brexit will be a loss for all of us. There will be no cakes on the table. For anyone. There will be only salt and vinegar.” In a softer moment, he also said, “We already miss you,” when he was handed the Article 50 letter.
• Jean-Claude Juncker: The president of the European Commission has also been vocal about his thoughts on Brexit. Best quote? Speaking of the UK’s reluctance to pay the “divorce bill,” he said “If you are sitting in the bar and you are ordering 28 beers and then suddenly some of your colleagues [are leaving without] paying, that is not feasible. They have to pay. They have to pay.”

Other EU representatives, including Guy Verhofstadt and Antonio Tajani, received little press coverage during the negotiations.

It’s going to cost how much?

In the early days of the Brexit withdrawal negotiations, much of the focus and anger within the UK revolved around the so-called “divorce bill.” As negotiations wore on, and especially after the draft agreement was published, attention switched largely to the Irish border issue (which I get to later in this chapter).

The divorce bill refers to the amount that the UK will pay to the EU to cover obligations that it agreed to as a member state. In other words, it settles the UK’s account with the EU and clears the slate for the future.

No specific figure appears in the withdrawal agreement, but the divorce bill is expected to be around £39 billion, payable over a number of years. In fact, the Office for Budget Responsibility estimates that the UK will be paying this until 2064, although most of it will be paid off by 2021. Part of this divorce bill will cover the UK’s financial contribution to the EU budget during the transition period. (I talk more about the transition period next. Circle back to Chapter 2 for more about EU budgets and the UK’s financial contribution.)

I know what you’re thinking — £39 billion is quite an expensive divorce, right? It is, especially when you consider the schools budget for 5- to 16 year-olds in England in the fiscal year 2017–18 was also budgeted at £39 billion. (Remember: That’s one year, though, whereas the UK will be paying the divorce bill over several years.)

Many Brexiteers insisted that the UK doesn’t legally have to pay anything to the EU in order to leave, while others paint the divorce bill as being like an “entry fee” for access to the single market further down the line. Either way, the UK has repeatedly confirmed its commitment to settling its account with the EU, and that commitment was cemented in the final withdrawal deal.

Transitioning smoothly with the “transition period”

When the UK finally exits the EU, the idea is it will enter a transition period, and this transition period is a key part of the withdrawal agreement. (If the UK leaves the EU without signing off on the withdrawal agreement — otherwise known as a no-deal Brexit — there will be no transition period at all.)

The transition period (or implementation period) runs from the day the UK exits the EU, until December 31, 2020 (at the time of writing). The idea behind the transition period is to ensure a controlled transfer, and to allow businesses, government agencies, financial institutions, citizens, and others time to prepare for changes in how the UK deals with the EU after the transition period is over.

Especially with the UK’s exit being delayed from March 29, 2019, until October 31, 2019 (more on the delay coming up later in the chapter), there’s a strong chance that the transition period may also be extended. Many people agree that the proposed transition period probably won’t be nearly long enough to negotiate a UK–EU trade deal, let alone other key aspects of the future relationship). If the UK and EU agree, the transition period could be extended until December 2022. This is one of the many as-yet-unresolved issues surrounding Brexit (turn to Chapter 12 to read about other unresolved Brexit issues to keep an eye on).

The obvious upside of the transition period is that it buys everyone time to prepare and paves the way for a smoother exit (as opposed to a cliff-edge, no-deal Brexit). It also gives the UK continued access to the single market and customs union for the duration of the transition period, and ensures that the UK has continued access to key European databases that are vital for security and law enforcement purposes. However, critics are quick to point out that it ties the UK to EU control for several more months, and possibly even longer than that.

What do these critics mean by “EU control”? Well, under the terms of the withdrawal agreement, during the transition period, the UK will:

• Be legally obliged to abide by all EU rules (more on this coming up next in the chapter)
• Lose membership of all EU institutions (so, in other words, the UK will have to abide by EU rules without having a say in the decision-making process for those rules)
• Continue to pay into the EU budget
• Be obliged to make extra financial contributions over and above the divorce bill if the transition period is extended

For these reasons, the transition period raised alarm among hardline Brexiteers, who were quick to point out that, instead of “taking back control” the UK government was still ceding control to Brussels.

Abiding by EU laws

The fact that the UK will have to abide by all EU laws for the duration of the transition period was one of the more eyebrow-raising issues of the withdrawal agreement (the divorce bill and Northern Ireland backstop being other key bones of contention).

During the transition period, the UK will still be under the jurisdiction of the European Court of Justice, meaning the EU will continue to influence the UK’s laws for the immediate future. But that’s only if the UK exits under the terms of the withdrawal agreement — in the less-likely event of a no-deal Brexit, there will no transition period at all.

One potential problem arising from the transition period is that UK businesses may have to abide by a lower value-added tax (VAT) threshold, if proposed EU VAT changes come into force during the transition period.

At the time of writing, UK businesses are exempt from paying VAT if their turnover is less than £85,000. But under proposed changes to the EU’s VAT directive, this threshold would be set at €85,000 (which is around £76,000). This means that, for the duration of the transition period, UK companies would have to abide by the reduced threshold — a move that could force hundreds of thousands of small businesses to charge VAT for the first time.

This is just one example of the disadvantages the UK faces during the transition period by not having a say on EU rules and regulations. As a member of the EU, the UK was always able to block proposed changes in the VAT threshold. This veto — indeed, any meaningful role in decision making — will be lost on the day the UK exits the EU.

Formalizing citizens’ rights

Around 3.8 million EU citizens live in the UK, and around 1.3 million Brits live in EU countries. For those European citizens living in the UK and Brits living in Europe, Brexit has brought a lot of anxiety; people who have built lives for themselves in a new country were understandably worried about their right to stay on after Brexit.

Why hasn’t anything been agreed on trade yet?

So, what happens with trade, I hear you ask? This is the area that many UK businesses want clarity on, yet it remains one of the biggest uncertainties. Because the withdrawal agreement only covers the UK’s exit from the EU, nothing concrete has been agreed on for trade beyond the transition period.

According to the withdrawal agreement, the UK will remain part of the single market — with all the same rights to free movement of goods and services — for the duration of the transition period. So, until the end of December 2020 (or whenever the transition period is over), trade will continue as it did before Brexit.

This gives businesses some sense of stability and allows them time to prepare for future changes … when those future changes have been agreed upon.

Effectively, the UK agreed to leave the EU without any certainty on what would happen with trade. The political declaration on future relations between the UK and the EU (see Chapter 4) sets out some vague intentions for a close trading partnership, but the specifics of that long-term trading relationship have yet to be agreed upon.

How did the UK get to the point of exiting the EU without any firm agreement on how it would trade with Europe? The short answer is, the UK didn’t want to. Here’s the slightly longer answer: Initially, the UK government was hoping to tie trade negotiations in with the withdrawal agreement. The EU, however, always saw withdrawal and future trade as two separate agreements. In other words, the EU said (and I’m paraphrasing here), “Nuh-uh, first you leave, then we talk trade.”

In Chapter 12, I highlight trade as one of the key developments to keep an eye on as Brexit unfolds, and set out some potential scenarios for the UK’s future trading relationship with the EU. You can also read more about the impact of Brexit on importing and exporting in Chapter 5.

Of course, one of the major stumbling blocks in delaying trade negotiations until after the UK has exited the EU is the impact this may have on the border between Northern Ireland and the Republic of Ireland. Which brings me to the next section… .

Northern Ireland and the tricky issue of the “backstop”

If you’re living in the UK, you heard a lot about Northern Ireland and the “backstop” during the negotiations. In fact, the backstop became one of the major sticking points when the withdrawal agreement went before UK Parliament for approval. (See “Getting Parliamentary Agreement on the, er, Agreement,” next in this chapter.)

But what is the backstop, and what does the withdrawal agreement mean for the frictionless border between the Republic of Ireland and Northern Ireland? Before I get to that, let’s have a super-quick history lesson.

Voting on the withdrawal deal: Round 1

In the first instance, a House of Commons vote was scheduled for December 11, 2018, to approve or reject the agreement. But the day before the vote was scheduled to take place, May postponed the vote because it was becoming glaringly obvious that the deal would be rejected by a large margin.

Although the vote was postponed, it was a case of delaying the inevitable; when the vote finally took place on January 15, 2019, the withdrawal deal was overwhelmingly rejected by a record majority: 432 votes to 202. In other words, it took a severe beating.

The backstop arrangement was a significant factor in Members of Parliament’s (MPs’) dislike of the withdrawal agreement, so, as the clock ran down and the leave date of March 29, 2019, fast approached, Theresa May repeatedly went back to the EU to try to secure legally binding assurances that the backstop wouldn’t apply indefinitely. The EU was unwilling to put a time limit on the backstop or allow an exit clause for the UK to leave the backstop without EU approval.

These discussions went right down to the wire, as a second House of Commons vote to approve or reject the withdrawal deal was set for March 12, 2019 — just 17 days before the UK’s original planned departure date of March 29, 2019. Talk about cutting it fine!

Immediately after postponing the vote in December 2018, Theresa May survived an attempted leadership coup by hardline Brexiteers. Although more than one-third of Tory MPs voted “no confidence” in her leadership, she won enough support to stay on as prime minister.

Then in January 2019, a day after the delayed withdrawal deal vote took place (and the deal was rejected), the opposition Labour Party mounted its own challenge to the government and tabled a “no confidence” motion (the first against a UK government for more than 20 years). This was rejected by 325 votes to 306, meaning the Conservatives clung on to power, just about.

In addition, there was a lot of talk about holding a second Brexit referendum, commonly referred to by campaigners as “the People’s Vote.” Labour leader Jeremy Corbyn pushed for an early general election, with the idea that Labour could take power and negotiate a new deal with the EU. And the European Court of Justice ruled that the UK could just cancel Article 50 and remain a member of the EU without getting permission from the 27 other members. It was a busy time for political journalists, while the general population (both in the UK and across Europe) simply scratched their heads and wondered what on earth was going on (see the sidebar “Meanwhile, outside of Westminster …”). However, there was more turmoil still to come.

Voting on the withdrawal deal: Round 2

With rumors of key cabinet ministers resigning over the impending prospect of a no-deal Brexit, Theresa May was forced to soften her stance and offer MPs the chance to vote on a no-deal Brexit and the option to delay Brexit, as well as voting on her withdrawal agreement for a second time.

This happened as a series of three votes across three days:

• On March 12, 2019, MPs voted overwhelmingly to reject the withdrawal deal again — this time by a margin of 149 votes.
• Then, on March 13, 2019, MPs voted on whether to leave the EU without a deal. In a tight vote, MPs voted to reject a no-deal Brexit under any circumstances, by 312 votes to 308.
• Finally, on March 14, 2019, MPs voted in favor of extending Article 50 and delaying Brexit. This delay was approved by a margin of 211 votes, giving Theresa May permission to ask the EU for more time to find a way forward.

More votes, and Brexit is delayed (for the first time)

Theresa May refused to give up on her withdrawal deal, even though MPs had already rejected it twice. But her plans to bring the deal back to Parliament for a third vote were hampered by John Bercow, speaker of the House of Commons, who, with just 11 days to go until the original exit date, refused to allow another vote on her deal, unless the deal itself had materially changed since the last time MPs voted on it (of course, it hadn’t changed). This plunged the UK government into constitutional chaos, with no clear way forward in sight.

Meanwhile, the government and businesses around the UK were spending a fortune preparing for the potential chaos of a no-deal Brexit. Because, even though MPs had rejected the idea of a no-deal Brexit, a no-deal Brexit was the legal default scenario if the withdrawal agreement wasn’t approved.

At this point, the EU then took matters into its own hands and moved the exit date back a couple of weeks to April 12, 2019, to give the UK more time to find a way forward.

MPs then held a series of votes in an attempt to find some sort of consensus. By this point, oddly, everyone had stopped talking about the withdrawal agreement, and had jumped ahead to debating options for the UK’s future trading relationship with the EU, even though the EU had said trade could not be negotiated until after the UK had actually left the EU … which it couldn’t do until it approved the withdrawal agreement. The UK had effectively become stuck in a Kafkaesque nightmare of fairly meaningless and repetitive votes, while the British public, and the EU, looked on in horror.

On March 28, 2019, MPs voted on a series of their own options or ideas for Brexit, all of which were rejected (some were rejected more narrowly than others). These options included:

• A plan for the UK to negotiate a permanent customs union with the EU (even though the idea of being trapped in a permanent customs union with the EU was the reason many people were enraged by the backstop): Confusingly, this option came the closest to winning, in that it was rejected by just six votes.
• A plan for the UK to hold a second referendum, giving the public a chance to confirm or reject the withdrawal deal: This also came pretty close; it was rejected by a margin of just 27 votes.
• A plan for “common market 2.0,” whereby the UK would join the European Free Trade Association (EFTA; see Chapter 1) and the European Economic Area (EEA; again, see Chapter 1), to ensure continued access to the EU single market: This would also mean accepting free movement of people — something that Theresa May had ruled out early in the Brexit negotiations. This, too, was rejected, by a margin of 95 votes.
• A plan for the UK to leave the EU with no deal (even though this had already been rejected previously — see what I mean about Kafkaesque!): This plan was widely rejected, by a margin of 240 votes.
• A plan for the UK to just revoke Article 50 and forget about Brexit: This plan lost by 109 votes.

Basically, Parliament held a lot of votes, and none of them got anywhere. It seemed politicians would never reach a consensus on how to “do” Brexit.

Voting on the withdrawal deal: Round 3

Theresa May did, in the end, get to bring her withdrawal agreement back to Parliament for a third vote — although the result was the same. On March 29, 2019 (the day the UK was originally supposed to be leaving the EU), MPs voted for a third time to reject the withdrawal agreement. This time the margin was much smaller — just 58 votes — but it was still a humiliating defeat for May, especially because she had promised to resign and give Conservative hardliners what they wanted (a new leader) in return for backing her deal. They still rejected it, leaving many unsure whether (or when) May would step down.

MPs then held a second round of votes on their own options, including the customs union, common market 2.0, and the second referendum. All options failed to gain a majority. Once again, all were rejected.

Theresa May then surprised everyone by inviting Jeremy Corbyn and Labour representatives to help find some sort of consensus on Brexit. At the time of writing, both May and Corbyn were still engaged in these negotiations, but few people have any real hope of these discussions bearing fruit. That’s because the two leaders have such different views on how to proceed with Brexit.

Labour is in favor of joining a customs union with the EU, which would make UK–EU trade easier in future but would limit the UK’s ability to do trade deals with non-EU countries. Theresa May, however, has been against the idea of joining a customs union with the EU. Labour’s official policy supports the idea of a second referendum (even if Corbyn himself isn’t personally that bothered about holding a second referendum). May, meanwhile, would face another revolt from her own party if she agreed to hold a second referendum. It seems unlikely that the Conservatives and Labour can reach an agreement on Brexit anytime soon.

Brexit is delayed … again

At an emergency EU summit on April 10, 2019, two days before the revised Brexit date of April 12, the EU27 met to decide just what to do about the UK — the country that had been desperate to leave the EU for years but couldn’t quite figure out how to do it.

The EU and the UK agreed to delay Brexit again, this time until October 31, 2019. (Is it me or does the Halloween date feel appropriate?) However, this extension is flexible, meaning that in the unlikely event that Theresa May manages to get approval on her withdrawal deal before then, the UK can leave early.

This extension was absolutely necessary to avoid the potential chaos of a no-deal Brexit. But it meant the UK would be forced to participate in EU elections, scheduled for May 23, 2019. At the time of writing, the UK was preparing to take part in EU elections, and elect Members of European Parliament (MEPs).

So, what happens next?

Good question! No one really knows how Brexit will play out from here — whether May will ever get approval of her withdrawal agreement, whether the UK will decide to join a customs union with the EU, whether Brexit will end up being delayed again… .

Here are some potential outcomes that may happen before October 2019:

• If May and Corbyn can reach an agreement, the political declaration on future relations (see Chapter 4) may or may not be revised to talk about joining a customs union with the EU. (Changes to the withdrawal agreement seem unlikely, given the EU and Theresa May’s insistence that the legally binding withdrawal agreement cannot be changed or renegotiated.) Parliament would then have the chance to vote again on May and Corbyn’s agreed-upon approach.
• MPs may hold yet more indicative votes on their own alternative approaches to Brexit.
• We may see a second referendum, whereby the public votes on the withdrawal agreement and political declaration.
• The UK may even hold an early general election. If Parliament continues to be deadlocked on all options, this outcome will become increasingly likely.
• The UK could, in theory, still exit the EU without agreeing on a deal at all (no-deal Brexit), even though this has been strongly rejected by MPs. At the time of writing, no-deal Brexit remains the legal default if the UK doesn’t approve the withdrawal agreement.
• In theory, Brexit could just be canceled, prompting both cheers and outrage from the public, depending on their Brexit stance.

One thing is sure: It’s going to be an interesting time as the UK prepares for the new exit date of October 31, 2019! And if none of these options happen, and no consensus is reached on a way forward, there’s a very strong chance that Brexit will be delayed again.