Boris Johnson’s hopes of securing a Brexit deal were dealt a blow on Thursday after Northern Ireland’s Democratic Unionist party said it could not support the revised deal as it stands.
The UK prime minister needs the support of the DUP to be confident of winning a parliamentary vote on a new Brexit agreement.
In a statement, the party’s leader Arlene Foster and deputy Nigel Dodds said that “as things stand, we could not support what is being suggested on customs and consent issues and there is a lack of clarity” on value added tax.
The DUP has insisted that any new deal has to be approved by the Stormont assembly with cross-community support — the idea enshrined in the Good Friday peace agreement that sensitive issues must be passed by both nationalist and unionist communities.
This would amount to a veto for the DUP, something that Dublin, and therefore the EU, will not accept.
A UK government official said there were still “important hurdles” to be overcome. The pound dropped 0.3 per cent against the US dollar to $1.2785 after the DUP’s statement early on Thursday morning. It has rallied sharply in recent days amid growing expectations that a no-deal Brexit at the end of this month is unlikely.
The latest setback came even as negotiators in Brussels anchored down the details of some of the most contentious elements of the proposed Brexit deal in the early hours of Thursday morning. In an evening briefing to ambassadors Michel Barnier, the EU’s Brexit negotiator, said that the two sides had made “substantial progress”.
Among the questions settled by the negotiators were customs rules and Northern Ireland’s right to have a say on the arrangements, said people familiar with the talks. The key outstanding issue was how to prevent fraud involving VAT.
However, without DUP support for the draft arrangements Mr Johnson cannot have any confidence he will clinch backing in the House of Commons for the deal. This will have major repercussions in Brussels, where European leaders were hoping to endorse a new Brexit deal as soon as this evening.
Diplomats were already worried that they would not have time to examine the legal text in time for the start of a European Council summit starting later today, making formal endorsement by the leaders very difficult.
An EU official said that European leaders were displaying patience and “Zen” as they await a finalised legal text on a new Brexit deal.
If no legal text is ready to be presented at the summit then the question of an extension to the UK’s EU membership would be “very much present in the discussions,” the official added.
Steve Barclay, the UK Brexit secretary, confirmed to MPs this week that Mr Johnson would write to the EU seeking an extension to the Article 50 divorce process if no withdrawal agreement had been approved by the Commons on Saturday.
Mr Johnson has been forced to make major concessions to the EU in recent days as he seeks to unlock a deal that can win the support of the 27 other member states. In doing so he has been treading a tightrope — as did his predecessor Theresa May — as he seeks to keep the DUP and Eurosceptic Tory MPs on board.
Mr Johnson’s negotiating team has accepted that, after Brexit, Northern Ireland would apply the EU’s customs and tariffs rules and have them overseen by the European Court of Justice.
The agreement means there would not be major customs checks on the island and, instead, all goods will be checked in Great Britain. The plan bears similarities to the Northern Ireland-only backstop that was initially agreed by Mrs May before she shifted to the all-UK backstop idea, which was rejected by Parliament.
Under the agreement, Northern Ireland would benefit from UK trade deals with third countries — a key demand of Mr Johnson — and Northern Irish businesses would be eligible for a rebate on some tariffs should the UK secure them.
But the system still entails the creation of a significant border down the Irish Sea. DUP leaders made it clear to Mr Johnson earlier this week that they were unhappy with a plan to create a customs border between Great Britain and Northern Ireland.
They said they could live with such a proposal depending on the democratic arrangements in Northern Ireland for approving the deal. Sammy Wilson, the party’s Brexit spokesman, publicly reiterated the DUP’s calls for a de facto veto, saying any decision at Stormont had to come “not just from a majority vote but from a cross-community vote”, otherwise it would breach the Good Friday Agreement.
However, Brussels negotiators settled on a complex system that reduces one party’s ability to ditch the arrangements. It would involve the assembly having the opportunity to hold a vote on the customs and regulatory arrangements four years after the end of the UK’s post-Brexit transition period.
If the assembly decided to continue with the regulatory and customs system, further opportunities to vote would arise in later years — but the arrangements would continue if the assembly was not sitting. Even if Northern Ireland were to vote to junk the system, a two-year cooling-off period would ensue.
Sorry. No data so far.