Brexit explained: What has just happened and what happens next?

What has just happened and what happens next?

Theresa May has reached agreement with the EU on a package to try to reassure MPs about her Brexit deal. However the House of Commons has rejected this package in a vote.

Specifically, the measures tried to address concerns relating to the Irish border backstop, the guarantee that there will be no hard border. The Brexiteer group of MPs and the DUP have argued that the backstop provisions in the withdrawal agreement could see the UK “trapped” – stuck in a trading arrangement that they don’t want with the EU in the long term.

The latest agreement between the EU and UK underlined that both sides would make every effort to avoid using the backstop – and to find a way out of it quickly if it is used. The UK also gave its interpretation of an arbitration system, designed to solve rows in relation to the backstop, arguing that this gives it further reassurance.

However the deal started to unravel early on Tuesday. UK attorney general Geoffrey Cox announced that earlier legal advice he had given – that the UK risked being trapped in the backstop arrangements – remained unchanged, even if the risk of this happening was now less than previously. By lunchtime the indications were that both the Brexiteer European Research Group and the DUP both felt the deal did not deliver what they were looking for. Most of the ERG and the DUP voted against the deal, which went down by a large majority of 149 votes.

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Why has the backstop become such a big deal?

Because it cuts to the heart of the Brexit argument and pushes the UK to define what it wants life after Brexit to look like – something UK politics is finding very hard to do. And because the DUP have the whip hand in the House of Commons, supporting Theresa May’s government.

To ensure there would be no hard Irish border – one where checks on goods movements are needed – the withdrawal agreement includes the backstop as an insurance policy, something which would apply unless and until some other way to avoid a hard border was found. This would be achieved by the UK staying in a basic customs unions with the EU and Northern Ireland following all of the EU's customs and regulatory rules. In this way no checks would be needed at the Irish Border and limited checks would be needed on goods, food and animals crossing the Irish Sea.

Brexiteer MPS in the European Research Group and the DUP object ed to this. They argued it could leave the UK following EU rules, stuck in a trading arrangement with the EU which it does not want and which could limit its ability to do trade deals elsewhere. More far-reaching EU rules would apply in the North and the DUP objected to this and to the North being treated differently to the rest of the UK. (Read Simon Carswell's explainer on the backstop here).

So what happened on Monday night?

Following weeks of negotiation, Theresa May’s dash to Strasbourg produced three items.

The first was what is called an instrument, a document which sits alongside the withdrawal agreement and gives an agreed interpretation of it. It underlines the commitment of both sides to try to avoid using the backstop by reaching a new trade deal and also to examine other technological alternatives. Progress would be reviewed regularly every six months under a process in the agreement. It includes reference to both sides making “ best endeavours” to avoid the backstop. It says that if the EU was found to have acted in bad faith by a joint arbitration agreement, the UK could “suspend” the backstop for a period.

The second change was in the political declaration, a document accompanying the withdrawal agreement outlining how both sides see the future relationship working. It also underlines the commitment to work quickly on a new trade deal and look at alternatives to the backstop.

The third, most contentious, move was a unilateral declaration by the UK, in other words a statement giving its interpretation of what was agreed, not necessarily shared by the EU. It relates to what would happen if talks to find a way to avoid the backstop are not successful. It says nothing in the withdrawal agreement would prevent it instigating measures that could eventually end its obligations on the backstop. However to do so it would have to use arbitration mechanisms and a review mechanism outlined in the agreement. (You can access all these statements and whatnot here)

What does it mean?

It would give the UK more assurance that the EU side will do all it can to avoid using the backstop – certainly in the long term. And it did underline how the UK feels the arbitration mechanism could be used, if the talks do break down. However it would not give the UK a unilateral exit route from the backstop. It could not decide itself simply to abandon it – it would have to use the mechanisms in the agreement.

This is more or less what the UK attorney general concluded. He said that what was agreed in Strasbourg does “ reduce the risk” of the UK being “indefinitely and involuntarily detained” within the backstop provisions, at least in so far as this was due to bad faith by the EU or lack of engagement by it in seeking alternatives. However, crucially, his original legal advice was unchanged, which was that the UK could end up with no way out of the backstop agreement. This undermined the chances of the vote passing. However the AG told the Commons that this was a political decision, as opposed to a strictly legal one.

What does the ‘meaningful vote’ mean?

The decision by MPs to reject the agreement again leads to new uncertainty. The scale of the defeat means it is unlikely the Commons would ever pass the deal in its current form – and the EU has said no further changes are on the table. The Commons need to approve a withdrawal agrement if the UK is to leave the EU in an orderly fashion and enter the transition period, which would avoid the chaos of a no-deal exit and the threat to the UK – and Irish – economies. Irish business will watch on Wednesday in particular for details of UK plans for how tariffs would apply after a no-deal Brexit, a key issue for exporters and importers. And there will also be intense interest here on what the UK side says it plans are for the Irish border, where there is speculation it may try to avoid physical checks on goods moving into the North.

Theresa May said she would stick to her promise, in the event of rejection, to allow MPs to vote on Wednesday on whether or not they supported a no-deal exit and – if they rejected a no-deal – to vote on Thursday on whether they wanted an extension to the Article 50 exit period. They could well vote against a no-deal and for an extension. But as the EU side has to agree to an extension and it will want some reason to do so, it is hard to predict what would happen. A number of senior EU figures, including chief negotiator Michel Barnier and European Council president Donald Tusk were last night warning that no-deal risks were increasing.

Discussions could move to the EU summit on March 21st-22nd, just a week before Brexit. An extension might be agreed to allow more time to talk or to give more time to prepare for a no-deal. But as the rest of the EU has not formally discussed this, it is not clear exactly what attitude it will take.

Beyond that it is unclear whether the prime minister could retain the support of her party, or there might even be a UK general election. There is support in the House of Commons for a softer Brexit – involving closer trading links with the EU – and speculation that MPs may try to grab control of the agenda to force events in this direction.

However the rejection by MPs of the agreement also puts the risk of a no-deal exit back on the table. By severing trading links between the EU and UK overnight this would lead to disruption and significant economic risk for the UK – and for Ireland . So there will be considerable drama around Wednesday’s vote.

It remains the case that to avoid a no-deal exit, something has to be agreed between the two sides and politically supported in the UK. Theresa May made this very point in her brief speech after the deal. It is the default option and a way to avoid it has still to be found.