UK Parliament report on progress of Brexit talks ahead December EU Summit.

The Select Committee overseeing Brexit published its second progress report today, 30 November 2017.

They note that the EU Team, headed by Michel Barnier, was constrained to negotiate within the framework set by the 27 remaining nations.  This precludes moving to the wider talks about matters such as future UK-EU trading relationship until “Phase 1” issues were substantially agreed between the parties.

The 27 will vote on whether sufficient progress has been made at the EU summit on 15-16 December 2017.  It has to be a unanimous decision in favour of moving forward – and each state has right of veto.

The report states that any slippage in time means that: “the UK and the EU face the prospect of not reaching a deal before the UK exits the EU on 29 March 2019.  Business, individuals and the public sector need time to prepare, but formal talks on either the future EU-UK relationship, or on a potential transition or implementation period have not yet begun.”

Detailing progress on the 3 items scoped for Phase 1 talks, the committee lays bare the risks of a ‘no deal’ scenario.  They express concern for the uncertainty created for citizens and suggest that this question could better be addressed separately from financial and trade issues.

The principle that ‘nothing is agreed until everything is agreed’ holds out the risk that, even when an agreement on citizens’ rights is reached, it could still be put in jeopardy by a failure to reach an overall Withdrawal Agreement.  We call on the Government to request, and the EU to agree, that any agreement reached on citizens’ rights should be ring-fenced when reached, and preserved even if no overall Article 50 deal is agreed.  If the EU negotiating team rejected such a request, then the UK Government should make a declaration that it will unilaterally provide a guarantee on EU citizens’ rights in the UK.  This would provide reassurance to the more than three million EU citizens living in the UK.  In these circumstances, we would expect the EU to issue a similar guarantee to UK citizens living in EU countries.”

The Committee welcomes the Government’s commitment to no physical or customs infrastructure at the land border between Northern Ireland and the Republic of Ireland.  However, they “do not currently see how it will be possible to reconcile there being no border with the Government’s policy of leaving the Single Market and the Customs Union…made harder by the fact that the Government’s proposals, by its own admission, are untested and to some extent speculative.”

On the financial settlement the Committee acknowledges the UK commitment to meet its financial obligations. However: “it must now seek a fair settlement that will not unduly burden UK taxpayers.”  The committee calls on the Government to provide analysis on the financial settlement.  “If the UK is required to contribute to the EU’s liabilities, then the UK must benefit from a share of the EU’s assets, which the EU’s position paper does not mention in any substantive way.”  Further, the Government should set out which scientific, educational, cultural, security and other programs it would like to contribute to - and benefit from – post Brexit.

There are additional analyses of the impact of Brexit on different industry sectors; the role of Parliament in approving the deal before finalising and presentation to the 27 EU nations; and, the impact on the devolved regions of the UK – Northern Ireland, Scotland and Wales.

We have not had sight of a parallel scrutiny report from an EU perspective going out the 27 nations ahead of the crucial summit in 2 weeks’ time.  However, the Select Committee report is a matter of public record.  If they share our reading of the report, it makes a unanimous vote to move to Phase 2 of the negotiations far from a certainty.

Confirmed in wider discussions with trade bodies this week, the Brexit-Partners team is increasingly focusing organisations on either a “no-deal” or “hard-Brexit” scenario.  In many cases the planning and preparations needed are similar – and will be needed at the end of a transition period in any case.  This Select Committee report is a ‘call-to-arms’ for organisations everywhere!

John ShuttleworthComment