In a private phone call, Jean-Claude Juncker has told Theresa May that to remove the backstop from her Brexit deal she would need to shift her redlines. The President of the EU commission has stated that to eliminate the backstop in the deal, which is the feature that many MPs have significant objections to, the UK would have to adopt a permanent customs union with the EU.
This would mean the Conservatives would have to switch to adopt Labour’s Brexit policy to get a substantially different deal with the EU. This phone call also reveals that, despite what has been previously stated in public, the EU would renegotiate a different deal if the UK’s redlines shifted. The phonecall along with other statements from the EU, reinforce the idea that Labour’s Brexit plan is workable and can be delivered.
The backstop was one of the reasons May’s deal was defeated by a humiliating 230 votes in the Commons earlier this month. MPs fear Britain could become trapped in the arrangement as the UK cannot withdraw from the backstop without the EU ‘s consent if activated.
The backstop is necessary to prevent a hard border in Northern Ireland which would be a violation of the Good Friday agreement.
Juncker’s deputy Frans Timmermans was emphatic in his support of the backstop in the deal saying:
“Let me be extremely clear: there is no way I could live in a situation where we throw Ireland under the bus, as far as the European Commission is concerned, the backstop is an essential element for showing to Ireland and to the rest of Europe that we are in this together.”
Timmermans also called Tory Brexiteers approach to peace “cavalier”.
On the record, a commission official said:
“President Juncker told Mrs May that the backstop was non-negotiable and only if May changed red lines then we can move on the backstop.”
A customs union with the EU would guarantee tariff-free access to European markets but would mean the UK would have to align with the EU’s external tariffs.
It has become clear this is a deal that the EU would be satisfied with. This would be a similar relationship to the customs union it has with Turkey but might be more comprehensive.
If the House of Commons does not agree on a deal that is accepted by the EU by the 29th March the UK will be forced to leave without a deal.
This scenario is forecasted to be disastrous for the UK economy as it will force the UK onto WTO terms for trade with the EU. Trade with the EU amounts to 44% of all UK exports and 53% of all UK imports. Adding tariffs to this trade would hurt the UK economy as imported goods would become more expensive while British goods would be less competitive in EU markets. British exporters to the EU would be hit by tariffs of around £6bn.
Over 15 years No Deal would amount to the UK economy being 9.3% smaller than if the nation had stayed in the EU. The CBI forecasts the regions worst hit would be the North East and West Midlands due to the manufacturing industries based there. Ford has predicted the economy would be £900 million worse off in 2019 alone.
The British Chamber of Commerce has said that thousands of British companies have triggered emergency plans to cope with a no-deal Brexit, with many preparing to move operations abroad if the UK crashes out of the EU. Companies like Dyson have already moved HQs and sections of their businesses out of the UK in preparation of the economic hit that Brexit will cause.