Brexit breakthrough in Prosperity UK report? No Deal rejected and the backstop stays until final deal, says group including Foster, Dodds and Rees Mogg. But thumbs down from NI business leaders

A leading Tory Brexit adviser tipped for No 10 who was part of the team who wrote the Prosperity UK report has told a news conference that No Deal is “not politically acceptable”. The report accepts the backstop but its recommendations are designed to ensure it never happens.

The verdict coming in is that  Prosperity UK’s interim report is a serious piece of work devoid of unicorns.  It this catches on, it will be a breakthrough. Singham’s  line sounds the most politically significant to  David Henig Director, UK Trade Policy Project at European Centre for International Political Economy.

“No deal outcomes are not politically acceptable, we are putting options on the table“.

Interesting admission, and this is the repeated message from the report. Deals will be needed… The acknowledgement of the importance of close alignment with EU rules, either for Northern Ireland only or UK-wide, is also a welcome step.

NI business leaders present were less impressed with the detail saying  in terms   that with such complicated arrangements, assuming they worked, we may as well have a hard border.

Henig a leading Brexit authority disagrees:

The interim report has already been widely criticised, but I disagree. For this is not another no-deal and it can all be fixed by Thursday type report. For a start, not getting rid of the backstop, but ensuring it is never triggered… (you have to note the language carefully).

The Prosperity UK Commission which commissioned the report is full of leading  Brexiteers.  The DUP top two Arlene Foster and Nigel Dodds are among  them. They include leading Tory MPs,  ex- Brexit secretaries David Davis, Dominic Raab,  Kit Malthouse and his associate Graham Brady,  the former Brexiteer NI Secs,Owen Paterson, and Theresa Villers, former FM David Trimble and his pro- unionist associate Lord Paul Bew, the unique Labour MP Kat Hooey, ERG chair Jacob Rees Mogg  and former Remainers Damian Green  and Nicky Morgan, the group’s co chair.

It isn’t clear if they have all endorsed the report – but we shall soon find out.

Peter Foster, the Europe editor of the Daily Telegraph  has supplied a very neat summary

•  Special Economic Zones (SEZs) in places like Londonderry and Donegal where the cross-border economy is highly integrated.

• Using technology like ‘geo-tracking’ to track consignments across the border, with paperwork filled in at the point of dispatch, and goods checked at the point of receipt.

• Using available exemptions under existing World Trade Organisation (WTO) remits that allow relaxation of some rules for border communities, and where security is an issue.

• Treating the island of Ireland as a ‘single unit’ for animal and plant products regulations, based on recognising that UK and EU rules will remain ‘equivalent’ for a reasonable period after Brexit.

• Getting Northern Ireland’s political communities to give consent to the proposals, including agreeing that Northern Ireland could remain aligned with the EU rules and regulations if the rest of UK (Great Britain) decided to diverge, by doing a trade deal with the US for example.

 It is fair to say that local business groups, trade specialists and officials in the Irish and British governments, and the European Commission, remain very sceptical of many of these proposals.

For example, Mr Singham argues that the creating SEZs of the kind the Irish Government once created in Shannon could be used to “turbocharge” local business and actually win over local communities to new Brexit arrangements.

But many political observers and local experts like Aodhán Connolly, the director of the Northern Ireland Retail Consortium, warn that such SEZs will “create more borders and layers not less”.

As for technology and ‘geo tracking’, the Irish border communities remain deeply divided and well remembers the hard security border of the Troubles.

Even with technology, however, there is still the need for ‘checks’. The report talks of “mobile solutions” to support inspections of goods away from the border.

The problem with this is that the British government committed to “no additional checks and controls” in 2017 – a pledge Mr Singham says UK government has interpreted too literally and now wishes to dilute – but from which the Irish government is determined the UK must not resile.

Mobile checks also still require “men in peaked caps” to enter premises near to the border for inspections. The Police Service of Northern Ireland has warned that such inspections risking becoming targets, leading to the scenario of the inspectors themselves needing protection and a downward spiral back to the hostile security environment of The Troubles.

Taken all together – checks, paperwork and surveillance – experts like Sam Lowe, the trade specialist at the Centre for European Reform also question whether this would be “any less intrusive” or costly than a hard border with infrastructure.

While noting there were elements of the proposal that could play a role in a closely aligned future UK-EU relationship, he says it would be “naive” to think that the EU would accept “this hodgepodge of ideas” as a substitute for the Irish backstop.

It fails to convincingly answer the question of why this costly disruption and intrusion into the lives of people who fundamentally view any new border processes as illegitimate will be any less destabilising for the region than physical infrastructure,” he added.

Similarly, Stephen Kelly, the director of Manufacturing Northern Ireland, welcomed the report but said it raised some “fundamental” issues – such as a lack of solutions for VAT, State Aid nor providing market access – and why the Irish government and local communities would ever opt for such ideas.

“Why would the EU drop the backstop, which guarantees the things it wants to guarantee, and rely on this approach instead?” he asked.

“Why would business prefer to trust in the delivery of a mass mixture of derogations, simplifications and the rest, when there already exists a solution which delivers frictionless trade on the island of Ireland?

“Why would border communities prefer this increased hive of enforcement, the greater intrusion of HMRC and others, when there could be none?”

Mr Singham – and the Tory party’s clean-break Brexiteers led by Boris Johnson – are determined to have a fully independent trade policy, which could include signing a trade deal with the USA, for example, which has radically different standards on issues like agriculture.

So is the search for alternative arrangements doomed to failure? Not necessarily, but much will depend on what problems “alternative arrangements” are designed to fix.

David Henig, a former Department for International Trade officials now with the ECIPE think-tank, said the AAC report should be welcomed because it accepted the reality that the level of alignment with the EU in the future was key to delivering the border. .Which begs the question: if the UK does diverge on trade policy, as Mr Singham and leading Brexiteers demand, what will happen to the border?

The report, interestingly, leaves open the door to Northern Ireland (where there is an apparent majority for the Irish backstop arrangements) deciding to remain aligned with the EU, while Great Britain diverges.

This would then create the Irish Sea trade border which the EU itself suggested back in October – a ‘de-dramatised’ border where checks were done at Northern Irish ports like Larne.

The Democratic Unionist Party furiously rejected this idea, as did Mrs May, because it divided the UK’s own internal market and risked unravelling the Union, since Scotland would soon resent a hard ‘English Brexit’ if Northern Ireland was enjoying friction-free access to the Single Market.

But who is to say that a different parliament, a different government – one not beholden to the DUP for its confidence and supply arrangement – might not make a different choice?

Henig concludes

So far today’s event on alternative arrangements has been a proper debate and to be fair mostly free of unrealistic solutions (and equally claims therefore to have solved the issue). We need more of such realistic discussions…

At best, the report could be used as a starting point for a Brexit reset that accepts the difficulties inherent for Ireland, rules out no deal as incompatible with previous commitments to Northern Ireland, and therefore moves us onto a proper future relation discussion.

Brian Walker

Former BBC journalist and manager in Belfast, Manchester and London, Editor Spolight; Political Editor BBC NI; Current Affairs Commissioning editor BBC Radio 4; Editor Political and Parliamentary Programmes, BBC Westminster; former London Editor Belfast Telegraph. Hon Senior Research Fellow, The Constitution Unit, Univ Coll. London