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9 September 2020

Why the Internal Market Bill makes a no-deal Brexit much more likely

A change to the Irish border protocol would not be a “limited” tweak to international law.

By Stephen Bush

How unusual is the government’s plan to break international law in a “specific and limited way” with the Internal Market Bill, and is the government really planning to do it? Those are the questions being raised in today’s papers, and by MPs, after Brandon Lewis admitted to the House yesterday that the Internal Market Bill’s tweaks to the operation of the Irish border protocol does break international law, but it’s nothing to worry about.

It’s true to say that governments around the world break international law all the time. I don’t mean that in a, “I hear the Crimea is lovely this time of year, why not send a few soldiers in to check?” kind of way; I mean that in a, “A new invention, type of crime or technological development interacts with a treaty in an unforeseen way, or makes its provisions redundant” way. The 2013 Finance Act, cited in the government’s defence by Lewis, is a good example of this: innovative forms of tax avoidance ran contrary to what global policymakers had intended to accomplish with various tax treaties, so the 2013 general anti-abuse rule (GAAR) was invented to combat it.

Although GAAR was and is criticised by some policymakers and lobbying groups, the means of its creation was not criticised. It was globally accepted as a normal and acceptable breach of the letter, rather than the spirit, of international law. That exemption does not apply as far as the Irish border protocol is concerned. The circumstances have not changed in a way unimagined by its authors. The purpose of the Irish border protocol is to ensure that the customs and regulatory alignment between Ireland and Northern Ireland that has underpinned the all-Ireland economy, and has been a fact of life since 1922, remains in place, regardless of the accord reached between the United Kingdom and the European Union after Brexit. That the protocol might come into being in the event of a no-deal Brexit is not an unexpected event: it is the protocol working as intended.

The British government would not be breaking international law in a “limited” way. The comparison with GAAR is entirely wrong-headed. If the Internal Market Bill interferes with the functioning of the protocol, it would be a major departure in how the British state operates. But is that the government’s real intention? Writing in the Diplomat, Bernard Jenkin has confirmed that in order to pass the withdrawal agreement into law, Conservative backbenchers were told that their concerns about the border protocol could be addressed in this phase of negotiations.

See also: Ailbhe Rea on the government’s plan to knowingly “break international law”

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That is partially true: if your main objection to the border protocol is that it creates a customs and regulatory border in the Irish Sea, that can be fixed by a new deal with the European Union, because the closer the regulatory relationship between the whole of the United Kingdom and the European Union, the fewer checks you need to make in the Irish Sea. You can keep Johnson’s promise that the United Kingdom will leave the European Union “whole and intact” – but you can’t do that and keep Johnson’s promise of a Canada-style trade deal. If you want to put aside the protocol and have a loose relationship with the European Union, it means a no-deal exit.

Some Conservatives believe that these moves are simply about making enough noise on the protocol to reassure nervous Brexiteer MPs that Boris Johnson hasn’t put a regulatory border in the Irish Sea. That belief is not solely the preserve of Tory Remainers, but of Leavers who believe that Johnson sold them out by voting for May’s withdrawal agreement at the third time of asking, sold the DUP out by putting a customs border in the Irish Sea, and will continue to behave in this way. The belief that the British government’s position is posture and nothing else is also shared by some EU diplomats and member states.

The trouble is, whether the Internal Market Bill is a change of position or simply a change of posture, it makes the existing divide between the European Union and the United Kingdom over state aid more fraught. The European Union’s position is that the British government needs to provide serious and binding guarantees on state aid. The British government’s counter-argument is that it can be trusted to self-regulate. It’s hard – perhaps impossible – to sell that argument to the 27 member states of the European Union while at the same time planning to unpick an agreement reached at the last stage of negotiations.

Whether the government’s position is a posture designed to reassure Brexiteers that Johnson is keeping his promise to them, a negotiating tactic to scare up a better deal with the European Union, or a deliberate shift towards a no-deal, the hard-border scenario doesn’t matter all that much. What matters is that, as it stands, a no-deal exit is made more likely – and with it, a major and destabilising row over the Irish border.

See also: Stephen Bush asks whether a no-deal Brexit is now inevitable