On Friday 6 July Theresa May delivered the Chequers statement on the future relationship between the EU and UK.  Over the next ten days, despite the resignations of David Davis and Boris Johnson, the ice entombing the Brexit negotiations imperceptibly cracked.

Despite its manifest flaws, the Chequers White Paper had shifted the dynamic.

"Chequers has been a long overdue moment," reflected one senior EU source ahead of the full White Paper, published six days later. "The EU’s reaction will be calibrated not to put more pressure on May. Nobody wants to raise the stakes even higher."

The response was, indeed, carefully tuned. A cautious welcome from Michel Barnier, from Angela Merkel and from the Taoiseach; a detailed paper was finally on the table.

But there was something else going on: a game of subtle signaling, a discreet semaphore between London and Brussels, despite the relentless dysfunction that seemed to fully characterise the past two years.  

The White Paper was, in fact, the staging post in Theresa May’s journey from a hard Brexit, the one projected by her Lancaster House speech, and a soft Brexit, as hinted at in her Mansion House speech.

The dial was shifting yet again. The EU was watching closely. 

"For us the most important thing was it was a further move from the Mansion House speech," says the senior EU official. "It indicated a direction.  On the basis of that we would have to find out during the summer what the negotiating margins are.

"This is not the alpha and omega of the negotiations. It’s more like a contribution towards something. We have to find out what that is."
 
The official added: "I assume we haven’t seen the end of the domestic dynamics."

That was a prescient observation. On Monday, just four days after the Chequers paper was published, hardline Brexiteers ambushed Theresa May’s wagons with a series of wrecking amendments.

The low politics and legal complexity of what happened this week are still being pored over in Brussels. EU officials here are deeply concerned. The Irish Government has settled into a grim determination about the backstop.

"The backstop is central and core and we will not be deflected from it," says one senior Irish figure.

Whatever about the meaning of this week’s events in the House of Commons, the ice has frozen over again.

There is no consensus between Dublin and Brussels about what the parliamentary machinations in Westminster mean, except that none of it looks good.

The only consolation is that there is more brutal clarity about what can or cannot command support in the House of Commons.

"It’s more and more worrying," says a senior EU official. "The real issue is that these votes are a barometer of where things stand in the House of Commons for Theresa May."

As such, no deal looks a more real prospect. Both the EU and UK proclaimed deeper preparations for such a scenario this week. A paper circulated by the European Commission’s new "Preparedness" unit to member states and EU institutions, revealed by RTÉ News on Friday 13 July, stated: "Drawing up contingency plans for the worst possible outcome is not a sign of mistrust in the negotiations. The Commission hopes for an agreement and devotes very significant resources and committed efforts to achieve this goal. 

"Negotiations, on the other hand, can fail."

All sides are now poring over the permutations of what no deal will mean, both for mainland Europe and the Irish border. None of it is pretty.

History may regard the knife-edge votes this week in the House of Commons as a critical moment. It’s worth looking in detail at what happened.

The Chequers White Paper was designed to unite the cabinet and party around a definitive UK position on its future relationship with the EU. It tried artfully - or rather acrobatically - to square the circle. Britain would leave the single market, but kind of be in it via a perpetual adherence to a "common rule book". It would leave the customs union, but it would end up "as if" it were in a shared customs territory with the EU via a Facilitated Customs Arrangement (FCA).

Those two gambits would solve the Irish border dilemma, since checks would be unnecessary either on the island or along the Irish Sea, and they would keep business happy by maintaining vital supply chains, since the UK would still comply with EU regulations.

There was a convoluted plan to be both free from the ECJ, but also be subject to its case law.  

EU officials were aghast at some of the contradictions. "A masterclass in cherry-picking", said one official. "Unworkable, completely unworkable," said another.

But the point was that there was movement. The future relationship is not a deadline bearing down on proceedings - that is the Withdrawal Agreement; the future partnership, which Chequers addresses, can be negotiated during the two-year transition, or beyond.

"There’s all sorts of stuff you recognise from before," said one official closely involved in the negotiations. "But there’s definitely more realism. There’s actually something serious on the table. It’s not cloud-cuckoo land. But the bits that are problematic are really problematic. The final deal is never going to look like that."

Dublin was similarly sanguine. "Nobody believes that what is presented is a solution," said one senior Irish figure. "Is it enough to open the door for a proper negotiation, a proper discussion? It’s not clear yet if this gives May enough breathing space. We would certainly hope so.

"There are clear signals in it about the direction of travel, that if things get moving in that direction you could see the chance of landing in some kind of a soft Brexit that would go a long way to meeting or addressing our particular challenges."

But in Westminster the White Paper simply deepened the political divisions. 

The revolt was led by David Davis and then Boris Johnson, but a groundswell of anger from the Tory grassroots prompted more MPs and junior ministers to resign. There were sackfuls of angry letters to the Daily Mail and Daily Telegraph. Some scribes wondered if Theresa May was guilty of treason.


More:
Tony Connelly's Brexit Republic Podcasts
More Brexit stories


On Monday the European Research Group (ERG), led by arch-Brexiteers Jacob Rees-Mogg, mounted four wrecking amendments against the Trade Bill. Facing an embarrassing defeat, Downing Street decided to accept the amendments. That in turn triggered such fury among pro-European Tories that 14 rebelled against the government’s climb down. 

The bill only passed by three votes and another Tory MP resigned.

On Tuesday an amendment by the Tory Remainer Anna Soubry was a qualified bid for the UK to remain in a customs union if it looked like a crash out was inevitable. 

In the end it was defeated by the narrowest of margins - thanks to the votes of four pro-Brexit Labour MPs.

Taken together, the victorious ERG and defeated Soubry amendments have done serious damage to the White Paper, and the potential the EU saw in it for finally shifting the negotiations on to a more "realistic" plane. 

One amendment blocks off the Facilitated Customs Arrangement because it requires the EU to collect tariffs for the UK in the same way that the UK would collect tariffs for the EU. (The idea is a non-starter for Brussels as it outsources its customs regime to a third country; even though the White Paper specifies that the UK would not, in any case, ask the EU for reciprocal tariff collection, Theresa May’s whips effectively sank that aspect of her own paper).

Another amendment ruled out the UK sharing the EU’s VAT area, something which would be essential in avoiding a hard border in Ireland.

A third amendment sought to drive a spear into the backstop. "It shall be unlawful for Her Majesty’s Government to enter into arrangements under which Northern Ireland forms part of a separate customs territory to Great Britain."

Let’s juxtapose that with the backstop as outlined in the draft Withdrawal Agreement: "A common regulatory area comprising the Union and the United Kingdom in respect of Northern Ireland is hereby established. The common regulatory area shall constitute an area without internal borders in which the free movement of goods is ensured and North-South cooperation protected."

Officials in Brussels regard the Anna Soubry amendment as following the same logic that Brussels could potentially see in the White Paper.

That is, that if the UK wants to solve the Irish border and minimise disruption to its economy, then it needs to gravitate towards a customs union. The defeat of the Soubry amendment on Tuesday night is therefore potentially fatal.

"It’s been politically killed," says one official. "Had it gone through it would have been great. It would have helped things a lot, but having it tested and shot down - that is not great."

Some suggest the ERG amendments could go to the Lords and be amended again, but since they mostly deal with fiscal matters, then the prevailing view is that the Lords cannot overturn them.

Dublin believes that in the autumn Theresa May will ultimately choose to sign the Withdrawal Agreement, an international, legally-binding treaty. If its terms clash with domestic UK legislation, then the British government will, according to Irish officials, simply have to change that legislation.

"It’s just another outworking of the politics of London that we have to deal with," says one source. "What we take as a position is what they put on the table in Brussels and what they put in the White Paper. They have to come to the table now and negotiate this, whatever political constraints she’s under in London.

"So if the UK agrees something in the autumn that’s inconsistent with domestic legislation, they’ll have to go back and change the legislation. That’s what every jurisdiction does when they enter into an international agreement that affects domestic legislation."

Theresa May would, however, meet the same parliamentary resistance in the autumn. The question is, though, would Jacob Rees-Mogg lead a revolt against the Withdrawal Agreement if it set up a calamitous no deal?

In the meantime, of course, there is the ongoing conflict over the Irish backstop.

There is a growing consensus that the Irish dilemma is a key driver in Theresa May’s conversion to a soft Brexit. The White Paper would potentially give her enough political cover to convince unionists that the backstop would never be activated because the future arrangements - a common rule book, a quasi-customs union - would remove the need for any checks on the border, or along the Irish Sea.

On Monday British negotiators were in Brussels to resume negotiations on the backstop. It’s understood Olly Robbins, Theresa May’s chief negotiator, would not move beyond London’s current mantra about a time-limited UK-wide backstop (as proposed on 7 June), partly because of the House of Commons vote that evening.

The Task Force officials were nonplussed, and the negotiating session went nowhere.

Yet, Dublin and the Task Force (and the EU26) are adamant: there must be a Northern Ireland-specific backstop in the Withdrawal Agreement. Without it, there is no agreement, and no transition.

London wants to dislodge the backstop from the draft Withdrawal Agreement and replace it with the 7 June Temporary Customs Arrangement (TCA), in other words, the UK-wide backstop. The TCA would be replaced by the Facilitated Customs Arrangement (FCA) in the White Paper.

The TCA spoke only of avoiding customs checks, disregarding the issue of regulatory checks (a greater barrier to a frictionless border) as something that had to be "discussed".

It’s understood London included a reference to regulatory alignment in its TCA proposal but took it out at the last minute for tactical reasons.

Now, say British officials, the White Paper itself takes care of regulatory alignment, because the UK as a whole will be aligned on goods and agriculture through the common rule book.

Neither side is budging.  

London can now point to the Rees-Mogg factor and cross-the-board rejection in parliament of anything that treats Northern Ireland differently from the rest of the UK.

Ireland and the EU say, yes, we understand that. We’re willing to look at UK-wide arrangements in the future relationship - but not in the Withdrawal Agreement. Both Dublin and Brussels view the Joint Report last December as an unambiguous commitment to the backstop, one which was repeated in March in a letter from Theresa May to Donald Tusk, and even acknowledged in the White Paper. 

Irish impatience is palpable.

"The UK made a formal solemn commitment to the backstop," says a senior Irish source. "If you have commitments made on the basis of any international negotiation, and you then start peeling stuff off, then the whole negotiating process comes under question. We’re assuming the British understand their obligations."

For the Irish Government the need to have a backstop as a legally effective guarantee has been made all the more critical, given the events of this week. The notion of a British promise that everything will be fine, if we all just wait for the future relationship to be worked out, cuts less muster than ever.

That view is shared in Brussels. One senior EU diplomat points out that the initial three-page Chequers communique suggested the UK would sign up to the backstop because they would never need to activate it.

But when the entire White Paper was published, welcome as it was, it was clear that the common rule book and customs partnership models would not leave trade frictionless. "Now when it is abundantly clear that this will not lead to frictionless trade," says the diplomat, "the need for a legal reassurance is even bigger."

On Friday Theresa May told an audience in Belfast that the EU backstop would lead to checks on the Irish Sea, something that would be in breach of the Good Friday Agreement.

"As a United Kingdom government, we could never accept that the way to prevent a hard border with Ireland is to create a new border within the United Kingdom. To do so would also be a breach of the spirit of the Belfast Agreement."

Yet, she was carefully nuanced in her remarks. If the UK crashed out without a deal, it could not just walk away from the Irish border and dare the EU to put up infrastructure. 

"This issue arises because of a decision we have taken," she said. "We can't solve it on our own but nor can we wash our hands of any responsibility for it, so we must work together to solve it. Like any country sharing a land border with another nation, we have a duty to seek Customs and regulatory relationships with each other to ensure borders work smoothly. In Northern Ireland that presents a particular challenge. The protection of the peace process and upholding our binding commitments in the Belfast Agreement are grave responsibilities."

Irish officials bridle at any suggestion that the Commission is preparing to alter the draft Irish Protocol text unilaterally. There are indications that there is room for a change on the language, but not the fundamentals of the Commission draft. 

Michel Barnier, meanwhile, is on a mission to, as he puts it, "de-dramatise" the prospect of checks at Northern Irish ports under a backstop scenario, by saying that such checks would be technical and more easily carried out there, where the infrastructure is already in place, than along a 500km border, where it isn’t.

"The Irish Protocol is a negotiating text," says one Irish source. "So the notion that the Task Force, or we, are going to unilaterally fiddle with the backstop is nonsense. We need to see a British proposal and then we can have a discussion."

One senior EU source, who is closely involved in the negotiations, ponders whether the backstop might have a follow up backstop to break the deadlock.

How would this work?

The Withdrawal Agreement will be accompanied by a political declaration negotiated between the EU and UK. Since Ireland and the EU will insist on a Northern Ireland-specific backstop being part of Withdrawal Agreement, the accompanying Joint Declaration could have a second backstop saying that if the Northern Ireland backstop kicked in then a different arrangement - along the lines of a UK-wide customs model - would also kick in.

The political declaration could say that such a lock would come in under a different legal basis, one that was still to be negotiated during the transition.

That would leave the Withdrawal Agreement intact - with, perhaps different, less offensive language - but with a political promise that it would not need to be activated, once the future arrangement was negotiated.

All of this, however, depends on Theresa May’s White Paper surviving. Tellingly, in Belfast Mrs May said the White Paper could "move the negations on". This means she believes it can survive.

However, her political fragility, the reality of what the House of Commons can accept, the clock hammering down to zero all add up to an unhappy cocktail as we head through the summer and into the autumn.

There is no majority in the House of Commons for no deal, but it may just happen anyway if all sides become paralysed by the increasingly toxic politics of it all and time runs out.

An extension to Article 50 has become a very real prospect. Officials believe a short extension of three or four months could command the unanimous support of all member states (something which is required), but anything longer would fall foul of the letter of Article 50.

Brussels believes Article 50 has already been stretched to the limit in order to accommodate the two-year transition. Officials say the transition is being presented as a natural winding down of Britain’s membership. That would be difficult to sustain if the transition drifted on longer than two years.

Should things fall apart or time out, there are real fears about what will happen on the Irish border. Dublin believes London is unconditionally committed to avoiding a hard border via its signature on last December’s Joint Report.

Senior UK sources, however, say that their unconditional support is not for the Joint Report, but for the Good Friday Agreement, an important distinction.

The Financial Times has reported discreet plans by the European Commission for a "parachute" effect should Britain crash out next March, with legal ramifications being staggered or temporarily waived for a few weeks so that chaos would be managed. 

But since Ireland would be the most exposed country - both in terms of the border and east-west trade - the Irish Government is in the spotlight in the most high-stakes diplomatic poker game imaginable.

Should Dublin, with the support of the Task Force, insist on a Northern Ireland-specific backstop until the very last minute, there is the risk that British obduracy holds and no deal becomes the only option.

Should that occur, Leo Varadkar’s next move would be one of unbearably high politics: stand firm and brook the consequences of no deal and a slump in trade, or yield under the pressure in the knowledge that that would be political suicide, given how, and for how long, Ireland has defined and defended its interests in these negotiations.

Irish officials say the burden of avoiding a hardening border in a no deal scenario lies firmly with the British government. Yet follow the logic of London facilitating no checks along the border and you arrive at checks along the Irish Sea.  

There is also no doubt that the EU26 would not for long tolerate an open border in Ireland that would allow the flow of unregulated goods into the single market. In such a scenario there would either be a legal challenge, or, worse, member states would start to place controls on exports coming from the Irish Republic.

Both Dublin and Brussels hope that calmer heads prevail over the coming weeks. None of these scenarios will have an immediately benign outcome. But in the House of Commons, these days, there are few calm heads around.