FTI Consulting Public Affairs Snapshot: Brexit Breakthrough? The views from all sides as a deal on Northern Ireland is secured

Be under no illusion, the Windsor Framework is a political triumph for Rishi Sunak, a vindication of his purposefully contrasting approach to negotiations with Brussels to that of Boris Johnson. The fact Ursula von der Leyen addressed her counterpart as “dear Rishi” yesterday betrays the extent to which a relationship has blossomed; this is a deal that could have been done sooner had the will from Downing Street been there.

After all, this newly renegotiated Protocol proposes much once considered uncountenanceable in London. Sunak is understandably championing Brussels’ concession to allow permit a customs ‘green lane’ for goods under no risk of entering the EU single market, something that should have real world benefits for put-upon Northern Irish consumers. But its existence only stands to confirm the other – a customs red lane. For Brexit absolutists, it will take more than Johnsonian-like contortions to deny that this still constitutes a border down the Irish Sea, however much Sunak states any semblance of one has gone.

Of no little political significance, the persistent political sore of European Court of Justice (ECJ) jurisdiction has also been faced down. Agreement that the UK will be able to lodge objections to future Single Market regulations, which the EU might then agree to disapply in Northern Ireland, is marked progress. Moreover, the new ‘Stormont Brake’ – inserted to provide the Northern Ireland Assembly with a right to consult on new regulations and, if necessary, block them from applying – is being painted as a breakthrough moment for democratic will.

Sunak’s immediate concern now is to ensure that even the most fervent Brexiters in his own party are sanguine. His fragile mandate cannot accommodate the internal fratricide that would result from reliance on Labour votes in Parliament to see his deal through. Thus, the choice Sunak is presenting to the European Research Group (ERG) of Eurosceptic Conservatives is binary – this is the only deal on the table and the alternative is to bring the Tory house down.

In previous years the balance of power would sway much towards this cohort, but with an election beckoning in 2024, and Labour now waiting in the wings, there simply isn’t the political space to be problematic. Steve Baker, erstwhile ERG evangelist-in-chief and now Sunak’s fox-in-the-henhouse minister for Northern Ireland was last night hailing the deal with the zealousness that only a convert can muster. If he can perform the necessary mental gymnastics, then surely anyone within the Tory ranks can.

So, can Brexit finally be declared ‘done’? EU Single Market rules will still apply in Northern Ireland, now with more latitude to diverge.  It is that risk of divergence that sows the seeds for problems in future. This is not a deal that addresses efficient functionality in a scenario where Great Britain and European Union pull significantly apart.

But for now, the UK and the EU can be friends again. The controversial Northern Ireland Protocol Bill, which would have created a mechanism in UK law for London to act unilaterally, has been shelved. Stalled conversations on issues such as an agreement on regulatory cooperation in financial services can resume. UK participation in Horizon, the European research and innovation programme, looks set to restart.  It even lays the foundations for a deal with France on cross-Channel migration – addressing one of Sunak’s five key pledges to the electorate. Visiting Belfast today, Sunak looks a happy man.

Author: Kyle Thomson, Consultant, London

In Brussels, Brexit can seem like yesterday’s news as political focus has changed radically over the past 12 months and more. Gone are the days that Brexit and its negotiations were making trade headlines. Geopolitical trends have shifted and with the COVID pandemic, Russia’s unlawful invasion of Ukraine and more recently trade tensions with the US, EU priorities have been reshuffled away from EU-UK tensions.

Nonetheless, the Windsor Framework deal reached yesterday is being celebrated as a significant milestone for the EU. First and foremost, Commission finally has confirmation from Rishi Sunak and his Government that the current deal signalled the demise of the Northern Ireland Protocol Bill. This unilateral move from London caused major tensions between the EU and UK and was seen as both a violation of international law and a break of mutual trust. From the business side, the deal will also benefit the EU, not only through stronger guarantees and safeguards for the Single Market but also thanks to new arrangements on customs, agri-food, medicines, VAT and excise rules.

The President of the European Commission Ursula von der Leyen herself welcomed the deal, underlining that “the interests and needs of people should always come first.” These words are key and demonstrate the shift operated by the EU on the question of Brexit, from being standoffish, to thinking of the practical impact on the citizens of the EU and looking towards peace and stability. When once the UK’s departure from the EU was seen as a threat which would not only harm the European economy but might also break apart the Union and make way for further ‘exits’, it has long since become just a challenge to be overcome like any other.

Following the pandemic which unified Europe financially (albeit in debt) and the invasion of Ukraine, which unified Europe on collective security and sanctions, European unity seems less fragile. Additionally, a largely united front with the UK against Russia has put Brexit tensions on the backburner more recently. Furthermore, for von der Leyen, it became increasingly impossible, after a pandemic and during wartime, to forget about the practical impact on individuals and livelihoods. As von der Leyen underlined herself, this deal “also allows us to turn the page towards a bilateral relationship that mirrors the one of close allies standing shoulder to shoulder in times of crisis.” Beyond its concrete business impacts, from an EU perspective the deal is not only to be seen as an important political milestone but also a significant achievement for von der Leyen. It will play a symbolic role as she runs for re-election as head of the European Commission next year.

However, Rishi Sunak’s predecessors, both Liz Truss and Boris Johnson, did much to break the trust between the EU and the UK. It is not so easily repaired. Doubts they sowed are still present and memories of the Northern Ireland Protocol Bill still vivid in the minds of EU officials. As the details of the Windsor Framework were being discussed, von der Leyen and other EU officials remained cautious, reminding reporters that the current deal is just an agreement in principle and that a vote in the UK Parliament was still required before any implementation could take place. Judgement on the British political class will remain reserved for now.

Of course, Brussels is itself bureaucratic.  The Commission has already tabled legislative proposals in the sanitary and phyto-sanitary (SPS), medicines and tariff rate quotas (TRQs) areas, which will now be submitted to the European Parliament and Council where they are not expected to fall.

Author: Danesh Kermabon-Haq, Senior Consultant, Brussels

In a country that has – as a direct result of the Protocol – lived without a functioning Executive since February 2021, some scepticism about the Windsor Framework is hardly unexpected. Indeed, the stalemate bought about by the Democratic Unionist Party’s (DUP) refusal to participate in power-sharing arrangements is a situation that has grown increasingly uncomfortable on both sides of the Irish Sea.

Yet there are no guarantees that the deal has done enough to placate the DUP and unlock a new era of power-sharing. Party leader Jeffrey Donaldson is well aware that he risks an internal revolt if he is caught accepting the deal too quickly; a heedful stance now is what Unionists demand. Donaldson did, however, acknowledge last night that significant progress has been secured. But he was also quick to state that “there can be no disguising the fact that in some sectors of our economy, EU law remains applicable in Northern Ireland.” He vowed not to be pushed into any hasty decisions.

The DUP therefore finds itself at a crossroads. The most ardent of Unionists – those who cannot countenance anything other than complete and unimpeded alignment with the UK market, without any European influence or control – will find nothing in this deal to assuage them. But the realists know that the sanctity of the Good Friday Agreement makes such an outcome impossible. The question for them is, have the most egregious aspects of the Protocol been addressed? Undoubtedly, the devil will be in the detail.

The hard reality for DUP dissenters is that they are running out of road. The party has exhausted all legal avenues in its attempts to hold the Protocol up as an infringement upon the status of Northern Ireland when the UK Supreme Court ruled it as lawful. Stuck between a rock and a hard place, the Party no longer wields the power it once did over Theresa May’s minority Government, and it is powerless to challenge the legality of the Protocol.

Therefore, in lieu of consent, the DUP only other option is to continue its refusal to enter into the Executive. But, with a central pillar of the case for doing so neutralised, doing so carries significant political risk. The UK and EU will press ahead with this deal regardless. A fresh set of Assembly elections will be the only way to resolve the power sharing impasse – and this is not due for at least another year. And therein lies the DUP’s Achilles’ heel; the newly-negotiated ‘Stormont Brake’ gives the Assembly new rights to block future EU regulation from applying in Northern Ireland. That new right is defunct for as long as there is no functioning Executive.

Decision-makers within the DUP must be mindful that an immovable approach at this juncture risks an existential political threat to the Party at the next Assembly elections, which will inevitably arrive. Having backed Sinn Fein in the May 2021 elections, the Northern Irish electorate might just decide it really is time to move on from the DUP’s obtuse and seemingly redundant positioning on the issue of the Protocol.

Author: Connor Stobo, Senior Consultant, London

The Republic of Ireland Government’s position on the Protocol – indeed on Brexit itself – was very clear from the beginning; protect the all-island economy and preserve the Good Friday Agreement. To achieve both has proven the hardest challenge to emerge from the UK’s divorce from the EU. The Protocol did both in theory, but in practice it proved unworkable. Dublin will be hopeful that the Windsor Framework finally removes the threat of a hard border on the island of Ireland and preserves the integrity of the EU Single market.

The Republic of Ireland has been transformed by EU membership. But both the EU single market and, since Brexit, the UK market are important for Irish businesses. Therefore, the Irish Government has been determined to minimise the impact of Brexit for Irish businesses and ensure access to both markets remains as seamless as possible. The all-island economy is also important to Ireland, and Tánaiste Micheál Martin recently stated that Ireland wants to see an agreement on the Protocol to “provide the certainty and stability that people and businesses in Northern Ireland need to take advantage of opportunities offered by the Protocol, not least access to both the EU Single market and also the UK internal market, a combined market of more than half a billion people.”

With regards to upholding the Good Friday Agreement, the prospect of a return to physical border controls between the North and South was a legitimate and significant cause for concern amongst Irish politicians and officials worried that any wrong step could provoke a return to political violence. Taoiseach Leo Varadkar was heavily criticised for voicing this concern during discussions in 2018 and was accused by some on the UK side of inciting violence. Despite this criticism, Ireland has remained firm in its view that any new agreement must take the potential for a return to violence into consideration.

While the Irish Government believes the Protocol is working economically and has sheltered Northern Ireland’s economy from the realities of leaving the EU, Taoiseach Varadkar has acknowledged that there was room for flexibility and room for changes during the negotiations on the Windsor Framework. He also expressed regret that the original deal was done without agreement from Unionists and Nationalists in Northern Ireland.

Now that a compromise has been found, Ireland is eager to agree a deal and hopes that it will see an end to the political stalemate in Northern Ireland, with Taoiseach Varadkar stating the deal “most importantly perhaps helps to get the Good Friday Agreement institutions – the assembly and the executive – up and running”. Tánaiste Micheál Martin has urged political leaders in Northern Ireland to act quickly to get the institutions back in place without delay. Sinn Féin Vice President, Michelle O’Neill has welcomed the deal and expressed the party’s wish that this should now mean the resumption of the Northern Ireland power sharing Executive as soon as possible. All sides would agree that is in the interests of Belfast, Dublin and London, making it happen is now the priority.

Author: Jack White, Senior Consultant, Dublin