The Brexit deal deconstructed: what it all means

Typically, when it comes to Brexit, no-one has let actually understanding what this vastly important document really does or means get in the way of their having strong opinions about it. Numerous MPs and Brexiteers were in the media within minutes of the agreement being made to rhapsodise on how wonderful it was, before the text was even published.

Even today, a week after the deal was sealed, we have no real sense of the detail of what it will actually do. But we do have a far better first impression than we had when Labour pledged its support for the agreement, and most pro-Brexit MPs deemed it passable.

So, subject to change, and gleaned from a look at the deal and numerous published blogs, articles, analyses and Twitter threads from experts, here is a first attempt at deconstructing what the Brexit deal is, what it isn’t, and what it will mean for this country for the next few years.

At its core, as a trade deal, most experts seem to think it’s pretty good, so far as it goes. The more salient issue comes when it’s compared to the much deeper and decades-long relationship that it replaced. And wildcards will emerge over the coming weeks and months, as businesses and voters discover that even where Brexit has delivered what it said it would, it has granted its wishes in much the same way as a monkey’s paw – and they may well end up similarly regretful about what they wished for.

Brexit will never end, part one

The one thing this deal categorically does not do is get Brexit ‘done’ – if such a thing meant it not being a political issue any more, nor in terms of the agreement suddenly ending ongoing preparations for change and the business uncertainty that has surrounded the process.

In place of the single one-year transition period for everything we had through 2020, this deal introduces numerous smaller transition periods, some formal, some informal. Some of these stem from ratification over the next few months, others cover phasing in of rules and checks in different sectors, while others concern EU certification of British regulations or standards – for example on data or financial services.

Each of these smaller transition periods has different rules, exists for different reasons, and have different durations. Several are for major sectors of the UK economy. All of them mean this is by no means over.

Brexit will never end, part two

Even leaving the various transition issues aside, the new deal provides for a longstanding and intricate set of UK-EU relations that hardly feels like an escape from dealing with European bureaucracy or EU committees – which should not come as a surprise, given they are our nearest neighbour and our closest trading partner.

The deal provides for a standing partnership council between the UK and EU, with a further 19 specialised committees and four working groups. At least they’re new committees.

Brexit will never end, part three

Politically, though, the biggest reason Brexit will never end is that this deal is up for renewal in five years’ time – and could be withdrawn from entirely, tinkered at the margins, or used as the basis for a much more comprehensive and deep free trade agreement than the fairly thin agreement it is at the moment.

Given the UK is scheduled for a general election in 2024, this means we can fairly confidently expect that once again – and against the usual history of UK politics – our relationship with the EU will be a major general election battleground, and then dominate the first year or so of the new parliament. Given this and that the flaws and tensions of this deal will become apparent in the next few years, don’t expect this deal to heal the nation.

The level playing field is actually pretty tilted

In broad terms, this deal is a very good one for the EU. This is not because of some sneaky piece of small print or other devious statecraft by Brussels – though there could well be some of that in there – but rather a simple consequence of what the UK government actually asked for.

Boris Johnson proudly declared that this deal meant “no tariffs” and “no quotas”, and for now at least it does mean that – though it does grant both sides the power to introduce them if either economy diverges dramatically from our current, fairly aligned, regulatory frameworks.

The issue for the UK is that tariffs and quotas are things that apply to the import and export of goods – where the EU already had a substantial surplus versus the UK, which this trade deal should help to maintain.

By contrast, the UK does much better in services, which make up around 80% of our exports. And on these the deal offers far less, and in some areas close to nothing. This is going to make providing certain services to EU countries far more complex, with no guarantees it is possible: in some countries it will be mandatory to have a physical presence in the country to offer legal services, for example, while in others it will be mandatory not to have that.

As part of its bid to get a deal through in record time, and to secure concessions on fishing (which contributes 0.02% towards our economy), the UK seems to have abandoned getting anything major on services. The result is a deal the UK wanted, but one which seems to favour the EU quite heavily.

Brexiteers got what they wanted… sort of

Many of the shortcomings of this deal for everyday life – it will leave us poorer, it will make trade harder, it will limit our ability to move to or work in the EU – are the result of deliberate trades Johnson’s government made to deliver its core Brexit promises, on sovereignty and on free movement.

Being fair to Johnson, this deal does deliver on those, at least in part. But voters may come to feel somewhat short-changed.

Take free movement: this is indeed ended, and there is no longer an automatic right to work in the UK for EU citizens, or vice versa. But there are plenty of measures to let EU citizens move to the UK if their jobs are needed, which has often proved to be the case over the last decade and is likely – especially for things like the NHS – to be true in the next decade.

Meanwhile, the deal will make it harder and slower to do things like deport foreign criminals or to send certain asylum seekers to the first EU country they encountered, as the UK was previously able to do, which might be less welcome to voters for whom immigration was a prominent issue.

Sovereignty is a similar mixed bag: the European Court of Justice no longer has jurisdiction after this deal or over this deal. But in certain regulatory areas, its rulings may have to be upheld by UK courts, and disputes between the UK and EU in relation to the agreement will come to arbitration panels involving senior UK and European judges. So European judges will still have at least some power, just with a different label.

Some of the deal is copy-and-pasted

Eagle-eyed observers have already found a few wildly out-of-date references in the new UK-EU agreement – most notably so far an annex discussing data sharing on page 931 (quick readers!) which promises to exchange data using software that hasn’t been updated in over a decade, secured by an encryption standard that would now be trivial for any home computer to break. As and when other bits of copy and pasted older treaties are found, they may prove more significant.

Brexit will not reduce red tape

In big ways and small, this new agreement will mean lots more forms, lots more payments, and lots more hassle for anyone whose business involves crossing a border. For individuals that ranges from things such as UK travellers to the EU eventually needing to fill in forms (as when travelling to the US) and standing in the slower queue, to having to pay customs to send forms, to paying roaming charges, to becoming unable to do certain work with overseas clients.

For businesses the consequences could prove much larger, changing rules on ownership and similar for companies like airlines, financial service providers, and more – and creating much more in the way of border hassle for others. There is a lot more red tape and cost in the UK’s future, which is unlikely to bankrupt anyone overnight, but could slowly see us become less competitive than our neighbours – meaning that as years and decades go by, we find ourselves increasingly poorer when compared to France, Germany, and others.

The effort put into fishing didn’t pay off

The UK government spent a huge amount of time and political capital on the UK’s tiny fishing industry, throwing aside the chance to secure concessions for far larger parts of the economy. It paraded a win – but the deal here seems to be unravelling particularly quickly.

For several key species, the UK has secured only modest increases to its quotas within UK waters. EU flagged boats will still be able to fish just six miles from the UK coast – a symbolic loss, given the UK promised fishers they could expect a 12-mile exclusion zone. Swapping quotas between UK-flagged and EU boats is no longer possible.

Fishers are feeling worried and betrayed. The government can point to the fact the agreement is only in place for five and a half years – but if it deviates dramatically at that point, the EU is free to introduce tariffs. The disproportionate amount of effort for the tiniest of industries hasn’t even delivered a symbolic victory.

Tariffs could reappear faster than you think

The UK-EU deal means no tariffs and no quotas, and has rules in place agreeing neither side will rip up existing rules on environmental or labour protections. But the deal goes further than that: if one side introduced new and much stronger rules, which perhaps put it at a disadvantage in trade compared with the other, it would be free to consider introducing tariffs or quotas against the affected goods.

That means the UK is free to an extent to diverge from EU regulations and state aid rules, just as the government says, but not free to do that without swift consequences. The result could be a strange period of years where instead of having a say over EU rules, we end up ‘voluntarily’ deciding to adopt oddly similar rules of our own, and trying to pretend the whole thing is a coincidence.

This could get interesting for Scottish independence

One lesson of this whole Brexit deal could be that breaking off from a larger and more powerful bloc with which you will need an ongoing future relationship is far more complex and costly than anyone could imagine, and delivers far less than anyone advocating for it promised. On that framing, this deal would make the prospect of Scottish independence far less appealing than once it was.

But it seems only a minority of Scots will see things that way. Instead, the inadequacy of the deal frames why Scotland shouldn’t be tethered to a sinking England, while simultaneously showing that splitting from a larger partner is in fact possible. Given that, it seems if anything the deal will boost support for Scottish independence.

That suggests a particularly thorny few years ahead: the UK, like the rest of the world, will have to try to get back off its knees following the coronavirus pandemic. It will spend at least the next five years dealing with the fallout of Brexit, again. Will it have to contend with the pain of a Scottish split, too?