12 Mar 2019

Brexit: Theresa May secures “meaningful legal assurances”

Ahead of today’s “meaningful vote” in the British Parliament, UK PM, Theresa May, has secured further legal assurances from the EU which she hopes will reassure MPs to back her Brexit plan. Specifically, they are aimed at reducing concerns that the UK would be unable to unilaterally extract itself from the Irish backstop, which is there to maintain the commitment to avoid a hard border on the island of Ireland.

There are three parts to the reassurance package, which would sit alongside the Withdrawal Agreement, which has not been amended. The European Commission President Jean-Claude Juncker said these amounted to “meaningful legal assurances”.


The first is a joint interpretative instrument which states that the EU could not deliberately seek to keep Britain in the backstop by not negotiating, in good faith, on a new trade deal. The instrument makes clear that if it did, the UK could seek arbitration and an exit from the arrangement.


The second is a joint UK/EU statement in the political declaration which commits both sides to developing new technologies to replace the need for the backstop. The third is a UK (only) declaration which states that there would be nothing to stop Britain launching a process to get out of the backstop, if the EU does not again act in good faith on trade discussions.


All three planks are aimed at bolstering the UK’s legal standing in any dispute over whether the UK could extract itself from the backstop (a temporary customs union) and thereby move on to sign its own trade deals.


Cox to give legal opinion


Later today we will hear updated legal advice from Attorney General Geoffrey Cox on this point. MPs in Parliament are scrawling through the details of the instrument/declaration whilst awaiting Geoffrey Cox’s updated legal opinion.


Ahead of this and a meeting of key ERG members we have heard relatively little by way of response, though the ERG’s Jacob Rees-Mogg tentatively indicated that the text looked to be a move in the right direction. 


The government’s confidence and supply partner the DUP has yet to state its view either. The arithmetic for PM May in tonight’s vote, even if the ERG flips to back the Brexit deal, would still be tight but certainly after last night’s changes there looks to be a greater chance of success for the PM.


The votes, including on amendments to the government’s motion, are expected to commence from 7pm today. We have a more detailed Brexit time table below.


Irish Economy: Scheduled T-bill auction on Thursday 


Ireland’s NTMA has announced the details of Thursday’s scheduled auction of T-bills. The agency will offer €500m of T-bills with a 12 month maturity on 14 March. This will be the 11th successive 12 month T-bill auction of that sum and, as with its predecessors, we expect that it will be completed at a negative yield.


While raising €500m of 12 month money at a negative yield is good business by anyone’s standards, it will not move the dial all that much for Ireland, given that Gross General Government Debt stands at €216.2bn, with an average blended cost of c. 2.4%.


Today’s Brexit timetable


9.30 am: Theresa May chairs Cabinet mid-morning: Attorney General Geoffrey Cox to publish updated legal advice on the Brexit deal. 

10.30 am: Deadline for MPs to submit amendments for tonight’s vote. 

11.15 am: Brexit Secretary Stephen Barclay to be quizzed by the Commons Brexit committee. 

12.30 pm: Possible Commons statement or urgent question on
the attorney general’s updated legal advice. 

1 pm or later: Theresa May to open debate on second meaningful vote. Look out for interventions from members of the ERG group of Tory Brexiteers, and from the DUP. 

7 pm: MPs start to vote — first on amendments, if selected, and then on the deal itself.