Theresa May backs down on Brexit ‘backstop’ plan, averts political upheaval

The U.K. government on Thursday published a paper outlining a “backstop” plan for trade with the European Union after Brexit, media reports said.

The plan lays out temporary arrangements to match EU trade tariffs, aimed at keeping the Irish border open after the withdrawal in March 2019. It would effectively keep Northern Ireland within the EU’s customs union, so as to avoid a “hard border” with EU member Ireland.

The expected publication of the document was delayed after its proposals met resistance from Brexit Secretary David Davis, who was unhappy that they didn’t include an end date for the arrangements.

The dispute sparked concerns that Davis might resign over the issue, prompting a full-blown political crisis. But after Prime Minister Theresa May held a series of meetings with Brexit backers in her cabinet, the proposals were amended to include a time limit, reports said.

The backdrop document reads: “The U.K. is clear that the future customs arrangement needs to deliver on the commitments made in relation to Northern Ireland. The U.K. expects the future arrangement to be in place by the end of December 2021 at the latest.”

“There are a range of options for how a time limit could be delivered, which the U.K. will propose and discuss with the EU.”

But the EU’s chief negotiator, Michel Barnier, has already dashed cold water on the proposals. In a post to Twitter, he questioned whether it was a “workable solution to avoid a hard border” — essentially pointing out that it only covers the problem of customs, and not other issues such as freedom of movement for people.

He also highlighted the “integrity” of the single market, seen as referring to oversight by European courts of disputes. Finally, he queried whether it would be an “all-weather backstop”; a phrasing that is being interpreted as a comment not just on the scope of the measures, but as criticizing the time limit as too short.

The pound  was lower after the publication on Thursday, at $1.3392, after opening at $1.3413 and hitting a high of £1.3472 earlier in the session.

The next key date in the progress of Brexit is a parliamentary debate on the EU Withdrawal Bill, a key part of the process to uncouple the U.K. from the bloc. On June 12, lawmakers in the House of Commons will discuss 15 important House of Lords amendments to the bill, including a measure to keep the country in the EU’s customs union.

May’s Conservative government is only in power through the support of Northern Ireland’s Democratic Unionist Party. It runs the risk of losing its bid to overturn some of the amendments if enough Conservative lawmakers decide to vote alongside opposition parties.