Brexit Bulletin: Unlocking the Border

(Bloomberg) -- Today in Brexit: Boris Johnson sets out his stall, and the British are preparing a new offer on Northern Ireland.

British Prime Minister Theresa May is working on a major new offer to unblock talks with the European Union over the crucial issue of the Irish border – potentially opening the way to a Brexit deal.

The U.K. plan risks keeping the whole U.K. tied to the EU’s trade regime for years after Brexit and could alienate Northern Ireland’s Democratic Unionist Party, which props up May’s government in London, Tim Ross and Alex Morales report.

Brexit talks are stuck on the question of how to avoid police and customs checks on the border between the U.K. and Ireland – and no divorce deal can be sealed until there’s an agreed solution. The EU’s proposal is that checks should happen between Northern Ireland and mainland Britain instead. The British side has rejected that as unacceptable. Now, with time running out, the U.K. has its own proposal, one that May is likely to put forward later this month, according to a senior British government official.

The proposal is part of the so-called “backstop” for the Irish border – an insurance clause to make sure that whatever future trade deal is eventually drawn up between the two sides, no hard border will go up on the island of Ireland.

Under the plan the U.K. would back down on opposition to new checks on goods moving between the British mainland and Northern Ireland. In exchange, May’s team would need the EU to compromise and allow the whole of the U.K., including Northern Ireland, to stay in the bloc’s customs regime.

Read More: Find out why the Irish border is such a sticking point

Even More: Take a look at what the border actually looks like

The EU has already rejected any kind of backstop that applies to the whole of the U.K. – it doesn’t want the U.K. staying in its trade and regulatory regime by the back door. And while the U.K. thinks the backstop should never be put into effect, the EU reckons that it will probably be needed and therefore must be fit for purpose.

The biggest risk to the plan is the DUP. They have long said that any border down the Irish Sea is unacceptable. DUP leader Arlene Foster will be interviewed on Bloomberg TV at 9 a.m. today.

Today’s Must-Reads

• It’s decision time for Boris Johnson. The former foreign secretary has flirted with the leadership for years. A speech today at the party conference will show whether his moment has passed.
• Arlene Foster, leader of the DUP, told the Telegraph she would work with Johnson if he became prime minister, praising his “positive” vision.
• British leaders have always courted Angela Merkel. But her star is fading. We have an early read on her potential successors.

Brexit in Brief

The Draft | The European Commission will present a draft proposal for future ties between the U.K. and the bloc next week, Germany’s Funke media group reports. The document will be discussed by commissioners on Oct. 10, Funke reports.

Boris the Delayer | Johnson has told senior Conservatives he would delay Brexit by six months to reset talks with Brussels if he became prime minister, the Sun reports. The window would give the government time to prepare more fully for a no-deal Brexit to give Britain the upper hand in talks, according to the newspaper.

Planes Grounded? | European Commission President Jean-Claude Juncker said the U.K. public should have been better informed about Brexit before the referendum, floating the idea that a no-deal divorce could leave planes grounded. “If everything goes wrong, then no more British planes can land on the continent,” he said in televised remarks on Monday. “People don’t know that. One should have told them beforehand.”

Temporary Halt | Toyota Motor Corp. would need to temporarily halt U.K. production in the event of a no-deal Brexit, its European President Johan van Zyl said. Such a scenario would cause a logistics disruption and force a stoppage, he told reporters in Paris.

Priority Migrants | The U.K. government set out its plans for a post-Brexit immigration system, dropping the priority status for workers coming from the EU. Post-Brexit, the focus will be on skills rather than nationality, the Conservative Party said.

On the Markets | Sterling surged on Monday after Bloomberg reported that the government is preparing a new offer to unblock talks on the Irish border. But the rally didn’t last, and the pound was little changed early on Tuesday at $1.3034.

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To contact the editor responsible for this story: Adam Blenford at ablenford@bloomberg.net, Jones Hayden

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