Pro-Brexit Tories Willing to Accept Five-Year Limit on Backstop

(Bloomberg) -- Pro-Brexit members of Theresa May’s Cabinet would be willing keep Britain tied to the European Union’s customs regime for as long as five years in an effort to break the deadlock in divorce talks, people familiar with the matter said.

The prime minister is trying to renegotiate the so-called backstop guarantee for avoiding a hard border with Ireland because euroskeptic Conservatives fear it will trap Britain inside the customs union indefinitely. Without their support, May can’t get her deal ratified in Parliament.

Pro-Brexit Tories Willing to Accept Five-Year Limit on Backstop

So far European officials have refused to countenance major changes to the backstop -- including any time limit -- and the stalemate threatens to force Britain out of the EU with no deal at the end of March.

Last month, Poland’s foreign minister suggested a five-year time limit would be a good way out of the impasse. While the idea was quickly knocked down by EU and Irish leaders, a number of senior pro-Brexit members of May’s top team privately say they would be willing to accept such a long-term commitment, according to people familiar with the situation, who asked not to be named.

Escaping the bloc’s customs and tariff regime -- to strike free trade deals around the world -- is a key prize of Brexit in the eyes of those who campaigned for Britain to leave the EU.

In talks in Brussels, May has been suggesting a time limit to the backstop, although she’s not set out how long this should be. Many staunch Brexit supporters would accept one year in the backstop but ministers in May’s Cabinet, among other senior euroskeptics, are now ready to be more flexible.

Whether May can sell such a long stay in the backstop to other pro-Brexit members of her party is a more difficult question. One of the problems for Conservatives is the idea of fighting the next election -- due in 2022 -- still trapped inside the backstop.

May would also need to sell the idea to the EU, which has so far shown no signs of ditching its longstanding pledge to defend the interests of Ireland, which wants the guarantee on the border to be open-ended. May spoke by phone to the leaders of Poland, Lithuania and Estonia on Friday as part of her campaign to find a compromise. But according to one person familiar with the situation, she made no new proposals on how to break the impasse.

Pro-Brexit Tories Willing to Accept Five-Year Limit on Backstop

The backstop would maintain current customs and tariff rules, along with key regulatory requirements, to avoid the need for border checks on goods crossing the land frontier between Northern Ireland and the Irish Republic. The policy would come into force after the status quo post-Brexit transitional period comes to an end, if no new trade agreement is in place that would make customs checks at the border unnecessary.

Both May and the EU have committed themselves to ensuring there is no return to a policed border with Ireland, amid concerns that checkpoints will revive memories of the decades-long conflict in Northern Ireland and undermine the peace process.

©2019 Bloomberg L.P.