Brexit: Concerns Around Latest Developments

In what comes as a latest twist in the Brexit negotiations, the Democratic Unionists Party (DUP) who have a deal with the Conservative Party have abstained on a recent series of votes on the finance bill, the legislation needed to implement measures in the UK budget. In recent weeks, the alliance between the two parties has been in an uneasy state, following criticism by the DUP of Prime Minister Theresa May’s draft ‘Brexit’ agreement. The DUP has threatened to withdraw its support from the government after indications came from Mrs. May that she was prepared to separate Northern Ireland economically and constitutionally from the rest of the UK. The party’s Brexit spokesman, Sammy Wilson said that the abstentions were made because UK had broken a fundamental agreement to deliver Brexit for the people of the UK “as a whole” and to not “separate Northern Ireland constitutionally or economically from the United Kingdom”.

The Conservative government has so far agreed on a financial package with the DUP in exchange for support on certain issues. About £430 million has come to Northern Ireland’s budget under the arrangement so far. The remainder of the £1 billion is due to come in the 2019-20 financial year.

The EU member countries have meanwhile supported the draft Withdrawal Agreement, which sets out the terms of the UK’s exit from the European Union. Another development in the crucial EU meeting was the extension of the transition period which could be extended by up to two years, taking it to the end of December 2022. The EU Ministers have also sent a clear message that the EU would not reopen negotiations, irrespective of whatever difficulties Prime Minister May encounters on the domestic front. On the other hand, the Spanish concern over clarity on how talks on the future status of Gibraltar should be handled has been a source of tension on the EU side. The Spanish Prime Minister has even spoken about Spain rejecting the draft deal without a clarification of the text on the status of Gibraltar. Taking into account the entire uncertain situation, Michel Barnier, the EU’s chief Brexit negotiator, has called on all parties to “remain calm” and focus on the future agreement.

For India, the repercussions of current developments are expected to be posityive. Mrs. May had expressed earlier that her plan would provide a fair immigration system that would help young people in the UK get jobs and training. She has insisted that instead of a system based on where a person is from, the UK will have one system that is built around the talents and skills a person has to offer. This indicates that for aspiring Indian software developers willing to work in the UK, it would means that they no longer have to go through strict visa application requirements. The skill-based system instead of a quota-based one will level the playing field for Indian IT professionals and others in the UK. Trade with India is also expected to go up.

However, Theresa May’s premiership could face problems if Tory MPs submit letters of no-confidence. If the number crosses the required 48-MP mark, a no-confidence vote in her leadership could come up. In that event, if no deal is reached by March 29, 2019 the UK will have to depend on the World Trade Organisation (WTO) rules to trade with its former European partners, which means that goods cannot pass through borders without undergoing customs and regulatory checks. The final stage of the Brexit deal is most likely to see more twists and turns, however, what is important is the fact that it should be a deal which is fair, balanced and amicable and that which provides equal say to everyone in the future trade deals.

Script: Dr. Sanghamitra Sarma, Strategic Analyst On European Affairs