The House of Commons has voted to reject peers’ amendments to the controversial Internal Market Bill – reinserting clauses that would allow the government to override the Brexit withdrawal agreement and breach international law.
Some 357 MPs – a majority of 89 – voted to hand these powers to ministers within the bill, which the government insists are necessary to prevent a border in the Irish Sea.
The bill, which sets out how trade within the UK will work once it is outside the EU’s single market and customs union, will now be passed back to the House of Lords.
While peers can either accept the amendments or delay the bill for up to a year, the point may become moot in a matter of days if a UK-EU trade deal is agreed.
In a major concession just hours before the Commons vote, Boris Johnson’s government issued a statement saying it would be “be prepared to remove” and deactivate three offending clauses regarding exports and state aid if “solutions being considered” in talks with the EU bear fruit in the coming days.
The prime minister’s earlier concession may have soothed some Tory misgivings about the vote on Monday night, but the division list showed three Conservative MPs still rebelled to oppose the move – Sir Roger Gale, Simon Hoare and Stephen McPartland.
Twelve others abstained, including former Brexit-era prime minister Theresa May.
The EU’s chief negotiator Michel Barnier is reported to have told EU27 envoys last week that the UK government’s decision to introduce and press ahead with the controversial bill – amid expectations that the Taxation Bill scheduled for debate on Tuesday contains similarly inflammatory clauses – was damaging trust and threatened to plunge trade talks into “crisis”.
With less than four weeks until the transition period ends, negotiations hang on a knife-edge, with one senior UK government figure on Monday lamenting that talks had not progressed since Friday.
“Whilst we do not consider this process to be closed, things are looking very tricky and there’s every chance we are not going to get there,” the source warned.
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The gloomy assessment came shortly after Mr Johnson and European Commission president Ursula Von Der Leyen issued a joint statement following a lengthy phone call, which stated: “We agreed that the conditions for finalising an agreement are not there, due to the remaining significant differences on three critical issues: level playing field, governance and fisheries.
“We asked our chief negotiators and their teams to prepare an overview of the remaining differences to be discussed in a physical meeting in Brussels in the coming days.”
The face-to-face discussion between the two leaders is almost certain to represent the last chance to bridge the remaining gaps – which have plagued talks since February.
A reportedly “downbeat” Mr Barnier is said to have told MEPs on Monday that talks were now in their “endgame” and would not continue beyond Wednesday.
The deadline comes ahead of an EU summit in Brussels on Thursday, widely seen as the last formal opportunity for the EU leaders to sign off an agreement, with France’s threat of a veto still ringing in negotiators’ ears and pressure mounting from senior EU officials who insist that any deal must be properly scrutinised.
If the UK crashes out without a deal, parliament’s fiscal watchdog – the Office for Budget Responsibility – has warned that the impact will wipe 2 per cent off the country’s GDP growth in 2021 and hammer sectors of the economy which have been relatively spared by the coronavirus pandemic.
However, with the UK’s fate resting largely in Mr Johnson’s hands, the threat of disruption and protracted economic hardship may prove a lesser motivator than pressure from hardline Tory MPs for him not to compromise – as evidenced on Monday by former party leader Iain Duncan Smith’s insistence that what matters most is “continued control of our laws, territorial waters and our trade”.
