MNI EXCLUSIVE:Risk of Accidental No-Deal Brexit As Clock Ticks

The UK parliamentary timetable for preparing for the end-of-year Brexit deadline is becoming very tight, raising the risk of an accidental collapse in trade talks with the European Union as early as next week unless London and Brussels make a breakthrough in the coming days, legislative experts told MNI.

UK contingency plans in case the transitional period for exiting the EU concludes on Dec. 31 without a trade deal require approval of the UK Internal Market Bill (UKIM) and a Taxation Bill. Both could contain provisions contravening the country's withdrawal agreement with Brussels, leaving the UK government trying to balance whether to hold back the legislation in order to give negotiations a chance to succeed or to rush it through parliament to put it in place this year.

No date has yet been set for UKIM's return to the House of Commons, although this is expected to be announced in parliamentary business Thursday and there are reports it could be scheduled for Monday.

DEAL NEEDED SOON

Neither has the government set a date for introducing what is reported to be a Taxation Bill, formerly known as the Finance Bill, which would grant powers to determine which goods transported to Northern Ireland are 'at risk' of being exported to the EU.

"If there is a (trade) deal this week, chances are the UK government won't reinsert the clauses in the UKIM bill or introduce the [Taxation] Bill – it will have a ladder to climb down," Jess Sargeant at the Institute for Government told MNI.

"But if we get into next week without a deal, that's when we get into trouble. The threat to introduce the [Taxation] Bill, reinsert the UKIM clauses may be a negotiating tactic, but if there's no deal (the government) will be under pressure to do so not least from its own back benches. If that happens it's hard to see a path to a deal from there. I think here is the risk of accidental no deal," she said.

The government's reported decision to convert what it had initially conceived as a Finance Bill, which would require four days of debate and approval by the upper chamber, into a Taxation Bill grants some additional flexibility. In its new form, the Bill could go straight from the Commons onto the statute books if the Lords has not passed it unamended within a month.

CLAUSES EXERT PRESSURE

While the clauses relating to Northern Ireland are reportedly seen in London as a means of exerting pressure on Brussels, those in the Internal Market Bill have already been removed once by the House of Lords and could easily be removed again. They are not likely to derail a deal should one be agreed with the EU swiftly. But the longer talks go on, the trickier things get, as tensions between preparing for no deal and avoiding one mount, with the Dec. 31 end date for the transitional arrangements looming large.

"Politically if there is a deal I think the UK government can say we got the EU to back down on these issues so we don't need these powers. I think the backbenchers would accept that, so the pressure would subside," IfG's Sargeant said.

Beyond pressuring Brussels, the UK government has no real need to rush through UKIM, Andrew Dunlop, a Conservative member of the Lords and previously Under Secretary of State for Scotland and Northern Ireland, told MNI. Powers already exist to ensure no damaging economic divergence between devolved administrations, he said, and in the event of a trade deal with the EU there would be no requirement to secure arrangements for the end of the year.

"The Government has failed during the Lords stages to provide any convincing justification for urgency as regards the other parts of the bill," he said.

Whether UK Prime Minister Boris Johnson wants to do a deal at all "hinges on whether he thinks it's massive trouble with his party or not," one well-placed observer said.