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Numbers game

The beginning of the week saw DUP leader Arlene Foster head to Brussels to weigh in on the Brexit negotiations through an "intensive" three day set of meetings with chief Brexit negotiator, Michel Barnier. The meeting comes after Foster had drawn her 'blood red" line that there must be no Irish Sea border under any backstop deals between the UK and EU. Recognising that Great Britain is Northern Ireland's biggest market, the DUP leader has ruled out Northern Ireland having any unique alignment with the Europe Union and is adamant the Northern Ireland must leave the EU on the same terms as the rest of the UK.

As we move ever closer to the end of negotiations, the DUP are doubling down and begging to be to be heard. The party's abstention in a vote on the agriculture bill this week was taken to be a 'warning shot' to the prime minister and a timely reminder that the parliamentary arithmetic is something she cannot ignore. The DUP are also threatening to hold the government to ransom by threatening to vote down the budget later this month should its red lines be ignored by the PM.

While Theresa May has been banking on the DUP's fear of a Corbyn /McDonnell-led government to see her through, this week was a reminder that she underestimates her Northern Irish allies at her peril. And although technically a defeat on her budget would not need to automatically lead to the collapse of her government and a general election, it would throw into further doubt her ability to hold onto the DUP's support on the final Brexit deal, which could well end up leading to the same result anyway.


Hoping to promote his alternative plan through his party and pile the pressure on the PM, ex-Brexit secretary, David Davis, issued a scathing letter to all Conservative MP calling on them to back a looser, deal that encourages free trade than is allowed under the PM's Chequers plans. In the letter, Davis warned that if the PM continues to pursue Chequers, the government would have "delivered none of the benefits of Brexit, with the country reduced to being a rule-taker from Brussels".

And it looks like Davis may have a point. After an intense meeting with core cabinet ministers, it appears Theresa May is set to further water down her ailing Chequers plan, and float the idea of remaining in a "temporary" customs union in order to facilitate a backstop agreement with no specific end date, if a wider trade deal is not reached. This arrangement further stokes Brexiteers' fears that this could keep Britain tied to EU rules indefinitely and stifle the UK's attempts to strike free-trade deals with the rest of the world, effectively undermining the red lines May set out in her Lancaster House speech in January last year.

It's predicted that a number of cabinet ministers - including Andrea Leadsom, Penny Mordaunt and Esther McVey could resign if May sticks to this approach ahead of next Wednesday's summit. With negotiators aiming to agree a draft treaty on Britain's exit, including finding a resolution to the Northern Ireland border by Sunday, the result of another walkout could be the PM's biggest headache yet and throw November's summit, the markets and Westminster into upheaval.

Oh Canada+++

So what does David Davis want exactly? 'Canada +++' is the answer, which would see the UK, he says, get more advantageous access to the EU's single market. Davis has maintained this preference for the plan since his time in DExEU. Canada+++ would seek to enhance the model Canada currently enjoys with the EU, which removes around 95% of tariffs between Canada and the EU states. Canada's deal currently allows it to gain access to the single market without having to obey EU laws or having to contribute to the EU budget. Davis wants the UK to have an even more bespoke deal with financial services, a key part of the British economy, included.

While it's easy to see the appeal of this 'cherry-picking' option, its critics point out that the gaping hole in the plan is that it still does not resolve the Northern Ireland border question. Furthermore, Brexit secretary Dominic Raab enraged eurosceptic backbenchers by shooting down the model earlier this week, reminding MPs that the Canada-style trade deal with the EU is off the table.

So despite Michel Barnier's declaration that 80% of the UK withdrawal from the EU had been agreed, there is a reason the other 20% is still outstanding, and there is still no clear path to solving the problem. All attention will therefore be focused on Monday when a skeleton version of the "political declaration" is published to serve as the basis for a final stretch of talks ahead of a special summit in November. Failure to make 'decisive progress' on withdrawal issues from this point on risks the summit being cancelled, extended negotiations and little time for Westminster to ratify an agreement if one is eventually reached.

Sarah Jones, Managing director, public affairs