The Northern Ireland Protocol (NIP) issue still dominated this week’s Brexit news. Most sources reported a certain de-escalation of tensions and some progress in talks between Brexit Minister Frost and Commissioner Maroš Šefčovič.

There are two interpretations of what is happening here. The first one sees the more conciliatory tone the UK government is striking as a temporary tactical change, because Johnson wants to avoid triggering Art. 16 of the NIP before Christmas. The second one is that Johnson and his government are getting cold feet. Indeed, there are some signs that people inside the government are genuinely worried about the possibility of an uncontrolled escalation of the situation in Northern Ireland and is therefore seeking to actually solve the NIP issue. The EU’s and the US’s warnings addressed to the UK, which I wrote about last week, reiterate in a letter to Johnson signed by a Republican and a Democratic senators this week, may have caused a change of heart here.

The Christmas truce thesis

Many observers and EU officials seem to expect – or fear – that the first interpretation is correct. The ‘Christmas truce’  thesis states that a beleaguered and weakened Johnson – due mainly to his handling of the so-called ‘sleaze scandal’ – is keen on not putting any additional stress on his popularity. Triggering art. 16 would most likely not only lead to a major deterioration of relationships with the EU, but also possible retaliatory measures, which in turn might affect British consumers during the festive period. On this account, the triggering of Art. 16 is still likely, but will probably happen in late December or January.

Frost’s reaction to the reports about a more conciliatory tone from the UK government may provide some hints, whether the ‘Christmas truce’ or the ‘cold feet’ thesis are more accurate. In a bizarre Tweet and in statements quoted in pro-Brexit papers, Lord Frost reacted to reports about a ‘thaw period’ by making it clear that his position had not change and triggering Art. 16 was still a possibility. At the face of it, this statement may suggest that the government’s plan to wreck the NIP have not changed.

The cold feet thesis

Yet could another interpretation be that a genuine willingness to solve the NIP issues is emerging? Irish Foreign Minister Simon Coveney stated today that he believed both sides were now serious about finding a solution. So, perhaps the ‘cold feet’ thesis has some traction. On this account, Frost’s statements about Art. 16 still being on the table may simply reflect his belief that showing too much goodwill will undermine his hard-ball negotiation tactics, which even the FT seems to think is working to some extent. In Frost’s worldview any international negotiation is a zero-sum game. What the EU or Ireland win, we lose. So, perhaps these statements could be read as support for the ‘cold feet’ thesis and that the government is genuinely preparing to reach a solution over the NIP.

The view that hardball tactics are working is questionable, of course. While the EU’s new proposals for the implementation of the NIP were clearly a reaction to Frost’s approach, it is far from certain that a similar set of proposals to improve the implementation of the NIP could not have been reached in a more cooperative atmosphere, without all the damage that Frost’s arrogance and extremism causes in other respects.

A window of opportunity?

If the UK government is genuinely interested in a solution and not just playing time before wrecking the NIP for good, the important question is whether Frost and Johnson understand where negotiation strategies stop and where the EU’s real redlines are. The EU may be ready to show some pragmatism on border checks and controls – at least as long as the UK’s regulatory regime remains fairly aligned with EU rules. But it is much less certain whether the EU will be willing to show any such flexibility regarding the European Court of Justice’s (ECJ) role as ultimate arbiter of EU law.

EU law experts – like Catherine Barnard – see one possible solution in the extension of the dispute resolution mechanisms of the Trade and Cooperation Agreement (TCA) to the NIP. That may be the case, but of course would strictly speaking not remove the ECJ from overseeing those parts of the protocol that relate to EU law. Indeed, the TCA dispute resolution mechanisms means that ECJ oversight is just one step removed. EU law remains the ultimate backstop. More generally, ECJ supremacy over the interpretation of EU law seems to be the one red line that the EU insists on in all its contractual arrangements with third countries. It seems highly unlikely that the UK will be able to change this fact. Still, such a ‘fake solution’ to the ECJ oversight issue could provide Frost and Johnson with a way out if they were indeed minded to settle the NIP issue.

Between the poles of finding a permanent solution for the NIP and blowing it up altogether, some observers have expressed the view that a permanent state of limbo, where the NIP remains only partially enforced, is possible – perhaps even desirable. But such a state of permanent tension and negotiations in Northern Ireland is hardly a positive post-Brexit outcome. If the border regime issues in NI remain unresolved, peace is simply on much shakier grounds than with a permanent solution accepted and supported not only by the UK government and the EU, but also by the Unionist and Republican sides in NI.

Many observers, including myself, have pointed out that keeping tensions with EU neighbours flying high is important for the Johnson government to maintain its popularity. This may suggest that settling the dispute over the NIP may not be in the government’s interest. English nationalism seems to be the one thing that unites the heterogenous coalition of rich rentiers and former labour voters in ‘Red Wall’ constituencies that formed the core basis of the Tories’ 2019 General Election victory. For some time the NIP was the perfect tool to keep those constituencies happy: provoking the EU over the border checks provided easy anti-EU headlines that the government feeds on, while any fallout from an escalation would only have hit Northern Ireland, which few Brexiters – and hence Tory supporters – in England actually care about.

Yet, with the EU’s threat to suspend or even cancel the TCA if the NIP could not be made to work, the dispute in the ‘unloved province’ may impact English voters more directly and in ways they actually care about; Namely when it comes to their ability to consume. Johnson may hence have strong reasons related to his political future to settle the NIP issues and move onto different battled fields with the EU, where the consequences are less severe if the conflict gets out of control.

Whether or not the Christmas Truce can morph into permanent peace over the NIP will also depend on the influence of the hard right inside the Tory party and in the press. Frost is under pressure from the Brexit ultras to go for confrontation and make maximalist claims. Yet, as Chris Grey wrote this week, the ultras are currently ‘weakened because of having driven the fiasco stemming from their attempt to protect Owen Paterson.’ The coinciding of the crucial NIP talks with the weakening of the Brexit ultras may create further leeway for compromise.

There may hence be a real window of opportunity opening up, whereby – by coincidence – Johnson’s pursuit of his own political self-interest without regard for anyone else – possibly throwing Frost under the bus in the process – may align with what is needed to solve an actual problem that the country is facing – and the temporary weakening of the ultras in the Tory party may provide the necessary space for this.

The ‘migrant crisis’ – a new battlefield?

Another reason why the political stars may be aligned to allow a solution in the NIP row is that Johnson will be worried about developments in what the media have started to call the ‘migrant crisis.’ The number of asylum seekers crossing the English Channel in small boats from France have increased to record hights in recent weeks (although that depends on which figures one relies on). Conservative sources see the handling of this crisis as a potentially very serious threat to the electoral support for the Tory party. Indeed, the Telegraph cites polls that show it is on migration – ahead of the handling of the ‘sleaze scandal’ – that voters rate the PM’s performance worst, with 54% disapproving and only 21% approving of his actions. Similarly, pressures within the party – and especially the 1922 backbench committee – are increasing for Johnson and Patel to deliver on promises to cut immigration.

In this context, it may well be that the PM could be tempted to make cross-Channel migration the next battlefield on which more controlled and limited tensions with the EU can be exploited for electoral gain. Home Secretary Patel has already started a bellicose attack on the EU’s immigration policies blaming the EU’s policy for the problems rather than the UK’s exiting the Dublin agreement after Brexit.

Levelling up and down: Another zero-sum game?

The other big topic this week was the government’s ‘levelling up’ agenda. The scrapping of the eastern leg of the HS2 highspeed railway link between Manchester and Leeds has met with a great deal of criticism from politicians and economic actors in the North of England. It is indeed an important decision that provides some clues about the government’s commitment to this electorally important policy.

Last month, the Byline Times ran a series of articles about levelling up – or rather down – of the Red Wall constituencies in the North and Midlands of England. They show in impressive fashion how a decade of Tory policies have made the situation there so bad that bringing about some improvements would seem like a very low bar. Living standards, investments, income, access to health and food all have declined dramatically due to Tory austerity after the Global Financial Crisis of 2008. Yet, even though regaining some of the pre-crisis levels of public services would not seem out of reach, the Johnson government falls short of delivering anything concrete.

As mentioned last week, the grants distribute by the levelling up fund seem ludicrous in comparison to the lost EU funds. Similarly, the money promised to Northern councils as part of the government’s levelling up strategy seem like a Band-Aid on the gaping wound left by a decade of austerity bloodletting, which affected local councils in the North more than in other regions.

In this context, the axing of the eastern leg of HS2 should dispel any illusions over how committed Johnson really is to the goal of making the country more equal.

Equally interesting – and concerning – were Johnson’s reaction to criticism of that decision. The Independent reported that the Transport for the North authority was immediately punished for strongly criticising the government’s decision, by removing some of its funding and powers. In a trade mark shift of argument, the PM now rejected new train lines for their impact on ‘unspoiled country side’ and because they take decades before becoming operational. This statement comes from the same person who less than two years ago used HS2 as prove that his government had ‘the guts to take the decisions’ to deliver prosperity across the country and who ignored any criticism by campaigners over the serious environmental damage the project has done to wildlife during the first phase between London and Birmingham.

A related piece of news this week was London Mayor Sadiq Khan’s letter in the FT imploring the government to end its ‘anti-London’ stance in the row over post-Covid funding for Transport for London (TfL). The government’s refusal to provide sufficient funding for TfL illustrates another flaw in Johnson’s approach to ‘levelling up.’ Namely, that in this government’s world view everything is a battle between two forces and therefore everything is a simple zero-sum game. From this perspective, ‘levelling down’ London may seem like a logical – indeed necessary – corollary to ‘levelling up’ other areas of the country. More broadly, as the FT also reported this week, the government’s approach to levelling up betrays a lack of understanding of the complex economic relationships between different economies both at the sub-national and the international level.

Brexit dividends?

In one of the increasingly rare instances of an alleged ‘Brexit victory,’ pro-Brexit newspapers reported about Royal Dutch Shell’s decision to move its fiscal headquarters from the Netherland to London and drop ‘Royal Dutch’ from its name. What the pro-Brexit papers do not tell you, of course, is that nothing causing this move has got anything to do with Brexit. The fact that Shell finds the UK a more attractive fiscal location is not the result of any post-Brexit regulatory or legal changes. Rather, the decision has been taken based on differences in rules about the taxation of dividends that existed in the exact same way when the UK was a member of the EU. Rather than illustrating a benefit of Brexit due to the UK exploiting its newfound freedom, the case illustrates that such divergences and regulatory competition were possible even within the EU. Indeed, Shell’s announcement immediately led the Dutch government to encourage the Dutch Parliament to drop the 15% withholding tax on dividends which prevent share buyback in the Netherlands and which is reported to be the main cause of Shell’s decision.

While the pro-Brexit press has become desperate enough to latch onto this kind of non-Brexit related events to deliver their readers a bit of good news, if the ‘cold feet thesis’ is right, perhaps there is some hope that the rest of us will have some genuinely good news for Christmas.