Boris Johnson wants a quiet Christmas. Allies say he is “psychologically scarred” by what happened last year, when Covid forced him to cancel the nation’s festivities at the last minute. And what Johnson does not want for Christmas this year is a trade war with Europe.

When Johnson convened senior cabinet ministers for a Global Britain (Strategy) committee meeting last week to discuss the country’s continuing Brexit drama, they surveyed a fractured political relationship between Britain and the EU, defined by broken trust, threats and a toxic dispute over trade in Northern Ireland.

The mood was sombre. Johnson, weakened by a row over his handling of a parliamentary “sleaze” scandal, his poll ratings falling, has fretted in recent weeks over how to stop the global supply chain crisis disrupting Christmas.

Rishi Sunak, chancellor of the exchequer, warned that provoking the EU into a trade dispute in the row over the so-called Northern Ireland protocol would hardly help. “Empty shelves this Christmas would be a disaster,” says one senior British official. “Nobody wants to be the person who screws up Christmas.”

Rather than force a confrontation with Brussels, Johnson ordered his chief negotiator, Lord David Frost, to return to the table with renewed vigour to try to resolve the post-Brexit dispute over Northern Ireland. UK government insiders said the meeting marked a significant shift in approach.

“There’s enough going on,” sighs one adviser to Johnson. The combination of a cost of living squeeze, a warning of persistent inflation from the Bank of England, increased energy prices and public services still facing Covid-19 pressures all presented an unappetising backdrop for a new confrontation with Europe.

In a sign of the new tone, Ireland’s foreign minister Simon Coveney insisted that — with goodwill — a deal on Northern Ireland could be reached by Christmas. Frost sounded sceptical but said on Wednesday: “I think it can be done — whether it will be done is a different question.”

The issue now is whether this Christmas Brexit truce will provide negotiators with the space to resolve the Northern Ireland dispute and to start normalising UK-EU relations. Many Tory MPs hope so. “If Brexit is the issue at the next election, we will be seen as being incompetent for not having dealt with it,” says one.

EU over-reach?

The past few months have seen escalating tensions between London and the EU over Northern Ireland, a region of the UK granted special status in the 2019 Brexit withdrawal deal. The region’s bloody history and volatile politics have preoccupied politicians in London and Brussels as they attempt to create a stable deal which underpins the progress made since the 1998 Good Friday peace agreement.

The unresolved issue of the functioning of the Northern Ireland protocol, which left it uniquely part of the UK market but also inside the EU single market for goods, is a running sore for Johnson, who won the 2019 UK election promising to “get Brexit done”.

Johnson and Frost signed the protocol in 2019 but have been trying to disown parts of it ever since. Frost last month said in a speech in Lisbon that the original deal was “a moment of EU over-reach when the UK’s negotiating hand was tied”, arguing that an enfeebled UK was forced to accept a lopsided agreement on Northern Ireland as a price for negotiating an overall Brexit deal.

The deal leaves Northern Ireland inside the EU’s customs area and single market for goods — thus ensuring no border checks on the island of Ireland. But the price for that is that Johnson accepted the need for some checks on goods travelling to Northern Ireland from the rest of the UK.

Johnson argues that the EU has been overzealous in its inspection regime on the Irish Sea, inflaming tensions in the pro-UK unionist community, which hates the idea of an internal UK trade border. In July, Frost added to the list of grievances in London about the protocol by insisting that the European Court of Justice — which oversees EU single market disputes — should be taken out of the dispute mechanism, ending jurisdiction of a “foreign” court over a corner of the UK.

Whitehall insiders say Frost has since the beginning of the year been itching to activate Article 16, the part of the protocol that allows either side to temporarily suspend parts of the deal, on the grounds that it is causing economic and social disruption or diversion of trade. His threat still hangs over negotiations over how to reform the deal.

A renegade in Brussels

Frost is viewed in the UK’s traditionally Europhile Foreign Office as “a renegade”, a former diplomat in Brussels who came to dislike the EU project. However, Johnson reveres “Frosty” and his bruising negotiating style. Even Frost’s critics inside the UK government admit that his threat to invoke Article 16 and his demands for a fundamental rewrite of the protocol have already helped to secure concessions from Brussels over the operation of the Irish Sea border.

But in Brussels and in European capitals, the former head of the Scotch Whisky Association is widely blamed for a breakdown in trust between the two sides. “This negotiator always chooses confrontation over co-operation,” says one EU diplomat. Frost’s references to Britain’s near 50-year EU membership as a “long bad dream” were particularly poorly received.

“People say they don’t understand London any more,” says one diplomat, speaking of an “air of exhaustion” when it comes to dealing with the UK. However, Frost and Maros Sefcovic, European Commission vice-president, have now committed to make renewed efforts to break the deadlock on Northern Ireland.

The question in Brussels is how durable will this change in tone prove to be. Few are optimistic. “We do not see signs of a general detente by the UK or that they want to move towards a better relationship with the EU. That could still be quite some time away, maybe even years,” says one senior EU diplomat. Any prospect of a more profound shift in attitudes towards Johnson and his government remains remote. “Trust is so low,” says an EU official. “The whole positive agenda is basically in the freezer.”

That means, for instance, that a memorandum of understanding on financial regulatory co-operation has remained unsigned all year, despite being one of the easiest “wins” flowing from the EU-UK Brexit trade deal — the Trade and Cooperation Agreement.

The UK has failed to gain entrance to the new Horizon Europe research and innovation programme, something officials say might otherwise have been in place by now. The UK would also benefit from a deeper and more stable arrangement with the EU on data transfers, but this remains a distant prospect.

“We clearly have an interest in having a close relationship with the UK, but given that the UK government’s priority is still Brexit, the time doesn’t seem ripe just yet,” says the senior EU diplomat. “Their approach is very ideological. They even accept that their actions make Britain poorer and see this as a necessary price to be paid for a purist Brexit. They are pursuing the illusion of being completely independent. They live in their own Brexit world.”

The answer on the EU’s side, the diplomat says, was “strategic patience”. They add: “Outlooks in the UK may change, more pragmatic leaders may emerge.”

Some EU officials see the UK’s decision to intensify discussions over how to improve the protocol primarily as a sign of London’s desire to avoid a breakdown in relations in the lead-up to Christmas. Many fear the improved dialogue will prove only temporary and that the UK may return to its practice of brandishing Article 16 late this year or early next.

‘We’ve got to stop talking about Brexit’

That may turn out to be the case. One British official says that “Article 16 has not gone away” and that Johnson may still trigger the override mechanism if the new round of Frost/Sefcovic talks fails to engineer a breakthrough. Contingency planning for A16 activation is continuing.

But the widespread belief in European capitals that Johnson is itching for another confrontation with Brussels for domestic political reasons is discounted by some of the prime minister’s allies.

For a start, Johnson is acutely aware he would have some explaining to do to Joe Biden, the US president, whose Irish roots were on display this month when he phoned the Ireland rugby team after its victory over the New Zealand All Blacks.

Johnson’s advisers concede there is some political mileage in limited “skirmishes” with Europe — for example, the recent spat with French president Emmanuel Macron over fishing permits — but that the public would not be so forgiving if a dispute over Northern Ireland escalated into trade disruption and shortages.

“Most people think Brexit is done,” says one ally of the prime minister. “The danger is if there’s a big blow up and there’s a perception it isn’t done. It goes to questions of grip and competence.”

Brexit is already taking an economic toll on Britain. The Office for Budget Responsibility, the official forecasting body, said last month the long-term hit to the British economy of Brexit would be twice that of the Covid pandemic, causing a “4 per cent reduction in long-run potential productivity”. The OBR assumes that total UK imports and exports would “eventually be 15 per cent lower than had we stayed in the EU”.

And while Johnson is being urged by Brexit hardliners in his party to rewrite the protocol, their influence in the Conservative party has been damaged this month by the row over sleaze, which saw Johnson attempt to protect a Brexiter former cabinet minister, Owen Paterson, who broke House of Commons lobbying rules. Johnson was later forced to retreat — Paterson quit as an MP — and many of the new generation of Tory MPs want a break with the party’s Brexit past.

One forty-something minister says: “The idea that anyone in my constituency is talking about Northern Ireland and Article 16 is laughable. We’ve got to stop talking about Brexit and move on.”

Simon Hoare, Conservative chair of the Commons Northern Ireland committee, says Tory MPs would be “far more questioning” now of decisions taken by Johnson on the advice of Brexiters.

He adds: “No business in Northern Ireland has ever raised the European Court of Justice issue with me or with my committee. There is an idea that triggering Article 16 would free you from everything, that the whole border issue will disappear. It doesn’t. It’s not a panacea.” Hoare says most businesses just want stability and a chance to make a profit, not more uncertainty.

A way out of the morass

If there is to be a deal on Northern Ireland, it will come in two stages. The first would see Britain trying to nail down the details of Sefcovic’s “far reaching” offer in October to cut up to 80 per cent of checks on animal and plant-based products and halve the customs paperwork on the Irish Sea border. “It’s not quite what it seems,” said one British official.

Raoul Ruparel, a former Europe adviser to ex-prime minister Theresa May, says: “The difference between the EU’s headline offer of reducing agrifood regulatory checks by 80 per cent, and the reality of what is in the commission technical papers is quite large.”

To reduce the Irish Sea border checks to an acceptable level to the UK, the EU would need to maximise those headline flexibilities to a point that would stretch the legal orthodoxies in EU directorates governing health rules and tax, Ruparel added.

Then, if the friction at the border could be sharply scaled back, there is a question of whether Johnson and the EU can settle their differences on the “governance” of the deal and — in particular — whether judges in Luxembourg should continue to have a role in settling disputes on UK territory in Northern Ireland.

Frost has demanded the ECJ should be removed from having oversight of the Northern Ireland protocol and be replaced with a “treaty-based” international arbitration mechanism of the kind used in the Trade and Cooperation Agreement.

Sefcovic has already ruled out any such move, arguing that since the protocol leaves Northern Ireland following EU laws and regulations as part of the EU single market for goods, it must be subject to oversight by the EU’s top court — just like the rest of the EU.

However, there is a possible compromise mechanism, according to Catherine Barnard, a professor of EU law at Cambridge university. This would be to extend the application of the dispute resolution mechanism used in the EU-UK withdrawal agreement to the Northern Ireland protocol.

“It would be a compromise because it would take direct enforcement proceedings out of the hands of the ECJ and create a consultation and arbitration stage in any dispute mechanism. The ECJ would then only rule on points of EU law,” she says.

In practice — since most of the disputes would be over the application of EU law as regards to the implementation of the Irish Sea border — this would leave the ECJ at the apex of the protocol dispute system, falling far short of Frost’s demands.

“If that was the price of a deal, and the EU was clear it would bring a durable settlement to the Northern Ireland issue, then it should be possible,” says a senior UK official. An EU diplomat with knowledge of the talks also did not rule the idea out.

Both sides, therefore, can see a possible route out of the Brexit morass, but the question is whether they will take it — either before or after Christmas. Will Johnson, politically weakened and facing a daunting array of political and economic challenges, decide it is worth the risk of triggering Article 16 with all the unpredictable consequences that it could unleash?

One unlikely person urging him to pull back from the brink is Dominic Cummings, Johnson’s former chief adviser and architect of the Vote Leave victory in 2016, who wrote this month: “I do not want this government to trigger Article 16. The PM is incapable of handling it. If he does, it’s bound to be a debacle that damages the economy and relations with allies.”

Cummings, who refers to his former boss as a broken supermarket trolley veering wildly, added pointedly: “If you are a Tory MP looking at the chaos around you created by the trolley, you have got to ask yourself a key question. Do you feel lucky?”

Additional reporting by Jude Webber in Dublin and Andy Bounds in Brussels