U.K. Prime Minister Facing 'Political Hit' Over Brexit Stumbling Blocks

Brexit negotiations between the United Kingdom and European Union "are at a very difficult point" and "there are still some issues to overcome", a spokesman for U.K. Prime Minister Boris Johnson has said.

Trade talks, which were on the verge of a breakthrough with the clock ticking down to the New Year deadline, stalled once again on Thursday when British officials said the EU had suddenly turned up with a new set of demands. With negotiators working around the clock in London, even ordering late-night pizza deliveries as discussions ran into the night, optimism had been that an agreement could be struck between both sides this weekend.

But a senior U.K. government source claimed Brussels was calling for fresh concessions "at the 11th hour". "A breakthrough is still possible in the next few days but that prospect is receding," the source said. It is not clear what demands were being made and EU officials denied it, telling the BBC there were "no surprises" from their side during negotiations.

Current trade rules between the U.K. and EU cease on December 31 when the Brexit transition period ends. There is little time to get a deal agreed by negotiators and approved by the EU's leaders, Westminster and the European Parliament. If no deal is agreed and ratified in time, the U.K. and EU will do business on World Trade Organization rules, meaning the introduction of tariffs. Fishing and the so-called "level playing field" aimed at preventing unfair competition on state subsidies and standards remain the main issues to be resolved in the talks.

Jill Rutter, program director at the Institute for Government and senior research fellow at UK in a Changing Europe, tells Newsweek: "Clearly, we do seem to be entering the end stage over the difficult details of these talks.

"Back in October, Boris came back fighting with having extracted some concessions from the EU and now it looks as though both sides are beginning to gravitate towards closing time. But the ratification process is already becoming incredibly rushed. Ultimately, we won't know what is going on in these talks until the details go back to MPs, it may well be that this is all for show - stalemate, ordering pizzas. It may well be that they are ironing it all out but if, as they've said before 'there is nothing to discuss' then are negotiators just kicking back?

"The EU doesn't trust the British government so they will be concerned with any deal made - have we really got a belt and braces agreement? Whatever happens, Britain will say 'this is a great deal' but if you look at the British press, Boris Johnson is being told 'do a deal but don't concede anything'. Well, the only way is to concede to get a deal. Is he prepared to take the political hit?"

EU Brexit chief negotiator Michel Barnier
EU chief negotiator Michel Barnier in central London on December 4 as talks continue on a trade deal between the EU and the U.K. Tolga Akmen/Getty

Both sides are urgently seeking compromises ahead of an EU summit next week. Before then, the U.K. government will ask MPs to reinstate controversial legislation giving ministers the power to break international law by ignoring provisions in the Withdrawal Agreement relating to Northern Ireland.

This has the potential to throw talks into crisis if an agreement has not been reached, as the EU has said it won't agree to the breaking of the law. The union has already taken the first steps towards legal action over the legislation. The U.K. government will also introduce the Taxation (Post-Transition Period) Bill, which reportedly includes measures to override parts of the divorce deal struck by the prime minister and the EU in 2019.

U.K. Chancellor Rishi Sunak made no mention of Brexit in his Spending Review at the end of November, but the Office for Budget Responsibility (OBR), in its economic and fiscal outlook produced alongside the review, included a no-deal scenario in its forecast for the first time.

The OBR warned that a no-deal Brexit could wipe another two percent off the economy next year and lead to a long-term decline in Gross Domestic Product (GDP), a measure of the size of the economy. It has predicted that the economy will suffer a four percent drop in output over the long-term from Brexit, even if the U.K. and EU sign a free trade deal.