Florence and May's Sheen
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Theresa May has had a good run the last few days. Will it extend to the weekend?
I think the PM is having a good spell (cue newsflash saying she’s just resigned). Let’s just look at some real actual things TM’s done over the last few days:
- The trip to Canada was positive, with Justin Trudeau suggesting that the UK would flip into a bilateral deal based on CETA after Brexit. May did a solid for Northern Ireland and Canada by calling President Trump on behalf of Canadian plane maker Bombardier, which employs a ton of people in Belfast but is threatened by a nasty trade dispute with Boeing;
- The PM’s tireless (and still under-recognised) efforts on Modern Slavery were rightly recognised in the Evening Standard as George Osborne appeared to show contrition for his remarks about wanting May chopped up in his freezer;
- In co-ordination with close European allies, she is sticking it to the online giants for their failure to take on the scourge of online extremism; and
- She appears to be taking control of Brexit by moving DExEU Permanent Secretary, Olly Robbins, to No 10.
Of course, the biggest test is Friday, where we will know if she has managed to outline an approach in Florence which simultaneously satisfies cabinet (which meets in advance on Thursday), her party and provides enough red meat to move negotiations with the EU27 forward. It’s a tough ask.
*** I have just updated the Brex-o-meter and I will probably have to do so again at the end of the week after Theresa May’s Florence speech.
Check out the latest version here: https://cicero-group.com/introducing-the-cicero-brex-o-meter-what-are-the-chances-for-each-brexit-deal/ ***
A pivotal moment is coming
It does look like we are facing another defining moment in the Brexit Saga. Theresa May is fond of using set piece speeches to make a big statement. It allows her a level of control over delivery which suits her style. And for all of Theresa May’s shortcomings, it can’t be said that her big speeches have not made an impact. The Nasty Party, Police Federation and Lancaster House speeches have been amongst the most significant British political speeches in (relatively) recent times. In retrospect, Lancaster House has stood up pretty well – setting out a destination that even now the fractious, divided and weakened Conservative party still buys into. Indeed, the Lancaster House approach may in time, be credited as the one thing that prevented the Conservative party from collapsing into civil war.
But it’s time for May to go further, as there are one or two matters that need to be cleared up PDQ. The questions the Prime Minister might tackle on Friday:
- How much dosh is the UK willing to pay on the way out? Nothing? A bit? A lot? An absolute pile? FT reports said the Germans have been told eur 20bn – which shows enough leg to move the discussion forward, but without making a big commitment on future liabilities. That can will be kicked down the road.
- Does May signal an intention to formally withdraw from the EEA under Article 127? The Government has said it will not be part of the Single Market after Brexit. However, Article 127, the process under which a country leaves the EEA has not been triggered - the Government says the Article 50 process will do the job. That view is contested by some Remainers who think that it must be done separately with the agreement of Parliament (hoping that Parliament will vote it down thereby keeping us in the EEA). Will May make it crystal clear that the UK government intends to press the button on Article 127, challenging opponents to sue the Government in the High Court in a re-run of the Article 50 case? That might calm the Brexiteers down who smell a conspiracy to keep us half-in half-out.
- What kind of transition will the UK seek? Will it last 8 minutes? Two years? Three years? Will it be based on mirroring EU responsibilities and obligations or something else much more limited? I think we or on for at least two years with a model that looks quite a lot like what we have now – UK complies with EU rules and standards, pays in and has same levels of market access. The Brexiteers appear to have given a bit of ground on transition in order to get to the final destination.
- What model is the UK seeking in its future relationship? Somewhat based on the EEA, with the UK effectively implementing EU rules on a sector-by-sector basis? Or more like a modern trade deal such as CETA, with a bunch of side deals on things like security and law enforcement? This appears to be the new battle line. George Osborne’s former adviser Rupert Harrison says there probably isn’t much of a difference in practical terms. I agree to some extent. But the question of ongoing payments to the EU is critical to the Brexiteers - after transition, payments would be intolerable for them. I think the exit, when it comes, will, by definition, be a pretty hard one because May will not compromise on her red lines and so the EU cannot give us what we want. For me the question really is whether the apparatus of the British state will be ready to handle this fundamental change.
If May doesn’t meaningfully address at least some of these points (especially the money) and just recapitulates Lancaster House, it will make it clear the Government won’t move the conversation forward in time for the October Council Summit. That will make business and markets freak out and the papers will go barmy. Yet the more detail she gives, the bigger the risk of alienating a wing of her party and perhaps pushes Bo Jo towards resignation just ahead of Tory Conference. It’s a Catch 22 and the way she handles it will be a serious test of her mettle and authority.
The Brexiteers are turning up the volume
Everything emanating from the Government over the last few weeks suggests that the Gradualist approach to Brexit is winning out – this is a compromise that appears to have been struck amongst the players in Cabinet. No one is thrilled with it – and Bo Jo and maybe Gove oppose it - but that’s precisely the point. It’s a compromise. This seeks a longish ‘status quo’ transition, allows for some form of budget contribution to the EU (certainly in the interim, if not beyond) and presumably a future relationship in which the UK largely mirrors EU standards and regulations without formally being in the Single Market or EUCU. We would however, have control over our immigration policy and there would be no direct jurisdiction of the ECJ. This is the Hammond model, and purist Brexiteers - both in Parliament and in the grass roots – view it with deep suspicion if not antipathy.
Sensing the tide has been running against them, radical Brexiteers like Dominic Cummings, Nigel Lawson and Mervyn King have begun to distance themselves from what they now think will become a train wreck (one for which they will never accept any responsibility, by the way). They think negotiations are likely to end in failure variously because: the civil service isn’t up to it; the EU will never agree to what the UK wants; and even if they did, the UK would be subservient to the EU which would defeat the point of Brexit. Or to put it more bluntly they are saying May, Hammond, Davis, Heywood and Robbins are screwing it all up and we need to GTFO of the EU quick and hard. It’s little surprise Mervyn King says the UK government should be planning for ‘no deal’.
Bo-rexit: £350 million a week redux
This is a good point to segue into Boris’ 4,200 word opus setting out what Snoop Mogg described as a ‘romantic’ vision of Brexit (romantic is one word for it). I thought it was a stark reminder of the colossal gulf between the outrageous claims and naïve idealism of arch-Brexiteers and the increasingly dismal, declinist defeatism of the Remoaner brigade.
Predictably, critics of Brexit have again fallen into the trap of arguing about the veracity of the £350 million-a-week-for-the-NHS-claim instead of engaging with the thrust of what Boris is saying. He’s making a blindingly simple point: he wants UK taxes spent on UK public services, not the Brussels circus carting back and forth to Strasbourg, or MEPs and Brussels officials who are paid bucket loads more than our own MPs and Civil Servants, or sending the EU money so it can be sent back to the UK. That is a remarkably simple message and it works. The public don’t care if it’s £200 million or £350 million, the principle is the same. So I was a bit surprised to see both Dave Norgrove and Robert Chote writing letters moaning about the £350 million claim. It’s over. Move on.
Whither Boris?
The Johnson Telegraph piece was drippingly disloyal and Ken Clarke is surely right in saying that he would have been sacked in other circumstances. But on a personal level I can understand Boris wanting to express a view on something he helped bring about, but in which he has been subsequently marginalised. This move positions him for the future if the Gradualist approach goes wrong and takes down its architects with it. But it comes with the attendant risk that he is seen by the party as a destabilising force at a time when stability is needed.
Will he resign? Will he stay? Will he back Florence, or disown it? If he flounces out, will it backfire? We’ll find out soon enough. But while the Boris situation makes good political drama, it is symptomatic of something bigger: the battle for the heart and soul of Brexit. Henry Newman of Open Europe puts it very succinctly: ‘[Boris’ piece] was above all a rejection (at least implicitly) of the way in which the Government has treated Brexit as a bomb that needs defusing, rather than as a mandate for change, and an opportunity to remake the nation for the better’. This is an argument that is bigger than individuals. It’s about two world views which have not yet been, and probably will not be, reconciled.
Theresa May has to try to chart a course through this. She recognised very quickly and acutely that Brexit was a mandate for change but has struggled to deliver it because she doesn’t have a majority and she doesn’t have much money. This makes her vulnerable. But who else can lead the Conservative party right now? And which Tory MP wants to increase the chance of a General Election? This is her strength.
Things can move quickly and by the middle of next week two extreme storylines are equally possible: May is in deep trouble and faces an imminent leadership challenge. Or she has seen off the threat and has stamped her authority. I wouldn’t like to make a bold call, but if I had to put a fiver on it, I think it’s the latter.
Blast from the Past
A reminder that it’s not just George Osborne who can be mean…this is from November 2016.
That will do for now. See you on the other side.