1. NORWAY? NO WAY
The inherent problem with last year’s Brexit referendum was that its binary In/Out choice meant Leave voters could only tell us what they didn’t want (to be in the EU) - not what they did want. And just as the ‘Vote Leave’ campaign refused to specify a vision for post-Brexit Britain, Theresa May today followed a similar approach. The PM spent quite a bit of time saying what wouldn’t work, but not what would.
Still, what she ruled out was significant. Several of the Cabinet’s pragmatists, and much of Whitehall it seems, had hoped that adopting a Norway-style trade deal (in the European Economic Area) would be the simplest option. But May said that EEA membership would mean us adopting EU rules over which we had “no democratic control” and would “lead to friction”. It would certainly have led to friction with her Brexiteer ministers, and they were delighted she dumped on what was seen as a Hammond plot. Aptly enough for some of them, today’s Santa Maria Novella Catholic church venue contained a fresco of the Crucifixion of St Philip.
May also ruled out a Canada-EU style free trade deal (favoured by the hardline Eurosceptics), noting it “would represent such a restriction on our mutual market access that it would benefit neither of our economies”. But on this most crucial of issues, what a trade deal would look like, she had no answer other than the vague vision of abstract nouns: “an ambitious economic partnership which respects the freedoms and principles of the EU, and the wishes of the British people”. Not so much Brexit means Brexit, as Brexit means blancmange: a bland, tasteless dish that harks back to the 1970s. It’s no wonder Michel Barnier, the EU negotiator, said he now awaited detailed “negotiating positions” not generalities.
One glimmer of hope for the Remainers is that May only paid lip service today to the ‘no deal is better than a bad deal’ mantra (and only then when pushed by journalists). In fact she said “no one sensible” is proposing “to impose tariffs where we have none now”, what seemed a dig at the ‘WTO-rules-are-fine’ lines of Liam Fox, and sometimes (depending on the day of the week) Boris Johnson.
May, like David Davis, wants to eat a la carte rather than accept the limited Brussels menu du jour. The real problem is she didn’t today express any preference for her main course or whether she could cook it herself. After her Lancaster House ‘hard Brexit’ speech this year, the pound bounced because she at least seemed to offer a clear vision. The pound tanked today, probably because the uncertainty is back.
2. A BRIDGE TOO FAR?
Of course, bespoke deals take time and at least the PM tried to buy some for herself today with the offer of a “bridge” to Brexit via a two-year transition deal. Brussels and UK business alike have long seen this as inevitable, and don’t see this as a huge ‘concession’ other than the belated acceptance of common sense.
Acutely aware of her Brexiteer MPs fearing a never-ending transition, she said it would have to be “time limited”. For Leave voters anxious to get the hell out of Europe, the idea of keeping the status quo on money and migration (see below) until 2021 may sound like May’s infamous election phrase: “Nothing has changed! Nothing has changed!” Nigel Farage was swift with his “pathetic” betrayal narrative, but most Tory MPs stayed firmly loyal. Euroceptics are pleased they avoided a longer three, four or five-year transition.
David Davis himself told a private City meeting recently that he favoured a “standstill” transition, followed by a clean break that could give the UK more competitive financial regulations than the EU. May talked about not seeking “an unfair competitive advantage” but that’s exactly the point for many in her party.
May has caved to Hammond by ditching her idea of different ‘implementation’ phases for different sectors and instead agreeing a simple transition for all firms. If she was honest, she’d admit that “implementation” is a weasel word too, as nothing will be implemented until after the transition ends.
The delay to 2021 helps those who also want to prepare a ‘no deal’ outcome. Today Florence was chosen as the speech venue because the Renaissance setting would be perfect for the ‘rebirth’ of Britain outside the EU. As any woman will tell you, in childbirth, the “transitional” phase is the most painful point just before the final push. That seems to be how most Brexiteers view the necessary evil of a ‘status quo Brexit’ for a couple more years.
3. ALIMONY MONEY, MUST BE FUNNY
The prospect of a two-year transition phase for Brexit may fuel growing hopes among some Remainers that the UK could see a separation, not a divorce, from the EU.
And on the vexed issue of alimony, May today hinted that we would keep up our maintenance payments for the kids, the joint mortgage and other long-term liabilities once Britain has quit the EU family home. Money talks in Brussels like everywhere else and May has at least reassured fellow leaders the UK will pay “an ongoing contribution to cover our fair share of the costs involved” in the transition.
More importantly, she hinted at longer term payments even after 2021, saying the “UK will honour commitments we have made”. May stressed she’d said this earlier this year too, but will hope Michel Barnier takes it as a concession to unlock stalled talks on trade. Given the liabilities will stack up to more than the 20bn euros offered today, he may bite. Figures ranging from 60bn to 100bn euros have been cited for the overall commitments and May referred pointedly to “working together in ways that promote the long-term economic development of our continent”.
“This includes continuing to take part in those specific policies and programmes which are greatly to the UK and the EU’s joint advantage, such as those that promote science, education and culture – and those that promote our mutual security.” The last bit was a significant shift from January, when may issued a dark threat that she could withdraw security and intelligence cooperation if she didn’t get the deal she wanted. Today she said: “The United Kingdom is unconditionally committed to maintaining Europe’s security.” Unconditionally is not a word May used much today so that mattered.
4. MOVING ON FREEDOM
Labour had a point when it crowed today that May had signed up to its own Brexit plan: staying in the single market and customs union for a transition period, while still going ahead with a formal Brexit on March 31 2019.
Yet on immigration, May seemed to be even more liberal than Labour, confirming explicitly for the first time that freedom of movement of EU migrants would continue in the transition period. She added the sop to her party that those who wanted to work her would have to be ‘registered’, but that is unlikely to upset business which desperately needs labour to pick our fruit, staff our hotels and fill our coffee cups.
What was signally absent today was any hint of the visa scheme leaked earlier this month with curbs on skilled and unskilled migrants workers. As her Cabinet ensures she finely calibrates all her moves to keep them united, May has limited freedom of movement politically but has clearly squared off her colleagues on free movement.
It remains to be seen how the public react. Lots of polls suggest that even Leave voters don’t mind skilled migration as long as its scale is controlled.
5. CITIZENSHIP HIP HOORAY
On EU nationals’ rights to live in the UK, May was perhaps at her most clear in her wish to help Barnier. She said “one of my first goals in this negotiation to ensure that you can carry on living your lives as before. I am clear that the guarantee I am giving on your rights is real”.
Many Brexiteers are passionate about this issue and have long felt May made a mistake in not making the rights of EU nationals clearer earlier. She could have said all this soon after becoming PM and may have won not just goodwill in Brussels but also some invaluable momentum.
May’s wording on the legality of citizens’ rights was telling too, offering to “incorporate our agreement fully into UK law and make sure the UK courts can refer directly to it”. Crucially, she added that she wanted UK courts to be able to “take into account the judgments of the European Court of Justice with a view to ensuring consistent interpretation”.
This may well be a hybrid court with UK and ECJ judges and many think compromise is perfectly possible. As one minister Dominic Raab once said, the UK would want to ‘keep half an eye on’ ECJ judgements.
And on the specific issue of the rights of those in Ireland and Northern Ireland, a key precondition of Brussels for any breakthrough, May was at her most conciliatory, saying there would be no ‘physical’ border. Here, she accepts compromise means the UK can’t ‘take back’ complete control of its borders. And it offers hope that similarly complex issues can be negotiated without rancour. Today, May took some small steps towards bigger deals, but she’ll need to start sprinting soon. The Brexit clock is still ticking, regardless of the transition.