Theresa May’s weakness at home is slowing down the Brexit talks
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THE parallels are almost oppressive. Successive Tory leaders, from Margaret Thatcher to David Cameron, have experienced painful party rifts over Europe. The most telling was John Major’s battle in the 1990s with anti-EU Tory rebels over the Maastricht treaty, which set up the single currency. Now, as Theresa May fends off coup attempts from her own backbenchers, Tim Bale, a historian of the Conservative Party at Queen Mary University of London, detects a whiff of those days in the air. Indeed, many ardent Brexiteers cut their teeth causing trouble then.
The problems for Theresa May are a lot bigger, however. Brexit is a far riskier proposition than arguing over a treaty. The economy is in worse shape now, with sterling weak and growth forecasts being cut. Today’s far-left Labour leader, Jeremy Corbyn, is a more disturbing alternative than his predecessors were. As Mrs May prepares for an EU summit next week, she might echo Mr Cameron’s one-time hope that the party would stop “banging on about Europe”.
Sadly, the timetable makes that impossible. The summit had been due to agree that sufficient progress had been made on the Article 50 Brexit divorce (which includes such matters as EU citizens’ rights, the border in Ireland and the exit bill) to allow the start of talks about trade. But it is clear this will not happen. Mrs May argued this week that, after her recent speech in Florence, in which she proposed a transitional arrangement and implicitly offered some €20bn ($24bn) towards Britain’s tab in Brussels, the ball was in the EU’s court. The European Commission promptly lobbed it back. And Donald Tusk, the European Council’s president, spoke only of possible agreement in December.
The delays are partly the EU’s fault for over-rigid sequencing. The truth is that neither Ireland nor the exit bill can be settled without some deal on future trade. But more blame attaches to Mrs May. Her fuzziness over what Britain wants the eventual relationship to look like has become grating. More important, her political weakness is making it hard for the EU to engage in serious negotiation.
The fact that her snap election in June backfired is only the starting problem. Her inability to control the cabinet, with Boris Johnson, her foreign secretary, openly contradicting the line of her Florence speech, is more aggravating. Her lack of clout in the party and the desire of many Tory MPs to replace her before the next election in 2022 further undermine her. She could shore up her position by firing Mr Johnson, but at the cost of inflaming Brexiteers’ demands for her to sack the pro-Remain chancellor, Philip Hammond, as well.
The hope after the Florence speech was that, even if trade talks could not start, the EU would open negotiations on transitional arrangements to avoid a cliff-edge Brexit when the Article 50 deadline expires in March 2019. The commission’s negotiator, Michel Barnier, still wants to do this. Yet France and Germany are opposed, showing again that it is national governments, not the Brussels institutions, which are the toughest customers on Brexit. Informal scoping out by the EU 27 of both transitional and trade arrangements is likely to begin after the summit, even so. One risk is that they once again cement in place too rigid a negotiating mandate.
On transition, the reality has always been that nothing will be on offer except a prolongation of the status quo. Mrs May acknowledged this in Florence, when she said that business should not have to adjust twice to a post-Brexit world. This week she conceded that the European Court of Justice would continue to play a role during this period, which she again said would last “around two years”. Although she was more ambiguous about remaining in the single market and customs union, in practice Britain will have to stay in both.
That prospect causes jitters among Brexiteers, who worry that a lengthy transition will amount to continuing membership without voting rights. Mujtaba Rahman of the Eurasia Group, a consultancy, notes that the past six months have seen the slow but steady acceptance by Tory Brexiteers of a softening of Mrs May’s position on transition, on the basis that a year or two of delay is a price worth paying for the ultimate prize. But that logic may cease to work if transition is prolonged and doubts grow about the final destination.
This has led to the revival of an old favourite among hardliners: a no-deal Brexit. Mrs May’s Florence speech dropped her earlier mantra that no deal was better than a bad deal, but her weakening position has forced her to wheel it out again. This week she talked of the need to plan for the worst outcome. Two new government white papers, on customs and future trade policy, discuss the possibility of a contingency scenario with no agreement. On October 11th Mr Hammond said the Treasury was not yet ready to spend money on such plans, but he also warned of the risk of a “bad-tempered” breakdown of talks.
Some Brexiteers who fear the referendum will be betrayed (a fear amplified when Mrs May this week refused to say she would back Brexit in a referendum held today) want a walkout. Even those who recognise the disruption it might cause favour a no-deal threat, in the belief that it strengthens Mrs May in Brussels. Many reckon Mr Cameron failed to win a better deal in his renegotiation of Britain’s membership terms in early 2016 largely because he was not prepared to walk away.
Yet there are two problems with reviving “no deal” talk. The first is the huge potential damage. The risks of airlines ceasing to fly, lorries backing up outside ports and hospitals losing access to radioactive materials may be exaggerated, but they are real even so. A no-deal exit would damage the EU, too, but a lot less. This leads to the second problem, which is that other EU countries do not believe Britain’s threats to walk out. They see British banks and other businesses already talking of leaving the country, and they doubt there is a parliamentary majority in favour of no deal.
They may well be right. But the danger they overlook is that, even if a Brexit with no deal is unlikely to happen deliberately, it could do so by accident. The clock is ticking and negotiating positions are entrenched. The rational outcome of the Brexit negotiations ought to be a mutually beneficial deal that gets as close as possible to keeping frictionless free trade. But negotiations between an implacably legalistic EU and a politically weakened Mrs May might not always be rational.