Can Theresa May Survive the Brexit Negotiations?

We finally seem to be approaching some sort of crunch in the negotiations between London and Brussels on Brexit. Monday’s meeting between British prime minister Theresa May and EU Commission president Jean-Claude Juncker had been expected to conclude that enough agreement had been reached on solving the main political obstacles to Brexit to allow negotiations to proceed to the next stage of a post-Brexit trade deal. Alas, the meeting failed. Back at Westminster the Democratic Unionist Party — on whose MPs May’s government relies for its majority — objected that a proposal for “regulatory alignment” between Northern Ireland and the Republic after Brexit would mean drawing an economic border between the North and the UK somewhere in the Irish Sea. That would undermine Unionism and was unacceptable to them. Mrs. May had to return empty-handed — for the moment, anyway.

Some experienced observers, among them my colleague Michael Brendan Dougherty, have suggested that this failure was in fact a Kabuki performance that gave all sides (Brussels, the Dublin government, the UK government, and the DUP) a victory in disguise, since they had all demonstrated they were fighting their various corners strongly. After further storm and stress, they would jointly agree on some clever wording that would allow everyone to proclaim a partial victory by the final deadline of this stage (now extended to Sunday). It’s possible that this will be the outcome. Given the rule that nothing is finally agreed until everything is finally agreed, the parties may feel able to make concessions today that they hope to withdraw tomorrow. Mrs. May’s willingness to accept “continued regulatory alignment” between the UK and the EU, for instance, is said to be premised on the calculation that a solution to the Irish conundrum that avoids a “hard border” will make her concession unnecessary.

But events since Monday have shown that the disputes are real, hard to resolve, and as yet unresolved. The EU, the DUP, and the Irish government have all retreated into their corners and repeated their positions. Mrs. May has accepted the role of honest broker who has the responsibility to forge agreement among all these intransigent factions. That’s a harder task than it might appear since — horrible to relate — not everyone is being entirely candid about what they want. Consider each in turn.

1. The Irish government is in a genuinely hot spot. It wants to remain in the EU but to retain unimpeded access to the UK market (including Northern Ireland), which is the Republic’s single-largest export market. London agrees, arguing that a “soft border” within Ireland is achievable by technical and administrative means. It’s the EU that disagrees, insisting that a hard border is (a) an outrageous threat to peace and (b) absolutely essential between EU and non-EU states. Ireland sides with the EU here: Dublin insists that it is Britain’s responsibility to prevent a hard border by accepting an extension of European regulation to the North. Why has it chosen the side of Brussels? Well, Dublin rather enjoys both sticking it to the Brits and being praised as Europe’s champion in the EU. Earlier in the decade it even accepted a sharp reduction in the Irish standard of living imposed by the Brussels Troika. For most progressive-minded Irish people, being “European” is second only to being anti-Catholic as a mark of being “modern.”
2. As a protectionist bloc, the EU has an acknowledged interest in clearly delineating its economic borders and imposing tariffs to enforce them. It stresses that interest here. But its deeper interest is to extend its regulations as far as possible in order to ensure that its high-regulation, high-tax economies face as little competition as possible from states both inside and outside the EU. On the surface Brussels is using the Irish conundrum as a way of preventing the Brits from reducing post-Brexit regulations and outcompeting France, Germany, et al. But it is also using the issue to create the conditions for imposing further tax harmonization on, among others, the former Celtic Tiger, which is one of the four EU countries that meet the Brussels criteria for defining “tax havens.” And extending its regulatory authority is a far more vital interest to Brussels than whether a little smuggling crosses the Irish border.
3. The DUP has two aims, which are in tension but not in conflict. One is to maintain Ulster’s position as an integral part of the UK by maintaining a political border within Ireland while preventing one within the UK; the second is to protect cross-border trade within Ireland, which its constituents value by having only a “soft” economic border with the Republic. Both aims were in harmony with the initial UK position. But the concession of “regulatory alignment” covertly made by May in talks with Dublin seemingly threatens the integrity of the UK and Unionism unless the extended EU regulation covers the UK as a whole.And in that event it would undermine Britain’s ability to set its own regulations and weaken its competitiveness in world markets. But there’s an important distinction: The DUP hasto oppose a system of regulation that separates Northern Ireland from the UK; it is not so inevitably hostile to the idea of the whole UK’s leaving the European regulatory process. Hence, since Monday, the Westminster government has been firm on the UK’s national integrity, more ambiguous on its regulatory independence.

Now that ministers have made this slight bow in the DUP’s direction, they will put enormous pressure on the Ulstermen to remove their objection to last Monday’s negotiating package. It’s already clear that the DUP is being set up by bien pensant opinion in the Westminster village as the fall guy if it resists: Why should a minority party have the ability to prevent all the other parties from offering Brussels a sensible compromise? Etc., etc. The smart money is on the DUP yielding, and it may. But that should not be too readily assumed. The DUP is typical of Ulster Protestants in being tough and hard-headed. It won’t yield if it isn’t given either persuasive assurances or side benefits. Nor is it, as the Irish PM has suggested, out of step with Northern opinion. Its main rival in the Protestant community, the Official Unionists, has already endorsed its position on this. And its political influence stems not only from the parliamentary seats it brings to the Tory majority but also from the fact that on these issues the DUP represents the pro-Brexit majority of Tory MPs. Neither side of that informal alliance will want to alienate the other without a very strong cause.

4. That leaves Prime Minister May and her negotiating team. They have not emerged well from this week’s comings and goings. And their difficulties arise from the fact that their position is much harder to state clearly than those of the other three factions above. Of course, May wants Brexit; she wants a free-trade deal with the EU after Brexit; and she has outlined the terms and costs she is prepared to meet to achieve both. But these are very broad guidelines indeed and they leave many questions unanswered. And that is because she heads a divided Cabinet (and party) that hasn’t agreed with itself on what kind of Brexit it is prepared to accept. Both bodies are divided, in particular, on the level of independence from European regulation and judicial review that Britain requires. What’s still odder is the nature of that division. Support for a “clear Brexit” declines the higher you go up the hierarchy: Grassroots Tories overwhelmingly favor it; Tory MPs support it by more than three-to-one; but the Cabinet seems to be narrowly in favor of a very soft Brexit — with chancellor Philip Hammond today arguing for payments to Brussels even if there’s no trade agreement down the line. May has therefore maneuvered to avoid holding a Cabinet meeting to decide a clear and detailed program for both negotiations and the eventual Brexit outcome out of fear of not getting what she wants. That’s driven her to rely increasingly on her senior civil servants — notably Sir Jeremy Heywood and Olly Robbins inside Downing Street — at the expense of input from ministers. It’s been reported, for instance, that the secretary of state for exiting the European Union (or DexEU), David Davis, did not learn of her Monday proposals until late on Sunday night. That’s politically risky and constitutionally “iffy.” It also grants too much influence to bureaucrats who, however able, have a natural interest in preserving as much as possible of the existing EU–UK relationship, in which officials already enjoy more power than was traditional in British democracy.

The Brexit crisis is now becoming a personal crisis for Theresa May.

But an even more insidious danger of this uncertainty is that it makes it very difficult for May to take firm decisions on what she will accept or demand from Brussels, to rally support for her aims in Westminster and the country, and to plausibly threaten to walk away from the talks if she doesn’t secure her goals. Even before the negotiations began, Britain was warned by the former Greek finance minister, Ioannis Varoufakis (on the basis of his own talks with the EU over the Greek bailouts), that Brussels would insist on “sequencing” the negotiations in a way that would disadvantage Britain. He proved to be correct. The first demand from Brussels was that Britain should agree on how much it would pay to leave the EU before Brussels would discuss anything that Britain wanted. There was no legal basis for this demand, and it was politically outrageous. If the Brits had refused to meet it, May would have had overwhelming popular support for that — and for later tough stances. But she conceded by degrees, and as a result the negotiations have been a gradual retreat until the latest one last Monday.

So the Brexit crisis is now becoming a personal crisis for Theresa May. She is already on shaky ground: An admittedly unscientific survey of Tory party members by the influential website ConservativeHome.com shows that a two-to-one majority of them would like to see her depart before the next election (with 11 percent saying “now”) and that her support is declining month by month. Even Juncker is now coming to her assistance to avoid a more Euroskeptic successor. She must reestablish the authority she had before the election — presumably by a bold reshuffle that gives her a majority for her own vision of Brexit both in the Cabinet and among Tory MPs. That almost inevitably means a Cabinet somewhat more Leave in tone than the present divided one. It sounds like a tall order, but that is exactly what Margaret Thatcher achieved in her September 1981 reshuffle, which gave her a Cabinet majority for her economic reforms for the first time in her leadership. If Mrs. May shrinks from such a course, or botches it, the Tory party will sooner rather than later decide it has to move on to a successor.

At present it is still nervous of precipitating a Labor government led by the infantile leftist Jeremy Corbyn. Given the Fixed Term Parliaments Act, however, this is an exaggerated anxiety. The Commons has no majority, let alone the required supermajority, needed to elect a Corbyn government. But there are several plausible contenders for a Tory leadership election. Not yet Jacob Rees-Mogg (though I would expect the winner to promote him). Not Philip Hammond, who, never popular to start with, has recently gone too far for Tory tastes in cutting the military. Not an evangelical Remainer, therefore no Amber Rudd nor Dominic Grieve nor five or six lesser figures. A Leaver? Almost certainly, but one with significant non-Brexit support. Both Michael Gove and Boris Johnson fit that bill comfortably enough. But it doesn’t seem the right time for Gove (too soon after his internecine support for Johnson), nor for Johnson himself since the current political mood over Brexit is too grim for his Woosterish style. Who then? It looks as if David Davis, the current DexEU secretary will be the last man standing if May falls — a graduate of both the SAS and the Public Accounts Committee who has support across the Tory spectrum on Brexit.

But will Theresa May fall? Not if she can find her inner Boadicea, reshuffle her Cabinet to get one more representative of post-referendum Tory opinion, and lay out a personal vision of Brexit that is optimistic, inspiring, and bold. If that risks rows with Brussels and her own civil service, that should be seen as a plus. But she has to do that very quickly indeed — in fact, today will be her first test. She has promised the Irish prime minister to deliver a new proposal to restart (I almost wrote “reset”) the negotiations on a more favorable course. Let’s see how she does.

Original article here.