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May at Bay, Part I

The British prime minister faces numerous challenges in finalizing a Brexit deal with the EU.

Theresa May returns from her three-day visit to China at the weekend to face two interlinked crises. The first is the threat that Brexit might be indefinitely postponed in a “transitional” period with no clear end in which Britain has to accept all the EU’s rules and regulations with no part in making them. The second is that her leadership may shortly implode, resulting in a leadership election for a new Tory leader (and thus prime minister) amid general political uncertainty. What links these two crises is that many Tories on both sides of the Brexit debate blame the increasing problems of Brexit on her. And it’s a crisis because “more” Tories are becoming “most” as the government looks increasingly divided and adrift.

It’s a far cry from less than two months ago, when May enjoyed a media and parliamentary triumph over her Brexit negotiations with Brussels. It was a triumph that was all the more convincing because it thrillingly overcame a last-minute obstacle: the Democratic Unionist Party (on whom her parliamentary majority depends) had refused to vote for the U.K.–EU deal! Quelle horreur! Then, at the last minute, it agreed to the deal! Breakthrough! May flew early on a Friday morning to Brussels, signed the agreement, returned to London, and received an enthusiastic reception. All the perils were overcome and Pauline leapt nimbly to the safety of office.

Do not be deceived by such stage-management, however. The test of an agreement should be: How would you have judged its terms before the negotiations began? And without going into all the details a second time, I was inclined to accept that:

(a) May reached a reasonable, if generous, deal on what to pay as an exit fee (between 39 billion and 59 billion pounds) on leaving the EU, but that

(b) She went beyond a reasonable compromise on the “transitional” period (in which Britain will continue to accept EU laws and regulations after Brexit) by making it two years — or dangerously near to the next general election, and that

(c) She has agreed to a “fudge” (that Dublin and the EU interpret one way and the DUP and London another) on preventing a hard border between Ulster and the Irish Republic by agreeing to accept EU regulations throughout the U.K. on matters covered by the Good Friday Agreement.

Depending on how this last is interpreted, it could mean either May confirming a handful of all-Ireland rules on a few matters specified in the GFA or her broad acceptance of harmonized regulations determined by Brussels and covering the whole U.K. for an undetermined period. And who would interpret this provision (and for how long) also matters: Would it be the British courts, some hybrid EU–U.K. arrangement, or, during the transitional period, Europe’s International Court of Justice? Since there are major uncertainties here, one looked for signs of Brexit’s “direction of travel.”

So how did things go? Not particularly well, would be my judgment, but not disastrously either. When Brexit Secretary David Davis cited the codicil that “nothing is agreed until everything is agreed” in relation to any future U.K. regulatory convergence with Europe, the EU Commission expressed indignation, then conceded he was correct, and finally demanded that the Brits prepare to put their concessions in “legally binding” form anyway. There was no good basis for this demand, and technically it makes little difference, since the legalisms will have no binding force until both sides sign the deal. But Davis agreed to get the fine-print boys onto it anyway.

Next Nick Timothy, a Telegraph columnist and former senior aide to May, to whom he is said to remain close, wrote in his weekly column that the prime minister was deeply reluctant to consider a “no deal” scenario in which Britain would trade with the EU under World Trade Organization rules because it would be disruptive economically. That’s obviously true to a greater or lesser degree, but it undercut the government’s fallback argument that it would gladly take the WTO course if it couldn’t get a decently adequate deal from Brussels. Taken together, these two steps suggested infirmity of purpose on May’s part and a willingness to appease a more determined opponent.

And, thirdly, the government’s negotiating tactics in a broader sense seemed to confirm this impression. In what even opponents describe as a pessimistic exercise in Brexit damage limitation, May and her “Brexit Cabinet” — this policy is being run from Downing Street — made the following errors:

(1) From the first, they agreed to negotiate under duress. When the EU said that it would not talk about a future trade agreement until after London had agreed to pay a hefty exit bill, she should have responded that all issues would be on the table from the start, to be discussed in simultaneous negotiations. According to the former Tory leader, Michael Howard, also a distinguished lawyer, the EU was violating its own rules in demanding this progression. But if this was a bluff by Brussels, no one called it. And by agreeing to the skewed timetable laid down by Brussels, May failed to capitalize on the EU’s greatest weakness in the talks — its need for money to finance a looming budgetary deficit that Brexit will aggravate. Instead, she offered to pay one estimated exit bill of $20 billion, and when that was turned down, she doubled the figure. All this signaled future weakness by the Brits.

May failed to capitalize on the EU’s greatest weakness in the talks — its need for money to finance a looming budgetary deficit that Brexit will aggravate.

(2) May had always said that “no deal would be better than a bad deal.” Whether or not that’s true — it surely depends on the terms of both deals — it’s a declaration designed to get the best terms possible from the other side. For it to work, however, there has to be some evidence that the Brits would actually walk away from a bad deal by, for instance, making serious financial and regulatory provision for a Brexit under which the U.K. would trade with the EU and others under WTO rules. As we have seen, however, so far neither May nor her colleagues have done that. On the contrary, Chancellor Philip Hammond initially refused to provide finance for a WTO Brexit because he thought it was an unlikely outcome. A public outcry forced him to change his mind, but the damage had been done. He had revealed the Treasury’s thinking, which was that since a no-deal Brexit was unthinkable, Britain would have to accept whatever terms the EU laid down. That told Brussels all they needed to know.

(3) The rhetorical packaging of the Brexit case has been defensive, apologetic, and regretful when it should have been confident and optimistic. In attempts to reassure both European and domestic opinion, ministers have coined the term “a deep and very special relationship” to describe Britain’s relationship with the EU and Europe more generally. This is a phrase that could mean everything or nothing. The U.K. has relationships with several international partners — the U.S., the Commonwealth, the EU, NATO, non-EU European countries, the Anglosphere, etc., etc. — and would probably produce adjectives suggesting warm friendship between any of them as dictated by the needs of the situation. Here the phrase is meant to reassure that though Britain is leaving the EU, the country will keep many ties with a wider “Europe.” That’s true enough, but the phrase exaggerates the specialness of Britain’s ties with Europe. They are not as important strategically as ties with the U.S., or as culturally important as ties with Canada, Australia, and New Zealand, or even as economically important as ties with non-EU countries, which now account for 56 per cent of UK trade. And given that most remarks about Britain from the EU during the negotiations have been hostile or dismissive, to keep insisting on the warmth of U.K.–EU relations has a feel of pleading that is feeble and counterproductive.

(4) This rhetoric is shaping negotiating tactics in three harmful ways. First, May gave the EU an absolute and unqualified assurance that the U.K. could be relied upon to help defend Europe. It doubtless would in any event — the U.K. is the largest European contributor to NATO. But since Britain’s defense contribution is its biggest card in the Brexit talks, it made no sense to announce in advance that London wouldn’t expect anything in return for giving this guarantee. (Note to armchair strategists: Germany and France are geographically situated between the U.K. and Russia, which means a close alliance is more important to them than to the U.K.) Second, May agreed not to open trade talks with third countries until after March 2019, when Brexit formally takes place. That’s in accordance with EU law, which makes the Union the sole trade negotiator for all member-states. But there was nothing to prevent the May government holding informal “talks-about-talks” in the meantime — and proclaiming that they were going very well. It hasn’t done so. Third, ministers have actually rebuffed overtures from Australia and other Commonwealth countries for closer reciprocal immigration arrangements with the U.K., despite evidence from multiple opinion polls that migration between CANZUK countries is massively more popular with their populations than immigration from anywhere else. A 2016 poll for the Royal Commonwealth Society showed that 75 percent of Canadians, 58 percent of Britons, 70 percent of Australians, and 82 percent of New Zealanders support free mobility and reciprocal rights to live and work freely in each other’s nations. A poll for CBC News showed even more lopsided figures. Yet Home Secretary Amber Rudd, a leading Remain member of the Brexit Cabinet, is reported to have blocked a proposal from Foreign Secretary Boris Johnson for more liberal immigration rules between these countries. This is important in itself, since it means that talented and culturally compatible English-speaking immigrants are less likely to be available to replace Europeans who after Brexit would no longer have the automatic right to live and work in the U.K. More importantly, it also deprives the Brits of the sense that they have fast friends in the wider world and that they would not be “isolated” outside the EU.

For these and other reasons, May’s conduct of the Brexit campaign has looked like a series of defeats and disappointments. It has disheartened Brexit’s supporters and encouraged its opponents. Leaks from Brussels have suggested that Britain cannot expect to obtain its main objective in the next stage of negotiations. And this war of rhetoric and argument is being waged by two ill-matched sides.

May’s conduct of the Brexit campaign has looked like a series of defeats and disappointments. It has disheartened Brexit’s supporters and encouraged its opponents.

On one side is Brussels, most of the U.K. establishment in and out of government, the House of Lords, the corporate business world, Europhile media (notably The Economist, the Financial Times, and the BBC), a small but noisy minority of Remainer Tory MPs, and a handful of radical centrist leaders such as Tony Blair who see stopping Brexit as the ticket to their return to prominence and power. Their pitch, constantly reiterated, goes as follows: Brexit equals Ruin, the Leave voters didn’t realize what they were voting for, democracy therefore dictates a second referendum before Brexit happens, and failing that the Lords or the Courts must stop it from happening. On the other side is the clear majority of the Tory party at every level except the Cabinet, a large minority of Labour voters, a tiny minority of Labour MPs, most of the private-sector media, small businesses, and aroused patriotic voters in all parties. In addition to their main objective of recovering the U.K.’s sovereign independence, these groups (including some former Remainers) sense that opposition to the Brexit referendum result has morphed into a wider hostility to democracy and to supposedly racist and ignorant blue-collar voters.

Given the ill-matched character of the two sides, the Remainer coalition has by far the better of the propaganda campaign and rains down on voters a torrent of dire economic forecasts of what will happen if Brexit eventually goes through. One common joke now is that if any good economic news gets through the net, it’s usually prefaced by the line: “In spite of Brexit . . . ” But this barrage of misinformation seems to be having little effect. Public support for Leave rises and falls but so far it has remained robust. Some part of this resistance is traceable to the embarrassing facts that most Remainer forecasts about the impact of the Brexit vote been falsified and the British economy is doing reasonably well (given its non-Brexit weaknesses). But a larger and more important part is that, as some polls have shown, the Leave voters are motivated less by economics than by patriotic loyalties and a cultural sense of national and local community. They want to govern themselves even if it makes them poorer (which, by the way, it certainly won’t, since even Treasury estimates forecast only that a post-Brexit U.K. will grow richer at a slightly lower rate). And they are naturally riled by the aggressive negotiating tactics of Brussels, which veer between asserting that the Brits are masochistically choosing disaster and warning that Europe will not tolerate their benefiting economically from Brexit.

All of this gives May the opportunity for a strong and optimistic campaign to win the psychological battle for Brexit. But she hasn’t taken this opportunity. And while she has dithered, failing to make a strong optimistic case for Brexit, seemingly unable to impose a common position on her Cabinet, and even postponing promised speeches that would outline such a position, her political position in Parliament and Cabinet has weakened further. And to that political weakness I shall return tomorrow.


Original article here.