May leads UK to soft Brexit, telling Cabinet to back her or go | Fin24
 
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May leads UK to soft Brexit, telling Cabinet to back her or go

Jul 07 2018 18:22
Emma Ross-Thomas, Robert Hutton, Kitty Donaldson and Alex Morales

UK Prime Minister Theresa May imposed her vision of a soft Brexit on her divided Cabinet, pleasing business with a plan to keep close trade ties to the European Union and telling insolent ministers to get behind her or resign.

Her plan, which would set up a free-trade area with the EU and mirror EU rules for goods and food, goes against much of what pro-Brexit Cabinet ministers have long demanded. But after months of threatened resignations or leadership challenges, none have so far materialised.

It’s a victory for May, long written off as a weak and indecisive leader with no authority, and a win for business, which has stepped up its lobbying efforts in recent weeks, with household names warning of the dire consequences of a messy divorce. Business lobbies welcomed her plan.

So did chief EU negotiator Michel Barnier, though he still needs to look at the details, many of which he won’t like. But there were messages in the Cabinet’s statement aimed directly at unblocking talks, which have been all but stalled since March and are meant to be wrapped up in just 15 weeks.

"This proposal should allow both parties to resolve the remaining Withdrawal Agreement issues," according to the statement, which was issued by May’s office while her ministers were still locked up at her country house without their phones.

May is not out of the woods. But even Jacob Rees-Mogg, the outspoken Brexit hardliner who commands enough support in Parliament to trigger a leadership challenge, reserved judgment the morning after, while suggesting he wasn’t happy. Brexit-backing lawmakers expressed their frustration in WhatsApp chats, but none has yet come forward to call for May to go.

Former Tory leader Iain Duncan Smith on WhatsApp said: "I want to know what the Brexit Cabinet ministers were doing." Another pro-Brexit Conservative lawmaker, Andrew Bridgen, told Bloomberg: “This looks like a weak form of Brexit even before the EU negotiators weaken it further.”

Clearing a path

May’s plan keeps the UK tied to EU rules for goods, but able to diverge on services - and the Cabinet acknowledges that will mean financial services won’t have the same access as before. It appears to have dropped an earlier proposal for "mutual recognition” of regulation for financial services.

The EU has objected already to partial access to its single market, saying the UK can’t pick and choose the bits it wants. It’s all or nothing. May’s plan also leaves the door open to some flexibility on EU immigration but stops far short of the EU’s demand that free movement of people is a non-negotiable aspect of single market membership.

Her proposal on goods also aims to solve the problem of the Irish border, which remains the major sticking point in talks with Brussels. The EU demands a backstop, or guarantee, that no hard border will emerge on the island after the divorce but neither side can agree on how that last-resort clause should be worded. The Cabinet says the new plan means the backstop will never have to be brought into effect, though the UK will sign the legal text "nonetheless." This, the Cabinet says, will help unblock negotiations.

Irish Foreign Minister Simon Coveney on Saturday said the UK text "needs and deserves detailed consideration."

If May keeps her Cabinet ministers and lawmakers on board over the summer and into the final stage of talks, then a path appears to be opening up to an orderly divorce.

The final trade deal doesn’t need to be agreed until after Brexit day next year. All the two sides need to agree now is to a legally binding divorce deal - which is nearly there apart from the Irish border issue - and then a non-binding political statement setting out what the two sides want the future trade deal to look like.

A vote in Parliament this autumn will be May’s last big test of her Brexit plan, and that’s an opportunity for pro-Brexit opponents to try to bring her down.

‘String it out’

“The EU will not go along with this, but I’m interested to see if they string it out so as to get the withdrawal agreement over the line,” Sam Lowe of the Centre for European Reform, said.

The country’s main business lobby the Confederation of British Industry, said the plan was a ‘genuine confidence boost’ and appears to be based on evidence companies have put forward. Other groups agreed.

May has changed her tone. Since losing a snap election last year, her authority has waned and she has allowed ministers to get away with unprecedented acts of defiance.

Foreign Secretary Boris Johnson, for example, has publicly criticized her policies and used words like "crazy" to describe her proposals. Brexit Secretary David Davis has made his opposition to a soft Brexit clear, and has made several resignation threats.

Davis, Johnson

After the meeting on Friday, May called time on the defiance. If ministers step out of line now, they will have to go.

On Friday, Johnson and Davis, both pictured in shirt sleeves on a sweltering day in the English countryside, decided not to start a fight. Davis gave a speech urging colleagues to get behind May, while Johnson raised a toast to the prime minister during dinner, people briefed on the encounter said.

Johnson raised some concerns earlier in the day, but was “pretty positive by the time we got to dinner,” according to one minister in the room. Environment Secretary Michael Gove, another key Brexit campaigner who has emerged as a pragmatist, spoke in support of May’s plan, and that helped shift the mood, according to another person familiar with the meeting.

“Brexiteers meet reality and - to their credit - don’t run away,” the minister said.

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theresa may  |  uk  |  brexit
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