Monday

29th May 2017

Column / Brexit Briefing

May’s Maggie moment

  • If Thatcher was the patron of British euroscepticism, May is certainly carrying her torch. (Photo: Number 10/Flickr)

Out of the single Market, out of the clutches of the European Court of Justice, probably out of the customs union.

"Out, out, out." Maggie Thatcher would have loved it. Theresa May’s speech to ambassadors on Tuesday (17 January) carried more than a hint of the Iron Lady’s famous (or infamous) Bruges speech in 1988 which rejected the concept of European integration.

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If Thatcher was the patron of British euroscepticism, May is certainly carrying her torch.

The dominant reaction of pro-EU politicians in the UK, and their counterparts across the EU, was of dismay, particularly at the warning that the UK could threaten a tax and trade war if the EU tries to offer a “punitive” deal.

Neither the content nor the tone of May’s remarks should have surprised anyone.

Since becoming prime minister last July, May has been consistent that control of immigration trumps economic self-interest. That was one of the main messages from voters in June. As a result, there’s not much to negotiate. The UK will not concede any ground on freedom of movement, and neither, for its part, will the rest of Europe. It was inevitable that staying in the single market was a non-starter.

Seismic shift

It is, still, a seismic shift in political priorities. For at least a generation, British politicians have put economic growth at the front and centre of their manifestos. Not any more.

As Charles Grant of the Centre for European Reform put it, “governments and businesses in many parts of the world will understand the essence of May’s Brexit strategy to be this: what matters is limiting free movement of labour and the rulings of foreign courts, and the price to be paid – the result of lower levels of trade and investment with the EU – of slower economic growth, is too bad.”

Aside from the clarity offered on the UK’s position outside the single market, the government also seeks clear guarantees on the status of UK citizens living in Europe and EU citizens living in the UK.

Yet there are still plenty of grey areas. The door remains open to the UK opting in to parts of the customs union, while the reference to contributing to "some programmes" in the EU budget also gives both sides some wiggle room.

The main "known unknowns" are likely to be the transitional arrangements – referred to by May as a "phased period of implementation".

Give and take

On a raft of issues ranging from trade and financial services to criminal justice and migration, the UK will hope to negotiate an “economically rational” deal to "avoid a disruptive cliff edge."

What is less clear is where the UK will be prepared to compromise. May has taken the position, taken by "hard Brexit" supporters, that the rest of Europe will lose more than the UK from a “calamitous” negotiation.

This is all well and good. But a negotiation, by definition, involves "give" as well as "take", and nobody south of Dover thinks that the UK is in a strong enough position to dictate the terms of the divorce.

If May faces several years of hard-ball negotiations with EU leaders, she also faces several domestic hurdles.

The rejection of single market membership makes a second Scottish referendum on independence far more likely. But the promise of a Parliament vote on the final deal is the main political hostage to fortune. What happens if MPs don’t support it?

Bumps on the Brexit road

Either way, pro-EU campaigners will use this mechanism to keep alive the possibility of a second referendum, especially if there is evidence that Britons are changing their minds about leaving the EU between now and spring 2019.

If that helps Remain supporters to sleep at night it comes with a caveat. May’s "hard Brexit" stance has been strengthened by the fact that, for the moment, there is no sign that Brexit carries a significant, or personal, price tag. If the EU is perceived to have offered a punitive deal, then a referendum rerun could see Britons give another V-sign in the direction of Brussels, and deliver an even more emphatic victory for Brexit.

May’s team won’t be thinking about the risks of a Parliament vote. She has given herself the two year deadline provided by Article 50 - a life-time in political terms – and the UK tabloids, and right-wing media, who backed the Leave campaign, are united in their support for their new heroine.

But as David Cameron found, self-imposed deadlines dependent on negotiations with 27 other countries are fraught with uncertainty. There are bound to be plenty of bumps on the road towards Brexit.

Benjamin Fox, a former reporter for EUobserver, is a consultant with Sovereign Strategy, a London-based PR firm, and a freelance writer.

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