4 Jul 2018

Brexit strains in the Cabinet

Ministers are getting sessions with Brexit supremo Olly Robbins and the PM’s Chief of Staff Gavin Barwell in the coming days. Some have had them already. Some are also seeing the PM herself to discuss where she wants to take the Brexit policy and to check they can live with it. They’ve been told to gather 9.30-10 at Chequers on Friday for the full day of talks and dinner.

Some ministers were very surprised to hear that the “Third Way” on Customs Union (morphing elements of the PM’s preferred Customs Partnership with the David Davis preferred Max Fac) is actually being proposed as something that could come into effect the moment the UK leaves the transition period at the end of 2020. That though, speaking to one minister who was closer to the front of the briefings queue, seems to be the pitch. It will amaze some in the EU who couldn’t have been clearer that they can’t imagine signing up to such ideas any time soon if at all. They argued that the technical and administrative challenges (some flagged up by HMRC itself) meant such approaches were more than 3 years away from being ready for serious consideration.

So to make that a proposal in the White Paper for something that comes into effect relatively swiftly after Brexit might superficially sound like a good idea if you’re trying to win over a Brexiteer longing to sign and implement free trade deals but might not withstand much scrutiny.

It will be just one of the White Paper proposals which the EU27 and the negotiating team in Brussels would, on past performance, be quick to rubbish. The PM’s trips to The Hague (yesterday) and Berlin (tomorrow) have involved her trying to make sure that doesn’t happen. Her message has been: don’t shoot this down, please welcome it as a basis for negotiation. There’s every chance some EU voices will say that Mrs May’s approach isn’t acceptable. She will be hoping that the “no” is at the softer end of the EU’s repertoire.

What happens if a minister resigns? Some Whitehall sources think that would rather help the optics of selling the policy to an EU27 sceptical that the PM is actually capable of doing anything decisive or daring. That’s not how No. 10 sees it. And if many ministers resigned we would be in a different place with Theresa May potentially toppled and a new leader and PM needed and a deafening clamour for a general election. That, it seems, is unlikely.

Some Cabinet Brexiteers have proved very adept at signalling resignation threats when they want to. There aren’t any reliably being signalled at the moment. David Davis, by the way, is an old mate of Horst Seehofer, the CSU boss who has been dancing around the idea of resignation from Chancellor Merkel’s government over the last week or so. It was widely understood when David Davis was last contemplating leaving his job that two of his DEXEU ministers, Steve Baker and Suella Fernandes, would walk out with him.

Some of the Cabinet Brexiteers will comfort themselves that the inhibitions and shackles of the Swiss approach, if it were to be adopted and if the EU would let the UK have something like it, would become apparent over time and a political force would develop that would demand the EU chains were shaken off. That force is not present in sufficient numbers in the present parliament, the logic runs, so the important thing is to secure Brexit against its many lurking foes. Other Brexiteers will rage.

There has already been a meeting this morning between some members of the European Research Group and the Chief Whip at which some of that anger will have been vented. Some Tory MPs told Julian Smith that the cash promised to the EU as part of the Brexit deal must be linked to the future relationship deal. Much legal thought has been given to whether such “conditionality” can be applied. Some in government say the answer has come back “certainly not.” The ERG MPs attacked Olly Robbins’ leadership of the Brexit process, demanded more “no deal” preparations. MP James Gray threatened “certain disaster” if the Cabinet adopted a policy unacceptable to him and like-minded MPs.
The Chief Whip read out from the manifesto and insisted that all the promises made there would be honoured. The ERG MPs are urging their frontbench fellow Brexiteers on to revolt. If that doesn’t work, they could again threaten to “go slow” in parliamentary votes and try to exercise leverage. Some emphasise they could ultimately vote against a negotiated deal, joining opposition parties expected to vote against any deal that the PM comes back with, and threatening the government’s fragile majority on this most central, strategic business.

But two years of Theresa May’s Brexit rhetoric will have left expectations of red lines which currently don’t look that straight. Some ministers are convinced that we will de facto be staying in the Customs Union even if it’s rebadged. The red line against rule-taking seems to look quite wobbly if we are operating under some kind of systematic machinery to update our product rules in line with EU regulations. If that is overseen by a court that obeys the rulings of the ECJ then another red line looks like it was drawn by a right handed person using their left hand. Paying money into the EU in return for access was a red line Mrs May repeated as recently as Monday in the Commons (and is said to be a red line the Foreign Secretary is particularly concerned about). It’s hard to see how the EU wouldn’t insist on contributions (as they do with Switzerland and Norway)  if the UK was trying to pick out elements of the deals they have with the EU.  And then there’s the big red line around immigration and Freedom of Movement.

Whitehall sources say that immigration doesn’t appear to be on the agenda for the Chequers summit but it would most definitely be a trading chip the EU27 would want to see on the table if there was engagement with the White Paper approach. The EU would want something as close as possible to Freedom of Movement for their peoples. The most talked about compromise position is freedom to come to the UK if you have a job offer.
Even if Theresa May stretches and strains some in her Cabinet to sign up to the pitch Olly Robbins has developed and then gets the EU to keep its objections muted and engage with the proposal, there will be more straining and stretching still to come. That would be the start of the negotiation. The compromises still to come could be even more painful than the ones Mrs May is asking for on Friday.

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