21 Sep 2017

Can Theresa May’s speech break the Brexit impasse?

There’s more than a little concern in No. 10 that Boris Johnson’s intervention in The Telegraph last week has rather raised expectations for Theresa May’s speech.

It is designed to break an impasse in the talks and acknowledge the desire for and outline the shape of a transition period in Britain’s exit from the EU. That’s a bridging period made necessary by the mountain of work still needed to get to the end point and by unresolved divisions on what the end point after Brexit should be for the UK.

Don’t expect great clarity on what the end point should be. Though Theresa May will spell out some places she doesn’t want to go (she could rule out full blown Norway copy and paste or distant Canada CETA copy and paste) she will make it clear that she is still in the market for a bespoke arrangement that reflects our existing closeness but acknowledges the voters’ 2016 mandate.

By no coincidence, Michel Barnier, the EU’s chief negotiator, has today (up the motorway in Rome) repeated the EU27’s position spelling out that only existing models for third country relations are acceptable. “Want some new hybrid, best of both worlds, cake and eat it relationship? Forget it” is the tone.

This is a section of the speech which the PM’s top official in the negotiations, Olly Robbins, will have laboured over long and hard. He has been in the room with the brains trusted to run the EU side of the talks and he will want to find a form of words which offers a way forward on the final post-transition relationship. That said, some in Whitehall expect some slap downs in the immediate aftermath of the speech.

Talking about the transition and spelling out that it is pretty much a “status quo” transition will be greeted with a sigh of “about time too” in Brussels and EU capitals. They say they are unimpressed that all the UK has managed to work out in the 15 months since the referendum is a process for kicking the can down the road.

They struggle to believe the PM is strong enough to survive plumping for the Brexiteers’ favoured end state or the Hammondites’ end state without losing her job. They will be laughing at the displays of unity as Mr Hammond and Mr Johnson walked out side by side from Cabinet today and are due to travel with the PM to Florence tomorrow for the speech. Maybe there will be more chatter than there was on the plane from New York last night where it sounds like they were pretty much on different sides of the plane with minimal, if any, contact.

In Whitehall, some think there’s a bit more wriggle room in the EU position on bespoke settlements than their rhetoric would suggest. They don’t expect it to be proclaimed but they suspect it lurks. We shall see.

In Brussels, EU27 delegations mutter that the handling of the money issue has broken trust. They interpreted David Davis’ words in July about honouring obligations as some sort of signing up to the EU drafted bill. Mr Davis’ interpretation of the obligations though is very different. The two day Treasury official presentation to EU negotiators challenging the legal basis for the EU bill line by line shocked some in Brussels. EU27 member state officials regularly talk of issues of trust and Michel Barnier has been using that language as well.

There is still the possibility that the two sides are not capable of reaching an agreement and some in Brussels put that possibility at 50%. There is the possibility of the UK Cabinet falling out over the end state. There is the possibility of No. 10 trying to find a middle way/hybrid compromise to satisfy the two Cabinet sides only to find that such a bespoke deal is unacceptable to the EU27.

All those big challenges though have been put off to another day. Tomorrow, in Florence, Theresa May tries to nudge the talks forward. And it’s not guaranteed that she will even succeed in that.


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