1 Feb 2018

May meets Xi as Brexit terms hang over China trip

The sun’s been out all day in Beijing and today you’ve actually been able to see it.

Theresa May is having tea with President Xi. A personality cult leader with unchallenged power meets a leader who has lost her majority, her top aides, her deputy, her ability to reshuffle and much more besides in one year flat.

Theresa May’s former joint chief of staff has written a piece warning that it would be chaos if the party moved against her now. The realities of no majority, Brexit leaving little room for anything else and a divided Tory Party would be there whoever replaced her.

There will be two meetings of the Cabinet Brexit Committee next week to try to get that divided Tory Party agreed at senior level on an opening pitch to the EU on Phase 2 negotiations.

Great efforts have been made to get Brexiteers across the full Cabinet onside for an approach that asks for the U.K. to stay aligned across most sectors with a right to diverge in the future.

It seems that most Brexiteers have been squared including Liam Fox, Penny Mordaunt and Chris Grayling. David Davis himself even outlined the planned approach during his opening questioning from Hilary Benn at the Brexit Select Committee last week. It got some members of the European Research Group very animated, one in the group tells me.

Some ministers have expressed concern that the process by which the EU and the U.K. post-Brexit agree any divergence doesn’t “become a swamp,” as one Minister put it. “We don’t want some talking shop that goes on forever,” the minister said.

The anxiety at the moment is over the Foreign Secretary. Leaving divergence for another day and another government (as David Davis spelt out last week to the select committee) is too much for Boris Johnson it is thought. “He is still smarting from the transition,” one source said.

Mrs May would effectively be saying to the country that we can’t know right now where we might want to diverge in the future. It should be a series of decisions to be made as time goes by.

Some government sources say that’s a message that gets a better reception in Brussels than public proclamations would suggest possible.

Today’s FT has a story about EU concern about divergence saying a recent EU presentation outlines how “the UK economy was too big and too close to treat like a normal trade partner” and the EU needs “to define new ways to enforce restrictions on taxation, state aid, environmental standards and employment rights.” The article suggests the EU is looking for very tight constraints on future U.K. divergence but points out that the U.K. would want very good access in return. The FT says the EU presentation says that given the importance to the EU of such a big neighbour on its doorstep the EU should consider a “tailored approach” to future relations, including “non-regression clauses” that ensure EU standards are not diluted after Brexit.

You can see in that report the outline of what tempts Theresa May and what alarms some Brexiteers. Will you ever be able to break free? Ask government sources whether this approach amounts to Norway Minus or Canada Plus and they acknowledge it’s some sort of hybrid but they say you have to use the “Canada” prefix or no Brexiteer will go near it.

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