9 Oct 2017

Deal or no deal on Brexit as the EU summit looms

You wonder quite what sort of meetings the UK and the EU are going to be able to diary after the October summit.

The current round of talks on Phase 1 (Brexit Bill, Northern Ireland and Citizens’ Rights) may yet see a deal agreed on citizens’ rights. But the other two topics are stalled.

The UK maintains that it is hard to tackle these issues independent of the final end settlement deal, which will determine how tricky the Irish border issue is and will allow the UK to deploy its leverage over money to maximum effect.

The EU (particularly, according to some reports, the French and the Germans) are saying that we signed up to the sequence of phases and should honour it. They want to see more money on the table than the £10b per year for the Transition period which was winked at by Theresa May in her Florence speech. The UK doesn’t feel it can go any further on that front until it is clearer what it is getting in return, i.e. what the final outline deal amounts to.

And the factors pointing to a stand-off don’t end there.

There were big differences on display when the Prime Minister answered questions on Brexit in the Commons this afternoon. She was pressurised by Brexiteers like Jacob Rees-Mogg to promise that the ECJ wouldn’t have jurisdiction beyond the date of Brexit (March 2019). She couldn’t give such a promise but said there was a chance the EU might agree to some hybrid court being set up during the transition. I wonder what percentage chance diplomats would put on that?

Iain Duncan Smith wanted to hear the PM say unequivocally in front of her party that the future relationship trade partnership negotiations would not stray beyond March 2019. He, like others of the same mind, are worried that allies of the Chancellor might try to maroon Britain in the “transition/status quo” state forever if the talks aren’t wrapped up by the date of Brexit.

Mrs May gave that assurance, though it is ambitious bordering on deluded according to European Commission sources.

Those same sources will note a hardening of tone on “no deal” by Mrs May.

In answer to Sir Desmond Swayne, the PM said she was indeed preparing for “no deal.” She’d said the same earlier in her statement. The line “no deal is better than a bad deal” was pointedly not included in the Florence speech (and when asked afterwards in the Q and A if she still believed that Mrs May somewhat swallowed her answer). Today, it’s back, higher up the script.

You get a flavour of those who’d like Theresa May to crack the whip next week at the European Council if you talk to Bernard Jenkin, a member of the Steering Group of the pro-Brexit European Research Group of Tory MPs.

He told me that if the PM returned from Brussels next week saying we were walking away from the negotiations she “would be cheered to the echo” by Tory MPs, many of whom, he said, were secret Brexit supporters who only supported Remain in 2016 because they wanted to curry favour with David Cameron and George Osborne.

He said collapsing the talks, in those circumstances, would be “what the party wants, it’s what the country wants … the people from the Treasury who’ve got the policy wrong for years have to be told what the policy’s going to be.”

Brussels will be watching these divisions closely and wondering how on earth Theresa May is going to extract a united position from a party that struggles to agree on a post-Brexit “transition” phase, let alone the end state.



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