26 Jan 2018

Tory divisions growing over Brexit

David Davis’ speech in Middlesbrough has not been helped by yesterday’s appearance of the EU guidelines for negotiating the Brexit transition. The speech is asking for some concessions from the EU27 which it looks like the government has already won. It’s a bit like the magician saying he’s going to produce the rabbit from the hat when the audience can already see the fluffy bunny sitting on the stage beside him.

The rabbits the government is promising include a right to be consulted (especially on fisheries quotas) during the transition. Fisheries are specifically name-checked in the EU guidelines so the red line Michael Gove put down on that has been accommodated. It’s less than the government would like but as much as they could have expected, it’s something they can say has been conceded.

Likewise the EU guidelines say only that the U.K. can’t “conclude” trade deals with third parties during the transition which meets Mr Davis’ plea that the U.K. should be allowed to do the groundwork to have them ready. Another concession, the government can claim.

It’s useful that the EU spells these out but it would’ve looked like bad form not to have engaged with the requests from the U.K.

The government is hoping that Mr Davis’ speech reassures the deeply uneasy Brexiteer ranks in Parliament that there is no pattern of slippage across government policy on Brexit. Those MPs I’ve spoken to will take some convincing. Philip Hammond’s words in Davos yesterday, seen as allying himself with the CBI pro-Customs Union line, didn’t help with that. Many of these Brexiteers initially backed Andrea Leadsom in the 2016 leadership contest and then rowed in behind Theresa May as the best way of securing Brexit – any other leader might split the party and threaten delivery of the prize in March 2019. When the leadership was revisited after the 2017 general election disaster, that calculation was revisited but sustained. Now some (though not all) are opening their minds to the idea of a re-think.

The arguments over the transition are pretty much done. That they are being aired now is a proxy for the real battle over final state, Phase 2 of the negotiations.

One Cabinet minister who sits on the Brexit committee described the “three baskets” approach which Brexit supreme Olly Robbins explained to ministers before Christmas, as “complete bollocks,” but as Charles Grant of the Centre for European Reform explains, they are working on the basis that this is what the U.K. will be asking for. In the FT today, Philip Stephens says nobody really has a clue what the government position is.

The baskets approach imagines splitting up sectors and interests: basket 1: fully  aligned as now with the EU; basket 2 : aligned but using different machinery and basket 3: diverging from EU rules. But given that some ministers think you should have huge chunks of the British economy in the first two baskets and Boris Johnson would have the bulk of it in the third, asking the EU to sign off on an approach that leaves the definition of our relationship for another day could be a tall order.

Some Tory pro-Brexit backbenchers sense that senior civil servants are monstering the Prime Minister and softening Brexit beyond recognition or use. That’s what provoked Jacob Rees-Mogg’s speech last night and it is what is behind the growing uprising around the Customs Bill which I mentioned last week.

This is all layered on top of a reshuffle that promised much and delivered little, a sense that the government would rather not try major reform beyond Brexit than try and be blocked. Two anecdotes circle widely at the moment of encounters with the Prime Minister in which she was briefed on policy ideas by Tory MPs and either looked across to her advisers to respond or read out a pre-prepared note in reply.

It could all go away. It could go and come back after the May local elections. It could come back every few months as Theresa May’s leadership stretches another year or two. But the talk amongst Tory MPs of pressing the button and trying to see if the Tory Party can get another leader without falling apart is around.

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