Extreme Brexit: This was May’s last moment of control

Theresa May should enjoy today. It is her final moment of control. Her speech confirmed that Britain was leaving the single market. There would be a free trade agreement with Europe, somehow miraculously agreed during Article 50, and then an “implementation period” to enact the changes after April 2019.

For anyone who believes in staying in the EU, or the single market, or is merely concerned about the government’s grasp of the Brexit issue, today seems like a moment of total failure. The domestic political consensus for hard Brexit seems fixed. May has confirmed it. There is all the reason in the world for despair.

They should resist that temptation. Brexit is a marathon, not a sprint. The key moment is not now, but months from now. Today May announced a plan that she will not be able to deliver. 

Her problem is time. Article 50, when she triggers it in March, gives her just two years to complete everything. It's a very long checklist of items.

FIrst she needs to agree the administrative elements of Brexit, like MEP office payments, who owes what to who, and what to do with EU citizens in the UK and UK citizens in Europe. This is the easy part, but even that will take time.

Then she needs to agree a free trade deal, which is highly unlikely to be possible in this time frame. Canada’s deal took seven years and that barely covered services. Britain is a services economy and not only that - it is a financial services economy. Many countries are wary of allowing financial services to penetrate their market. Others will be wary of giving the UK a good deal because Brexit provides an opportunity to bolster their own financial firms. Others might simply be motivated by political anger.

She also needs to get Britain’s domestic legal and regulatory arrangements up to a level where they can handle the duties which used to be done by European bodies. This is a massive operation. In some cases she needs to new regulators, in others to move legal responsibilities to existing ones. She needs trade remedy bodies to handle disputes at the WTO. She needs to set up reciprocal recognition arrangements within the UK economy so that goods made here can be recognised by the EU at the border to allow for frictionless trade.

This is not really possible in two years. And she doesn’t actually have two years. She’s choosing to trigger Article 50 just before the French elections in the spring, which are followed by the German elections in the autumn. It’s likely that only small administrative tasks will be addressed until these two key European players are done with their domestic troubles. So she may well lose the first six months or so. Then any deal will need to be voted on by the European Parliament and Council. That will take the last six months. So in fact she has about a year of clean, full-attention negotiating time to work with.

It's not even clear she'll win those votes. MEPs have been utterly alienated by Britain’s post-referendum rhetoric and belligerence - especially the now-discarded threat to set up lists of foreign workers in firms. They may not play ball. Certainly, we’re going to need a very impressive lobbying operation to make sure they do.

And after all that, a trade deal would need to be ratified. If the Canada example is anything to go by, that involves a veto by all 27 EU member states and even some regional assemblies, like Walloonia in Belgium. And it also involves a vote, as May announced today, in the Commons and the Lords.

This is why experts (you remember them, we used to be keen on  them) said from the start that she urgently needed to extend that two-year window. And it looked for a second like she might have listened today. But then the details emerged. She would not support a ‘transitional’ arrangement. She would only support an “implementation” period. In other words, all the arrangements would be finalised within Article 50. The secondary deal would just give Britain time to get all its regulations and legal bodies in line. Not only does this do nothing to address the need for more time to negotiate. It also places the benefits of the extended period almost entirely on the British side. “The interim arrangements we rely upon are likely to be a matter of negotiation,” May conceeded today. You can say that again. 

If no trade deal is reached with Europe - or it is but no agreement is made on a transitional deal - Britain faces a cliff-edge drop out of the single market. That is the consequence of failure. Tariffs will devastate the car and food industry. We will have lines of lorries at Dover winding back to London, because of sudden border controls. Financial services firms will migrate away to the continent. Our regulatory structure will be in chaos, pushing away even more investment. It is the armageddon option. No government in its right mind would allow it.

May knows this. She is about to play a game of chicken with the EU. In the most revealing section of the speech, she said the cliff edge would be “an act of calamitous self-harm for the countries of Europe”, whereas for Britain “no deal is better than a bad deal”. In other words, a cliff-edge Brexit is worse for the EU than it is for the UK.

You can imagine what was said to her to convince her of this position. It would be bad for Europe - no bones about it. Eighty per cent of EU financial service transactions happen in London. The Germans sell us loads of cars and would like to continue doing so without tariffs. European leaders want security cooperation to stem the flow of horrific terror attacks in Germany and France. Eastern Europeans want assurances on military help, especially now the election of Donald Trump has cast doubt on the viability of Nato. And all this comes as the EU faces multiple internal and external crisis which push it towards option offering stability. May does have cards to play.

But she appears to have radically overinterpreted these relative strengths. Her position - our position - is still one defined by weakness next to a stronger partner. That is not a statement of pessimism or lack of faith in Britain or any of that nonsense. It is a sober assessment of fact.

As bad as a hard, chaotic Brexit would be for Europe, it would be worse for Britain. Half our trade is with the EU, whereas less than a fifth of the EU’s trade is with us. They are losing a part of their market, we are starting again from Year Zero, completely alone. And even if this imbalance of scale was not pertinent, the EU is not guaranteed to behave rationally. There are emotional political forces at play too. As Michel Barnier, the EU Commission’s chief negotiator, confirmed recently, Britain has to get a worse deal than it would have in the EU, or Brexit serves as a sign of encouragement for everyone else to follow suit. He is not going to deliver on that pledge by rushing through a comprehensive and hugely controversial trade deal for a leaving state and then creating generous “implementation” stages so they can take their time to prepare for it.

And even if all these points did not apply, May is not actually dealing just with the EU as a block, but also with each member state as an individual entity. Imagine the EU as a whole wants to avoid the cliff edge. Even in that unlikely best-case scenario, each country still gets a veto on trade deals: Only one - presumably a country with little trade with Britain - can scupper the whole thing. May’s plan puts the living standards of every British citizen in the hands of the regional assembly in Wallonia.

She is having a Mexican standoff with an opponent she does not understand, amid power dynamics she has not comprehended, for the highest stakes imaginable.

This was her last moment of control. Once Article 50 starts, the brute force of reality will invade the self-interested dream Britain has been having since June 24th. It is easy for May to be popular now and for even some Remainers to be won over. After all, she’s just saying what she wants. Anyone can look firm when not confronted with opposition. But soon she is going to be facing the truth of her predicament, and then views will not be so sympathetic.

As food prices rise due to sterling’s fall, as banks start to shift their operations overseas in a bid to keep passporting, she will look increasingly weak and trapped on the international stage.

There is no guarantee that that situation will play into the hands of those who want to remain, or who desire a soft Brexit. Perhaps it will do the opposite. But those concerned by what is happening should position themselves now for that period, which will start, in all likelihood, after the German election in the autumn. That is when Brexit will be decided. May should enjoy this moment of seeming in control. It’s likely to be the last one she’ll have.

Ian Dunt is the editor of Politics.co.uk. His book - Brexit: What The Hell Happens Now? - is out now from Canbury Press.

The opinions in politics.co.uk's Comment and Analysis section are those of the author and are no reflection of the views of the website or its owners.

Week in Review: Trump, Putin and the Brexit subplot

Brexit and Trump have always had a weird relationship. They’re not the same thing, no matter how some outraged liberals think of them. There are plenty of valid reasons for wanting to leave the EU, whether you agree with them or not. There are no valid reasons for supporting the president-elect.

And yet, there is a connection. Both events were driven by the same troubling global spread of authoritarian nativism, an instinctive aversion to difference and diversity, a love of control and walls.

They have always had a more direct practical relationship too. Trump tried to stamp his brand on Brexit by flying into (Remain voting) Scotland and pretending he'd played a big role in the whole thing. He predicted his victory would be Brexit "plus plus plus". He invited Nigel Farage to whip up the crowds for him on the campaign trail, then had him trundle along behind some Breitbart journalists to Trump Towers after the vote, and then tried to publicly pressure the prime minister into making him US ambassador.

Liberals see Brexit and Trump as part of the same story. And so does Trump.

This week that relationship swung round again, as the Brexit subplot threatened to play a key role in the Trump drama. The US is still reeling from the release of a dossier of allegations against Trump. On the crude end were unverified allegations about what he got up to sexually. On the more serious end were claims that people in his camp were working with the Russians in a conscious effort to tilt the election in their mutual favour. If the dossier were shown to be true, it would suggest that Russia had succeeded in installing its puppet as president of the United States.

The dossier came from a former MI6 operative who conducted research on public figures for clients. It was first compiled for Republican opponents, then Democrat opponents of Trump. Russia is suggesting he remains an MI6 operative. The man has reportedly gone into hiding, in fear for his life.

When reports emerged that US senator John McCain had been handed the dossier by a former British ambassador to Moscow, it felt like the Brexit-Trump connection was coming full circle again. Tim Barrow, who was recently made British ambassador to the EU after the dramatic resignation of van Rogers, was British ambassador to Russia between 2011 and 2015 and had previously worked with the MI6 operative. These connections look inaccurate however. In the end it seemed that Andrew Wood, another former ambassador to Russia,was consulted about it by McCain at a conference in Canada shortly after Trump won.

But the real connection between Brexit and Trump, in this regard, isn’t about individuals. It’s a broader story about destabilisation and the strange new right-wing love for Vladimir Putin.

The news is now full of allegations about Russian meddling in western affairs. It's not a new story - the KGB would always be looking to compromise presidential candidates - but it does seem to be taking place in a far more effective manner than was previously the case. In part this is due to technological change. The fake news and trolling operations being used are only possible now. In part it is also about domestic Western politics. None of it would work were it not for the disenchantment in Britain, America and elsewhere with the political class. But it is ironic that now, as Russia’s economy is falling apart, it is wielding such extraordinary influence.

Most Brexiters are not fans of Putin and nor are most Republicans. But the numbers are growing. Back in July 2014, just ten percent of Republicans held a favorable view of him. By September 2016, it had grown to 24%. Today it’s 37%.

Ukip has long had similar instincts. In 2014, Farage said Putin was the world leader he most admired. Last month he praised the former KGB man as "mature". Current Ukip leader Paul Nuttall told BBC’s Sunday Politics that in the Middle East the Russian leader was "generally getting it right". Diane James, who was Ukip leader for all of five minutes, used at least some of that time to confirm him as one of her political heroes, alongside Churchill and Thatcher.

France National Front leader Marine Le Pen sings from the same hymn sheet, saying Putin is "looking after the interests of his own country and defending its identity".

For some people, the links are deeper. Some suspect the Kremlin funds hard-right groups like Ukip in Europe - although there has never been any evidence of a direct link between them and the British eurosceptic party.

Perhaps the hard-right sees something they like in the optics of Putin - the constant visual expressions of strength, the strong-arm KGB political tactics used domestically and internationally, the focus on control as an irreducible political virtue. Or perhaps there is a more practical web of cooperation in which Russia and its fellow travellers on the hard right cooperate. Or maybe it is more serious than that and, as that dossier implies, the West's hard-right, which is about to take power in Washington and wields increasing influence in London, is being actively maintained by the Kremlin.

The full story is coming out. But already it's clear that Brexit and Trump share much more than just their ability to play havoc with western democratic assumptions. They are part of a phenomenon which is threatening to reshape the world.

We may never find out what Corbyn's position on Brexit is

After 24 hours of statements, retractions, hesitations, reformulations and briefings, Labour’s position on Brexit seems to have turned 180 degrees, then U-turned again to its original formulation, then made a half U-turn on the original U-turn to end up in a position like the one it was in before it started U-turning but slightly different. Maybe.

If Jeremy Corbyn’s aim was to clear up his position on Brexit then it’s safe to say it was not a success. The question now is not whether the public like his position, or whether it can hold the party together, or whether it would stand any chance against European negotiators. It is: Can his position actually be discerned? The answer is no.

At six minutes past four in the afternoon yesterday, Labour sent out extracts of his speech. One section read:

"Labour is not wedded to freedom of movement for EU citizens as a point of principle. But nor can we afford to lose full access to the European markets on which so many British businesses and jobs depend."

This was interpreted as Corbyn finally turning his back on free movement, thereby satisfying the right of his party and signalling Labour support for a hard Brexit outside the single market. But was it? After all, he immediately followed it up by saying that this had to be balanced with the economic needs of the country, which suggests you would stay in the single market.

That is very different to Theresa May’s position, which is that free movement must end regardless of the effect on the economy. She has said it countless times: it will end (she doesn’t say the sentence which must logically follow from that, which is that we are leaving the single market, but everyone understands that it does logically follow).

Corbyn’s comments suggest that he instead wants her to try to reform freedom of movement, but that if that failed we should stay in the single market.

That impression was confirmed on Good Morning Britain with the awful Piers Morgan earlier today. "If the EU, as is, says access to the single market requires the continuation of free movement, then there’s a choice to be made," Corbyn said. Then he was pressed on which option he'd choose: ending free movement or leaving the single market? He replied: "I would say economically, we've got to be able to trade with Europe."

On the Today programme, he was asked what kind of reforms to free movement he'd be prepared to countenance. "That depends on what the offer is on free market access," he replied.

That view seemed to be cemented one final time when he made the speech this afternoon. Corbyn changed the section which had been briefed to the press nearly 24 hours earlier. This time it read:

"Labour is not wedded to freedom of movement for EU citizens as a point of principle, but I don't want that to be misinterpreted, nor do we rule it out."

In other words - we're going to try to reform free movement rules so we can stay in the single market, but we’re not going to say, as May has, that we’re definitely getting rid of free movement.

This has formally been Labour's policy for some time. The party's Brexit secretary, Keir Starmer, clearly envisages Britain trying to reform free movement and then staying in the single market (through the European Free Trade Area agreement on the European Economic Area). Here he is speaking to Politico saying we should try to secure "some change to the way freedom of movement rules operate"and here he is in a speech towards the end of last year saying "changes to the way freedom of movement rules operate in the UK have to be part of the Brexit negotiations".

Note the wording. Theresa May always says that control over immigration will be brought back to Westminster. That is not reform of freedom of movement, it is its abolition. But Starmer wants to "change" the way it "operates". Which means it’s still operating. Which means Britain is still in the single market.

The difference sounds minor, but it is very significant: it’s the difference between trying to change or ending something. And it’s potentially the difference between a very significant economic change and a very minor one. Many believe we'd be unlikely to suceed in trying to reform free movement, but let's leave that to one side for now. This is just about the Labour tactic, not whether it would actually work.

So there we have it. Everyone is confused and unfair and Corbyn has been perfectly consistent, right? Well, no. Because behind the scenes Labour sources are talking absolute madness.

Take the word 'access' to the single market. Usually this is code for hard Brexit, because it's short of promising membership. But it's not clear either Corbyn or Starmer are using it that way.  

Last year in that Politico interview Starmer said the term 'membership' doesn't apply:

"There's been a discussion about whether one should aim for membership or access. At the moment our membership is because we're a member of the EU. That membership will have to lapse. That's why I have used the phrase fullest possible access to the single market.”

It's not obvious what Starmer is trying to do here. Perhaps he is talking technically. More likely, he finds it useful to use this phrase so that he doesn’t have to commit to a position and can keep his options open. Maybe - this is my interpretation - he's saying that the term encapsulates the full range of options from a free trade deal to single market membership. 

Either way, it seemed like Corbyn was using 'access' in the same way.

Maybe. Or maybe not. One source close to the leader tell me that "full access" to the single market referred only to tariffs. That's a bizarre argument. Tariffs are a tiny part of the single market jigsaw. Much more important is the mutual recognition of standards, which allow goods to pass between countries as if they were in the same one. Or free movement of people. Or services. Tariffs are the kind of thing you sort out relatively quickly at the start of a free trade deal.

Then look again at Corbyn's comments during his morning round of interviews:

"I would say economically, we've got to be able to trade with Europe."

This is such a strange comment. Anyone can trade with Europe. You just send them a thing and they buy it. And then they send you stuff. America trades with Europe and it certainly doesn't have free movement with it. Does Corbyn understand the difference between trade, free trade deals and the single market? It's not clear.

It gets weirder. When you mention this to them, Corbyn figures sometimes say there is no such thing as membership of the single market. This isn't a one off. I've been told it and someone obviously told it to the Guardian too because it's in there.

God knows what they're getting at when they say this. It's not much less mad than saying the table you're eating your dinner on does not exist. This idea is thought to have come from Seamus Milne, Corbyn's Stalinist henchman. It is not clear what the function of saying it is. Does he believe it? Or is it some strange sort of political tactic to deflect questions or maximise flexibility? If the latter, why be so precise - and so hopelessly wrong - about the single market being just about tariffs?

And even that strange hallucinatory definition is not shared across Labour. Other Labour sources say 'full access' means membership of the single market. Others that it means whatever Starmer says it means. No-one seems to be able to agree.

Is this all some genius tactic meant to keep the party together while telling each side what they want to hear? Is it part of some complex political game by Milne to tilt us out the single market while not making it clear? Is it just the failure of people in the team to be properly briefed on what these terms mean and when to use them?

Who is in charge here? What's going on? God knows. They are an unspeakable shambles. I would go into a rant here about the total absence of responsibility or scrutiny at a key moment in British political history, but you can pretty much fill that bit in for yourself.

Ian Dunt is the editor of Politics.co.uk. His book - Brexit: What The Hell Happens Now? - is available now from Canbury Press. 

The opinions in politics.co.uk's Comment and Analysis section are those of the author and are no reflection of the views of the website or its owners.

Latest entries