Despite the fanfare, the UK government has hurtled past what was apparently its own deadline on finally deciding what it wants after Brexit.
I t was supposed to be crunch time. This week was widely billed in the media as the moment the British government would finally set out its vision for what the UK’s post-Brexit trading relationship with the EU should look like.
Two meetings between Prime Minister Theresa May and her “war cabinet” of top ministers were meant to deliver a united position after months of agonising. Few thought the fierce ideological divisions between the most influential members of the Conservative government were close to subsiding, but signs were emerging that the biggest bruisers of the ruling party’s civil war had started to come to terms with the pressing need for compromise.
After weeks of intense criticism from within her own party for failing to lay down a clear direction on post-Brexit, Ms. May faced a slew of challenges from MPs on both sides of the divide. Some were directed to her office, while public challenges from party heavyweights captured the headlines with increasing ferocity.
These are nothing new, but time is running out for the beleaguered prime minister. Conservative party rules mean that a leadership contest is automatically triggered once a sufficient number of its MPs send the party letters - typically kept anonymous - demanding her resignation. Reports indicate that just a few more are needed to reach the benchmark.
Yet the meetings have been and gone, with no indication that the top Brexit team has settled on a stance at the time The World Weekly went to press. “Nothing” was agreed after the first meeting, sources told the Telegraph, and the cabinet is still “a million miles away” from an agreement. Indeed, reports suggest consensus was not even on the cards to begin with. Prior to the meetings, government insiders insisted this was not “decision week”, according to Politico.
A statement from Downing Street last week had given some semblance of progress. It announced that the UK would not only leave the EU customs union, but would not seek any similar arrangement which could be construed as “a” customs union. This appeared to show that influential Brexiteers were winning the argument in some respects. Trade minister Liam Fox, for example, has long pushed for Britain to regain the ability to strike free trade agreements independently of EU policy, which the customs union forbids.
Yet it quickly emerged that the government had not ruled out a ‘customs arrangement’ with the EU, under which the government could in principle sign back over some of its independence on trade policy. Meanwhile, criticism over the economic damage the government’s so-called stance would wreak was met with reminders that British business faced disruption either way. Signing up to a new customs partnership would still leave trade hampered by checks on goods and other non-tariff barriers.
“A fundamental choice still needs to be made,” explains Stephen Booth, director of policy and research at think-tank Open Europe. “How much do we value independent trade policy versus minimising disruption due to customs issues?”
The apparent disparity between Downing Street’s public pronouncements and the more muted reality of its progress in sealing cabinet unity raises questions over Ms. May’s strategy.
Despite the barrage of criticism she has faced for her supposed inefficacy over the last year-and-a-half, she has managed to cobble together some degree of unity on key issues. Stories of cabinet chaos loomed over the prime minister until the eleventh hour of the withdrawal deal reached in December. The consensus on a so-called ‘status quo’ transition deal, under which the UK will effectively remain part of the EU for the two years following the official Brexit date of March 2019, would have seemed almost unimaginable in the early days of her premiership.
The danger lies in that every subsequent race to reach an agreement seems to be taking longer to complete. The British prime minister has under a month before Michel Barnier, the EU’s chief negotiator, is expected to receive his formal negotiating instructions from EU leaders, at the next meeting of the European Council on March 22-23.
Half the battle
Once she has her cabinet in order, however, Ms. May must then take the fight to Brussels.
Even demands with support from across the government benches, such as including Britain’s services sector in a future trade deal, have already been met with fierce resistance. One of Brussels’ core conditions is that no such arrangement can be reached unless the UK signs up to the whole single market package exemplified by the Norway model, including free movement and European Court of Justice (ECJ) oversight.
It has often been argued that the EU’s missives on such matters are more negotiating positions than concrete red lines. But Brussels’ apparent confidence shows few signs of abating. This week reports emerged that the bloc could punish the UK with immediate effect if it fails to uphold EU law during the transition effect, with no right of appeal in the ECJ.
Leaked European Commission papers codifying the bloc’s position on the transition in legal terms suggested sectors of British business would be stripped of access to the single market in retaliation, according to the Telegraph. Member states which break EU law can typically fight their corner in the ECJ, and such cases frequently take longer than the two years that Britain’s transition period will afford.
Perhaps with some irony, the longer the brinkmanship goes on, the less likely a total breakdown in talks becomes. If the UK walks away from the negotiating table in a so-called ‘no deal’ scenario, it can fall back on World Trade Organisation trading rules. Experts believe there is still just about enough time to set up the customs infrastructure to avoid chaos in such a scenario. But it is fast slipping away.
The mammoth task of getting the divided cabinet to finally thrash out its position, 19 months after the referendum, could well be dwarfed by the challenge ahead.