Friday, 22 September 2017

May's Florence flop

Anyone expecting Theresa May’s Florence speech to live up to its ‘momentous’ billing will have been disappointed. The part that was most heavily trailed and which will be most extensively focussed on is the willingness to continue to pay into the EU budget for a probable two year transition period whilst staying in the single market and, it seems, the customs union. But this is not some ‘open and generous’ offer: it is the bare minimum in order to achieve that transition, which all but the most cretinous of Brexiters (step forward, Peter Bone) knows that the UK desperately needs. It’s also, for all that it is being touted as a large amount of money, quite trivial in the context of the overall costs of Brexit, including those incurred so far.

In any case, it’s still not clear what this transition period (which May insisted, illogically, on calling an implementation period) means. It seems to entail freedom of movement, but with a new registration process (which may or may not be compatible with EU law) and continued ECJ jurisdiction (though May ducked the question about what happens with new EU rules during the transition). But she implied it would not involve the common commercial policy (i.e. so Britain can start negotiating trade deals) which is unlikely to be acceptable to the EU.

And May has failed to explain in detail what that final arrangement would be because her cabinet and party can’t agree on what it should be. The idea seems to be a “Canada +” deal, with the plus presumably being considerable coverage on services. If so, it will be unlike any other FTA in existence, will be a long time in the making and will involve a high degree of ongoing regulatory harmonization with the EU, whereas May wants also to have scope for regulatory divergence. She appears to have fallen hook, line and sinker for the Brexiter myth that existing harmonization makes for an easy agreement. It would, if we were joining the EU; it doesn’t, because we are leaving.

The wider issues of the ‘exit bill’ in terms of future liabilities for past commitments – for example to pensions – remain unresolved and were not mentioned beyond a vague statement that Britain would honour its existing commitments, which seemed to pertain to the current budget. Nothing new or useful at all was said about the Irish border, and on citizens’ rights May continues to maintain the primacy of UK courts - there was a nod at taking ECJ judgments ‘into account’ but what this might mean in practice is unclear.

So there was very little said that properly addresses the points raised by Michel Barnier, in his Rome speech, that set out what the EU were hoping to hear from May. It therefore seems unlikely that what she said will ‘unlock’ the talks so as to allow a move to phase 2 on future trade. This phasing, don’t forget, is in line with the wording of Article 50, has always been the position of the EU, and was accepted by the UK at the start of the negotiations. There’s nothing sinister about it, and the longer the UK refuses to face up to dealing with the phase 1 exit issues the closer we get to leaving with no deal in place. In effect, we have only one year to do that deal since the final six months of the Article 50 period will be required for ratification.

Thus May’s speech changes nothing, but that doesn’t mean it is insignificant. It was an attempt to get the EU to solve the problems that Brexit creates for the UK. Hence the talk of ‘shared responsibility’ and of an ‘imaginative and creative’ approach. Indeed the backdrop slogans of ‘shared values, shared challenges, shared future’ all seemed to point to this as the central message. What it codes – and the same code can be found in most of the UK position papers – is the idea that the EU should come up with solutions to the hundreds of vexed issues and, moreover, in a way that respects the UK’s red lines, red lines deriving entirely from the need to appease the Brexit ultras in May’s party.

It is an approach which is unequivocally doomed to failure, and lacks any kind of political realism whatsoever. As an EU member, the UK was frequently able to extract ‘imaginative and creative’ solutions because the other countries recognized the constraints and pressures of UK domestic politics and had some interest in keeping Britain on board. Hence all the opt-outs, such as from the Euro and Schengen. Choosing to leave the EU means that horse has died and can’t be flogged back to life. The EU-27 have no reason to care one way or the other about Britain’s domestic difficulties. And that is compounded by the multiple ways over the last year or so that May and others have squandered what goodwill there might have been. If Britain wants to leave, then it is for Britain to solve the problems that leaving creates. The EU-27 will try to minimise the harm to themselves so far as possible; as for the harm to the UK, that’s our problem.

Fundamentally, May’s speech simply went around the same loop that Brexit has been in for months, albeit in different language. In essence, although she claimed otherwise, the idea is that everything stays the same and yet everything changes. We keep everything the Brexiters perceive as benefits whilst dropping all those things they don’t like. It really is – still - as simple and as stupid as ‘having our cake and eat it’ and if the EU don’t allow that then they are being awkward or punitive. It’s as if Brexiters still don’t grasp that leaving the EU isn’t some act of symbolism but has real legal and institutional effects. On March 29 2019 at midnight the UK becomes a third country with respect to the EU, with all that that entails.

Of course there is no mystery as to why we keep going around this loop and keep getting the same result. It’s squarely down to the refusal of ultra Brexiters to accept that they are living in a fantasy world. Whether May has now entered that world, or whether it is just that she is too politically weak to face down the ultras hardly matters. The effect is exactly the same. But with Article 50 triggered despite having failed to deal with the ultras something important has changed. Each time we go round the same loop we get closer to that day we become a third country without anything remotely like a deal in place. It was noteworthy that, when asked, May did not repudiate the ‘no deal is better than a bad deal’ formula, although not with any great conviction it’s true to say.

And, to be clear, what that would mean would be far beyond anything conjured up by ‘Project Fear’. It would mean, overnight, that Britain ceased to be connected not just to the EU but to all of the global agreements it participates in via the EU. Britain would – quite literally, because of the effects on air travel – be cut off from the world. It would be a massive and unprecedented economic and social dislocation. In practice, if we get to within a few months of that date with no prospect of a deal some of this will begin anyway, both in terms of growing company relocations and things like plane bookings not being available. So even if – as some on both sides of Brexit imagine – at the last moment the EU or the UK caves in much damage will be done, and much of that damage will be permanent.

May has blown what is getting close to being the last chance she has to re-set the course of Brexit. Admittedly, it would take political leadership of an extraordinary skill to do so. But the speech re-affirmed that she lacks any leadership qualities at all. She is entirely devoid of flair, imagination or charisma. Despite her one-time reputation for mastery of detail she seems not to understand the most basic facts about how the EU works and the issues at stake in the negotiations. She has neither the courage nor, now, the strength to deal with the ultras in her party. For that matter, as the peculiar choice of Florence as a venue and the audience who attended show, she doesn’t have the courage to speak directly to the EU itself. There’s no reason at all to expect that she will miraculously acquire any of these qualities before March 2019 any more than the Tory party and cabinet will agree what they want.

There was at the heart of May’s speech a terrible, tragic irony. All that she said about shared values, history, security challenges, economic needs and how co-operation and partnership could and should arise from these sounded like a speech making the case to join the EU rather than to leave it.

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