What do you do with a problem like Theresa?
The English language has yet to invent the words to describe how uniquely incompetent Theresa May’s Brexit negotiating strategy has been, as well as how uniquely incapable she is of understanding just how bad is the Withdrawal Agreement (WA) and Political Declaration approved by EU leaders on 25 November 2018.
I have examined elsewhere in Briefings for Brexit the Prime Minister’s claims that the WA – while specifically about citizens rights, the divorce bill and the situation in Ireland – will also allow us to:
- Take back control of our laws
- End European Court of Justice jurisdiction in the UK
- End vast sums of money going to the EU
- End free movement
- Allow the UK to leave the Single Market
- Allow the UK to leave the Customs Union
- Guarantee control of our agricultural policy
- Guarantee control of our fisheries policy
- Allow new independent trade deals for goods and services
- Guarantee the existing defence and security arrangements with our international allies, and
- Keep all parts of our “precious” country united.
I pointed out that none of this is true – and this has been confirmed by the Prime Minister’s own Attorney General (EU Exit: Legal position on the Withdrawal Agreement and the Legal Effect of the Protocol on Ireland/Northern Ireland) and the House of Commons EU Legislation Team (The Withdrawal Agreement: Legal and Governance Aspects).
She offered the backstop to the non-problem of the Irish border. Yet the backstop has become the Achilles Heel that the EU will use to keep us trapped in its orbit indefinitely, subject to its rules, but with no say in how those rules are determined. The WA allows the EU to control and, indeed, veto the use of state aid in the UK, giving the EU “extensive control over UK competitiveness” after Brexit. The WA even affects our defence forces, and former Field Marshals in the British Army and heads of the security service have warned her how dangerous the WA is for our future security. We are told that no government can bind its successor, but this is what the WA does because it will be registered as a legally binding international treaty and cannot be changed without the consent of every member state of the European Union.
Every day, new evidence of incompetence emerges. Here are just three examples at the time of writing. The Times covered a report from the House of Lords EU financial affairs sub-committee which shows that the UK government, as part of the WA, has given up its right to receive £6.6bn in profits and dividends from the European Investment Bank – which it will have to leave when it leaves the EU. This could have been used to offset part of the £39bn Brexit bill. IPE reported that the government has agreed to pay at least £8.5bn towards EU staff pension liabilities which the EU insists we make. Only now, two years after the problem first emerged and less than two months before the UK is due to leave the EU, the Guardian reports that UK officials will begin to “test the workability” of the alternative to the Irish backstop proposal, which includes using existing technological solutions to facilitate a smooth border crossing without infrastructure.
Has the PM now recognised her own ineptitude and realised she needs to listen to others outside her own very narrow circle of confidants? Not at a bit of it. She hasn’t listened to any of these criticisms at all.
Her only response is to say that “the WA is not perfect, but we mustn’t let perfection be the enemy of the good”. And consistent with one of the personas that I identified in the Briefings for Brexit piece cited above, she is – having spent two years of her life working on it – “determined to get this deal through”. She has had to endure a huge amount of flak from almost all quarters and this is now personal.
The ‘meaningful vote’ and a glimmer of hope
There was a slight problem with this, of course. The WA had to be approved in a ‘meaningful vote’ in the House of Commons. This took place on 15 January 2019 and Parliament rejected the WA by 432 votes – which included 118 Conservative MPs – to 202, the biggest defeat for any government in modern British history.
MPs were given a chance to propose amendments to the WA during a debate on 29 January. The outcome of the debate was initially quite encouraging for Brexiteers. Two amendments – the Cooper and Grieve amendments – which essentially wanted to delay or cancel Article 50 were defeated. A third amendment, tabled by Dame Caroline Spelman, that rejected leaving the EU with ‘no deal’, was passed with a majority of 8 (318 votes to 310), although this cannot overturn the 2018 European Union (Withdrawal) Act which states that the UK will leave the EU at 11pm on 29 March 2019 whether or not there is a deal. A fourth amendment, tabled by Sir Graham Brady, “requires the Northern Ireland backstop to be replaced with alternative arrangements to avoid a hard border…[and supports] the WA subject to this change”. This was passed with a majority of 16 (317 votes to 301). The PM now has to go back to the EU to renegotiate the backstop and the House would debate the matter again.
And for the next few days, there was a glimmer of hope. One of the key reasons that the Brady amendment passed was an agreement to support it by both Remainers and Leavers in the Conservative Party, following secret talks initiated by the Housing Minister, Kit Malthouse. This involved meetings between Remain-supporting Robert Buckland, Stephen Hammond and Nicky Morgan, on the one hand, and Jacob Rees-Mogg and Steve Baker from the European Research Group (ERG), on the other. This resulted in the ‘Malthouse Compromise’ which has two stages. The first involves the PM going back to Brussels and to renegotiate the backstop, so we can leave the EU on schedule on 29 March. The second involves extending the transition period by an additional year to allow extra time to agree a new trading relationship. If that failed, the UK and EU would move to World Trade Organisation (WTO) terms at the end of 2021. These changes would be legally binding. There was widespread support for the compromise on the Tory backbenches.
Initially, there were encouraging signs from Downing Street. In the hours before the vote, it gave assurances to the ERG that it would change it negotiating team, sidelining Olly Robbins and bringing in two top trade negotiators, Crawford Falconer, chief trade negotiator at the Department for International Trade, and Julian Braithwaite, the UK’s permanent representative at the WTO. Downing Street also said it would consider three alternatives to the backstop: a time-limit to the backstop, a unilateral exit clause, and the Malthouse plan, which “recast” the backstop as a “free trade agreement-lite” with a commitment to no hard border. It even set up an Alternative Arrangements Working Group (AAWG). This looked like progress, since previously, the PM had insisted that the WA was the “only deal on the table”.
There had even been recognition over the previous week or so by Michel Barnier that in the case of a no deal Brexit, the EU will “find an operational way of carrying out checks and controls without putting back in place a border….Controls can be made paperless or decentralised”. The European professional customs body, CLEAT, confirmed that this was possible and consistent with procedures based on intelligence and risk management available under EU law. Similarly, the Irish Prime Minister, Leo Varadkar, said that the backstop could be replaced by “an agreement on customs and regulations”. This, of course, is no more than the ‘maximum facilitation’ proposal originally proposed when David Davis was Brexit secretary, and which previously had been criticised as a “hunt for the unicorn” by Barnier’s deputy, Sabine Weyand.
But it was a false dawn
But in the days following the vote, this all changed. Falconer and Braithwaite were not included in the new negotiating team. Instead three ministers were included: the Remain-supporting deputy PM David Lidington, and the Brexit-supporting attorney general Geoffrey Cox and Brexit secretary Stephen Barclay. Robbins remained head of the civil service team. He made it clear to the PM that he was opposed to reopening negotiations on the basis of the Malthouse plan which he said “wasn’t worth the paper it’s written on”. Philip Hammond, the Chancellor, announced he was also opposed to the plan because the EU have said that they will not renegotiate the backstop or reopen the withdrawal agreement.
The ERG announced its disappointment at these changes: “Some people in government still want to see a Customs Union with the EU. So it’s no wonder they don’t want free traders in the room who will explain how it all works”.
But my fear is that the situation is far worse than deciding who would be best suited to discuss the benefits of free trade with the mercantilist Michel Barnier. In my Briefings for Brexit piece, I considered one of Theresa May’s other personas. She is the “Manchurian Candidate” – a Remainer who is just going through the motions of exiting from the EU by agreeing to a WA that is so absurd that people will say that if this is what Brexit means, we might as well stay in. The EU made it very clear that the only deal we would get is one that made us worse off than staying and the PM and Robbins have collaborated fully in ensuring that the WA delivers that. Viewed through this lens, all this incompetence is quite deliberate. The British people were going to have to pay a high price for defying Europe’s elites on both sides of the Channel.
Bringing these two personas together, you can see that Theresa May will deliver Brexit – in contrast to the other Remainers in Parliament who want to cancel Brexit by revoking Article 50 or by using a second referendum. But it won’t be the Brexit that was promised in the Lancaster House speech. It will be ‘her’ Brexit – a very bad exit followed by two years of future relationship talks preparing us for re-entry. This explains why Falconer and Braithwaite were ‘dropped’. There isn’t going to be a serious renegotiation. Theresa May genuinely believes in her deal. According to Charles Moore, the PM is “stuck on staying in the Customs Union. She does not use those very words, since the Conservative Party is explicitly committed not to stay. But all those phrases like ‘deep and special partnership’, ‘close alignment’ and ‘customs partnership’ are attempts to preserve our membership by slightly different means”.
So how can she go back to Brussels renegotiate it? In any case, she’s not up to the job. The EU have outwitted her at every stage – although, as I say, you can’t rule out that this is all part of a carefully choreographed plan by high-level EU and British officials. We shouldn’t underestimate this possibility – the EU has a history of manipulating national populations by getting them to vote again until they make the ‘right’ decision. And significantly, Lord Kerr, the British civil servant who drafted Article 50, has always made it clear that he deliberately chose a short time period of two years, because he knew it would virtually be impossible to negotiate a proper withdrawal during such a short period and that the leaving member would be forced to accept whatever terms the EU offered.
There is another reason for Brexiteers to be concerned – the parliamentary arithmetic and the make-up of the present Parliament. Most of those voting against the WA were Remainers. Of those who voted for the Brady amendment, there are fewer than 120 genuine Tory Brexiteers. There were just seven Labour MPs who voted for the amendment, although there are up to 50 Labour MPs in midlands and northern leaving seats. While the Labour leadership (Corbyn and McDonnell) are anti-EU and do not see ‘no deal’ as catastrophic, a leftwing pro-referendum group, Another Europe is Possible, is promising a “moment of reckoning”, including deselection, if these Labour MPs do not vote down the PM’s Brexit deal and support a second referendum. You need 319 votes to ensure that the UK withdraws on 29 March in the event that a revised WA along the lines of the Malthouse plan is rejected by the EU.
There is a small band of principled politicians on both the Left and Right who support a proper Brexit. But, Sherelle Jacobs observes that: “Over the last 50 years, the quality, integrity and risk-taking capacity among British politicians has steadily disintegrated. And now, here we are in 2019, with the most inept, dismal, self-seeking Parliament in its history”. She describes most Remain MPs as “risk-averse managerialist” types and believes that these MPs are “incapable of going through with stopping a no-deal Brexit”. But I have my doubts. These are the kind of people who fear change and prefer the status quo. I believe most of them will chicken out and vote for the WA.
It is still possible to have a successful strategy to deliver Brexit
On the domestic front, two things are necessary. The first is to build bridges to those MPs who could be persuaded to support a ‘no deal’ Brexit – as has been done between Tory Leavers and Remainers to agree the Malthouse plan This is urgent, but if the EU can be persuaded that a credible block of MPs will vote for ‘no deal’, then they will open the WA for renegotiation, since they definitely do not want a no deal that threatens their £67bn net trade surplus with us and definitely do not want to impose a hard border in Ireland. Analysis by the Daily Telegraph shows that there is a potential majority (334 to 295) for the WA with the Brady amendment. This compares with a bare majority (319 to 315) for a softer Brexit than the WA. There is no majority for a harder Brexit than the WA (303 to 327) or for a second referendum (130 to 507).
The second is recognise Theresa May’s real personas and her own preferences. She needs to be persuaded to walk out of any Brussels renegotiations if the EU does not compromise. According to EU sources, she has not yet formally asked for the WA negotiation to be reopened.
On the European front, a number of avenues need to be followed.
First, any successful strategy will need to confront the EU with its own deceit. Immediately, following the vote for the ‘Malthouse Compromise’, Donald Tusk repeated that the backstop was non-negotiable. But as Fraser Nelson points out: “Let’s remember that the ‘backstop’ is something that the EU itself says it has no plans to use: a fallback mechanism that would only kick in if trade talks fail. So why would it risk plunging a continent into no-deal uncertainty over a tiny change to a clause that it says it doesn’t want to activate in the first place? Britain needs to make this point to other European states, so they can add their pressure to Brussels. The UK’s request is entirely reasonable. The EU’s intransigence is not. …[And] to Mr Tusk’s point – what does Britain want – the answer may very well be expressed in a sentence. A simple addendum to Mrs May’s deal could say: ‘The backstop, should it be needed, will be reviewed every three months with either party able to terminate the agreement after six months’”.
Nick Timothy also confirms that: “workable alternatives exist. If they did not, as the EU now claims, then we would know that the backstop itself is a deceit, because it has always been presented as a temporary and precautionary measure. It would be evidence that Brussels and Dublin have been negotiating in bad faith all along. …So MPs and ministers have to hold their nerve. The EU will not compromise if it believes Parliament will fold in a fortnight. Brussels asked what Britain wanted and now they have their answer. Their own negotiating guidelines promised ‘flexible and imaginative solutions’ that reflect ‘the unique challenges of Ireland’. With flexibility and imagination, a better deal can still be done, but Parliament must stick to its guns”.
Lord Bew of Donegore, a leading historian of Ireland and whose publications include The Making and Remaking of the Good Friday Agreement, argues that the “UK Government has allowed the Irish Government to weaponise the 1998 Good Friday Agreement in a way that prevents compromise on the backstop. The backstop, by placing key areas of North-South co-operation under the operation of a new regime, without the consent of the Northern Ireland Assembly, would turn the Good Friday Agreement on its head. Unless the delicate structure of the Good Friday Agreement is preserved, the current deterioration in North-South relations might intensify in unpredictable and dangerous ways. Unionists especially could regard the backstop as a betrayal”. However, “alongside the Good Friday Agreement, the UK and Irish Governments signed the British-Irish Agreement of 1998, which pledges a ‘solemn commitment’ to the provisions of the Good Friday Agreement in international law. The UK Government must insist that these are preserved and that the backstop is made temporary – in explicit and legally binding terms”.
Sajid Javid, the Home Secretary, has said that replacing the backstop with ‘alternative arrangements’ was entirely possible: “I asked Border Force months ago to advise me, to look at what alternative arrangements are possible, and they’ve shown me quite clearly you can have no hard border on the island of Ireland and you can use existing technology. It’s perfectly possible. The only thing that’s missing is a bit of goodwill on the EU side”.
The present Irish PM, Leo Varadkar, takes much of the blame for this situation, as Liam Halligan points out. Under his predecessor, Edna Kenny, Irish and British civil servants began working in good faith on proposals to avoid a backstop using authorised economic operator and trusted trader schemes, away-from-the-border checks and derogations for local small firms. When Varadkar replaced Kenny in June 2017, he “ordered an end to direct UK-Irish collaboration, combining with Brussels to cook up the backstop – preventing the UK from leaving the EU’s customs union unilaterally, while drawing a border, incendiary to any British government, down the Irish Sea. Varadkar has bashed the Brits in a bid to draw nationalist support to shore up his own minority government. Brussels, meanwhile, wants Britain trapped in the customs union so UK consumers and businesses keep paying the common external tariff on imports from outside the EU. Four fifths of those revenues – billions annually – go directly to Brussels”.
Second, it needs to build on reasoned arguments coming from within the EU. It is true that these have been few and far between over the last couple of years. But a good current example is the report from a group of top German economists, led by Clemens Fuest and Gabriel Felbermayr from the Ifo calling on the EU to drop its ideological demands in Brexit negotiations, particularly over the backstop and instead pursue a flexible Europe of concentric circles that preserves friendly ties with the UK. It urges Brussels to “abandon its indivisibility dogma” on the EU’s four freedoms in favour of a more constructive solution or risk a catastrophic showdown with London that could spin out of control. It proposes a new supranational trade body, the European Customs Association, in which both the EU and the UK are members with full voting rights. This would cover goods but exclude services, intellectual property, foreign investment, and social areas, such as health. Disputes could be resolved through a bilateral tribunal.
Prof Felbermayr says: “I am very angry about what has happened. Everybody in Europe is pointing the finger at London and blaming Theresa May, but nobody has been questioning whether Brussels has been doing the right thing. From the German point of view, we need Britain as hedge against countries with protectionist instincts like France and Italy. The British are closer to our liberal free-market tradition. We also need Britain in this customs association because it makes Europe’s GDP 20% larger and gives us more bargaining power with China, India, and the US”.
Third, it needs to get across to enough Remain MPs the message that the EU is in total crisis and this will have very serious spillover effects on the UK – although you would never know this from listening to the Brussels Broadcasting Corporation or reading the Financial Times. As I have written in another Briefings for Brexit piece, the EU is facing political, economic and financial crises that are getting worse by the day. Take some current examples. Populist parties in virtually all member states are targeting May’s European Parliament election to take control of the EU away from Brussels in order to “bring Europe back to its sensible core”. European economic growth has collapsed: Italy is in recession and industrial production in France and Germany has slumped. A ‘no deal’ Brexit would push Europe in to a deep recession. The financial crises facing German banks is so great that the government is considering a forced merger between Deutsche Bank and Commerzbank.
Is this strategy likely to work?
The strategy depends on all parties behaving rationally and exercising “flexibility, imagination and goodwill”. It also depends on the British side speaking with a single united voice. But sadly, this is not the world we currently live in.
The ERG have now voiced concerns that the PM will not ask for the WA to be renegotiated. Geoffrey Cox has been saying he will instead seek a “joint interpretive instrument”, or written assurance, from Brussels that the backstop will not be permanent. Jacob Rees-Mogg said that such an assurance would be “pointless and would impress few people”.
Further, the British voice continues to be fragmented, with Remainers constantly speaking out against our strongest negotiating card, the threat of a ‘no deal’ Brexit. At the time of writing, Greg Clark, the Business Secretary, said this would be “ruinous” for the economy, while Rebecca Long-Bailey, the Shadow Business Secretary, said: “The government must rule out no-deal, for the sake of the car industry, manufacturing and the economy as a whole.” These statements are deliberately intended to weaken their own government’s negotiating position.
In Europe, as Daniel Hannan points out: “Most member states – especially those which conduct a lot of trade with Britain, such as Germany, Denmark and the Netherlands – are aghast at the prospect of tariffs. Likewise, many of the states with large expatriate populations here – populations which vote in their countries of origin – don’t want to risk an equitable settlement of citizens’ rights over a border that no one is ever going to install. …The incentives in Brussels, though, are not the same as those in the national capitals. For EU functionaries, this isn’t about finding a mutually beneficial outcome. Rather it is about, as Juncker put it during the referendum, ‘punishing deserters’. This is especially true of the chief Commission official, the Anglophobic Martin Selmayr, who is determined that Britain must suffer for Brexit, even if that makes everyone else suffer too”.
Selmayr has joined Barnier’s negotiating team. He is fully aware of the delicate parliamentary arithmetic in the UK, delights in the comments of Clark and Long-Bailey, and sees no need to compromise. He told a delegation of British MPs that the EU would not even consider the legally binding assurances being sought by Geoffrey Cox, let alone a more substantial reworking of the original deal. Ramping up the pressure, he said it was a good idea that the EU had started its no-deal Brexit preparations in December 2017. He also said that the UK must pay the £39 billion Brexit bill, even in the event of no deal, otherwise the future relationship between the UK and EU could be jeopardised.
Sadly, the strategy is not going to work
Speaking in Belfast on 5 February, the PM said the backstop would not be scrapped, but that changes would be needed to persuade the House to vote for the WA and leave the EU on 29 March. Without specifying what these changes would be, there are only two possibilities, adding a backstop expiry date to the WA and having a unilateral backstop exit mechanism for the UK.
On 6 February, The Sun reported an unnamed Cabinet minister saying that the PM now wanted to abandon the Malthouse plan believing it was simply unrealistic to introduce new ideas and get them approved by the EU just 50 days before departure from the EU: “The PM needs Brussels to kill off Malthouse quickly. She can’t do it herself, she knows the EU has to do it for her or the European Research Group will never forgive her”. Jean-Claude Juncker duly obliged by announcing: “Alternative arrangements are for the future, not for now. When it comes to the future relations, we can have a look into alternative arrangements. But they can never replace the backstop. We are sticking to the line that we set on Day One”. This very statement provides conclusive proof of the EU’s deceit!
The PM met with Juncker in Brussels on 7 February and, according to the joint statement that followed, “raised various options for dealing with” concerns about the backstop, but Juncker “underlined that the EU27 will not reopen the WA”. They will meet again before the end of February, a little more than a month before the formal date for leaving the EU in order “to take stock”. So the ERG’s concerns are valid, there is no sign of serious negotiations on any of the possibilities for dealing with the backstop problem.
Instead, the PM began toying with idea of staying in the Customs Union after Brexit, building on Labour leader Jeremy Corbyn’s proposal. She knows that this would secure a majority in the House, despite having said dozens of times that the UK would be leaving the Customs Union. Donald Tusk immediately came out in support of Corbyn’s softer Brexit. So we now have an unholy alliance between a corporatist Tory Prime Minister and a Marxist Labour leader who is a big fan of Chavez-Maduro economic policies. They are both hellbent on keeping us trapped in some kind of customs arrangement with an increasingly authoritarian European superstate in which consumers are paying around 20 per cent more for their food, shoes and clothing than they need to in order to protect the profits of big European businesses.
But even this bizarre possibility now looks like further diversionary tactics. Olly Robbins has been overheard saying that the PM will only ask for minor changes to the backstop and will then present MPs with a choice of either backing her essentially unchanged deal or accepting a long extension to Article 50. This explains why she has still not formally asked to reopen negotiations!
On 10 February, Downing Street announced that MPs will be given another chance to vote for the WA at the end of February, even if the PM has not managed to negotiate any meaningful changes. It is now clear that Theresa May is “running down the clock” so that enough MPs chicken out and change their vote in favour of the “only deal on the table”, her withdrawal agreement. She is quite determined to get her deal through. And as her Justice Secretary, David Gauke, has warned MPs: “back the PM’s deal in short order or risk Brexit delay”.
Whenever we needed an ‘Art of the Deal’ Prime Minister, like never before in our history, we just don’t have one who is up to the job. Instead, we have one who is fully on side with the EU.