May’s ‘renaissance’ speech paints over cracks in Tories’ Brexit position

Theresa May PM May's plan to rip up human rights law

Theresa May has a history of hedging her bets when it comes to Brexit – and her speech in Florence on Friday was no exception.

Even before she took to the stage in an annexe of the Santa Maria Novella church, it was clear what her objective was. Her chancellor Philip Hammond, foreign secretary Boris Johnson, and Brexit secretary David Davis had been flown to Italy to applaud her every word. The three cabinet ministers – who have disagreed profoundly on what Brexit should mean, and still do – filed in and sat down in the front row before smiling benignly throughout. The fact that May thought they had to be there, when they had approved the speech the day before at a two-and-a-half-hour cabinet meeting, said it all.

What had been billed as a visionary speech about the long-term position of Britain in Europe seemed, from the choreography at least, to be dictated more by the needs of short-term party management as May desperately tried to keep the peace. Just as May’s only contribution to the Brexit debate before the referendum in June last year had ducked and weaved, offering something for everyone, so in many respects did her address in Florence. Immediately afterwards, MPs of all parties were left scratching their heads. Had it really moved things on at all? What was the long-term vision? The Labour MP Heidi Alexander remarked afterwards: “We were all asking why she had flown all those ministers out to Florence at such huge expense. It offered no clarity on the long term whatsoever.”

A few hours after May and her ministers flew back to London, Moody’s, one of the country’s leading rating agencies, downgraded the UK’s credit rating, citing lack of clarity about the UK and its future in Europe. “Any free-trade agreement will likely take years to negotiate, prolonging the current uncertainty for business,” it declared. The subject matter of the speech had bamboozled most Tory MPs back home and in the hours afterwards they were strangely quiet. No one was quite clear which side had come out best.

So where did the speech leave the plan for Brexit? As the fog lifted, one thing was abundantly clear. While May offered little clarity about the long-term destination, in the short run she and her cabinet had united around a hugely significant decision. It was one that only weeks ago would have provoked fury among hardline Leavers. Brexit was, to all intents and purposes, being delayed by two years until 2021. This was not because of any great master plan on the part of May or her government, but because her party and cabinet could not agree what the future should look like beyond 2019, and time was running out. May had begun her premiership selling herself as strong and decisive on Brexit, a leader who would deliver the will of the people and take us out of the EU lock, stock and barrel in March 2019. “Brexit means Brexit” was the mantra.

More than a year later in Florence, however, she was announcing a transitional phase for at least two years after March 2019, during which, so long as the EU agreed, the UK would remain effectively inside the EU’s economic union. She was pushing the pause button, agreeing that for a limited period the UK would accept free movement, European court of justice jurisdiction and payments to Brussels for the privilege of accessing its markets. The can was being kicked down the road.

Labour’s Keir Starmer tweeted that May was endorsing Labour’s position on Brexit, but noted that she had not needed to go to Florence to do so. In January, in her last set-piece speech on Brexit at Lancaster House in London, pausing Brexit seemed the last thing on May’s mind. Then she was the queen of hard and fast Brexit. “Not partial membership of the European Union, associate membership of the European Union, or anything that leaves us half-in, half-out,” she declared. She did not “seek to hold on to bits of membership as we leave. No, the United Kingdom is leaving the European Union. And my job is to get the right deal for Britain.”

In Florence, all that flew out of the window. We would seek a two-year transition and “access to one another’s markets should continue on current terms” for a “strictly time-limited period”.

This was the part of the speech that squared off most Remainers, for the time being, in her party and cabinet, most notably Hammond, and the businesss lobby led vociferously by the Confederation of British Industry. Hammond had been pressing for a lengthy “status quo” transition, arguing that businesses would leave if we quit the single market before striking other trade deals around the world. The CBI wants us to remain in the single market for good, warning of a cliff edge for business if we do not. For employers, the call for a transition is progress. Carolyn Fairbairn, CBI director general, welcomed the speech while drawing attention to even more important decisions that will still have to be made by 2021. “The prime minister’s speech has set a positive tone and we now need leadership from both sides to turn the proposals and principles into decisions and action,” Fairburn said.

For the Leavers in her cabinet such as Johnson, who only days before had been flirting with resignation if May pulled back too far from hard Brexit, there was also enough to keep them happy. May explicitly ruled out adopting a Norway-style model under which we would have to obey all EU rules and regulations for good, post-transition, but with no say over what they are. Johnson tweeted: “PM speech was positive, optimistic & dynamic – and rightly disposes of the Norway option! Forwards!”

There was much in the speech that Johnson and the hardline Brexiters will find difficult to swallow. May had to give ground in a number of key areas, not just to keep the peace in her own party but also in an attempt to persuade the EU that enough progress has been made to move stalled negotiations on to trade issues later this year. She suggested the UK could be willing to offer up to £40bn in return for Brussels agreeing to the transition arrangements, and in a significant move offered to write legal protections for EU citizens living in the UK into the actual exit treaty.

EU Brexit negotiator Michel Barnier said the speech had been “constructive”, although he, like French president Emmanuel Macron, made clear that much more detail would be needed to allow the next phase of talks to begin. For the long term, May failed to spell out what she wants – largely because her cabinet cannot agree. She reassured Johnson and others that she would seek a “bespoke” deal with the EU on issues such as the relationship with the single market, while avoiding spelling out what form this might take, and despite the EU’s repeated iinsistence that such an arrangement was out of the question.

One leading Tory Remainer said that, while the speech had offered something for both sides, it had, in so doing, given both Remainers and Leavers equal reason to worry. “It was a classic May performance,” he said. “You hold the line but you do not commit firmly one way or the other. The big questions about where we are heading in the long run, after we unpause the pause button, are unanswered.”

Hilary Benn, chair of the Brexit select committee, said a speech that was supposed to provide long-term vision offered only the hope of a transition to a destination unknown. “We still don’t know what will come after the transition. Mrs May ruled out both the Norwegian and Canadian options in favour of a ‘bespoke’ deal. Yesterday Mr Barnier made clear that no such option is on the table as far as the EU is concerned. How does the prime minister plan to achieve such a deal when her speech did not provide the detail or certainty that British business desperately needs so it can plan ahead?”

As May held a champagne reception for 30 Tory MPs at Chequers on Saturday – presumably to spin the speech to each backbencher to suit their Brexit preferences – there were already signs that the uneasy post-Florence truce was under strain. Friends of Johnson were busy briefing that the foreign secretary had prevented Hammond from securing a transition deal of five years, not two. Allies of the chancellor were adamant, however, that Hammond had been pushing no such plan. “He doesn’t talk about wins, but it wasn’t that long ago that his idea of a transition was unpopular – now there is almost a consensus,” said one friend.

Johnson’s friends were also insisting that, until he had written his article setting out his own vision in the Daily Telegraph nine days ago, “we were heading towards a Norway model – so out in name only, after the transition.” This, they said, would have meant the UK accepting freedom of movement for good, and it was only thanks to Johnson that the plan was scrapped.

There were also reports that the leader of the House, Andrea Leadsom, had spoken out strongly in cabinet on Thursday in opposition to key parts of the May speech. Senior government sources said that, while they were hopeful the prime minister’s speech would unclog the logjam, they still expected that it would be too little, too late, for trade talks to proceed next month. Whitehall now hopes they will take place before Christmas. There was also a growing sense of unease that the government was failing to plan for the eventuality of no deal being struck by the time the UK leaves.

Former Tory minister Oliver Letwin said: “My sense talking around iis that the work is beginning inside the government now, but I don’t believe it has yet reached anything like the level of intensity that it needs to reach. That is OK – there is still time , but it will have to be done in the next few months, because that is detailed work. It requires clear thinking and administrative competence.”

With just a week to go until May heads to Manchester for the Tory party conference – the first gathering of the faithful since the snap election that robbed her of her Commons majority – she has pressed the pause button on Brexit. Her cabinet professes to be united behind her. The wider party is still trying to digest what her speech in Florence was all about. If the history of the Tory party’s vicious arguments on Europe is anything to go by, it will not be long before normal service is resumed and civil war starts up again.

Powered by Guardian.co.ukThis article was written by Toby Helm, political editor, for The Observer on Sunday 24th September 2017 07.00 Europe/London

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