Brexit Bulletin: May’s Five New Tests
Brexit Bulletin: May’s Five New Tests
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Theresa May has set five tests for any Brexit agreement she brings home from Brussels. One of them might just force her divided Cabinet into a softer divorce than some would like.
In major speech on Friday, the prime minister will pledge that the eventual Brexit deal “must protect people’s jobs and security,” according to extracts released overnight. She has sought as much wiggle room as possible, rejecting anything that could weaken her negotiating hand, but the tests she will set out on Friday could end up boxing her – and her divided Cabinet – into a corner.
May was haggling with her Cabinet as late as yesterday as she prepared for what is her fourth landmark Brexit speech, and was set to take on board changes that were suggested by both pro-EU and pro-Brexit ministers. In a sign of her political weakness, she asked ministers to allow her some flexibility to make her own changes, one official said. They agreed to let the prime minister edit her own speech before delivery, Bloomberg’s Alex Morales and Tim Ross report.
In trying to keep all sides on board she runs the risk that the speech won’t provide the detail that Brussels is demanding before talks on the future relationship start at the end of this month. With just a year to go until exit day, any further delay is a problem. The EU has already rejected what it has seen of May’s plan as based on “illusion” and unacceptable cherry picking. But she will stick to her demands for a tailor-made deal.
“I want the broadest and deepest possible agreement – covering more sectors and co-operating more fully than any Free Trade Agreement anywhere in the world today,” she will say. “Rather than having to bring two different systems closer together, the task will be to manage the relationship once we are two separate legal systems.”
Here are those five tests:
- Regain control of laws, borders and money, while recognizing the referendum “was not a vote for a distant relationship with our neighbors”
- The agreement must be enduring and not lead to endless future negotiations
- It must protect people’s jobs and security
- It must be consistent with Britain remaining a “modern, open, outward-looking, tolerant” nation that stands up for its values while meeting international obligations
- The deal “must strengthen our union of nations and our union of people.”
She will surely be reminded of them time and again, and certainly when she brings any deal back to Parliament for approval.
On Thursday, in a two-hour meeting with senior figures, everyone weighed in on what May should say. The biggest source of friction was how close Britain should remain to the bloc’s regulations after the split. Some pro-EU ministers, including Business Secretary Greg Clark, want her to make a binding commitment to align Britain’s rules and regulations in key industry sectors with those of the European single market. Others, including Brexit Secretary David Davis and Foreign Secretary Boris Johnson, pushed back.
Thursday’s meeting was the penultimate stage in a long week of speeches and soundbites from across the Brexit spectrum. Here’s your pre-speech highlights reel.
Friday’s speech is expected in London shortly after 1.30pm. You can watch it live and follow our live blog.
Watch out for comments on the customs union, the European Court of Justice, key industries, and any mention that divorce will mean Britain can go out into the world and strike new trade deals. That’s a key demand of the Brexit-backers. As pro-Remain Tories are emboldened, look also for messages directed their way.
Brexit Latest
Food Crisis Warning | A no-deal Brexit would lead to an unprecedented U.K. food shortage, J Sainsbury Plc Chief Executive Officer Mike Coupe said. “The impact of closing the borders for a few days to the free movement of food would result in a food crisis the likes of which we haven’t seen,” he told Bloomberg’s Sam Chambers in an interview. “It’s inconceivable to me that there won’t be a solution found.”
Major Gives Rebels a Boost | Former Prime Minister John Major’s speech on Wednesday has given pro-EU rebel Tories a shot in the arm and some political cover to put the issue of Brexit above party politics. As Rob Hutton writes, pro-EU rebels don’t have the years of experience defying governments that the Brexit hardliners can draw on, and in that context Major’s speech gives them a much-needed boost.
Transition at Risk | European Union chief Brexit negotiator Michel Barnier told the U.K. that even if there’s a deal this month on the transition period that businesses seek, it’s still at risk of unraveling until a full agreement on the exit is approved in 2019.
“Certainty about the transition will only come at the end of the process,” which will be “probably early next year,” Barnier told an audience of business leaders on Thursday in Brussels.
The Physics of Friction | European Union President Donald Tusk warned the U.K. that it can’t expect frictionless trade outside the bloc’s single market, once again pre-empting May’s moves as she tries to bring her cabinet to a united stance on Brexit. “Friction is an inevitable side-effect of Brexit,” Tusk said in Brussels before meeting May in London over lunch.
On the Markets | Pound traders will be parsing May’s speech for clues as to the kind of Brexit she’s after. The pound was little changed on Thursday at $1.3780.
And Finally...
The Royal Mint has released 26 new 10p coins celebrating the best bits of being British, from queuing to cricket, the Angel of the North, James Bond and even the National Health Service.
The coins were designed after a public vote. Visitors to trying to get their hands on the new coins crashed the Mint’s website on Thursday, and visitors were asked to join an orderly queue.
To contact the editor responsible for this story: Adam Blenford at ablenford@bloomberg.net, Andy Reinhardt
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