May's Fragile Truce Tested as Brexit Pledges Start to Unravel
(Bloomberg) -- The fragile truce Theresa May struck with her warring cabinet and the European Union last week was already being tested on Monday, as some of the promises made to clinch a breakthrough Brexit deal started to fray.
Brexit Secretary David Davis was among those sending signals over the weekend that the U.K. wasn’t really committed to what it signed up to last week after rushed four-way talks between London, Dublin, Brussels and Belfast. A bid to placate the pro-Brexit faction of May’s Conservative Party had the side effect of angering the Irish government, and with it, probably the EU.
Davis told BBC TV on Sunday that a fall-back provision in the agreement -- that Britain will maintain regulatory “alignment” with the EU in the absence of a deal to keep an open border with Ireland -- doesn’t mean Britain can’t set different rules. He also raised a question about how binding the deal is.
The deal “was much more a statement of intent than it was a legally enforceable thing,” Davis he said, referring specifically to provisions on the Irish border. Still, “if we don’t get a deal, we’re going to have to find a way of making sure we keep the frictionless border, as it were, an invisible border, in Northern Ireland.”
May is treading a fine line to balance the competing demands of Brexit supporters in her cabinet, such as Foreign Secretary Boris Johnson and Environment Secretary Michael Gove, with the wishes of her divided backbenchers as well as those of the EU, EU member Ireland and the Northern Irish party that props up her government. With the clock ticking down to Brexit in March 2019, any number of obstacles could derail her plans.
Ireland’s Deputy Prime Minister Simon Coveney hit back against the claim that the deal isn’t binding with a Twitter message late Sunday pointing to a clause in the agreement that the commitments “are made and must be upheld in all circumstances, irrespective of the nature of any future agreement.”
The Irish government issued a statement saying “both Ireland and the EU will be holding the U.K. to the Phase 1 agreement” struck on Friday.
The Irish view matters because the final obstacle cleared by May before sealing last week’s deal was finding wording about the Irish border that kept happy both Ireland and Northern Ireland’s Democratic Unionist Party, which props up her minority government.
May reiterated the words “nothing is agreed until everything is agreed” in an emailed statement on Monday. Nevertheless, she said Friday’s agreement has injected “a new sense of optimism” into the process.
“This is not about a hard or a soft Brexit,” she said. “This was never going to be an easy process. It has required give and take for the U.K. and the EU to move forwards together.”
May on Monday will hold a cabinet meeting before later addressing the House of Commons to spell out the deal. Rumblings of dissent emerged over the weekend, with the Sunday Times reporting that May faces pressure from Gove and Johnson to pursue a “hard” Brexit. They’ll demand a transition deal and a trade agreement that allows the U.K. to write its own laws without seeking EU approval, the paper said.
“We should show the maximum flexibility in this negotiating phase so we can then exercise the maximum freedom as a nation at the end,” Gove wrote in the Telegraph on Saturday. After a two-year transition period, he said, the U.K. should have “full freedom to diverge from EU law on the single market and customs union.”
On Tuesday and Wednesday, lawmakers will debate the EU Withdrawal Bill, May’s key piece of Brexit legislation. She’ll face attempts by her own backbenchers to amend the bill to call for Parliament to approve Britain’s final withdrawal terms before Brexit can happen. Ten Tories have put their names to the amendment -- in theory, enough to cancel out her majority.
With Friday’s deal, May secured the recommendation of the European Commission that the Brexit talks will progress to the trade discussions she sorely wants. Later this week, the European Council will decide whether to accept that recommendation.
On Sunday, Davis spelled out the sort of trade deal he’s after, describing it as “Canada plus plus plus,” a reference to the EU’s existing deal with the North American nation.
“What we want is a bespoke outcome,” Davis said. “We’ll probably start with the best of Canada, the best of Japan and the best of South Korea and then add to that the bits that are missing, which is services.” He added that the chances of the U.K. leaving the EU without a deal, defaulting to World Trade Organization rules, have “dropped dramatically.’’
Failure to strike a deal would render Britain’s financial commitment to pay as much as 39 billion pounds ($52 billion) null and void, Davis said. “No deal means that we won’t be paying the money.”
The Brexit secretary’s bullishness belies noises coming from his EU counterparts. It’s taken eight months of at times bitter haggling to make sufficient progress on supposedly the easiest part of the talks -- resolving Britain’s exit payment, its future border with Ireland and the rights of EU and U.K. citizens. Moreover, the EU made clear on Friday that it’s offering the U.K. a Canada-style deal that is well short of what Britain currently enjoys.
“We all know that breaking up is hard, but breaking up and building a new relation is much harder,” European Council President Donald Tusk said on Friday.
The opposition U.K. Labour Party, which is leading May’s Conservatives in the polls, also fleshed out its Brexit vision on Sunday. Labor Brexit spokesman Keir Starmer told the BBC he’d like a Norway-style deal in which Britain would participate in “variants” of the single market and customs union. That would include “easy” movement of people, he said.
“We want a partnership that retains the benefits of the single market and the customs union,” Starmer told the BBC on Sunday. “You would have to sign a new agreement. You can’t stay in exactly the same agreement you’re in.”
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