U.K. Promises Brexit Clarity in Time for EU Summit in June

(Bloomberg) -- Prime Minister Theresa May will publish a detailed plan for the U.K.’s post-Brexit relationship with Europe next month, setting a deadline for her warring Cabinet to agree on a common stance.

The policy document, known as a white paper, will be released in June, according to a government official. A European Union summit is scheduled for June 28, so May will probably be able to offer counterparts at that meeting the clearest vision yet of what she wants the future relationship to look like. The EU has been calling for clarity, and sees the June summit as key milestone.

With just five months to go until both sides aim to seal a divorce deal, May’s Cabinet remains deeply split over how Britain’s trading relationship with the bloc should change after Brexit. Her inner Cabinet met again on Tuesday for about 90 minutes. As expected, there was no breakthrough.

Ministers on opposite ends of the Brexit debate have been fighting over customs, an issue that goes to the heart of what kind of relationship Britain will have with its biggest trading partner after it leaves the bloc.

David Lidington, May’s de facto deputy, confirmed on Wednesday that the white paper would include the government’s approach to trade and customs, as well as other elements of the future relationship such as defense.

Divide the Dividers

Two rival plans are being discussed and the one May backs -- an unprecedented partnership that would keep close ties to the bloc -- has been rejected by a majority of her inner Cabinet, including Brexit Secretary David Davis.

According to the Times of London, Davis told May her preferred plan could be illegal under international law. The newspaper said the attorney general’s office will give the prime minister a direct legal opinion on the matter before a final decision is made.

The other plan, known as Max Fac, puts more distance between the U.K. and the EU and relies on untested technology. That’s the one the Brexit-backers favor, even though the EU has made clear it wouldn’t be good enough to avoid a border emerging on the island of Ireland -- something both sides have committed to.

Seeking a way out of the deadlock, May has divided her ministers into two sub-groups tasked with examining and honing the two proposals. They will continue their work, with the prime minister seeking progress as soon as possible, according to another government official.

Seeking Agreement

May wants consensus around a single option that she can present to her wider Cabinet and Conservative Party, as well as the EU. Though the bloc previously dismissed both options as unworkable, it has started to engage on May’s partnership plan by asking for more details.

The two working groups each include ministers who are opposed to the proposal they are tasked with discussing. Pro-EU Business Secretary Greg Clark and Northern Ireland Secretary Karen Bradley were teamed with Davis on Max Fac, which the latter supports. Brexit-supporting Environment Secretary Michael Gove and Trade Secretary Liam Fox were focusing on the customs partnership plan along with Lidington.

Issues that need resolving on maximum facilitation include how to make it as frictionless as possible, and how to overcome EU concerns around plans to exempt small traders from some provisions, the official said. On May’s preferred option, hurdles include the impact of Britain having its own independent trade and tariffs policy, and who would have jurisdiction over a dispute resolution mechanism.

Both groups have only met once so far, the official said, but will meet regularly in the coming days.

Applying Pressure

The main opposition Labour Party said Tuesday it will use a rarely deployed parliamentary device to force the government to reveal the details of the two customs options, which could reveal key intelligence on what May’s government has in mind to pitch to Brussels. The party has used the “humble address” to get the government to hand over documents in the past.

Business Secretary Clark visited Norway on Monday to examine the country’s border with Sweden, according to another official familiar with the matter. As a member of the European Economic Area, Norway is part of the EU’s single market but not its customs union, meaning that there are still border checks for goods crossing between the two jurisdictions.

Both the government and the Labour Party have rejected joining the EEA because it would leave the U.K. subject to EU rules after Brexit -- though the House of Lords voted in favor of it last week.

--With assistance from Jessica Shankleman

To contact the reporters on this story: Alex Morales in London at amorales2@bloomberg.net, Robert Hutton in London at rhutton1@bloomberg.net.

To contact the editors responsible for this story: Flavia Krause-Jackson at fjackson@bloomberg.net, Emma Ross-Thomas, Stuart Biggs

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