Tuesday, June 13, 2017

Brexit weekly briefing: shock election result means new negotiation calculus

EU Referendum Morning Briefing

Brexit weekly briefing: shock election result means new negotiation calculus

A weakened Theresa May will need support of political rivals, including those who support a softer Brexit

Theresa May
Theresa May is significantly weaker after the unexpected election result and is now reliant for her majority on Northern Ireland's DUP. Photograph: Toby Melville/Reuters

Jon Henley and Ian Walker


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The big picture

So many questions. Britain's shock election result has huge but unknowable Brexit consequences, with about the only thing most people seem to agree on being that it will now be very difficult for the government to pursue the kind of "clean break" with the EU that it was pushing for.

For the time being, the Brexit secretary, David Davis, is sticking manfully to the script, telling the BBC on Monday:

We've made pretty plain what we want to do. It's outside the single market but with access. It's outside the customs union but with a customs agreement. It's taking back control of our own laws and borders. Those things are fundamental.

But key elements of the new reality do seem – in contrast to earlier government acknowledgment that "taking back control" of its borders, laws and money means Britain cannot stay in the single market – to suggest it may end up doing so after all:

  • The election result has significantly weakened Theresa May and means she is unlikely to survive for long as prime minister and party leader – how long is a moot question.
  • However long she stays, she now needs the support of political rivals inside the Conservative party, including "pragmatists" such as the chancellor, Philip Hammond, who favour a softer Brexit.
  • The prime minister is also reliant for her majority on Northern Ireland's DUP, whose demand for a "frictionless border" with the Republic could necessitate staying in both the customs union and the single market.
  • The support of pro-European Scotland's cohort of new Conservative MPs will also be critical. Their newly powerful leader, Ruth Davidson, has already called on the government to pursue an "open" Brexit.
  • The so-called "Norway option" is back. Previously dropped because it requires free movement of people, this would see the UK retain full access to the single market by rejoining the European Free Trade Association (Efta).

Which is not, of course, to say that any of the above will happen. Other factors may prevail (and increase the chances of a car-crash Brexit), including:

In any event, it seems as though the start of Brexit talks – like the Queen's speech – may now well be delayed.

The view from Europe

Concretely, the election result changes little for the EU27: they still want to get on with it, they will still insist the UK respects their schedule of "divorce first, trade talks second", and their Brexit red lines remain unaffected – just as they would have if May had won a large majority.

Europe is worried, however, that a weakened prime minister will no longer be able to bring her party to compromises. Senior EU diplomats also say the election has magnified their uncertainty about what the UK really wants, as London has not sent Brussels a single position paper.

Several leaders and EU officials warned about delaying the start of the talks by too long, pointing out that the clock was already ticking on the two-year time period allowed for the article 50 divorce negotiations:

We don't know when Brexit talks start. We know when they must end. Do your best to avoid a "no deal" as result of "no negotiations". #GE2017

— Donald Tusk (@eucopresident) June 9, 2017

Others called the election a "disaster" and an "own goal" that would "make already complex negotiations even more difficult", and risked increasing the chances of the talks breaking down altogether.

Senior EU sources also said that if London insisted on talking about a free trade deal before the issues of the divorce bill, citizens' rights and the border in Ireland, the EU would take a year to draft a new mandate for its chief negotiator, Michel Barnier, in effect killing the negotiations.

Meanwhile, back in Westminster

As of this week, the political action is finally back in Westminster following the election campaign, as MPs return to the Commons – and in notably different political proportions to those that more or less everyone expected.

The 30 extra Labour MPs and 13 fewer Tories might be only a relatively small proportion of the entire 650-seat Commons, but it has dramatically transformed the political landscape.

Theresa May, who called the snap election in the expectation of winning a crushing majority, is instead hanging on to her job by her fingernails, and must placate furious – and no longer afraid – Conservative MPs with a more conciliatory style, and perhaps a tweaked platform of policies.

Already her two main advisers have departed, and a planned shake-up of May's cabinet instead became a tweak, not least as she no longer has the authority to remove any fellow big beasts. The vital pact with the DUP that will allow her to stay at No 10 has, moreover, yet to be sealed.

For Labour, the problems are more benign, and to look at Jeremy Corbyn's face you might never guess it was his party that, officially, lost the election. He has postponed a shakeup of his front bench, mainly to keep the media focus on the Conservatives' many problems.

Now suddenly seen as electable, the Labour leader has seen a few of Labour's previously critical heavyweights allow talk to happen about how they might consider a return to the shadow cabinet. A few might be given roles, but Corbyn is also believed to want to remain loyal to the MPs who stuck with him. Yes, it's a conundrum. But as a problem, it is one that May would love to have.

You should also know ...

Read these:

In The Guardian, Charles Grant of the Centre for European Reform thinktank is optimistic about a softer Brexit, arguing that May's crumbling authority offers a new chance for compromise:

The EU will make it clear that if you want more economic integration, you must give up sovereignty. In recent months they have grown increasingly frustrated with May, her team and the key Whitehall ministries, accusing them of being ill-prepared, lacking expertise and making too many unrealistic demands ... The 27 hope for a softer and more realistic British approach – whether they have to talk to May Mk II or a new prime minister. If the British oblige, the EU could scale back some of its demands, for example on money. And then a deal would become more likely.

On Project Syndicate, Ngaire Woods, dean of the Blavatnik school of government at Oxford University, offers negotiating tips for a weakened UK government, saying that thus far it has been too combative and too self-interested, and has created altogether unrealistic expectations:

May called the recent election because she wanted a stronger mandate to negotiate a good deal for her country. She didn't get it. Now more than ever, securing a deal will require shifting to a collaborative, outward-looking, and realistic negotiating strategy.

And in a brilliant essay in the New York Review of Books, Fintan O'Toole argues that this tumultuous election showed above all that the Brexit chickens were finally coming home to roost:

Brexit is a back-of-the-envelope proposition. Strip away the post-imperial make-believe and the Little England nostalgia, and there's almost nothing there, no clear sense of how a middling European country with little native industry can hope to thrive by cutting itself off from its biggest trading partner and most important political alliance …

The Brits want what they can't possibly have. They want everything to change and everything to go as before. They want an end to immigration – except for all the immigrants they need to run their economy and health service. They want it to be 1900, when Britain was a superpower and didn't have to make messy compromises with foreigners. To take power, May had to pretend that she, too, dreams these impossible dreams. And that led her to embrace a phoney populism in which the narrow and ambiguous majority who voted for Brexit under false pretences are be re-imagined as "the people" …

May's appeal to "the people" as a mystic entity came up against Corbyn's appeal to real people in their daily lives, longing not for a date with national destiny, but for a good school, a functioning National Health Service, and decent public transport. Phoney populism came up against a more genuine brand of anti-establishment radicalism that convinced the young and the marginalised that they had something to come out and vote for.

Tweet of the week

Ian Dunt on fighting form (thread):

We have no Brexit plan. We have no consensus, in either of the main parties, in parliament, or in the country, about what we want.

— Ian Dunt (@IanDunt) June 12, 2017
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