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Analysis

Theresa May heading for dreadful deal

by Hugo Dixon | 16.11.2017

The prime minister seems close to making her latest flip-flop: offering the EU more money to break the deadlock in the Brexit talks. But that won’t secure a good trade pact. The latest Brussels leak suggests the EU won’t go beyond a “Canada Dry” deal, which would consign our economy to the slow lane for as far as the eye can see.

The drum beats are getting louder that Theresa May is preparing to cave in on money. Manfred Weber, head of the centre-right group of MEPs in the European Parliament, emerged from a meeting with the prime minister yesterday to say he was optimistic that a deal could be done at next month’s crunch summit.

Weber’s comments follow Michael Gove’s remarks in an interview with the BBC’s Andrew Marr Show at the weekend, where the hardline Brexiter said he wouldn’t try to stop May offering more money to unblock the talks. In her Florence speech in September, the prime minister indicated we would pay around £18 billion. The EU has made clear that we need to offer around three times as much.

May hopes more money will be enough to persuade the other EU countries that we should move onto the next stage of the talks. But even if it is – and it’s still possible that the failure to find a way of avoiding a hard border in Ireland will snarl things up – she won’t like what’s on offer. The best deal the EU is prepared to cut is a Canada-style agreement, according to documents from EU chief Brexit negotiator Michel Barnier seen by Politico.

What’s wrong with Canada, one may ask? It’s a rich country, most of whose people speak English and whose head of state is the Queen.

All true, but irrelevant. Canada’s prosperity doesn’t depend on access to the EU’s vast market. The neighbouring American market is much more important. Nevertheless, the deal Canada managed to cut with the EU after years of tortuous negotiations was a big step up from where it started.

A similar deal would be a huge step down for us – and it would really matter because our prosperity is closely tied to having unhindered access to our neighbours’ markets. A Canada-style deal would do little for our services industries, which account for 80% of our total economy.

As May herself said in Florence: “Compared with what exists between Britain and the EU today, it would nevertheless represent such a restriction on our mutual market access that it would benefit neither of our economies.”

The prime minister used to say “no deal is better than a bad deal”. It is becoming increasingly clear that she is going to do a dreadful one. But crashing out with “no deal” would be even more foolish. The logical conclusion is that we should have no Brexit at all.

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Edited by Luke Lythgoe

4 Responses to “Theresa May heading for dreadful deal”

  • You are right in what you say. In addition, however, Canada (as is Norway) is a totally inappropriate model. Both are extremely rich in natural resources and have relatively low populations—-their priorities and aspirations are a million miles away from ours. Brexit and wishful straw-snatching represent economic, industrial, political and diplomatic suicide.

  • It has never been clearer to my mind that when you look past all the talk and rhetoric, May is not up to the job, she is tough on the weak and weak against the powerful, she cannot throw our money at every problem and pretend otherwise

  • James, as Mr Mogg finds increased food bank usage “uplifting” may I suggest the he is the one out of sync. And maybe you as well.