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Theresa May’s first negotiation challenge is her own cabinet

by Hugo Dixon | 27.07.2016

Theresa May’s mantra that “Brexit means Brexit” was enough to win the Tory party leadership. But it is a vacuous statement, as nobody knows what Brexit means. The prime minister’s job is now to define it. The first, tricky, step is to convince her cabinet colleagues of whatever vision she plumps for.

Simple maths might suggest that May can impose a “soft Brexit”, something like the Norway model, where Britain retains much access to the EU’s single market while making only minor changes to the free movement rules. After all, 16 cabinet members were in favour of Remain versus seven who campaigned for Leave. One might, therefore, expect the cabinet to back soft Brexit. Boris Johnson, the least hardline of the Brexiteers, might conceivably join them.

The snag is that most of the others – especially Brexit minister David Davis and international trade tsar Liam Fox – are hard Brexiteers who may be prepared to sacrifice single market access if that’s needed to stop free movement. In what could be a forerunner of bigger battles to come, Fox is already pressing May to pull out of the EU’s customs union, according to the FT, which could require border controls between Northern Ireland and the Republic of Ireland. If the hard Brexiteers feel the PM is going soft, they could even threaten to resign. May can be only too aware of the difficulties that her Tory prime minister predecessors suffered at the hands of eurosceptics.

She is also well aware that the government has a majority of only 17. Since the number of hardline Brexit Tory MPs is larger than that, they could threaten to rebel if they think the government is going wobbly. Such potential rebels would feel they had the public and Conservative Party members on their side. Although May could conceivably rely on opposition MPs to ram through any necessary laws, she would not want to split her party.

But the prime minister must be worried that a hard Brexit – say Britain having to fall back on WTO rules for its trade – would crash the economy. She also seems nervous that it would damage Northern Ireland, while giving Scotland a perfect excuse to demand independence from the UK.

Since May will be stuck between a rock and a hard place, she will probably look for compromise solutions. One would be a two-step approach: quit the EU rapidly but then stay in the single market for several years while a longer-term trade arrangement, say on the lines of Canada’s, was being figured out. The snag is that hardline Brexiteers might not like such a deal – particularly if it involved Britain paying into the EU budget, following its laws and allowing free movement well into the 2020s.

Another option would be to demand unrealistic divorce terms from the EU – say full access to the single market without paying into the EU budget, following its rules or allowing free movement. That might put off the evil day when she has to confront divisions within the cabinet. But the EU would probably laugh her out of court, damaging her reputation as a serious politician.

The need first to square her cabinet is one reason why it will be many months before May gets down to the main business: negotiating our exit with the EU.

 

Edited by Michael Prest

Tags: Categories: Articles, Post-Brexit