The five things you need to know now Brexit has really started…
1) MAKING HER-STORY
At 12.29pm, the Prime Minister’s Parliamentary Private Secretary George Hollingbery leaned over the Commons frontbench and handed Chancellor Philip Hammond his smartphone. It displayed a tweet by EU chief Donald Tusk, the very 2017 confirmation that Theresa May had been waiting for: Brexit was really, finally, definitely under way. Tusk had the PM’s letter in his hand. The two-year countdown clock had started ticking.
And when she rose to make her statement, May wanted to match all the theatre and choreography of the day’s events with a sense of history. Or rather, her-story: the first female Prime Minister since Margaret Thatcher, who was now in charge of a process that even Mrs T could only have dreamed of.
May came armed with a script to match the theatre, referring to Brexit as one of the “great turning points in our national story” and stressing that “the choices that we make define the character of our nation”. A new day had dawned (being Britain it was a typically grey and overcast one) and she wanted to look to the sunlit uplands. “I believe in the enduring power of the British spirit. I choose to believe in Britain”.
Looking on, rapt, Tory backbencher and Leaver Victoria Borwick was sporting a red, white and blue bow in her hair. But May’s message was that she wanted the ‘Leave’ and ‘Remain’ labels to become history. Her main pitch was she was the one to unify the country (a task that could seem almost fanciful to many after the bitter divisions of the referendum) and to reassure the EU that she meant it no harm.
She wanted a “deep and special partnership” with the EU, she said. In case we missed the point, she said that seven times in her letter and four times in her Commons statement. She wanted “continued friendship” with a “continued partner”. Tory Eurosceptics, who have joked about ‘Continuity Remain’ tactics, took it all in their stride. After all, this was still their day.
2) WITHDRAWAL METHOD
When YouGov did a survey earlier this year, it asked British voters what they would most like to see ‘brought back’ once Brexit had happened. Top of the list was ‘hanging’. Second was ‘dark blue passports’. Third was ‘selling goods in pounds and ounces’. Fourth was the cane in schools. At the 1922 Committee of Tory backbenchers on Wednesday night, May made clear she felt the Brexit vote was not all about Brexit and was more about many people feeling left behind by the modern world, and its globalisation and pan-national politics.
But what was really striking about her Commons statement was that compromise was not a dirty word. She told Labour MP Chris Matheson: “He says that the government is going for a hardest of hard Brexit. We are not.” In fact, the big difference between today and her Lancaster House speech setting out her principles for Brexit was the absence of the ‘no deal is better than a bad deal’ line. Many EU diplomats felt that rhetoric had ruined what was otherwise as Europe-friendly speech with an empty threat or bluff to keep her party happy at home. What infuriated them even further was Philip Hammond – seen as a friendly minister – talking about turning the UK into a low tax, low regulation Singapore style threat to Europe if it didn’t get a good deal.
Instead, May today signalled that she was happy to agree “implementation periods” on various aspects of Brexit. The idea of not just one but several transitional deals (though no one calls them that, the Germans don’t like the word) will have reassured many in the City and manufacturing worried about a ‘cliff-edge’ in 2019. She talked of a “big” trade deal that covers “financial services and network industries”, the latter a new shorthand for the supply chain that so many car firms and others depend on.
Labour and SNP MPs laughed hard at May’s line that she believed in “the liberal democratic values of Europe”, so hard that she had to repeat the line. Yet they weren’t laughing when she admitted that being outside the European single market would mean “consequences” for firms that have “to align with rules agreed by institutions of which we are no longer a part”. She claimed this was “just as UK companies do in other overseas markets”, but that didn’t sound all that reassuring. Only today, Lloyds of London – a great symbol of the City – will be moving to Brussels to establish a new European base to avoid losing business after 2019. Withdrawal is, of course, often a two-way process.
3) IN, SECURITY
Yet May’s emollient, pragmatic tone was undermined by what looked like yet another needless bit of sabre-rattling: her linking crime and terror measures with a trade deal. This was all the more jarring given her wider approach in the Commons. But it was in her letter, in black and white, and appeared to be another hardball threat that the EU needed us as much as we need them. She mentioned trade six times and security 11 times.
No.10 seemed slightly surprised at the backlash as Labour and the Lib Dems got their teeth into it. Former Treasury Permanent Secretary Nick Macpherson was typically caustic, dismissing it as “not a credible threat”. The PM’s own spokesman repeated that the PM was just setting out ‘a simple fact’ that we would quit Europol and the European Arrest Warrant when we pull out.
But it was clear that the PM – who thought long and hard over the letter’s every word – wanted to fire warning shot about how much the UK’s security expertise would be missed by Brussels if they messed us about. May, who as Home Secretary was famously burned by her own Tory MPs for signing up to lots of EU home affairs requirements, knows this stuff in the minutest detail. Home Secretary Amber Rudd was sent out to calm the row down, but succeeded in ramping it up. She pointed out that the UK is the largest contributor to Europol and “if we left..then we would take our information with us”. Rudd even said later this was: “Absolutely no threat, only an observation”.
Some in Brussels were not impressed. Michel Barnier, the EU’s chief Brexit negotiator, explicitly warned last week he wasn’t prepared to “haggle with the security of our fellow citizens in trade discussions”. One source today told the Guardian it all felt like ‘blackmail’. Talk about EU security being more fragile than since the end of the Cold War sounded particularly strange as the UK has tried to stand up to Putin's Russia as it buzzes the Baltics.
It may well be that May is supremely confident that pulling out of things like Europol wouldn’t harm the UK much at all. Our security services put a lot in and get little back, some former insiders suggest. The unspoken hint is that our spooks don’t even really trust their EU colleagues anyway. But when you’re just starting a two-year negotiation, it seemed odd to undermine the wider message of close co-operation and “deep and special partnership”.
Worse still could be Brussels thinking the whole thing is inept bluffing. Many of them already think the ‘no deal’/Singapore threat is hollow. If they think the security threat is too, that could undermine the serious business on trade demands. To have one bluffed called would be a misfortune. To have two bluffs called would begin to look like carelessness.
4) THE REAL OPPOSITION
Jeremy Corbyn’s best question in the Commons was to ask the PM if she agreed with Brexit Secretary David Davis that her new deal would produced “the exact same benefits” as the single market. The PM notably ignored the question and No.10 later refused to repeat DD’s words too.
But it was the SNP, not Labour, who were the Opposition most with their tails up in the chamber. When Corbyn said he would “not give this Government a free hand”, the Scots erupted with jeers. Yet DUP leader Nigel Dodds made plain once more just why May’s working majority is not just 17 – but in fact around 30. He lauded the PM as having proved she is “the right leader for this country”.
And the fact is that the real Opposition is likely to lie not among Remainer Tories but among Leavers on the PM’s backbenches and in her Cabinet. If the PM somehow compromises too much on the Brexit bill, on the length of a transition deal, on European Courts jurisdiction, and crucially on immigration, the ‘betrayal’ narrative could take off.
The Brexiteers were upset when Philip Hammond suggested lots of Remainer-style compromise on the Today programme, with some sources pointing out he was ‘damaged goods’ since the Budget. Allies of Boris were not amused by Hammond saying ‘we can’t have our cake and eat it’.
Perhaps the PM’s best hope is not a divide-and-rule of EU capitals, but of her own Brexiteer ministers. DD sounds as though he knows the ‘no deal’ line was more a negotiating tactic than reality. Liam Fox’s friends think he really does want WTO rules as a matter of principle and best practice. Boris too doesn’t sound like he’s bluffing. The question is just how many backbenchers would back them.
5) PARALLEL LINES
It’s a week for strong women dominating politics. And after Nicola Sturgeon and Theresa May’s frosty meeting on Scottish independence on Monday, today it was the turn of Angela Merkel to throw some shade in the PM’s direction. In an utterly Teutonic way, that is.
Merkel gave a dry-as-dust reaction to May’s sweeping rhetoric, refusing to budge from the EU 27 line that ‘divorce’ talks have to come before talks about future trade deals. "The negotiations must first clarify how we will disentangle our interlinked relationship... and only when this question is dealt with, can we, hopefully soon after, begin talking about our future relationship."
This is a real problem for May, who desperately wants to start trade talks in parallel and not in sequence. Yet with the clock now running down, it’s obvious that the EU 27 hold the cards as they can simply put things on hold until after the French and German elections anyway.
May told the 1922 Committee that the European leaders’ reactions were what she had “expected”. But that doesn’t make her position any stronger. Francois Hollande was not alone when he said today that Brexit will be 'douloureux' for the UK – painful.
Perhaps one of the most important bits of intel of the entire week was that BMW, Daimler and Volkswagen have been briefed by the German chancellor’s office that their interests cannot take precedence over EU unity. And despite the huge potential cost of World Trade Organisation tariffs under a hard Brexit, that unity is what matters most to Merkel. Don’t forget that she too has her own eye on history. And her story.