There's a rumble goin' on

11 March 2018

We’re in for a confrontation - I’m betting on a stagey bust-up between the two negotiating sides. This would forestall the revocation sought by diehard Remainers, though their ploy can’t be altogether dismissed. To focus on the most likely, four developments point to a rumpus: the aftermath of the Cabinet speeches, HMG’s apparent new backbone, the prospect of a fiscal windfall, and Hurricane Trump.


The round of speeches
May’s Mansion House address was comparable to her earlier pronouncements. She confirmed that the UK is to leave both the single market and the customs union. She also confirmed that she seeks special arrangements for certain industrial sectors, in particular financial services as subsequently amplified by Hammond. Her forthright rejection of a customs union left Corbyn looking weak and helped rally the Tories - at least for a few days. Donald Tusk immediately trashed Britain for sticking to “pick-and-mix”, later issuing menaces about Ireland. This is hard to see as improving the climate.

HMG finds some spine
On 6 March, HMG published its Technical Note: Other Separation Issues - Phase 2. This concluded:

…the UK believes that [provisional] arrangements are contingent on the future relationship…and is therefore only prepared to engage substantively (my emphasis) on these technical issues on the basis that any discussion on separation issues is without prejudice to the future relationship…

Such tough language from the UK - if only on procedure - breaks new ground. The sense of a new wind in HMG’s sails is reinforced by coincident changes of tune by a couple of senior Remain columnists. It’s reasonable to trace this to a single cause: official sources are upping their game.

Gideon Rachman is the chief foreign affairs columnist for the FT, formerly Brussels correspondent for the Economist. Till now, he has been foursquare with both titles as a fervent Remainer. On 5 March, under the headline Europe’s strategic choices on Brexit, he wrote:

It is clearly true that the EU is a legal order. But it is also a political organisation. The EU is perfectly capable of creating new laws — or interpreting current ones with extreme flexibility — when it is politically necessary.

The next day saw similar signals from Daniel Finkelstein, associate editor of the white Times. He was formerly an aide to John Major, who called Eurosceptics “bastards”; and William Hague, who also campaigned for Remain, which Finkelstein himself supported lustily. On 6 March, under the headline Brussels should start listening to voters, he wrote:

Britain, one of the EU’s most powerful members, has opted to leave. At what point does the EU stop to consider whether…this might possibly be a reflection on the way it works…whether its insistence that political integration comes before everything might not be so wise?

Columnists speak for themselves, but it’s no stretch to detect Government machinery gearing up handily, stiffening official language and rolling out “talking points” to win over opinion-formers.

Windfall to war-chest
It seems that Hammond’s Spring Statement will deliver good news. The figures are unclear: is it £6bn of unexpected receipts in the last year, or higher growth forecasts delivering £15bn next year? Either will be welcome. Then for the customary tussle about the division of the spoils - tax reductions or spending money.

Or they could fund a Brexit war-chest, for Channel and North Sea logistics and high-tech borders in Ulster; or for bilateral subsidies to EU member-states taking a Brexit hit, in return for help on negotiations. Examples include payments to Spain to finance healthcare for Costa expats; or to Poland and other Eastern Europeans to taper the loss of welfare payments to dependents once the full acquis lapses.

The Trump carve-out
President Trump has ordered punitive tariffs on steel and aluminium imports into the US. He has conceded a “carve-out”, ie, exemption, for his “friends”, Canada and Mexico. Liam Fox is in Washington next week to ask for similar treatment for the UK. It is beyond me to divine what the Trump administration might do, but he has made much of his affection for this country and the Brexit project. If he grants a carve-out to the UK but not the EU27, the latter will go hopping mad, not least complaining that the UK has violated “sincere co-operation”. No-one can say how this plays out but it cannot make for harmony.


Conclusion: rumble in prospect
The Cabinet speeches advanced matters little; HMG is communicating grit; May has a potential war-chest; and transatlantic trade-wars raise temperatures all round. I see both sides headed for a bust-up: initially some complicitous theatre intended to shift negotiating positions, but risking loss of control if attitudes harden further.

Attitudes already hardening combine with the Tories’ rally to hamper the derailment sought by Remain diehards. Revocation relied upon a far-fetched agenda of Court action, coupled with a heady brew of principled defiance from two or three Tories and a disciplined acceptance by Labour MPs of the opportunistic manoeuvres of their shifty leadership. I can’t see it, but I’ve been wrong before. Either way, I sense an almighty row in the wind.