03 Oct 2018

Hanging on in there: May leaves Birmingham with enough authority to conclude an EU exit deal

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The Conservative Party conference in Birmingham which Theresa May has just concluded was a very considerable improvement on the same event held In Manchester 12 months ago. That proved to be a truly grim saga, not merely because the Prime Minister had all but lost her voice, endured a professional prankster personally handing her a P45, and had to stand there while letters fell off the set behind her, but because the atmosphere throughout those three very long days appeared to be a cross between a wake and a séance. The sheer shell-shock of the unexpected outcome of the 2017 election overshadowed everything. It felt like a meeting of a political party that had just lost office, not one that was still in power, albeit as a minority administration backed by the Democratic Unionist Party. The fragility of the whole occasion was such that one wondered whether not merely the First Lord of the Treasury but the entire government which she led would make it intact to Christmas.

The sentiment surrounding this conference was different. The Conservatives have largely come to terms with what happened on 8 June 2017 and have determined to be in it for the long haul. It had the flavour of a governing party conclave with a serious focus on the policy challenges that ministers had to navigate.

Brexit, inevitably, sucked the oxygen out of almost everything else but it would be unfair to claim that it was the only issue on the minds of parliamentarians and delegates. Indeed, if anything, there was the barely suppressed desire to see the Brexit process done and to move on to domestic matters of more intense interest to the electorate. That, alas, is not a realistic proposition until after 31 December 2020 when the transition period is completed and the real post-Brexit era is initiated. Despite this, much of the fringe meeting circuit was an exercise in imagining that point.

The backdrop to this conference had been the informal EU summit in Salzburg which backfired in a spectacular fashion. What was meant to be a carefully choreographed interim step in a chain of events leading to an EU27-UK accord by mid-November fell apart in what Mark Rutte, the Prime Minister of the Netherlands, correctly later described as “an accident”.

The unwitting villain of the piece was Donald Tusk, the EU Council President and ordinarily seen as a sympathetic figure by the UK, who in one sentence of his press conference, in which he asserted that the Chequers Plan “would not work”, and then an Instagram post involving Mrs May, cakes and cherries, dropped a bomb on proceedings. The Prime Minister had little choice but to respond in forceful language, so digging the trenches deeper than had ever been the intention and raising the stakes for her party conference. All sides in the Brexit dialogue have spent two weeks on hold awaiting the outcome in Birmingham.

So where does the Prime Minister and the Conservative Party stand now that assembly has finished?

In the short-term the Prime Minister has sufficient internal authority to revive a deal with the EU

In the worst case scenario, the Conservative conference could have turned into an anti-Chequers rally and left the Prime Minister too enfeebled to conclude any kind of deal with the EU27. This did not happen.

In the short-term, Mrs May has the firm support of the vast majority of her Cabinet colleagues. This stems from three factors. First, in a strange way the Salzburg debacle has come to her assistance, obliging her own party, including many consistent critics, to align themselves with her as the advocate of the national interest against a seemingly intransigent EU leadership. The PM’s poll numbers have actually improved since her apparent ambush in Austria, as not only the party faithful but the public at large appear to have seen what occurred there in ‘them against us’ terms.

Second, again perhaps counter-intuitively, the emergence of Boris Johnson as the personification of the anti-Chequers cause has been something of a blessing for the Prime Minister. If there is one item on which the whole of the most senior cadre of the Cabinet can agree it is that they do not want to see the ex-Foreign Secretary emerge as her successor.

The May-Hammond relationship (which has had some extremely rocky moments over the past two years) is probably better than at any time since she replaced David Cameron in Downing Street. Potential rivals (to her and each other) such as Sajid Javid, the Home Secretary, and Jeremy Hunt, the Foreign Secretary, have buried the hatchet (possibly only temporarily) to ensure that they are not both outflanked by the blond alternative. The working relationship between Number 10 and Dominic Raab, the Brexit Secretary, is streets ahead of what it was when David Davis occupied that portfolio. The Cabinet knows that over the next several weeks the alternative to her is not one of them but he who none of them trust in the slightest.

And, thirdly and finally, having been obliged to confront what the impact of ‘no deal’ would be on a department-by-department basis, few who have the title of Secretary of State have any enthusiasm for the option.

Mrs May has the challenge of presenting what in effect will be a ‘Chequers Minus’ as a triumph

It is testament to the febrile nature of the Conservative Party in Parliament that many in the Cabinet believe that securing a deal with the EU-27 will be less difficult than achieving the consensus among the ranks of Conservative MPs to enact it afterwards.

The fundamental challenge for Mrs May is to emerge with wording in the ‘Future Framework’ that she can insist is rooted in her Chequers blueprint, while others can take heart that it is sufficiently different from that formula that they can vote for it in the House of Commons.

This is a balance that is far from straightforward to achieve, but it is not impossible either. The Future Framework is not a legal tome but a political declaration and that allows the ambiguity of language its opportunity.

The real imperative for the Prime Minister in the next few weeks is to nail down a solution to the Irish backstop controversy which does not divide Northern Ireland from the rest of the UK and which is enough to avoid a hard border between the north and south of Ireland. If she can get a backstop of that form (and she probably can) then that is almost enough to declare victory.

Most of the more controversial aspects of the Chequers Plan are there to avoid either an internal economic schism within the UK and a hard border in Ireland, and could be diluted or downgraded if she is seen to have mostly won the argument over the backstop. So expect her language over the next month to relate more to the Irish dimension than any other subject.

It should also be possible to detect a subtle shift in rhetoric away from defending every detail of the Chequers Plan towards the thesis that the Future Framework has to set out a line of travel towards a final EU-UK end state that is better than Canada. Talk of a ‘common rulebook’ on trade in goods might move towards a ‘complementary rulebook.’ The truth is that the difference between Chequers Minus and Canada Plus, Plus, Plus is marginal.

What is far less clear is whether Mrs May can remain as Prime Minister in the medium-term

The logic of the observations above is that the Prime Minister will have sufficient strength to strike a bargain with the EU-27 and that there will be enough flexibility in the Future Framework to allow her colleagues in Parliament to endorse it (even if this takes the mass application of thumbscrews by the Whips and possibly a symbolic defeat in the House of Commons for cathartic purposes before the real ‘take it or leave it’ vote leads to a ‘take it’ win). This remains the public working assumption of her allies and also the private one of her adversaries.

While in many senses a triumph, what is less certain is whether or not the Prime Minister will have to sacrifice herself thereafter to obtain such a settlement. This hints at, in many ways, a seemingly paradoxical conclusion: that this conference will come to be regarded afterwards as a significant stepping stone to a personal and political success but will also be her last one as Prime Minister.

Tim Hames
Director General, BVCA


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