18 Jul 2018

Political Pitch: How May will seek to convince her colleagues to support her Brexit strategy

8D7EE00C-3DEB-462C-89C6E1F7D3AC29C4.jpg

“Standing in the middle of the road”, Margaret Thatcher once observed, “is very dangerous; you get knocked down by the traffic from both sides.” Her words were less of a homily on the Highway Code than a less than subtle argument to her own political party about the perils of positioning itself in, as she saw it, the superficially appealing but ultimately ineffective centre of the spectrum. Moderation is not much of a motivator. Politics and policy, she thought, was about making and taking a stand.

Theresa May is entitled to reflect on those words ruefully. The White Paper which the Government published last week and the broader Brexit strategy that she has now decisively adopted (‘Switzada’ in the language of BVCA Insight) is a shameless compromise and an attempt to find a middle stance which both respects the referendum result and which limits the disruption as the UK leaves the EU.

As an approach, it has the virtue that it is tolerable to a large proportion of her party and potentially the public. It has the vice that it is the first choice of almost nobody, including, one suspects, the PM. It is thus exposed to attack in equal measure from those who essentially do not want Brexit to occur at all and those who wish that a 24-carat absolute Brexit could be implemented on 29 March 2019. That has been illustrated by the contortions she has had to undertake in the House of Commons this week as her stance was assailed by both the hard-line Remain and the staunch Leave factinaons.

Yet it was always inevitable that Mrs May would find herself somewhere on the spectrum between ‘Switzada’ (between Switzerland and Canada but closer to the Swiss end of that continuum) and ‘Canland’ (the same but nearer the Canadian side of the line). Think of the Brexit process as a graph with ‘access to the EU’ as the vertical and ‘autonomy from the EU’ as the horizontal. Then draw two lines in pencil half way across in both directions. The bottom left hand quadrant would be ‘low access and low autonomy’ (which would clearly be utterly illogical for the UK to aspire to). The top right hand quadrant would be ‘high access and high autonomy’ (which would plainly be irrational for the EU-27 to concede). That leaves the top left box (‘high access and low autonomy’) and the bottom right box (‘low access and high autonomy’) as the only realistic spaces to be located in.

Then take the exercise one stage further by allowing for political and practical realities. ‘Norway’ is at the furthest edge of the top left hand quadrant and is a theoretical model for the UK to emulate. But ‘Norway’ means membership of the European Economic Area and hence a full rule-taker for the single market in both goods and services and, therefore, unrestricted freedom of movement. It is very hard to see how this could be reconciled with the June 2016 referendum outcome, which, all sides concede, was about migration more than any other matter.

‘Singapore’ is at the furthest edge of the bottom right hand quadrant. It has a free trade agreement with the EU of a standard form and little else in the way of a relationship. It has a free market economic model and is very successful. It is what many in the ‘Hard Brexit’ contingent of the Conservative Party would like the UK to become.

The idea, though, that the UK could suddenly transform itself into a much larger version of Singapore at a stroke on 1 January 2021 does seem somewhat ambitious. At best, it would be a lengthy project to recast the economy to emulate Singapore. At worst, it might be futile in that the crucial factors that have contributed to Singapore’s extraordinary story might prove to be more cultural than economic.

In the short to medium term at least, then, the countries that may be appropriate have to be found from much closer to the middle of the two respective boxes. That is why a line drawn from a dot in about the centre of the top left hand box entitled ‘Switzerland’ to another in a similar place in the bottom right hand box labelled ‘Canada’ in the only credible space in which to look to do a Brexit. Unfortunately for Mrs May, many of her party colleagues much prefer Norway or Singapore instead.

How is she going to seek to convince enough of her MPs that they have to settle for her blueprint?

Ambiguity as an asset

Although the White Paper is almost 100 pages in length and there is plenty of content in it, many of the most politically contentious areas retain a substantial degree of ambiguity to them. This is in part in anticipation of the negotiations to come with the EU-27, but in other cases is deliberate for domestic politics. In terms of goods trade, the Government tome refers to a “common rulebook” (not a single rulebook) which would mean continued recognition of EU rules but “only those necessary to provide for frictionless trade at the border”. What exactly does that mean? Could a Leave Conservative MP be persuaded that, if a business produced a good that they had no desire or need to sell in the EU-27, then they would not fall within the regulatory authority of Brussels?

In a similar spirit, the document refers to “the phased introduction of a new Facilitated Customs Arrangement (FCA)”. ‘New’ is really something of an understatement in this context. The FCA concept is without precedent anywhere on the planet. It is a highly theoretical option invented almost entirely in order to add some weight to the ‘backstop’ solution for the Irish border, which all parties hope will never need to be activated. If the right sort of deal is done, ministers will stress to backbenchers, then the FCA will be redundant.

The term ‘mobility framework’ for post-EU migration policy is also an exceptionally elastic formula. There are plenty of means of making the same words mean different things to different sorts of MP.

‘Switzada’ now does not preclude ‘Canland’ later

Mrs May’s preference for the UK to be closer to the Swiss than the Canadian model is not a dictum that will last for all eternity. It is a starting position for a complicated set of negotiations and even if accepted would, once again, only be a starting point and not necessarily the ‘end state’ for the UK. If the EU-27 refused to bend at all on free movement then, Conservative MPs will be told repeatedly, she would rather shift towards the Canadian example after having tried to find something more intimate than find herself dragged beyond Switzerland towards toxic Norwegian territory. Destabilising her today in pursuit of an instant ‘Canland’ alternative would hence be distinctly counter-productive.

Conservative MPs who favour something much closer to the EU-Canadian Free Trade Agreement might still secure what they want from the final outcome. Even if they did not, with the House of Commons required to agree or to disagree with every aspect of regulatory harmonisation on goods in the future, there would be nothing to stop a different Conservative Prime Minister, Cabinet and Government choosing to edge away from ‘Switzada’ towards ‘Canland’ as the UK adjusted to its departure from the European Union and secured new trade accords and alternative markets. In this regard, the ‘hard Brexit’ lobby will hear, ‘Switzada’ might best be thought of as Transition Period II. If that were not the case, why would the likes of Michael Gove and Dominic Rabb have embraced it?

The alternatives are worse

The above assertions will be supplemented by one other, tailored for the Conservative MP involved. If an ardent Remainer, the contention will be that the alternative to Mrs May’s strategy would not be remaining in the EU but a ‘total Brexit’ exit from it on 29 March 2019 into a WTO-based world.

If a committed Leaver, by contrast, the pitch will be that the alternative to Mrs May’s strategy will not be a ‘total Brexit’ but a delay and possibly a denial of Brexit as a basically pro-Remain majority in the House of Commons either refuses to back the relevant legislation or insists on an extension of Article 50 or flirts with a second referendum.

In any case, the only winner from Conservative disarray would be the Labour Party and Jeremy Corbyn and an election which could come at an unpredictable time with catastrophic consequences. This, in the end, is what Mrs May is right to regard as her trump card.

Tim Hames
Director General, BVCA


×

Update your login details

We updated our website and supporting systems on 12th December. 

If you previously had an account, please reset your password. If it's your first-time logging in, please register to create an account. For assistance, please contact the BVCA Membership Team

Login