Brexit watch: summer promises fireworks

Dharshini David

Cricket, polo, open air theatre, music festivals and horse racing are just a few of the many activities to pick from during the height of the British summer season in June. Of course, they’re typically accompanied by a feast of corporate hospitality, with politicians, business leaders and financiers amongst those raising a glass or two. But the former may be largely missing from the line-up this year. Instead, they’re battling a series of opponents on the Brexit front, facing a series of fixtures and potential flashpoints. Already, the showdowns and upsets, complete with tantrums and behind-the-scene antics are worthy of Wimbledon. That tennis tournament doesn’t start until July. By then, the outcome of the current round of Brexit tussles may result in a very different game, due to political in-fighting, and the woeful lack of strategy, skill and courage of key players

The most potent face-offs include:

Theresa May vs the Cabinet
After batting their preferred type of customs arrangement languidly back and forth for weeks, the divisions between May and her senior colleagues erupted into a tense stand-off. The Prime Minister prefers a partnership whereby the UK would collect tariffs on behalf of the EU. Her pro-Brexit colleagues favour a “max-fac” (maximum facilitation) model which relies on technology and trusted trader schemes to minimise border checks. Both have been deemed unworkable. But it’s the fall-back plans that had the Brexit Secretary, David Davis, threatening to leave. These would keep Britain aligned with elements of the single market and customs union. He wanted an end-date stamped on this arrangement. The rift descended into a farce that for many typify the dithering and dysfunction that has trumped economic realism in this process. She persuaded Davis to stay (for now) but conceded to specify that “the UK expects the future arrangement to be in place by the end of December 2021 at the latest” – which in reality, amounts to a non-binding and so meaningless compromise.  It may have amounted to little more than a tantrum (from a minister who is accustomed to resigning) but to some it was a sign that there may be moves afoot to overthrow the Prime Minister. Her Foreign Minister, Boris Johnson stirred matters further suggesting (in leaked comments)  that Donald Trump could have done a better job of handling Brexit. This squabble could be overshadowed if May finds her hand forced by a parliamentary revolt.

The UK government vs the House of Commons
The real drama could come in Parliament on Tuesday and Wednesday. The EU (Withdrawal) Bill has to complete its passage through Parliament, in readiness to become law in time for Parliament to vote on the terms of Brexit, supposedly in the autumn. Otherwise, those MPs will be voting blind, without knowing the type of future relationship they are voting for.  The House of Lords has added 15 amendments to this Bill, the most significant of which requires the UK to seek to remain part of a customs union and retain membership of the EEA. The London Mayor, Labour’s Sadiq Khan, has urged his party’s MPs to support this. But claiming that this wouldn’t wash with some of its members, Labour has added a watered-down version of the latter, proposing full access to the internal market of the EU.  After much stalling, this bill returns to the House of Commons where, over two days, MPs have to decide whether to retain or reject these changes.  Bearing in mind there are only a handful of pro-Brexit opposition MPs, any of these amendments could be upheld if the rest of the opposition and 15 or so Conservative MPs vote to do so. However, Labour’s amendment may dilute the chances of the amendment regarding the EEA being retained – indeed its rather vague and confused strategy could well play into the government’s hands. Unsurprisingly, May and colleagues have spent the run-up stressing to their party that a rebellion could threaten the very future of the government.

Theresa May vs backbenchers
That threat is very real. A loss in the House of Commons, coupled with the dispute with her Cabinet colleagues would put the Prime Minister on a collision course with her hardcore pro-Brexit colleagues, potentially triggering a leadership contest. It’s not just her adversaries she has to fear. Even allies are rumoured to have become disillusioned by her lack of decisive leadership.

Theresa May vs UK plc
What of those who will have to wrestle with new customs arrangements? May has long been criticised for ignoring business’ needs. But last week, corporate leaders were summoned to 10 Downing Street to meet senior ministers, where they emphasised the overdue need for clarity, the importance of frictionless trade and pragmatic immigration rules. Others from the likes of BP, Nestle and Vodafone warned the Prime Minister that they will not invest in the UK while there remains uncertainty over the country’s terms of exit. The trade body representing the shipping industry sailed into the storm to pronounce the UK’s “lack of strategic vision and ambition”. Has this made a difference? May’s response indicated not. The White Paper, setting out the UK’s vision for its future relationship with the EU, will not now be published until July. In the meantime, business has no choice but to carry out implementing (costly) contingency plans – and putting investment decisions on ice, as its battles are overshadowed by political manoeuvres.   

Civil service vs the Brexiteers
“Civil servants advise, Ministers decide”: the old adage has fallen by the wayside. Officials may be battling to get their voices heard, while ministers attempt to ignore, or even suppress those voices.  First came the government’s impact studies (subsequently leaked),  then, reportedly,  work undertaken by the Brexit Secretary’s own department looking at three “no deal” scenarios, the worst of which was allegedly labelled Armageddon, with food, fuel and medicine shortages . The department dismissed these reports but it highlights the risks if the government walks away from the negotiating table – or drags its feet. Then there’s the warnings from the tax office boss who says that max fac would cost businesses £20bn per year. The government hasn’t denied this– but will such warnings have any bearing on its thinking? 

(Michel) Barnier Vs (David) Davis
With it still unclear exactly what the UK wants, talks in Brussels resumed this week. Little progress has been made since the March announcement that about 75% of the withdrawal deal has been agreed upon – the key exception being the issue of the Irish border. Posturing rather than progress has characterised the game. The EC’s Michel Barnier called on Britain to decide on a realistic exit policy, saying “to negotiate effectively you must know what the other party wants,” he added “the UK must accept the consequences of its own decision [to leave], explain them and assume them.” This after Brexit Secretary David Davis accused the EC of looking to “score points”. Incidentally, Brussels has already dismissed both the customs arrangements being considered by the Cabinet as “fantasy island, unicorn models”. Mr Davis has denied that final agreement on withdrawal terms by the end of the month is unrealistic, pointing at how a broad agreement on the initial terms of withdrawal came at the last minute. That deal of course, was widely labelled a fudge: unsatisfactory and incomplete. The reality is that official Ollie Robbins, who favours maintaining close relations with the EU, is carrying out the bulk of the negotiations for the UK.

The UK vs the EU
The intention was to serve up both the final withdrawal agreement and the broad plans on the future relationship at the EU summit on the 28th and 29th of June. Now, like a player who’s failed to prepare for a career-defining match, the UK is at severe risk of turning up without agreement on the former – and almost certainly won’t have the latter ready. Moreover, Prime Minister May may be distracted by a leadership crisis. There may be a heavy price to pay for dithering, political infighting and a lack of investment into strategic policymaking. The UK now has less chance of securing agreement with the EU and there’s a greater danger that the UK parliament will indeed be voting blind come the autumn. The 28th of June also sees England scheduled to play Belgium in the group stage of the Football World Cup. Some think that will prove to be England’s last game in the tournament. But there may be a greater chance of England progressing to the knock-out stages than the UK government serving up this month the makings of a Brexit deal that safeguards political and economic stability.

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