The PM hoped her Florence speech would unlock negotiations—but her recent Brussels trip showed it has not. What happens now?by Alex Dean / October 17, 2017 / Leave a comment
The Article 50 clock is ticking—but Britain just doesn’t seem to be getting anywhere on Brexit. Months into the biggest constitutional challenge the country has faced in decades—perhaps ever—negotiations are at a standstill. Little progress has been made on the most fundamental exit terms, let alone the future trading relationship Britain wants with the continent.
Theresa May had hoped that her Florence speech—where she said Britain would seek a transitional deal and agreed to pay the EU a “divorce bill”—would unlock the talks. The lack of a breakthrough during her trip to Brussels yesterday suggests it has not. Juncker, Barnier and co are still playing hardball, claiming the divorce offer is not sufficient for talks on the transition to begin. The rebuttal comes just days ahead of a crunch EU summit, by which time the PM had hoped things would be moving forward.
So what’s going to happen now? How long will the deadlock last? Could talks breakdown altogether, leaving Britain to plunge over the Brexit cliff edge? Discussion with those in the know confirmed the worst.
The problem has been building over recent months. When John Kerr, the author of Article 50, visited the Prospect offices in early September, he accused the government of downright incompetence. “I think the negotiation which has mattered to the government up to now has been the negotiation inside the Conservative Party,” he said. “I don’t think much time is being spent thinking about how to influence the foreigners.”
Kerr worked with Brexit Secretary David Davis in the 1990s, and said: “I do like him, I think he’s an honest man and straightforward. I think he has an impossible job.”
The situation has only deteriorated further since.
Steve Bullock, a former British negotiator in the EU, emailed me in the wake of last night’s Brussels meeting. “While the PM and Davis’s Brussels dinner appears not to have done any actual harm—something to be grateful for in these difficult times—it has not, and was never going to, change much,” he said.
“Could Brexit talks collapse completely? Of course”
“What could have [done so] was the UK Government actually explaining which financial commitments it considers it is liable for and which it doesn’t, instead of just shouting (very low) numbers at the EU27.”
“Could Brexit talks collapse completely? Of course,” he said.
John Springford, Director of Research at the Centre for European Reform, was similarly downbeat in comments to me this morning. “The likelihood of no deal is clearly not zero,” he warned, adding: “The Conservative party has been willing to gamble on European issues since David Cameron said he would hold a referendum. If the 27 push too hard, there is a risk that Theresa May cannot fold without losing her job.”
The thinking is that pressure from hardline Eurosceptics on the backbenches could mean the PM daren’t give any ground, and that Britain could be thrown out into the cold as a result.
The same group is keen that May dangles the “no deal” outcome to kick Europe out of its complacency. Bullock was not keen on this tactic: “Everyone has known from the start that no deal is a possibility, but talking it up simply shows the UK to be an unreliable, unserious negotiating partner.”
Peter Chase, former Vice President for Europe at the US Chambers of Commerce, added to the gloom. “There’s a significant chance” that talks could end with no deal agreed, he said. “You’ve notified that you’re going to abdicate the agreement. That happens on a certain day. I think there’s a quite a good chance that the UK and the EU would not have solved all of the problems—much less the trade and investment problems—before that.”
He continued: “I cannot stress enough—and it’s not because I’m a pro-EU sorta guy, it’s just simply the truth of this—you have a treaty relationship, you ended the treaty relationship, and no one owes you anything. Do you see what I mean?”
Are we all being too pessimistic? The government has called attention to a specific comment of Juncker’s yesterday that negotiation efforts “should accelerate over the months to come.” But there was no concrete commitment.
“You have a treaty relationship, you ended the treaty relationship, and no one owes you anything”
Springford said: “I expect the UK will end up paying around €40-50 billion in order to secure a transition, which will take the form of EU membership without any votes in the EU’s institutions. But I would not bet my house on it.”
If the worst does happen, and Britain does fall off the cliff, what then? “If the EU and UK can’t agree a deal,” Springfield said, “the chaos will be immense. The UK will probably suffer a recession, as barriers to trade, migration and investment are thrown up. The 27 will also be hit, but to a much smaller degree: half of British trade is conducted with the EU, while only a sixth of EU trade is conducted with the UK.”
Paul Daly, a legal academic at Cambridge, told me that in a “no deal” scenario “Belgian customs officials, French financiers, Italian importers, German air traffic control and Spanish exporters will not recognise the United Kingdom as part of the European Union trading system; indeed, they will not have the legal authority to do so… the United Kingdom’s current trading arrangements will fall into a void.”
The government cannot allow this to happen. The consequences for ordinary households would be catastrophic. It must get its act together—fast. If that means upping the Divorce Bill offer or making further concessions elsewhere, so be it.
Of course, there’s one further possibility I haven’t gone into: if Britain continues to wrestle with the EU and get nowhere, it might give up the fight altogether and decide to “Remain.” I explored the chances of this here, and while not likely the outcome cannot be discounted altogether.