The UK and Europe

Theresa May and Brexit

Andrew Grice / Jul 2016

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As the House of Commons rose for its summer break on July 21, government ministers and civil servants welcomed the breathing space it would give them after the most turbulent four weeks in British politics that anyone can remember.

The Brexit vote was followed by the resignation of David Cameron, a swift handover of power to Theresa May and a challenge to Jeremy Corbyn’s leadership of the Labour Party because of his half-hearted referendum campaign.  As the drama played out, behind the scenes in Whitehall there was something close to panic. Cameron had ordered all departments not to make a Plan B for Brexit – because he didn’t want it to leak out and because the Vote Leave campaign had 57 varieties of what Brexit would really mean.  The excuses were feeble. The Foreign Affairs Select Committee has rightly described the lack of contingency planning as “gross negligence” which has made the post-referendum uncertainty worse and the Government’s task much more difficult.

So Whitehall is running to catch up. It has only 20 officials working on trade, because the EU handles the issue, and suddenly needs to recruit 300. Work will continue over the summer on the exit deal the new Prime Minister hopes to secure. The crucial question for the Government machine will be to discover May’s bottom line on immigration. The trade-off between the UK’s access to the single market and its ability to limit migration from the EU will be at the heart of the matter when formal negotiations with the EU27 begin.

May’s public statements have been opaque but have given us some clues.  She has spoken of her desire to secure as close a trading relationship as possible with the EU in both goods and services, and  has not backed demands by Conservative Europhiles to abandon the single market. She has said that one key message from the referendum is that the public want more “control” over immigration. However, she does not speak of  “ending” EU migration, as hardline Leave campaigners do.

As a reluctant Remainer, May has repeatedly assured Tory MPs and those who voted Leave that “Brexit means Brexit.” Her body language suggests that she wants a soft Brexit. But political reality may intervene. Although she is enjoying a honeymoon period with her party, Tories who advocated  Leave  will cry foul if they suspect she wants only limited curbs on free movement. Then, of course, there is the matter of what the EU27 will allow her. May knows that in the real world, Boris Johnson’s policy on cake – he said he was “pro having it and pro eating it”—will not apply. Britain will have to sacrifice some market access, perhaps on financial services, in return for being able to limit EU migration.

The Prime Minister might have a slightly better idea of what might be possible now that she has held private talks with Angela Merkel and Francois Hollande. To the frustration of the European Commission and leaders including Hollande, May has given herself an extra two months to invoke Article 50 of the Treaty of Lisbon. When she originally promised that  formal negotiations would not start until after the end of 2016, she was hoping to become prime minister in September.  But she is sticking to the same timescale even though she entered Downing Street much earlier than expected when she won the Tory leadership without a ballot of the party’s members.

EU leaders will press May to move quickly when she attends her first meeting of the European Council in Brussels on October 20. But she will not be rushed, even when she has worked out her goals. Whitehall has told her that the EU27 will be in the driving seat once formal negotiations start, helped by a two-year deadline which can be extended only if all 27 agree.

There has been much speculation about the influence of The Three Brexiteers she appointed to her Cabinet – Johnson as Foreign Secretary; David Davis, the combative former Europe Minister heading a new “Department for Brexit” and Liam Fox, the International Trade Secretary. Was she setting the Leavers up to fail? Or relying on them to sell the deal in case it is a bad one?

But May is not a natural delegator. The most crucial announcement of her wide-ranging reshuffle was in the small print: she will chair the crucial Cabinet committee responsible for Brexit. Although May denies it, Brexit will define her Government. And so she will call the shots – in London, if not in Brussels.

Andrew Grice

Andrew Grice

July 2016

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