Friday 22 September 2017

The devil is in the detail

That was the impression I was left with after Mrs May's Brexit speech in Florence, and we didn't get much detail beyond what was leaked beforehand, although the questions from journalists did tease out one or two points.

Despite the prime minister's insistence that Britain was able to carve out a new relationship with the EU that did not have to draw on existing models, I got the impression that she was trying to steer a middle course between the Europhiles and Europhobes in her own party. She rejected both the EEA and Canadian free trade treaty models as unsuitable for both the UK and EU. In particular, she noted that the Canadian model made insufficient provision for mutual market access, so her 'bespoke' model may be close to the 'Norwegian' end of the spectrum, even if she rejects the idea of such a spectrum.

The beginning and end of the speech was largely rhetorical, so the key part was in the middle. A comprehensive security treaty with the EU including justice and home affairs issues does offer the EU an incentive for agreement.

It was also made clear that the UK would make payments during what she envisages as a two year implementation or transition period, shorter than the three years that business and Europhiles want, but longer than the six months the likes of Boris Johnson think would be sufficient. A figure was not mentioned, although £18m (around €20m depending of the exchange rate) has been leaked. This provides a basis for negotiation, although it does not take into account the €9bn/€10bn of pension commitments.

I was a bit surprised to hear that there had been 'concrete progress' in the negotiations: in so far as there has been, it is in relation to relatively minor matters. The 14 position papers issued by the UK Government have been largely judged to be unsatisfactory by the EU.

The rights of EU citizens already in the UK would be protected by the UK courts who would be able to take into account ECJ judgments.

She correctly said that regulatory issues are going to be crucial. But what does this mean in practice: for example, will we still follow EU guidance on allowable active ingredients in pesticides? She also envisaged that a disputes settlement mechanism would be necessary, but what form this (presumably quasi-judicial) body would take was not specified.

She said that the UK's 'fundamentals' were good, but I would not say that of our productivity problems or of real wages (which in part are held back by poor productivity).

Journalists' questions

These provided a little more illumination, although what was not answered was often significant.

Laura Kuenssberg of the BBC drew an admission that 'no deal is better than a bad deal' still remained a premise of UK policy. This could end up with what in effect amounted to a partial economic blockade of the UK simply by using the pinch point of the Channel ports.

The prime minister did not answer a question about whether we would remain in the EEA in the implementation/transition period.

Asked if we had got a single concession from the EU in the negotiations, she said we had got several, but did not specify one.

Asked by the FT if we would abide by new EU rules and regulations passed in the transition phase, she said that would be a matter for negotiation.

Now we have to wait for the reaction of the EU and member states. It is a step forward if Britain can work out what it wants from the negotiations, at least in general terms, but it takes two to tango.

One of the oddities of the event was that it did not place in the beautiful church of Santa Maria Novella as advertised, but in a disused police training academy nearby. It also occurred to me that Clement Attlee could have done the whole speech in Italian, indeed he did deliver a political speech in Italy in the country's language.

No comments: