Few people would choose to celebrate their birthday by listening to Philip Hammond speak, but that is the pleasure that awaits Theresa May on Monday. On Tuesday she must suffer in silence as Boris Johnson derails Tory party conference with an appeal to ‘chuck Chequers’.
It’s hard not to pity the Prime Minister. She is now horribly isolated. Both in her own cabinet and in Europe, she has few allies. As she tries to sell her Chequers plan, almost nobody is backing it or her. Other prime ministers have endured difficult periods. Few have faced them with as little support. It is no coincidence that Ruth Davidson, the leader of the Scottish Tories, now says she doesn’t want to be PM. She has seen inside No. 10 — and knows that it is ‘the loneliest job in the world’.
The Salzburg snub last week, when Brussels rejected Theresa May’s plan for a future relationship between Britain and the EU, made the Prime Minister seem not only weak but abject. She turned up to the European summit expecting lukewarm support that would help her through the Tory conference. She wanted to show that the EU would engage with her Chequers plan; that the strain on Tory party unity was worth it.
Instead, she was spurned, even betrayed. She had spoken to Donald Tusk on Thursday and the two even retired to the balcony to talk with no aides present. As president of the European Council, Tusk might have told her in robust language that he would have to reject her Chequers plan. But the British side complains that he gave her no clue of what he was about to say. As the EU made brutally clear last week, it is only interested in May’s plan to the extent that it paves the way for further concessions. Her plea that she has stretched the elastic of British politics as far as it can go is being ignored.
Her current policy — to threaten to walk away from talks if the EU doesn’t accept her Chequers plan — is not taken seriously in Brussels. EU leaders can see that the UK is hopelessly unprepared for no deal, and reason that she’d be stopped by her cabinet, parliament or both if she tried it. May’s colleagues worry that she is in denial, and so they are making their own plans. One of those intimately involved in the government’s contingency planning tells me, ‘No deal cannot be our only Plan B.’
No. 10 is furious with Jeremy Hunt, the Foreign Secretary, for not having dismissed a Canada-style deal. But few cabinet ministers want to come out and argue for walking away from talks, because they know the disruption that would cause.
Within May’s own cabinet there are few who are evangelists for Chequers. I understand that three of the most influential members of the cabinet are now involved in a rolling discussion of how — and when — to persuade May to abandon her position. Some argue that since it is now clear the EU won’t accept the plan, Britain must move towards a Canada-style deal. They won’t try to force the issue before party conference, but they all take the view that she can’t head off to next month’s EU summit without a credible Plan B.
Even the handful who still defend Chequers in private, as well as in public, admit that things are now more difficult. One cabinet minister concedes that the EU’s approach at Salzburg was a ‘very successful negotiating tactic’. Another cabinet member says the Chequers plan has done its job: to show the government had made an effort, in good faith, to negotiate as close an economic relationship with the EU as possible. ‘You’ve got to be able to say to the Remainers that we tried.’
There are some in the cabinet who still loathe Brexit and regard Chequers as the UK’s opening offer. Philip Hammond, the Chancellor, is expected to push to stay in the customs union and makes no attempt to disguise his concerns about Brexit. In cabinet meetings this week, he complained that a restaurant in his Surrey constituency can’t hire enough staff to wait all the tables — proof, he said, that the UK needed low-skilled immigration. But as one exasperated cabinet minister put it to me afterwards, it didn’t seem to have occurred to the Chancellor that maybe the restaurant should just pay its staff more. And that the balance of power between workers and low-wage businesses might be precisely why so many voted for Brexit in the first place.
May’s defiant reaction to the Salzburg snub has bought her some time. She can go to Tory conference and pose as the woman standing up to Brussels. She’ll be able to demand that the UK is treated with ‘respect’ by the EU, which will go down well in the hall. But things will become more complicated for her once the EU gives more details about why it dislikes her plan. As one cabinet minister explains, ‘If the EU come back with specific asks, she’ll come under pressure to accept them or to go the other way. Some people will say accept that and we’re on course for a deal. Others will say we can’t accept that.’
In truth, the UK has a pretty good idea why the EU doesn’t like May’s Brexit plan. Even before Salzburg, Olly Robbins — her hugely influential Europe adviser — was arguing that if the UK agreed not just to copy all future EU product rules but social and environmental ones too, that would deal with one of the EU27’s concerns about Chequers. There are cabinet members who have threatened to resign if Robbins gets his way on this.
The EU’s most fundamental objection to Mrs May’s plans is that, while she would still agree to bind Britain by a great many of its regulations, the UK would also be free to sign trade deals with the EU’s competitors while enjoying frictionless trade in goods with the bloc. Brussels would prefer Britain to stay closer and join its customs union, so EU countries continue to enjoy their privileged and protected access to one of Europe’s largest markets. But if May concedes on this point, she would be removing one of the principal economic arguments for Brexit: the ability to forge closer ties with other areas of the world.
If May is led by her cabinet colleagues towards a looser, Canada-style free trade deal with streamlined customs checks, she’ll have other problems. The Northern Ireland border, for example, would need some form of customs control. Industries with cross-border, just-in-time European supply chains would also be anxious. Greg Clark, the Business Secretary, argues with passionate intensity that any disruption would be devastating to British industry.
Soon, May will have to make a decision on which way to go. Salzburg showed that the EU is not about to accept her compromise. Many in cabinet believe that the EU has already offered a Canada-style arrangement — and that if we accepted this deal, Brussels would be more accommodating on the Northern Ireland question. They recognise that one reason the EU — and in particular, France — is being so tough is because it doesn’t want the UK to have many of the benefits of single market membership while shedding its obligations. If the UK accepted that this situation wasn’t achievable, they argue, then the EU would become more reasonable on the Irish issue.
So if Mrs May were willing to change tack, the Brexit talks might make progress. But that is not her style. Some of those around her say she is in denial, back to her ‘nothing has changed’ mode — and is quite serious about threatening to walk out of talks. ‘If she was taking decent advice, it wouldn’t be so worrying,’ says one. ‘But there’s no one there now, so she will be intransigent.’ Indeed, one of the more politically minded members of her cabinet has long observed that ‘the only way I can see her getting out of this dilemma is by calling the EU unreasonable’ and then opting for no deal. You can already hear cabinet ministers trying out the lines they’ll use in this scenario. One fumed this week, ‘They say: we can’t split our four freedoms, so you have to split your country.’
The Prime Minister may well be angry. But this does not alter the facts. Serious preparation for no deal started so late in the day that several cabinet Brexiteers are terrified at the prospect. They worry about Mrs May’s bluffing, and that her bad position might become a lot worse. Her declaration that a Canada–style deal would be worse than no deal suggests an alarming desire to burn every potential option. She is saved only by the absence of any agreement among her opponents on which direction she should move in.
But in reality, it would be easier for Mrs May to move towards a Canada-style arrangement than to accept ever-closer binding of the UK to the EU rules and regulations. Indeed, Angela Merkel reiterated just this week that if the UK wants free movement of goods, then it needs to accept the other three freedoms, which of course includes the free movement of workers. As one government source, who backed Remain, tells me, ‘What the PM needs is a plan to elegantly sidestep into Canada.’
To get Canada through the Commons, Mrs May would have to argue that despite her best efforts, the EU was only interested in a closer economic relationship if the UK carried on following its rules. This, she would have to say, is simply not compatible with the referendum result. In these circumstances, she would have to hope that the EU would be prepared to agree an Irish backstop that didn’t remove Northern Ireland from the customs territory of the United Kingdom. There is no guarantee that it will.
Mrs May faces a series of nigh-on impossible choices in the coming weeks. A group of cabinet ministers will try to pressure her into shifting position. But ultimately, only she will be able to make the call. It sums up not only the loneliness of power but also its thanklessness. She had wanted to be the Brexit Boudicca; instead, she’s becoming the Brexit scapegoat.