Open Britain Background Briefing: Theresa May’s Florence Speech

Overview:

Theresa May today outlined her latest Brexit negotiating stance in a speech in Florence. In this background briefing, we outline the six areas where the speech fell short. In our view, these are: the Prime Minister merely kicked the can down the road; she is demanding entirely bespoke deals on trade, security and dispute resolution; she has caused further confusion on the Single Market and Customs Union; she has lost trust and credibility in Brussels; she stood by the threat of no deal; and finally, the speech highlighted the broken promises made by the Government on Brexit so far.

  1. Kicking the can down the road
    The speech acknowledged that nothing substantial will change until at least 2021, but the UK’s future relationship with the EU beyond that point remains as unclear today as it did the day after the referendum last year. The cliff-edge remains and no amount of empty words about “shared values” can change that. And with every day that passes, Britain’s negotiating hand becomes weaker still.
  2. Demanding bespoke deals on everything
    The Government is asking for bespoke deals on trade, security and dispute resolution, and the Prime Minister once again called for innovative and creative solutions. However, almost six months after triggering Article 50, she is still unable to offer any serious or realistic solutions of her own.
  3. Loss of trust and credibility
    The Prime Minister dropped the threatening rhetoric today. But it is clear that the repeated threats and insults that have come from the Government over the past 18 months have damaged the UK’s negotiating position, and weakened the prospects of securing a good deal.
  4. Further confusion on the Single Market and Customs Union
    Open Britain believes the Prime Minister made a significant mistake by ruling out membership of the Single Market in the long-term, and there is a profound disagreement within the Cabinet over whether Britain will continue to abide by EU rules into the future, or to diverge away from them. There is also a huge question mark over the Government’s ambition of negotiating trade deals during the transition period.
  5. Standing by threat of no deal
    The Prime Minister restated her dangerous and counterproductive “no deal is better than bad deal” mantra. Leaving with no deal would be disastrous for the economy and for security, and the Prime Minister should have ruled it out as an option.
  6. Broken promises
    The Prime Minister’s speech today smashed many Brexit promises into smithereens. From immigration, to the jurisdiction of the ECJ, to the financial settlement, to trade deals, to the difficulties posed by Brexit, to the timeline of negotiations, one thing is clear from today’s speech: the promises made by the Vote Leave campaign and by hard Brexit-supporting Government ministers with whom the Prime Minister has aligned herself are unachievable.

In Detail:

Kicking the can down the road

“As I said in my speech at Lancaster House a period of implementation would be in our mutual interest. That is why I am proposing that there should be such a period after the UK leaves the EU…Clearly people, businesses and public services should only have to plan for one set of changes in the relationship between the UK and the EU. So during the implementation period access to one another’s markets should continue on current terms and Britain also should continue to take part in existing security measures. And I know businesses, in particular, would welcome the certainty this would provide. The framework for this strictly time-limited period, which can be agreed under Article 50, would be the existing structure of EU rules and regulations…As of today, these considerations point to an implementation period of around two years.”[1]

  • Open Britain believes permanent membership of both the Single Market and the Customs Union is the best option currently available to the Government. It would provide certainty for our economy, for our businesses and for citizens, both EU citizens in the UK and UK citizens in the EU. It would take away the risk of driving the UK off a cliff-edge.
  • The Prime Minister’s decision to kick the can down the road for two years does nothing to address this issue. All it does is prolong the uncertainty that is damaging our economy and causing huge amounts of worry and stress for citizens.

“The eyes of the world are on us, but if we can be imaginative and creative about the way we establish this new relationship, if we can proceed on the basis of trust in each other, I believe we can be optimistic about the future we can build for the United Kingdom and for the European Union.”[2]

  • In line with the Government’s general approach to Brexit so far, the Prime Minister’s speech was long on empty rhetoric, but short on concrete solutions. It proposed no specific model for the UK’s future relationship with the EU beyond a two year ‘implementation period’.
  • Open Britain urges the Government to adopt the best model currently available for the UK’s future relationship with the EU: permanent membership of both the Single Market and the Customs Union.

“One way of approaching this question is to put forward a stark and unimaginative choice between two models: either something based on European Economic Area membership; or a traditional Free Trade Agreement, such as that the EU has recently negotiated with Canada. I don’t believe either of these options would be best for the UK or best for the European Union.”[3]

  • The Prime Minister has spent a lot of time ruling out options for the UK’s future relationship with the EU, but almost no time ruling anything in.
  • Open Britain is hugely concerned that, without any concrete model for what the UK’s future relationship with the EU will be, uncertainty will continue, the economy will carry on suffering and EU citizens will continue to leave. The Government and the Prime Minister must start making the big decisions on Brexit immediately, not kick the can down the road for another two years.

Demanding bespoke deals on everything

Trade: “As I said at Lancaster House, let us not seek merely to adopt a model already enjoyed by other countries. Instead let us be creative as well as practical in designing an ambitious economic partnership which respects the freedoms and principles of the EU, and the wishes of the British people.”

Security: "So what we are offering will be unprecedented in its breadth, taking in cooperation on diplomacy, defence and security, and development. And it will be unprecedented in its depth, in terms of the degree of engagement that we would aim to deliver."

Dispute resolution: "To make this partnership work, because disagreements inevitably arise, we will need a strong and appropriate dispute resolution mechanism. It is, of course, vital that any agreement reached – its specific terms and the principles on which it is based – are interpreted in the same way by the European Union and the United Kingdom and we want to discuss how we do that."

  • The Government is asking for bespoke deals on trade, security and dispute resolution, and called for “creative” solutions. However, she offered absolutely none of her own.
  • The Prime Minister used this speech to rule out existing trading relationship models which the EU has in place, and from which the UK currently benefits (in the case of Norway) and stands to benefit (in the case of Canada).  
  • However, what she failed to do was to spell out precisely and in detail what kind of future relationship she would actually like to have with the EU once the UK has left the EU and once the transition deal has come to an end.
  • Despite the Prime Minister’s speech lasting almost 45 minutes, there was no detail whatsoever about the shape of the future partnership. There is no long-term vision and uncertainty will continue, despite the Prime Minister’s claiming the contrary.    

Trust and credibility

"When I gave my speech at the beginning of this year I spoke not just about the preparations we were making for a successful negotiation but also about our preparations for our life outside the European Union – with or without what I hope will be a successful deal."

  • Since her Lancaster House speech, Theresa May and her ministers have severely damaged credibility in other European capitals, having consistently undermined her own position since July last year.

  • The Prime Minister and members of the Cabinet have repeatedly threatened the EU, with everything from withdrawing security cooperation to slashing corporate tax rates to removing the rights of EU nationals. Ministers have also said they would like to see “contagion” across the EU, or for the bloc to collapse.[4]

  • These threats and insults have profoundly undermined Britain’s negotiating position and further weakened Theresa May’s credibility in Brussels and key European capitals. The removal of any such threats in today’s speech simply confirms how counterproductive they have been and how far the Government’s actions and words have set the country back. 

Confusion on the Single Market and Customs Union

"One way of approaching this question is to put forward a stark and unimaginative choice between two models: either something based on European Economic Area membership; or a traditional Free Trade Agreement, such as that the EU has recently negotiated with Canada. I don’t believe either of these options would be best for the UK or best for the European Union." 

“We recognise that the single market is built on a balance of rights and obligations. And we do not pretend that you can have all the benefits of membership of the single market without its obligations.”

"Our relations with countries outside the EU can be developed in new ways, including through our own trade negotiations, because we will no longer be an EU country, and we will no longer directly benefit from the EU’s future trade negotiations."

  • Open Britain believes the Prime Minister made a significant mistake by ruling out membership of the Single Market and the Customs Union in the long-term. 
  • Her position on the Single Market is also fundamentally at odds with the views of her Foreign Secretary. She said Britain should in future have the same rules and regulations as the EU in order to ensure frictionless trade, which would mean simply adopting EU rules. Yet as he wrote in his recent Telegraph article, Boris Johnson, and many others in the Cabinet, believe Britain should be able to depart from EU regulations.
  • The Prime Minister appears to have made a glaring admission that the UK will not be able to have the benefits of single market membership without its obligations, despite the fact that the Prime Minister as well as numerous cabinet members have consistently argued that “the exact same benefits” would be a possibility.

  • The only thing the Government has left to offer is a fantasy vision of the free trade deals it claims are waiting to be signed. The Prime Minister claims it will be possible to negotiate new trade deals whilst remaining, effectively, in the Customs Union for the transition period.

  • However, there are two issues with this. First, it is unclear why or whether the EU will agree to a transitional deal that allows the UK to directly compete with the EU for trade deals with third countries. Second, as numerous countries have made clear, they would not be able to properly negotiate a trade deal with the UK until they know what they UK’s future relationship with the EU looks like.

Standing by threat of no deal

Q: “Do you still believe that no deal is better than bad deal?

A: “We continue to believe that” [5]

  • The Prime Minister restated her dangerous and counterproductive “no deal is better than bad deal” mantra. Leaving with no deal would be disastrous for the economy and for security, and the Prime Minister should have ruled it out as an option.
  • The question still remains as to whether the negotiations are actually at a stage where it would be possible, to move on from discussions on the withdrawal to discussions on the future relationship. The European Union’s Chief Negotiator, Michel Barnier, alluded to this yesterday stating in a speech to the Italian Parliament that “Without a withdrawal agreement, there is no transition. This is a point of law.”[6]
  • In other words, discussions on the withdrawal agreement will need to be wrapped up first, prior to discussions on the transition period commencing.

Broken Brexit Promises

  • From immigration, to the jurisdiction of the ECJ, to the financial settlement, to trade deals, to the difficulties posed by Brexit, to the timeline of negotiations, one thing is clear from today’s speech: the promises made by the Vote Leave campaign and by hard Brexit-supporting Government ministers with whom the Prime Minister has aligned herself are unachievable. Today the Prime Minister, belatedly, began to recognise that.

  • Whilst Open Britain welcomes this dose of long-overdue reality from the Prime Minister, the public should keep an open mind about the implications of these broken promises and what they mean for Brexit.

  • Below are some of the most egregious examples of the Prime Minister back-pedalling on its previous positions.

Immigration

What they said then…

  • “Brexit must mean control of the number of people who come to Britain from Europe. And that is what we will deliver.”

Theresa May, Lancaster House speech, 17 January 2017[7]

What Theresa May says now…

  • “So during the implementation period, people will continue to be able to come and live and work in the UK.”

Theresa May, Florence speech, 22 September 2017[8]


Jurisdiction of the ECJ

What they said then…

  • “We will take control of our own affairs, as those who voted in their millions to leave the EU demanded we must, and bring an end to the jurisdiction in the UK of the Court of Justice of the European Union (CJEU).”

Government Brexit White Paper, 2 February 2017[9]

What Theresa May says now…

  • “I want the UK courts to be able to take into account the judgments of the European Court of Justice with a view to ensuring consistent interpretation.”

Theresa May, Florence speech, 22 September 2017[10]

Financial settlement

What they said then…

  • “What happens in that sort of interim period you will have to leave me to negotiate, I’m afraid. But the aim is to bring to an end these £10bn-a-year payments.”

David Davis, Good Morning Britain, 15 August 2017[11]

What Theresa May says now…

  • I do not want our partners to fear that they will need to pay more or receive less over the remainder of the current budget plan as a result of our decision to leave. The UK will honour commitments we have made during the period of our membership.

Theresa May, Florence speech, 22 September 2017[12]


Brexit timeline

What they said then…

  • “You invoke Article 50 in the early part of next year. You have two years to pull it off. I don’t actually think we will necessarily need to spend a full two years but let’s see how we go.”

Boris Johnson, September 22 2016[13]

What Theresa May says now…

  • “The United Kingdom will cease to be a member of the European Union on 29th March 2019…But the fact is that, at that point, neither the UK - nor the EU and its Members States - will be in a position to implement smoothly many of the detailed arrangements that will underpin this new relationship we seek.”

Theresa May, Florence speech, 22 September 2017[14]


[2] ibid