Theresa May doesn’t use an autocue for her speeches. She feels that reading off a screen at the back of the hall makes it far harder to connect with the audience. But the Prime Minister had no need to worry about her connection with the audience at this conference. Tory activists love her; they regard her as one of their own and are rejoicing at her leadership. ‘The grown ups are back in charge’ was a refrain heard frequently in Birmingham this week.
The mood of Tory activists has been further improved by what Mrs May has said about Brexit. Her commitment to trigger Article 50 by the end of March has reassured them that Britain really is leaving the European Union and the tone of her speech on Sunday indicated that she is aiming for the kind of clean break with the EU that most of her audience at conference wanted. (There were grumblings from pro Remain Tories that their brethren had largely stayed away this year.)
May’s comments on Brexit have delighted Tory Eurosceptics: ‘We are not leaving the European Union only to give up control of immigration again,’ she declared. ‘And we are not leaving only to return to the jurisdiction of the European Court of Justice.’
Those MPs who formed the awkward squad under David Cameron are now seeking out journalists to praise Mrs May. One pointed to the chief whip, Gavin Williamson, who used to be Cameron’s parliamentary private secretary, and said: ‘He used to have to call me before the Prime Minister said anything on Europe and try and get me to keep quiet. Now he has to call George [Osborne] and Nicky Morgan. That’s how much things have changed.’
If May’s aim was to make sure that she didn’t alienate her right flank, she has succeeded. What complaints there were at this conference came from the hardcore Remainers. But May also had another objective in mind when she outlined her timetable for triggering Article 50.
One of the Brexit ministers tells me that the government hopes that the rest of the EU will be willing to engage in preliminary discussions now a date has been fixed and that May will be able to test the waters at the European Council in December, before the formal negotiations begin.
She has made it clear that Brexit will not consist of a series of opt outs. Instead, she wants to work out an entirely new, but close, relationship with the EU built around trade and security cooperation. Nearly everyone in Birmingham — and in the markets, judging by the fall in the value of the pound — has taken this to mean that the UK is not going to remain a member of the customs union or the single market. This has raised expectations among the Eurosceptic right and Mrs. May will face quite a backlash if she ends up disappointing them.
But, oddly, by suggesting she doesn’t want Britain to remain a member of the single market, May might have made discussions with the rest of the EU easier. The other 27 states want to show that there is no ‘better’ deal than membership available and that the four freedoms — of movement, goods, capital and services — are inextricably linked. So, if the UK wanted to stay in the single market, the conversation would turn on how this would not be possible if Britain also sought to control EU immigration. But if the UK is not trying to stay, another more constructive discussion becomes possible. It would allow other member states to tell their voters that Britain had paid a price for its desire to leave the EU’s jurisdiction. From this position, a free trade agreement could be reached covering goods and some services.
Those involved in the preparation for the negotiations admit that the task is complex. One jokes that ‘as soon as you solve one problem, another five come along’. There is optimism that the goods part of any deal will be relatively straightforward. The City and the Treasury are not so confident when it comes to financial services.
But influential figures in the Brexit department think that new EU financial services rules could serve much the same purpose as the current EU passporting rules in terms of allowing UK financial services to operate on the Continent. And there is also a chance that the troubled European banking system could help the City get a better deal than expected. European banks are not keen to lend, currently — they would rather build up their capital bases — and European Central Bank efforts to make them do so have not worked. At the end of last year, however, UK banks were providing 1.1 trillion euros in cross border EU lending. This suggests that EU members might be keen for their companies to continue raising money as easily as possible — in London.
Brexit will raise the stakes for Britain. It will make it all the more important to get domestic policy right. At this conference we have seen the stirrings of an argument over immigration. Some ministers, notably Philip Hammond, have gone out of their way to make the case for immigration according to skills: to argue that making it harder for the best and brightest to come here could snuff out the UK’s advantage in growth sectors of the economy such as technology. Meanwhile, the Home Secretary Amber Rudd has been keen to stress that the government remains committed to Theresa May’s target of bringing immigration down to the tens of thousands. Rudd — traditionally seen as a liberal on immigration — won’t say how quickly she wants to do this. It is her version of Augustine of Hippo’s prayer: ‘Grant me chastity and continence — but not yet.’
Theresa May keeps saying that she doesn’t want her government to be defined by Brexit, and on Wednesday, she made her speech about the ‘new centre ground’, which is a far greater political passion for her than leaving the EU (after all, she thought it would be better to remain). But this week has confirmed how Brexit will totally dominate politics until Britain has finished negotiating its new relationship with the EU.
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