Читать книгу Fall Out: A Year of Political Mayhem - Tim Shipman, Tim Shipman - Страница 25

On 17 January, more than one hundred days after Theresa May gave her speech on Brexit at the Conservative Party conference, the prime minister got to her feet in Lancaster House and finally confirmed in public that she wanted a ‘clean break’ from the European Union by leaving the single market and abandoning full membership of the customs union. She announced that Britain would seek a ‘new partnership’, not ‘partial membership, associate membership or anything that leaves us half-in, half-out’ of the EU. Seeking to learn from David Cameron, she threatened to walk if the terms were not good enough, declaring, ‘No deal for Britain is better than a bad deal for Britain.’

Those with a perverse sense of history might have recalled that Lancaster House, one of London’s great neoclassical Georgian buildings, was the venue where Margaret Thatcher in 1988 had declared her ambition to take Britain into the single market. Here now was Britain’s second woman prime minister declaring an intention to leave. It was a measure of the importance that she attached to the occasion that May took to the stage in the green and blue tartan Vivienne Westwood suit she had worn to her leadership campaign launch six months earlier. Before a canvas of King George III, the monarch who lost the American colonies, May delivered her case for British independence. The ambassadors of the twenty-seven other member states applauded, grateful at least for some clarity.

The Lancaster House speech had taken shape over the Christmas break, when Nick Timothy sat down with May to agree the main points. ‘This is what I want the speech to be,’ she said, explaining her priorities. Timothy worked her thoughts into twelve statements of intent, or ‘pillars’, some of them momentous, others peripheral. ‘How does this structure work for you?’ he asked. ‘I like it,’ May replied. It says much about May that she did not boil the points down to a media-friendly list of ten. When he had the skeleton of a text, Timothy brought in Chris Wilkins to help with the second draft. As the speech was refined, May ‘commented on the arguments and the substance more than the language and soundbites’. Since so much of the substance had been months in the planning, Timothy told colleagues, he found it ‘one of the easiest speeches I’ve ever written’.

Before the Christmas break, the chiefs had taken soundings from a range of Conservatives who would have liked to think they would be consulted about the substance of such a momentous speech. However, as at conference, the decision-making circle was extremely small. Accompanied by Michael Tomlinson, another Eurosceptic MP, Steve Baker, the chairman of the European Research Group, went into Downing Street on 19 December to see Timothy and Hill. ‘We were on transmit, they were on receive,’ Baker told a friend. Baker was clear that May must stick to her three red lines: no single market, no customs union, and no ECJ oversight. The chiefs took all this in but gave nothing away. ‘They were very cool operators,’ Baker reported back to the other Eurosceptics.

May herself had played host to a group of a dozen Remain MPs, led by the former minister Alistair Burt, in her House of Commons office just before Christmas, at the meeting from which Nicky Morgan had been banned. They pressed the case they had been making publicly that the government’s plans should be converted into a white paper, so they had legislative weight and could be properly scrutinised, and that Parliament should be granted a vote on the final deal.

The chiefs also talked to ‘DD, Hammond and Boris’, as well as Damian Green and Amber Rudd. ‘The consultation was not wide,’ a Downing Street official said. Unlike Cameron, who had toured the capitals of Europe before revealing his negotiating demands the previous February, the prime minister did not consult foreign diplomats, let alone foreign leaders, about her intentions.

The key development that helped May to achieve a cabinet consensus ahead of the speech was the emergence of an alliance between David Davis and Philip Hammond. Despite initial ‘mutual suspicion’, the Brexit secretary and the chancellor had come to see each other as the ‘grown-ups’ around the table. Davis’s chief of staff, James Chapman, and Hammond’s special adviser, Poppy Trowbridge, plotted to bring the two big beasts together like zookeepers encouraging reluctant pandas to mate. ‘James constantly impressed on DD the importance of Hammond because Hammond needed a friend,’ a source said. ‘They influenced each other.’ The two men agreed to meet once a week. ‘They went for drinks in Hammond’s flat, quite often.’

Hammond was beginning to understand that his defence of membership of the customs union was a lost cause. Davis, now better read in the detail, had begun to appreciate the complexities which concerned the Treasury. Cabinet sources say that he resorted less often to the old Brexiteer argument that ‘German car makers and French knicker manufacturers’ would ride to Britain’s rescue and insist on a good trade deal with Britain. A government source who sympathised with the Treasury said, ‘Davis made a lot of progress. It was painful at times. But DD did want to work with Big Phil. He did recognise it was vastly more difficult than he first thought.’ Davis himself told MPs, ‘This is likely to be the most complicated negotiation of modern times, and maybe the most complicated negotiation of all time.’

The rapprochement between Davis and Hammond was evident to cabinet ministers in meetings of the Brexit subcommittee. ‘They would snigger together,’ a minister said, at some of the contributions from Boris Johnson and Liam Fox. This created suspicion among some Leave-voting ministers, who wondered if DD was backing away from his belief that the UK could not stay in the customs union. ‘There was a period when we all thought DD was wobbling,’ said a leading minister.

They were more suspicious on 1 December, when the Brexit secretary told the Commons, in response to a question, that the government would ‘consider’ paying to ‘get the best possible access for goods and services to the European market’. Hammond backed him up, saying Davis was ‘right not to rule out the possibility that we might want to contribute in some way’. The Eurosceptics smelt ‘an establishment betrayal’. Steve Baker, as convener of the backbench sceptics, phoned Davis and asked what the position was. Davis clarified that Britain would not be paying large sums to Brussels indefinitely but would settle its outstanding obligations. Baker messaged the MPs on his WhatsApp group, urging them to remain calm. But one veteran Paleosceptic urged him to break off links with Downing Street. ‘Go radio silent,’ the MP said. ‘Just let them sweat, because they’re betraying us.’ Baker was concerned. ‘This is people gearing up for civil war,’ he thought.

Nonetheless, under the influence of Hammond, Davis began to say Britain would ‘meet our obligations’ on the exit bill, an acknowledgement of the political reality that billions would have to be paid to Brussels if Britain wanted a trade deal. ‘Anyone who tells you any different is a fantasist,’ a DExEU source said at the time. That put Davis and Hammond at odds with Boris Johnson, who continued to insist that Britain had no legal obligation to pay anything. ‘Phil was trying to keep open the option of spending money to access the single market,’ a Tory adviser recalled. ‘Boris was very concerned to close that down.’ In private, Johnson told colleagues, ‘It needs to be nothing. Zero. There is no case at all for continuing to spend British taxpayers’ money to trade with the rest of the EU. If the argument is you should pay for access to markets, they should pay us.’

Significantly, after Davis’s hint that Britain might pay up, there was not a peep of contradiction from Downing Street. While Johnson and Fox had frequently had their freelancing interventions shot down by Number 10, May’s aides remained silent. ‘The most significant thing that happened that day is what didn’t happen,’ a special adviser said. ‘DD talked about paying money into the EU budget and no one from Downing Street machine-gunned him in the street.’ An MP close to Davis said he had been pressing the case to Number 10 that ministers – not the media – should start doing more to define Brexit publicly, a coded rebuke to May’s insistence that there should be ‘no running commentary’. Another source made clear that budget contributions were a centrepiece of government plans: ‘The money is where they will try to compromise.’

Four days later, on 5 December, Hammond and Davis met ten influential City bosses at the Shard, Britain’s tallest building. Both agreed that they needed to calm the fears of the City, which were beginning to percolate into the media and, Davis feared, hand Barnier a stick with which to beat them. ‘If people in Britain panic and the press are saying, “The City’s going to evacuate to Frankfurt,” then that instantly becomes a lever for the other side,’ Davis warned. Barnier had already shown himself an assiduous reader of the British newspapers, quoting back stories about the prospect of queues at the border in his conversations with British officials. The Shard event resolved very little, but it allowed Davis and Hammond to be pictured together. ‘What mattered more was the photo,’ a minister said. ‘Because everyone was trying to do their Kremlinology and saying, “Davis is in one corner and Hammond is in the other.” And they weren’t.’

Davis’s support emboldened Hammond to push things further. On 12 December, in front of the Treasury select committee, the chancellor announced that a transitional arrangement would be necessary after Brexit because there was not time to secure a full deal in the two-year period of negotiations. It was a view, he said, that was shared by ‘businesses, among regulators, among thoughtful politicians, as well as a universal view among civil servants’. It was not, at that stage, a view shared by Boris Johnson, Liam Fox or Steve Baker’s Eurosceptics. On 29 November the prime minister had hinted to the CBI’s annual conference that she would consider a transitional period. ‘People don’t want a cliff-edge; they want to know with some certainty how things are going to go forward,’ she said. But May’s ‘cliff-edge’ comment had not been pre-planned. It came about, in part, because she had only done three minutes of prep for her appearance. There was nothing unplanned about Hammond’s intervention. Encouraged by Ivan Rogers, he was pushing for a transitional period to be agreed straight away. ‘Phil would have liked to have a two- or three-year transition period, agreed at the beginning of the negotiation,’ a fellow cabinet minister said.

Davis was prepared to countenance a transitional deal, but only if there was a fixed end point to transition to – and if it was not called a transition period. He believed the term encouraged Barnier to get the wrong end of the stick. ‘His idea of a transition arrangement, is that you spend two years doing a divorce and then spend the next ten years doing the transition,’ Davis warned his colleagues. ‘In which time we’re still under the ECJ, we’re still paying out bills and all the rest of it.’ Davis regarded Hammond’s plan as dangerously open-ended and wanted the destination to be clear. ‘How do you build a bridge when you don’t know where the shore is?’ he asked aides. Davis did not want to spend his political capital seeking a transition deal – but crucially he did not oppose it in principle. Within DExEU, George Bridges – the minister in the Lords – had joined Hammond in arguing for a transition period.

The chancellor was still on his own in arguing for Britain to stay in the customs union. In early January, when they returned from the Christmas break, Hammond met Boris Johnson for more than an hour. The chancellor made one last bid to persuade the foreign secretary. ‘Can we at least agree something on the customs union even if we can’t have the single market?’ Johnson replied, ‘We can’t do it.’ Afterwards Johnson told Foreign Office officials, ‘It was him saying to me that he is losing the battle with the prime minister. He’s got to do it. If you’re out, you’re out.’

When Boris Johnson heard that May was planning to make the speech in January he decided he ‘had to be useful’. He spent the Christmas break writing a 3,000-word paper on what he thought she should say. Johnson’s allies call it a ‘draft’, though they concede that not many of his actual words (or jokes) found their way into the final speech. May’s aides referred to it as ‘a letter’. Johnson advised May to make a clear statement that Britain was going to leave the customs union and would be taking back control of its laws. He also urged her to explain to the rest of the EU that Brexit was about Britain making a positive decision for itself, not against them – the mantra of ‘leaving the EU but not leaving Europe’.

Johnson was pushing at an open door when he asked the PM to adopt the positive vision of the UK unleashed as ‘Global Britain’, a brand he had developed as London mayor and made the centrepiece of a speech to Foreign Office staff in July. His allies briefed journalists that Boris was feeding into the speechwriting process. One even claimed, ‘Her speech was 70 per cent his content – leaving the single market, leaving the customs union, agitating for free trade, not pulling up the drawbridge, an open and dynamic economy that people come to visit, global Britain – you could hear so much of him in it.’ May’s speechwriting team certainly read Johnson’s thoughts, but most of them already appeared in the speech. ‘There was basically no involvement in the speech,’ a source close to May said. Her team did not mind Johnson’s grandstanding because they were keen for senior ministers to feel they had ‘buy in’ to the process, and Boris’s input showed that he was on the same page as the prime minister.

If Johnson can be said to have contributed anything it was an attitude of positivity, which Chris Wilkins was also keen to incorporate following criticism of the ‘citizens of nowhere’ line in the conference speech. He had worked for Nicky Morgan, one of the most outspoken Remainers, and wanted to bridge the gap between his old boss and his new one. ‘Chris was concerned that the speech should be very optimistic and outward looking because we needed to bring in the 48 per cent and particularly the kind of people who might have been irritated by the citizens of nowhere thing,’ a Number 10 official said. ‘That was what he brought to it.’ May’s trip to the Gulf Cooperation Council in Bahrain in December, and the positive welcome she had received there about trading with the UK, helped crystallise the prime minister’s view that she needed to use her big Brexit speech not just to outline the basics of her negotiating position but also to speak much more about the future and delineate Britain’s global position.

Jeremy Heywood also pressed for an upbeat tone that would build bridges with those who had voted Remain. The cabinet secretary, who acted as the ‘voice of the business community’ in Downing Street discussions, told May she should offer an olive branch on immigration. ‘Jeremy Heywood wanted a really firm commitment to continuing to attract the brightest and the best,’ a senior aide said. ‘He really, really was concerned that we maintain immigration for the best talent.’ The phrase ‘brightest and the best’ made it into the final draft.

The most important political argument May planned to make – since it was not widely expected – concerned what would happen if there was no deal. In order to impress on the EU that May was prepared to cut and run if she did not get what she wanted, Nick Timothy came up with the line ‘no deal is better than a bad deal’. Internally, the chief of staff had argued the point vigorously. ‘There are some people on the European side who say the only acceptable deal is one which punishes Britain – that’s not a good deal,’ he said. ‘There are some on our side who are so eager to do a deal that they’ll want to sign up to all the bad bits of EU membership and none of the good bits. That’s not a good deal either.’

In the aftermath of the speech, this approach was characterised as evidence of the prime minister’s cavalier approach to Brexit and her total capitulation to the brinkmanship of the hardline Eurosceptics. But in private May was far from sanguine about the prospect of resorting to WTO rules, judging that scenario ‘very sub-optimal’. Her view had formed in early September, when Oliver Robbins drafted a paper on the implications of moving to WTO rules for different sectors of the economy. May’s response was to say, ‘I really don’t like the look of that and I don’t want to go for WTO. I don’t want to go there, I do want a preferential agreement.’ The prime minister was convinced enough that, unusually, she did not ask for a more detailed paper to be prepared. A source familiar with the discussions said, ‘She was very clear she wanted some sort of preferential economic and trade agreement and the WTO was unpalatable.’

David Davis believed Britain would survive a no-deal scenario ‘perfectly well’ but he also approved of May deploying the gambit, telling colleagues it was a strategy of ‘mutually assured scaring the shit out of each other’. To Remainers who told him it was irresponsible to flirt with a no-deal Brexit, Davis said, ‘The more people squawk about a WTO option being so terrible, the more likely it is to happen because it will persuade either side we don’t mean it. And we bloody well do.’ Another cabinet minister said, ‘David Cameron’s mistake when he was negotiating before the referendum was that the Europeans never thought we would walk away. This time we will.’

It was the chancellor, of all people, who raised the ‘no deal’ issue to Defcon One. On 15 January, the German newspaper Welt am Sonntag ran an interview with Hammond in which he suggested Britain could transform its economic model into that of a corporate tax haven if the EU failed to do a deal on market access. ‘If we are forced to be something different, then we will have to become something different,’ he said. Asked to clarify, he added, ‘We could be forced to change our economic model to regain competitiveness. You can be sure we will do whatever we have to do. The British people are not going to lie down and say, “Too bad, we’ve been wounded”. We will change our model and we will come back, and we will be competitively engaged.’ Jeremy Corbyn dismissed this vision of the UK as Singapore-on-Sea as a ‘bargain basement tax haven’. But Hammond had been concerned that May’s speech would cause the pound to fall and he wanted them to see the government had a plan. His colleagues were grateful. Davis felt the threat would stop the Commission thinking it could push Britain around as it had Greece during the eurozone crisis. A fellow cabinet minister said, ‘That was Phil being a team player even though he was not entirely comfortable with the strategy.’ Hammond would back away from his comments when he talked to Le Monde in July but his intervention in January helped ensure that when May spoke, the pound actually rose.

Privately, Hammond was less supportive of his prime minister. That week the Economist had run a cover story on May under the headline ‘Theresa Maybe’. ‘After six months, what the new prime minister stands for is still unclear – perhaps even to her,’ it said. The article was curiously timed since May was finally making her strategy public, but Hammond let it be known to a journalist at the magazine that he was amused by the article.

The final details of the speech were thrashed out during a breakfast meeting in Hammond’s office in Number 11 Downing Street the same weekend. The dysfunctionality of the cabinet committee system had driven decision makers into ever smaller groups. ‘It leaked like a sieve,’ a cabinet minister said. ‘We started having bilaterals, trilaterals and quadrilaterals with Theresa.’ For the crunch meeting Boris Johnson was not invited. ‘The civil service worked out that the only way that they could get any decisions on anything was with DD, Hammond and May in the room,’ a DExEU official recalled.

Over two hours, the prime minister, the chancellor and the Brexit secretary – and their closest aides – went over each of the twelve pillars of the speech to ‘stress test’ them. One of those present said, ‘It was one of the best meetings a group of politicians making big decisions have had in the time I’ve been there. They chewed the fat on everything and then came to the decision.’

The purpose of the meeting was to win Hammond’s support for May’s proposals. Davis was invited because it was felt he could help the chancellor over the line. ‘DD can talk to him probably in ways that others can’t,’ a cabinet source said. The meeting was the moment Hammond finally accepted the inevitable, that Britain was leaving the customs union. The chancellor remained ‘appalled’ by the idea, but when the time came to fall into line he did so with a whimper rather than a bang. A source present said, ‘I went in expecting there to be quite a big debate. In truth it was quite mild. It was not quite a shrug of the shoulders but he said, “Yes, okay.” And that was that.’

A cabinet minister said, ‘Phil knew this was the speech that mattered. The party conference speech was basically telling Europe “Brexit is actually going to happen.” Up until that point, European governments kept on asking us, “How are you going to get out of this?” But the substantive policy was in the Lancaster House speech. Phil realised he had to make the best of a bad job, from his point of view.’ A close ally of Hammond added, ‘He saw the value in Theresa clarifying the situation. She basically bought off the Brexiteers wholesale. Philip still saw the problems but he realised that politically it was the only way to stop their being a leakage to Ukip.’

Sitting at the back of the room, Fiona Hill breathed a sigh of relief. ‘That meeting was one of the single most important meetings because it meant Theresa could stand up and say that she had DD and Philip not just behind her but utterly intellectually in the same place as her,’ a source close to May said. A cabinet minister agreed: ‘In any economic project – and for God’s sake this is the biggest economic project – you absolutely have to take a chancellor with you.’ Hammond did not have much choice, as a cabinet source observed. ‘The ship was already gone. Phil’s only option was to jump onto the back of the lifeboat or into the sea. He jumped into the lifeboat.’

Once again, the most important decisions on Brexit in May’s first year in power had been taken by a group of people who could have fitted into a telephone box. The fear of leaks was such that most cabinet ministers were only shown the text of the speech minutes before May delivered it.

When the Treasury got their hard copy of the final draft the day before, Hammond and his officials made one final effort to change the approach to the customs union. May’s aides had worded that section carefully to maintain a degree of ambiguity. ‘Full Customs Union membership prevents us from negotiating our own comprehensive trade deals,’ it said, but ‘I do want us to have a customs agreement with the EU. Whether that means we must reach a completely new customs agreement, become an associate member of the Customs Union in some way, or remain a signatory to some elements of it, I hold no preconceived position. I have an open mind on how we do it. It is not the means that matter, but the ends.’ A Downing Street official said, ‘That language was already a concession to the Treasury. When the chancellor’s comments came back on the draft they were incredibly limited but he did want the language on the customs union watered down more and we pushed back on it. We retained the original language.’ A special adviser added, ‘Hammond mishandled it because she had made up her mind.’

In May’s forty-two-minute speech the headlines came thick and fast. ‘I want to be clear that what I am proposing cannot mean membership of the single market,’ the prime minister said, since that would mean accepting the EU’s four freedoms – free movement of goods, services, capital and people – and ‘complying with the EU’s rules and regulations that regulate those freedoms’. That, May argued, would mean ‘not leaving the EU at all’. Instead of membership of the single market, Britain would seek ‘the greatest possible access to it through a new, comprehensive, bold and ambitious free trade agreement’.

The plan Nick Timothy had devised in September was made flesh. His and May’s greatest achievement was to make seem inevitable what after the referendum had only been logical. Having moved fast to put Britain on this path they had set a course from which the government could not be diverted. By waiting four months to make it explicit, much of the heat that might have led to the plan being contested had dissipated.

May repeated her priority to ‘get control over the number of people coming to Britain from the EU’ and ducked the chance to make a unilateral offer to EU citizens living in the UK. On the money, she said ‘vast contributions’ to the EU budget ‘will end’, but left open the prospect that Britain might pay to remain in ‘specific European programmes’. Significantly, she also announced that she wanted a phased ‘implementation period’ because it was ‘in no one’s interests to have a cliff-edge’, but made clear this would not mean the ‘permanent political purgatory’ of an indefinite interim deal. Hammond had his transition period, though under another name. May struck a far warmer tone than at the party conference, telling her fellow EU leaders, ‘It remains overwhelmingly and compellingly in Britain’s national interest that the EU should succeed.’

The speech was generally well received at home and abroad. Whatever their differences, it was a text the whole cabinet felt able to support. A source close to May said, ‘Some of the divides between Leave and Remain camps were healing because ministers from both sides of the campaign were very happy with that speech and thought it was the right concept.’

Boris Johnson could be seen nodding vigorously while May spoke. At the cabinet that followed he declared it ‘a great day’. Even Hammond seemed happy, pronouncing it ‘a seminal moment’ and ‘an excellent speech’. ‘He was so sycophantic,’ a witness recalled. ‘There were many rolled eyes.’ While Remainers like Nicky Morgan were unhappy that May had confirmed hard Brexit, there was relief that the position was now clear. The Eurosceptics were delighted. Nick Timothy received supportive messages from Iain Duncan Smith and John Redwood. Steve Baker wrote in his diary, ‘Amazing speech, joy abounds.’ A Downing Street source recalled, ‘We were incredibly pleased with how well it landed. For a short time, it looked like we had managed to unite all sides of the Conservative Party around this issue.’

There was just one dark cloud on the horizon in Number 10. Nick Timothy and Fiona Hill had asked Katie Perrior to organise a series of op-ed articles in European newspapers. A Downing Street aide said, ‘The op-eds didn’t happen. It was the press office’s job to make it happen. They would say that Katie had not delivered on that.’ The tensions between Hill and Perrior, which had exploded over ‘Trousergate’, would not be long in coming to the boil.

Nonetheless the reaction from the rest of the EU was calm. The other countries recognised that May had respected the integrity of the single market by acknowledging that the four freedoms were not something from which Britain could pick and choose. A cabinet minister said, ‘A lot of them thought we wanted to stay in the single market but leave the EU. For a lot of them that redressed their fear that we wanted to be there having it all.’ Another minister, who walked out of Lancaster House with several EU ambassadors, said, ‘They liked the clarity. They didn’t like what she was saying, they liked the fact that it has set the course and they knew what Britain wanted. Lancaster House was her finest hour.’

The experience of dealing with a group of outside egos arguing over populist policies stood May in good stead for her next assignment. On 27 January, ten days after the Lancaster House speech, she was due in Washington, the first foreign leader to visit the forty-fifth president of the United States, Donald J. Trump.