James Arnell is a partner at Charterhouse. He writes in a personal capacity.
There is a real strength of feeling in today’s reactions to Mrs May’s Brussels deal. On the one side, many are relieved at the breakthrough. On the other, many are furious at what they see as a “sell out” to Brussels.
So, how should we score this round of the negotiations?
I do not propose to go through the substance of the text released yesterday. Many others have done that already.
Instead, I would like to focus on the signals from the shape of the negotiations and from the negotiators themselves.
As I have said previously, the EU seized the early initiative. Cleverly, they made us come to them for talks in Brussels. They forced us to accept two phases of talks, leading to the embarrassing images of our team going over as supplicants, having to accommodate EU demands in order to earn the right even to discuss a trade deal which the EU must surely want.
This was a terrible start.
Things began to go a little better as we dug in on the exit bill. The EU began to express some exasperation and resorted to repeated reminders of ticking clocks. It sounded then as if the clocks were ticking against the EU team, at risk of being held accountable by Germany for screwing up one of their largest export markets for the sake of a few billion euros on the divorce bill.
Then the “breakthroughs” started coming: the divorce bill began to rise, the citizens’ rights issue moved forward steadily, and only Northern Ireland remained as an obstacle.
And then there was a moment of fascinating insight on Monday. There was comical footage of a room of gleeful EU bureaucrats looking forward to signing the agreement with the UK, celebratory announcements all-round and then that awkward call with Arlene Foster and the pause button was hit. And then we saw the truth of these negotiations to date: the EU looked very, very worried at the prospect of the deal falling apart. They even openly expressed their fears that Mrs May might be toppled.
This revealed what I suspected: they wanted this deal SO badly.
Despite an encouraging phase of holding firm on the divorce bill, we have, in the end, seriously underplayed our hand.
Let’s dial back. What should we have done?
First, we should have accepted EU citizens’ rights straight away. If the EU had not reciprocated, we could have retaliated later.
Second, we should have insisted that the talks on trade and other issues run in parallel. It would have led to a standoff. Brussels would have been surprised by our determination and this would have led to more pressure on the EU from its member states. The talks would in my view have moved more rapidly into a discussion on trade. As it is, after months of haggling over the divorce bill to get the right to “move on to the second stage”, we all agree in any case that “nothing is agreed until everything is agreed”. And in the meantime, our credibility has taken a huge blow.
Third, we should have been clear that we would not be putting a hard border in Northern Ireland, even if we moved to WTO rules, and that we expected the EU and Ireland to come up with a proposal for the border arrangements to the single market, as it was essentially their issue to fix.
We should have point blank refused to have talks in Brussels. They should have alternated between Brussels and the UK. And Mrs May should never have met Mr Barnier or Mr Juncker. She is a Head of State and they are no such thing. That should have been made very clear. She should have insisted that, if she was to speak to anyone, it would be her fellow Heads of State.
And then, when the talks had got going, we should have walked away at least once. The DUP has twice now shown itself considerably better at this game than the UK government.
So, as we look forward, this government clearly has a lot to learn about hardball negotiating.
At the next stage, we need a major change in personnel and in approach, or we are going to find ourselves reduced to rule taking from an emboldened EU.
Here’s what I would suggest:
- The talks now need to shift from Brussels. They should alternate between Brussels and the UK. Until this is accepted, we sit tight.
- Preparations for no deal really need to be emphasised in the media and they need to be very visibly progressing.
- There needs to be a change in the negotiating team. The EU needs to see some different faces around the table, and these new faces need to come in hard, making it clear to the EU that we are not going to roll over. We need to use the £40 billion of leverage we now have to full effect.
- There needs to be a clear destination in terms of the deal we seek, but that should not be what we ask for. We should ask for much, much more. Philip Hammond and others need to stop undermining the negotiating position and agree to stay silent while we ask for something we know we will not get. And then hammer away at getting it, so as to get the best we possibly can.
- We need to decide when we are going to walk (the date, ideally, as there will always be something worth walking for) and be ready to walk. It must happen at least once. Having seen the reaction of the EU last Monday, we can all rest easy: they will not let us leave without a deal.
- Mrs May needs to tell the EU very clearly that they are not of equal standing to a member state. They are unelected officials. She is the democratically elected Head of State of a large country. If they want her in a room, they need to provide Mrs Merkel and Mr Macron to accompany her. No more 4am flights to allow Donald Tusk to go and get an honorary doctorate. She is the laughing stock of Europe, not because of what she agreed (that can be retrieved) but because of how she agreed it.
I have, now, almost no hope that the government will heed this advice. If they do not, I think we will get a terrible deal and the Conservatives will be obliterated at the next election.
Meanwhile, Michael Gove’s preemptive apology for what we are set to agree (“don’t worry, you can all change it later”) should be treated with the scorn it deserves. If you want a better deal, Mr Gove, fight for it now.