Trade

Theresa May’s plan for ‘immediate’ break with EU after Brexit

LONDON — To those on the inside of Theresa May’s government, it’s a plan designed to finally get Britain out of its “defensive crouch.”

After months of wrangling and Tory infighting over the U.K.’s future relationship with the EU, a set of proposals have been drawn up that aim to maximize what Brexiteers see as the “opportunities” now available to Britain as a result of exiting the bloc.

The outlines of the long-awaited plan, which will be discussed by a Brexit sub-committee of May’s Cabinet Thursday and are expected to be signed off by the full Cabinet over the coming weeks, envisages the U.K. diverging from a series of key EU rules and regulations “immediately” after the end of any Brexit transition period while retaining the power to go further in other areas at a later stage, according to senior British officials.

One official named three areas where the government wants to diverge after Brexit: agricultural subsidies currently administered under the Common Agricultural Policy, financial services regulation and trade policy.

The plan to diverge from EU regulation suggests May is prepared to push for a harder Brexit than suggested.

Another official agreed these three policy areas were being discussed and said imposing restrictions on freedom of movement was also an imperative for the government, as was the desire to spend money recouped from the EU budget on public services such as the NHS.

“Everyone around Cabinet agreed there should be a Brexit bonus,” the second official said.

While the proposal has widespread support in Cabinet, according to the first senior U.K. official, it is likely to spark concern among the “soft” Brexit wing of the Conservative Party over fears it will lead to a hard departure from the bloc that will damage the economy.

EU officials have also consistently warned that the further the U.K. seeks to depart from EU standards after Brexit the worse its final trade deal will be.

Kicking the can down the road

U.K. Prime Minister Theresa May has come under increasing pressure in recent weeks as private disagreements about where Britain should head after Brexit have spilled into the public domain. Her leadership has repeatedly been questioned by many in her own party for a perceived failure to set a direction or broker a compromise her team can all sign up to.

However, the prime minister has made it clear in private that Britain must aim high in its opening offer to the EU, according to one of the officials.

Ahead of Thursday’s meeting of her top Brexit team, the prime minister addressed the Conservative Party’s annual Black and White Ball in London, where she struck a defiant tone on Brexit.

May told the audience of Tory donors that leaving the EU must mean “taking control” of Britain’s money, borders and laws and this meant “leaving the single market and customs union and constructing a completely new trading partnership with the EU.”

The plan to diverge from EU regulation immediately after Brexit suggests May is prepared to push for a harder Brexit than recent statements by some of her senior ministers have suggested.

Brexit Secretary David Davis told the House of Commons exiting the European Union committee last month that “the aim in this whole exercise” was to keep “maximum possible access” to the EU market while delivering the freedom to set a different regulatory course. However, he added: “The decision on how that freedom is used will be a matter for future governments and parliaments. I see my task as creating that freedom. How far apart we diverge will be a matter for the government thereafter.”

His comments raised eyebrows among hard Brexit-supporting Conservative MPs, and a day later Chancellor Philip Hammond dropped further hints of a more limited divergence from the EU when he told an audience in Davos that the U.K. and the EU’s economies would move “hopefully, very modestly apart.”

EU chief Brexit negotiator Michel Barnier (left) and Brexit Secretary David Davis on February 5 | Stefan Rousseau/Getty Images

The bigger clashes between those seeking closer and more distant relationships with the EU are likely to be parked until the EU pushes back against the U.K. opening bid, which many in Brussels will inevitably view as a “cake and eat it” approach.

“It’s easier to establish a negotiating position than to agree a final deal,” the second official said, predicting that if the EU were to insist that the U.K.’s goals were only possible by staying inside a customs union, that could split Cabinet opinion.

Asked whether the emphasis in the future relationship talks would be on immediate rather than future divergence from EU rules, the prime minister’s official spokesman declined to comment on “negotiation matters.”

Original Article

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