Brexit transition: Cabinet not completely harmonious at May’s plan

The transition period requested by Theresa May yesterday in Florence is pretty much exactly what the Treasury, speaking it thinks on behalf of big business, has been asking for. But it leaves the UK in a bizarre, protracted limbo which could antagonise bad feelings amongst Brexiteers.

There was nothing on the side of any referendum campaign bus saying “Vote Leave and Nothing Changes for 5 Years.” Some Vote Leave figures insist this is a mess the government has got itself into by moving Article 50 before it had started the infrastructure on customs and immigration to make a walk-out and no deal survivable. Instead, they say, we are on our knees begging to stay in, accepting rules with no place at the table.

Some in government had expected Theresa May to rule out accepting new rules and regulations pronounced by the 27 during the transition. But she did nothing of the sort. Her aides say this will be “part of the negotiations” but that they are not too worried as the gestation period of Brussels laws is elephant like. For a new law to come to fruition during the transition, it’s argued, will mean it’s bound to be a law that Britain was at the table to shape during its time of full membership.

Some in government aren’t quite so sure and recall emergency regulations and bans on products that have come in relatively quickly. They don’t rule out hostile acts towards British economic sectors. Officials say Brussels will know there could be retaliation if that happens.

So far no one at the top of government has broken cover to speak ill of this compromise in public but I understand that the extended Cabinet on Thursday (30 minutes to read the speech plus 2 hours to discuss it) wasn’t completely harmonious.

Apart from some calls for unity, including one by Justine Greening, that were clearly aimed at Boris Johnson, there was also what one attendee described as a pretty snippy contribution by Andrea Leadsom, clearly unimpressed with the plan which was unveiled yesterday in Florence.

As for what it is that the UK is willing to pay to leave, that’s another whole headache. There’s some subtle semaphore in yesterday’s speech. By talking about honouring “our obligations” rather than than the narrowly defined “legal obligations” which were detailed in that Treasury presentation that so irritated Brussels, Mrs May appears to be opening up the possibility of a much bigger British payment than the £10bn per year for a two-year transition – maybe double that amount according to The Times.

The PM emphasised that money had to be considered alongside the shape of the final trade deal (something Brussels publicly disavows but which officials believe they know will be where we end up). It could start a conversation but there’s no guarantee where that goes. The UK government position remains that we are not legally obliged to pay to check out of Hotel Europe and we are only legally obliged to pay for the ongoing use of the facilities. But if the talks go well, we are willing to meet some of the bill the EU27 are presenting.