Brexit Update: Chequers Deal Dead?

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Posted on September 6, 2018

Having corralled most of her cabinet behind her in July to formulate the Chequers Brexit deal, Prime Minister Theresa May has found that she is now sitting on an agreement which has gained no traction and no public support from either the Remain or Leave sides of her party. But even more important, it has been roundly rejected by the chief EU negotiator Michel Barnier. The UK Government had been pushing EU member states to support the Chequers Brexit deal, but with neither French President Macron or German Chancellor Merkel onside it seems increasingly unlikely they will do so. Unhelpfully from May’s perspective, Barnier is now suggesting a trade deal based on the EU-Canada CETA should be pursued. We should recall that CETA took the better part of nine years to negotiate and, while a CETA-type deal is what May’s previous Brexit Minister, David Davis had always promoted, Davis resigned from her cabinet, unable to support her Chequers Brexit position.

So where does this leave the PM?

May will of course soldier on with her Brexit Chequers deal. She has no alternative for the moment, there is no plan B, making it almost certain that no agreement will be reached in time for an orderly Brexit in March of 2019. While May remains committed to avoid this no deal scenario, as she knows that no deal would be a likely disaster for both sides, she must contend with a sizeable number of Leave MPs pushing for just such a no-deal eventuality. Former Foreign Secretary Boris Johnson remains openly critical of May’s handling of the Brexit negotiations – as if he had no part in them during his time as Foreign Secretary – as a blatant strategy to position himself as next in line to No 10. On the other side, May continues to enjoy the support of many within her caucus including Treasury Minister Philip Hammond and Brexit Minister Dominic Raab. Ironically for May, much depends on where the Labour party will land on a Parliamentary vote on the final Brexit deal. The Labour Party too, like the Tories, are at best divided, not only over Brexit, but also over their poor handling of the anti-Semitism issue that has arisen within the party. Politics in the UK has probably never been in such a parlous state.

If May were to fall, it is unclear whether Johnson, perhaps because of his aggressive jockeying for the job, would be chosen as her successor. No10 recently rebuked him as ‘not serious’ following his article on the UK achieving ’two thirds of diddly squat’ and history has taught us that the Tory party has never chosen the obvious successor to an ousted PM. John Major and Theresa May are testament to that.

So where now?

The next few months in the lead up to the UK leaving in March 2019 will no doubt become more fractious and unpredictable. The markets continue to put pressure on Sterling, which remains 20% lower in value now than pre-referendum, and Brexit continues to consume UK politics and push the limits of the art of the possible. We are in uncertain times.

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