Wednesday 3 October 2018

The May Speech

Theresa May has given her closing speech to the Conservative Party conference. She did not once mention Chequers by name. Instead she reiterated that she will sign no backstop which means that unless she has to a whole UK solution (as indeed Chequers is designed to be) there cannot be a deal.

She rightly remarked that the FTA proposal from Johnson is insufficient for the facilitation of frictionless trade - which she emphasised the need for. She has set the parameters that would lead one to conclude that the EEA is now her only option. Though she did not make mention of the EEA. In effect, ever since she raised the concept of a common rulebook she has been working on the understanding that frictionless trade does not happen without regulatory harmonisation.

Being that the EEA route is politically unpopular she has sought to recreate it in all but name but with caveats that allow for the regulatory sovereignty that her backbenchers crave. This is impossible and the EU would never agree to it. Now, though, with May rumoured to be moving toward more concessions along the lines of a customs union, it would seem there is space to develop Chequers into something that could be accepted by the EU. ie not Chequers.

This would suggest that Mrs May is forced by circumstance to get to grips with the reality of our predicament and make a number of unpopular concessions. Here she will likely choose any combination of components apart from the one that can work... the EEA.

Meanwhile there are rumours that an anonymous "EU diplomat" has told a journalist who told another journalist that the trade component of the withdrawal agreement could be limited to a three page political declaration. There has always been the outside chance of that with a de-dramatised backstop thereby kicking the whole cannery down the road. If that happens then there is a stronger possibility that we will end up with a variant of the EEA Efta option.

Without knowing more we are still left to guess - but if it is still the case that the EU wants a firmer framework for the future relationship in the withdrawal agreement then we are running out of time for Mrs May to see the light. We are still odds on for no-deal.

As to the style and content of the speech, that is for the scribblers of The Times and other such court journals. All that need be said is that none of her spending commitments or big ideas (if indeed there are any) can come to fruition unless she has a deal because without one we are up a certain creek. Between now and then, there is politics. We are still none the wiser.

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