The most important speech of Theresa May’s career so far was in response to a clamour for more clarity on how she intends to take Britain out of the European Union. She managed to provide it without saying anything that most observers did not know already. After Brexit, Britain will not be a member of the European single market.
Mrs May pulled off the trick of sounding both conciliatory and menacing. She pitched earnestly for a British-European partnership of friends and insisted, in effect, that Brexit was not personal but rather a straightforward reassertion of the right to national self-determination. She then issued a steely warning that if her negotiators fail to win the “bespoke” deal they seek from Brussels they may simply walk away.
In both respects this was a clever, nuanced speech and arguably a fine one. Few prime ministers if any have had to shoulder a national reorientation project as ambitious as Brexit. Mrs May will have silenced for the time being those who said she did not know what she was doing.
What the speech lacked, presumably on purpose, was any European context. There was no acknowledgement that the government’s success in reaching the deal it seeks will depend ultimately on European consent; on persuasion, not assertion. Nor did she note that Brexit has already hastened change in Europe that could radically alter the tone and terms of the looming negotiations. It has emboldened Eurosceptics before elections in France, the Netherlands and Germany.
Mrs May’s remarks were meant chiefly to reassure critics at home that after six months with no running commentary she has a plan. She does indeed. It has 12 objectives, including tariff-free trade with the EU, preservation of the common travel area with Ireland and “phased” implementation of Brexit so that key exporters have time to adapt. What lies ahead “is not a game”, she said. She will have no truck with opposition for opposition’s sake. In truth, thanks largely to Jeremy Corbyn’s hapless leadership of the Labour Party, she will face no domestic opposition at all. Her real test is yet to come, in Brussels.
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Shrewd advance briefing of key sections of the speech meant that any anxiety in the financial markets had been factored into the price of sterling before Mrs May spoke. When she promised a vote on any agreement in both houses of parliament, the pound rallied strongly against the dollar.
In her ideal world any agreement would preserve the “greatest possible access” to the single market, especially for sectors such as car manufacturing and financial services that depend on it. At the same time Britain would gain full independence from the European Court of Justice, full control of its borders and full freedom to make trade deals elsewhere in the world. Ordinarily this would rule out membership of Europe’s customs union as well as the single market. Mrs May is not ready to give up on some form of customs union membership, however, since it would help to make a reality of the “frictionless” trade with the EU that she rightly seeks.
It is a big ask, but it is not implausible. Britain has three main sources of leverage: its value as a regional partner in defence and security; its threat, as a valuable market for European exports, to leave the negotiating table if talks do not go well; and its money. The first two Mrs May has put firmly in play. For Europe to deny Britain and itself a mutually beneficial deal, she said, would be an act of “calamitous self-harm”. The third she jeopardised by calling a definite halt to large payments to the EU. The £9 billion hole in EU budgets that Brexit will leave is a serious worry in Brussels. It would be foolish to give up on the leverage it represents.
Even so, a speech that puts Britain on a course towards a clean break with Europe was welcomed by one City trader as “less hawkish” than expected. This is an accolade that would have been hard to imagine last summer. Mrs May has deftly moved the goalposts to give herself the option of the hardest of hard Brexits. The definition of success will be not having to use it.