Fall Out: A Year of Political Mayhem

Timothy and May were clear on three things: leaving the European Union meant leaving the jurisdiction of the European Court of Justice in Luxembourg, and leaving with it the single market and customs union over which its judges held sway. Anything else, Timothy believed, would leave May open to the charge that she was trying to undermine the referendum vote, and put the other EU countries in a position to claim that Britain wanted the benefits of EU membership – free access to markets – without the downsides – the cost and the need to accept rules made elsewhere. By opting out of all these areas, May could then try to negotiate some of the benefits without being tied to the institutions. ‘Nick’s view,’ a Downing Street aide said, ‘was that you’re always going to be accused of cherry picking and they’re going to say you can’t cherry pick. Therefore, we should try and forge our own way forward with a new relationship. Nick largely wrote the speech and took pleasure in doing so.’

In the speech, May was to say, ‘There is no such thing as a choice between “soft Brexit” and “hard Brexit”. This line of argument – in which “soft Brexit” amounts to some form of continued EU membership and “hard Brexit” is a conscious decision to reject trade with Europe – is simply a false dichotomy.’ May explained her new deal ‘is not going to be a “Norway model”. It’s not going to be a “Switzerland model”. It is going to be an agreement between an independent, sovereign United Kingdom and the European Union.’ Timothy said later, ‘If you seek a partial relationship the danger is that you will be in the worst of all worlds, where you will be a rule-taker with none of the advantages of being in, but you will also sacrifice some of the advantages of being out.’

There was a demonstrable logic to all this but it is extraordinary that these, the foundational decisions of Britain’s withdrawal strategy, which would shape the next two years of negotiations, were taken, in essence, by two people. The cabinet certainly had no chance to debate them.

Timothy knew where the decisions would take the country but recognised the plan was too controversial to announce so bluntly while emotions were still raw about the referendum result. It would be three months before May admitted publicly, in another speech at Lancaster House, that she wanted to leave the single market and the customs union. ‘You need to conduct the negotiation in a way that takes all of the people with you,’ a source close to May said. ‘I think if we’d said we no longer want to be in the single market at party conference, it would have looked on the EU side like an aggressive statement.’

To distract attention from these major decisions – and to settle key issues of concern – May used interviews with the Sunday Times and the Sun on Sunday to launch the first of two major announcements from her speech. The government would convert the acquis – the existing body of EU law – into British law so that nothing would change on day one of Brexit. Individual laws could then be changed by Parliament in the usual way. The way this was to be accomplished was by a ‘Great Repeal Bill’ which would also do away with the European Communities Act 1972, the legislation that gave direct effect to all EU law in Britain. The paper was briefed with some suitably Churchillian rhetoric from the speech: ‘Today marks the first stage in the UK becoming a sovereign and independent country.’

The rhetoric of repeal was clever since it disguised the fact that the plan was to take every hated Brussels directive for four decades and write them into British law. In private, Davis referred to it as ‘the Great Continuity Bill’. Government lawyers had said it was impossible to do anything else, but in an environment where ministers like Andrea Leadsom were proposing to start tearing up regulations and the Daily Mail was running a ‘scrap EU red tape’ campaign, the move took some guts.

May delivered the second announcement during an interview on the BBC’s Andrew Marr Show on the Sunday morning, pledging to trigger Article 50 of the Lisbon Treaty – the mechanism for kickstarting two years of Brexit negotiations – by the end of March 2017. May had bought time during the leadership election by saying she would not trigger Article 50 before the end of the year. Senior civil servants in DExEU and Ivan Rogers in Brussels had warned her that announcing a timetable was a bad idea because the moment Britain fired the starting gun, ‘you lose pretty much all the leverage you have’, putting Britain on a countdown clock where the other twenty-seven countries set the rules of the negotiation.

On 29 June, five days after the referendum result, the other twenty-seven member states had agreed a policy of ‘no negotiations without notification’ and – to the surprise of some British officials – they had stuck to it ever since. Rogers told May the best way of forcing the EU to compromise would be to say, ‘We intend to invoke in March, but I give you no cast-iron commitment. The moment I’ve seen your draft guidelines document we’ll invoke.’ So confident was Rogers that the prime minister had listened that he told friends in Brussels just days before the conference that May would not invoke Article 50 until the end of 2017. It was proof that even the most experienced civil servants don’t always read the politics of a situation accurately. As one of May’s senior aides recalled, ‘We couldn’t get through conference without putting a line in the sand. We had to say something about timing.’ David Davis was involved in the discussions over the timing, suggesting that the vague ‘before the end of the first quarter’ be changed to ‘by the end of March’, which he believed to be ‘specific sounding’ and ‘hard to demur from later’.

Figures like George Osborne were arguing that no progress would be made in the negotiations until after the German elections in September 2017, so May should delay triggering until then. In retrospect it is possible to conclude that Britain would have been in a stronger position in the talks if the prime minister had set a firm date of October 2017 to trigger Article 50 and announced that Whitehall would spend the next year preparing for the UK to leave without a deal in order to maximise leverage in the negotiations. A minister said, ‘She might just have got away with that.’ But May was a new prime minister who did not wish to antagonise the Eurosceptics. Choosing 31 March as T-Day, Timothy said, ‘I don’t think it is sustainable to take longer.’

Later that day, May opened her speech by dismissing those who ‘say that the referendum isn’t valid, that we need to have a second vote’ or were planning to ‘challenge any attempt to leave the European Union through the courts’. She said, ‘Come on! The referendum result was clear. It was legitimate. It was the biggest vote for change this country has ever known. Brexit means Brexit – and we’re going to make a success of it.’ In addition to the two main factual announcements, the most important passage of the speech came when the prime minister made clear that controlling immigration was her top priority, above even economic prosperity. ‘We are not leaving the EU only to give up control of immigration again,’ she said. A May adviser observed, ‘It’s logical we’d leave the single market because we don’t want free movement. By conference we knew that. The vote for Brexit was about controlling immigration. Everything else flows from there.’

May also announced, ‘Our laws will be made not in Brussels but in Westminster. The judges interpreting those laws will sit not in Luxembourg but in courts in this country. The authority of EU law in Britain will end.’ This was not, as some have suggested, a line smuggled past a confused prime minister. ‘The PM was very clear that the jurisdiction of the ECJ had to come to an end,’ a close aide said. ‘She thinks that is one of the major things that people voted for.’ Yet that decision had huge implications which were far from fully understood in the cabinet and some corners of Downing Street when May delivered her speech. The ECJ’s remit ran across dozens of agencies and thousands of regulations, from the regulation of medicines and nuclear materials to aviation safety.

While Davis was aware of much of what May was going to say, he had not seen the speech and nor had Oliver Robbins. ‘The ECJ wasn’t mentioned before the conference speech as a red line,’ a DExEU official said. ‘It was conjured up by Nick Timothy to get very Eurosceptic conference delegates and the Tory press cheering. They were terrified of people saying, “She’s a remainer.” There was no discussion or debate whatsoever. I don’t believe Olly Robbins knew what she was going to say. The speech was not shared with any of the ministers. The chancellor didn’t see it. He was livid. Even DD was furious. He agreed with most of what she said but he didn’t know exactly what she was going to say.’ Months later, after leaving government, James Chapman, Davis’s chief of staff, said, ‘The repeal bill was Nick’s idea. We thought that was the big announcement. Instead of which he basically announced hard Brexit. She hamstrung the whole negotiation from the start.’ In interviews that evening May denied that she had decided to leave the single market. ‘All options are on the table,’ she said. But according to a DExEU official, ‘The pound crashed because anyone with any sense could work out that this means hard Brexit.’

May risked accusations that her tone was divisive too. She also used the Sunday speech to train her guns on the vocal minority in her party who were demanding that MPs have a vote on Brexit. ‘Those people who argue that Article 50 can only be triggered after agreement in both Houses of Parliament are not standing up for democracy, they’re trying to subvert it. They’re not trying to get Brexit right, they’re trying to kill it by delaying it. They are insulting the intelligence of the British people.’ Later that week, in her main conference speech, she was no more conciliatory, attacking liberals who found the referendum result ‘simply bewildering’ and the Brexit voters’ ‘patriotism distasteful, their concerns about immigration parochial, their views about crime illiberal, their attachment to their job security inconvenient’. May was aligning herself clearly with the 52 per cent who backed Leave. While this was understandable politically, the prime minister missed an opportunity that week to put herself above both warring factions and stake a position as a national leader in a way that might have given her greater freedom of manoeuvre in the months ahead.

The influence of May’s team was also evident in a policy announced by Amber Rudd, the new home secretary, in her conference speech – a plan to force firms to reveal the percentage of their workers who were foreign. The proposal unleashed a storm of protest and would see Rudd reported to the police for ‘hate speech’ the following January.

Having said what she wanted to say, the prime minister made clear that the media and the public would have to get used to another information drought on Brexit: ‘There will always be pressure to give a running commentary on the state of the talks. It will not be in our best interests as a country to do that.’

When it came to speaking about herself, though, May was learning to open up. After a fashion.

The truncated leadership election meant that Theresa May was denied the chance to properly introduce herself to the nation or properly outline her political philosophy. Conference gave her the opportunity. Before her interviews with the Sunday Times and the Sun on Sunday, communications director Katie Perrior had prepped May to respond more openly than usual to more personal questions. Her voice wavering slightly, she talked about the death of her parents and her love of the Great British Bake Off and even contributed her mother’s recipe for scones.

The interviews were well received but they might not have been if the public had known the agonies that went into the preparations. May was not comfortable talking about herself, a prerequisite of modern politics. ‘Why do they want to know this stuff?’ she asked her aides. Perrior and press secretary Lizzie Loudon had also lost parents when they were young. Loudon tried to help out. She told May, ‘My dad died and it’s really sad for me that he can’t see me here because I know he would be really proud. But in some way I feel like he would know that I would be doing something like this.’ A colleague said, ‘When the PM was asked the question by the interviewer she repeated Lizzie’s words. She just pick-pocketed the explanation. It was an appropriation of her emotional response. You think: “You yourself don’t feel anything”.’ Another Downing Street aide said, ‘If you are prime minister, you have a duty to communicate what you do. You can’t resent the questioning but she does resent the questioning.’

May’s morale was boosted that week by Fiona Hill, who sent her home with a CD of the high-octane Rolling Stones song ‘Start Me Up’, which she judged to be what May needed as walk-on music for her set-piece speech. ‘She got totally into it,’ a member of the team said. ‘I love it,’ said May.

The main conference speech was a collaborative effort between Nick Timothy and Chris Wilkins, who had been friends for years after meeting in the Conservative Research Department. Wilkins was short and bald and shared Timothy’s view that the Conservatives needed to broaden their appeal to the poor. He understood May’s philosophy and the cadences of her speech. Timothy found him to be the only person he was comfortable writing with. Timothy had prepared a mini-manifesto for May which she had never used during the leadership election, and he passed on this and a couple of pages of notes laying out the substantive argument. Wilkins fashioned a first draft which the two could ‘knock about’ between them, with Fiona Hill and others making suggestions for improvements.

The keynote speech was a symphony on the riff May had played during her first speech in Downing Street, promising to make the Tories the ‘party of workers’ and go after ‘rogue’ businesses. She pledged to govern for the whole nation: ‘We will take the centre ground.’ It contained a bold declaration (for a Conservative) that she was not ideologically averse to state intervention. ‘It’s time to remember the good that government can do,’ she declared, though her definition of government appeared to be a dig at David Cameron: ‘It’s about doing something, not being someone.’ A May aide admitted, ‘It clearly was designed to define ourselves against what had come before.’

For Wilkins, the most important theme of the speech was its depiction of May as an agent of ‘change’. When he was writing the speech, Wilkins had studied the language in Tony Blair’s 2005 conference address, which used the phrase ‘We are the change-makers’ to try to depict a party in power for eight years as fresh and dynamic. May’s team hoped she could pull the same trick, using the constant refrain that ‘a change has got to come’. Wilkins recalled, ‘We even played the song “A Change Has Got to Come” over the speakers in the hall before she walked on as a little in-joke.’ This approach was to become important again months later when May called the general election.

The change message was drowned out, however, by one small phrase in the 7,500-word text, a line penned by Timothy which had barely been glanced at since the first draft. In words that cemented her reputation for plain speaking, May concluded, ‘If you believe you’re a citizen of the world, you’re a citizen of nowhere.’ The jibe was aimed at irresponsible jet-set businessmen. A source said, ‘It was basically an attack on Philip Green,’ the former boss of BHS who had sold the firm for a pound with a black hole in its pension fund. But, to Wilkins’ and Timothy’s surprise, some Remain voters and many Cameroons saw it as a totemic symbol of May’s hostile approach to internationalism, multiculturalism and immigration. One observer summed up the speech, with its statist slant and red meat for the faithful, as ‘part Ed Miliband, part Daily Mail’.

There was a second gaffe as well. In explaining that the economy had failed to help many since the economic crash, May had said, ‘While monetary policy, with super-low interest rates and quantitative easing, provided the necessary emergency medicine after the financial crash, we have to acknowledge there have been some bad side effects.’ Her words appeared to be a breach of the convention, established when the Bank of England was granted independence in 1997, that politicians refrain from commenting on monetary policy, and it caused a temporary fall in the pound. A former cabinet minister said, ‘They got a real shock. They had no idea that markets paid attention to these things. It was just amateurishness. I know Mark Carney was staggered by it. He thought it was unbelievably incompetent. She said “we’re the fifth largest economy in the world” and I think by the end of it we were the sixth.’

Business leaders disliked much of May’s rhetoric about rogue bosses. Chris Brannigan, the debonair head of government relations whose job it was to act as the link man with business leaders, was unable to placate them in advance since he had not been told what was going to be in the speech. Carolyn Fairbairn, the new boss of the CBI, Britain’s biggest business group, walked past him ‘with a face like thunder’ as May finished.

On the EU front, May’s speech was welcomed in Westminster as much-needed clarity and by the Brexiteers as proof of May’s commitment to their cause. But the citizens of the world and those running the other EU countries joined the City in reacting with horror.

In interviews during conference week, May had made clear that she was keen to start ‘preparatory work’ with Brussels before she invoked Article 50. Both she and David Davis pledged that Britain would respect the existing rights of the three million EU citizens in Britain, as long as the 1.5 million Britons elsewhere in the EU were protected. Ministers saw that as an easy, early win. It was one the rest of the EU did not want to give them. Jean-Claude Juncker and officials from France, Germany, Poland and Slovakia all reasserted the position that there would be ‘no negotiation before notification’. While some welcomed the clarity over timing and the acceptance that May was not trying to hold on to all the benefits of membership, Joseph Muscat – the Maltese prime minister who would hold the EU presidency in 2017 – spoke for many when he said, ‘Any deal has to be a fair deal, but an inferior deal.’

While attention at home was focused on the timetable for triggering Article 50 and the Great Repeal Bill, the Europeans were transfixed by May’s blanket rejection of ECJ oversight. ‘My sense of that was that they hadn’t fully realised what they’d said on jurisdiction and how radical it was,’ commented a diplomat. In Brussels, Rogers and his colleagues began to hear from their EU counterparts, ‘Clearly you’re leaving the single market and the customs union. Why then can’t we just get on with it?’

Nick Timothy had defined British policy on Brexit. Now Theresa May had to guide her cabinet to the same place without admitting the policy was already set in stone.

2

‘No Running Commentary’

Two moments in early September summed up Theresa May’s approach to Brexit negotiations during the autumn of 2016. In the first Prime Minister’s Questions after the summer break, May said she would not give a ‘running commentary’ on the talks. She then took a call from the French president, François Hollande. Six weeks earlier, May had shocked Westminster by putting on hold an £18 billion deal for French company EDF Energy to build the Hinkley Point C nuclear power station, a joint venture with a Chinese state-owned firm. Now, having studied the evidence herself, May gave the green light. Hollande asked why she had thrown the deal into uncertainty. The prime minister replied, ‘It is my method.’

Alasdair Palmer, who worked for May at the Home Office, said, ‘She likes to consider the evidence carefully before coming to a conclusion. That takes her time. That is why she likes to set up inquiries and consultations – processes that delay decision taking and help reassure her that the decision that eventually emerges will be the right one.’ She would not be bounced into decisions. ‘I’ve seen people trying to grab her in the margins of a meeting and say, “Can we do this?” and she’ll ask them to produce a piece of paper, and not take the decision now,’ a senior cabinet minister said. ‘She has always been like that.’

May embarked upon a laborious series of cabinet discussions about Brexit, in which her desire to keep her destination hidden from the public seemed at times to fly in the face of the clear signals that she had sent in her party conference speeches. It was a process in which the prime minister herself seemed to want reassurance that the roadmap she and Nick Timothy had agreed was the right one.

The prime minister had made a big thing of returning to cabinet government after the Cameron years but Brexit was not discussed by the full cabinet. Instead, May appointed a dozen-strong cabinet subcommittee (the European Union Exit and Trade Committee). In keeping with her penchant for secrecy the membership was not published until it leaked in mid-October. Every cabinet minister who had campaigned to leave the EU – David Davis, Boris Johnson, Liam Fox, Chris Grayling, Priti Patel and Andrea Leadsom – was included, half the committee, when they represented just a quarter of the full cabinet. The other five members, all Remain backers, were Philip Hammond, Amber Rudd, Damian Green, Greg Clark and party chairman Patrick McLoughlin.

May let everyone have their say and ministers initially praised the way conclusions had not been preordained on her sofa before the meeting as they had been in the Cameron days. One cabinet minister said, ‘There’s proper consideration of the issues.’ Soon, though, some realised these discussions seldom led to decisions at all. ‘They were deliberations not decision making,’ one cabinet minister said. ‘The decisions were still made in Downing Street.’ Another present for the meetings described them as ‘fairly odd’. ‘Cameron meetings were always chaotic and vociferous. Hers were calm, more measured, but you don’t really get a real debate with her. You lodge some points and some observations and she absorbs. But it’s terribly difficult to gauge whether you are getting anywhere.’ To those paying attention, it seemed obvious that May had decided to leave the single market and the customs union, but the prime minister denied it publicly and in private let her warring ministers fight it out, occasionally showing her displeasure. A senior cabinet minister said, ‘She has a very healthy impatience, a slightly Thatcherian quality. She gives that heavy sigh and there’s a rolling of the eyebrows.’

In the early meetings, each of which lasted around two hours, Boris Johnson and Philip Hammond emerged as the key antagonists at the head of the blocs of Remain- and Leave-supporting ministers. ‘Boris would make rousing speeches about how it was all going to be brilliant and how we should all be saying positive things about Brexit,’ a cabinet colleague recalled. ‘Phil used to get pretty annoyed about that and say, “It’s not that simple.” Phil was pretty punchy about staying in the single market and even more so on the customs union.’ A source close to May said, ‘Hammond and Boris wound each other up, pulling faces when the other one was saying stuff.’ Another witness said, ‘Boris would chunter through Phil’s interventions.’

The two men could not have been more different. Johnson, the Dulux dog lookalike with papers spilling from the distended pockets of his suit, was a man of feral political instincts whose yearning for positive publicity belied an essential shyness. By contrast, Hammond was buttoned up in both tailoring and manner. His accountant’s eye for the bottom line had garnered him one nickname ‘Spreadsheet Phil’, his allergic reaction to the media and soporific delivery another ironic appellation: ‘Box Office’. Hammond had a sense of humour drier than a Jacob’s cream cracker in the Sahara but his lugubrious politics and appearance, that of a purse-lipped Jar Jar Binks, almost invited the question, ‘Why the long face?’