Theresa May Capitulates on Brexit Settlement, Agrees to Pay Full Liabilities; What Will Brexit Ultras Do?

The Government appears finally to be recognizing how weak its Brexit bargaining position is and how desperately it needs to avoid a “no deal” outcome. According to the Financial Times, Theresa May’s emissary Olly Robbins capitulated to the EU’s demands on the Brexit divorce bill. That has the potential to resolve one of the three issues where the negotiations needed to show sufficient progress for the EU Council to agree to allow the negotiations to move on to discussing “the future relationship” meaning among other things, trade. From the Financial Times:

According to several diplomats familiar with the talks, the UK would assume EU liabilities worth up to €100bn although net payments, discharged over many decades, could fall to less than half that amount.

Prime minister Theresa May is expected to formally present the breakthrough offer next week as part of package deal if agreement can be reached on the other issues of citizen rights and the contentious question of the border between Northern Ireland and the Republic.

Note that the story was originally reported at the Telegraph, but the pink paper appears to have independently verified it. However, Reuters got a frostier response:

A British government official said they “do not recognize” this account of the talks going on ahead of a visit by Prime Minister Theresa May to Brussels this coming Monday.

However, the press reports indicate that Britain has conceded (at least for negotiating purposes, as opposed to domestic messaging) to the EU’s position, that the UK had a long list of outstanding EU commitments that needed to be cash settled and the two sides needed to agree on an approach as to how to value them. Heretofore, the UK had effectively taken the position that the EU was demanding a payment for the privilege of exiting, and they were engaged in what amounted to a hostage negotiation. From the Independent:

Sources in Brussels suggested to The Independent that talks have seen the two sides’ stances begin to align over the “methodology” for calculating the settlement, with the outcome increasingly acceptable to both sides….

No figure has been explicitly agreed upon, but sources in Brussels highlighted that the EU had always been pushing for clarity on how the bill would be drawn up as opposed to an outright number.

Various UK papers are headlining the net value of the UK offer, given the lower value of payments staggered out over time, as between €45 and €55 billion, consistent with the Financial Times’ summary. This is finally within hailing distance of the net figure the EU had bruited about most often, of €60 billion. And if that €50 billionish net result is net of the UK’s EU assets, which are at most €10 billion (€5 to €7 billion is a reasonable guesstimate), the two sides may finally be aligned on financial terms.

However, the noises from the EU side seem more cautious, of the “progress is being made” sort. From Politico’s daily European newsletter:

A senior EU diplomat told POLITICO’s Jacopo Barigazzi that “No agreement has been presented to member states. Agreement has to be on paper, not in papers. We let the negotiators do their work and can’t comment [on] rumors.” Another senior EU diplomat said “it’s something fed to press that has not been translated yet into a negotiating position.”

Mind you, as we and other observers have pointed out, the UK is far from having come to grips with the Irish border conundrum, as we will discuss shortly. Nevertheless, this is a huge climbdown for the Government. Strikingly, it is also at odds with recent press report of hard core Brexiters Boris Johnson and Michael Gove having gotten the upper hand in the seemingly never-ending power struggle in the Tory party and among May’s own ministers over Brexit. And let us not forget that May offered the EU a major concession in her speech in Florence, in which among other things she offered a hard currency payment for the UK to remain in the EU during a transition period. The uproar among the Tory ultras led that offer to look as it if was a deflated trial balloon.

Many Brexiteers seem to be rationalizing this concession as “buying” a trade deal when it does no such thing. First, there’s no reason to believe that the EU has or is willing to budge from its position that the UK needs to pass its three hurdles for both sides to start talkin’ trade. Yet the Brexiters have talked themselves into the idea that this concession on the settlement total buys them something, in particular a trade pact, as opposed to being a necessary precondition for the talks moving forward. For instance, from the Financial Times:

Mrs May won the backing of her cabinet to break the deadlock in Brexit talks with an increased financial offer, but on the condition it was tied to a good trade agreement. British ministers have made clear that “nothing is agreed until everything is agreed”.

Ahem, the ministers’ statement verges on being tautological. Yes, even though the terms are being negotiated sequentially, the talks can fall apart at any time, rendering any understandings reached to date moot. So it’s peculiar to see them treat an inherent feature as a win.

The Independent may have a better fix on how the diehard Brexit camp is rationalizing this climbdown. And if this line of thought is representative, it’s another demonstration of the pathology among the ultras:

Conservative MP Bernard Jenkin told The Independent: “It better be worth it.

“It won’t be unless they now roll out the red carpet for a Rolls Royce free trade deal.”

Second, even if the two sides do reach a completed Brexit deal, it will not included a trade pact. Those agreements are complex and take years to negotiate. Sir Ivan Rogers, who had said in Parliamentary testimony that the UK would not have a trade agreement with the EU before the early-mid 2020s, underscored in a recent speech about how Cameron got to Brexit that a departure deal would only set the parameters of a future trade agreement. From his lecture last week at Hertford College, Oxford:

Political agreements, with high falutin aspirational guff are one thing. Legally binding agreements, treaty changes and trade deal texts are another. All we shall see, at very best, on U.K.-EU trade in 2018 is a political agreement on ambit, not legal texts.

Yet despite the fact that the UK is now more than halfway through the time period between when it voted for Brexit and the current departure date of March 2019, even those members of the British press that are starting to realize that the UK is going to face a world of hurt are still wedded to substantial elements of a deeply flawed, self-contratulatory narrative that is morphing into one of victimhood, with the EU rather than feckless British pols as the bad guy. From the Guardian in Brexit talks: for all Britain’s bluster, the EU has it over a barrel:

Now it looks as if Boris Johnson’s taunt that Brussels could “go whistle” if it wanted a €60bn divorce settlement appears to have been the prelude to Britain sounding a full retreat. We have yet to discover just how much humble pie will be eaten by the foreign secretary, but early reports on Tuesday night suggest Downing Street has conceded a net bill of €60-65bn (£53-58bn), equivalent to the indigestion-inducing gross total of up to £89bn.

All the while, the EU’s aims for the first phase of exit talks have only hardened. Where once it looked as if Brussels might be willing to temporarily park the requirement for a full agreement on keeping the Irish border open until trade and customs talks began, now Dublin has succeeded in making this the final test of Britain’s suitability for further talks….

Privately, British officials have been telling ministers since July that they are unrealistic to expect the EU 27 will be any more forthcoming over trade, let alone agree to the “cake-and-eat-it” model of maximum market access and minimal sovereign compromise.

Instead, leaked EU papers make clear that the only prize that Britain has bought with its €60-65bn is a stark choice between the low-access trade rights of Canada, or the low-sovereignty vassal state status of Efta members such as Norway.

This passes for informed commentary in the UK. EU leaders said from the morning after Brexit, with one voice, that the UK had to accept the four freedoms if it was to have access to the single market. The UK is insistent upon limiting EU immigration, which is a rejection of one of the four freedoms. That means it can choose only among “third country” options of the sort depicted as an insult above. This is not news if you have been paying attention. You didn’t need leaked documents to hear what the EU was saying from the very outset. Nor is it news that the settlement of the so-called Brexit bill was not buying any concessions from the EU.

By contrast, Richard North was harrumphing about the fuzzy math of the Brexit financial settlement:

Needless to say, both sides are playing games on the financial settlement. Attempts are being made to obscure the size of any final payment – if it is accepted. Rather than a single sum, it appears that a complex payment method will be adopted, that allows for phased payments with no end date fixed and no overall figure published. Payments could continue “for decades”.

Attempts will be made to massage the figure by offsetting the UK’s European Investment Bank (EIB) capital, which will be returned to the Treasury, and by delaying payments until they are actually due, such as the RAL commitments and the pensions apportionment.

Whether this will overcome the opposition from the “ultras” remains to be seen, but there will unhappiness at what will doubtless be called underhand dealing. This puts further political pressure on Mrs May but, as always, nothing emerges from the Westminster gossip machine that might suggest she might be deposed.

The Financial Times confirms North’s reading:

Under this model, pensions of EU officials, for instance, could be paid on the basis of annual costs, meaning there will be no final figure for the so-called “Brexit bill” until the final eligible EU pensioner is dead, many decades from today.

But the fact that the UK and EU have tentative deal on the divorce settlement does not mean that Britain has solved its pressing Brexit problems. Even though the Brexit bill was supposedly a UK red line, the Ireland border is the thorniest. There’s no indication that the UK is any closer to a workable solution. And to quote unnamed UK ministers: “nothing is agreed until everything is agreed.”

Update 5:30 AM: Richard Smith sent this optimistic take from the BBC’s very well plugged in Robert Peston, via Facebook. Key section:

The full cabinet today approved the UK’s negotiating position for the first phase of Brexit negotiations – which the prime minister hopes will lead to agreement from the rest of the EU in just over a fortnight for talks to move on to trade and transition.

The three elements to the UK’s offer are:

1. a pledge to keep open the border with the Republic of Ireland

2. a formula for the so-called divorce bill that would see the UK paying more than £40bn and less than £60bn in divorce payments

3. a system for guaranteeing the rights of 3m EU migrants resident in the UK that would allow Britain’s Supreme Court to refer issues “up” to the European Court of Justice, when it felt unqualified to adjudicate.

Help me. Item 1 is a non-starter. The UK by leaving the EU becomes a “third country” and as Richard North has described, that creates a hard border with the EU. The UK must subject imports from Ireland to the same border procedures as imports from the EU, or it will fall afoul of WTO anti-discirmination rules. Plus Ireland has made clear it won’t accept UK handwaves.

Item 3 will also be unacceptable to the EU. It has held firm to the position that EU citizens must have the right to have access to the ECJ. A system under the control of the UK counts, in which it is entirely conceivable that no cases would ever be referred to the ECJ, isn’t going to get a green light.

So what was the Brexit bill capitulation about? It is entirely conceivable that cabinet members are still so badly in denial that they though if they made one big concession, they’d be met more than halfway on the others. Or is it just a cynical ploy to present the Government as having gone the distance to a badly propagandized citizenry and assign blame to the EU for the coming train wreck?

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    1. Clive

      Oh, please. It’s this sort of intellectual laziness that gives Brexiteers a (richly deserved, on all too many occasions) reputation for dimwittedness.

      Your argument is like me going to the supermarket, taking a packet of biscuits off the shelf and then paying the price it was marked as on the shelf for it when I went through the checkout. And then as I walk out store having someone shout out at me that I’ve “sold out” to the supermarket owner.

      The U.K. has used something that has been of benefit to it. That something had a cost. The U.K. is liable for that cost.

      The U.K. might come to the conclusion that it wants to continue to use that same something in the future. It still has a cost. The U.K. must, collectively, decide if it really wants it and if it is worth the cost it will incur.

      The seller, the EU in this case, not only has no reason to give its benefits away for free, it cannot do so. If it did, the other parties it relies on (the other member states) would — rightly — say to themselves “hey, why are we subsidising that lot?” and eventually the whole edifice would collapse as each party withdrew as it realised it wasn’t a level playing field.

      Or do you expect free biscuits?

      1. Norb

        Decades of not considering externalities results in this form of thinking. The true cost must be paid eventually. I’m not sure if people are up to the emotional task of facing up to that reality.

        The Reagan-Thatcher era was kicked off with the slogan,”there is no free lunch.” It cynically manipulated the selfishness residing in everyone- that survival instinct that leads to hoarding in stressful times. That phrase was swallowed up hook line and sinker. The notion that government should ensure a certain level of social welfare to its citizens by subsidy was destroyed. In the modified worldview, all subsidy should go to the private business sector in the form of tax cuts, reduced regulation, and government contracts. It was, and is, a masterful display of slight of hand. A turning of the world on its head.

        The Hard Brexiters seem to think they can keep this line of action going indefinitely. Yes, the biscuits are free where they can be had and if a bill is due, send it to the guy standing over there. If you have to destroy your own population in the process, make sure the pain is extended over a long period of time.

        This strategy of victimhood is disconcerting because it leads directly to unleashing base violent tendencies in the population. Once again, cynical leadership.

        I don’t know if dimwittedness is the right phrase. A dimwit implies harmlessness. Criminals and thugs seems more accurate. They seem to follow Jay Gould’s sentiment that they can hire one half the working class to destroy the other half and maintain their social position.

        The citizenry is in desperate need of a non-cynical leadership.

        1. Mark P.

          They seem to follow Jay Gould’s sentiment that they can hire one half the working class to destroy the other half and maintain their social position.

          Works till it doesn’t. As Louis XVI and a cast at thousands at Versailles, as well as Tsar Nicholas and his family, all learned.

        2. RBHoughton

          A commentator here calling himself Colonel Saunders (I think) made the point a few weeks back that the quality of civil servants in London collapsed with the policy changes of Mrs Thatcher and the assumption of supreme national power by the men of commerce.

  1. makedoanmend

    Thanks Yves for the cogent and concise summary of the situation.

    It is to be hoped that the negotiations are ultimately successful, and it appears the first step has been taken; at long last. The road ahead is long and winding. I’m willing to bet there is both relief and trepidation in Dublin – hope in that some substantive issues are being addressed and trepidation that the border issue might somehow be side-stepped. Whilst the Dublin government (including the civil service) are not looking to finalise a border deal (since so many other factors come into play in stage II) they do need acknowledgement (from all sides) that the border issues have to be addressed in detail. They want ink on this – not vague aspirational ponies and promises of technophilia toys.

    Again, thanks. Your coverage of this topic has been invaluable and often provided safe haven to ponder the seeming imponderables.

  2. PlutoniumKun

    On the border issue – British people on the street unable to draw the NI border. Its slightly unfair reporting, but it does indicate how far from the minds of ordinary English people Ireland and its issues are. The one thing that made me happy about the DUP doing a deal with the Tories is that I’d hoped it would bring into British peoples living rooms on TV the sort of nasty fanatics they share their nation with.

    On the Irish border, the Irish domestic political crisis is now over (the government was on the verge of falling over an issue unrelated to Brexit). This leaves the government free to focus on the border issue.

    My reading of the Irish political situation now is that the government recognises that it is in a very strong negotiating position and is not in a mood to compromise. There is zero opposition across the political spectrum to the governments hard line on this – on the contrary the pressure will be on not to compromise. I find it hard to see how the circle can be squared as there is simply no time for the British to come up with anything feasible solution that would satisfy the Irish demands.

    On semi related topics, the satirical magazine (not available online) The Phoenix (usually quite a reliable source of gossip) reported that when Varadkar met Macron back in September an informal deal was done relating to the French using their influence with the Egyptian government to release an Irish muslim citizen who’d been held in Cairo for years – the Irish side of the deal wasn’t clear, but its rumoured that Varadkar promised among other things to support Macrons side in future discussions on the direction of the EU. Its also possible that a united front on Brexit was also part and parcel of the discussions.

    On the general topic of the ‘deal’ on payments, I’m sceptical that this is anything more than an attempt to build up a narrative that ‘we did everything we could, but the EU just won’t play fair’. I believe a significant chunk of Brexiter opinion within the British government and establishment actually welcome a no-deal exit, it fits perfectly into their delusional ideology. Blaming the EU and Irish for it will be perfect for them.

    1. Matt

      To be fair I doubt a lot of people could accurately draw the border with Scotland or Wales either. Not a lot of people think about what is happening in N. Ireland/Ireland, but not many think about what is happening in Rutland or Dorset, and would struggle to define them on a map.

  3. John A

    What will the Brexiters do?
    Maybe they won’t hear about it. The BBC dedicated 50% of its new coverage to the now redundant Spare Windsor getting engaged to a pretty actress, model whatever from the US this week. Definitely the week to bury ‘bad’ news in Britain!

    1. Christopher Dale Rogers

      John A,

      The Tories took no time at all to release much bad news when the MSMs attention was fawning coverage of a Yank getting engaged to a German, as the Engagement hogged the headlines, the Tories announced that all those receiving social welfare, as for the past three years, would get no increase in benefits whatsoever, commitments to a Living Wage were also watered down. So, it was a good day for the Tories, a good day for the Royals and a bad day for the majority struggling with daily activities.

      1. Synoia

        Yank getting engaged to a German

        That German’s family has quite deep roots in the UK. I’m reasonably positive my ancestors arrive by on shore in East Anglia.

        1. Christopher Dale Rogers


          Both my parents surnames are derived from Saxony, which means I have a fair old bit of Germanic blood in them veins, however, given the racism implicit in much of the UK media, it seems my own little headline was most apt & honest.

  4. vlade

    The fascinating thing is that the state-change seems to be very abrupt. There’s no gradual change, it’s denying it until the last moment, and then just rolling over.

    This is a really dumb strategy, as the EU hardly budged on anything, a lot of (non UK) commentators were saying from the start the EU would not budge (and in fact could not on a number of issues), so all it does is shows incompetence to those who know (it was entirely predictable), and hard-to-understand weakness to those who don’t (if they assume at least a bit of competence in the UK govt).

    1. Yves Smith Post author

      I have to differ with you. Far and away the loudest and biggest contingent saying the UK would/should never budge on the Brexit tab was the hard-core Brexiters and their allies in the media. For instance, I signed up for e-mails from Brexit Central, which has some original content but mainly excerpts the most rabidly pro-Brexit major press stories and has links to pretty much all of the big UK articles. The press outside the UK just isn’t that into Brexit, and I can’t recall seeing much if any rah rah coverage in the foreign press.

      1. Christopher Dale Rogers


        You say the press external to the UK don’t have much interest in Brexit, the same observation is true if you actually look outside of the London ‘Bubble’ and actually catch gossip in places where predominantly working class folk assemble.

        On my last three visits to the UK, having undertaken both ‘voter registration’, canvassing & generally visiting social venues (pubs and clubs) I’ve yet to overhear any of my working class peers engage in the topic of Brexit – whilst anecdotal evidence is not the best way of getting feedback on the electorates concerns, the fact remains that in four population centres in South Wales (UK), Cardiff, Newport, Cwmbran & Pontypool – all Labour strongholds – persons have more pressing concerns.

        Further, and in confining my opinions to South Wales, the news that Ms May has agreed to fulfill payment obligations into the EU coffers long after withdrawal will not be met with applause, if only based on the fact the most well known family in our area that has benefitted greatly from both the EU & Westminster is the Kinnock Clan, Neil Kinnock being a former Commissioner & sitting Lord, whilst his wife Glenys, also receives a pension from the EU following a lengthy stint as a Euro MP, and also sits in the House of Lords with her Husband, not withstanding payments for Charity work eluded too by Colonel Smithers yesterday on these boards.

        Indeed, and again noting reasons why my home country voted in the majority to exit the EU, the fact remains that, as with the North East, North West & Midlands, Wales has not benefitted at all from 40 odd years of neoliberal economic orthodoxy, an orthodoxy not only prevalent within the UK since the Sterling Crisis of 1976, but the EEC/EU itself from the early1980s – see Bill Mitchell’s two latest posts on EMU detailing this fact:

        Again, and as ever congratulating you on your analysis of the economic impact of Brexit, which our Oligarch owned MSM often ignores, the fact remains as far as opinion in the UK is concerned, we only hear from those in the upper echelons of society, rather than the lower orders, who’s opinions are usually ignored or dismissed, much as this fact applies to society in the USA.

        Hopefully the Colonel and others residing in the UK can add to this issue.

        1. Colonel Smithers

          Thank you, CDR. I agree.

          From Buckinghamshire, Sussex and Suffolk, most people, including those commuting to London / the City, have more pressing issues to worry about.

          I have spent much of the year in France and watch TV5 most days when in the UK and have rarely seen Brexit related items on the France 2, RTBF (Belgium) and RTS (Switzerland) news. When the trio do cover Brexit, it’s much better than anything from the London bubble media. For example, a fortnight ago, France 2 featured a Cornish fruit and vegetable farmer struggling to replace EU27 labour and EU finance (for his hydroponic facility).

          With regard to the Kinnocks, the Danish member is called Gucci Helle at their family benevolent fund masquerading as Save The Children, a name imported from home, and, increasingly, Grace Mugabe.

        2. PlutoniumKun

          I was visiting some old friends week before last in England, and I have to say they were very anxious to talk about Brexit – I thought they’d be sick of it by now. But most of the friends I met were fairly politically active types. One recently found out he is likely to lose his job in the New Year – he’s a coder with a small consultancy and his company has a major contract with the Welsh Office. The project is mostly EU funded and they have no expectations that London will step in with financing, so he has been put on notice. He is a long time Labour footsoldier and he is livid with fury at what he sees as Corbyn’s weakness on the issue.

          But certainly I think most people have become bored with it. An exception I think are the young – the daughter of a friend who is in Birmingham Uni told me that there is real anxiety among a lot of students around issues like recognition of degrees and travel.

          1. Colonel Smithers

            Thank you, PK.

            You are right to highlight the recognition of degrees etc. As a fellow of various medical colleges and being multilingual, my dad did some work in that in the run-up to 1992 and soon after. We are puzzled that so little has been made of this, especially by the middle / professional classes that will be most affected. Without a second nationality, often Irish, they are stuck on the good ship Britannia unless they head to the former colonies.

            1. PlutoniumKun

              I think it will slowly dawn on the Universities themselves that their valuable supply of foreign students will dry up because of this. I notice that they are keeping very quiet about it so far.

              I was talking recently to an Irish-Chinese woman who works as a marketer to China for a Dublin mid level college. She’s on her way next week to a conference in Taiwan and she will be making precisely this point to prospective students.

              1. Colonel Smithers

                Thank you, PK.

                You should tell your friend to market to Mauritius. The island sends thousands of students abroad annually.

                As the island has a mix of Napoleonic code and English common law, lawyers have to study in both former mother countries before being able to practice. Ireland, especially Trinity which has a Mauritian contingent, can benefit.

                Trinity, although Anglican, was always the recommended institution by the island’s Catholic hierarchy and schools, often staffed by Irish priests and nuns, going back to the late 18th century.

                1. PlutoniumKun

                  I’ll pass that on, CS. I’d no idea about the Mauritian contingent in Trinity (or that about Mauritian law). I’d been curious about whether there is a Mauritian population in Dublin – I know of one very small restaurant off Moore Street. So now I know…

                  Its ironic that they sent catholics to Trinity as for a long time the Catholic Bishop of Dublin refused to allow local catholics to attend!

                  Trinity was always open minded about religion it must be said. There is a story from the 1950’s that one rebellious young fresher put down ‘Sun Worshiper’ on his application form. For the entire first term the helpful Trinity security staff were instructed to awake him from his slumbers in time for him to welcome his deity at sunrise.

      2. vlade


        I think you misread me – I wrote that the non UK comentators were saying from the start that the EU wouldn’t budge (when they still cared to write about Brexit).

        Your point on the rabid UK Brexiters saying the gov’t shoudl not budge is exactly my point – that to readers of that, the gov’t rapid change of stance is a hard-to-understand weakness.

    2. PlutoniumKun

      The biggest problem for Britain is that the EU, and all its constituent members, seem to have collectively decided that the British government simply doesn’t know what its doing. They can hardly conceal their open contempt. The best strategy now for London may be to play for pity, thats all they have left.

      (sorry if this appears twice, my last post just disappeared for some reason)

      1. Christopher Dale Rogers


        By what I can understand of the situation – notwithstanding the fact that the Tories are a train wreck – is the fact that our EU peers, both at a Brussels level and national level, would be far happier conducting negotiations with the Labour Party’s Brexit team, rather than a lame duck PM and Cabinet full of persons wishing to politically assassinate her – still, if you will take electoral advice from Commission President Juncker, this is what happens when exposed to an increasingly fractured UK electorate.

        1. PlutoniumKun

          I would have thought that a key problem for Labour if they won would be that so many of the key governments in Europe now are centre-right so not naturally allied with them. So while I’ve no doubt there would be a huge sigh of relief if the Tories were bumped out of power, I wonder if Labour would have the sort of ‘soft influence’ in Europe they had in the days of Blair (not that I’m a fan of Blair, but its undoubtedly true that he was a big hitter on the world stage).

          But at least a Labour government would be in a fairly strong position I think if they asked for a suspension of A.50 to allow more negotiations. They would certainly be far more likely to agree something on the Irish border (although they would be wary of setting a precedent the Scots might use). I’m sure Corbyn would quite enjoy the possibility of giving the DUP a good kick in the teeth.

          That said, I’ve no doubt that any Corbyn government would face a wave of hostility and uncooperativeness from the establishment and the media at an intensity we’ve never seen before.

          1. Colonel Smithers

            Thank you, PK.

            I would, too, but would rather Corbyn gave the Israel Firsters a good kicking and their marching orders from this country.

            Dad served with the RAF in Northern Ireland in the 1970s and 1980s. As Roman Catholics with origins in a former colony, we never understood what the mainland / most mainlanders had in common with unionists and loyalists.

            1. Christopher Dale Rogers


              Its quite worrying that a majority of the PLP are members of Friends of Israel, which, was the go to group to be associated with when Blair held sway in the Party – the history behind the Jewish Labour Movement, which like a zombie, recovered from death at the same time Corbyn was elected leader is also ominous – they are spreading anti-semitism smears at anyone and anything that is opposed to Blairism within the Party and all he stood for, basically, the pro-Israeli, pro-Progress, pro-Labour First camp not only hold democracy in contempt, but have the greatest contempt for the membership and our working class voting constituency, so, labels of racists, anti-semites and ultra-leftists are most common. On a positive note, and despite what Emily Thornbury may say, Labour is now very much pro-Palestine, rather than Zionist as in most of its past, which augurs well in my book.

  5. Matthew Cunningham-Cook

    I just don’t see how she squares the circle on the Irish border. My prediction is a delay of the inevitable until 2021/22, when elections will force their hand. Then they’ll try and hand off Brexit to a Corbyn government. Corbyn, in turn will have two choices–hard Brexit, or staying in the single market and customs union, the latter of which I think is slightly more likely at this point–but I’d only give it odds of 55% or so, as hard Brexit does present a crisis/opportunity moment for Corbyn and McDonnell to completely remake the British economy, while being able to convincingly blame any hiccups on the Brexit process. (And, of course, enrage Blairites and the City, a psychological consolation to the two that shouldn’t be discounted.)

    1. PlutoniumKun

      I don’t see how they can delay anything to 2021/22, the A.50 clock is ticking and there is no indication of a mood in Europe to stop that clock. Lets not forget that it was May who insisted on an early launch of A.50. The real chaos is likely to hit in 2019.

      I’ve no great personal insights to Tory policy, but if the various comments here by the Col., and others who are well informed, the ‘thinking’ among the grey suits of the Tory Party is that May and the current crew are sacrificial lambs for Brexit – they will be carted off to the House of Lords or a nice sinecure in the City and replaced with fresh faces at a time when (they assume) the worst of the Brexit chaos will have passed. By which time they think the Corbyn wave will have peaked and started to ebb. My guess is that they have such a visceral hatred and fear of the Labour left that they would see handing over Brexit to Labour as a high risk Plan B, not a core strategy.

      1. Yves Smith Post author

        Agreed. There was a story which I cannot locate thanks to the state of Google, but it ran on one of the major UK sites (as in the ilk of the FT or BBC). It included a section that discussed that the most the EU was willing to give the UK in the way of a transition period was to the end of 2020. Not a lot of additional runway, particularly given how the Government has been faffing about.

        1. Clive

          Yes, this started off from a dry written answer to a European Parliament question which confirmed that, due to EU budget setting cycles, the transition period would have to end in 2020-ish latest to allow the certainty needed in the next budgetary period.

          Realistically, everything had to be settled by September 1st 2019 (either that’s then confirmation of an agreement being reached to the end of any transition or else the U.K. has to sign up for another 7 years).

          And I thought your typical gym membership Terms and Conditions were stringent.

      2. Matthew Cunningham-Cook

        Interesting. Isn’t one of the subtexts of Yves’ commentary here that May & Co have nothing that could even be considered a “core strategy” or “Plan B”?

        1. PlutoniumKun

          I think the usual Tory minister ‘Plan B’ is ‘cosy post political sinecure in some City bank and a suspiciously lucrative book deal from a Murdoch owned publisher’.

  6. Colonel Smithers

    The British Obama, or one of the pretenders to that crown, Chuka Umunna, who has interesting backstory and should not be allowed anywhere near Downing Street, was on BBC TV news at lunchtime, invited to comment on the climb down over the bill. He was asked about Donald Trump first, an issue that took up much of his interview, and belatedly about the volte face. The UK’s Pravda, BBC and Channel 4, know what is expected of them, as CDR mentioned with regard to the German-American marital alliance soon to be funded by the long suffering British taxpayer peasant.

    1. Synoia

      Bread and Circuses. Interesting that the circus comes an the same time as the EU payment agreement. I’m positive that’s just a coincidence.

  7. PlutoniumKun

    Incidentally, I’m not sure what to think of this information – it might be a complete outlier, but last night I was talking with a friend who does voluntary translation work at a refugee centre in Dublin.

    She said she was helping translate with a lawyer a family from China (Fujian) who had been many years illegally living in the UK (their oldest daughter is 20, she basically grew up in the UK but is still illegal and apparently has poor English). The father has a serious cancer and they have moved to Dublin to claim refugee status. I was pretty surprised at this and asked why – my friend said that the family said the reason is ‘Brexit’. Apparently he was refused treatment by the NHS (something that astonishes me, I’d never heard of someone being refused, even an illegal immigrant) and came to Ireland and are claiming refugee status on the basis of his illness.

    I’ve no idea if this is just an isolated incident and perhaps this family are very poorly informed, but if it is true that there are increasing restrictions on treating illegal immigrants and that this could lead to a flood out of the UK, then it doesn’t bode well at all.

    1. Anonymous2

      Thank you also from me, Yves. Insightful as always.

      It is so difficult to read where this is going. A climbdown on the Irish border as well, or a walk-out when agreement is not reached on the border, so that the UK government can say to its electorate ‘ we offered them huge sums of money but that was not enough’ ? I question whether Mrs May herself knows what the next step will be. She appears to go in whichever direction she is being pushed hardest, so may be waiting to see how others react: press, opinion in the party, her political rivals (someone is going to put the knife (metaphorically) into her sooner or later).

      One report had it that the deal in the cabinet subcommittee was that the ultras agreed to the money being offered but insisted as a quid pro quo on divergence from EU standards which would obviously mean a hard border with the Republic of Ireland, so maybe a breakdown in the talks. Another report said that they could not agree the minutes of the relevant meeting so did not even agree what had been agreed!

      Some of the political players are probably waiting on instructions from their puppet-masters, who may themselves be trying to gauge how the wind blows, so do not know themselves what their next move will be.

      The next few days will be very interesting and should give a much clearer idea where we are headed. I fear the cynical interpretation could prove the sound one.

      1. PlutoniumKun

        While I suppose its still possible that there is some big overarching strategy, its very difficult to interpret recent signals from May’s cabinet as indicating anything other than chaos and incomprehension.

        The only logic I can see from the Brexiteers perspective of agreeing to the contribution is that they can:

        1. Use it as an excuse to push the blame on the EU if and when negotiations break down on other grounds, or

        2. Use the vagueness of the commitment as allowing them to backtrack at any stage if they feel the EU has weakening resolve, so they can declare ‘victory’ on this point.

        I think its also impossible to avoid the conclusion that the mainstream Brexit faction really do believe their own propoganda about how manageable a no-deal Brexit will be. They genuinely believe that at worst there will be a few months of problems, and after that they will emerge into the dawn of a libertarian paradise and endless prosperity. They really are that clueless.

    2. Christopher Dale Rogers


      This has nothing to do with Brexit, but everything to do with seven years of Tory misrule – on this thread you’ll note the trauma many have in bringing spouses into the UK, such trauma did not exist until July 2012, when Ms May changed the rules without a Parliamentary vote, until that date, you could legally bring your spouse with you to the UK, but were denied any State assistance for two-years, hence, given I myself applied after this date, me & the family are stuck in Hong Kong.

      Which brings me to your point in question, namely hospitals are now indeed checking if patients are legal in the UK. Again, I’ve suffered this nonsense in my old doctors medical practice – I politely told them to bugger off & joined another practice that does not engage in such discrimination – but the Tory hysteria over immigration, driven by Cameron and May has had a most toxic effect on the UK, and that’s before Brexit.

      1. Grebo

        It’s not just immigrants. A couple of months ago I was looking to top-up my state pension after some years abroad. In amongst the paperwork it says in no uncertain terms that expats are not entitled to free treatment by the NHS.

  8. PlutoniumKun

    Article today in the Irish Times:

    ‘Why is the British public so ignorant on Brexit?’

    Meanwhile, the hard Brexiteers crash on with their Dambusters fantasy game; blast your way towards Empire 2.0 via the World Trade Organisation and never mind WTO rules about controls at border crossings. And the vital mission to keep the citizens in pig ignorance lurches on with the government’s refusal to publish 58 Brexit sectoral impact studies (rumoured to be the stuff of nightmares) , with the controversial bits excised, which – get this – may or may not exist.

    Could they be this obtuse? Another theory presents itself. Take a good look at that overlap between the hard Brexiteers and the strutting billionaires who support them. If you simply walk away from the customs union and single market, change the regulations and abandon the Border problem to Ireland and the EU, by default you land the holy grail you’ve salivated over for decades: a no-deal Brexit.

    You then watch gleefully as an ignorant citizenry lashes out at the EU, Ireland, anything with European in the title, academics, judges, banks and British industry bosses who “talked down” Brexit.

    The author, incidentally, would be considered very middle of the road.

  9. PlutoniumKun

    It looks like the talks have moved on a lot further than most of us had expected – the Guardian is reporting that Britain has effectively capitulated on the main issues.

    When the time came to hoist the white flag, the cabinet’s swashbuckling Brexiters were nowhere to be seen. Instead, it was left to civil servants to hammer out the terms of Britain’s expensive retreat from the EU, settling a divorce bill that could pave the way for a wider exit agreement struck almost entirely on terms demanded by Brussels.

    Apparently, the Irish EU commissioner is hinting broadly that there is a deal about to be made on the Irish border.

    However, Ireland’s EU commissioner Phil Hogan said that “the United Kingdom has brought forward proposals that go very close towards meeting the requirements of the EU 27 member states.”
    “I expect that we will see movement (on Ireland) in the next few days as well,” he added.

    Its implied in the Guardian that May has left it to officials to do whatever is necessary for the deal, and she is trying to drag the cabinet Brexiters along with her. Maybe they’ve finally seen some sense.

    But if this is true, and May has basically conceded everything, then the political reaction may be intense.

    1. Strategist

      I’m lost here. How do you square a circle? The article linked to gives no clues.
      Surely the only way to make a border acceptable to the EU & WTO work in a way acceptable to the Republic and the northern republicans is to put it in the sea? How will that ever be acceptable to the DUP? I’m not saying no British Government would ever sell the NI loyalists down the river, but at the moment this particular government is propped up by the DUP.
      There is a way out, but it’s to scrap Brexit. I’ve been wondering for some time about the irony of the DUP of all people being the group who insist that this option is reactivated.

    2. vlade

      That’s why we have royals – to take one for the country when it needs it (because just about everyone except FT will put Harry’s marriage higher than Brexit bill). So there’s something to occupy the country for the next six months..

  10. gonzomarx

    Seen this quote from a Tory MP on twitter: “Supporting Brexit will destroy UK. Opposing Brexit will destroy Tories.”

    Unfortunately can’t trace it’s origin but has the ring of truth.
    I’d bet on party first.

  11. TedHunter

    Frankfurter Allgemeine Zeitung has received leaked documents describing EU working group working on contingency plan for a complete failure of Brexit negotiations. Source

    The plan is being devised by a working group reporting directly to Junker. The group is called „Brexit Preparedness Group“ and is working on diverse issues from airlines to fishing.

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