Fall Out: A Year of Political Mayhem. Tim Shipman
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betrayal’. Steve Baker, as convener of the backbench sceptics, phoned Davis and asked what the position was. Davis clarified that Britain would not be paying large sums to Brussels indefinitely but would settle its outstanding obligations. Baker messaged the MPs on his WhatsApp group, urging them to remain calm. But one veteran Paleosceptic urged him to break off links with Downing Street. ‘Go radio silent,’ the MP said. ‘Just let them sweat, because they’re betraying us.’ Baker was concerned. ‘This is people gearing up for civil war,’ he thought.
Nonetheless, under the influence of Hammond, Davis began to say Britain would ‘meet our obligations’ on the exit bill, an acknowledgement of the political reality that billions would have to be paid to Brussels if Britain wanted a trade deal. ‘Anyone who tells you any different is a fantasist,’ a DExEU source said at the time. That put Davis and Hammond at odds with Boris Johnson, who continued to insist that Britain had no legal obligation to pay anything. ‘Phil was trying to keep open the option of spending money to access the single market,’ a Tory adviser recalled. ‘Boris was very concerned to close that down.’ In private, Johnson told colleagues, ‘It needs to be nothing. Zero. There is no case at all for continuing to spend British taxpayers’ money to trade with the rest of the EU. If the argument is you should pay for access to markets, they should pay us.’
Significantly, after Davis’s hint that Britain might pay up, there was not a peep of contradiction from Downing Street. While Johnson and Fox had frequently had their freelancing interventions shot down by Number 10, May’s aides remained silent. ‘The most significant thing that happened that day is what didn’t happen,’ a special adviser said. ‘DD talked about paying money into the EU budget and no one from Downing Street machine-gunned him in the street.’ An MP close to Davis said he had been pressing the case to Number 10 that ministers – not the media – should start doing more to define Brexit publicly, a coded rebuke to May’s insistence that there should be ‘no running commentary’. Another source made clear that budget contributions were a centrepiece of government plans: ‘The money is where they will try to compromise.’
Four days later, on 5 December, Hammond and Davis met ten influential City bosses at the Shard, Britain’s tallest building. Both agreed that they needed to calm the fears of the City, which were beginning to percolate into the media and, Davis feared, hand Barnier a stick with which to beat them. ‘If people in Britain panic and the press are saying, “The City’s going to evacuate to Frankfurt,” then that instantly becomes a lever for the other side,’ Davis warned. Barnier had already shown himself an assiduous reader of the British newspapers, quoting back stories about the prospect of queues at the border in his conversations with British officials. The Shard event resolved very little, but it allowed Davis and Hammond to be pictured together. ‘What mattered more was the photo,’ a minister said. ‘Because everyone was trying to do their Kremlinology and saying, “Davis is in one corner and Hammond is in the other.” And they weren’t.’
Davis’s support emboldened Hammond to push things further. On 12 December, in front of the Treasury select committee, the chancellor announced that a transitional arrangement would be necessary after Brexit because there was not time to secure a full deal in the two-year period of negotiations. It was a view, he said, that was shared by ‘businesses, among regulators, among thoughtful politicians, as well as a universal view among civil servants’. It was not, at that stage, a view shared by Boris Johnson, Liam Fox or Steve Baker’s Eurosceptics. On 29 November the prime minister had hinted to the CBI’s annual conference that she would consider a transitional period. ‘People don’t want a cliff-edge; they want to know with some certainty how things are going to go forward,’ she said. But May’s ‘cliff-edge’ comment had not been pre-planned. It came about, in part, because she had only done three minutes of prep for her appearance. There was nothing unplanned about Hammond’s intervention. Encouraged by Ivan Rogers, he was pushing for a transitional period to be agreed straight away. ‘Phil would have liked to have a two- or three-year transition period, agreed at the beginning of the negotiation,’ a fellow cabinet minister said.
Davis was prepared to countenance a transitional deal, but only if there was a fixed end point to transition to – and if it was not called a transition period. He believed the term encouraged Barnier to get the wrong end of the stick. ‘His idea of a transition arrangement, is that you spend two years doing a divorce and then spend the next ten years doing the transition,’ Davis warned his colleagues. ‘In which time we’re still under the ECJ, we’re still paying out bills and all the rest of it.’ Davis regarded Hammond’s plan as dangerously open-ended and wanted the destination to be clear. ‘How do you build a bridge when you don’t know where the shore is?’ he asked aides. Davis did not want to spend his political capital seeking a transition deal – but crucially he did not oppose it in principle. Within DExEU, George Bridges – the minister in the Lords – had joined Hammond in arguing for a transition period.
The chancellor was still on his own in arguing for Britain to stay in the customs union. In early January, when they returned from the Christmas break, Hammond met Boris Johnson for more than an hour. The chancellor made one last bid to persuade the foreign secretary. ‘Can we at least agree something on the customs union even if we can’t have the single market?’ Johnson replied, ‘We can’t do it.’ Afterwards Johnson told Foreign Office officials, ‘It was him saying to me that he is losing the battle with the prime minister. He’s got to do it. If you’re out, you’re out.’
When Boris Johnson heard that May was planning to make the speech in January he decided he ‘had to be useful’. He spent the Christmas break writing a 3,000-word paper on what he thought she should say. Johnson’s allies call it a ‘draft’, though they concede that not many of his actual words (or jokes) found their way into the final speech. May’s aides referred to it as ‘a letter’. Johnson advised May to make a clear statement that Britain was going to leave the customs union and would be taking back control of its laws. He also urged her to explain to the rest of the EU that Brexit was about Britain making a positive decision for itself, not against them – the mantra of ‘leaving the EU but not leaving Europe’.
Johnson was pushing at an open door when he asked the PM to adopt the positive vision of the UK unleashed as ‘Global Britain’, a brand he had developed as London mayor and made the centrepiece of a speech to Foreign Office staff in July. His allies briefed journalists that Boris was feeding into the speechwriting process. One even claimed, ‘Her speech was 70 per cent his content – leaving the single market, leaving the customs union, agitating for free trade, not pulling up the drawbridge, an open and dynamic economy that people come to visit, global Britain – you could hear so much of him in it.’ May’s speechwriting team certainly read Johnson’s thoughts, but most of them already appeared in the speech. ‘There was basically no involvement in the speech,’ a source close to May said. Her team did not mind Johnson’s grandstanding because they were keen for senior ministers to feel they had ‘buy in’ to the process, and Boris’s input showed that he was on the same page as the prime minister.
If Johnson can be said to have contributed anything it was an attitude of positivity, which Chris Wilkins was also keen to incorporate following criticism of the ‘citizens of nowhere’ line in the conference speech. He had worked for Nicky Morgan, one of the most outspoken Remainers, and wanted to bridge the gap between his old boss and his new one. ‘Chris was concerned that the speech should be very optimistic and outward looking because we needed to bring in the 48 per cent and particularly the kind of people who might have been irritated by the citizens of nowhere thing,’ a Number 10 official said. ‘That was what he brought to it.’ May’s trip to the Gulf Cooperation Council in Bahrain in December, and the positive welcome she had received there about trading with the UK, helped crystallise the prime minister’s view that she needed to use her big Brexit speech not just to outline the basics of her negotiating position but also to speak much more about the future and delineate Britain’s global position.
Jeremy Heywood also pressed for an upbeat tone that would build bridges with those who had voted Remain. The cabinet secretary, who acted as the ‘voice of the business community’ in Downing Street discussions, told May she should offer an olive branch on immigration. ‘Jeremy Heywood wanted a really firm commitment to