A short post of my first thoughts about May's speech in Florence - what have we learnt?
“This is part of a series of posts focusing on what Brexit might mean for businesses generally and corporate IT specifically. Its aim is to explore what will happen, how businesses and regulators will react, and what this means for corporate CIOs and their teams.”
Firstly, lets remember the context we are in.
- For good or ill, the EU wants to conclude on three priorities, on the financial settlement, on the island of Ireland, and on the legacy rights of EU citizens living in the UK. The EU position was that when these are concluded, negotiations on the future relationship can start; this was relaxed to "sufficient progress" having being made. In my view, the EU probably finds this rather academic as they feel there is no chance for the future arrangements to be agreed by March 2019 - so for them the point is to keep discussions focused on what has to be agreed in the next 18 months.
- It is also clear that the EU has doubts that May's Government can deliver on any of the promises made (or indeed survive for the next 2 years).
- And finally, negotiations have not made good progress to date - mainly because the UK Government is still debating internally as to what they want.
This is the context, the UK Government is trying to persuade the EU that we have made enough progress and so can now turn to negotiating a future arrangement. In short - that the EU and UK have got a political agreement, and that only technical negotiations are needed to conclude the separation agreement.
My view is that no one (whatever their views on Brexit itself) can really believe that. The UK Government is still forming its position, has not really started agreeing one with the EU, and let us not forget that the EU will then need to get political agreement between its 27 members.
Has May moved this forward?
Like the papers produced on Brexit by the UK Government, May's speech seemed to be addressing a UK audience (probably more than that, addressing the Brexit supporting voters and Tory activists) - a potted history of the UK and the EU is interesting, as is an analysis on why the UK voted to leave the EU, but we really only care about the Government's plans for the future.
For me it was still a "have our cake and eat it" speech - the UK wants to have the same rights for trade as now but not having to follow EU regulations or other obligations, or to be bound by bodies like the ECJ. The argument seemed to be that the EU should give us a closer relationship because our large trade with them and because of current common regulations. It is in both the UK and EU's interests to seek no tariffs and no border friction.
"Short on detail", might be an unfair criticism for a political speech but it did seem to outline a number of "wants", or "must haves" but with little explanation of how they could actually be achieved. The speech did moved forward on the financial settlement (the UK will meet its obligations and will ensure that the current EU budget is protected) and on citizens rights (these will be built into the withdrawal treaty) but no suggestions on how the Ireland border will work.
May also made it clear that a Security Partnership was a given - a welcome development.
Of course the most important part of the speech was the request for a transitional (or implementation) period; the most disturbing was in the Q&A. The FT asked about how new EU laws would be handled during the implementation period, the answer was that this was a detail - unfortunately there are lots of details still to be worked through by the UK Government.
This speech is important. It is important because it is an effort by the UK Government to start to lay down what it wants to achieve politically. It wants a close trade partnership with the EU, much closer than that enjoyed by Canada for example, but does not want to be in the single market or customs union. It wants a 2 year implementation period during which the UK would essentially be a non-voting associate member of the EU. Whether the EU would agree with any of this is for the future - and is besides the the point - what is important is whether over the coming weeks the Government manages to keep this consensus between its waring factions (and the Press).
In sum, May has tried to assert some leadership - will she survive the effort? My guess is that the EU hope so - no one wants a chaotic counterparty.
For businesses, the request by the UK for a transitional period is a welcome development, we now need to listen carefully to the EU's response, and even more carefully to the response from Conservative Party politicians, activists and press to assess the Government's future.
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I am a solution director, enterprise architect and IT strategist with over 25 years architecture and design experience. I have held senior architectural roles in health, consumer banking & fund trading, insurance, and government and have wide experience across business and technology, business development, and programme delivery.
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