May's Brexit Stance Secures Uneasy Truce Among Conservatives

(Bloomberg) -- Theresa May's latest speech on Britain leaving the European Union seems to have secured an uneasy truce between the pro- and anti-Brexit wings of her Conservative Party, with all sides saying they hoped she would achieve the deal she'd set out.

For those who want maximum distance from the EU, May's position represents almost everything they want. “We're leaving the single market, customs union, taking back our laws, courts, money, all the rest of it,” Iain Duncan Smith, a leading Brexit supporter, said Sunday on the BBC. Crucially for them, even though the prime minister listed areas where she wanted to stick close to EU rules, the option to diverge has been left open. 

Meanwhile those seeking some ties with the EU welcomed that promise of initial closeness, as well as May's acknowledgment in her Friday speech that Brexit will mean trade-offs. “We need to give the prime minister breathing space,” Conservative member of Parliament, Sarah Wollaston, said on ITV. “Both sides see something that they like.”

But the peace may short lived. Wollaston and others were clear that they weren't yet going to back away from supporting an amendment to the Trade Bill, currently going through Parliament, that will urge the government to seek a customs union with the EU. Wollaston said her position would be based on whether it looked like May might get what she is seeking.

‘Frictionless Trade'

“A lot depends on how the EU responds,” she said. For her, the key issue was whether business would be able to function. “It's about whether we have some form of partnership so that we have frictionless trade at our borders.”

Even May's allies acknowledge that there is a danger here. Cabinet Office Minister David Lidington described May's speech as “an ambitious opening bid for what will be a complicated set of negotiations.” He acknowledged that she might bring back less than she wanted.

Anna Soubry, one of the most outspoken Conservative opponents of Brexit, and the person behind the customs union amendment, in a Twitter posting described May's speech as “honest and conciliatory,” before questioning how it will go down with the EU. 

In a sign of how difficult negotiations will be, Ireland's deputy prime minister Simon Coveney expressed frustration that May hadn't offered a new solution to the problem of his country's border with the U.K. “She hasn't really gone into any more detail than we've already heard,” he said on the “Andrew Marr Show” on the BBC.

May's own intervention on Sunday was an interview recorded on Friday, in which she went over the ground of her speech, emphasizing that the U.K. isn't looking for a “passporting” deal to let British financial-service companies work in the EU.

“We'd have to abide by the rules that were being set elsewhere,” she told Marr. Instead, she said, she wanted financial services to be covered in the free-trade agreement she's proposing with the EU. Chancellor of the Exchequer Philip Hammond is due to give a speech on that this week.

To contact the reporter on this story: Robert Hutton in London at rhutton1@bloomberg.net.

To contact the editors responsible for this story: Flavia Krause-Jackson at fjackson@bloomberg.net, Steve Geimann, Brian Lysaght

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