May Takes Control of Brexit Talks in Bid for Softer EU Split

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Prime Minister Theresa May is taking control over the U.K.'s Brexit negotiations and will direct strategy from her own office, in a move that reinforces her drive to keep close to the European Union. The pound rose.

May shook up her team on Tuesday, sidelining the troublesome ministry that she created two years ago to lead the British withdrawal from the EU. It follows months of tensions between the former Brexit Secretary David Davis, who led the department until he quit this month, and May's chief Europe adviser Oliver Robbins, who she increasingly turned to for advice.

The pro-Brexit Davis wanted a clean break from the EU and resigned in protest at May's plan to keep EU rules for trade in goods. Robbins, meanwhile, is now more powerful than ever. While he rarely speaks in public, Robbins holds sway over policy behind the scenes. The consolidation of his influence saw sterling climb 0.3 percent and angered Brexit campaigners in May's ruling Tory party.

“I will lead the negotiations with the European Union, with the Secretary of State for Exiting the European Union deputizing on my behalf,” May told Parliament in a statement. The Cabinet Office, which May oversees and where Robbins works, “will have overall responsibility for the preparation and conduct of the negotiations,” she said.

Political Crisis

May's move came at a critical time in the negotiations. With less than three months left to finalize the U.K.'s divorce terms and map out the future trade agreement, progress has all but stalled as EU officials waited for the British side to spell out its detailed position.

The premier set out her blueprint for a new free-trade area with the EU on July 12, keeping its regulations for trade in manufactured goods and agri-food. But since then, she's suffered a political crisis as pro-Brexit ministers Boris Johnson and Davis resigned in protest, accusing her of failing to deliver the decisive split from the bloc that voters want.

While Parliament -- and May's Tory party -- are divided over the merits of her plan, the EU is likely to welcome the latest shuffle of her team, as negotiators in Brussels know Robbins well and regard him as someone they can work with.

Davis's replacement as Brexit Secretary, Dominic Raab, played down the significance of May's announcement. Appearing alongside Robbins in front of a panel of lawmakers on Tuesday, Raab insisted the pair were working hard to make sure there's “one team, one chain of command” in Brexit talks, with May in charge at the top. He said May was merely clarifying the situation, “given some of the tensions” of the past.

Brussels Trips

In Brussels, talks resumed among officials in an effort to resolve the major stumbling block -- how to guarantee that there will be no return to customs checks at the U.K.'s land border with Ireland. Raab will travel to the Belgian capital on Thursday for a meeting with his EU counterpart Michel Barnier. He promised to make the trip to Brussels “regularly” during the summer in an attempt to speed up progress. Both sides aim to strike a deal at the EU leaders' summit in October.

Earlier on Tuesday, Raab published a government “white paper” detailing the British vision for the exit deal, but it had little new to say about the biggest obstacle to an agreement: how to guarantee there won't be a hard border between the U.K. and Ireland.

One idea that officials were weighing up last month would involve keeping Northern Ireland aligned with EU rules after Brexit as a last resort.

The rest of Britain would potentially adopt different regulations under the proposal. This would cause a problem for the 10 lawmakers in the Northern Ireland's Democratic Unionist Party, which props up May's Tory government, because they are opposed to any border between the province and mainland Britain.

When asked whether there could be a “regulatory border down the Irish Sea,” Raab said: “We will do everything we can to protect the integrity of the U.K.”

--With assistance from Ian Wishart.

To contact the reporters on this story: Tim Ross in London at tross54@bloomberg.net;Alex Morales in London at amorales2@bloomberg.net;Thomas Penny in London at tpenny@bloomberg.net;Kitty Donaldson in London at kdonaldson1@bloomberg.net

To contact the editors responsible for this story: Flavia Krause-Jackson at fjackson@bloomberg.net, Andrew Atkinson, Stuart Biggs