Книга - Fall Out: A Year of Political Mayhem

Fall Out: A Year of Political Mayhem
Tim Shipman


The unmissable inside story of the most dramatic general election campaign in modern history and Theresa May’s battle for a Brexit deal, the greatest challenge for a prime minister since the Second World War.By the bestselling author of All Out War, shortlisted for the Orwell Prize 2017.This is the unmissable inside story of the most dramatic general election campaign in modern history and Theresa May’s battle for a Brexit deal – the greatest challenge for a prime minister since the Second World War.Fall Out tells of how a leader famed for her caution battled her bitterly divided cabinet at home while facing duplicitous Brussels bureaucrats abroad. Of how she then took the biggest gamble of her career to strengthen her position – and promptly blew it. It is also a tale of treachery where – in the hour of her greatest weakness – one by one, May’s colleagues began to plot against her.Inside this book you will find all the strategy, comedy, tragedy and farce of modern politics – where principle, passion and vaulting ambition collide in the corridors of power. It chronicles a civil war at the heart of the Conservative Party and a Labour Party back from the dead, led by Jeremy Corbyn, who defied the experts and the critics on his own side to mount an unlikely tilt at the top job.With access to all the key players, Tim Shipman has written a political history that reads like a thriller, exploring how and why the EU referendum result pitched Britain into a year of political mayhem.










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Copyright (#u691ffe73-8586-5741-89c5-6427c5d20d82)


William Collins

An imprint of HarperCollinsPublishers

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London SE1 9GF

www.WilliamCollinsBooks.com (http://www.williamcollinsbooks.com)

This eBook first published in Great Britain by William Collins in 2017

Copyright © Tim Shipman 2017

Cover illustration by Morten Morland/Spectator

Tim Shipman asserts the moral right to be identified as the author of this work

A catalogue record for this book is available from the British Library

All rights reserved under International and Pan-American Copyright Conventions. By payment of the required fees, you have been granted the non-exclusive, non-transferable right to access and read the text of this e-book on screen. No part of this text may be reproduced, transmitted, downloaded, decompiled, reverse engineered, or stored in or introduced into any information storage retrieval system, in any form or by any means, whether electronic or mechanical, now known or hereinafter invented, without the express written permission of HarperCollins e-books.

Source ISBN: 9780008264383

Ebook Edition © November 2017 ISBN: 9780008264390

Version: 2018-05-01




Dedication (#u691ffe73-8586-5741-89c5-6427c5d20d82)


For Charlotte




Epigraphs (#u691ffe73-8586-5741-89c5-6427c5d20d82)


fall out v.

1 quarrel

3 come out of formation

fallout n.

1 radioactive debris caused by a nuclear explosion or accident

2 the adverse side effects of a situation

The Concise Oxford Dictionary (1991 edn)

‘It is not the critic who counts; not the man who points out how the strong man stumbles, or where the doer of deeds could have done them better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood’

Theodore Roosevelt, 23 April 1910

‘Everybody has a plan until they get punched in the mouth’

Mike Tyson




Contents


Cover (#u1f6dc5d3-7f34-5456-9be4-30aea6160218)

Title Page (#u6c0bf3c2-2c66-5b57-b452-be256e82e26f)

Copyright (#ud79b2108-effa-56c8-a587-0ef552738f01)

Dedication (#u2355f532-e1b7-5784-ae7e-2f15a6548a8f)

Epigraphs (#u1249e568-5223-5a4b-9d68-6d44b971345e)

Acknowledgements (#ud2577bec-b6da-503f-a62c-2e8999aa5b67)

Timeline (#ubd069157-58ca-5e07-ac0b-a8172acf69e8)

Introduction: Four Minutes to Ten (#ueb61e53e-8804-58f7-a850-130bc44109d3)

PART ONE: GENESIS (#ufb72d0f8-58eb-5651-9814-cfe9ea1f0cff)

1 ‘Brexit Means Brexit’ (#uff8eb7ac-2a59-5565-acaf-ce42e1dfbb91)

2 ‘No Running Commentary’ (#ue31828cc-099d-5628-aa92-bb2f4b94e995)

3 The Enemy Gets a Vote (#u46e53eef-a8ed-55f5-bb57-6d6ab216ce7a)

4 Enemies of the People? (#u11cc5ab6-6d08-567c-bda4-67670d4cd34c)

5 How Do You Solve a Problem Like Boris? (#u92113d07-5ec4-594f-8740-c68ae32e7195)

6 Ivan the Terrible (#ub52cd984-445b-5e6b-870f-08badabb453d)

7 Lancaster House (#ude96591f-ae0e-5acc-8764-3cf2a4de50a8)

8 The White House (#u397f181a-d4d7-5013-96b7-3da14a5fb4e9)

9 Triggered (#u1c6b5fd7-0e02-58b8-b54b-d16496977521)

PART TWO: HUBRIS (#u6948d0d1-89cf-54a4-a29f-8230409d1875)

10 ‘Economically Illiterate’ (#ude4c7938-8c46-512d-890f-1ad667a48407)

11 The Snarling Duds of May? (#ub3f95a82-ca00-5a31-825f-962fb226f523)

PART THREE: NEMESIS (#u0ff00ea3-00a6-5520-8f4c-3fb72d3bec45)

12 Bolt From the Blue (#u1d9b4eb1-f21e-58bd-8e13-5d97b5c9e8bb)

13 Leninists and Lennonists (#u2d09b39f-34f7-533d-8f4e-e712d4712222)

14 ‘Another Galaxy’ (#ub01ecb7a-8271-5b9f-b6c8-e80bf68fd1b4)

15 Strong and Stable (#ufcbc7b56-9cc8-5bb4-be1b-8d56202d2383)

16 From Sharks to Minnows (#u7bbae6f4-9a86-5b31-91a2-7c8380abb433)

17 Manifesto Destiny (#u87993dec-9848-5cbc-aa50-30bdde6ab89b)

18 ‘Nothing Has Changed!’ (#uefda561b-9ba2-56a8-b063-c7f9c88336b5)

19 Manchester (#ub02334d6-607c-5681-851f-307abcb19337)

20 ‘This Isn’t Working’ (#u13068673-58f8-57ed-a449-7129ce8cc1a6)

21 I, Maybot (#u4b93a267-ef29-575b-bfdc-cec163bdcc1c)

22 The Corbyn Surge (#ufb842db4-ff24-5066-ac6b-ebd3d9a7c234)

23 Political Alchemy (#ud63681ba-03aa-526c-a254-90004ba0b7a4)

24 London Bridge (#u8744ebe9-ae6c-5125-b557-24126e9d5f82)

25 Mayday! (#ua551f339-d200-5799-a764-d8a442965ed1)

PART FOUR: CATHARSIS (#u0bda7665-525e-512c-b5ee-972002b5c3db)

26 Shellshock (#u3c826799-1aaf-5e54-b7e4-afe2e4b7ae0b)

27 The Four Horsemen (#u07845a90-edf6-5e38-8d2c-589ca6c8224f)

28 Florence and the Maychine Malfunction (#ub7a641f6-95c3-51c0-9481-9461ae08605d)

29 ‘Sufficient Progress …’ (#uc33ff81d-82b8-5a56-ab10-ebb1ad57f947)

Conclusion: May Was Weak in June (#uc7ae6e76-2de9-56a3-8865-60feab95c272)

Appendix 1: Results of the 2017 Local Elections (#u848377e6-b075-52b3-bfd1-83317a7c3cba)

Appendix 2: Results of the 2017 General Election (#u7819e6a3-9980-5ff7-9cc7-dd7251cd6e05)

Appendix 3: Chris Wilkins’ Strategy (#u38f18682-b6ce-5ff4-848d-fe36a375b4cf)

Appendix 4: Lynton Crosby’s Strategy (#u80d2ec28-8e2d-550f-a325-f7ff2dbf0981)

Appendix 5: Seumas Milne’s Strategy (#u310a375e-9814-5e35-9387-9d14315ee391)

List of Illustrations (#ubbe2ef39-a3f7-5d19-8a9b-ac6af13a874f)

Picture Section (#u5b537105-b7a3-5773-91d8-7570bbe96246)

Notes (#ue9c4db89-5b5e-5b0a-a1b4-0adc78a42b85)

Index (#uc581b467-3ae2-5e16-8f3b-63c54ad1c65d)

Also by Tim Shipman (#u5a320213-971a-53eb-8a4a-6451e2f73cdc)

About the Author (#u73a5a02a-771c-5c2b-833b-e344fc522c74)

About the Publisher (#u70a6cc20-d342-5552-b088-4b618bdb2d03)




Acknowledgements (#u691ffe73-8586-5741-89c5-6427c5d20d82)


This is the second book I never intended to write. Just as with All Out War, my 2016 book on the Brexit referendum campaign, Fall Out is the product of extraordinary events. The original intention was to add a few chapters to All Out War to bring the Brexit story up to date with the declaration of Article 50 in the spring of 2017. Then Theresa May called a general election and the inexorable logic of writing a sequel overwhelmed me. The fallout from the EU referendum and the general election is still with us. It was perhaps the most extraordinary of my lifetime. It led the Tory Party to fall out with itself and fall out of formation.

This book is based on more than one hundred interviews conducted primarily between July and October 2017. Last time I listed most of the primary sources. This time I have not done so since many more of them are still in prominent posts and most were reluctant to be named. That said, only a very small number of people refused to cooperate. Those who talked to me include fifteen members of Theresa May’s Downing Street staff, twenty ministers, including thirteen of cabinet rank, more than twenty-five Tory campaign staff, more than a dozen senior figures in the Labour Party, the shadow cabinet, Jeremy Corbyn’s office and the trade unions, as well as civil servants, special advisers, diplomats, former ministers, MPs and pollsters.

During the time covered by this book I interviewed Theresa May three times and accompanied her on her visit to the White House. I also conducted on-the-record interviews with David Davis, Boris Johnson, Damian Green, Michael Gove, John McDonnell, Nigel Farage, Arron Banks and Michael Fallon. I have drawn on the unpublished transcripts of these conversations.

As before, some people agreed to certain observations being ‘on the record’ but most of the time we spoke on the understanding that I would construct a narrative of events without signalling the origin of every fact and quote. Where I have directly quoted someone or attributed thoughts or feelings to them, I have spoken to them, the person they were addressing, someone else in the room who observed their behaviour, or someone to whom they recounted details of the incident or conversation. You should not assume that the obvious source is the correct one. Many of those who spoke to me off the record have written newspaper articles, given interviews or spoken publicly about their views. Where this is the case I have footnoted published sources in the text.

I will repeat a couple of stylistic warnings I issued in All Out War. Westminster is a profane place and I have sought to capture the language of the age. Be warned. Peers are referred to by the name by which they are best known. Knights of the realm are ‘Sir’ on first usage then stripped of their titles. In no one’s world is Stephen Gilbert, Lord Gilbert of Panteg and anyone who has tried to call Lynton Crosby ‘Sir’ gets a look that discourages repetition.

The Brexit negotiations and the general election are a complex series of interlocking and overlapping events. In seeking to impose narrative order not everything is presented in strictly chronological order. This felt necessary to prevent Fall Out descending into a recitation of ‘one damn thing after another’. Part One covers the negotiations over Brexit between September 2016 and March 2017, when Theresa May triggered Article 50. Part Two covers the internal battles of the May government – which pitted her chiefs of staff against other senior members of the administration – to try to explain how the culture they had created affected the election campaign and their own demise. Part Three covers the election and Part Four the subsequent leadership plotting and its implications for Brexit, culminating in the phase one exit agreement in December 2017.

With events still live there are many people who will not like what they find in these pages. We do not know yet how Brexit will end or how the 2017 election will impact on the future history of the Conservative Party, still less whether 2017 represented the beginning of the end or the end of the beginning for Theresa May and Jeremy Corbyn. I have sought to honestly convey the events as they seemed to the participants at the time. My personal view is that Britain must make the best of its future. Good people on both sides of the referendum result have a role to play. Capitalising on the benefits of Brexit requires a cold-eyed understanding of the complications.

While people have behaved with conviction as well as ambition they have not always behaved well. I have known Nick Timothy and Fiona Hill for a decade. If I have highlighted some of the extremes of their characters as they were experienced by others, I can only say my own contacts with them have almost always been positive. Both are dedicated public servants and – away from the stresses of office – charming company. If they did not always seem so to colleagues, it is worth remembering that all the best political operators I have known – Damian McBride, Dominic Cummings and Alastair Campbell among them – have been divisive figures.

At HarperCollins I am deeply indebted to the incomparable Arabella Pike, whose image will adorn the next edition of the Illustrated Oxford Dictionary alongside the word ‘sangfroid’. I hope she persuades David Cameron to file quicker than I did. Iain Hunt and Robert Lacey dealt with a mountain of words with similar forbearance. I’m also grateful to Marianne Tatepo, who sorted the pictures and much else besides and the legendary Helen Ellis. My agent, Victoria Hobbs, and all at A. M. Heath kept up my morale at key moments.

Special thanks must go again to my Sancho Panza, Gabriel Pogrund, who contributed acute reporting, several insightful interviews and the fastest transcription services in the West. Hannah McGrath let me see unpublished material from election night. I am also grateful to both old comrades – George Greenwood, Harriet Marsden and Oliver Milne – and new – Sebastien Ash, Megan Baynes, Isabelle Boulert, Tony Diver, Caitlin Doherty, Emily Hawkins, Anna Hollingsworth, Michael Mander, Conor Matchett, Holly Pyne and Josh Stein – for their help in turning more than one hundred hours of interviews into seven hundred thousand words of transcripts. I’m grateful to Natasha Clark for the introductions to such a keen young team.

At the Sunday Times, I am indebted to Martin Ivens, Sarah Baxter and Ben Preston for offering space to the political reporting on which this book was built. Ray Wells was generous with his time sourcing the pictures. There is no better wingman in covering Brexit than Bojan Pancevski, the king of the Brussels correspondents and no wiser partner in crime than Caroline Wheeler, who held the fort when this book took over. Richard Kerbaj helped with the fallout from the terrorist attacks. Elsewhere in Westminster, I’m grateful to Jim Waterson for guiding me through the digital election battle and David Wooding for sharing a transcript.

My greatest debt remains to my family, particularly my amazing wife Charlotte, who have put up with more absences than anyone should have to endure – and to Kate and Michael Todman for indulging a monosyllabic house guest for the second summer in succession.

Tim Shipman

Westminster, Preggio, Camerata, San Nicolo,Church Knowle, Studland and Blackheath

July–October 2017




Timeline (#u691ffe73-8586-5741-89c5-6427c5d20d82)


2016

23 Jun – Britain votes to leave the European Union by a margin of 52 per cent to 48 per cent

29 Jun – Other 27 member states agree a ‘no negotiations without notification’ stance on Brexit talks and Article 50

13 Jul – Theresa May becomes prime minister and pledges to create ‘a country that works for everyone’

7 Sep – May insists she will not give a ‘running commentary’ on Brexit negotiations

24 Sep – Jeremy Corbyn re-elected as Labour Party leader

30 Sep – Carlos Ghosn, Nissan’s CEO, says he could scrap potential new investment in its Sunderland plant

2 Oct – In Brexit speech to party conference, May says she will trigger Article 50 before the end of March and create a Great Repeal Bill to replace the 1972 European Communities Act

5 Oct – In main speech to party conference, May criticises ‘citizens of nowhere’

6 Oct – Keir Starmer appointed shadow Brexit secretary

27 Oct – Nissan says it will build its Qashqai and X-Trail models at its Sunderland plant, protecting 7,000 jobs

2 Nov – At Spectator awards dinner May compares Boris Johnson to a dog that was put down

3 Nov – High Court rules that only Parliament not the government has the power to trigger Article 50

4 Nov – Daily Mail calls the judges ‘enemies of the people’

8 Nov – Donald Trump elected the 45th president of the United States

14 Nov – FT reveals the EU wants a €60 billion exit bill from Britain

15 Nov – Boris Johnson tells a Czech paper the UK will ‘probably’ leave the customs union and is reprimanded by May

19 Nov – Johnson accused of turning up to a cabinet Brexit meeting with the wrong papers

20 Nov – Sixty pro-Brexit Tory MPs demand Britain leaves the single market

21 Nov – Trump calls for Nigel Farage to be made British ambassador to Washington

7 Dec – MPs back government amendment to opposition day debate saying the government must set out its Brexit plans but also that Article 50 should be triggered by the end of March

8 Dec – Johnson calls Saudi Arabia a ‘puppeteer’ in the Middle East, sparking a rebuke from Downing Street and fears he will resign

11 Dec – Fiona Hill’s ‘Trousergate’ texts to Nicky Morgan, banning her from Downing Street, are published

15 Dec – BBC reveals that Sir Ivan Rogers has privately warned ministers a post-Brexit trade deal might take ten years

2017

4 Jan – Ivan Rogers resigns

10 Jan – Corbyn announces a wage cap in his ‘Trump relaunch’

17 Jan – In speech at Lancaster House May announces Britain will seek a hard Brexit leaving the single market, the customs union and the jurisdiction of the European Court of Justice. She says ‘no deal is better than a bad deal’

24 Jan – Supreme Court votes 8–3 to uphold the High Court ruling

25 Jan – Downing Street says Brexit plans will be set out in a white paper

27 Jan – May meets and holds hands with Trump at the White House

1 Feb – Article 50 bill passes second reading by 498 votes to 114

2 Feb – White paper published echoing the Lancaster House speech

7 Feb – Government defeats amendment 110 which would have given Parliament the right to a vote on Brexit following a deal with Team 2019 Tory rebels

9 Feb – Article 50 bill passes Commons by 494 votes to 122

16 Feb – May’s aides hold strategy meeting at Chequers for the 2020 election

17 Feb – Tony Blair makes a speech urging Britons to ‘rise up’ against Brexit

7 Mar – House of Lords amends Article 50 bill to guarantee a ‘meaningful vote’ on Brexit deal. Lord Heseltine sacked

8 Mar – In his spring budget, Philip Hammond raises National Insurance contributions for the self-employed

13 Mar – Nicola Sturgeon confirms she will ask for permission to hold a second referendum on Scottish independence, playing into Ruth Davidson’s hands

14 Mar – Article 50 bill finally gets royal assent

15 Mar – May forces Hammond into humiliating U-turn on National Insurance

17 Mar – George Osborne named editor of the Evening Standard, overshadowing May’s Plan for Britain

29 Mar – May signs letter triggering Article 50

18 Apr – May announces that she is calling a general election

26 Apr – May dines with Jean-Claude Juncker at Downing Street. Details of the meal leak and are blamed on his chief of staff Martin Selmayr

4 May – In local elections Tories make big gains

10 May – Labour manifesto leaks

16 May – Labour manifesto published

18 May – Conservative manifesto published, includes plans for a controversial social care policy

21 May – Polls show Tory support ‘dropping off a cliff’. Lynton Crosby says care could lose the election

22 May – May U-turns, scrapping the care plan but insisting ‘nothing has changed’. Manchester Arena terror attack that night leads to a pause in the campaign

24 May – In Downing Street meeting, May is warned the numbers are bad

3 Jun – London Bridge terror attack puts police cuts at the top of the agenda

8 Jun – General election: the Conservatives win 317 seats, down thirteen and lose their majority. Labour gains thirty seats

9 Jun – May visits the queen and says she has a deal with the DUP then fails to apologise for losing seats

11 Jun – Nick Timothy and Fiona Hill resign as chiefs of staff

12 Jun – May apologises to 1922 Committee and endures criticism from ministers in cabinet

14 Jun – Grenfell Tower disaster plunges the government into a new crisis and May into a ‘personal crisis’

19 Jun – First round of Davis–Barnier Brexit negotiations

26 Jun – Andrew Mitchell and Nicky Morgan tell One Nation dinner Theresa May should resign

6 Jul – CBI demands a transition period with no time limits

20 Jul – Second round of Davis–Barnier talks

31 Aug – Third round of Davis–Barnier talks ends in fractious deadlock

7 Sep – Select group of cabinet ministers shown policy paper by Oliver Robbins setting out plans for May’s Florence speech

12 Sep – Philip Hammond tells Lords Economic Affairs Committee there must be a ‘status quo’ transition

15 Sep – Boris Johnson publishes 4,200-word article in the Daily Telegraph challenging May’s authority on Brexit

18 Sep – Oliver Robbins leaves DExEU to run Cabinet Office Brexit unit

22 Sep – During speech in Florence, May says Britain will seek a status quo transition lasting ‘about’ two years and hints the UK will pay €20 billion to the EU in that time

30 Sep – Johnson sets out his four ‘red lines’ for Brexit

4 Oct – Theresa May’s conference speech descends into disaster

16 Oct – May dines with Jean-Claude Juncker. A leak suggests she was ‘begging’ for help

19 Oct – At Brussels summit, May pleads with EU leaders to get the trade talks moving

22 Nov – Hammond’s second budget of the year cuts stamp duty for first-time buyers

4 Dec – DUP pulls the plug on May’s exit deal, plunging the talks into fresh crisis

8 Dec – May strikes phase one Brexit deal when Commission pronounces that ‘sufficient progress’ has been made on money, citizens and the Irish border



Introduction




Four Minutes to Ten (#u691ffe73-8586-5741-89c5-6427c5d20d82)


The first clue that something was wrong was the look on Fiona Hill’s face. One of Theresa May’s two chiefs of staff emerged from the safe space reserved for the senior staff at the rear of the war room in Conservative Campaign Headquarters. She was looking for the other chief, Nick Timothy. Hill was a thin and elegantly dressed brunette in her early forties whose waif-like appearance concealed a backbone of pure galvanised steel. ‘Where’s Nick?’ she asked. Her voice was a sweet Scottish lilt that belied a tongue which could crack like a whip. Hill was a figure of authority but her voice betrayed her nervousness. ‘Her face was just white,’ a witness recalled.

In the weeks to come those who were there would see the next few moments unfold again and again in their mind’s eye like a Martin Scorsese film, indelible images that jump-cut into a portrait of unfolding disaster. A member of the Conservative media team, which Hill had commanded for the previous seven weeks, said, ‘I looked at her and thought, “That’s not somebody who’s been told good news.” She grabbed Nick and took him to the Derby room.’ It was Thursday 8 June. Election day. The aide looked at his watch, so he would remember the time. ‘The moment I knew it was fucked was at 9.56 p.m.,’ he said.

Nick Timothy looked both like he meant business and like an egghead – fitting for one of the best Conservative policy brains of his generation. Like many political players he was a figure of contradictions, sometimes easy company, smoothly charming to both men and women. He spoke with an accent that betrayed a little of his Midlands upbringing and a great deal of the relentless inner drive that had taken him from working-class Birmingham to the pinnacle of a Conservative government. Thirty-seven and balding on top, Timothy had become a recognisable public figure thanks to the lustrous beard he wore, which would not have looked out of place on a nineteenth-century Russian novelist. In Tory circles ‘Timmy’ was most usually compared to the 3rd Marquess of Salisbury, the last Tory prime minister to sit in the House of Lords.

When Hill and Timothy emerged from the side room and made their way to the safe space again, others, anxious now, stood rooted to the spot. ‘The two of them were the only people moving,’ one recalled. A Conservative special adviser – a ‘spad’ to all those in Westminster – turned to Liz Sanderson, one of May’s Downing Street staff, and asked what sort of percentage lead the Tories would need in the exit poll to have a good night. ‘I don’t know what good is supposed to look like,’ the adviser said. As Big Ben struck ten, the BBC’s David Dimbleby announced that Britain was on course for a hung Parliament. The Conservatives were set to lose seats. ‘It dropped on the screen and I thought, “Well it ain’t fucking that.” I burst into laughter because that is my reaction to anything totally catastrophic.’

No one else was laughing. ‘The whole place was like someone had been murdered,’ another spad recalled. There was a paralysing quiet. ‘Panic looked like the most wonderfully British panic, which was total fucking silence,’ a Downing Street official said. ‘The air just went from the room. It was like a vacuum.’

Hill and Timothy spoke to Theresa May by phone. The prime minister was at home in her Maidenhead constituency. They agreed to await the results. Inside, May prepared for the worst. She had already had a little cry. After a seven-week campaign which was supposed to be a victory lap, May had taken her party backwards. Over the next eight hours, her expected majority of sixty or more dissolved into a net loss of thirteen seats. Conservative staff fell into a deep depression. The campaign had not been enjoyable but the prospect of victory had kept them going. Now that was gone. ‘I felt like Andy Dufresne in The Shawshank Redemption,’ one spad said. ‘I had crawled through a mile of shit and there was supposed to be a boat or money or Morgan Freeman coming to hug me at the end. Instead, it was just a pile of poo, and I was stuck in a pond with the rain pouring down on me.’

The political implications were as acute as the personal. A prime minister who had seemed impregnably strong was suddenly dangerously weak and fighting for her career. An election called to strengthen Britain’s hand in negotiations on the country’s exit from the European Union – ‘Brexit’ as it was now known to everyone – had left the UK disempowered at a critical moment in her history. May’s two closest aides, who had been as dominant a duopoly as 10 Downing Street has ever seen, saw their power evaporate. Timothy and Hill had helped to create the public being of Theresa May. They were her greatest cheerleaders and defenders. Now they were to be sacrificial lambs for the disaster that was unfolding, their best service to throw themselves to the wolves so that she might escape their jaws.

It had all been very different on results night a year earlier. Nick Timothy was in a remote Sicilian mountain-top village with his then fiancée Nike Trost on the night of the EU referendum. He was a convinced Brexiteer but did not think Leave would win. Halfway through the night his phone began beeping with messages saying ‘Are you watching?’ Timothy took out his laptop and began live streaming Sky News as the biggest electoral earthquake in modern political history unfolded. His partner, a German citizen, realised what was happening and groaned, ‘Oh my God!’ By dawn it was clear that, after forty-four years, Britain had voted to leave the European Union by a margin of 52 per cent to 48 per cent.

Over his hotel breakfast, Timothy watched David Cameron resign as prime minister. A German family at the next table lectured him about how bad the result was for Europe. The Italian woman who owned the hotel was more enthusiastic: ‘This is British Brexit, it’s the Italians next!’ As the sun came out Timothy and Trost booked their flights home. He knew this was a defining moment in his life. By then he had already spoken with the two other women in his life: Theresa May and Fiona Hill. For a decade they had discussed how to make the Conservative Party more electable and had quietly positioned May for a tilt at the top. Timothy had a leadership campaign to run, perhaps a country to run. This time he was convinced he would win. This is a play with many actors, but overwhelmingly it is the story of those three people and how they took charge of the most complex political conundrum since the Second World War, one which unfolded in the small hours of 23 June 2016.

The road that brought them to that moment four minutes before ten has many tributaries. The first came in a geography tutorial meeting at Oxford University in the mid-1970s when the young Theresa Brasier turned to a fellow student, Alicia Collinson, and first expressed a desire to become prime minister. Collinson was already the girlfriend of another future cabinet minister, Damian Green, and the two students spent their university years in a social circle around the Conservative Association and the Oxford Union which included others who would find future fame in Westminster: Alan Duncan, Michael Crick and Philip Hammond. Brasier’s most significant meeting in those years – famously at the instigation of Benazir Bhutto, the future leader of Pakistan – was with Philip May, a president of the union who was to become her husband in 1980 and her ‘rock’ thereafter.

The serious, dogged devotion to ‘public service’ and May’s occasionally pious insistence that her only goal was to ‘do what I think is right’ appeared to come from her father, Anglican vicar the Revd Hubert Brasier. The cabinet colleague who said, ‘She is extraordinarily self-contained,’ sought an explanation no deeper than her status as an only child, the death of both her parents in her mid-twenties and the Mays’ subsequent discovery that they could not have children. Hubert Brasier died in a car crash in October 1981; his wife Zaidee succumbed to multiple sclerosis a few months later. Bill Clinton, Tony Blair and Barack Obama all lost parents when they were young.

When Andrea Leadsom, against whom May faced off for the Tory leadership in July 2016, questioned her suitability for the job because she was not a mother, it was Leadsom who was forced to drop out. Yet the questions she raised about May’s emotional intelligence were to become a feature of her difficulties eleven months later. Leadsom had been the third major rival to self-immolate. George Osborne had gone down with David Cameron’s ship after lashing himself to the mast of the Remain campaign during the EU referendum. Then, as the battle to replace him began, Boris Johnson showed less commitment to victory than his campaign manager, Michael Gove, would have liked, prompting Gove to declare him unfit for the top job, a shot fired from such an angle that it ricocheted into Gove’s own foot. The result was that May inherited the Tory crown without either her colleagues or herself learning what she was like under sustained fire during a campaign. They were soon to know.

Those looking for clues about the sort of prime minister she would be would have found contradictory messages from her past. After twelve years at the Bank of England and a council career in Merton, south-west London, where she crossed paths with another future colleague, Chris Grayling, May became an MP in the Labour landslide of 1997. These were the darkest days of opposition. She was the first of her intake into the shadow cabinet two years later. Initially, May was seen as a moderniser. As the first female party chairman in 2002, she delivered a few home truths from the conference platform, urging the grassroots to change. ‘You know what people call us? The nasty party.’ Katie Perrior, May’s press mouthpiece at the time, recalled, ‘The traditionalists around Iain Duncan Smith, the Tory leader, were ordering Mrs May to remove the words “nasty party” from the speech. On the floor below, a gang of modernisers including Mrs May, staring two huge electoral defeats in the face, were thinking there was not much to lose and were determined to press on.’1 (#ue9c4db89-5b5e-5b0a-a1b4-0adc78a42b85) May did not endorse the ‘nasty party’ label but to many members she had legitimised criticism of her own team. Yet, her analysis that the public were losing faith in politics was ahead of its time.

May’s appointment as home secretary by David Cameron in 2010, when the coalition government was formed, added further layers of complexity to her politics. Cameron joked that he and May were the only two ministers who supported the Tory commitment to reduce net immigration to the ‘tens of thousands’. Yet May also led a crackdown on police ‘stop and search’ powers, which she felt were directed unfairly at young black men, and a crusade to stamp out modern slavery. May was hard to categorise politically. Nick Timothy said, ‘Those things aren’t mutually exclusive but hearing it from the same person leads people to think, “I don’t really understand what that person stands for.” She doesn’t allow herself to be put into ideological boxes.’2 Colleagues think being home secretary changed her. A former special adviser said, ‘If you spend years and years saying something you do end up believing it. When she was shadow work and pensions I used to work with her on things like parental leave. She was into gender equality and social liberalism. Being home secretary for six years does something to you.’ Willie Whitelaw, who lost the 1975 leadership contest to Margaret Thatcher and then became her home secretary, is said to have remarked that no home secretary should ever become prime minister because they spend their time trying to stop things from happening rather than leading from the front.

The pattern May set in the first decade became a blueprint for her premiership – pathological caution punctuated by moments of great boldness and bravery. She fought a tenacious and ultimately successful battle to deport Abu Qatada, the ‘hate preacher’ branded Osama bin Laden’s ambassador in Europe – in the face of a Human Rights Act that appeared to make it impossible. She woke up one morning in 2012 and used the human rights of Asperger’s sufferer Gary McKinnon as reason not to deport him to face hacking charges in the United States, a decision that took guts even if it did virtually guarantee the support of the Daily Mail, which had been campaigning for McKinnon, in a future leadership contest. Former Home Office official Alasdair Palmer said, ‘When she is convinced that her cause is right, May can be determined, even obstinate.’

In the Cameron cabinet, May was an oddity, someone the Cameroons would have liked to ignore but knew they could not. Her abilities and virtues stood in direct counterpoint to those of Cameron and his sidekick George Osborne. Where Cameron excelled at presentation and pulling victory from the jaws of defeat with glib displays of concentration and political charisma, May was a grinder, a determined reader of documents who moved towards her conclusions with all the facility of a static caravan on a low loader. Having reached those conclusions, she was unbending in their defence however inconvenient her colleagues found it.

Where Cameron was open, May was secretive. One civil service official said May and her Home Office permanent secretary Helen Ghosh ‘would go for weeks without speaking’. May regularly kept both Number 10’s staff and her own in the dark about her intentions. A longstanding aide added, ‘She’ll tell you the truth. If she doesn’t want to tell you, she won’t make any bones about it, she just won’t tell you. That’s not an insult, it’s just that she’s keeping her own counsel.’ Where Osborne was imaginatively political and tactical, May obsessed about doing the right thing after due consideration, sticking to her principles. ‘Politics,’ she was fond of saying, ‘is not a game.’ Cameron and Osborne revelled in being the best game players in town.

While the Cameroons shared dinner parties as well as political views, May dined in the Commons with her husband. In her leadership launch speech, she explained, ‘I don’t gossip about people over lunch. I don’t go drinking in Parliament’s bars.’ A senior party official said, ‘She is the least clubbable politician I know.’ Alasdair Palmer had a typical lunch experience: ‘She lacks the personal charm of most politicians. Conversation was not easy. Somewhat to my alarm, May had no small talk whatsoever. She was perfectly comfortable with silence, which I found extremely disorienting.’3 This detachment would continue in Downing Street, where one aide observed, ‘She’s so removed from the world her colleagues live in.’ The aide said, ‘Gavin [Williamson, the chief whip] would come in and explain that this MP was having an affair. The “ins and outs” stuff the whips call it. She’d just be exasperated and say, “Why can’t they just do the job.”’

There was a peculiarly English social edge to May’s differences with the Cameroons. They were public schoolboys, easy company in the salons of the capital; she was a provincial grammar-school girl with no small talk. Although she and Cameron shared a home counties Conservatism, his social circle touched the lower hem of the aristocracy while May was the product of genteel vicarage austerity. Cameron’s Christianity, it was said, ‘comes and goes’ like ‘Magic FM in the Chilterns’; May’s was steadfast if seldom talked about. Where Cameron’s approach to those less well-off found voice in a Macmillanite soft paternalism, May’s simmered with the determined rage of one disgusted by injustice, but a rage that her buttoned-up personality never quite allowed her to express in a way that would have turned voters’ heads.

May’s ordinariness was on display when she moved into Downing Street. The new prime minister was asked whether she wanted the gents’ loo outside her office converted for her use. It had previously been for the sole use of Cameron. May replied, ‘Absolutely not, I’m not wasting a penny of taxpayers’ money. I’ll go down the corridor like everybody else.’ The same humble approach ensured she went door-knocking in her constituency every weekend. Hill explained to friends, ‘She thinks if she underestimates Corbyn and Labour then it will come back to bite her in the bum. She doesn’t take her majority for granted.’ Another aide saw it as a chance of escape: ‘There is a point where she has had enough of being in Number 10. It’s a decompression thing, when she goes back and has that connectivity with people that she is comfortable with. When she doesn’t have that she gets ratty and you can see the pressure start to build on her.’

May preferred people with knowledge rather than rank. ‘She didn’t want senior bullshitters,’ a Downing Street aide said, ‘she wanted younger people who knew what they were talking about.’ A civil servant saw the same down-to-earth approach: ‘The custodial staff in Number 10 and the ones who take her tea or sandwiches, they were all happier when she arrived after Cameron because she would address them by name. They felt that she treated them like people who were helping her rather than lackeys.’

May’s social awkwardness and secrecy meant even close colleagues knew little about her. Some who worked closely with her were perplexed by the efforts of journalists and MPs to discover the ‘real’ Theresa May. One Tory who worked for her said, ‘I’m not sure there’s much there. She’s very sensible. There’s no interest in ideas. Philip is a very sweet man but it takes a certain type of character to marry someone who is so bland. Their conversation is completely banal.’

May appeared determined, even when she became prime minister, to deny there was any such thing as ‘Mayism’. ‘She’s quite anti-intellectual,’ a former minister said. ‘She’s not a great thinker. To admit of an “ism” would be to suggest there was a great Heseltinian long-term plan to be leader – which of course there was.’ The plan, though, was not May’s but that of Nick Timothy and Fiona Hill.

The fact that Theresa May seemed the only possible option for prime minister by 13 July 2016 was the work of her two closest aides, who were rewarded with the top staff jobs in Downing Street – for ever more known as ‘the chiefs’. Nick Timothy grew up in a working-class family in the Tile Cross district of Birmingham. His father left school at fourteen and worked his way up from the factory floor to become head of international sales at a local steel works. His mother did secretarial work at a school. Margaret Thatcher converted his parents to the Tory Party and Timothy was politicised by the 1992 general election because the Labour Party was threatening to close the grammar school – Edward VI Aston School – which had given him a chance in life. He went on to get a first-class degree in politics from Sheffield University and then landed a job in the Conservative research department, where his path first crossed with May’s.

May and Timothy quickly realised they were political soulmates. Over a period of fifteen years they fashioned an analysis of how the Conservative Party should reposition itself to broaden its appeal, with ‘a conservatism that is about the welfare and interests of the whole of the country across class divides and geographical divides’ and the belief that ‘there needs to be more of a role for the state’. Katie Perrior said, ‘For her it was always about putting the party back in touch with ordinary working people – the Conservatives should no longer be the party of the rich and the privileged.’4 A colleague of Timothy said, ‘He wanted to complete the process of Tory modernisation, but his brand of modernisation was always about class.’ Timothy was adamant that he was not ‘Theresa’s brain’, the title he had been awarded by journalists. ‘Suggesting I’m the creator of those ideas is absurd and insulting to her,’ he said. ‘I do think there’s more than a hint of sexism.’5 A cabinet minister close to May agreed: ‘The idea that she is this wax palette which can be inscribed by this curious pair is not correct. She has a very, very strong sense of public service and believes from a place deep within herself that injustice is wrong.’ Like May, Timothy was a man of contradictions. ‘He’s very traditional,’ a close friend said. ‘Even as a twenty-something he had a flat that looked like a man in his mid-forties. It’s all old-fashioned paintings and dark antique furniture.’ Yet this arch-Brexiteer’s two longest relationships had been with European women, a Belgian and a German.

In 2006, Timothy met Fiona Hill outside The Speaker pub in Westminster and the cerebral staff officer acquired an artillery commander. ‘I just immediately knew we were politically in the exact same place,’ she told friends. Hill had a blunter approach, once declaring, ‘We fucking hate socialism and we want to crush it in a generation.’ Hill also came from a poor background, growing up in Greenock outside Glasgow. She forced her way into a job on the Scotsman newspaper, writing football reports and features, developing the news sense and sharp elbows that would take her to Sky News, where she worked on the newsdesk and met her husband, Tim Cunningham, whose name she was to take until they divorced. When she joined the Conservative Party press office in 2006 Timothy introduced her to May. ‘They know each other inside out,’ said one who has worked closely with both. ‘Sometimes Fi can say something and Nick will say, “That was literally in my head.” They both like working hard. It sounds too pious to say they believe in fairness, but they do – and that is what they share with Theresa.’

Hill and Timothy were equals but Hill’s media background meant she was seen by the outside world as primarily a communications professional. As someone who had helped May develop legislation on modern slavery and domestic violence it grated. ‘She’s very sensitive about the idea that Nick is the policy brain and she’s just a comms person,’ a colleague said. Hill was also resentful of claims that she was May’s personal stylist, even though she did advise her on clothes. On one foreign trip Hill erupted with rage when the events team passed her May’s handbag. It made her late for a meeting with Vladimir Putin. ‘They never give Nick the handbag,’ she complained to Katie Perrior. ‘What am I? The fucking handbag carrier?’ When Perrior said she would take the handbag instead, Hill attacked: ‘This is why you don’t have any gravitas – because you’re willing to take the handbag.’ In pointing out the different treatment of Timothy and the senior women, Hill had a point.

Colleagues say Hill’s most important attribute – in matters of both policy and appearance – was to act as May’s cheering section, boosting her morale. ‘Fi operates as the emotional support: “You’re fine, you look great, you don’t need to care about this”,’ a colleague said. At one meeting in Downing Street May had been put off by something. ‘Fi leant across and put her hand on her arm and said, “Don’t worry, we said there would be days like this,”’ a witness said. ‘I thought that was a tragic sight, but it also illustrated how connected she is to both of them. They are literally the people who reach out and put an arm around her and tell her it is going to be all right.’ A senior Home Office official agreed: ‘Theresa was unable to take big decisions without the clear steer and guidance of Fiona.’

The relationship between Timothy and Hill was compared by colleagues to that between brother and sister or even lovers, which they had never been – often fractious but with a united front presented to the world. ‘They never let a cigarette paper come between them in public,’ a colleague said. Another observed, ‘They’re like siblings, they fight a lot. They don’t care what they say about each other. But there’s a loyalty there. It doesn’t matter what they’ve done, it doesn’t matter how bad the other person’s behaved, they’ll always cover the other’s arse.’

Timothy and Hill had a devotion to May which surpassed the usual relationship between politician and staff. A former minister who discussed May with Timothy recalled, ‘I was talking about her appeal, I said, “I know this sounds almost religious which it’s not,” and he said something like, “Yes, it is religious.”’ Timothy was joking but his zeal left an impression on the MP: ‘That was a glimpse of how strongly her supporters had come to see her as the messiah.’

Together, ‘the twins’ set themselves up as May’s gatekeepers. ‘You had to go through them for everything,’ a senior Border Force official said. Some said May’s personal limitations and lack of feel for people meant she needed Hill and Timothy’s guidance. ‘She didn’t have the character to elicit the information she might want,’ a Home Office official said, ‘or know what’s true and what’s not true. You and I will hear a story and know if it’s right or not. I think she found that very difficult. She became reliant on others to do that screening, shielding, interpreting on her behalf.’ Others disliked the way Hill and Timothy substituted their judgement for May’s. When Alasdair Palmer, a Home Office speechwriter, did once see the home secretary alone, he wrote the speech to reflect May’s views and then submitted it to the twins. Hill asked, ‘Have you been talking to the home secretary?’ Palmer said he had. ‘I thought so,’ she said. ‘I don’t think she should say these things.’ Palmer suggested that was up to May. ‘It’s up to me,’ Hill said.6

Their determination to go to any lengths to protect May led to disaster in June 2014. Hill’s downfall came as a result of a feud between May’s team and Michael Gove, then the education secretary, over the issue of extremism in schools. Gove briefed journalists from The Times that the Home Office was to blame for the failure to tackle the so-called ‘Trojan Horse’ plot to take over schools in Birmingham. He singled out for criticism Charles Farr, director of the Office for Security and Counter-Terrorism, saying officials only took on Islamist extremists when they turned to violence, an approach Gove compared to ‘just beating back the crocodiles that come close to the boat rather than draining the swamp’. At that time Farr was in a relationship with Hill.

Furious, she retaliated by releasing onto the Home Office website a letter May had written to Gove, accusing his department of failing to act when concerns about the Birmingham schools were brought to its attention in 2010. The document was published in the small hours of the morning, after Hill and Timothy had enjoyed a night out at the Loose Box restaurant in Westminster with journalists from the Daily Mail. To make matters worse, Hill gave quotes to journalists suggesting Gove had endangered children. ‘Lord knows what more they have overlooked on the subject of the protection of kids in state schools,’ she said. ‘It scares me.’ Following an investigation by Sir Jeremy Heywood, the cabinet secretary, David Cameron ordered that Hill be sacked, and that Gove issue a written apology to both May and Farr.

Hill found work at the Centre for Social Justice, a thinktank founded by Iain Duncan Smith, where she wrote a report calling for more effort by the authorities to tackle modern slavery, before taking up a post at lobbying firm Lexington Communications.

Timothy got his comeuppance a few months later in December 2014 when he and Stephen Parkinson – another of May’s Home Office special advisers – were kicked off the list of Conservative candidates for refusing to campaign in the Rochester by-election. The decision was taken by Grant Shapps, then the party chairman, who had decreed that all candidates and special advisers had to help out. Shapps felt they ‘thought themselves above the process’ and made an example of them. May phoned Shapps twice to ask for their reinstatement and also collared him in the margins of a cabinet meeting, but he stood firm. He reflected afterwards that, despite being a cabinet colleague for three years, it was the only time May had bothered to talk to him. It was a ripple in a pool which was to have further implications later.

In July 2015, Timothy became director of the New Schools Network. Yet he continued to exercise influence from afar, contacting his protégé Will Tanner, another special adviser, regularly about the running of May’s office. A year later the gang was back together in Number 10. An MP close to May summed up the relationship: ‘She wouldn’t be in Downing Street without their support. And she wouldn’t have got to Downing Street, if she didn’t have something about her. What Nick and Fi added to that was the ability to make the political weather. Very few people are capable of that.’

Thrown into the deep end, May’s authenticity made her popular. A cabinet colleague said, ‘There are a very small collection of politicians who are immediately attractive to the public, because they’re normal human beings, they see someone who’s true to themselves – Ken Clarke is the classic example. You will never hear Ken say something in private that he would not say in public. The PM is the same.’ During the leadership contest, Clarke had given May a helping hand, calling her a ‘bloody difficult woman’. May adopted the phrase as her calling card. Those looking for her weaknesses might have reflected that Clarke had explained her better than she had ever managed herself.

There were other clues too about what was to come. During the leadership election one of her aides said, ‘A large number of MPs said I’m backing Theresa because she came to my constituency for the dinner fifteen years ago, and I’ve never forgotten it. She has met and engaged with a huge number of people, and most of those people really like her. The problem is people who’ve never engaged with her. And that’s where her appeal falls short. She can’t stand on a stage.’ An official who worked with May in the Home Office said, ‘She instils loyalty in people when you’re close. At a distance, it’s much more difficult to get that. She doesn’t reach out to people. She knows who she is and expects you to come to her.’ Knowing how difficult that was for May, Hill and Timothy devised for her a ‘submarine strategy’ whereby she kept her head down, surfacing rarely to make carefully planned set-piece interventions. At the Home Office, where most news is bad news, it was a shrewd strategy. May dodged public scrutiny but made three of the boldest speeches of the Cameron years – a 2013 party conference speech which was a leadership pitch in all but name; a 2014 warning to the Police Federation that officers should ‘face up to reality’; and a party conference speech in 2015 in which she threw raw red meat to the party faithful on immigration that earned her the appellation ‘Enoch Powell in a dress’.

In Number 10, Hill and Timothy took the same approach. On the steps of Downing Street May gave a very well received speech vowing to ‘fight against the burning injustices’ of poverty, race, class and health and make Britain ‘a country that works for everyone’. When it came time to set out May’s plans for Brexit, they knew it was the moment to write a big speech.



PART ONE



1




‘Brexit Means Brexit’ (#ulink_1a7db666-d659-56f5-a073-6807329b1a82)


It all began with a phrase and an idea. The phrase, in a perfect encapsulation of so much that was to follow, was part Nick Timothy, part Theresa May. The two of them and Fiona Hill were in May’s parliamentary office. It was July 2016 and David Cameron had resigned. The Conservative leadership contest was under way and they were discussing how May, a leading though not prominent Remainer, could reassure the party base that she would respect the results of the EU referendum. As they tossed around phrases, Timothy said, ‘Brexit means Brexit,’ at which point May chimed in, mimicking the jingle-like cadence Timothy had used and adding the coda, ‘… and we’ll make a success of it’.

It was a phrase, as Timothy was to put it, ‘with many lives’. The immediate purpose ‘was to be very clear that she, as someone who had voted remain, respected the result and Brexit was going to happen’. In the months to come the phrase evolved. ‘It also became a message to people who didn’t like the result that they had to respect it. Brexit had to mean actually leaving and limiting the relationship, not having us effectively rejoin.’

‘Brexit means Brexit’ was a statement of intent, but there was still the question of what that meant in practice. Britain had voted to leave the European Union, but the destination had not been on the ballot paper. The Leave campaign deliberately never specified which model of future relationship should be pursued. Public debate dissolved into whether the UK would mimic Norway, Switzerland, Turkey or Canada.

Norway was a member of the European Economic Area (EEA) along with all twenty-eight EU countries, plus Liechtenstein and Iceland, giving it full membership of the single market, an area of 500 million people within which the free movement of goods, capital, services and labour – the ‘four freedoms’ – was guaranteed. While outside the European Union, Norway paid money into the EU budget and had to agree to all the standards and regulations of the market, except those on agriculture, fisheries, and justice and home affairs. The downside was that Norway was a ‘rule taker, not a rule maker’ and had no say over the future rules of the market.

Switzerland was a member of the European Free Trade Association (EFTA) but not of the single market, and its access to the market was governed by a series of more than one hundred bilateral agreements with the EU governing key sectors of the economy, though crucially not its banking or services sector. The Swiss made a smaller financial contribution to the budget than Norway and had to implement EU regulations to enable trade. A referendum in 2014 to end the free movement of people had led to retaliation from the EU.

Turkey, like Andorra and San Marino, was in a customs union with the EU, while outside the EEA and EFTA. That meant it faced no quotas, tariffs, taxes and duties on imports or exports on industrial goods sold into the EU and had to apply the EU’s external tariff on goods imported from the rest of the world. The deal did not extend to services or agricultural goods.

Canada had just concluded a comprehensive economic and trade agreement (CETA) with the EU after seven years of negotiations, which eliminated tariffs on most goods, excluding services and sensitive food items like eggs and chicken. The deal gave Canada preferential access to the single market without many of the obligations faced by Norway and Switzerland, for goods that were entirely ‘made in Canada’, but for Britain it would not have given the financial services sector ‘passporting’ rights to operate in the EU.

The alternative to all these models was to leave with no deal and revert to the rules of the World Trade Organisation (WTO), which imposed set tariffs on different products. Supporters of free trade said the average 3 per cent tariffs were not burdensome but on cars, a key industry for Britain, they were 10 per cent. Removing all tariffs would also be expected to see the market flooded with cheap food and steel, threatening the UK’s farming and manufacturing.

At this point the phrase ‘soft Brexit’ was taken to mean membership of the single market and the customs union, while ‘hard Brexit’ meant an alternative arrangement, though these terms were to evolve.

This approach was anathema to May, who rejected all attempts to compare the deal Britain might negotiate to any of the existing models. She told her aides, ‘That’s entirely the wrong way of looking at it.’ From the beginning May knew she wanted a new bespoke deal for Britain. The prime minister, with encouragement from Hill, saw the process as similar to negotiation she had carried out as home secretary in October 2012 when she opted out of 130 EU directives on justice and home affairs and then negotiated re-entry into thirty-five of them, including the European Arrest Warrant, several months later. ‘We have already done what was in effect an EU negotiation,’ a source close to May said. ‘We know how it works, we know what levers to pull and we know how to get what we want out of a negotiation.’

The first thing they wanted – the big idea – was a dedicated department to run Brexit. May, Hill and Timothy believed the ‘bandwidth’ in Whitehall was seriously lacking. ‘We knew we’d have a big challenge to get preparation for Brexit up and running quickly,’ a source close to May said. During a meeting in Nick Timothy’s front room the weekend before May became leader they decided they would create a standalone department, a move that put noses out of joint at the Foreign Office and the Treasury in particular. ‘We know Whitehall, we know how it works,’ the source said. ‘Unless you have a standalone department heading in the same direction then everyone works in silos.’ It was the first of many decisions with far-reaching consequences made on the hoof.

The idea of a new department for Brexit was enthusiastically supported by Sir Jeremy Heywood. The owlish cabinet secretary was a problem solver par excellence who had made himself indispensable to four prime ministers in succession, but his enemies saw a mandarin whose first priority in all situations was to maintain his own power base. As the official who had carried out the review that led to Hill’s departure from the Home Office, Heywood was understandably on edge after Team May’s arrival in Number 10. Under Cameron, the cabinet secretary had been driven to Downing Street every morning and then walked through Number 10 to the Cabinet Office. It was a symbol of his status. ‘When she came in that changed, he went through the Cabinet Office door,’ a senior civil servant said. ‘That was symbolic, putting him in his place.’

Heywood and May were well acquainted. They had dined together when she was home secretary. ‘He used to say that he didn’t look forward to these dinners because they had run out of things to talk about by the main course,’ a fellow mandarin recalled. However, the dinners served a purpose on both sides. ‘She did it because she was paranoid about what the centre was saying about her and it was a way of finding out,’ the mandarin said. Heywood, meanwhile, was spying for Cameron, who wanted to know what May wasn’t telling him. ‘In the Home Office she pulled up the drawbridge,’ said the mandarin. ‘It was like Gordon Brown times two.’

Keeping his job meant Heywood supporting the creation of new departments, even though that put him at odds with other senior civil servants like Sir Ivan Rogers, Britain’s permanent representative in Brussels – effectively the UK’s ambassador to the EU. Rogers – an intense character with a high forehead who spoke at one hundred miles an hour – felt that setting up new departments would consume the time and energy of officials that could have been better directed at the details of a potential deal.

The other issue facing Heywood was that almost no preparations had been done for Brexit, since Cameron had banned the civil service from working on contingency plans in the run-up to the referendum. The cabinet secretary had hoped to spend the summer getting the civil service ready but the earlier-than-expected end to the Tory leadership contest put paid to that. ‘We were caught flat footed,’ a senior civil servant admitted. One of May’s team said, ‘I remember thinking when I got to Number 10 that the absence of any real thinking about this massive issue the country was facing was really quite remarkable.’ Some said Heywood should have ignored Cameron. ‘It’s rather shocking that they did no preparations for Brexit,’ a Tory peer said. ‘They had a moral duty to prepare. People should have called for Jeremy’s head.’

The Department for Exiting the European Union (DExEU, pronounced Dex-ee-oo) was born out of the European and Global Issues Secretariat, a group of forty officials in the Cabinet Office, and quickly cannibalised the European affairs staff of the Foreign Office as well on its way to engaging more than four hundred staff. From early in her leadership campaign, May knew who she wanted to run DExEU – David Davis. ‘DD’, as he is known in Westminster, had been a whip during the passage of the Maastricht Treaty and then John Major’s Europe minister, jobs he had done with the devil-may-care bravado of an ex-SAS territorial, which remained the most interesting line on his CV and gave him an air of menacing charm that he had put to good use over the years. Davis finished second to Cameron in the 2005 leadership contest before throwing away his frontbench career as shadow home secretary with a maverick decision to resign his seat and fight a by-election to highlight civil liberties issues. That finished him with the Cameroons and paved the way for May to become home secretary. Davis became May’s most obstreperous backbench opponent during her time at the Home Office. A vociferous critic of the snooper state, he even joined forces with Labour’s Tom Watson to take ministers to court over the government’s surveillance powers. However, these confrontations had bred mutual respect not contempt – and crucially had even impressed Hill, whose stance towards May’s political enemies more usually resembled that of a lioness protecting her cubs. She told a friend, ‘He’s an absolute pro and having been on the receiving end of his campaigning for things like counter-terrorism laws I know how good he is. When he came onto the leadership team we really hit it off.’

Having been given a chance to do a serious job in government, Davis resolved to make himself useful to May and not allow policy differences to open between DExEU and Downing Street. ‘He decided he wanted to be a political consigliere to her,’ a source said. Davis’s attempts to ingratiate himself with May went to extreme lengths. ‘She and DD had this hideous flirting thing going on,’ said one official who attended their meetings. ‘She twinkled at DD. It was awful, it was like your grandparents flirting. Everybody wanted the ground to open up and swallow them whole.’

At Hill’s instigation, and with Katie Perrior’s encouragement, James Chapman – a former political editor of the Daily Mail who had been George Osborne’s special adviser – joined as Davis’s special adviser and chief of staff. The appointment raised eyebrows since it was a leap to go from the man most determined to stop Brexit to work for the minister now charged with delivering it, but Chapman was highly intelligent, calm under pressure and brought a deep knowledge of the Eurosceptic press, who would have to be kept on side through the negotiations. It was to be a mistake for both him and Davis.

To start with, DExEU was ‘a total and utter shambles’. Four ministers were crammed into 9 Downing Street, where there had previously been just one. ‘The department didn’t function properly,’ said one official. ‘One of the floors was a courtroom which we couldn’t change because it was a listed building. The press office people were sitting in the dock in the Supreme Court of the Colonies.’ The brass plaque on the front door still read ‘Chief Whip’s Office’.

DExEU was able to coax highly regarded officials to join from across Whitehall since Brexit was a career opportunity, but the civil service had to implement an outcome in which many did not believe. In Brussels, Ivan Rogers gave his staff a pep talk: ‘You’re going to be integral to the biggest negotiation the country’s ever done and your expertise is valued. But if you can’t work for a government that’s delivering a Brexit – and that may be a hard Brexit – don’t do it. Walk out.’ Very few did. But DExEU officials were hamstrung by not knowing May’s planned destination. ‘It could be anything from staying in the EEA to hard Brexit,’ an official said. ‘They didn’t really know where to start.’

The architecture created by Heywood and the chiefs created two problems, which would hamper the government’s planning for the next year. As the lead department, DExEU was both a key participant and expected to be an honest broker with other departments. A cabinet minister said, ‘DD was both a player and the referee.’ The resentments led to briefings against Davis and his new department. ‘There was a turf war,’ said a senior DExEU official. ‘The Foreign Office was massively put out and wanted to demonstrate that DExEU didn’t know what they were doing. We had to fight against that backdrop. It was Jeremy Heywood’s fault. There should never have been a separate department.’

The second problem concerned the official who was to play the most important role in the Brexit negotiations. Oliver Robbins was appointed not only permanent secretary at DExEU, the most senior mandarin in charge of the department, but also the prime minister’s personal EU envoy – her ‘sherpa’, in Brussels parlance. Tall, mild-mannered and bespectacled, Robbins was a labrador of a man but with the brains of a fox. Just forty-one when he got the jobs, he had little EU experience. What he did have was the patronage of Jeremy Heywood – who was grooming him as a successor – the trust of Theresa May, from a spell as second permanent secretary in the Home Office, and the power of incumbency as David Cameron’s last Europe adviser. He had also served as the prime minister’s principal private secretary during the handover from Tony Blair to Gordon Brown and as the director of intelligence and security in the Cabinet Office. He combined his Rolls-Royce CV with bags of intelligence and sharp elbows clothed in a slightly old-fashioned pompous bonhomie.

Ivan Rogers told Robbins he was taking on too much. ‘You’ve got two impossible jobs,’ he said. ‘Try sticking to one impossible job. The only job that really matters is sherpa because you have to be her eyes and ears around the circuit. You need to be the person to whom people transmit messages if they want to get them to the prime minister. If you’re not that, you’re toast.’

Robbins disagreed. ‘It would be harder to do one job and not the other,’ he said. A year later it was decided this was a mistake.

Robbins had May’s trust. On foreign trips, other officials watched jealously as he talked to the prime minister alone, without Hill or Timothy listening in. ‘He was allowed to have conversations with her one on one,’ a colleague said. A senior mandarin who worked closely with Robbins described him as ‘an upwards manager’, good at ingratiating himself with his bosses, less so with his peers.

Robbins’ split role created tensions with David Davis. ‘DD and Olly didn’t see each other regularly enough and Olly was travelling an enormous amount,’ a colleague said. Robbins’ office in 70 Whitehall was a ten-minute walk from Davis’s in 9 Downing Street. ‘The consequence was they hardly ever saw each other. You want your minister and your permanent secretary – who is also the PM’s sherpa – to be talking to each other all the time and they didn’t.’ That meant May’s two key advisers on Brexit ‘weren’t properly aligning where they were headed’. The official said, ‘DD was therefore saying things in public that were contrary to what Olly thought was a sensible position.’

It was clear to Davis that Robbins put more time and effort into the Downing Street half of his job. ‘His primary concern was the relationship with Nick [Timothy] because he knew nothing was decided by anyone else,’ a DExEU source said. Robbins was not alone in this attitude. Those who had served in the Cabinet Office’s EU secretariat could not see the point of DExEU. ‘There was resentment among the officials that they had ministers at all,’ said a source close to Davis. ‘They just thought they should report to Number 10.’ Davis war-gamed various scenarios for the Brexit negotiations but could never get Robbins to discuss ‘the plan’ – the strategy for the negotiation, which cards Britain held and when they should be played. More than one official concluded, ‘It was all in Olly’s head. It wasn’t really a properly functioning relationship.’

DExEU was not the only new department established that summer. May also ordered the creation of a Department for International Trade (DIT) to drum up deals with countries outside the EU. She handed the keys to Liam Fox, a former defence secretary and Brexiteer whose cabinet career had ended in controversy under Cameron but who was an enthusiast for free trade and travel and had cleverly cultivated May for years. ‘Liam would take her out for lunch, which no one else could bear to do,’ a special adviser recalled. DIT was slower to get off the ground but cannibalised UK trade policy and UK Export Finance, took the Defence Export Services Organisation from the Ministry of Defence and grabbed UK Trade and Investment, the part of the Foreign Office which was supposed to promote business out of Britain’s embassies overseas. It would take until January, six months after the department was set up, to get a permanent secretary: Antonia Romeo, another Heywood protégée. It was not until June 2017 that Britain acquired a lead trade negotiator. Crawford Falconer, an experienced New Zealander, took the job after the first choice, Canadian Jonathan Fried, walked away at the final stage because Heywood refused to raise the £260,000 salary.

When tackling Brexit, May had learned three crucial lessons from David Cameron’s renegotiation with Brussels before the referendum. The first was to ask for what Britain wanted, rather than making an opening offer calibrated to what the rest of the EU might accept. The second was to at least look like you were prepared to walk away from the talks to maximise leverage. The third was not to broadcast her negotiating position in advance to the media or MPs. A sound tactic this might have been, but by September 2016 May’s reticence in spelling out what Brexit really meant had led to claims she was ‘dithering’. The only announcement had been a reassurance to farmers and universities, on 13 August, that until 2020 they would keep the same level of subsidy outside the EU as they enjoyed inside it.

MPs on both sides of the EU divide were twitchy. Ken Clarke, the former cabinet minister and arch-Europhile, accused May of running a ‘government with no policies’. As the party conference approached – it was to be held, appropriately, in Timothy’s home city of Birmingham – May knew she had to add flesh to ‘Brexit means Brexit’.

The prime minister’s challenge was to reassure Brexiteers that she would honour the result of the referendum, despite her decision to vote Remain and despite insisting to those who voted to stay that she would get the best deal possible. The first part of the equation was made easier by May’s less than enthusiastic support for Cameron. ‘She was a reluctant Remainer,’ said one adviser, ‘but she’s never been any fan of the EU. She was absolutely comfortable in her own skin about why we were leaving.’ Timothy was a longstanding Brexiteer and Fiona Hill, while also a Remain voter, was quickly reconciled to the result and an enthusiast for the opportunities Brexit offered. May saw her first priority as confirming the triumph of the 52 per cent, both to prevent civil disorder and protect her own position within the Conservative Party. She told her closest aides, ‘We need to keep this country stable because this could get quite messy.’ The senior Eurosceptics, including veterans like Bill Cash, Bernard Jenkin and John Redwood, plus Steve Baker – the leader of the backbench Eurosceptic forces during the referendum campaign – were agitating. ‘It was a hugely tense moment leading up to conference,’ one sceptic said. ‘Was she going to do Brexit properly or not? All hell could have broken loose.’ A Downing Street aide said, ‘We had to be absolutely clear with the party that Brexit really did mean Brexit – and with some parts of the country. Any confusion would have led to real disruption and calls for another referendum.’ May’s view was, ‘We live in a democracy, democracy has spoken. Now we have to enact it.’

Tory leaders usually give their big conference speech before lunch on the Wednesday. May was keen to lay out her vision for Britain, but if that was not to be drowned out by Brexit she would need to deliver it separately – and first. Timothy said, ‘It’s unsustainable to wait until Wednesday to hear from Theresa when it’s her first conference as leader.’ Hill agreed: ‘We need two speeches and a plan for Europe. Then we can have a big conference speech about our domestic agenda.’ May was ‘already there’ and agreed immediately. She would give a short speech on the Sunday on Brexit.

Used to governing by speech, May’s aides say she used the writing process to define policy, rather than have the speech reflect a pre-ordained line. Timothy discussed with May what she wanted and then wrote a text. The finer points were clarified in ‘an iterative process’ involving May, Timothy, Hill, Jojo Penn, the deputy chief of staff, and Chris Wilkins, the head of strategy who had penned May’s ‘nasty party’ speech fourteen years earlier. ‘The first draft is a hypothesis that either she agrees with or not,’ one of those involved said. ‘Nick being Nick would write the most “out there” option and it would get reined in. The process of drafting and editing gets Theresa to the point of, “Yes, that’s what I want to say.”’

Timothy and May were clear on three things: leaving the European Union meant leaving the jurisdiction of the European Court of Justice in Luxembourg, and leaving with it the single market and customs union over which its judges held sway. Anything else, Timothy believed, would leave May open to the charge that she was trying to undermine the referendum vote, and put the other EU countries in a position to claim that Britain wanted the benefits of EU membership – free access to markets – without the downsides – the cost and the need to accept rules made elsewhere. By opting out of all these areas, May could then try to negotiate some of the benefits without being tied to the institutions. ‘Nick’s view,’ a Downing Street aide said, ‘was that you’re always going to be accused of cherry picking and they’re going to say you can’t cherry pick. Therefore, we should try and forge our own way forward with a new relationship. Nick largely wrote the speech and took pleasure in doing so.’

In the speech, May was to say, ‘There is no such thing as a choice between “soft Brexit” and “hard Brexit”. This line of argument – in which “soft Brexit” amounts to some form of continued EU membership and “hard Brexit” is a conscious decision to reject trade with Europe – is simply a false dichotomy.’ May explained her new deal ‘is not going to be a “Norway model”. It’s not going to be a “Switzerland model”. It is going to be an agreement between an independent, sovereign United Kingdom and the European Union.’ Timothy said later, ‘If you seek a partial relationship the danger is that you will be in the worst of all worlds, where you will be a rule-taker with none of the advantages of being in, but you will also sacrifice some of the advantages of being out.’

There was a demonstrable logic to all this but it is extraordinary that these, the foundational decisions of Britain’s withdrawal strategy, which would shape the next two years of negotiations, were taken, in essence, by two people. The cabinet certainly had no chance to debate them.

Timothy knew where the decisions would take the country but recognised the plan was too controversial to announce so bluntly while emotions were still raw about the referendum result. It would be three months before May admitted publicly, in another speech at Lancaster House, that she wanted to leave the single market and the customs union. ‘You need to conduct the negotiation in a way that takes all of the people with you,’ a source close to May said. ‘I think if we’d said we no longer want to be in the single market at party conference, it would have looked on the EU side like an aggressive statement.’

To distract attention from these major decisions – and to settle key issues of concern – May used interviews with the Sunday Times and the Sun on Sunday to launch the first of two major announcements from her speech. The government would convert the acquis – the existing body of EU law – into British law so that nothing would change on day one of Brexit. Individual laws could then be changed by Parliament in the usual way. The way this was to be accomplished was by a ‘Great Repeal Bill’ which would also do away with the European Communities Act 1972, the legislation that gave direct effect to all EU law in Britain. The paper was briefed with some suitably Churchillian rhetoric from the speech: ‘Today marks the first stage in the UK becoming a sovereign and independent country.’

The rhetoric of repeal was clever since it disguised the fact that the plan was to take every hated Brussels directive for four decades and write them into British law. In private, Davis referred to it as ‘the Great Continuity Bill’. Government lawyers had said it was impossible to do anything else, but in an environment where ministers like Andrea Leadsom were proposing to start tearing up regulations and the Daily Mail was running a ‘scrap EU red tape’ campaign, the move took some guts.

May delivered the second announcement during an interview on the BBC’s Andrew Marr Show on the Sunday morning, pledging to trigger Article 50 of the Lisbon Treaty – the mechanism for kickstarting two years of Brexit negotiations – by the end of March 2017. May had bought time during the leadership election by saying she would not trigger Article 50 before the end of the year. Senior civil servants in DExEU and Ivan Rogers in Brussels had warned her that announcing a timetable was a bad idea because the moment Britain fired the starting gun, ‘you lose pretty much all the leverage you have’, putting Britain on a countdown clock where the other twenty-seven countries set the rules of the negotiation.

On 29 June, five days after the referendum result, the other twenty-seven member states had agreed a policy of ‘no negotiations without notification’ and – to the surprise of some British officials – they had stuck to it ever since. Rogers told May the best way of forcing the EU to compromise would be to say, ‘We intend to invoke in March, but I give you no cast-iron commitment. The moment I’ve seen your draft guidelines document we’ll invoke.’ So confident was Rogers that the prime minister had listened that he told friends in Brussels just days before the conference that May would not invoke Article 50 until the end of 2017. It was proof that even the most experienced civil servants don’t always read the politics of a situation accurately. As one of May’s senior aides recalled, ‘We couldn’t get through conference without putting a line in the sand. We had to say something about timing.’ David Davis was involved in the discussions over the timing, suggesting that the vague ‘before the end of the first quarter’ be changed to ‘by the end of March’, which he believed to be ‘specific sounding’ and ‘hard to demur from later’.

Figures like George Osborne were arguing that no progress would be made in the negotiations until after the German elections in September 2017, so May should delay triggering until then. In retrospect it is possible to conclude that Britain would have been in a stronger position in the talks if the prime minister had set a firm date of October 2017 to trigger Article 50 and announced that Whitehall would spend the next year preparing for the UK to leave without a deal in order to maximise leverage in the negotiations. A minister said, ‘She might just have got away with that.’ But May was a new prime minister who did not wish to antagonise the Eurosceptics. Choosing 31 March as T-Day, Timothy said, ‘I don’t think it is sustainable to take longer.’

Later that day, May opened her speech by dismissing those who ‘say that the referendum isn’t valid, that we need to have a second vote’ or were planning to ‘challenge any attempt to leave the European Union through the courts’. She said, ‘Come on! The referendum result was clear. It was legitimate. It was the biggest vote for change this country has ever known. Brexit means Brexit – and we’re going to make a success of it.’ In addition to the two main factual announcements, the most important passage of the speech came when the prime minister made clear that controlling immigration was her top priority, above even economic prosperity. ‘We are not leaving the EU only to give up control of immigration again,’ she said. A May adviser observed, ‘It’s logical we’d leave the single market because we don’t want free movement. By conference we knew that. The vote for Brexit was about controlling immigration. Everything else flows from there.’

May also announced, ‘Our laws will be made not in Brussels but in Westminster. The judges interpreting those laws will sit not in Luxembourg but in courts in this country. The authority of EU law in Britain will end.’ This was not, as some have suggested, a line smuggled past a confused prime minister. ‘The PM was very clear that the jurisdiction of the ECJ had to come to an end,’ a close aide said. ‘She thinks that is one of the major things that people voted for.’ Yet that decision had huge implications which were far from fully understood in the cabinet and some corners of Downing Street when May delivered her speech. The ECJ’s remit ran across dozens of agencies and thousands of regulations, from the regulation of medicines and nuclear materials to aviation safety.

While Davis was aware of much of what May was going to say, he had not seen the speech and nor had Oliver Robbins. ‘The ECJ wasn’t mentioned before the conference speech as a red line,’ a DExEU official said. ‘It was conjured up by Nick Timothy to get very Eurosceptic conference delegates and the Tory press cheering. They were terrified of people saying, “She’s a remainer.” There was no discussion or debate whatsoever. I don’t believe Olly Robbins knew what she was going to say. The speech was not shared with any of the ministers. The chancellor didn’t see it. He was livid. Even DD was furious. He agreed with most of what she said but he didn’t know exactly what she was going to say.’ Months later, after leaving government, James Chapman, Davis’s chief of staff, said, ‘The repeal bill was Nick’s idea. We thought that was the big announcement. Instead of which he basically announced hard Brexit. She hamstrung the whole negotiation from the start.’ In interviews that evening May denied that she had decided to leave the single market. ‘All options are on the table,’ she said. But according to a DExEU official, ‘The pound crashed because anyone with any sense could work out that this means hard Brexit.’

May risked accusations that her tone was divisive too. She also used the Sunday speech to train her guns on the vocal minority in her party who were demanding that MPs have a vote on Brexit. ‘Those people who argue that Article 50 can only be triggered after agreement in both Houses of Parliament are not standing up for democracy, they’re trying to subvert it. They’re not trying to get Brexit right, they’re trying to kill it by delaying it. They are insulting the intelligence of the British people.’ Later that week, in her main conference speech, she was no more conciliatory, attacking liberals who found the referendum result ‘simply bewildering’ and the Brexit voters’ ‘patriotism distasteful, their concerns about immigration parochial, their views about crime illiberal, their attachment to their job security inconvenient’. May was aligning herself clearly with the 52 per cent who backed Leave. While this was understandable politically, the prime minister missed an opportunity that week to put herself above both warring factions and stake a position as a national leader in a way that might have given her greater freedom of manoeuvre in the months ahead.

The influence of May’s team was also evident in a policy announced by Amber Rudd, the new home secretary, in her conference speech – a plan to force firms to reveal the percentage of their workers who were foreign. The proposal unleashed a storm of protest and would see Rudd reported to the police for ‘hate speech’ the following January.

Having said what she wanted to say, the prime minister made clear that the media and the public would have to get used to another information drought on Brexit: ‘There will always be pressure to give a running commentary on the state of the talks. It will not be in our best interests as a country to do that.’

When it came to speaking about herself, though, May was learning to open up. After a fashion.

The truncated leadership election meant that Theresa May was denied the chance to properly introduce herself to the nation or properly outline her political philosophy. Conference gave her the opportunity. Before her interviews with the Sunday Times and the Sun on Sunday, communications director Katie Perrior had prepped May to respond more openly than usual to more personal questions. Her voice wavering slightly, she talked about the death of her parents and her love of the Great British Bake Off and even contributed her mother’s recipe for scones.

The interviews were well received but they might not have been if the public had known the agonies that went into the preparations. May was not comfortable talking about herself, a prerequisite of modern politics. ‘Why do they want to know this stuff?’ she asked her aides. Perrior and press secretary Lizzie Loudon had also lost parents when they were young. Loudon tried to help out. She told May, ‘My dad died and it’s really sad for me that he can’t see me here because I know he would be really proud. But in some way I feel like he would know that I would be doing something like this.’ A colleague said, ‘When the PM was asked the question by the interviewer she repeated Lizzie’s words. She just pick-pocketed the explanation. It was an appropriation of her emotional response. You think: “You yourself don’t feel anything”.’ Another Downing Street aide said, ‘If you are prime minister, you have a duty to communicate what you do. You can’t resent the questioning but she does resent the questioning.’

May’s morale was boosted that week by Fiona Hill, who sent her home with a CD of the high-octane Rolling Stones song ‘Start Me Up’, which she judged to be what May needed as walk-on music for her set-piece speech. ‘She got totally into it,’ a member of the team said. ‘I love it,’ said May.

The main conference speech was a collaborative effort between Nick Timothy and Chris Wilkins, who had been friends for years after meeting in the Conservative Research Department. Wilkins was short and bald and shared Timothy’s view that the Conservatives needed to broaden their appeal to the poor. He understood May’s philosophy and the cadences of her speech. Timothy found him to be the only person he was comfortable writing with. Timothy had prepared a mini-manifesto for May which she had never used during the leadership election, and he passed on this and a couple of pages of notes laying out the substantive argument. Wilkins fashioned a first draft which the two could ‘knock about’ between them, with Fiona Hill and others making suggestions for improvements.

The keynote speech was a symphony on the riff May had played during her first speech in Downing Street, promising to make the Tories the ‘party of workers’ and go after ‘rogue’ businesses. She pledged to govern for the whole nation: ‘We will take the centre ground.’ It contained a bold declaration (for a Conservative) that she was not ideologically averse to state intervention. ‘It’s time to remember the good that government can do,’ she declared, though her definition of government appeared to be a dig at David Cameron: ‘It’s about doing something, not being someone.’ A May aide admitted, ‘It clearly was designed to define ourselves against what had come before.’

For Wilkins, the most important theme of the speech was its depiction of May as an agent of ‘change’. When he was writing the speech, Wilkins had studied the language in Tony Blair’s 2005 conference address, which used the phrase ‘We are the change-makers’ to try to depict a party in power for eight years as fresh and dynamic. May’s team hoped she could pull the same trick, using the constant refrain that ‘a change has got to come’. Wilkins recalled, ‘We even played the song “A Change Has Got to Come” over the speakers in the hall before she walked on as a little in-joke.’ This approach was to become important again months later when May called the general election.

The change message was drowned out, however, by one small phrase in the 7,500-word text, a line penned by Timothy which had barely been glanced at since the first draft. In words that cemented her reputation for plain speaking, May concluded, ‘If you believe you’re a citizen of the world, you’re a citizen of nowhere.’ The jibe was aimed at irresponsible jet-set businessmen. A source said, ‘It was basically an attack on Philip Green,’ the former boss of BHS who had sold the firm for a pound with a black hole in its pension fund. But, to Wilkins’ and Timothy’s surprise, some Remain voters and many Cameroons saw it as a totemic symbol of May’s hostile approach to internationalism, multiculturalism and immigration. One observer summed up the speech, with its statist slant and red meat for the faithful, as ‘part Ed Miliband, part Daily Mail’.

There was a second gaffe as well. In explaining that the economy had failed to help many since the economic crash, May had said, ‘While monetary policy, with super-low interest rates and quantitative easing, provided the necessary emergency medicine after the financial crash, we have to acknowledge there have been some bad side effects.’ Her words appeared to be a breach of the convention, established when the Bank of England was granted independence in 1997, that politicians refrain from commenting on monetary policy, and it caused a temporary fall in the pound. A former cabinet minister said, ‘They got a real shock. They had no idea that markets paid attention to these things. It was just amateurishness. I know Mark Carney was staggered by it. He thought it was unbelievably incompetent. She said “we’re the fifth largest economy in the world” and I think by the end of it we were the sixth.’

Business leaders disliked much of May’s rhetoric about rogue bosses. Chris Brannigan, the debonair head of government relations whose job it was to act as the link man with business leaders, was unable to placate them in advance since he had not been told what was going to be in the speech. Carolyn Fairbairn, the new boss of the CBI, Britain’s biggest business group, walked past him ‘with a face like thunder’ as May finished.

On the EU front, May’s speech was welcomed in Westminster as much-needed clarity and by the Brexiteers as proof of May’s commitment to their cause. But the citizens of the world and those running the other EU countries joined the City in reacting with horror.

In interviews during conference week, May had made clear that she was keen to start ‘preparatory work’ with Brussels before she invoked Article 50. Both she and David Davis pledged that Britain would respect the existing rights of the three million EU citizens in Britain, as long as the 1.5 million Britons elsewhere in the EU were protected. Ministers saw that as an easy, early win. It was one the rest of the EU did not want to give them. Jean-Claude Juncker and officials from France, Germany, Poland and Slovakia all reasserted the position that there would be ‘no negotiation before notification’. While some welcomed the clarity over timing and the acceptance that May was not trying to hold on to all the benefits of membership, Joseph Muscat – the Maltese prime minister who would hold the EU presidency in 2017 – spoke for many when he said, ‘Any deal has to be a fair deal, but an inferior deal.’

While attention at home was focused on the timetable for triggering Article 50 and the Great Repeal Bill, the Europeans were transfixed by May’s blanket rejection of ECJ oversight. ‘My sense of that was that they hadn’t fully realised what they’d said on jurisdiction and how radical it was,’ commented a diplomat. In Brussels, Rogers and his colleagues began to hear from their EU counterparts, ‘Clearly you’re leaving the single market and the customs union. Why then can’t we just get on with it?’

Nick Timothy had defined British policy on Brexit. Now Theresa May had to guide her cabinet to the same place without admitting the policy was already set in stone.



2




‘No Running Commentary’ (#ulink_37b02fb0-cafc-5947-9128-0bd9a821a02c)


Two moments in early September summed up Theresa May’s approach to Brexit negotiations during the autumn of 2016. In the first Prime Minister’s Questions after the summer break, May said she would not give a ‘running commentary’ on the talks. She then took a call from the French president, François Hollande. Six weeks earlier, May had shocked Westminster by putting on hold an £18 billion deal for French company EDF Energy to build the Hinkley Point C nuclear power station, a joint venture with a Chinese state-owned firm. Now, having studied the evidence herself, May gave the green light. Hollande asked why she had thrown the deal into uncertainty. The prime minister replied, ‘It is my method.’

Alasdair Palmer, who worked for May at the Home Office, said, ‘She likes to consider the evidence carefully before coming to a conclusion. That takes her time. That is why she likes to set up inquiries and consultations – processes that delay decision taking and help reassure her that the decision that eventually emerges will be the right one.’ She would not be bounced into decisions. ‘I’ve seen people trying to grab her in the margins of a meeting and say, “Can we do this?” and she’ll ask them to produce a piece of paper, and not take the decision now,’ a senior cabinet minister said. ‘She has always been like that.’

May embarked upon a laborious series of cabinet discussions about Brexit, in which her desire to keep her destination hidden from the public seemed at times to fly in the face of the clear signals that she had sent in her party conference speeches. It was a process in which the prime minister herself seemed to want reassurance that the roadmap she and Nick Timothy had agreed was the right one.

The prime minister had made a big thing of returning to cabinet government after the Cameron years but Brexit was not discussed by the full cabinet. Instead, May appointed a dozen-strong cabinet subcommittee (the European Union Exit and Trade Committee). In keeping with her penchant for secrecy the membership was not published until it leaked in mid-October. Every cabinet minister who had campaigned to leave the EU – David Davis, Boris Johnson, Liam Fox, Chris Grayling, Priti Patel and Andrea Leadsom – was included, half the committee, when they represented just a quarter of the full cabinet. The other five members, all Remain backers, were Philip Hammond, Amber Rudd, Damian Green, Greg Clark and party chairman Patrick McLoughlin.

May let everyone have their say and ministers initially praised the way conclusions had not been preordained on her sofa before the meeting as they had been in the Cameron days. One cabinet minister said, ‘There’s proper consideration of the issues.’ Soon, though, some realised these discussions seldom led to decisions at all. ‘They were deliberations not decision making,’ one cabinet minister said. ‘The decisions were still made in Downing Street.’ Another present for the meetings described them as ‘fairly odd’. ‘Cameron meetings were always chaotic and vociferous. Hers were calm, more measured, but you don’t really get a real debate with her. You lodge some points and some observations and she absorbs. But it’s terribly difficult to gauge whether you are getting anywhere.’ To those paying attention, it seemed obvious that May had decided to leave the single market and the customs union, but the prime minister denied it publicly and in private let her warring ministers fight it out, occasionally showing her displeasure. A senior cabinet minister said, ‘She has a very healthy impatience, a slightly Thatcherian quality. She gives that heavy sigh and there’s a rolling of the eyebrows.’

In the early meetings, each of which lasted around two hours, Boris Johnson and Philip Hammond emerged as the key antagonists at the head of the blocs of Remain- and Leave-supporting ministers. ‘Boris would make rousing speeches about how it was all going to be brilliant and how we should all be saying positive things about Brexit,’ a cabinet colleague recalled. ‘Phil used to get pretty annoyed about that and say, “It’s not that simple.” Phil was pretty punchy about staying in the single market and even more so on the customs union.’ A source close to May said, ‘Hammond and Boris wound each other up, pulling faces when the other one was saying stuff.’ Another witness said, ‘Boris would chunter through Phil’s interventions.’

The two men could not have been more different. Johnson, the Dulux dog lookalike with papers spilling from the distended pockets of his suit, was a man of feral political instincts whose yearning for positive publicity belied an essential shyness. By contrast, Hammond was buttoned up in both tailoring and manner. His accountant’s eye for the bottom line had garnered him one nickname ‘Spreadsheet Phil’, his allergic reaction to the media and soporific delivery another ironic appellation: ‘Box Office’. Hammond had a sense of humour drier than a Jacob’s cream cracker in the Sahara but his lugubrious politics and appearance, that of a purse-lipped Jar Jar Binks, almost invited the question, ‘Why the long face?’

Since no work had been done by the civil service to prepare for Brexit, these early meetings were information-gathering exercises rather than policy-making forums. Civil servants despaired at the level of knowledge around the table. ‘It is not possible to underestimate the level of knowledge in the cabinet at that point,’ one official said. ‘When those things were said at conference I would be quite careful about assuming that the implications were really clear. A big part of the job for officials was educating politicians about the implications of the political narrative that they had established.’ This even included Davis. A civil servant said, ‘He thought he knew a lot but most of what he’d written was wrong in some way: legally, diplomatically or just plain not correct. You had to put evidence in front of him and use facts.’

May also faced a steep learning curve. Her experience as home secretary was valuable. But having done the same job for six years she lacked expertise outside her brief, particularly in economic affairs. A senior civil servant said, ‘I didn’t have a sense that outside the world of justice and home affairs she knew what she thought very much.’

A senior cabinet minister summed up the Brexit committee discussions as ‘an educational process’. He said, ‘There hadn’t been a stroke of work done under Cameron, so this was all from scratch. The initial meetings covered what the questions were, then by late autumn we were beginning to get options. In the new year we started answering those questions.’

To their colleagues some Brexiteer ministers seemed more interested in justifying the way they voted in the referendum than preparing for Brexit. Andrea Leadsom, the environment secretary, stood out to colleagues as one who read her thoughts from the departmental brief in front of her. ‘Andrea turns up and says what officials have told her to say,’ a source close to May said. Another aide characterised the contributions of Leadsom and Priti Patel, the international development secretary, as ‘pretty vacuous’, their comments a combination of ‘departmental briefs’ and ‘occasional prejudices’.

DExEU officials told Leadsom she would need to hire five hundred more staff but she initially recruited only thirty. ‘They’ve got to redesign forty years of agriculture policy and the entire system of subsidy,’ a DExEU source said. ‘Meetings with her were embarrassing.’ A cabinet colleague said, ‘She was completely out of her depth at the beginning. She is a genuine and decent person, but massively underpowered for what was needed at secretary of state level. She’s very stubborn and basically not really bright enough.’ Several ministers recalled that Leadsom’s most memorable contribution in cabinet that year was nothing to do with Brexit. Leadsom had been subjected to ridicule from MPs when she used leadership hustings in June 2016 to discuss the neonatal charity she had set up, which advocated massaging babies’ brains. During a health discussion that autumn, she raised the subject again, to the bemusement of her cabinet colleagues. One said, ‘She only ever talks about exports of British produce and babies’ brains.’

Philip Hammond’s time as foreign secretary during Cameron’s renegotiation gave him an advantage over most of his colleagues. Combined with the institutional clout of the Treasury, he quickly began to assert himself. The chancellor was ‘very gloomy’ about Brexit for three reasons. A former minister with whom he discussed his concerns that autumn said, ‘One was the economic cost of it. The second was they could see the impact on financial services. Companies were making decisions about whether to leave. Third, they were feeling a bit overwhelmed by all the problems – like creating a customs system at the border.’

A cabinet committee paper discussed in mid-October warned that the Treasury could lose up to £66 billion a year in tax revenues if there was a hard Brexit. It also predicted a worst-case scenario that GDP could fall by as much as 9.5 per cent after fifteen years if Britain left the single market and traded on World Trade Organisation terms. ‘In headline terms trade would be around a fifth lower than it otherwise would have been,’ it said. The paper drew on the work Treasury officials had done for George Osborne during the referendum campaign. Jeremy Heywood ordered a rewrite of key sections for ‘more balance’, but even the revised draft drew complaints from Brexiteers that Hammond was ‘trying to make leaving the single market look bad’.1 Publication of the leak drove the pound to a thirty-one-year low against the dollar.

Hammond’s vociferous stance and the institutional activism of the Treasury enraged the senior Brexiteers. ‘The Treasury for months after the vote was absolutely determined to frustrate the outcome as much as it possibly could,’ a senior cabinet minister said. ‘They believed that membership of the single market would be seen by everybody as an unalloyed good. But to leave the EU you have to leave the legislative rule-making system, which is the single market.’

Realising after the first cabinet committee meeting on Brexit that they needed to stick together, Boris Johnson, Liam Fox and David Davis met in a waiting room in 10 Downing Street to confirm to each other that they accepted the logic that Brexit meant leaving both the single market and the customs union. ‘If you’re going to do it, do it right,’ Johnson said. ‘It’s like Theresa says, you’ve got to stop thinking about what we hold on to, you have to imagine Britain free and think of what you want.’ Fox’s ability to secure free trade deals depended on Britain leaving both arrangements: ‘To be in the single market would mean unrestricted freedom of movement which is politically not possible,’ he said. ‘To remain fully in the customs union we’re not allowed to have separate free trade agreements with the rest of the world outside of the EU.’ Fox regarded these arguments as ‘unanswerable’.

Davis was sceptical of the ‘clever people with a uniform set of views’ in the Treasury and the ‘gravity model’ they used on trade, which decreed that the closer you are to a country the more you trade. He believed it was ineffective because services were ‘weightless’ and traditional constraints on long-distance trade, like transport costs, were a small fraction of what they had been decades earlier. ‘David felt they massively overestimated the negative impact of a no-deal WTO scenario and then underestimated the advantages of deals with the rest of the world because they’re all a long way away from us,’ a source said. When Hammond told him there might be a 25 per cent fall in trade, Davis replied, ‘That’s bollocks!’

Despite her conference speech, May did not wish to be boxed in or hurried into stating her views publicly. ‘The system was moving too rapidly to tell her what the right answer would be without giving any evidence,’ one mandarin admitted. Some officials found it difficult to adapt from the free-wheeling briefings of the Cameron days to a female prime minister who wanted things done more formally. Both Mark Lyall-Grant, the national security adviser, and Andrew Parker, the director general of MI5, attracted May’s ire for interrupting her, talking over her and ‘mansplaining’ in condescending tones.2 Ivan Rogers had a similar effect. Some saw the same trait in Hammond, who did not trouble to disguise his disdain for those with lesser intellects or job titles. A cabinet minister said, ‘He was patronising. Boris, in particular, had a rough time at some of these meetings.’ Another cabinet colleague explained, ‘He thinks Boris is a plonker.’ May’s team saw Hammond’s spats with Johnson as evidence that he, too, was seeking to justify his vote on 23 June: ‘It does feel a little bit like an exchange of blows over things that are long gone. Phil made such a song and dance about his Euroscepticism over the years – then he campaigned to stay in. Having then lost he feels he can’t re-rat.’

When May made Hammond her chancellor, the conventional wisdom was that they were old university friends and that she wanted someone she could trust next door. While they were Oxford contemporaries, Hammond had a very different approach to economics from May and Nick Timothy and felt himself to be no less able than May. Hammond told a former cabinet minister, ‘If Theresa May can be the prime minister, so can I.’ The source said, ‘They’re not friends. He doesn’t like her.’

Hammond’s personality also irritated May’s team. A cabinet colleague said, ‘There is something mildly Aspergic about him. Philip is not very user friendly.’ The chancellor clung to the security blanket of single market membership long after others had given it up as impossible. A senior mandarin said, ‘Phil was beating a dead horse. That’s the charm and the irritation of the man. He usually picks the wrong battle.’

For his part, the chancellor became highly frustrated that he was blocked by the chiefs from seeing May alone, without their presence. A Downing Street official said, ‘Philip used to get very frustrated that he could not see the PM. He thought he had the right to see her any time he liked.’ A senior civil servant said Hammond would hover outside May’s office but would be intercepted by Timothy or Hill: ‘He would want to see her on her own but they would say, “You’re not going in there without us.”’ Another Downing Street source said, ‘He was made to feel unwelcome. They never spoke to DD like that.’

In October it was reported that Hammond had threatened to resign, in part because he had been excluded from the 8.30 a.m. planning meeting in Number 10 at which George Osborne had been an habitué. In fact, Hammond had never threatened to resign but he had told friends that he had thought about doing so. ‘He went around – in a gallows humour kind of way – saying, “Well, I won’t be in this government very long,”’ one ally said. ‘He doesn’t get on with her at all.’ Fiona Hill put ‘face time’ with Hammond in May’s diary but the chancellor demanded meetings about the autumn statement alone with May, which the chiefs viewed as unacceptable. Hammond’s marginalisation was also painful for his officials. ‘The Treasury was running the country under George Osborne and Gordon Brown,’ one said nostalgically. As a result of this episode it was agreed that Hammond would have regular dinners or breakfasts with May. ‘Phil insisted on having his weekly time with her,’ a fellow minister said. Nick Timothy explained later, ‘They go for dinner or breakfast with one another probably every fortnight.’3 The arrangement was publicised by Hammond’s aides. By contrast, David Davis was able to wander in to see Hill and Timothy – both of whom were firm DD fans – whenever he liked.

May’s aides believed Hammond – while not a leaker to the media himself – was too ready to sound off to people who shared his thoughts with journalists. A cabinet colleague said, ‘Philip talks too freely.’ A May aide stated, ‘On Brexit he quite willingly talks against her to Mark Carney, who tells everyone in his circle and that feeds back. I think he’s a bit naïve, actually.’ In discussions with third parties Hammond did little to disguise his scepticism about May’s approach. ‘The economy almost certainly will slow down,’ he said privately. As chancellor, Hammond wanted more headroom in the public finances to cushion against turbulence. His personal assessment that autumn, shared with political and media contacts, was that a Remain vote would have provided ‘a growth kick of half a per cent of GDP a year for several years’ and that growth in 2017 would have been 2.5 per cent, a figure he now expected to be just 1 per cent. Nick Timothy, in particular, regarded Hammond’s views on the economy as excessively pessimistic. A DExEU official said, ‘The way they talked to the chancellor of the exchequer was totally outrageous. I’ve seen DD in meetings roll his eyes as Hammond tries to say something sensible about Brexit. They don’t want to hear anything about problems.’

As the autumn went on the daunting complexity of Brexit became clearer to the cabinet. At the end of September, Carlos Ghosn, the CEO of Nissan, warned that he could scrap potential new investment in the car firm’s Sunderland plant unless the government promised to compensate the company for any tariffs imposed after Brexit. WTO rules stipulated tariffs of 10 per cent on car imports and exports, wreaking havoc with cross-border supply chains. One senior cabinet minister admitted, ‘Brexit was a surprise for the Japanese and they don’t like surprises.’

Theresa May and Greg Clark, the business secretary, set to work to put Nissan’s mind at rest. They did not offer tariff relief but privately made clear that Britain would be pursuing a bespoke trade deal with the aim of keeping tariffs at zero and borders as frictionless as possible. A minister said, ‘Assurances were given about investment in training but there were no financial inducements.’ It was enough for Ghosn to announce, on 27 October, that Nissan would build its new Qashqai II and X-Trail models in Sunderland, safeguarding seven thousand jobs. It was a propaganda win for the Brexiteers. The Remainers responded by pointing out that insurance giant Lloyd’s of London was planning to open a series of subsidiary offices elsewhere in the EU so they could continue to operate post Brexit.

Ministers were quickly aware that moving EU law into British law could not be done at the stroke of a pen, since many laws referred to rulings by the European Commission or various EU regulatory bodies. Each of these would need to be rewritten to refer to new British regulators. A cabinet minister said, ‘People made an initial scan and thought, “Fuck!” The number of statutes affected started off in the tens of thousands. It came down significantly to around one thousand.’ The number fell because government lawyers ‘found ways of doing things once’ which would ‘cross over to other statutes’.

Davis set up fifty-eight projects inside DExEU to analyse the implications of Brexit for different sectors of the economy and public life and make recommendations about which had to be protected. Separately, Davis asked a bright civil servant called Tom Shinner to oversee a risk register of key projects and institute a ‘critical path analysis’ which would send alarm bells to Davis if progress on preparing for Brexit was too tardy. May’s conference speech brought home to civil servants across Whitehall what was at stake. ‘You could go from no impact on the automative industry if you replicate tariff-free trade to total disaster if we have hard Brexit with all the tariffs,’ one said. ‘We realised that we had to prepare for the worst-case scenario.’

The implications of May’s approach to the European Court of Justice raised alarm bells in several departments. The court played a role in overseeing Euratom, the nuclear materials regulator, the Open Skies Agreement, which gave British airlines parity of access to European airports; the European Medicines Agency, which regulated medicines; and the European Broadcasting Union, which granted licences to television companies, prompting the Discovery Channel to warn ministers they might have to relocate elsewhere in Europe. Ivan Rogers sought to explain to ministers some of the benefits of ECJ oversight. ‘On aeroplanes, access to the single market means planes can land at EU airports and return from them. Membership of the single market means you get slot, gate and lounge allocation on the same terms as local airlines – not 3.00 a.m. slots a mile away from the terminal, and the airlines can fly within the EU, not just to and from the EU. Access means that your banks can only lend via a local subsidiary. Membership means there is no need for your banks to be separately supervised, regulated, managed and capitalised subsidiaries in other countries. Access means that Scotch can be sold into France or Germany; membership of the single market means that all taxes and duties for comparable products to Scotch must be the same as for Scotch, and if they are not, we can take them to the ECJ and say, “Why are they not?”’4

In each case a new deal or a domestic solution was possible, but they would need to be found. A DExEU official said, ‘It was clear we were leaving not just the single market but every European agency. The Department of Health people said, “We can’t leave the European Medicines Agency”. Well, you just have. When we asked each department what their preferred outcome was they all said, “Everything to remain as it is.”’ That meant officials needed to concentrate on finding ways to replicate the status quo and resist contingency planning for a scenario in which there was no deal. Davis was forced to ‘kick them hard’ to prepare.

After initial concerns that the Brexit secretary did not like detail and would not put in a full five-day week, by Christmas most saw him as a serious figure striving to get to grips with the task in hand. ‘My aim,’ he told his staff, ‘is to imagine a huge Venn diagram of the different groups – politicians, the City, industry, the diplomatic corps – and find somewhere in that bloody great Venn diagram where everybody overlaps.’ At the centre of the diagram, Davis sought to ‘ensure Number 9 and Number 10 [Downing Street] are as close as they sound like they are’. A cabinet minister observed of May, ‘It takes her time to make decisions. It also takes her time to trust people. You have to work at it.’

Despite Philip Hammond’s agitation, the cabinet quickly came to the view that Britain would leave the single market. Their most heated debates throughout autumn 2016 concerned whether the country would remain a full member of the customs union, within which countries set common external tariffs and do not require customs checks. Also at issue was whether the UK could begin negotiating its own free trade deals with other countries, which was not possible with full membership.

In October a leaked cabinet paper showed ministers had been warned that pulling out of the customs union could lead to a 4.5 per cent fall in GDP by 2030 and the clogging up of trade through ports like Dover and Holyhead. It estimated that the UK would need to grow trade with its ten largest partners outside the EU by 37 per cent by 2030 to make up the difference. But the cabinet Brexiteers did not believe the Treasury’s figures, after their referendum campaign warnings about an immediate economic shock had proved incorrect. Davis dismissed them as ‘pessimistic’, while Johnson branded the modelling ‘Project Fear crap’ reminiscent of the referendum campaign.

Hammond, backed up by Greg Clark, challenged Fox’s Department for International Trade to quantify the benefits that could be accrued from new trade deals with non-EU countries, but the figures were not forthcoming. ‘This was why Hammond was saying, “We’re not leaving the customs union” – because he didn’t believe these other trade deals are going to make up the difference,’ a senior civil servant said. Trade deals with even friendly countries like the US, Australia and New Zealand presented difficulties, since they would open the border to hormone-infused beef, chlorinated chickens from the States and cheap lamb from Australasia. ‘The Welsh Office said, “Hang on a minute, that will kill the Welsh lamb industry,”’ a source recalled.

There were also practical problems at the border. A former minister said, ‘Phil told me that for every hour at Dover, 30 kilometres of lorries go through. They just don’t have any system at all for stopping and checking them.’ Customs were installing a new computer system, the Customs Declaration System, a fact which raised alarm bells following previous government IT failures. Officials advised Davis that they would need one thousand lorry bays to inspect incoming freight at Dover. There were currently ten. The dawning realisation that Britain would also need thousands of new customs officers strengthened the hand of Hammond and other ministers who were pressing for a transitional arrangement, to buy Britain more time to move from EU membership to the new order. Put simply, unlike May and Davis the chancellor believed there was no chance of having the necessary people and systems in place by the end of March 2019. ‘That’s why the Treasury began to kick back violently,’ a source said.

As the row rumbled on, Fox remained confident that Britain would be outside the customs union, a view he was quick to share with EU officials. A DIT trade strategy paper leaked in September warned that staying in the customs union ‘would constrain our ability to act independently’ and could also be ‘portrayed by some that remaining means we have not left the EU’. A senior civil servant observed, ‘Liam, of course, was fighting for his job. But unless May was going to sack him and shut his department down, the customs decision was taken on the day they created DIT.’

However, when Ivan Rogers sought clarity from Downing Street he was told nothing had been decided. In Number 10, despite her conference speech, allies say May was engaged in the search for a halfway house. ‘On the customs union, I think she genuinely wanted to try and find another way,’ one said. With some ministers, May even used an old phrase of Tony Blair’s. ‘She kept saying, “Maybe there’s some third way …”’ When quizzed by reporters, May would say, ‘It’s not a binary decision.’ A source close to the prime minister explained, ‘Membership itself is a binary choice but access is not.’ There was even talk of keeping certain sectors of the economy or parts of the country inside the customs union – an idea soon dropped as impractical. This hedging created friction with the Brexiteers, particularly Boris Johnson, who wanted a clear statement that the UK was leaving.

Johnson compared the customs union to the Zollverein, the nineteenth-century arrangement which broke down tariff barriers between German states while maintaining tariffs with the outside world. He wanted Britain to ‘come out of the Zollverein’ as it related to the rest of the world, but retain free movement of goods between the UK and the rest of the zone. The foreign secretary was unable to keep his views private. On a trip to Prague on 15 November he told a Czech newspaper, ‘Probably, we will need to leave the customs union.’ He also dismissed the notion that freedom of movement was a founding principle of the EU, with customary relish, as ‘bollocks’. May was not amused. Her official spokeswoman Helen Bower told journalists, ‘The foreign secretary reflected the government’s position which is that a decision hasn’t been taken.’

On his return, Johnson was summoned to Downing Street for a ‘meeting without coffee’ with May and Timothy. ‘Boris, why are you so obsessed with the customs union?’ May asked. The foreign secretary replied, ‘It doesn’t make any sense.’ They had a long argument. Johnson pointed out, ‘You could have frictionless trade from outside the customs union and continue to have goods and services circulating inside the single market.’ He cited the example of integrated automotive supply chains that cross the US-Canadian border. Johnson left and told aides that May was concerned business would be ‘spooked’ by the idea of leaving the customs union. Privately he was critical that Davis was not backing him up. A source close to Johnson said, ‘DD’s position was, “God, it’s all so difficult” because he had a vested interest in intensifying the magnitude of the task in order to intensify his triumph when it comes. Boris was worried that the whole tone of the government was becoming defeatist.’

Johnson did have an ally in Fox. In a wing of the Foreign Office overlooking Whitehall, which had been annexed by DIT, the international trade secretary got on with the job as if he had no doubts Britain was leaving. He saw four main tasks. The first was securing Britain separate ‘schedules’ at the World Trade Organisation, in effect deciding how much of the EU’s trade concessions would be taken over by Britain. It was not just a case of taking ownership of a fixed percentage. The vast bulk of New Zealand lamb coming into the whole EU ended up in Britain, for example. Fox argued that the schedules should apply based on the percentage of any quota ending up in the UK market.

The second task was arranging deals for Britain with countries who already had a free trade deal with the EU so that the UK could keep trading with them on the same terms after Brexit. That meant trying to transplant forty agreements covering fifty-eight countries. Two were worth a disproportionate amount of the trade: Switzerland and South Korea. Fox told those countries, ‘We want to adopt the EU FTA [free trade agreement] into UK law. We’ll come to a more bespoke agreement that’s more liberal later on.’

The third task was to begin talks to secure new free trade agreements. He regarded the US as the main target, but Australia, New Zealand and the Gulf Cooperation Council all indicated interest, with China and India as the other main prizes. This work could not begin in earnest until Davis made progress on trade talks with the EU, because these countries wanted to know what access to the EU a deal with Britain would bring. A paper prepared for a cabinet Brexit committee meeting in September (leaked in November) showed that the DIT had divided countries he wanted Britain to trade with into ‘gold’ and ‘silver’ categories.

The fourth and final strand of his work was to talk to Britain’s EU partners about how the EU negotiations, led by Davis, would affect world trade. Fox warned that they had a responsibility not to damage global prosperity: ‘If Europe comes to an agreement that limits trade and investment that will impact the global economy.’ He explained his approach in a speech in Manchester on 29 September, vowing to make Britain a ‘world leader in free trade’ and exploit the ‘golden opportunity’ to forge new links. He urged the EU to avoid tariffs which he said would ‘harm the people of Europe’.

Things weren’t plain sailing, though. Fox received legal advice that there was a ‘high risk’ that the European Commission would take Britain to court and seek to fine the UK if he sought to sign or negotiate trade deals with third countries while it remained in the EU. The paper revealed that even discussing a trade deal with a country not actively negotiating with the EU would still ‘carry a medium/low risk’ of being sued by Brussels. A Downing Street official said, ‘There was a lot of bravado from ministers about what they were going to achieve, which very quickly proved to be unrealistic and legally impossible.’ Some civil servants believed that Fox’s focus on trade tariffs – and his belief that a trade deal with the EU would be the ‘easiest in the world’ – was missing the point, since the real problems were encountered trying to secure a deal on services, where the refusal to recognise professional qualifications and other non-tariff barriers were more significant. ‘It’s not all about tariffs,’ a senior mandarin said. ‘Liam believes you just unilaterally disarm and then take all your tariffs down.’

Ivan Rogers also warned Downing Street that the belief of Brexiteers that they could just walk away from the EU with no deal and keep trading on the same terms if neither side erected tariffs was incorrect. Unless the UK signed a trade deal it would automatically revert to the status of a third country after Brexit. He told May, ‘You have to be on the list of countries permitted to export into the EU market. Secondly, individual firms then have to be approved, and thirdly individual consignments have to be cleared before the goods or services are allowed on the EU market. That applies to all non-member states until you have a preferential agreement.’5

Hammond and the Treasury were also fighting for the financial services industry, which would need special ‘passporting’ deals to trade in the EU. ‘He was of the view that if the FTA doesn’t cover financial services, it’s not worth having anyway,’ a senior official said. May, schooled by Timothy in a distaste for City fat cats, saw it as less of a priority. ‘She was not persuaded by the City arguments,’ a cabinet minister said. ‘They concluded they would be a sacrificial victim.’ Davis, who had chaired the Future of Banking commission back in 2010, believed the banks had captured the Treasury. Privately he had been heard to describe bankers as ‘the most overpaid useless bunch of wankers I’ve ever met in my life’.

There were also problems getting DIT fully up to speed. Ivan Rogers warned Jeremy Heywood that the EU trade directorate was, with its US counterpart, the best in the world. ‘We have within a very short space of time to build one of the best three trade negotiating authorities in the world.’6 DIT was not ready for battle.

In seeking to forge a compromise on the customs union, Davis argued that it was perfectly possible to have a frictionless border if Britain secured a free trade agreement with the EU. His ‘grand simplifying principle’ of the agreement was that Britain would start with total regulatory alignment with the EU and ‘if in doubt, keep it as open as it is now’. In the absence of tariffs, a new customs deal would have to settle ‘rules of origin’ – designed to stop a country like China using the UK as a ‘landing craft’ to flood the EU market – and how to equate standards on safety, hygiene, data, consumer rights and the environment between the two jurisdictions. He argued that 92 per cent of goods consignments, whose contents could be electronically pre-notified, would take just five seconds to clear customs. Only 8 per cent would have to be inspected.

Ivan Rogers helped get Hammond to understand how isolated he was becoming. They met before the chancellor travelled to a meeting of EU finance ministers on 6 December. ‘I think you’re fighting a completely losing battle on the customs union, I understand why you’re fighting it but I think you’re on a loser,’ Rogers said. Hammond argued that the future benefits of free trade deals would never match those of single market and customs union membership. ‘I’d like to see a reputable cross-government cost-benefit analysis, because it will only show one thing.’ Rogers replied, ‘If this were about cost-benefit analysis we wouldn’t be here at all.’ Instead, Rogers urged Hammond to concentrate his efforts on persuading May to secure a transitional arrangement which would keep Britain inside the customs union while a full-blown agreement could be drawn up. ‘That’s all you’re going to get,’ he said.

In her conference speech May had said, ‘Every stray word and every hyped-up media report is going to make it harder for us to get the right deal for Britain.’ But all the bickering meant the cabinet committee leaked relentlessly as the two sides manoeuvred for position. A paper on trade found its way to the Sunday Times, details of an immigration discussion to the Daily Telegraph and another on security to the Sunday Telegraph. The Times got hold of a handful of leaks, most notably a paper circulated in November ranking various industries as high, medium and low priorities in the Brexit negotiations. The high-priority industries included pharmaceuticals, car-making, clothing, aerospace, banking and air transport. The steel industry and the business services sector were unimpressed to find themselves in the lowest category.7

After initially distributing the key papers a week in advance, Jeremy Heywood began numbering every document, limiting them to hard copies, so they could not be emailed on, and sending them out only the night before or on the morning of meetings. A cabinet minister said, ‘You knew perfectly well that if you discussed anything in cabinet it would be outside three minutes after cabinet finished. You cannot have an argument with someone when they’re having a three-way discussion with the newspapers at the same time.’ Suspicion fell on Johnson and Hammond, but also on Priti Patel, Chris Grayling and Liam Fox, who was liked by May but regarded as an oddball by the chiefs. Fox’s cabinet colleagues delighted in spreading a story – vehemently denied by Fox himself – that he had been locked in his hotel room on the orders of the chiefs for several hours during May’s trip to India.

As a former journalist who knew Sam Coates – the principal recipient of the Brexit committee papers – James Chapman was quizzed by MI5 officers, who demanded access to both his and his wife’s mobile phones. ‘We can see you’ve been talking to him,’ one of his interrogators said. Chapman had won a reputation among journalists for never telling his former colleagues anything useful, so the experience was distressing. ‘I’ve never leaked a cabinet document in my life,’ he said. Chapman had already decided to leave government and was in talks with the public affairs company Bell Pottinger. Embarrassingly, his private email was full of messages about the possibility of a new job.

The primary leaker was never identified but senior officials in Downing Street, including Katie Perrior, came to suspect that the chiefs were responsible for some of the leaks in a bid to keep journalists occupied and that they had pointed the finger of blame at Chapman to cover their tracks. In October Laura Kuenssberg, the BBC’s political editor, found out, half an hour before the decision was announced, that Heathrow was to be allowed to build a third runway.

Earlier, ITV’s Chris Ship had broken the news of May’s decision to approve Hinkley Point. Perrior was quizzed by security: ‘Do you ever speak to Chris Ship?’

‘Yes.’

‘How often?’

‘Several times a week.’

‘Why do you do that?’

‘Because I’m the director of communications …’

The leak inquiries were inconclusive but Hill and Timothy had not been required to submit their own phones. When most of the autumn statement appeared in the public domain in advance, Hammond told May he suspected one of her staff of trying to undermine him. This time Perrior suggested that everyone – including May, Hammond and Jeremy Heywood – hand in their phones to ensure there was no excuse for the chiefs to be excluded. She knew the chiefs had been briefing because Timothy was taking her through the plans when they were interrupted by an official informing him that a Sunday newspaper journalist was waiting for him in the next room. The officials charged with the leak inquiry discovered that the chiefs talked to journalists so often that it was impossible to tell if they were behind the specific leaks.

In early December, Jeremy Heywood issued an edict that the ‘spate of corrosive leaks’ must come to an end. In a memo to mandarins he ordered senior officials to use only government-issue phones, allowing all their communications to be monitored, and warned that anyone leaking would be fired, whether or not there was a threat to national security. Within a few days, Heywood’s memo itself had been leaked to the Mail on Sunday.

May’s government took security very seriously. Every minister in the Brexit department was given an MI5 briefing when they got the job. ‘They told us that we were going to be the most targeted department in Whitehall,’ one minister said. David Davis took this to heart, carrying around his computer and iPad in a metal briefcase containing a ‘Faraday cage’ to block all wireless, cellular, GPS and WiFi signals. At his home he stored them in a biscuit tin. He was also told by the security services to ditch his Apple watch to prevent foreign spies using it to listen to his conversations. He replaced it with a Garmin smart watch, advertised as ‘for athletes and adventurers’. Asked if it was ‘government issue’, Davis said, ‘You must be joking – that’s a thousand-quid watch.’ When embarking on foreign trips ministers were warned that they might be approached by ‘honey trap’ agents from foreign powers and jokingly told, ‘You might even want to get changed under your bedclothes.’ The warning led to a story in the Sun on Sunday that Theresa May herself had been advised to disrobe under the covers or risk being filmed naked – a leak for which Boris Johnson was blamed.

The paranoia extended to Downing Street, where Fiona Hill was highly security conscious after living with a former spy for several years. ‘Fiona banned us from talking on mobiles in case people were listening,’ said a DExEU official. ‘If you wanted Fiona you had to call her on her landline.’ Six years at the Home Office had made the prime minister, too, wary of security issues. One of her staff asked May how she kept her wardrobe refreshed: ‘I don’t know how you find the time. I go home at midnight, I sit on the John Lewis website and I get it all delivered. Do you online shop?’

May said, ‘I’m the former home secretary, of course I don’t shop online.’

By November May’s desire for secrecy around Brexit meant progress was slow. Number 10’s sensitivity was well summarised by a memo written by a Deloitte consultant in the Cabinet Office on 7 November, which leaked to The Times eight days later. It warned that Whitehall was struggling to cope with more than five hundred Brexit projects and the fact that ‘no common strategy’ had emerged among cabinet ministers. The memo said May’s predilection for ‘drawing in decisions and details to settle matters herself’ was holding up decision-making.

The prime minister was described as ‘personally affronted’ by the wording. The official response was, ‘This is not a government report and we don’t recognise the claims made in it.’ But for all too many people it had hit the nail on the head.

Within a month Deloitte had a meeting with Sir Jeremy Heywood and John Manzoni, the chief executive of the civil service, and – under threat of further punishment – agreed not to bid for any further government contracts for six months. Deloitte’s treatment excited comparisons between May’s operation and both Stalin and Colonel Gaddafi, while business voices complained that her team ‘don’t want to hear difficult messages’ and were guilty of ‘government by rage’.8 MP Anna Soubry, a Remainer, said Deloitte had been ‘bullied’. Ministers told to keep quiet, not accept lunch invitations from journalists and refused permission by Downing Street to make announcements on the government ‘grid’ felt much the same way.

The very next day, 16 November, the Institute for Government (IfG), a thinktank close to senior mandarins, warned that Brexit represented an ‘existential threat’ to the operations of some departments: ‘Whitehall does not have the capacity to deliver Brexit on top of everything else to which it is already committed.’ The IfG said May’s ‘secretive approach’ was hampering preparations, with the result that they looked ‘chaotic and dysfunctional’. It said, ‘Silence is not a strategy. Failure to reveal the government’s plan to reach a negotiating position is eroding confidence among business and investors.’9

The same day the IfG report was published, Sir Simon Fraser, the former permanent secretary at the Foreign Office, appeared in front of the new select committee shadowing DExEU and said the government did not yet have a ‘central plan’ for Brexit.

May and her team thought they had signalled clearly where they were heading, but her cabinet was divided and Whitehall was in open revolt. To make matters worse, the European Commission was now playing hardball too, over the most contentious issue of all.

Money.





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