0:00:14 > 0:00:17Getting to this point has required give and take on both sides.
0:00:17 > 0:00:20The deal we've struck will guarantee the rights of more than 3 million EU
0:00:20 > 0:00:22citizens living in the UK and of a million UK
0:00:22 > 0:00:28citizens living in the EU.
0:00:28 > 0:00:31After some tough conversations, we've now agreed a settlement that
0:00:31 > 0:00:33is fair to the British taxpayer.
0:00:33 > 0:00:36It means that in future we'll be able to invest more
0:00:36 > 0:00:42in our priorities at home.
0:00:42 > 0:00:44In Northern Ireland, we will guarantee there will be no
0:00:44 > 0:00:48hard border and we will uphold the Belfast Agreement.
0:00:48 > 0:00:51And in doing so, we will continue to observe the constitutional
0:00:51 > 0:01:00and economic integrity of the United Kingdom.
0:01:01 > 0:01:04Theresa pulls it off!
0:01:04 > 0:01:07In the early hours of this morning, the Prime Minister made a dash
0:01:07 > 0:01:10to Brussels and sealed a deal on phase one.
0:01:10 > 0:01:12But was there a lot more give than take?
0:01:12 > 0:01:14And has she just parked the Northern Ireland problem
0:01:14 > 0:01:16in the long-stay car park?
0:01:16 > 0:01:20We ask one keen Brexiteer.
0:01:20 > 0:01:22We've opened up the negotiations to talk about that future
0:01:22 > 0:01:26partnership deal, and the win-win of that deal on trade and security
0:01:26 > 0:01:28cooperation and all those other things is within sight.
0:01:28 > 0:01:30So I think it vindicates the Prime Minister's approach.
0:01:30 > 0:01:32And another...
0:01:32 > 0:01:35I listened to Michael Gove and Boris Johnson today, and thought,
0:01:35 > 0:01:37were we on the same side?!
0:01:37 > 0:01:40I simply couldn't believe it.
0:01:40 > 0:01:43I will say this to you - I think within the next 48 hours,
0:01:43 > 0:01:46you will hear a lot more Conservative voices who perhaps kept
0:01:46 > 0:01:48quiet this morning saying, actually, they're not happy
0:01:48 > 0:01:49with what's happened today.
0:01:49 > 0:01:53But does the hard work start here?
0:01:53 > 0:01:55The battle lines have been drawn for phase two, then.
0:01:55 > 0:02:00The EU's demand for a level playing field, and the trend
0:02:00 > 0:02:05towards a softer Brexit anyway, will leave many Brexiteers asking,
0:02:05 > 0:02:10what was the point of this?
0:02:10 > 0:02:13We'll be discussing with our panel whether this is all just,
0:02:13 > 0:02:16as David Davis says, "constructive ambiguity",
0:02:16 > 0:02:26and does it bode ill or well for thrashing out a trade deal?
0:02:30 > 0:02:32Good evening.
0:02:32 > 0:02:34If the Government wanted to inject some drama and excitement
0:02:34 > 0:02:36into the Brexit story, which some might argue
0:02:36 > 0:02:38was badly needed, then they certainly managed it -
0:02:38 > 0:02:41with Theresa May making a pre-dawn flight from RAF Northolt
0:02:41 > 0:02:43across the Channel this morning with the latest version
0:02:43 > 0:02:46of the UK's position.
0:02:46 > 0:02:50It would only have been bettered if she'd actually
0:02:50 > 0:02:53piloted the plane herself.
0:02:53 > 0:02:54But as to the actual substance?
0:02:54 > 0:02:59A deal on EU citizens' rights, a divorce settlement
0:02:59 > 0:03:01of 35-40 billion euros, a date for the end
0:03:01 > 0:03:03of the jurisdiction of the European Court of Justice,
0:03:03 > 0:03:05and a bit of finagling over Northern Ireland -
0:03:05 > 0:03:08but the actual promise there would not be a hard
0:03:08 > 0:03:09border between Northern Ireland and the Republic.
0:03:09 > 0:03:12Enough to get phase one of the negotiations over the line,
0:03:12 > 0:03:15and, assuming it gets the nod from the European Council next week,
0:03:15 > 0:03:17to start talks about a trade agreement, rested and refreshed.
0:03:17 > 0:03:22Here's our Political Editor, Nick Watt.
0:03:22 > 0:03:31MUSIC.
0:03:31 > 0:03:36When everyone else is having fun, breaking up can be so hard,
0:03:36 > 0:03:41as Theresa May discovered at an EU summit last year.
0:03:41 > 0:03:46Or maybe we do have friends after all?
0:03:46 > 0:03:49At the end of a week of heartache, Theresa May finally pulled off
0:03:49 > 0:03:53a deal with the EU on stage one of the Brexit negotiations.
0:03:53 > 0:03:56Sufficient progress has now been made on the three terms
0:03:56 > 0:04:00of the divorce.
0:04:00 > 0:04:04I very much welcome the prospect of moving ahead to the
0:04:04 > 0:04:07next phase, to talk about trade and security, and to discuss the
0:04:07 > 0:04:10positive and ambitious future relationship.
0:04:10 > 0:04:15But after Monday's humiliation, how did it happen?
0:04:15 > 0:04:25Shortly after 11pm in Downing Street last night, Theresa May finally
0:04:26 > 0:04:29achieved a breakthrough when she sort of won over the DUP in a
0:04:29 > 0:04:30telephone call with Arlene Foster.
0:04:30 > 0:04:34At around midnight, she left Downing Street, skipping the office
0:04:34 > 0:04:36Christmas party, to catch two hours sleep at her constituency
0:04:36 > 0:04:38home in Maidenhead.
0:04:38 > 0:04:40Then, at 3:45am, she was picked up for an RAF flight to
0:04:40 > 0:04:41Brussels.
0:04:41 > 0:04:45The deal covered the three main separation areas.
0:04:45 > 0:04:48Theresa May has resisted pressure to keep Northern Ireland in the EU's
0:04:48 > 0:04:50Single Market and Customs Union.
0:04:50 > 0:04:56But the EU has secured an alignment of roles in
0:04:56 > 0:05:02areas related to cross-border cooperation in the event of no deal.
0:05:02 > 0:05:06The UK cut an initial EU demand for a Brexit payment of up to £65
0:05:06 > 0:05:08billion by around a half.
0:05:08 > 0:05:14But the UK will still pay between 36 and £39 million.
0:05:14 > 0:05:20European Court of Justice will have a limited role, overseeing
0:05:20 > 0:05:24the rights of EU citizens the UK for eight years rather than 15.
0:05:24 > 0:05:33But EU citizens lawfully resident in the UK
0:05:34 > 0:05:37on Brexit day will have the rights guaranteed.
0:05:37 > 0:05:39We've heard a lot about the Tory civil war and Europe.
0:05:39 > 0:05:41Well, today, the tribe appeared to embrace
0:05:41 > 0:05:42the spirit of Christmas goodwill.
0:05:42 > 0:05:44This agreement is a significant political achievement
0:05:44 > 0:05:45for the Prime Minister.
0:05:45 > 0:05:48Theresa May has absolutely put her mark on this.
0:05:48 > 0:05:55She has stood up and she has not been found to be wanting.
0:05:55 > 0:05:57Others weren't quite buying into the accord.
0:05:57 > 0:05:59I listened to Michael Gove and Boris Johnson
0:05:59 > 0:06:01today and thought, are we on the same side?!
0:06:01 > 0:06:11I simply couldn't believe it.
0:06:15 > 0:06:19I will say this to you, I think within the next 48 hours we
0:06:19 > 0:06:20will hear a lot more Conservative voices
0:06:20 > 0:06:21who perhaps kept quiet this
0:06:21 > 0:06:23morning saying, actually, they're not happy with
0:06:23 > 0:06:24what's happened today.
0:06:24 > 0:06:27At the heart of this deal lies a Cabinet truce on Brexit.
0:06:27 > 0:06:30The Leave side are so concerned to preserve the actual goal of leaving
0:06:30 > 0:06:33that they are willing to give ground on the details.
0:06:33 > 0:06:35The Remain side have accepted the UK is leaving, but
0:06:35 > 0:06:37they've been pushing for a gentle Brexit.
0:06:37 > 0:06:39The Prime Minister's challenge is to preserve that truce
0:06:39 > 0:06:41going into the next round of negotiations.
0:06:41 > 0:06:43One minister who supported Remain hopes the UK will
0:06:43 > 0:06:44hug the EU close.
0:06:44 > 0:06:48This talk of ongoing alignment, I think there
0:06:48 > 0:06:52will be some key strategic sectors, looking at the financial services -
0:06:52 > 0:06:56it applies to professional services, biotech, life sciences, a number of
0:06:56 > 0:07:01sectors like that were actually a fragmentation of the European
0:07:01 > 0:07:04offering in global terms would be bad news not just
0:07:04 > 0:07:06for us, but the EU 27.
0:07:06 > 0:07:10I think in those sort of areas I suspect that
0:07:10 > 0:07:12in the years to come we will want to mirror
0:07:12 > 0:07:14many of the regulations and directives that
0:07:14 > 0:07:17come out of Europe.
0:07:17 > 0:07:19But, the overwhelming bits of the economy, both in goods
0:07:19 > 0:07:23and services, I think we may well want to move ahead positively with
0:07:23 > 0:07:24free trade deals as quickly as possible.
0:07:24 > 0:07:27Labour believes this has been a less than glorious week for
0:07:27 > 0:07:30the Government.
0:07:30 > 0:07:32Look, Theresa May should have hit the first deadline in October.
0:07:32 > 0:07:33She failed.
0:07:33 > 0:07:39She looks as if she's going to hit this deadline.
0:07:39 > 0:07:41That is progress, it would be churlish of me not
0:07:41 > 0:07:42to recognise it as progress.
0:07:42 > 0:07:45But what we can't have going forward is the absolutely
0:07:45 > 0:07:48chaotic scenes that we've seen this week.
0:07:48 > 0:07:50But in Whitehall, they are likening the deal
0:07:50 > 0:07:51to Churchill and El Alamein.
0:07:51 > 0:08:00The word is, it is the end of the beginning.
0:08:00 > 0:08:01Nick's with me now.
0:08:01 > 0:08:08Nick, what's the mood in Downing Street tonight?
0:08:08 > 0:08:13It is absolute delight. I think it is stunned relief. We have done it
0:08:13 > 0:08:18and this Prime Minister has at last achieved success. When the Prime
0:08:18 > 0:08:22Minister left for Brussels, she did not know how this was going to go
0:08:22 > 0:08:27down politically with her back benches and with the DUP. Arlene
0:08:27 > 0:08:31Foster had not wholly signed up to this. But talking to the Brexiteers
0:08:31 > 0:08:35who have been critical of this deal, they said this evening they are not
0:08:35 > 0:08:41planning to rock the boat. But they do have what is described as,
0:08:41 > 0:08:47residual anxieties in two areas. One, these very limited
0:08:47 > 0:08:51circumstances the Supreme Court will refer to the European Court of
0:08:51 > 0:08:56Justice over citizens and this regulatory alignment is related to
0:08:56 > 0:09:01Northern Ireland.Whatever that proves to be. What happens now?Adam
0:09:01 > 0:09:08Fleming in Brussels has got a leak of the draft conclusions for the
0:09:08 > 0:09:12European Council meeting in Brussels on Thursday and Friday. Good news
0:09:12 > 0:09:17and bad news. The good news is the European Council is suggesting yes
0:09:17 > 0:09:23to a transition deal for two years. The bad news is the entire body of
0:09:23 > 0:09:27EU law would apply to the UK in that period and any new laws and
0:09:27 > 0:09:31regulations introduced in that period would apply to the UK, which
0:09:31 > 0:09:37would have no votes. That crosses one Boris Johnson's red lines, which
0:09:37 > 0:09:42might explain why the Chief Whip sent out a photo of him two-day
0:09:42 > 0:09:45meeting the Prime Minister in the early hours because the Prime
0:09:45 > 0:09:50Minister will have a cabinet meeting and discussion on the future.Thank
0:09:50 > 0:09:53you very much indeed.
0:09:53 > 0:09:55Well, Government ministers today were so pleased with the outcome,
0:09:55 > 0:09:58and the lack of incoming - so far - from the right
0:09:58 > 0:10:00of the party, it was as if Christmas had come early.
0:10:00 > 0:10:03Certainly the Justice Minister, Dominic Raab, was in a chipper
0:10:03 > 0:10:05mood when I spoke to him earlier at Westminister.
0:10:05 > 0:10:08I asked him whether today's deal was proof the Government had
0:10:08 > 0:10:09caved to EU demands.
0:10:09 > 0:10:11We are a third of the way through a two-year negotiation
0:10:11 > 0:10:14period, and today was a really important step forward -
0:10:14 > 0:10:16on EU nationals and their rights here in the UK, expats.
0:10:16 > 0:10:18We've opened the door to trade talks, very important
0:10:18 > 0:10:20for business confidence.
0:10:20 > 0:10:22We've narrowed the bones of contention, but not
0:10:22 > 0:10:24settled all the issues on Northern Ireland and money.
0:10:24 > 0:10:25So, yes, there is...
0:10:25 > 0:10:27You haven't settled any of the issues on Northern Ireland
0:10:27 > 0:10:29except there will be no hard border.
0:10:29 > 0:10:30Well, a very important issue to settle.
0:10:30 > 0:10:31But you're right.
0:10:31 > 0:10:33There's going to be some hard yards left.
0:10:33 > 0:10:35It's going to go down to brass tacks.
0:10:35 > 0:10:38But we're only a third of the way through the negotiations.
0:10:38 > 0:10:41And as a result of taking this step, we've opened up the negotiations
0:10:41 > 0:10:44to talk about that future partnership deal and the win-win
0:10:44 > 0:10:47of that deal on trade and security cooperation and all of those other
0:10:47 > 0:10:48things is within sight.
0:10:48 > 0:10:52So I think it indicates the Prime Minister's approach.
0:10:52 > 0:10:55Full alignment is essentially part of the Single Market,
0:10:55 > 0:10:57beside the Single Market, beside the Customs Union on these
0:10:57 > 0:10:58issues - agriculture, education, transport,
0:10:58 > 0:11:01environment, waterways, Social Security, tourism,
0:11:01 > 0:11:05inland fisheries, health, urban and rural development...
0:11:05 > 0:11:11You have no power on these going forward.
0:11:11 > 0:11:14You will be takers, not rule-makers.
0:11:14 > 0:11:17The EU will keep you in-line in all these things.
0:11:17 > 0:11:19Kirsty, Kirsty, you can't have it both ways.
0:11:19 > 0:11:21You can't say we've done nothing on Northern Ireland and then say
0:11:21 > 0:11:24we've given all the game away.
0:11:24 > 0:11:27The reality is, what we've said today on alignment is the default
0:11:27 > 0:11:30position if none of the options are agreed but we still want
0:11:30 > 0:11:33and have a package within sight is that we would have alignment.
0:11:33 > 0:11:35And what alignment means is on the principles,
0:11:35 > 0:11:36the goals, the policy goals...
0:11:36 > 0:11:40For example, if it was on a certain area like, I don't know,
0:11:40 > 0:11:42agricultural standards, but you retain the regulatory means
0:11:42 > 0:11:45to delivering them at home.
0:11:45 > 0:11:48Let's just take agriculture.
0:11:48 > 0:11:54And there will be a European law on the movement of animals that
0:11:54 > 0:11:58you will have to adhere to if there is full alignment.
0:11:58 > 0:12:02Indeed, if there are new laws designed by the 27 on the movement
0:12:02 > 0:12:06of animals, you will have to adhere to them on full alignment.
0:12:06 > 0:12:09No, you're wrong on both counts.
0:12:09 > 0:12:13This is the default position on those areas of North-South
0:12:13 > 0:12:15cooperation in the context of Northern Ireland if nothing
0:12:15 > 0:12:18else can be agreed.
0:12:18 > 0:12:20But we want to proceed with the whole package.
0:12:20 > 0:12:22The detail, the options are still to be chosen.
0:12:22 > 0:12:24This is all still a matter for negotiations.
0:12:24 > 0:12:27You can call it strategic ambiguity, you can call it
0:12:27 > 0:12:28constructive ambiguity...
0:12:28 > 0:12:29You can call it that.
0:12:29 > 0:12:31That's very interesting, you're calling it strategic ambiguity?!
0:12:31 > 0:12:34No, what I'm admitting to you, very openly and honestly,
0:12:34 > 0:12:37is that we've agreed principles but the details still need to be
0:12:37 > 0:12:40ironed out on this very bespoke set of issues around Northern Ireland,
0:12:40 > 0:12:43which can't be dealt with properly and responsibly outside
0:12:43 > 0:12:46of the context of the broader negotiation on customs and trade
0:12:46 > 0:12:49and all those other things which we've said all along.
0:12:49 > 0:12:53If you don't get an acceptable deal on Northern Ireland, full alignment
0:12:53 > 0:12:59could continue forever.
0:12:59 > 0:13:01Well, Kirsty, ifs and buts and pots and pans.
0:13:01 > 0:13:05What I can tell you now is that we've got what we wanted,
0:13:05 > 0:13:07which was to move forward to talk about trade talks.
0:13:07 > 0:13:10We've settled the issue of EU nationals and UK nationals, and,
0:13:10 > 0:13:13you know, we can open up to those trade talks which we said should
0:13:13 > 0:13:14have happened at the beginning.
0:13:14 > 0:13:17Nicola Sturgeon said in a tweet today that the UK Government
0:13:17 > 0:13:20promising that there will be no hard border in Northern Ireland means
0:13:20 > 0:13:24that the Government can never again say that an independent Scotland
0:13:24 > 0:13:26will mean a hard border.
0:13:26 > 0:13:28She's right, isn't she?
0:13:28 > 0:13:31No, she's not, but I would of course expect the SNP to view
0:13:31 > 0:13:33anything within the prism of their obsession
0:13:33 > 0:13:40with independents.
0:13:40 > 0:13:41with independence.
0:13:41 > 0:13:44I'm sure that's not the way the Scottish people think of it.
0:13:44 > 0:13:45One last try on full alignment.
0:13:45 > 0:13:46Go for it.
0:13:46 > 0:13:49You're in the transition period, you don't have a deal
0:13:49 > 0:13:51on Northern Ireland, and the EU proposes a new law
0:13:51 > 0:13:52on agriculture you don't like.
0:13:52 > 0:13:54You have to adhere to the principle of it?
0:13:54 > 0:13:55No, we don't.
0:13:55 > 0:13:58I'm sorry, that is not what we've agreed today.
0:13:58 > 0:14:00What we've agreed, as a default position, I'll go over
0:14:00 > 0:14:03it again if you like, is that if nothing else is agreed
0:14:03 > 0:14:06and we're confident that we can, then actually what we would have
0:14:06 > 0:14:09is some form of alignment which means that we agree the policy...
0:14:09 > 0:14:11Full alignment is not some form of alignment!
0:14:11 > 0:14:13The alignment is in relation to the goals you retain
0:14:13 > 0:14:14the regulatory means of achieving.
0:14:14 > 0:14:18We're now entering phase two.
0:14:18 > 0:14:21And in phase two, the draft EU Council guidelines say that in phase
0:14:21 > 0:14:24two what will be decided is that during the transition
0:14:24 > 0:14:27period there will be four freedoms guaranteed,
0:14:27 > 0:14:29and Britain will still be in the Single Market
0:14:29 > 0:14:30and the Customs Union.
0:14:30 > 0:14:33Theresa May on the 9th of October said that in March 2019
0:14:33 > 0:14:36when we enter transition, the four freedoms will end,
0:14:36 > 0:14:39and we will not be in the Single Market and we will not be
0:14:39 > 0:14:40in the Customs Union.
0:14:40 > 0:14:42These are diametrically opposed statements.
0:14:42 > 0:14:45That is the EU's negotiation position for phase two.
0:14:45 > 0:14:47Well, that's going to be a very big row.
0:14:47 > 0:14:50It is, but we've always said, let's get on and talk
0:14:50 > 0:14:51about trade and the transition.
0:14:51 > 0:14:54We can't talk about the transition until we're in those trade talks.
0:14:54 > 0:14:57And I'm delighted that the EU is now restless to get
0:14:57 > 0:14:58on and talk about that too.
0:14:58 > 0:15:00But of course, as you've just pointed out, there's
0:15:00 > 0:15:03going to be some creases that will need ironing out.
0:15:03 > 0:15:05We're only a third of the way through these negotiations.
0:15:05 > 0:15:06But it's a major...
0:15:06 > 0:15:07At least recognise...
0:15:07 > 0:15:08Come on, Kirsty!
0:15:08 > 0:15:10But it's a major, major crease.
0:15:10 > 0:15:12Against all the pessimism, we made a really important step forward.
0:15:12 > 0:15:13It's a major crease.
0:15:13 > 0:15:23Go on, give us that!
0:15:23 > 0:15:26Theresa May did not say on the 9th of October, "On March 2019,
0:15:26 > 0:15:30I kind of hope that I'll be in a position when I enter
0:15:30 > 0:15:33the transition that actually I might be able to end the four freedoms
0:15:33 > 0:15:36and I might be able to get the Single Market and I might be
0:15:36 > 0:15:37able to get the Customs Union".
0:15:37 > 0:15:40She said on the 9th of October, these things will happen.
0:15:40 > 0:15:42These are not entirely in her gift.
0:15:42 > 0:15:44So, first of all, you started by saying that EU communication
0:15:44 > 0:15:46was what we've agreed for the transition -
0:15:46 > 0:15:48it isn't, it's the position.
0:15:48 > 0:15:49it isn't, it's their position.
0:15:49 > 0:15:51But you're absolutely right, it's not entirely within our gift
0:15:51 > 0:15:53what we negotiate in phase two.
0:15:53 > 0:15:53We're not there yet.
0:15:53 > 0:15:56I wouldn't want to get the tambourine out quite yet, Kirsty.
0:15:56 > 0:15:59But we're a third of the way through the negotiations,
0:15:59 > 0:16:02and today was a step forward and an indication of the approach
0:16:02 > 0:16:03that the PM has taken.
0:16:03 > 0:16:05"Nothing is agreed until everything is agreed".
0:16:05 > 0:16:08The phrase at the top of the joint EU-UK document today that
0:16:08 > 0:16:11if phase two founders - if no trade deal can be struck -
0:16:11 > 0:16:14then potentially what's been decided today could be dumped in the bin.
0:16:14 > 0:16:15So, the stakes are very high.
0:16:15 > 0:16:18As Dominic Raab said, he hasn't got the tambourine out yet.
0:16:18 > 0:16:19Our Diplomatic Editor, Mark Urban, guides us
0:16:19 > 0:16:21through the next round of chess.
0:16:21 > 0:16:22There can be no turning back.
0:16:22 > 0:16:24Britain is leaving the European Union.
0:16:24 > 0:16:27From the outset, the EU wanted to direct this movie.
0:16:27 > 0:16:31Its script, one of phased negotiations starting
0:16:31 > 0:16:34with the three separation issues - citizens' rights, budget liabilities
0:16:34 > 0:16:37and the Irish border.
0:16:37 > 0:16:40There never really was any chance of the UK picking off member
0:16:40 > 0:16:43states on these questions.
0:16:43 > 0:16:46Their position was solid.
0:16:46 > 0:16:50It has been interesting how effective the EU has been in keeping
0:16:50 > 0:16:57the 27 together on the three major issues of the first phase.
0:16:57 > 0:17:01And they had a clear idea of what they needed the UK to do
0:17:01 > 0:17:04in that first phase.
0:17:04 > 0:17:07And actually, step-by-step, the UK has fallen in line
0:17:07 > 0:17:12with that approach.
0:17:12 > 0:17:16Among the 27, the narrative played to us again and again was that
0:17:16 > 0:17:21Theresa May was negotiating first and foremost with her own Cabinet.
0:17:21 > 0:17:25But for veterans of the European Commission,
0:17:25 > 0:17:28every big negotiation involves both sides arguing among themselves.
0:17:28 > 0:17:34It's not strange if you look at the bigger picture
0:17:34 > 0:17:36of the trade negotiations.
0:17:36 > 0:17:39I mean, the European Union is losing time, but also our
0:17:39 > 0:17:40counterparts are losing time.
0:17:40 > 0:17:43For example, the reason that TTIP stalled was because the American
0:17:43 > 0:17:45side could not come to a common position.
0:17:45 > 0:17:48So that's not so extraordinary.
0:17:48 > 0:17:51Number Ten had hoped today's milestone would be
0:17:51 > 0:17:52reached back in October, after Theresa May's
0:17:52 > 0:17:55offer in Florence.
0:17:55 > 0:17:58But the EU held firm.
0:17:58 > 0:18:00Downing Street blamed October's failure on French
0:18:00 > 0:18:04and German intransigence.
0:18:04 > 0:18:07But it may have helped educate the Brexit
0:18:07 > 0:18:10hardliners in the Cabinet.
0:18:10 > 0:18:18And in the aftermath of that setback, Theresa May
0:18:18 > 0:18:22leveraged her weakness, leading Europeans have
0:18:22 > 0:18:25told me, telling them - "if you don't give me something
0:18:25 > 0:18:27here, you're going to end up talking to Boris Johnson".
0:18:27 > 0:18:29The Prime Minister has always known that the leverage
0:18:29 > 0:18:32would be distinctly limited, and talks might take the form
0:18:32 > 0:18:33of a fighting withdrawal.
0:18:33 > 0:18:34How do we know?
0:18:34 > 0:18:38Because she said it before she became Prime Minister.
0:18:38 > 0:18:42In a stand-off between Britain and the EU, 44% of our exports
0:18:42 > 0:18:49is more important to us than 8% of the EU's exports is to them.
0:18:49 > 0:18:52The reality is that we do not know on what terms we would have access
0:18:52 > 0:18:56to the Single Market.
0:18:56 > 0:18:59We do know that in a negotiation, we would need to make concessions
0:18:59 > 0:19:03in order to access it.
0:19:03 > 0:19:06And the UK has indeed been making many concessions.
0:19:06 > 0:19:11Among them, agreeing to the EU's negotiating that it will pay
0:19:11 > 0:19:13substantial budget liabilities, and accepting it cannot start
0:19:13 > 0:19:23negotiating its own trade agreements any time soon.
0:19:23 > 0:19:28But on citizens' rights and even the budget issue,
0:19:28 > 0:19:30the EU has given ground also.
0:19:30 > 0:19:33So, what about the phase two negotiation, setting out the broad
0:19:33 > 0:19:37framework for trade, security and so much else?
0:19:37 > 0:19:39The EU suggests that must be a choice between Single Market
0:19:39 > 0:19:46membership like Norway, or a trade deal like
0:19:46 > 0:19:47the one done by Canada.
0:19:47 > 0:19:49Theresa May, it's clear, wants something much closer
0:19:49 > 0:19:51than that Canadian deal.
0:19:51 > 0:19:56Compared with what exists between Britain and the EU today,
0:19:56 > 0:20:00it would nevertheless represent such a restriction on our mutual market
0:20:00 > 0:20:04access that it would benefit neither of our economies.
0:20:04 > 0:20:07Not only that, it would start from the false premise
0:20:07 > 0:20:11that there is no pre-existing regulatory relationship between us,
0:20:11 > 0:20:14and precedent suggests that it could take years to negotiate.
0:20:14 > 0:20:19We can do so much better than this.
0:20:19 > 0:20:24And that expression of Prime Ministerial aspiration,
0:20:24 > 0:20:26coupled with the concept of regulatory alignment to deal
0:20:26 > 0:20:29with the Irish border, tell us a great deal.
0:20:29 > 0:20:35It suggests changing as little as possible, a softer Brexit.
0:20:35 > 0:20:40If it was a forerunner of a decision that the whole of the UK would stay
0:20:40 > 0:20:49in regulatory alignment with the EU, in other words, in the Single
0:20:49 > 0:20:51in the Single Market, in the Customs Union,
0:20:51 > 0:20:52or very close to them,
0:20:52 > 0:20:55then that's a very significant policy statement, and one
0:20:55 > 0:20:56that we haven't had before.
0:20:56 > 0:20:59And of course, it would make a lot of other things easier.
0:20:59 > 0:21:02As for the EU side, it seems to have glimpsed the direction of travel
0:21:02 > 0:21:09and is already signalling they are closely aligned.
0:21:09 > 0:21:11The UK must abandon the vision of some Brexiteers for a
0:21:11 > 0:21:12Singapore-style deregulated economy.
0:21:12 > 0:21:15The battle lines have been drawn for phase two, then.
0:21:15 > 0:21:18The EU's demand for a level playing field, and the trend
0:21:18 > 0:21:25towards a softer Brexit anyway, will leave many Brexiteers asking,
0:21:25 > 0:21:28what was the point of this?
0:21:28 > 0:21:33Critically, the UK will have to carve out some sort of exemptions
0:21:33 > 0:21:36to allow them to restrict freedom of movement and sufficient latitude
0:21:36 > 0:21:44to create their own trade deals.
0:21:44 > 0:21:52If you look at the mandate for the second round negotiating
0:21:52 > 0:21:56of our trade deal, there is a clause in it on the level playing fields,
0:21:56 > 0:21:59and that's the first time ever that this
0:21:59 > 0:22:01is in a negotiating mandate.
0:22:01 > 0:22:06What it means is that they say, look, you can have the trading deal
0:22:06 > 0:22:08with Europe provided that you are not dumping,
0:22:08 > 0:22:12that you live up to the competition rules, etc, etc.
0:22:12 > 0:22:19The level playing field for the first time has been defined.
0:22:19 > 0:22:22That will demonstrate to be a very hard one for Great Britain.
0:22:22 > 0:22:25The clock starts now on a phase two negotiation that
0:22:25 > 0:22:28will test both sides.
0:22:28 > 0:22:31It's clear now that the UK will align closely with the EU,
0:22:31 > 0:22:36and that could make it far harder for the Brexit the vision
0:22:36 > 0:22:46of a freewheeling trading superpower to be fulfilled.
0:22:46 > 0:22:48-- for the Brexiteer vision.
0:22:48 > 0:22:49Mark Urban there.
0:22:49 > 0:22:52And to discuss this further now I'm joined by Dia Chakravarty,
0:22:52 > 0:22:53the Brexit Editor for The Daily Telegraph.
0:22:53 > 0:22:54Jonathan Freedland of The Guardian.
0:22:54 > 0:22:56LBC presenter Iain Dale.
0:22:56 > 0:22:57And Stephanie Bolzen the London Correspondent,
0:22:57 > 0:22:59for the German newspaper Die Welt.
0:22:59 > 0:23:04And, before we actually say hello to you, let's have a look at the front
0:23:04 > 0:23:10pages, starting with the Mail. Rejoice! We are on our way. The
0:23:10 > 0:23:14price of freedom, the Daily Telegraph goes on to list all of the
0:23:14 > 0:23:20cost of the deal so far. And on to the Guardian. The deal is done, the
0:23:20 > 0:23:25EU warns of more delays. Stephanie, we don't have Die Welt, but what's
0:23:25 > 0:23:29it saying tomorrow morning?Headline is a bit similar to the Guardian,
0:23:29 > 0:23:34saying, happy Britain, but Europe remained sceptical. The comment on
0:23:34 > 0:23:38page one also says, well, there is maybe a bit of light at the end of
0:23:38 > 0:23:42the tunnel. The pragmatism that we are used to buy the Brits, the
0:23:42 > 0:23:46smart, magmatic Brits, it has returned maybe a little bit, but
0:23:46 > 0:23:51watch this space.That smart pragmatism, interestingly, Dia, do
0:23:51 > 0:23:55you think Theresa May, she is a much stronger figure now than she was 24
0:23:55 > 0:24:00hours?Definitely, but you have to see where she was coming from. On
0:24:00 > 0:24:06Monday, things were looking pretty bad. It felt that she was trying to
0:24:06 > 0:24:10unite the country and bring the Remainer and Brexiteer colleagues
0:24:10 > 0:24:14together, and taking both the lot together. Today than when she
0:24:14 > 0:24:18actually managed to make some sort of a progression in the process, it
0:24:18 > 0:24:22looks very good for her. Certainly it has bought her some time if
0:24:22 > 0:24:26nothing else.So far she seems to be in command of her Cabinet if nothing
0:24:26 > 0:24:30else.She was working from a very low base, she couldn't have been
0:24:30 > 0:24:34weaker than two was, but to have got through a deal and got over this
0:24:34 > 0:24:42hurdle makes her stronger. Before that, her job was hanging by a
0:24:42 > 0:24:45thread on the basis of where she was on Monday.Iain Dale, what do you
0:24:45 > 0:24:48make of the idea in Mark's fill that the Europeans were saying that what
0:24:48 > 0:24:51she was saying to Junker and the others, leveraging her weakness, if
0:24:51 > 0:24:54you don't deal with her you will have two end up dealing with Boris
0:24:54 > 0:24:57Johnson?Jean-Claude Junker was quite anxious that her government
0:24:57 > 0:25:01might fall. This time yesterday, a lot of us would have thought that
0:25:01 > 0:25:06was quite near, but it is remarkable what a difference 24 hours makes.
0:25:06 > 0:25:09She is certainly in a very strong position. It was a diplomatic
0:25:09 > 0:25:22triumph of a Prime Minister. As Dia says, to have got from Monday to
0:25:22 > 0:25:25hear, got the DUP and the Irish government on site, and I also
0:25:25 > 0:25:28think, and something that I haven't heard it said, I think a lot of EU
0:25:28 > 0:25:30governments were putting pressure on the European Commission saying, come
0:25:30 > 0:25:32on, do this deal.Wonder from a German perspective if you think
0:25:32 > 0:25:34that's correct, that individual governments were saying to Junker,
0:25:34 > 0:25:38look, is off, do this more diplomatically, we have to get a
0:25:38 > 0:25:41deal. Junker was taking an incredibly negative attitude prior
0:25:41 > 0:25:45to this week.Yes, that might be the case. But if you think back,
0:25:45 > 0:25:48especially talking about the money, it was the French and Germans that
0:25:48 > 0:25:52were far more strict on this than the commission was, actually. We
0:25:52 > 0:26:04will see who was this. What is clear is that of course as we leave,
0:26:04 > 0:26:06especially in Berlin, there is enough things in Europe happening.
0:26:06 > 0:26:09So let's sort this out.I think that's exactly right, once the money
0:26:09 > 0:26:12is sorted out, the position in Paris and Berlin shifted to, we just want
0:26:12 > 0:26:15this now dealt with. They have a huge agenda in Europe that they want
0:26:15 > 0:26:17to get on with, including closer integration and defence. Having the
0:26:17 > 0:26:21Brexit had a crumbling bun, they just wanted it over. It helps by the
0:26:21 > 0:26:25way of the other side, in this case Britain, as more or less conceded in
0:26:25 > 0:26:30all of the key demands.Who do you think came out of that on this,
0:26:30 > 0:26:40Europe or Theresa May?Obviously Europe did, they've got the money
0:26:40 > 0:26:42that they wanted.No, they haven't. This is where all of the pundits
0:26:42 > 0:26:45said, it's going to be 60 billion or 100 billion. It's not, it's
0:26:45 > 0:26:4935-39,000,000,000.Boris Johnson was one of the ones talking...He said
0:26:49 > 0:26:55they can go whistle if it is exorbitant.And David Davis said it
0:26:55 > 0:26:59was nonsense and other going to happen.We can argue that 35 billion
0:26:59 > 0:27:03is exorbitant, but it is a long way from 60.You talk about the French
0:27:03 > 0:27:07and Germans wanted to get their money. But on the principle of
0:27:07 > 0:27:11Ireland they had to say strong on no solid border. Do you think it was
0:27:11 > 0:27:16better that she pulled this off at the last minute, or... What Arlene
0:27:16 > 0:27:20Foster was saying today, time ran out. As in, we're not very happy
0:27:20 > 0:27:25about this.She blinked.Who do you think blinked, Iain, sorry?Arlene
0:27:25 > 0:27:32Foster, clearly.It's probably not a popular idea on this panel, but it
0:27:32 > 0:27:36seems to me a bit like the EU blinked as well. On Monday, when
0:27:36 > 0:27:39Theresa May said, this is not going to happen, the EU could have said,
0:27:39 > 0:27:43right, see you next year then. They didn't, something did happen there,
0:27:43 > 0:27:49they did come back to talk with her again and they worked something out.
0:27:49 > 0:27:54This note of full alignment, you know, originally we are talking
0:27:54 > 0:27:58regulatory alignment, now it's follow my mid-.No, before that it
0:27:58 > 0:28:03was regulatory convergence.This could not be more important because
0:28:03 > 0:28:07the soft Brexiteers and the fact Remainers are seeing in this the
0:28:07 > 0:28:11potential to in some ways for what Brexit and keep Britain in the
0:28:11 > 0:28:15Single Market and the Customs Union in the names of alignment -- what
0:28:15 > 0:28:19Brexit. They are assuming that sacred is the aversion to having a
0:28:19 > 0:28:23hard broader. When it really comes to it, there is the choice between
0:28:23 > 0:28:27staying in the Single Market and the Customs Union, and palatable to
0:28:27 > 0:28:30Brexiteers, and giving away and actually allowing the border in the
0:28:30 > 0:28:34end, that is what the Europeans expects quite how long do you think
0:28:34 > 0:28:38people might Jacob Rees-Mogg will keep quiet about this in phase two?
0:28:38 > 0:28:42All of the people and the so-called hard Brexit site have been very
0:28:42 > 0:28:46quiet. I don't think Nigel Farage was right, I don't inspect them to
0:28:46 > 0:28:50cause them trouble. There will be people on the fringes who might. But
0:28:50 > 0:28:53Anna Soubry and Nicky Morgan are fully supporting the Prime Minister.
0:28:53 > 0:28:58Most of the Brexiteers have been doing that. It is a triumph.Let's
0:28:58 > 0:29:04say, Stephanie, we are coming to phase two, it. In the New Year, and
0:29:04 > 0:29:08actually -- it. In the New Year, and Junker... It's going to get very
0:29:08 > 0:29:14tough against.It will be messy, there will be now a lot of different
0:29:14 > 0:29:18fronts, because there will be national member states' interest
0:29:18 > 0:29:22coming in, there's the European Parliament now gearing up, there's a
0:29:22 > 0:29:26lot of different interests.Let's talk on this very subject. One key
0:29:26 > 0:29:31thing was in this phase one, what became very clear, you know, it was
0:29:31 > 0:29:36one for all and all for one. The 20 27 states together didn't flinch and
0:29:36 > 0:29:47they were powerful for it. So what the 27 states. But when it comes to
0:29:47 > 0:29:49trade, the car industry and everything else, how much do you
0:29:49 > 0:29:52think the 27 will stay together?I wouldn't put too much money on
0:29:52 > 0:29:54fractions between the Europeans. The Europeans wanted the same, they
0:29:54 > 0:29:57wanted the money, but the second phase now is of course, you can get
0:29:57 > 0:30:00what? At the end of the day, there is no cherry picking. This will
0:30:00 > 0:30:04unify the Europeans, no cherry picking for the Brits.I think it
0:30:04 > 0:30:08will be very difficult to get a bespoke deal, but we've got to try.
0:30:08 > 0:30:11I think Ian Duncan Smith has written a piece for us into Morra's
0:30:11 > 0:30:23Telegraph. That is saying, as a Brexiteer, he is not jubilant but he
0:30:23 > 0:30:25doesn't feel betrayed either. That captures the mood of most Brexiteers
0:30:25 > 0:30:28very well. They are hanging onto this line that nothing is agreed
0:30:28 > 0:30:30until everything is agreed. So everything can actually...Will Iain
0:30:30 > 0:30:33Duncan Smith go for a Norway style deal, really?What he's saying,
0:30:33 > 0:30:38again, sorry to repeat it, but nothing is agreed...No, they won't,
0:30:38 > 0:30:43this is the point. They can't stomach staying in the Single Market
0:30:43 > 0:30:47and Customs Union, even though the logic is that they must.I don't
0:30:47 > 0:30:51think so, I don't think that's right.Let me explain why, because
0:30:51 > 0:30:55if you leave the Single Market and the Customs Union, the EU has the
0:30:55 > 0:30:58pleased the border on its external frontier, and that means a hard
0:30:58 > 0:31:06border in Ireland.Is there an alternative?All four parties,
0:31:06 > 0:31:09Ireland, Britain, the Northern Ireland Assembly and the EU or want
0:31:09 > 0:31:12a frictionless border. If they all have the same game they will get
0:31:12 > 0:31:18there in the end. They will come out of the Customs Union, because if
0:31:18 > 0:31:23they don't, Liam Fox doesn't have a job. We can't negotiate our own
0:31:23 > 0:31:27trade deals. We've got this agreement today between the EU and
0:31:27 > 0:31:31Japan. Does anyone seriously think that we're not more convergent than
0:31:31 > 0:31:35the Japanese economy? I mean, please!I'm afraid we have to end
0:31:35 > 0:31:41it. There will be a lot more conversation in the next few weeks.
0:31:41 > 0:31:45That's all we have time for.
0:31:45 > 0:31:50Have lovely weekend from all of us here at Newsnight, good night.
0:31:50 > 0:31:53Have lovely weekend from all of us here at Newsnight, good night.
0:31:53 > 0:31:58Well, there is more snow on the way, but there is a bit of a long also on
0:31:58 > 0:31:59the way for Saturday.