December 14, 2016 / 1:15 PM / 7 months ago

British PM May's Brexit plan: secret strategy or muddle?

6 Min Read

* PM May says she is keeping negotiating stance secret

* But leaks and EU diplomats suggest there is no strategy

* Businesses and investors still having to wait and see

By Guy Faulconbridge

LONDON, Dec 14 (Reuters) - If Prime Minister Theresa May has a detailed Brexit plan, it is very secret.

Since the June 23 referendum, May has been clear only that the United Kingdom will leave the European Union and that she will formally trigger exit talks by the end of March 2017.

May says it would be foolish to reveal her cards before one of the most complicated negotiations in post-World War Two European history that could decide the fate of both her premiership and the world's fifth largest economy.

"It is absolutely right that we do not set out at this stage every single detail of our proposed negotiating strategy, because that would be the best way to get the worst possible deal for Britain," May told parliament when asked whether she had a coherent plan.

May attends an EU summit in Brussels on Thursday but she has not been invited to a dinner where leaders of the other 27 EU member states will discuss their approach to Brexit.

Britons' vote to leave the bloc has opened a huge number of questions including whether exporters will keep tariff-free access to the single European market and British-based banks will still be able to serve continental clients, not to mention immigration and the future rights of the many EU citizens already living in the United Kingdom.

The absence of a specific government stand on these and many other issues has confused May's allies and perturbed company bosses, while investors try to work out what Brexit might mean for the future of their businesses and for London, the only financial centre to rival New York.

Brexiteers say there is little point laying out detailed demands as, with France and Germany due to hold elections next year and the future of a new Italian government uncertain, it is still unclear who will be in power in Paris, Berlin and Rome.

Another unknown is how Donald Trump, who once said Brexit was wonderful, could affect the divorce proceedings after he becomes U.S. president next month.

Behind the secrecy, though, there are signs of muddle.

When May pushed for informal negotiations with German Chancellor Angela Merkel at a Nov. 18 meeting in Berlin, Europe's most powerful leader blocked the attempt, according to people involved with the negotiations.

After months of refusing to speculate about Britain's negotiating position, Brexit Secretary David Davis told parliament this month - almost in passing - that he would consider making payments to the EU to get access to markets, a move that sent sterling up almost 2 cents on the day.

The government fought and lost a legal challenge in the High Court over whether May could trigger Brexit without parliament's approval. It then appealed to the Supreme Court. A decision is due next month.

"Red, White and Blue Brexit"

May has dismissed public discussion of different variants of Brexit, insisting that she will get the right deal for Britain. Speaking on the BBC this month, she said only that it would reflect the colours of the British flag.

"People talk about the sort of Brexit that there is going to be - is it hard or soft, is it grey or white? Actually we want a red, white and blue Brexit: that is the right Brexit for the UK, the right deal for the UK," she said.

But some British officials talk privately of disarray in the civil service, admit there is little clarity on how Brexit will work and say May is hoarding decisions in Downing Street.

Giving few specifics on Brexit also helps keep her government and ruling Conservative Party together.

A memo by consultants Deloitte cast Britain's leadership in a chaotic light. The leaked document suggested May was trying to control major Brexit questions, senior ministers were divided and the civil service was in turmoil. The government said the memo was wrong.

Another document, photographed by reporters as a Conservative Party official carried it into Downing Street, said: "What's the model? Have cake and eat it".

After so many leaks, the top civil servant sent a warning to officials threatening them with dismissal if they made sensitive Brexit details public. That memo was itself promptly leaked to the media.

At least five executives of major British companies told Reuters they had sought clarity but been given none by the government.

A Great Cynical Strategy?

Foreign diplomats say there is no unified British position on Brexit but rather a host of different utterances, both public and private, from various government ministers.

"I simply do not know what the Brits want: they seem to want access to the single market and limits to immigration," a senior diplomat from an EU member said on condition of anonymity. "Beyond that, I am unsure. It is all unclear. Perhaps it is a great cynical strategy to be unclear but I am not convinced."

One hedge fund manager who supported Brexit praised May's strategy, saying Britain's economic strength and integration into the EU's economy would ensure a favourable deal.

"Just because we are loaded with aces, this should not stop us keeping a poker face," said Savvas Savouri, a partner at Toscafund, which has 2 billion pounds under management. "Those 'playing' the game of Brexit against us will quickly fold."

But a senior envoy from another EU country said it remained unclear how the Brexit negotiations would progress, though he believed a deal would ultimately be done.

"The trouble at the moment is that perceptions are so different between London and the rest of Europe's capitals. I worry that there is plenty of room for misunderstanding," said the diplomat. "The question is how costly getting that deal might be for the United Kingdom." (Editing by Robin Pomeroy and David Stamp)

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