Bangla Mirror Desk
When Theresa May became prime minister last year, she quickly established a strong grip on her cabinet, permitting little dissent between ministers on Brexit policy. Now, after a major setback at the general election, her authority has been damaged, opening the way to splits within her cabinet over what kind of Brexit Britain should pursue.
The divisions were starkly revealed on Tuesday in contrasting statements from Philip Hammond, the chancellor, and David Davis, the Brexit secretary. Mr Hammond is battling for a softer departure from the EU that puts the interests of the economy first. Mr Davis is closer to those who advocate a clean Brexit, believing that Britain will thrive after 2019 by pursuing trade deals with non-EU states.
The differences between the two men touch on four areas:
Transition: Mr Hammond wants a lengthy transitional arrangement after Britain leaves the EU in March 2019 so that UK business does not fall off a cliff. He has suggested that this transition could last four years, which would take it up to 2023. Mr Davis cuttingly retorted that the chancellor has said “a number of things that are not quite consistent with each other”. Any transition, in Mr Davis’s view, has to end by the 2022 general election.
Customs Union: Mr Hammond accepts that Britain must leave the Customs Union but he wants the closest possible replica of the current customs arrangements through the transitional period, one that in his words “protects the free flow of trade across our borders and the integrity of pan-European supply chains”. Hard Brexiters see this as too close to retaining membership of the Customs Union.
Trade: The chancellor seems relaxed that replicating current Customs Union arrangements over the transition period could prevent Britain from signing trade deals with non-EU states after Brexit. “That won’t stop us negotiating and preparing,” he told the BBC. Mr Davis said on Tuesday that “we should be at that point for a number of them the day after March 29, 2019”. Brexit Briefing Sign up to your daily email briefing Keep up to date with the latest developments on the UK’s exit from the EU.
Legal jurisdiction: Mr Hammond has been bolder than any other minister in recognising the need for a common legal jurisdiction to underpin any UK-EU agreement on financial services. He accepts there would be “genuine and reasonable concerns . . . about things like the oversight and supervision of cross-border financial markets”. But any oversight involving the European Court of Justice would be anathema to hard Brexiters.
How serious are these rifts? The differences can be overplayed. Mr Hammond and Mr Davis are said to have a reasonable working relationship. We should also remember that Labour is itself divided on Brexit. If it had a clear position, perhaps committed to retaining Customs Union membership, it could table an amendment to that effect in the Queen’s Speech debate and split the Tories.
Still, the Conservatives’ internal differences are likely to intensify, as Britain approaches the point when it needs to negotiate a future trade agreement. Many Conservative Eurosceptics also fear that Mr Hammond is secretly in favour of Britain in effect staying in the Customs Union for good. As Charles Grant writes in a valuable new upsum of the UK negotiating position: “[Mr Hammond] has not yet risked war with the Eurosceptics by stating in public that linking to the Customs Union is a long-term option, but in private he is reported to be in favour.”
These splits are a warning of how divisive a Tory leadership contest might be if Mrs May were forced to stand down or decided to quit of her own accord. They are also a reminder to European leaders, if they needed it, that Britain has entered the formal negotiations in Brussels without having first worked out what kind of Brexit it actually seeks.