The Cabinet remains divided on one of the most fundamental Brexit questions. Everyone in the Cabinet does accept that Britain is leaving not just the EU but the single market too. But there remains a split over whether Britain should be aiming for an EEA minus deal with the EU or a CETA plus one. This might sound techy but it is fundamental to Britain’s future.
Free movement makes it a political non-starter for Britain to stay in the single market. However, several of the most senior members of the Cabinet, backed by the institutional Treasury, think that Britain should stay as closely aligned to the single market as possible. They want Britain to shadow the EU’s regulatory structures and transpose European Court of Justice judgements. This, they argue, would allow Britain to maintain the most frictionless access possible to the single market while getting out of free movement.
But to the Brexiteers in the Cabinet this dilutes the whole point of leaving. They want Britain to have the freedom to chart a different course. Their aim is a deal with the EU based on the EU-Canada free trade agreement with a bit more on services. This would require Britain to obey some minimum labour and environmental standards. But it wouldn’t require the entire UK economy to follow every piece of EU regulation. It would mean making trade with the EU less smooth than it is now as the price of Britain being able to be more globally competitive.
This desire to avoid shadowing the EU regulatory structure is the red line that Boris Johnson and Michael Gove definitely share. In the short term, they have different priorities. Boris is more agitated about money and the length of transition than Gove; Gove is sceptical about the civil service’s ability to get Britain fully ready to leave by March 2019 and is, therefore, more relaxed about a status quo transition. For his part, Gove is most concerned about the European Court of Justice and the influence it might have on the UK post-transition. But when it comes to the question of whether Britain wants a single market minus deal or a free trade deal they are united.
In her Florence speech, Theresa May will be able to fudge this point. But at some point soon, she is going to have to choose.
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