Silly season squalls over Brexit, supposedly involving turf wars between Boris Johnson and Liam Fox and slow progress in setting up David Davis’s Department X, are about to give way to the real thing. Theresa May has summoned her Cabinet to Chequers on Wednesday to accelerate the process of hammering out a blueprint for taking Britain out of the EU.
Among Tory MPs, impatience is rising at the apparent lack of progress. As backbencher Andrew Bridgen put it: “The Prime Minister is going to have to say something to her backbenchers. She has got to elaborate on what she means by ‘Brexit means Brexit’. We need some red meat. The public want it too.”
The uneasy mood among Tories has not been helped by Lord (Gus) O’Donnell, former Cabinet Secretary and onetime press secretary to John Major, claiming that Brexit is not inevitable and that Britain could end up remaining in an reformed EU. The spectre of Sir Humphrey stalks Westminster, fuelling fears that the institutionally pro-EU Civil Service is hellbent on employing all its wiles to frustrate the emphatic Leave verdict of the referendum.
A battle certainly looms, though advocates of a ‘hard Brexit’ should not be hitting the panic button just yet. A raft of good economic news across the summer, pointing to an economy in robust shape and rising consumer confidence, has give the lie to Remain predictions of Armageddon following the vote to Leave. Nor are the politics looking too bad. The mood music from No 10 supports the hard-liners with Mrs May and her closest advisers said to be insistent that Britain will have to leave the single market so that it can reclaim control of its borders. May is reported to have told German Chancellor Merkel that she would not be able to accept the EU’s cherished commitment to free movement of people.
Brexit Secretary Davis is said to be adamant that the Leave vote amounts to a clear instruction from the British people that they want the Government to restore full national control over borders, money and law-making. No one seriously doubts Liam Fox’s commitment to the cause and it’s hard to imagine Boris now taking up the cudgels for Remain.
The finger of suspicion appears to be pointing at Chancellor Philip Hammond, reported by The Sunday Times to resisting moves by hard Brexit ministers to pull Britain out of the single market and so escape its free movement obligations. Not surprisingly for a Treasury minister, Hammond is believed to be prioritising continued access to the single market for the financial services industry and opposing moves to set out clear red lines for the detailed negotiations to come.
If so, Hammond is barking up the wrong tree. It would be unthinkable for the Government to use free movement as a bargaining chip for UK banks and insurance firms to retain their rights to sell their services across the EU. It would also provoke an unholy row inside the Conservative Party and denunciation by the Brexit-supporting press. Free movement is a red line for hard Brexit, now the dominant faction in Tory ranks.
Hammond, the subject of a detailed profile in the Financial Times last week, emerges as a more colourful figure that his “grey man” accountant image suggests. He has never been an accountant and is, in fact, a serial entrepreneur with a love of fast cars, whose business escapades have had their ups and downs. He is also described by a former business partner as being “an absolute dynamo” beneath his safe suit persona. Like May, Hammond backed Remain, though not before sending out plenty of signals that he had serious doubts about Britain’s EU membership.
Of course, it is right that Britain should press for continued tariff-free access to the single market, in goods and services, including financial services, once Brexit is implemented. UK financial services support over two million jobs and account for 12 per cent of GDP. They are as important to our economy as the car industry is to Germany. The goal for the UK government should be crystal clear – full access to the European market for our financial services firms in return for full access to the UK market for BMW and Mercedes. But not, of course, at the expense of diluting the UK’s right to take back control of its borders.
As backbencher Bridgen has said, the time has come for the Prime Minister and her team to spell out in some detail what she means by ‘Brexit means Brexit’. That need not require her to reveal her full negotiating hand. But it does mean setting out her red lines and emphasising her determination to stick to them.