British officials have quietly abandoned hope of securing the government’s promised “cake and eat it” Brexit deal, increasingly accepting the inevitability of a painful trade-off between market access and political control when the UK leaves the EU.
Government insiders report a dramatic change of mood at the Department for Exiting the European Union (DExEU) since the general election, with growing Treasury influence helping force ministers to choose between prioritising economic interests or sovereignty.
This is in stark contrast to the public position of both main political parties, first set out in the #Theresa May’s Lancaster House speech in January, in which she echoed Boris Johnson’s boast that Britain can “have its cake and eat it” – enjoying full trade access without conceding over immigration, courts and payments. Labour’s Jeremy Corbyn sacked three shadow ministers on Thursday for departing from a similar position.
Yet UK civil servants are now said to be presenting ministers with a more binary choice: accept political compromises similar to aspects of the European Economic Area (EEA), or settle for a much more limited trade deal such as the recent EU-Canada free trade agreement (Ceta).
“We have a problem in that really there are only two viable options,” one official told the Guardian. “One is a high-access, low-control arrangement which looks a bit like the EEA. The other is a low-access, high-control arrangement where you eventually end up looking like Ceta – a more classic free trade agreement, if you are lucky.
“Of course the policy position remains the Lancaster House speech which says what we want is a high-access, high-control situation, but the author of that speech [reported to be Downing Street adviser Nick Timothy] is no longer in an influential position.”
Though full EEA-style participation in the single market is seen as politically toxic due to its requirement to accept freedom of movement, pressure is building in Whitehall for a rethink of opposition to a customs union with the EU. This would satisfy many business leaders, who are clamouring for ways to avoid trapping manufacturers behind an inflexible tariff wall but possibly still allow new international trade deals to be pursued in the service sector.