Theresa May leans towards Hammond over Boris

British prime minister’s choice on Brexit strategy is a “moment of maximum danger” for her and the divided Tories.

کد خبر: ۷۳۴۸۱۸

تاریخ: ۱۰ مهر ۱۳۹۶ - ۰۸:۱۹

British prime minister’s choice on Brexit strategy is a "moment of maximum danger” for her and the divided Tories.

MANCHESTER, England — As plenty of Tory prime ministers have found before her, Theresa May’s biggest European headache is still at home.

The prime minister — in Manchester this week for the Conservative Party’s annual conference — is trying to steer a course through the competing demands of hardline Brexiteers, led by Boris Johnson, who want a clear break with Brussels and those like Chancellor Philip Hammond who seek a "soft” divorce that maintains close regulatory alignment with the rest of the bloc to ensure the deepest possible trading relationship after exit day in 2019.

U.K. officials who spoke to POLITICO on condition of anonymity believe May is "leaning” towards a lasting agreement with Brussels to maintain equivalent rules and regulations with the EU, potentially for decades after Brexit, in a move which would be far closer to Hammond’s position than Johnson’s.

The battle raging between the two camps threatens to tear the government apart and goes to the heart of the Brexit debate — in particular the referendum promise made by Johnson, Michael Gove and others to "take back control” of laws made in Brussels.

The time when May is forced to choose between the competing visions signifies "the moment of maximum danger” in her premiership, according to a senior Tory in the previous administration who spoke on condition of anonymity.

"The PM is leaning to convergence based on advice,” one senior official said. "The divergence lot will have to persuade her against, I believe.”

Officials believe it may be impossible for the PM to square off the competing demands of those in her cabinet demanding the freedom to diverge from Brussels’ regulations and those urging May not to endanger the U.K. economy.

The Treasury and some of the prime minister’s most senior Brexit advisers are privately pushing May to agree to "converge” with Brussels regulation once Britain leaves the bloc so as not to restrict the U.K.’s access to the single market after a proposed two-year transition, officials, political aides and government ministers said.

According to two people, the Treasury is privately telling the prime minister it would be "mad” to cut off Britain’s access to trade with the EU in return for freedom to set Britain’s own regulation at home and hypothetical free-trade deals with other countries, which may take years to negotiate and have no guarantee of replacing trade lost with the Continent. The British economy would not benefit from a policy of regulatory divergence with the EU for up to 30 years, according to one estimate shared at senior levels of government.

The battle to shape the British government’s position on its final relationship with Brussels is gearing up to be "the row of the autumn,” according to senior government aides.

A spokesperson for the prime minister declined to comment.

‘Trickiest issue of all’

According to senior officials familiar with developments in the Brexit negotiations and May’s thoughts on the dilemma, the prime minister accepts the principal of close regulatory alignment, even though she is adamant Britain cannot be a "rule taker” in the Swiss or Norwegian style.

However, there is skepticism among officials, according to those who spoke to POLITICO, about whether it is possible to hold both sides of the cabinet table together with this position. There is widespread belief among senior civil servants that while a decision can be "fudged” to save face, the broad principle of whether Britain continues to follow EU regulation must either be agreed or rejected by the U.K. government.

Of particular concern is whether May will be able to achieve a solution which can keep Johnson and the other leading Brexiteers around the cabinet table. In the words of one senior British official, May will need to build her foreign secretary "a big ladder to climb down” if she opts for a regime which keeps Britain aligned to the EU after Brexit.

Those close to the PM believe an agreement for each side to respect each other’s regulatory regimes as being of "equivalent” standards could satisfy both sides, as it would allow for divergence in specific rules and regulations agreed in Westminster and Brussels within limited parameters agreed in an exit treaty.

While the prime minister has flatly ruled out a Norwegian-style model with Brussels after Brexit — an arrangement which would see the U.K. remain in the European Economic Area guaranteeing unimpeded access to the single market in return for total compliance with EU rules and no say on making them — she has yet to spell out her preferred future relationship with the bloc.

In her eagerly-awaited speech in Florence last month, which was designed to unlock negotiations with offers on financial contributions and citizens’ rights, May said that while single market membership was not an option, a more limited Canadian-style free trade agreement would also not work.

She said such a "CETA-plus” deal, in the jargon, did not offer enough market access for the U.K. — an acknowledgement which opens the door to a lasting economic relationship with the EU which goes far deeper than many of the most ardent Euroskeptics are comfortable with.

Despite the political difficulties, Chancellor Hammond and civil service chief Jeremy Heywood are pushing for an early agreement on Britain’s preferred "end state” to give business certainty, according to two senior officials. Hammond, in particular, is now "obsessed” with getting an agreement at cabinet, one official said, and would push at every opportunity ensure it happens before the close of the year.

Boris worries

The chancellor faces significant opposition from Johnson, who set out a series of hard red lines in an interview with the Sun on Saturday, including the freedom to set economic regulation in Westminster even if this restricts the scope of a trade deal with the EU.

Allies of the prime minister say a compromise is possible, which would seek to agree limited parameters within which British regulation could diverge from the EU in return for almost complete access to the single market.

Such a "bespoke” deal may be enough for all sides in the Tory civil war, they say, particularly in light of the Labour Party’s new-found vigor after a surprise surge in June’s election. Whether such an arrangement would satisfy EU leaders on the Continent is much less certain.

Writing in the Telegraph ahead of May’s Florence speech, the prime minister’s former chief of staff Nick Timothy warned the "trickiest” issue of all in the Brexit negotiation was managing "regulatory divergence.”

"There needs to be agreement that our economies remain in close regulatory alignment,” he wrote. "That is what sophisticated free trade agreements require of their signatories. The question, however, is the extent of that alignment.”

However he added that anything that forced the U.K. to change its regulations if Brussels adopted new rules would be unacceptable.

May told the Sunday Telegraph this weekend that the U.K. could ignore some EU rules and regulations during a transition period and should be able to "diverge” from the EU before 2021. But on the BBC’s Andrew Marr program later Sunday she refused to rule out accepting new rules devised in Brussels during a transition, of which Britain would have had no say over