Theresa May is heading towards a soft Brexit supported by Philip Hammond

pulse

October 2, 2017 10:51 AM

The prime minister is "leaning" towards a Brexit deal that includes a deep regulatory relationship with the EU, according to reports.

LONDON — Theresa May is reportedly in favour of a Brexit deal where the UK continues to use European Union regulations to ensure the closest possible trading ties with the bloc.

The prime minister is "leaning" towards an arrangement with the EU that includes deep regulatory alignment, which is favoured by Chancellor Philip Hammond, according to Politico.

Hammond is on one side of the cabinet split, wanting a "soft" Brexit, where the UK maintains close regulatory and trade ties for many years to come. Others, meanwhile, such as Foreign Secretary Boris Johnson want "hard" Brexit, whereby Britain will quickly cut-off links to the EU.

The row is dominating the Conservative Party conference in Manchester, with the British Chamber of Commerce director-general Adam Marshall saying businesses have huge concerns over the "division and disorganisation at the heart of the party of government."

One senior Conservative told Politico that the time when May chooses between the two Brexit arguments will be "the moment of maximum danger" for her government.

It is believed that May favours a "soft" Brexit in order to maintain a relationship with the EU that is close to the UK's current one.

A senior civil servant said: "The PM is leaning to convergence based on advice. The divergence lot will have to persuade her against, I believe."

Convergence is the argument for a deep regulatory relationship with the EU after Brexit, while divergence is favoured by those who want to see the UK break off permanently from the bloc.

The Treasury and senior Brexit advisers are reportedly recommending to the prime minister that she should back the "convergence" argument so the UK can still have access to the single market after the transition period.

This approach will face significant opposition from senior Brexiters including Johnson and International Trade Secretary Liam Fox, who favour "divergence."

One of the foreign secretary's Brexit "red lines," which he published on Saturday, is that the UK should not be bound by EU rules in order to gain access to the single market.

On Monday Hammond said that "everyone is sackable" following Johnson's latest Brexit intervention.

May has ruled out a "Norwegian-style" Brexit deal, where the UK would remain part of the European Economic Area, but has not announced the government's intentions for the future UK-EU relationship.

pulse