Senior Conservative MPs are urging members of Theresa May’s cabinet to stop publicly setting out their demands for a transitional deal on Brexit, saying the move could make negotiations with the European Union more difficult.
The warnings from senior leave campaigners and allies of the Brexit secretary, David Davis, come as ministers prepare to clash over issues of immigration and trade in a series of key meetings this autumn.
Philip Hammond, Amber Rudd, Damian Green, David Gauke and Greg Clark are among those likely to push the prime minister to accept that while free movement will officially end, there should be no immediate move to reduce immigration.
But the divisions in the cabinet were laid bare as Liam Fox said in an interview that there was no cabinet-wide agreement on what a post-Brexit implementation period should look like, and warned that “control of our own borders” was a key driver of the leave vote.
One Whitehall source who is close to Davis said it would be helpful if other ministers let him get on with the job of negotiating with the EU, stressing that the final deal would determine what any implementation period would look like.
Iain Duncan Smith, former Conservative leader and key Brexit supporter, added: “Conservative backbenchers now wish cabinet members would practise what some are preaching and that they ‘transition’ from saying too much about Europe to saying nothing at all. This is a transition that should last up to two years.” The question of a transitional deal has been forced up the agenda since May lost her majority in June’s election, emboldening the proponents of soft-Brexit in her cabinet.
The ministers will hammer out what would be acceptable to voters this autumn when May chairs a number of sessions of her cabinet sub-committee on leaving the EU.
While the prime minister is on holiday, the chancellor has made a series of interventions, including claiming that the UK’s relationship could look “similar in many ways” for some time after formally leaving the bloc in 2019. He has been supported by Rudd, who ordered an analysis of EU migration, but also made clear that EU citizens would be free to continue coming to the UK during the transition period, as long as they registered.
The Guardian understands that a letter from the home secretary setting out the policy was not shared with cabinet colleagues. Fox and Boris Johnson were also not primed to expect a major government announcement on the issue last week when they were both out of the country, although they were aware of the policy.
Separately, the chancellor has denied that he wanted to turn the UK into a deregulated, Singapore-style economy. Hammond told France’s Le Monde: “I often hear it said that Britain is considering participating in unfair competition in regulation and tax.
“That is neither our plan nor our vision for the future. The amount of tax we raise as a percentage of our GDP puts us right in the middle of the pack.” He argued that after Brexit the country would keep a “social, economic and cultural model that is recognisably European”.
Sources have revealed that senior Treasury officials want to maintain a close association with the EU customs union during transition, but also have not ruled out retaining that relationship in the long term. That could prevent the UK signing new free trade agreements in the future – a move that would increase tensions between Hammond and Fox.
The trade secretary has been using the recess period – when Conservative MPs are not needed in parliament to win votes – to drum up trade business around the world. Speaking to the Sunday Times on his second visit to the US in a month, he said there was no cabinet-wide agreement on migration not being controlled after March 2019, when the UK will formally Brexit.
“If there have been discussions on that, I have not been party to them. I have not been involved in any discussion on that, nor have I signified my agreement to anything like that,” he said.
One senior No 10 figure admitted that the chancellor had used the period that May was away to “fly kites” on Brexit, and “see what he can get away with in coordination with others”. They said overall Hammond was likely to be concluding “So far, so good” because of a lack of pushback from other ministers.
However, when cabinet figures meet for discussions in September, differences may well emerge, and they are likely to come under pressure from MPs on both sides of the argument.
Anna Soubry, an advocate of soft Brexit, said: “Hammond speaks with authority and common sense. It’s clear that at last the economy and jobs are at the heart of a sensible and smooth Brexit.” She urged colleagues to put their ideology to one side and get behind the chancellor and prime minister. “These Brexiteers promised a land of milk and honey – the reality is gruel and chlorinated chicken,” she said.
A cabinet minister agreed that the chancellor was right, saying Hammond had set out a “sensible approach that enables us to deliver the referendum result while protecting the economy from a cliff edge”. They said that meant there would have to be some time before full migration controls were introduced.
But a member of the European Research Group – representing backbench Tories determined that Brexit takes place – said the key was for a “closed end process with a certain outcome: control of laws, borders and money”.
The government’s first hints at what a post-Brexit migration system will look like are likely to land in late autumn when the Home Office publishes a white paper. The immigration minister, Brandon Lewis, is said to be meeting a series of industry groups to help design a framework, and will be looking into how the government’s IT systems will support a registration system that will have to deal with 3 million EU citizens living in Britain.
Charles Grant, director of the Centre for European Research, said he had visited officials in Paris and Brussels and said that the EU was as determined as Britain that any transitional phase would only last two to three years.
But he warned that free movement may well need to continue in principle, even if it is technically ended. “If we want a transitional deal including the single market and customs union, which is what business wants, it will need to be off the shelf.
“That means it is something similar to the Norway option, with four conditions that will have to be accepted: free movement, paying into the budget, following EU rules including new ones, and accepting ECJ rulings.”
