The EU would regret punishing us

Last Monday, Theresa May’s chief of staff talked junior ministers through her Mansion House speech. Gavin Barwell was frank with them. The decision to stay in various EU agencies — and the commitment that UK regulatory standards for goods would remain ‘substantially similar’ to Europe’s — would make it harder to negotiate big trade deals with other countries. But he argued that the trade-off in access to the EU market made it worthwhile. In keeping with the current Tory truce over Brexit, no one in the room dissented.

No. 10 believes that maintaining this peace is not just desirable, but essential. Barwell ended the meeting by emphasising that the lesson of Maastricht and Jeremy Corbyn’s behaviour over the customs union was that Labour would always take the opportunity to bring down a Conservative government. So the Brexit deal needed to be one that every Tory, from Anna Soubry to Jacob Rees-Mogg, could support.

Mrs May’s speech succeeded because no single Tory faction got everything it wanted but most got what they needed. For the Brexiteers, there’s the fact that the UK is legally leaving the single market and the customs union and that free movement will end. The vast majority of former Remainers, meanwhile, are reassured by the government’s effort to stay in various EU agencies and to replicate parts of the single market. On goods, the deal the UK is seeking bears significant similarities to Switzerland’s relationship with the EU. Observing the current Tory mood, one of the Prime Minister’s cabinet allies confidently declared: ‘She’ll be fine as long as she doesn’t do what David Cameron did, and give in.’

Unfortunately, the European Union is about to take a wrecking ball to this carefully constructed compromise. The EU doesn’t much like its deal with Switzerland and is currently trying to pressure the Swiss into accepting changes.