Brexit Bulletin: Going Soft?

  • Ministers urge PM May to soften Brexit policy after election
  • Davis backs policy of leaving single market and customs union

Sign up to receive the Brexit Bulletin in your inbox, and follow @Brexit on Twitter.

As Prime Minister Theresa May clings on to power for now, some her of most senior ministers are plotting to soften her plans for a hard Brexit.

Last week’s general election weakened May and left her reliant on the support of political rivals inside and outside her Conservative party. Three government officials told Bloomberg that means she’ll be unable to force through her vision of a clean break with the European Union.

Theresa May faced a weekend of speculation about her future as prime minister.
Photographer: Luke MacGregor/Bloomberg

Staying in Europe’s single market and customs union could now be realistic options after voters appeared to reject May’s plan to leave in order to regain control of immigration, law-making and money.

Chancellor Philip Hammond is said to be positioning himself as the grandfather of a softer Brexit. He told May he would only stay in her cabinet if she gave him more influence over the withdrawal negotiations, according to one person familiar with the matter.

One senior minister said the fact May intends to rely on Northern Ireland’s Democratic Unionist Party for support means she could be forced to keep Britain in the customs union, as well as the single market, to keep a “frictionless” border between the two Irelands.

Read more: The DUP might urge a pragmatic Brexit.

One potential solution is to join Norway in the European Economic Area, which allows membership of the single market but also requires freedom of labor movement. Former Chancellor George Osborne said that could provide a “holding position for a very long period of time.”

A new approach won’t be easy and could even end up with talks collapsing if euroskeptic Tories rebel. For one thing, the EU will demand May pays a price for continued market access. That could force her to maintain easy access for its labor, send money to Brussels or accept oversight of the European Court of Justice. Staying in the Customs Union would deprive the U.K. of the ability to strike trade deals.

Meanwhile, Brexit Secretary David Davis is sticking to the party line. He told ITV this morning this the U.K. wants to be outside both the single market and the customs union yet enjoy access to the region’s trade.

“We’ve made pretty plain what we want to do. It’s outside the single market but with access. It’s outside the customs union but with a customs agreement. It’s taking back control of our own laws and borders. Those things are fundamental. We spent ten months devising that strategy.”

Cabinet Reshuffled

For now, May is insisting she will push ahead with her Brexit plans, giving no hint she intends to water them down, even as she prepares for a showdown with her party lawmakers. She insists she is “getting on with the job.”

She told Chancellor Angela Merkel on Saturday she would start exit talks, as planned, within the next two weeks and initially focus on gaining a “reciprocal agreement” on EU citizens in the U.K. and British citizens abroad.

On Sunday she promoted pro-Brexit lawmaker and onetime rival Michael Gove to her Cabinet as environment secretary. Bearing in mind Gove was cast out last year after his role in the Tory leadership contest, his re-emergence in a reshuffle is a sign of how wounded May is.

As she prepares to speak to the Cabinet and then Conservative lawmakers on Monday, May acknowledged her time in charge was limited after her calling of an election backfired. She told Sky News:

“I said during the election campaign that if re-elected I would intend to serve a full term. But what I’m doing now is actually getting on with the immediate job – and I think that’s what’s important.”

Her critics don’t think she’ll last long. 

“Theresa May is a dead woman walking,” Osborne, who now edits London’s Evening Standard newspaper, told the BBC. “It’s just how long she’s going to remain on death row.”

For now potential leadership contenders aren’t showing their hand. “To those that say the PM should step down, or that we need another election or even – God help us – a second referendum, I say come off it. Get a grip,” Foreign Secretary Boris Johnson wrote in The Sun.

Brexit in Brief

  • Election might result in “closer relations” between U.K. and EU than May originally planned, EU Budget Commissioner Guenther Oettinger tells German newspaper. Lawmaker Werner Langen says the election could mean an “exit from Brexit.”
  • U.K. and EU officials will meet on Monday to discuss the timeline for talks, reports Wall Street Journal
  • Kensington turned Socialist. Here’s how it happened.
  • Labour MP Yvette Cooper suggests a cross-party commission to handle Brexit
  • It would take a year to change the mandate for EU negotiator Michel Barnier if bloc agreed to discuss trade and divorce in parallel, the Guardian reports
  • Accountant BDO says growth in the services sector has almost stagnated and consumer spending has fallen for the first time in almost four years
  • Some 57 percent of business leaders are pessimistic over the economy amid a hung parliament, according to the Institute of Directors 
  • Harvard study says “almost all” business owners want membership of single market and customs union
  • Employers are “totally unprepared” for a fall in migration after Brexit, says Resolution Foundation

And Finally…

If May found last week’s election hard to stomach, spare a thought for author Matthew Goodwin.

Having promised during the election campaign to “happily eat my new Brexit book” if Labour won more than 38 percent of the vote, Goodwin, who teaches politics at the University of Kent, appeared on Sky News to do just that.

“It is actually a hardback, there are lots of chemicals but I’ve got to get through the whole thing,’’ he said. “I am a man of my word.”

Photographer: Sky News/Twitter

For more on Brexit follow Bloomberg on Twitter, Facebook and Instagram, and see our full coverage at

    Quotes from this Article
    Before it's here, it's on the Bloomberg Terminal.