May's support for single market for goods could spark new Brexit row
Prime Minister Theresa May could risk another row with the pro-Brexit wing of the Tory party if she shows support for a proposal to keep the UK in a single market for goods post-Brexit.
Remaining in the single market is likely to imply concessions from the UK such as the free movement of people, which Tory Brexiters are unlikely to accept.
Although the government reiterates that the UK would be leaving the single market in its entirety, the Guardian reported on Thursday that cabinet sources suggest the issue will be discussed in the Brexit 'war cabinet' in early July.
Reportedly, government insiders believe Britain could keep a frictionless trading relationship if it follows EU manufacturing rules but diverges in sectors such as services.
Nevertheless it is expected that if Brussels accepts the UK’s proposal it would request some concessions such as free people movement, a deal-breaker for Brexiter Tories and currently one of the PM’s red lines.
According to Charles Grant of the Centre of European Reform, the option of a single market of goods could potentially solve the Irish problems that is generating so many bumps for the divorce although it would still require some oversight from the European Court of Justice.
Writing for the Financial Times, Grant said: "Voluntary alignment by British companies would not suffice; the EU would insist on mechanisms for arbitrating disputes.”
Some of the most prominent Leave ministers and MP’s believe that this regulatory autonomy is the core purpose of leaving the block and the closer the UK remains to the EU the less chance it has to find other partners for trade deals.
A new row with the Brexiter wing of the Tory party is not what Theresa May needs at the moment since she has just survived another revolt by pro-EU Conservatives. May managed to convince the rebels to make a last minute concession on the MP’s “meaningful vote” on Wednesday.
Although given the circumstances of the Brexit negotiations, May will probably have to dilute some of her red lines to break the deadlock with the EU and secure a deal. This may please pro-EU conservatives but it is likely to alienate Brexiters.