The Chancellor is doing that thing again. Speaking in Davos yesterday on a CBI platform, Philip Hammond argued for only “very modest” changes in the relationship between the UK and the EU after Brexit. If that didn’t raise enough doubts about his commitment to a proper Brexit, he also went out of his way to praise the CBI Director General’s recent call for what the Chancellor called “the closest possible future relationship” – a speech in which she explicitly argued for the UK to enter into a customs union with the EU, to start from a presumption of mirroring EU regulation, and to opt for something far closer to Norway than to Canada.
Hammond’s choice of the place, the host, and the things he said was not accidental. He knew exactly what message he was putting across. Notably, his comments on Twitter after the fact played the game of sounding like a correction without actually correcting anything. Yes, his speech noted that Britain will leave the EU, and its Customs Union and Single Market, but that recognition is no rebuttal of the wider implications of his speech – not least on the UK’s future freedom to strike trade deals and set our own regulations as we choose.
As Henry Newman wrote earlier this week, it would be reasonable to seek a situation where the norm is that we set our own rules but agree mutual recognition with the EU, leaving situations where we commit to aping the EU’s rulebook as relatively rare exceptions. The Chancellor appears to be arguing for the reverse – in the words of a Cabinet source in the Telegraph, “leaving Britain as a submissive rule-taker” – and when he had the opportunity to correct that impression, he declined to do so.
His non-correction also notably didn’t address the phrase in his speech which grabbed the most attention: the idea that Brexit will involve “very modest” change. Hammond’s critics argue that he is timid and unambitious about the liberating opportunities of leaving the EU, both on the domestic economy and international trade, and that he still does not really understand why so many people voted Leave in the referendum. These two words – “very modest” – sum up that critique. The Chancellor is openly talking of Brexit as something to be mitigated, not something to make the most of. That peeves his colleagues, jars with the many millions of people who voted to take back control, not for “very modest” change, and, if he were to succeed, threatens to limit the opportunities available to the UK.
He evidently still either fails or refuses to adapt to changed circumstances. He supported Remain in the referendum, which was of course his right, but unlike most other Remain-supporting Conservatives he appears to have made little to no effort to study why Remain lost or what Leavers wanted, and adjust his position as a result. This is not a recent divergence, either – he is even out of step with what has been the Government’s own policy since the Prime Minister’s speech at the 2016 Party conference.
To a certain extent, one could argue that he is simply making the case in which he and his department both believe. It’s been clear for a long time that on the sliding scale (not binary choice) between a Canada-ish and Norway-ish relationship, Hammond is far closer to the latter. Indeed, that’s one reason why we argued in October that May would need a new Chancellor in order to be able to finally and clearly choose something closer to the former – as her policy, the politics, and the national interest demands.
The fact that she did not replace Hammond in the reshuffle does not necessarily point to her shifting position to agree with him on the post-Brexit relationship, though many Brexiteers understandably fear that it might. Instead it points to something almost as bad: the fact that the Prime Minister still refuses to formally determine a full and final position on the end-goal.
She knows that giving such an answer will please some people and displease others, shifting the balance around the Cabinet table and inviting both praise and criticism, which brings attendant risks to a leader in her weakened position. Rather than tackle those risks, May has so far simply sought to postpone them. That isn’t a productive approach, and rows like this – and that over Boris Johnson’s NHS spending comments earlier in the week – are a direct product of that cop-out.
So the Chancellor should not be freelancing in such a damaging way on such an important topic. But, at the same time, the Prime Minister should not be dithering on that same issue in a way that grants him the space, opportunity and motive to do so.
Troublingly, dithering seems to be the new default. Even after Hammond’s Davos remarks had gained widespread coverage, it took Downing Street far too long to even try to put him back in his box. Those Leavers and Johnson fans who watch for perceived slights have noticed that while the Foreign Secretary’s own foray into indiscipline was met with stinging rebukes and leaked accounts of a “proper bitch-slapping”, the Chancellor appears to have got off rather more lightly. May’s failure to decide on the Brexit end-goal invites indiscipline, and thereby creates a whole new theatre in which people will try to scry out her true views in the form of perceived strictness or leniency towards one camp or another.
That amounts to a hugely dangerous ramping up of tensions in Government and around her leadership. It is no coincidence that at the same time as this new game has begun, rumours abound of letters being handed in to Sir Graham Brady, the ERG is restless, the remaining Remainers are reported to be mulling when might be best to strike, and so on. If making a decision seemed too risky for the Prime Minister, she must now appreciate that deliberate indecision has proved even more so. There’s only one way to lance the boil: she has to choose.