Chancellor Philip Hammond’s summertime dream of an indefinite ‘transition’ phase in the UK’s departure from the EU seems to be over

At a stroke, it is as if Britain’s Brexit summer never happened. Five weeks of a steady thaw in government thinking over how to ease Britain’s departure from the EU appears to have come to a shuddering halt. A joint article by the chancellor, Philip Hammond, and his cabinet rival Liam Fox instead signals that the position paper on customs policy published on Tuesday could once again favour a more bracing leap into the unknown.

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That, at least, is the fear of business groups who are interpreting the weekend peace accord between Hammond and Fox as a sign that the cabinet Brexit wars have been won by Tory hardliners. By conceding that any transition phase cannot involve membership of the single market or the EU customs union, the once troublesome chancellor seems to be raising the white flag ahead of the prime minister’s return from holiday this week.

The post-election thaw in government thinking began at a summit of business leaders at the Chevening country house on 7 July at which the CBI called for full continued membership of both the single market and customs union. But the political consequences of this are threatening in many ways, none more so than for Fox, whose international trade department would be barred from striking any new deals abroad for the entire length of the transition.

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Without doubt, there has been a climbdown in the chancellor’s language while his boss has been away. Out is Hammond’s summertime dream of an indefinite “transition” phase, in which life largely continues as normal while trade negotiators finish the lengthy process of thrashing out Britain’s future relationship with the EU. Instead, Downing Street is once more buzzing with talk of an interim or “implementation” period: a phrase preferred by the prime minister because she believes it suggests a more finite, controlled process of departure.

But the EU has always insisted that enjoying the full benefits of market membership can only come with an agreement to play by existing rules. If cabinet unity is to be maintained, then promises of “frictonless trade” throughout may still end up looking a lot like temporary membership of the customs union.

Either the government is now prepared to tolerate a sharp, painful departure, or it still believes in the cake-and-eat-it dream of changing EU minds. Many Brexit-watchers fear a combination of both. Brace yourself, they warn, for more unrealistic promises of painless transition for all involved as the country edges inexorably closer to the cliff edge.