Theresa May and her Cabinet will hold a crunch meeting today to decide the UK's Brexit policy.

62 Brexit-supporting MPs have written to May calling on her to commit to a hardline version of Brexit.

One MP tells BI that failure to agree to a "proper Brexit" will "reflect very badly on the government and very badly on the Conservative party."

Remain-supporting MPs accuse them of seeking to "blackmail" the prime minister.



LONDON — It's almost a year since Theresa May first triggered Britain's exit from the EU, yet her government has still not come up with an agreed position on what Britain's future will look like after Brexit.

Today the prime minister will attempt to solve that by taking her Cabinet to her official retreat at Chequers in an attempt to finally decide what Britain's so-called Brexit "end state" will be.

These talks, which are set to go on until late in the evening, are the culmination of months of internal Conservative party wrangling.

These divisions came to a head on Wednesday when a group of 62 hardline Brexit-supporting Tory MPs signed an open letter to May demanding that the PM sign up to a series of highly restrictive terms for Britain's transition period.

These terms, which include demands that Britain must leave the customs union and the single market, as well as any jurisdiction from European courts during the transition, are at complete odds with the government's official policy.

Yet the letter was signed by very junior members of the government and even one of the vice chairs of the Conservative party, causing further anger and disunity across the party.

Yesterday Business Insider spoke to Conservative MPs on both sides of the Brexit divide to see if May has any hope of bringing her party together.

"Proper Brexit"

"This hard and soft Brexit; there's no hard or soft Brexit. There's either Brexit or there's becoming some sort of vassal state," Andrew Bridgen MP, one of the signatories of the letter to May, tells me.

Bridgen is one of the leading members of the pro-Brexit, European Reform Group, which co-ordinated the letter to May. This group, which is chaired by the Conservative MP Jacob Rees Mogg, has become increasingly vocal in recent months as May has begun to spell out her approach to Brexit negotiations.

Bridgen's suggestion that May is prepared to turn Britain into a "vassal state" of the EU, has gained popularity among its members ever since the prime minister signed the Brexit divorce agreement with the EU in December.

This agreement, although broadly welcomed in the party, caused panic among Brexiteer MPs as it suggested that Britain could remain closely aligned to EU laws and regulations. May's subsequent suggestion that Britain will remain fully aligned to those rules during the Brexit transition period has led many of its members to suspect that the prime minister is preparing to "betray" their vision of what Bridgen calls a "proper Brexit".

"I think that would be a very weak position to take," Bridgen says, of the suggestion that trade talks will continue well into the transition period.

"All that's doing is getting another 20 billion pounds into the European Union's coffers."

Bridgen believes the difficulties of negotiating a free trade deal with the EU are being grossly exaggerated by the government. So confident is he that he believes there should be no transition at all.

"Why are we talking about transition?" Bridgen asks me.

"A free trade deal can be sorted very, very quickly.

A free trade deal can be sorted in an afternoon.

"We can't sign it apparently until we leave but we can sign it the morning we leave and we don't need a transition period if we've got no free trade deal to go forward to do we?

"Why would we want to drag it out for two years and then have no deal at the end?"

I put it to him that leaving the EU on World Trade Organisation terms during the transition, as the ERG letter calls for, would immediately cause Britain to fall out of dozens of European agencies and agreement which cover everything from medicines to aviation.

He dismisses this out of hand.

"I don't think we'll need to because the European Union need a) the 40 billion pounds, plus the 20 billion for transition — that's 60 billion pounds to prop up their budgets."

He insists that European dependence on UK trade will force them to make an agreement.

"On trade, the European Union is the only part of the world where we have a trade deficit. We are the customer and as your business people will know, and I was in business for 22 years, serial entrepreneur, chairman of the Institute of Directors for the East Midlands, the customer is king."

So confident is Bridgen, that he tells me a trade deal with the EU could be "done in an afternoon."

"It isn't complicated is it? It's the most straightforward trade deal you could ever do. The free trade deal we could do with the European Union will be the most straightforward ever in history. We've got full regulatory equivalence. It's just a matter of what you want tariffs on. It could be done in an afternoon."

They're 'trying to blackmail the prime minister'

Those on the other side of the Conservative Party's Brexit divide see it all very differently.

"Quite frankly this letter looks ridiculous," one centrist MP tells Business Insider.

"It is simply not appropriate for any group in the parliamentary party to be sending these sort of letters that are trying to twist the prime minister in one direction or other."

The letter has apparently gone down very badly among the majority of Conservative MPs in Parliament's tearooms, where MPs meet to gossip, discuss policy and form alliances.

This is 20% of the parliamentary party trying to blackmail the prime minister.

"It's not going down at all well with the rest of the parliamentary party which is not at all impressed [by this letter] and that's fairly representative across the party," an MP who backed Remain in the referendum tells me.

"It's definitely being discussed in the tearooms.

"But the fact is that they are just going to have to compromise. Nobody is going to get 100% of what they want out of this. Nobody. And it's about time they realised that."

The feeling among Conservative MPs is that yesterday's letter was merely a list of the "usual suspects" on the Brexiteer wing of the party.

"Strategically I think it's a mistake on their part. I mean if they had say 120 MPs signing the letter then fair enough, but this is just 62. What's that? This is 20% of the parliamentary party trying to blackmail the prime minister."

However, among the signatories of the letter were the official aides to ministers — the very lowest rung of government.

"Yes I am a little bit concerned that it includes the PPSs and the deputy chairman of the party," the MP admits.

"That is a bit concerning."

Holding the PM to ransom

Whatever the size of the Brexiteer rebellion in May's party, there is no doubt that it is a rebellion which the government is acutely aware of.

As Business Insider reported this week, the government had been scheduled to publish a draft legal response to the EU's negotiating guidelines for the Brexit transition first thing on Wednesday morning.

If we don't deliver proper Brexit it will reflect very badly on the government and it will reflect very badly on the Conservative party.

However, the document failed to appear after a draft of the text was leaked by EU figures to publications including BI.

The document included the suggestion that the transition could be extended indefinitely beyond the EU's preferred option of it ending on December 31, 2020.

This caused yet another round of panic among Conservative Brexiteers who were already fearful that the government will be pushed into a so-called "Hotel California" Brexit whereby Britain checks out of the EU but never really leaves.

As MPs, including the former Conservative leader Iain Duncan Smith, protested about the line, the document was withheld as Downing street desperately tried to maintain any damage by insisting that Britain's policy had not changed. The document was eventually slipped out late on Wednesday afternoon.

The row highlighted the leverage these 60-plus MPs who signed the letter to May yesterday now have over the prime minister.

And May gathers her Cabinet today at her retreat in Chequers, it is a power which Bridgen and other members of the ERG are determined to leverage.

"I'm sure the letter will be discussed," Bridgen tells me.

"And I hope that they will accept [our demands] because if we don't deliver proper Brexit it will reflect very badly on the government and it will reflect very badly on the Conservative party."