Cabinet ‘Alliance’ Working On Secret Plan For ‘Super Norway’ Brexit Alternative

With Theresa May out of town for the G-20 summit in Buenos Aires, eight of May’s senior cabinet ministers are reportedly working behind her back to undermine her draft deal, or at the very least hammer out an alternative proposal that they can bring to the EU once the current plan – which at least 100 members of her party have said they would oppose – is inevitably voted down.

According to the Telegraph, the talks are focusing on a forging a Norway-style “plan B” if the Prime Minister’s deal is voted down. This follows reports from earlier in the week that an ‘alliance of Tory cabinet members and EU ministers are secretly working behind the scenes to prepare a back up plan’. With the deal’s future in doubt, a growing number of Tories have taken to endorsing what they have called the “Super Norway” plan (for more detail and context, see our latest Brexit guide).

A cross-Brexit alliance of ministers – equivalent to almost a third of the Cabinet – has held discussions about joining the European Free Trade Association amid concern there is “zero chance” of the Prime Minister’s deal surviving.

Last week four ministers – Jeremy Hunt, the Foreign Secretary, Michael Gove, the Environment Secretary, Geoffrey Cox, the Attorney General and Matt Hancock, the Health Secretary – were briefed on the plans.

Amber Rudd, the Work and Pensions Secretary, Philip Hammond, the Chancellor, Greg Clark, the Business Secretary, David Gauke, the Justice Secretary, have also privately expressed support for Norway.

While EU officials like European Council President Donald Tusk and Commission President Jean Claude Juncker have insisted that the current deal is the only option and that negotiations will not be reopened, at the end of the day, the Europeans don’t have as much leverage as they would like because, as we pointed out this week, while a ‘no deal’ Brexit would be ‘bad’ for the UK, it would be catastrophic for the EU.

This unassailable fact is perhaps the only clear theme that has emerged from the chaotic negotiations of the past three months. Adding to the secret plan’s chances of survival, it reportedly has the backing of Conservative Party chairman Brandon Lewis, who has privately expressed his support. The first stirrings of the plan emerged a few weeks ago after Theresa May’s first tumultuous week of trying to sell the draft deal nearly ended in a ‘no confidence’ vote. At the time, several of her key cabinet ministers agreed to stay on, reportedly so they could work on winning a better deal from the inside.

As a reminder, here’s what a ‘Super Norway’ trade agreement might look like (courtesy of Capital Economics):

Over this past week, anonymously sourced media reports have claimed that May is considering holding a “meaningful vote”, which would allow MPs to propose amendments to her plan, then vote on which amendments they’d like to keep.

In another example of the irony that has at times characterized the political farce that is the Brexit talks, Theresa May opposes “Super Norway” because she feels it wouldn’t end free movement of people, and hence wouldn’t fulfill the popular mandate delivered in the June 2016 Brexit vote. And so the prime minister, who has so often been accused of being a closet remainer, is now insisting that tight immigration controls be part of any final deal.

Speaking to reporters on the flight to Buenos Aires, she said: “At the beginning of the negotiations with the EU, there were two options on the table, one was Norway and one was a Canada-style free trade agreement.”

“The EU said there was nothing else available, but what you see in the [Brexit deal] is…a more ambitious free trade agreement than Canada, that ends free movement which Norway doesn’t do. So this is the deal that is right for the UK.”

But there’s one factor of the Norway plan that neither May nor the EU would be able to argue with: The fact that it enjoys broad support not just among the Tories, but from Labour rebels, the DUP and the SNP.

However Cabinet ministers backing the Norway option believe it can win the support of more than 70 Labour rebels, the DUP and even the SNP. “It’s the only realistic alternative,” one minister said.

“This is about coalescing around something that will avoid a no-deal Brexit. Mr Hammond earlier this week refused to rule out the Norway option.”

Asked about whether the Government has a “plan B”, he said: “We will be in uncharted political territory. We will then have to sit down as a government and decide where to go on the basis of the vote.”

Asked about a Norway-style deal, Mr Hammond did not rule it out: ‘We will have to look at the decision Parliament has made and consider what is the best way to proceed.”

Under the Norway scenario the UK would retain access to the Single Market after Brexit but be forced to accept continued free movement. The Prime Minister has been clear that this represents a red line for her.

But as Deutsche Bank pointed out earlier this month, negotiations involving the EU often go down to the wire. At this point, both May and Michel Barnier, the EU’s lead negotiator, know the deal, as it stands, will never work. Which reinforces our other major point about Brexit: That everything that happens between now and the day the deal is finally passed and accepted by the EU is pure political theater.

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