Theresa May must face down her Brexiteer MPs sooner rather than later – everyone knows a 'no deal' isn't going to happen

One cabinet minister told me, ‘The centre of gravity in the Cabinet is closer to Hammond than Boris; she seems to be moving that way too’

After her LBC appearance inevitably produced headlines about May being unsure on Brexit (LBC)

Theresa May must now realise that her attempt to switch the focus on to domestic policy – such as the “burning injustice” faced by ethnic minorities – is doomed to fail. She cannot escape the dark shadow of Brexit. She eclipsed her own largely positive story about her “race audit” by refusing to say in a LBC radio phone-in on Tuesday whether she would vote to leave the EU in another referendum now.

I suspect her equivocation tells us more about the Prime Minister’s position than she intended on the €64,000 question her divided Cabinet must soon answer: what should the long-term UK-EU relationship be?

Several Cabinet ministers believe May is edging towards the Chancellor Philip Hammond’s “hug Europe close” model in which the UK would mirror most EU regulations before deciding whether to diverge if and when benefits accrue from (unbankable) trade deals with other countries. That would mean rejecting a “clean break” with the EU when the proposed transitional phase ends in 2019, as championed by the Foreign Secretary Boris Johnson.

May’s instinct might be to find a compromise acceptable to both camps – perhaps keeping some EU rules but having some freedom to diverge – but this is a fork in the road and there may be no middle way.

After her LBC appearance inevitably produced headlines about May being unsure on Brexit, some ministers recalled her remarks before last year’s referendum 2016 in which she came down narrowly for Remain. Although she did not believe “the sky would fall in if we vote to leave”, the then Home Secretary concluded that on balance, the EU “does make us more secure”, more prosperous and “more influential beyond our shores”.

May needs to make a similar judgement now. Ministers believe she will again put safeguarding the economy ahead of controlling immigration, despite her tough reputation on the latter. “It comes down to whether we risk wrecking the economy; she won’t do that,” one cabinet minister told me. Another said: “The centre of gravity in the Cabinet is closer to Hammond than Boris; she seems to be moving that way too.”

But May’s path is strewn with thorns. What do you do with a problem like Boris? He’s being loyal again now, but overshadowed May’s Florence speech and the Tory conference by throwing his toys out of his pram, no doubt sensing the way the Cabinet wind is blowing.

If she sacks Johnson or (more likely) tries to move him from the Foreign Office in the reshuffle being urged on her, he’ll end up on the backbenches as he would not accept a demotion. He could be more trouble for May there – on domestic policy as well as Brexit. If, as expected, she keeps Hammond at the Treasury, that would be read as a clear and dangerous signal by her hardline Brexiteer backbenchers.

She is going to have to face them down at some point. But her room for manoeuvre on the EU relationship and the reshuffle may be limited by her still perilous position after her calamitous Tory conference. Until then, the 60 Brexiteer Tory MPs in the European Reform Group had mostly kept their heads down, prepared to swallow a two-year transition if they got a hard Brexit afterwards. Since the conference, they have accused Hammond of trying to smother Brexit and demanded his head. Perhaps they sniff something bad in the air like Boris. May cannot ignore this group; on paper, it has more than the 48 MPs needed to trigger a vote of confidence in her.

She tossed the hardliners a bone on Monday by agreeing to step up the Government’s preparations in case “no deal” is reached with the EU in order to put pressure on it in the exit negotiations. But she also upset them by accepting the European Court of Justice’s writ during the transition. A classic example of the Prime Minister riding two horses at once.

The threat to walk out of the Brussels talks is an empty one and the EU27 know it; it’s an open secret that the UK could not get new customs, immigration and border systems in place by March 2019. There is no majority in Parliament for “no deal”; MPs would try to block that outcome. We need an agreement, and so Hammond is right not to spend money on “no deal” preparations for now.

May should go all-out for a deal rather than pretend we have a credible plan B. She should recognise that, for all her good intentions to tackle “burning injustice”, she will not now get the time to implement her domestic agenda.

Brexit is May’s last chance to secure a decent legacy. Although she remains under threat, she might still get time to achieve it. Crashing out of the EU without a deal, as some Brexiteers wish, would risk economic disaster. It’s time for her to chose which horse to ride.