Stark reality of Brexit aftermath beginning to unfold

As Theresa May's Brexit "war cabinet" finished their first ever discussion of what they hope for from the final Brexit deal, Michel Barnier's senior adviser was arriving at an elegant house on St James's Square with a large bucket of water to pour over it.

Stefaan De Rynck outlined clearly to an audience of foreign office experts at Chatham House how limited Britain’s options will be.

The cabinet sub-committee, which is balanced between hard Brexiteers and former Remainers, was reported to be divided over how much regulation should diverge from the EU. One group, led by Boris Johnson and Michael Gove, wants British regulation to be able to diverge from the EU after the end of a transition period.

Another group, led by Philip Hammond and Amber Rudd, warned that British business would suffer if British regulations did not remain closely aligned with those in the EU. In between was a group of ministers who favoured "gradual divergence" of regulation as time went on rather than a clean break. As is so often the case, nobody seems to know exactly where the prime minister stands.

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British politicians and think tanks have in recent days floated ingenious proposals which would allow a post-Brexit Britain to retain many of the benefits of the single market and the customs union while shedding some of their obligations. De Rynck told them to forget about it.

“What you cannot do is square an FTA [free trade agreement] circle into a single market. And that is one of the key issues that people have to live with and clarify quickly. There can be no sector-by-sector participation in the single market. And trying to square the FTA in a way that would lead to sector-based participation in the single market would for the EU be the beginning of the end of the correct functioning of the integrity of the single market,” he said.

He was echoing comments this week from Barnier himself, who said there was "no way" Britain could expect a bespoke deal with the benefits enjoyed by Norway and the freedom enjoyed by Canada.

The first phase of the Brexit negotiations saw Britain slowly and painfully coming to understand that the EU was serious about its demands on money, citizens’ rights and Ireland. The second phase of talks look set to involve a similar awakening to the grim reality of negotiating with the EU – and of Brexit itself.