After a disappointing election result, pragmatists in Britain’s ruling Conservative Party pinned their hopes on Philip Hammond to save them from a “hard” exit from the European Union.
It seems they miscalculated.
In an interview with the BBC’s Andrew Marr, the chancellor ruled out continued membership of both the European single market and the customs union.
He also reiterated the Conservatives’ commitment to reducing annual immigration to the tens of thousands, a target the government has missed for years and which is inconsistent with a Norway-style deal.
Having lost her majority, British prime minister Theresa May cannot afford to alienate either “soft” or “hard” Brexiteers in her party.
Hammond is (or was) considered a leader of the first group, which argues for the least disruptive departure from the EU possible.
Ruth Davison, the Scottish Tory leader, is another prominent soft Brexiteer.
The hardline faction, which includes Brexit Secretary David Davis, Defense Secretary Michael Fallon and Environment Secretary Michael Gove, wants a clean break with the EU in order to regain full control over Britain’s borders and do trade deals with non-EU countries.
Membership of the European Economic Area (EEA), like Norway, would give Britain access to the single market in return for allowing free movement of EU nationals and paying into the EU budget — without getting a say in how the money is spent.
On the upside, Britain could do trade deals with other countries and would no longer be bound to the EU’s agriculture and fishery policy, an important point for the Scots, who have a large fishing industry.
But without a strong advocate for EEA membership in May’s cabinet, it doesn’t look like a realistic prospect.