With the passage of Theresa May’s unloved Brexit deal almost certain to be blocked by MPs next month, the destination signs now point to Norway.

Government analysis of the Brexit options, published on Wednesday, shows the economy would take less of a hit under a Norway-style deal involving membership of the European Economic Area (EEA) than under May’s Chequers strategy, a Canada-style free trade agreement or a no-deal exit.

Crucially, May’s deal has little chance of getting through the Commons, while backers of Norway believe it does, as it has cross-party appeal. Philip Hammond, the chancellor, nodded in this direction this morning when he told BBC Radio 4’s Today programme that if May’s agreement were defeated, “we would have to look at the parliamentary arithmetic”. He added: “If you look purely at the economics, remaining in the single market would give us an economic advantage.”

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Chancellor Philip Hammond says Theresa May’s Brexit deal ‘is very close’ to the economic benefits of being in the EU

The government is going to need a Plan B. May is now fighting not just to avoid a crushing Commons defeat on 11 December, but for her very survival as prime minister.

Some Brexiteer ministers want a Canada-EU-style free trade deal or a “managed no deal” based on mini-deals with the EU in areas such as aviation, medicines and security. But neither would likely win Commons approval or prevent a hard border between Northern Ireland and Ireland.

So the option coming up fast on the rails is staying in the single market via the EEA and European Free Trade Association (Efta), and in a customs union with the EU.

Norway-plus is being championed by Nick Boles, a former minister close to Michael Gove, who can’t support it while May’s deal is still in play, but would probably push Norway once it is dead. So would Amber Rudd, an important player now she is back in the cabinet. Hammond’s words suggest he would too.

Norway-plus would deliver the “frictionless trade” that May failed to win. The UK would leave the common agricultural and fisheries policies and the remit of the European Court of Justice. The Efta court is less interfering. Budget contributions would be small compared with EU membership.

The EEA option would almost certainly win the EU’s backing, another pre-requisite. Under the Boles plan, it would take effect when the “status quo” transition period ends in December 2020.

It would prevent a hard Irish border, while Northern Ireland would have the same rules as the rest of the UK – removing the Democratic Unionist Party’s main objection to May’s deal, which is shared by many Tories. The Scottish National Party and Liberal Democrats would likely buy it. The Labour leadership is cautious for now, as it wants to propose its own plan. But many Labour backbenchers would back EEA membership; 75 did so in a Commons vote in June.

Norway-plus has downsides. The UK would have to retain free movement. Although the EEA allows members to apply an emergency brake in response to economic or social pressures, it is doubtful the UK would qualify.

The UK would be a rule-taker, not a rule-maker, and a customs union would hinder trade deals with other countries. Both would be hard for Eurosceptics to swallow. But some might live with Norway as a staging post to a much looser Canada-style agreement, though Boles has stopped calling his plan “Norway to Canada”. As one minister who backs the Norway option told me: “If you tell a club you’re only joining for five minutes, it won’t let you in.”

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It’s unclear whether May could steer the UK in Norway’s direction. She would have to abandon her free movement red line. She might not even get the chance.

With hindsight, it would have been much better for May to go down the Norway route when she became prime minister in 2016. Instead, she overcompensated for backing Remain, and was too anxious to pander to the Eurosceptics, making promises she could not keep without damaging the economy. She has now gone almost full circle; adopting Norway would complete the process.

However, as the government analysis shows, we would be worse off than under our current EU membership terms. Surely, it would be right to consult the people about that first in a Final Say referendum. It is true that Norway-plus might appeal to MPs reluctant to vote for another referendum. But arguably, as May claimed in Prime Minister’s Questions on Wednesday, it would not implement the 2016 referendum because the UK would have to follow the rules without shaping them. As Svein Roald Hansen, a Norwegian Labour MP, told the BBC: “If I were British, I would prefer to stay in the EU and have a say on the decisions.”

Ministers are not merely putting pressure on MPs when they say they do not know what would happen next if May’s deal is shot down. No one knows. However, it seems to me that we’re heading for Norway.



The Independent has launched its #FinalSay campaign to demand that voters are given a voice on the final Brexit deal.

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