Philip Hammond. Photo: Getty
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The Tories are split over how Brexit is going – but so is the country

Philip Hammond could still be playing the politics of this a lot, lot better.

Is there light at the end of the tunnel as far as the Brexit talks go? Should Philip Hammond be sacked? Your answers to those questions probably say as much about where you stand on the Remain/Leave question than anything else.

After a glum assessment of where things stand from Michel Barnier gives cause for gloom, a leaked document showing that the European Council may begin preparatory work on trade negotiations has given reason for hope. Both are legitimate, but the problem is that regardless of whether the talks move on, the underlying problems causing them to stall, particularly the question of the Irish border, are going to cause a crisis sooner or later.

What about Philip Hammond? Tory grandee Nigel Lawson has called for him to be sacked and pressure is growing on the Chancellor as a result of his refusal to put money aside to "plan for no deal".

There are a couple of points worth noting here. The first is that while I know balanced budgets are so 2000-and-late, as a result of George Osborne's repeated failure to hit his targets, there is no money to "set aside". What the Conservatives are actually calling on is for more borrowing, more taxes, more debt: that is to say, they are quietly holing their big argument against Labour under the waterline.

The second is that Hammond could still be playing the politics of this a lot, lot better. Yes, preparing for "no deal" is a fantasy (how does one prepare for telling cancer patients they have no isotopes for treatment, etc?) for reasons Chris Giles details well in the FT this morning. But after the United Kingdom leaves the European Union it will still need a bigger customs infrastructure, both in terms of personnel and government property, than it currently has. The Chancellor could begin some of that spending now.

The problem is that the Conservative Party has lost the ability to think about Brexit rationally, which bleeds through to everything else. Precious few on the centre-right seem to have noticed the mismatch between lecturing the feckless young about why they should stop whining because at least they've got Wi-Fi one week, and calling for a bonanza of borrowing to build a few warehouses in Dover the next. Fewer still have a plan for Brexit that includes seeing off Labour as well as implementing Brexit.

Because it's not just the Tories who are increasingly split into two worldviews, it's the country as well. The latest Times/YouGov poll  finds that just 18 per cent of people who backed a Remain vote in 2016 see Theresa May as the best available PM, while 54 per cent of Leave voters do. We already know that Remainers and Leavers have radically different ideas of how the economy is performing. And the difficulty for any party is working out how to carve out a route to a stable majority among those two nations – whatever happens to Hammond or the Brexit talks.

Stephen Bush is special correspondent at the New Statesman and the PSA's Journalist of the Year. His daily briefing, Morning Call, provides a quick and essential guide to domestic and global politics.

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Why Jeremy Corbyn’s evolution on Brexit matters for the Scottish Labour party

Scottish Labour leader Richard Leonard, an ideological ally of Corbyn, backs staying in the customs union. 

Evolution. A long, slow, almost imperceptible process driven by brutal competition in a desperate attempt to adapt to survive. An accurate description then by Shadow Chancellor John McDonnell, of Labour’s shifting, chimera of a Brexit policy. After an away day that didn’t decamp very far at all, there seems to have been a mutation in Labour’s policy on customs union. Even McDonnell, a long-term Eurosceptic, indicated that Labour may support Tory amendments when the report stages of the customs and trade bills are finally timetabled by the government (currently delayed) to remain in either “The” or “A” customs union.

This is a victory of sorts for Europhiles in the Shadow Cabinet like Emily Thornberry and Keir Starmer. But it is particularly a victory for Scottish Labour leader Richard Leonard. A strong ally of Jeremy Corbyn who comes from the same Bennite tradition, Leonard broke cover last month to call for exactly such a change to policy on customs union.

Scotland has a swathe of marginal Labour-SNP seats. Its voters opted voted by a majority in every constituency to Remain. While the Scottish National Party has a tendency to trumpet this as evidence of exceptionalism – Scotland as a kind-of Rivendell to England’s xenophobic Mordor – it’s clear that a more Eurocentric, liberal hegemony dominates Scottish politics. Scotland’s population is also declining and it has greater need of inward labour through migration than England. It is for these reasons that the SNP has mounted a fierce assault on Labour’s ephemeral EU position.

At first glance, the need for Labour to shift its Brexit position is not as obvious as Remainers might have it. As the Liberal Democrat experience in last year’s general election demonstrates, if you want to choose opposing Brexit as your hill to die on… then die you well may. This was to some extent replicated in the recent Scottish Labour Leadership race. Anas Sarwar, the centrist challenger, lost after making Brexit an explicit dividing line between himself and the eventual winner, Leonard. The hope that a juggernaut of Remainer fury might coalesce as nationalist resentment did in 2015 turned out to be a dud. This is likely because for many Remainers, Europe is not as high on their list of concerns as other matters like the NHS crisis. They may, however, care about it however when the question is forced upon them.

And it very well might be forced. One day later this year, the shape of a deal on phase two of the negotiations will emerge and Parliament will have to vote, once and for all, to accept or reject a deal. This is both a test and an incredible political opportunity. Leonard, a Scottish Labour old-timer, believes a deal will be rejected and lead to a general election.

If Labour is to win such an election resulting from a parliamentary rejection of the Brexit deal, it will need many of those marginal seats in Scotland. The SNP is preparing by trying to box Labour in. Last month its Westminster representatives laid a trap. They invited Corbyn to take part in anti-Brexit talks of opposition parties he had no choice but to reject. In Holyrood, Nicola Sturgeon has been ripping into the same flank that Sarwar opened against Richard Leonard in the leadership contest, branding Labour’s Brexit position “feeble”. At the same time the Scottish government revealed a devastating impact assessment to accompany the negative forecasts leaked from the UK government. If Labour is leading a case against a “bad deal”,  it cannot afford to be seen to be SNP-lite.

The issue will likely come to a head at the Scottish Labour Conference early next month, since local constituency parties have already sent a number of pro-EU and single market motions to be debated there. They could be seen as a possible challenge to the leadership’s opposition to the single market or a second referendum. That is, If these motions make it to debate, unlike at national Labour Conference in 2017, where there seemed to be an organised attempt to prevent division.

When Leonard became leader, he stressed co-operation with the Westminster leadership. Still, unlike the dark “Branch Office” days of the recent past, Scottish Labour seems to be wielding some influence in the wider party again. And Scottish Labour figures will find allies down south. In January, Thornberry used a Fabian Society speech in Edinburgh, that Enlightenment city, to call for a dose of Scottish internationalism in foreign policy. With a twinkle in her eye, she fielded question after question about Brexit. “Ah…Brexit,” she joked. “I knew we’d get there eventually”. Such was Thornberry’s enthusiasm that she made the revealing aside that: “If I was not in the Leadership, then I’d probably be campaigning to remain in the European Union.”