Report: British government split on EU workers

Another source, said to be close to Hammond, told the newspaper: “A key priority is going to be financial services for us. For the Germans, the automotive industry is going to be key.”

The two ministers appointed to plan the future Brexit negotiations, David Davis and Liam Fox, have, like prime minister Theresa May, indicated that neither they nor the British public would be willing to accept EU free movement after the Brexit referendum, which was dominated by anti-immigrant feeling.

But The Sunday Times said that Hammond’s treasury is trying to take control of the Brexit process due to its officials’ deeper experience on economic issues.

The feeling inside the British civil service is more pro-European than in the Tory party, according to Gus O’Donnell, the UK’s former top official, who said last week that Britain might be able to remain as a “loosely aligned” member of a reformed European Union despite the referendum.

But if May listens to her civil servants, she risks a political rebellion, some of her MPs have warned.

“She’s got to elaborate on what she means by ‘Brexit means Brexit’. We need some red meat. The public want it too”, Andrew Bridgen, a Tory MP, said at the weekend.

The British political tussles also include one on whether to first consult parliament before triggering the so-called article 50 procedure to exit the EU.

Two senior Labour MPs, Barry Gardiner and Owen Smith, over the weekend urged May to hold a vote, risking a potential crisis if a majority of MPs voted to stay in the EU.

“She’s [May] looked at the numbers and she knows she might not win a vote in parliament”, Smith said. If she did not hold a vote, she would “diminish parliament and assume the arrogant powers of a Tudor monarch”, Gardiner said.

The Sunday Telegraph newspaper reported that May has asked her ministers to submit their Brexit ideas at a meeting in her official retreat, Chequers, on Wednesday, amid expectations that she will invoke article 50 early next year.

Talks on future UK-EU relations are also speeding up on the mainland ahead of an extraordinary summit of 27 EU leaders without the UK in Bratislava in mid-September.

Sigmar Gabriel, Germany’s left-wing deputy chancellor, who is to compete for office with the centre-right chancellor Angela Merkel in next year’s elections, said on Sunday that the EU would go “down the drain” if the UK got exceedingly generous terms.

“If we organise Brexit in the wrong way, then we’ll be in deep trouble, so now we need to make sure that we don’t allow Britain to keep the nice things, so to speak, related to Europe while taking no responsibility,” he said.

A senior official from a western European country told The Sunday Times that Merkel’s talks with 15 EU leaders last week came to a similar conclusion.

“Britain will have to leave the single market, then negotiate a trade deal with additional agreements on specific issues. Not accepting freedom of movement means losing access to the single market. Limited acceptance of the freedom of movement means limited access. It is up to the British to choose”, the official said.