Dan Roberts writes: If the EU referendum was the moment the British electorate clashed with the establishment, 8 December 2017 was the day that the legal and economic consequences collided with its political promises. The joint divorce agreement hammered out in the intervening 528 days makes clear that little remains of the many red lines set out by Theresa May in her Lancaster House speech or party conference address of 2016.

The first, and biggest, concession is buried in paragraph 49 of the 15-page report published early on Friday morning. Its implications will be anything but quiet in the weeks to come, for it undermines the prime minister’s previous insistence that Britain will be leaving the single market.

It states clearly: “In the absence of agreed solutions, the United Kingdom will maintain full alignment with those rules of the internal market and the customs union.” In other words, the UK may not be a member of the single market, or have any direct ability to shape its rules in future, but it could yet have to play by them in perpetuity.

Much will be made of the “in the absence of agreed solutions” caveat, yet what it means in practice is that the UK hopes to flesh out this pledge through a wider free trade agreement with the EU. If the other 27 members were reluctant to allow any wriggle room in the first phase of talks, they are even less likely to budge now that this principle is established as a back-stop.

When the agreement was first drafted on Monday, there was much concern that the promise of maintaining regulatory “alignment” might only apply to Northern Ireland, but the Democratic Unionist party has succeeded in removing any ambiguity and forced Downing Street to spell out that alignment stretches right across the Irish sea. [Continue reading…]