The Cabinet split over Brexit trade deals will come to a head this week

Eighteen months after the referendum, cabinet ministers will this week finally debate the UK’s long-term relationship with the EU. To say their discussion is long overdue must be the understatement of the year.

But better late than never. The Government was woefully unprepared for phase one of the exit negotiations, which almost ended in failure as a result. Remarkably, the Irish border issue seemed to come as a bolt from the blue to ministers. Theresa May had to back away from her hastily-drawn “red lines” on the European Court of Justice and free movement, at least during a two-year transitional period.

Hopefully the Government will be better prepared for phase two. But we cannot be sure. Ms May repeatedly put off the crucial debate on the “end state” because her Cabinet is deeply divided over it. Now she must try to reconcile its very different visions, when her “inner cabinet” on Brexit meets on Monday, followed by the full Cabinet on Tuesday.

Philip Hammond, the Chancellor, leads a group which wants to stick close to most EU regulations to protect the economy until the UK is sure benefits will flow from trade deals with non-EU countries. Boris Johnson and Michael Gove lead a rival faction which wants a “clean Brexit”, believing that Hammond’s version will hamper the prospect of trade agreements and not deliver the 2016 referendum's verdict. Mr Johnson told The Sunday Times that the UK should not go from being "a member state to a vassal state” by mirroring EU laws.

The nine cabinet members of the European Union Exit and Trade (Strategy and Negotiations) sub-committee appear to lean 5-4 in favour of diverging from the EU, as Mr Johnson and Mr Gove wish. That leaves Ms May, who chairs the group, in the pivotal position. But anyone expecting our inscrutable Prime Minister to declare her hand this week will probably be disappointed. She is said to be in listening mode and to want to mull over her Cabinet’s views before finalising her strategy and making her third big speech on Brexit in the new year.

Ms May can be forgiven for wanting to keep both factions happy. If she were to announce that the UK will hug the EU close indefinitely, it would probably spark cabinet resignations. The Prime Minister will no doubt be tempted to broker a compromise, perhaps one under which the UK sticks to some EU regulations for the time being but can diverge in other areas. (Whether the 27 EU countries would allow what they regard as “cherry picking” is another matter).

Ms May should listen carefully to her Chancellor. The UK should not take a leap in the dark in the hope that unbankable trade deals suddenly materialise; even if they happen, they could take several years. Certainly, it would be foolish to rely on the much-trumpeted “special relationship” with the United States with an unreliable Donald Trump in the White House. Mr Hammond does not rule out some divergence, for example in the industries of the future such as artificial intelligence. But is right to argue that the UK must stick close to the EU for now.

Ms May should also bear in mind the views of Parliament. Last week’s Commons decision in favour of giving MPs a meaningful vote on the Brexit deal was a reminder that she cannot take its support for a hard Brexit for granted.

The Cabinet’s debate this week could hardly be more important. As Ms May searches for a compromise, the UK’s future should not be reduced to a matter of Conservative Party management. At some point, she will have to give a lead, and expect her ministers to follow. When she does, she must put the economy first.

It is in her party’s interest to get it right. If a bad Brexit leads to an economic downturn, Ms May would have betrayed the working class people she purports to champion and added to the “burning injustice” she seeks to eradicate. And the Tories would pay a very heavy price.