Row over the Rock helps Theresa May slip under the radar with Brexit backtrack

The United Kingdom's negotiators would not have chosen to start two years of Brexit talks amid Conservative threats of war with Spain over Gibraltar. But the row over the Rock has served as a helpful distraction while Theresa May makes an important shift in her approach to negotiations with the European Union.

Until now the prime minister has been clear that Brexit must mean an end to the free movement of people, contributions to the EU budget and the jurisdiction of the European Court of Justice. During a visit to Saudi Arabia this week, however, she acknowledged that some of these arrangements with the EU may persist for some time after Brexit.

The UK cannot sign a free-trade deal with the EU until after it leaves, and May accepts there will have to be transitional arrangements to bridge the gap.

“If you think about it, once we’ve got the deal, once we’ve agreed what the new relationship will be for the future, it will be necessary for there to be a period of time when businesses and government are adjusting systems and so forth, depending on the nature of the deal, a period of time during which that deal will be implemented,” she said.

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She declined to rule out free movement of EU citizens continuing throughout a transitional period. And the EU has made clear that, if the UK wants to remain in the single market while a new trade deal is being agreed, it will have to abide by all the rules. These include free movement, budget payments and the continuing jurisdiction of the European Court of Justice.

The PM's shift reflects the reality she reads about every day in reports about the economic impact of a cliff-edge Brexit

The prime minister's shift reflects the reality she and her ministers read about every day in reports from officials about the economic impact of a cliff-edge Brexit. It also testifies to the strength of her relationship with the hard Brexiteers on her own backbenches. While Ukip accused May of preparing to betray voters over immigration, leading Conservative Eurosceptics like Bill Cash came to her defence.

“The fact that we leave means the end of the European legal basis for free movement. But there will still be a need for some fluidity of labour, and that will be dealt with in the immigration Bill,” he said. “You can’t have an overlap. EU law will end and the terms of the immigration Bill will take over, but that will include movement of people for the purposes of having a proper workforce, and I think that’s what the prime minister was referring to.”

The key figure among Conservative Brexiteers is Steve Baker, a backbench MP who serves as shop steward to about 80 hardliners he co-ordinates through a WhatsApp group. May has worked hard to cultivate Baker, and he has ensured that his allies on the backbenches have remained calm and united behind the prime minister's approach to Brexit.

Luckily for May, Ukip has chosen the moment of its greatest triumph to destroy itself in a frenzy of spite and internal feuding. Its two most prominent Conservative defectors, the Clacton MP Douglas Carswell and the Welsh assembly member Mark Reckless, have quit the party. Ukip's biggest donor, the businessman Aaron Banks, has also given up on the party, and its only real star, its former leader Nigel Farage, spends more of his time these days as a radio presenter and Fox News contributor.

Labour's feeble response to Brexit, for which centrists like Keir Starmer bear more blame than Jeremy Corbyn, has given May further room for manoeuvre. Paralysed by fear of the minority of Labour voters who backed Brexit, the party backed May's hard Brexit before she triggered article 50.

Now Starmer, the shadow secretary of state for exiting the EU, is making impossible demands of the policy he supported, insisting that the UK should enjoy exactly the same benefits outside the single market as it does now. Labour justifies this by referring to a rash claim made by the Brexit secretary, David Davis, substituting a crass debating point for a serious policy.

While May was softening her tone in Saudi Arabia the European Parliament floated the idea of an association agreement, under which the UK could co-operate with the EU on some policy areas while remaining outside it. None of this made as much news at home as the action of a small Royal Navy patrol boat in chasing a large Spanish warship out of Gibraltarian waters.