Brexit weekly briefing: Hammond and Fox call a truce on customs union After a summer of sniping, the cabinet ministers on opposite sides of the soft-hard Brexit divide agree on the terms of a post-Brexit transitional arrangement – hailed by the Brexiters as a victory Philip Hammond, left, and Liam Fox: joint enterprise Photograph: Phil Noble/Reuters Jon Henley @jonhenley Welcome to the Guardian's weekly Brexit briefing, a summary of developments as the UK heads to the EU door marked "exit". If you would like to receive it as a weekly early morning email, please sign up here. You can listen to our latest Brexit Means podcast here. Also: producing the Guardian's independent, in-depth journalism takes a lot of time and money. We do it because we believe our perspective matters – and it may be your perspective too. If you value our Brexit coverage, please become a Guardian Supporter and help make our future more secure. Thank you. The big picture A cabinet truce appears to have been concluded on the terms of a post-Brexit transitional arrangement, with the chancellor, Philip Hammond, and the international trade secretary, Liam Fox, agreeing that the UK will be "outside the customs union" and "a 'third country', not party to the EU treaties" for a "time-limited" period. The two ministers' joint article for the Sunday Telegraph on the arrangement the UK wants to bridge the gap between Brexit day and the start a future trading deal with the bloc follows a fortnight of public sniping by both sides of the soft-hard Brexit divide while Theresa May has been away. Hammond and his supporters backed a gradual transition period in which the UK-EU relationship would be "similar in many ways" to what it is now, while Fox and his allies said anything resembling continued free movement and membership of the single market and customs union would not be what the country voted for. While it is unclear how it might work in practice (and how the EU could agree to it), the plan is seen as a victory for the Brexiters: leaving the customs union should leave Fox free to conclude trade deals with non-EU countries from the moment Britain leaves in March 2019, without having to wait till the transition is over – possibly three years later. As predicted last week, the Brexit secretary, David Davis, is now expected to publish a government position paper on Britain's hopes for a future customs deal this week, as well as a document on the future status of the border in Northern Ireland. As the prime minister's spokesman put it: The first round of the negotiation has shown that many of the withdrawal questions can only be settled in the light of our future partnership. So now is the time to set out our approach to that partnership, to inform the upcoming negotiations, and to provide citizens and businesses at home and across Europe with a deeper understanding of our thinking. The view from Europe Europe – and particularly Brussels – is, if anything, even more on holiday than it was last week. But there was good news from Spain where the foreign minister, Alfonso Dastis, said Madrid would not seek to block a Brexit agreement by attempting to regain sovereignty over Gibraltar. His comments followed rising tension after the EU 27's negotiation guidelines suggested Spain would be given a veto on whether the Brexit deal could be applied to "the Rock", which was ceded to Britain in 1713. Dastis told Spain's ABC newspaper he placed "great importance" on the issue, "which takes the form of a Spanish demand for the completion of our territorial integrity", but would not block a Brexit deal in order to secure it. We will try to convince the Gibraltarians that joint sovereignty is a route worth exploring and that it would benefit them, too. But what I don't want to do is jeopardise an EU-UK agreement by subjecting it to a need to alter Gibraltar's status at the same time. I won't make an agreement between the EU and the United Kingdom conditional on recovering sovereignty over Gibraltar. Meanwhile, back in Westminster A former Tory business minister, Anna Soubry, warned the party could split if May insists on pursuing a hard Brexit. Soubry she would be willing to resign from the Tories and join up with "like-minded people" if the government opts for a Brexit that she felt would "destroy the lives and livelihoods" of her constituents. She urged the prime minister to avoid that by refusing to let "Brexit ideologues" dictate government policy. Labour's former foreign secretary David Miliband sounded a similar warning, calling for politicians from all parties to work together to prevent the government from driving the country "off a cliff". Miliband said Brexit was an "unparalleled act of economic self-harm" and suggested it was up to MPs of all political colours to fight back against its worst consequences – and to demand another vote on the terms of a final settlement, either by referendum or in parliament. James Chapman, a former aide to both David Davis and George Osborne, said two serving cabinet ministers had expressed interest in his idea of forming a centrist political party aimed principally at blocking Brexit. In a series of tweets, Chapman, also a former political editor of the Daily Mail, had earlier said Brexit would be a "calamity" and that Boris Johnson and other leading Brexit campaigners should be jailed for claiming there would be an extra £350m a week for the NHS after the UK left the European Union. Past time for sensible MPs in all parties to admit Brexit is a catastrophe, come together In new party if need be, and reverse it #euref19 — James Chapman (@jameschappers) August 8, 2017 You should also know ... UK retirees are rushing to settle in Europe before Brexit, financial advisers say. Britain is "falling behind on counter-terrorism" as EU links are loosened. Nationwide sounds a note of caution over lending in the run-up to Brexit. Morgan Stanley predicts pound-euro parity by early next year. The UK trade deficit widens as the fall in sterling fails to improve export sales. The government will sign a deal with the Scottish government on Holyrood's post-Brexit powers before the repeal bill, a minister says. The UK property market slowdown is blamed on Brexit-related political uncertainty. The Bank of England warns that Brexit will put a strain on its regulatory resources. The president of the supreme court calls for clarity on the UK status of ECJ rulings after Brexit. Read these In the Guardian, John Springford of the Centre for European reform said Philip Hammond and Liam Fox's Brexit transition plan (see above) was a pipe dream the EU could never agree to: It is the EU that will decide the nature of the transition Britain will get … If Britain wanted a very simple agreement that kept trade tariff-free but lacked any of the single-market rules that tackle important non-tariff barriers to trade, a transition wouldn't be needed: the whole thing could be wrapped up quickly. But any agreement comprehensive enough to be economically tolerable for Britain will take much longer to negotiate. And during the transition period itself, the 27 will insist that all EU rights and obligations continue. If it disagrees, Britain will need to go over the cliff-edge and try to negotiate a trade deal from outside the single market. Remainers will get nowhere by continuing to shout "Told you so", writes Anne McElvoy, also in the Guardian. There is a strong case against Brexit, she says, but it must be made without condescending to those who voted for it: Of course people should state very strongly when they think ideas are foolish or risky. But one sort of inflation that Brexit has definitely unleashed is the verbal variety. The word "catastrophe" is deployed so routinely that it makes me wonder what description would be reserved for, say, nuclear war (not as fanciful as it looked until recently) or the immolation of Syria. And Gina Miller, the lead claimant in the successful legal fight to allow parliament to vote on triggering article 50, argues that a transitional arrangement will not be the answer for this country – we need to extend the exit timetable: Many politicians are settling on the idea that Britain needs a transitional arrangement beyond March 2019. This would certainly be preferable to a cliff-edge scenario. But as a matter of principle and practicality, it will simply be impossible to negotiate … The difficulty arises because it would be almost impossible to negotiate a transitional arrangement without knowing or having agreed what we want our long-term relationship with the EU to look like. This is also the basic question that the EU would rightly ask: what are we seeking to transition to? What Britain should be aiming for instead is an extension of the withdrawal period. Tweet of the week James Chapman launches his incendiary campaign to overturn Brexit: Past time for sensible MPs in all parties to admit Brexit is a catastrophe, come together In new party if need be, and reverse it #euref19 — James Chapman (@jameschappers) August 8, 2017 Guardian News & Media Limited - a member of Guardian Media Group PLC. Registered Office: Kings Place, 90 York Way, London, N1 9GU. Registered in England No. 908396