This row over Brexit helps no one but Labour

The Tories must focus on balancing the books, not plunge into another civil war over the EU

Michael Heseltine describes it as “the cancer gnawing at the heart of the Tory Party”. The vote for Brexit bought apparent remission, a moment of catharsis where Tory Remainers seemed to recognise that the battle had been lost and reconciled themselves to Britain’s exit from the European Union.

It didn’t last long. Theresa May’s disastrous election gamble has brought the tumour raging back; stripped of their majority, the Conservatives once again risk tearing themselves apart over Europe.

Consumed by argument over deal or no deal, hard and soft Brexits, and what to most people is the faintly arcane issue of European customs union membership, they run the even greater risk of letting Jeremy Corbyn in by the back door.

The latest standoff finds its embodiment in a long-standing rivalry – that between the Treasury, guardian of the public purse, sound money and the health of the economy, and the Prime Minister, who must of necessity represent a wider political purpose.

There at its centre stands Philip Hammond, the Chancellor, still seething with resentment over the way he has been treated by Mrs May’s inner circle. So toxic did the situation become that by some accounts they couldn’t even bring themselves to refer to him by his proper name, preferring instead a single expletive; unforgivably, he was almost completely shut out of the election campaign, leaving Labour’s fantasy economics to go virtually unchallenged.

To cap it all, Mrs May has interpreted the Labour surge as a vote against austerity, and again without apparent consultation with her Chancellor, signalled its end. This may only recognise the political reality of her predicament. No minority Government would be able to hold the line on public sector pay restraint for long, or indeed on the benefits freeze. The Government is also now hostage to all kinds of pork barrel pressures; support in parliament will need to be bought, constituency by constituency, with one pet project or tax giveaway after another.

The new mood of profligacy is anathema to the Treasury, still struggling, nearly 10 years after the financial crisis, to get a grip on the public finances. Mrs May seems to have learnt nothing from that collapse. Come the next downturn, which the way things are going may be quite soon, the deficit will again spiral out of control.

Marginalised for much of the past year, the Treasury is desperate to reassert its authority over the enfeebled Mrs May, on Brexit, the public finances and much else besides.

Whatever the main issue of the day, the relationship between prime minister and chancellor is often a difficult one. Sometimes that’s because of personal rivalry, as with Gordon Brown and Tony Blair, where the standoff became so bad that Blair would be kept in the dark about the contents of the Budget. “Give us a clue”, he was once said to have asked of Brown.

But it is also because the priorities of the two positions tend to be quite different. The chancellor’s job is to manage the public finances; almost by definition he therefore becomes the only member of the Government trying to keep the lid on spending.

For the relationship to work, the prime minister has to share that purpose. So it was during much of Margaret Thatcher’s reign. Even more so than the Treasury, she instinctively understood the need to balance the books, famously likening management of the national accounts to a housewife on a budget.

Up until her spectacular falling out with Nigel Lawson, as much personality clash as difference of policy, she got on well with her chancellors and was supportive of their actions. The same was true of David Cameron and George Osborne, united in seeing deficit reduction as their primary purpose in government.

Once that unity of purpose goes, fireworks inevitably follow. And May and Hammond seem to disagree on virtually everything – not just on the overarching issues of Brexit and fiscal consolidation, but on the minutiae of worker directors, foreign takeovers, and even share buybacks.

If May had won the election with a sizeable majority, Hammond would have been out on his ear. Yet now he’s unsackable, at least by her. But for the tragic events at Grenfell Tower, he would last night have been twisting the knife in his Mansion House speech.

Mrs May is unlikely still to be there by the end of the summer, so whatever her views on Brexit and austerity, they may no longer count. Even so, Hammond would be wise to temper his anger and focus instead on what seems to be an again fast deteriorating economy where major deficiencies in productivity and competitiveness have yet to be addressed.

Renewed Conservative Party civil war over Brexit helps no one but Labour. Park Brexit, as William Hague has suggested on these pages, with some kind of cross-party commission, with input from business and the City – hitherto largely ignored in the insufferable rowing – and focus instead on the economy and the still parlous state of the public finances.