The door is open to a Brexit deal on freedom of movement

At the heart of Westminster, there lurks a secret. Both Theresa May and Jeremy Corbyn want to thwart the moderates in their party who are opposed to a "hard" Brexit. And both have alighted on the same alibi: they claim that since we cannot change the rules governing freedom of movement and stay in the single market, then we have no choice but to leave the single market altogether. It sounds neat - and democratic. After all, few would disagree that immigration in general, and EU free movement in particular, played a significant role in the EU referendum last year. EU leaders regularly emphasise the importance of the "four freedoms". And so the logic flows effortlessly: the will of the British public must be obeyed; EU freedom of movement must go; single market membership must be rescinded. This argument is self-serving nonsense.

The leaderships of the two main UK parties - united by Euroscepticism if little else - are wilfully misrepresenting the rules governing free movement within the EU. They claim that it is an unchanging EU principle. It is not. They claim that it cannot be curtailed. It can. They claim that the rest of the bloc will not bend to British demands for change. They already have. If only Mrs May and Mr Corbyn showed a little more ingenuity, the scope for a breakthrough in the Brexit talks would open up: one in which the UK could remain in the single market but could also secure important changes to freedom of movement. The right to free movement was originally focused exclusively on people seeking work. It was only in 1990 that the then-European Economic Community introduced a right of movement for pensioners, students and those with independent means, provided that they could support themselves. The Maastricht treaty in 1992 went one step further and introduced the concept of EU "citizenship". Detailed provisions then ensued to ensure that workers and their families could move between member states without losing their social security entitlements. So the principle of freedom of movement has evolved over time. It has served Europe's economies, and especially Britain's, well.

In recent years, it has become particularly associated with the single currency. The economic logic of free movement in its purest form makes most sense among the members of the eurozone because the movement of people helps a currency union deal with the rigidity of a single monetary policy but is less necessary among those countries outside the currency union. Crucially, there is far more latitude for member states to apply restrictions to freedom of movement than is commonly appreciated. The Belgian authorities aggressively deport EU citizens who do not work and cannot support themselves. Under EU law, the UK authorities could do the same for EU citizens who have failed to find work after six months. Access to Spanish healthcare requires registering with the social security authorities and showing residence and identity documents. The German authorities, in an attempt to protect domestic pay deals, are tightening up access to the construction and other sectors by EU workers. Several EU leaders have told me of their irritation that UK politicians blame them for a decision taken in Westminster, not Brussels: opening up the UK labour market in 2004 to workers from central and eastern Europe. They point out that the UK's non-contributory welfare benefits, unqualified access to healthcare and absence of administrative residence checks, mean that the UK takes a far more lax approach than they do.

When David Cameron requested further flexibility over the way freedom of movement rules are applied, the EU obliged, allowing for new limits on the benefits provided to EU citizens. As one EU official involved in the Brexit talks explained to me, last summer EU governments were expecting Mrs May to ask for a further, wider overhaul of freedom of movement. No such overture came. The Conservatives - and now Labour - prefer to box themselves in an economically self-defeating corner. There is an obvious solution: with goodwill and a little imagination, EU governments could agree an "emergency brake" on the free movement of EU citizens, allowing governments to impose quotas and work permits in response to unusually high levels of EU immigration (similar to the trigger in the Cameron package). It is still not too late to pull back from the hard Brexit cliff edge. The circle of single market participation and reformed free movement can be squared.

Nick Clegg