Brussels hints it will say no way to Theresa May's 'third way' on Brexit

Theresa May is to tell Brexiteers that if they refuse to compromise now, they could lose control to Parliament altogether
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Theresa May's “third way” for Brexit was already under strain this afternoon as Brussels said there were “too many questions and too few answers”.

Chief EU negotiator Michel Barnier gave the view as a Chequers summit aimed at thrashing out a UK Cabinet agreement was under way.

The Frenchman said he had “respect” for Mrs May and would not give a verdict until after her Brexit white paper next week.

The Prime Minister aimed to persuade Cabinet Brexiteers to back her deal by warning that if they refuse any compromise they risk being over-ruled by Parliament imposing a full-blooded customs union.

The crunch summit is taking place at Chequers, the Prime Minister's official country residence near Ellesborough in Buckinghamshire
PA

Ex-PM David Cameron held a meeting last night with Foreign Secretary Boris Johnson and urged him to compromise because there are not the parliamentary numbers to support a hard Brexit.

Chief Whip Julian Smith has assessed that about 20 Tories are ready to rebel by backing a customs union to save smooth EU trade and protect jobs.

A motorcade arrives at Chequers ahead of the summit
PA

Mrs May assured International Trade Secretary Liam Fox that her plan would not stop him having a full trade agreement with the US and others.

The key sticking points

 

Regulatory alignment

The Prime Minister’s “third way” plan includes keeping Britain fully aligned with EU rules for goods and agriculture, which covers details ranging from vet inspections of food to specifications for car parts. This is essential for frictionless trade with the bloc, which business needs, and to avoid a hard border with Ireland that could endanger the United Kingdom. Brexiteers want to know if Parliament will have genuine freedom to reject new EU legislation on goods in future - or if Britain will be forced to become obedient “rule-takers” with the risk of being disadvantaged. Mrs May might give clarification at Chequers.

Free Trade Agreements

Free trade deals are reached by horsetrading, in which both sides offer up sectors for more trade freedom. The problem of keeping an effective customs union for goods is that it limits what the UK could offer non-EU countries like the United States. For Brexiteers, the chance for free trade deals with the US and emerging economies was at the heart of the Leave campaign. But Government studies show the economy is dependent on protecting trade with the EU. Mrs May managed to reassure Liam Fox in a private meeting yesterday - now the rest of her Cabinet is keen to hear what she said.

Parliament

With very deliberate timing, the Government announced yesterday the date for the big Commons vote on a customs union, July 16.  This was no accident because is raised a massive risk to Brexiteers of being outvoted - and having Parliament foist even closer ties with the EU than the ones Mrs May is proposing. This is the PM’s “big stick” and she appears to be weaponising it at Chequers.

Northern Ireland border

In December, Mrs May gave a pledge to protect free travel with no border checks between the Province and the Republic. Under WTO rules the UK is legally obliged to enforce a trade border or have such harmonised rules that checks are unnecessary. Mrs May is pushing a “facilitated customs arrangement” that would align trade rules for goods and see the UK collect tariffs for the EU.  Brexiteers believe this opens the door for the European Court to interfere, as well as undermining free trade deals.

But former No 10 Brexit official Matthew O’Toole said that was impossible under trade laws. “There is no way, literally none, that the UK could do a US trade deal without a very hard border in Ireland (unless it accepted a hard border in the Irish sea),” he said. “This is very basic and should really have been clear and accepted months ago.

Michael Gove arrives at Chequers
PA

Cabinet members arrived at the Prime Minister’s grace-and-favour country mansion in a procession of black cars before the official start of 10am, and had their mobile phones confiscated at the door to prevent leaks.

Justice Secretary David Gauke (right) arrives at Chequers
PA

Mr Johnson’s allies said he would be seeking a series of clarifications and concessions at the meeting — but there was no suggestion he would resign.

A police officer guards the perimeter of Chequers
PA

He and Mr Cameron were understood to have agreed that Mrs May’s Brexit plan was not ideal. But Mr Cameron is said to have urged the Foreign Secretary to support it given the parliamentary numbers opposed to a “hard” Brexit. A spokesman for Mr Johnson declined to comment on the conversation.

Despite rumours of possible walk-outs by Eurosceptics, sources on both sides played down the prospect. But one source said David Davis, the Brexit Secretary, had “the trickiest position”.

Three remain activist look at the grounds of Chequers
PA

He wrote to Mrs May warning that her plan would be rejected by Brussels. In a sign No 10 may be prepared to play hardball, it was reported that the Chief Whip had made plans for an “emergency reshuffle”, in case of a walkout by ministers such as Mr Davis, Mr Johnson, Mr Fox and Michael Gove.

Mr Smith was alleged to have met with upcoming Eurosceptics and to have pencilled in others for promotions if necessary. Official No 10 sources dismissed these reports.

Nicky Morgan, a leader of the Tory rebels, told BBC Radio 4’s Today that if ministers “cannot live” with the PM’s proposal “they would have to think about their position”.

Cabinet Office minister David Lidington told BBC radio the plan “delivers on the referendum verdict, takes back control of our laws and ends the jurisdiction of the European court”.

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