Theresa May is facing a fresh Remainer onslaught after she finally won backing from ministers for her Brexit blueprint.
The Prime Minister is facing a serious threat to her plans as Tory rebels unite with Labour, the Lib Dems and SNP to try to force the government to stay inside a customs union.
Former minister Anna Soubry has tabled an amendment to the Trade Bill that could put Mrs May’s slim Commons majority to the test.
But Downing Street today made clear they would not cave in in the crucial issue, paving the way for a showdown in parliament.
Meanwhile, Brussels has slammed her proposals for future trade ties, agreed by the Brexit war Cabinet last night, saying it will not allow the UK to pick and choose what regulations it follows.
No10 has confirmed that the premier will make a major Brexit speech on Friday as negotiations reach a critical stage.
After eight hours of discussions, the Brexit war cabinet reached an agreement. Pictured left to right around the table: Greg Clark, Gavin Williamson, Amber Rudd, Liam Fox, Philip Hammond, Boris Johnson, Karen Bradley, Julian Smith, No10 Brexit envoy Olly Robbins, Cabinet Secretary Sir Jeremy Heywood, Theresa May, David Lidington, David Davis, Michael Gove
Angela Merkel and Emmannuel Macron were both at the EU summit in Brussels today
EU commission president Jean-Claude Juncker (pictured in Brussels today) suggested that Britain would be better off if he was in charge
Tory Brexit rebel Anna Soubry has tabled an amendment to the Trade Bill designed to force Britain to stay in the EU customs union
After eight hours of talks at the Prime Minister’s country retreat Chequers, senior ministers agreed to pursue a strategy that will allow the UK to diverge from EU laws.
Pro-Brexit ministers claimed they had achieved a significant step in ensuring a clean break with the EU – with one senior figure describing it as an ‘outbreak of unity for now’.
One Cabinet source said: ‘Divergence has won.’
But, in a concession to pro-Remain ministers, the pace and scale of any future divergence is likely to be fudged for months.
Ministers, who did not leave chequers until 10pm, were tight-lipped about the precise details of yesterday’s meeting.
According to the BBC, one minister in the room claimed everyone was ‘rather happy’ at the end, with another saying the PM had ‘played a blinder’.
Another said they had reached a ‘sensible compromise which pitches an ambitious ask but recognises that we will be in a negotiation’.
Sources said they had agreed to seek an ambitious deal that would allow wide-ranging access to the single market for British goods and services on the basis of ‘mutual recognition’ of standards rather than membership of the customs union.
In return, Britain would make a binding declaration not to undercut the EU by leading a ‘race to the bottom’ on workers’ rights.
Within this framework, Britain would have the ‘right to diverge’ from EU laws – particularly in emerging technologies like artificial intelligence.
But the proposals have been dismissed by the EU before being formally tabled. One diplomat told the Evening Standard: ‘We cannot make sense of all the ideas they have floated because lots of them are inconsistent.’
Ministers are braced for a hardline response from the EU, with the 27 ongoing member states meeting today. Pictured are French president Emmanuel Macron, Belgian PM Charles Michel and Angela Merkel dining in Brussels last night
Ministers were locked in talks until 10pm and were tight-lipped about the details, although one Cabinet source said: ‘Divergence has won’
Brexiteer fury at reports May is ‘resigned’ to caving in to Brussels demands for free movement during the transition period
Theresa May is preparing to cave in on EU demands for full free movement during the Brexit transition, it has been claimed.
The Prime Minister is said to be resigned about bowing to Brussels over citizens who arrive during the period getting permanent residency rights.
The issue has threatened to derail the negotiations over an implementation phase that would avoid a cliff edge for businesses on both sides of the Channel.
According to the Times, Mrs May is considering making a unilateral promise to EU citizens that they can remain after the transition.
However, there are concerns the move could leave UK nationals living on the Continent with fewer rights than their EU counterparts.
Brexiteers would also be up in arms about conceding the ground to Brussels.
Tory MP Jacob Rees-Mogg
Jacob Rees-Mogg, head of the influential European Research Group, of Tory MPs, said today he would be ‘astonished’ if Mrs May U-turned on her pledge to end permanent free movement rights in 2019.
‘Mrs May said when she was in China that she wasn’t going to do that and that people who came after we’d left would be subject to different conditions, which seems absolutely right.
‘You’ve got to remember we are leaving the European Union on March 29 (2019), we will be out of the treaties on that day, we will not have any say in the rules that are made and, therefore, people who come after that day ought not to be allowed to have the full and permanent free movement rights.
‘That would be quite wrong and they will know the conditions on which they come, which is important, so it’s fair to people who come after that date.
‘I’d be astonished if Mrs May would make a u-turn of that kind, she is a lady of great backbone and for her to kowtow to the European Union is, I think, unconscionable.’
A Downing Street spokesperson said: ‘We’ve set out our position – the December joint report covers EU citizens arriving up until Brexit day, and the PM has been clear that for EU citizens arriving after that point there should be a different approach – this will be a matter for the negotiations.’
Asked about the UK’s proposals for a trade deal as he arrived at a summit in Brussels today, Mr Juncker said: ‘I’m not the British Prime Minister. It would be good for Britain if I was, but I am not.’
The comment drew an angry response from Brexiteers, with Tory MP Nigel Evans saying: ‘I wouldn’t put Juncker in charge of my wine rack.’
Environment Secretary Michael Gove – one of 11 Cabinet ministers at the Chequers meeting – said that divergence from EU regulations would allow Britain to impose ‘even higher standards’ in areas like environmental protection.
He rejected suggestions there was a ‘tension’ between his environmental agenda and the UK’s bid to secure freedom to set its own regulations, insisting the Government was seeking ‘a green Brexit’.
German Prime Minister Angela Merkel (pictured centre), French President Emmanuel Macron (pictured left) and Italian Prime Minister Paolo Gentiloni (pictured right) arrive at the EU summit yesterday. Brussels has slammed Britain’s Brexit proposals
‘One of the things about Britain leaving the European Union is that it gives us the opportunity to look at all of these areas and see how we can meet even higher standards,’ Mr Gove told reporters.
But Mr Gove was mocked by the deputy head of the European Commission Frans Timmermans.
Retweeting a report that Mr Gove might ban plastic straws, Mr Timmermans wrote: ‘@michaelgove One step ahead of you. EU legislation on single-use plastics coming before the summer. Maybe you can align with us? #EUDoesntSuck.’
Earlier, Health Secretary Jeremy Hunt said Britain would not be accepting Brussels dictats on regulations.
‘There will be areas and sectors of industry where we agree to align our regulations with European regulations: the automotive industry is perhaps an obvious example because of supply chains that are integrated,’ he told BBC Radio 4’s Today programme.
‘But it will be on a voluntary basis, we will as a sovereign power have the right to choose to diverge and what we won’t be doing is accepting changes in rules because the EU unilaterally chooses to make those changes.’
As Remainers marshal their forces for a push to water down Brexit, Jeremy Corbyn is expected to confirm a shift in policy on Monday to support staying in a customs union with the EU.
Ms Soubry’s amendment has already been signed by half a dozen Tory MPs – including former ministers Nicky Morgan and Stephen Hammond.
Ex-attorney general Dominic Grieve today indicated he would back the change.
Even if the amendment is passed, it could not legally bind the hands of ministers in the talks.
However, it could be politically devastating and undermine Mrs May’s credibility to conduct the negotiations. There are concerns that defeat could bring down the government.
The discussions at Chequers involved the 11 most senior Cabinet members.
Before the meeting there were thought to still be significant differences between Brexiteer and Remainer factions on how far Britain should diverge from EU rules after we leave the bloc.
A series of previous meetings of the inner circle of ministers had failed to come to firm conclusions.
Home Secretary Amber Rudd (pictured today, said ministers are united behind Theresa May’s vision for Brexit
Mrs May appeared to have enlisted some help to try and get a better outcome – with a border collie sheepdog seen being driven on to the estate in a Landrover.
Remainers such as Philip Hammond and Amber Rudd reportedly argued for a softer approach, while Boris Johnson and Michael Gove favoured a cleaner break.
The other ministers who attended were David Davis, David Lidington, Liam Fox, Karen Bradley, Gavin Williamson and Greg Clark, and chief whip Julian Smith.
The group was carefully balanced between pro-EU and Eurosceptics, with Mrs May theoretically holding the balance between the sides.
The PM’s top Brexit civil servant Olly Robbins gave presentations on parts of the negotiations.
The talks also saw interventions from UK ambassadors to European capitals, including the top diplomat in Paris Ed Llewellyn – David Cameron’s former chief of staff.
The Chequers summit was part of a ‘road to Brexit’ series of events intended to set out the Government’s ambitions for a post-withdrawal settlement with the EU.
WHY DOES THE CUSTOMS UNION MATTER AND WHAT COULD HAPPEN POST-BREXIT?
When Britain stays in a custom union with Brussels (the European Commissions headquarters is pictured) is one of the main points of Brexit contention
The customs union has emerged as a crucial battleground in the struggle over Brexit.
The customs arrangements could decide the fate of the overall deal – as the UK has already said it will ensure there is no hard border between Northern Ireland and the Republic.
Here are the main options for what could happen after Britain leaves the bloc.
Staying in the EU customs union
The arrangements allow EU states to exchange goods without tariffs, and impose common tariffs on imports from outside the bloc.
But they also prevent countries from striking deals outside the union.
Theresa May has repeatedly made clear that the UK will be leaving the customs union.
Forging a new customs union
Some MPs and the Labour leadership have raised the idea of creating a new customs union with the EU.
This could be looser than the existing arrangements, but still allow tariff free trade with the bloc.
However, many Eurosceptics believe it is impossible to be in a union without hampering the UK’s ability to strike trade deals elsewhere.
They also complain that it would mean accepting the EU’s ‘protectionist’ tariffs against other parts of the world in areas like agriculture.
Downing Street sources confirmed last night that this option is off the table.
A customs partnership
Less formal than a union, this proposal would seek to cherry pick the elements that facilitate tariff-free trade – without binding the UK’s hands when it comes to deals with other countries.
One possibility could be keeping the UK and EU connected for trade in goods, but allowing divergence for the services sector.
The partnership option was floated by the government in a position paper last year.
‘Highly streamlined’ customs
This scenario would be a ‘bare minimum’ customs arrangement between the EU and UK.
New technology would be deployed alongside a simple agreement to minimise friction.
But there are fears that this could hit trade, and it is unclear how the system would work with a ‘soft’ Irish border.
The gathering of the Brexit war Cabinet was held at the PM’s Chequers country retreat, and lasted until 10pm