May gathers Cabinet amid fears of deadlock in Brexit talks

Theresa May is gathering her Cabinet today amid fears Brexit talks are failing – while the government steps up plans for ‘no deal’ with the EU.

The Prime Minister and her top team will discuss tactics for the increasingly bitter stand-off with Brussels.

They will also consider how to appease Brexiteers on the Tory backbenches – who are increasingly uncomfortable about the slew of concessions being offered in a bid to break the deadlock.

Mrs May told MPs last night that the government was preparing for ‘every eventuality’ in the talks – including the possibility that Brussels never agrees to engage on the terms of a new free trade deal.

HM Revenue and Customs has set out the first detailed proposals for policing a new post-Brexit border in the event of no deal.

‘Project After’ plans including dropping all import tariffs and becoming a champion of free trade

 The Prime Minister told Brussels the 'ball is in your court' and urged the EU to help forge a 'dynamic, creative and unique' relationship as she dismissed the prospect of further concessions before trade talks begin

 The Prime Minister told Brussels the ‘ball is in your court’ and urged the EU to help forge a ‘dynamic, creative and unique’ relationship as she dismissed the prospect of further concessions before trade talks begin

A white paper published by HMRC states that a new customs regime will be ready ‘from day one’ after Brexit, regardless of whether the EU agrees a trade deal.

Plans include the creation of new inland lorry parks to check imports without causing queues at major ports like Dover and Harwich.

A leaked document from the Department of International Trade also lays out radical contingency plans for leaving without a deal.

Ideas contained within the so-called ‘Project After’ document including dropping all import tariffs and becoming a champion of free trade. A senior government source last night said contingency plans would be stepped up after Christmas if Brussels continued to drag its feet.

Preparing the physical infrastructure for a new border regime is likely to cost several billion pounds and require the recruitment of thousands of staff.

‘It will be expensive, but we can do it and we will,’ the source said. ‘We don’t believe we will leave without a deal. But the EU has to understand that we are serious about going it alone if we have to.’

In a statement to the Commons last night, Mrs May made clear the white papers on customs and trade paved the way for new laws ‘to allow the UK to operate as an independent trading nation and to create an innovative customs system that will help us achieve the greatest possible tariff and barrier-free trade as we leave the EU’.

She added: ‘While I believe it is profoundly in all our interests for the negotiations to succeed, it is also our responsibility as a Government to prepare for every eventuality, so that is exactly what we are doing.

‘These white papers also support that work, including setting out steps to minimise disruption for businesses and travellers.’

Mrs May also risked inflaming tensions with Brexiteers by saying the European Court of Justice would still be supreme during an ‘implementation’ period – and hinting that the length of the transition could be longer than the two years previously mooted.

Theresa May leaves Downing Street as HMRC promises a new customs regime from 'day one' following our exit from the EU

Theresa May leaves Downing Street as HMRC promises a new customs regime from ‘day one’ following our exit from the EU

Tory MP Philip Davies told Mrs May the Florence speech ‘seemed like a reward for the EU’s intransigence’. He asked for a guarantee that there would be ‘no more rewards’ for Brussels.

Jacob Rees-Mogg said he was ‘concerned’ at the concession on the ECJ, saying: ‘Any suggestion that we are still under that jurisdiction means we haven’t left the European Union.’

Boris Johnson and Michael Gove, two of the leading Leave supporters in the Cabinet, were deployed after the statement to reassure Tory MPs and urge them to be ‘practical’.

Mrs May told MPs it was now time for the EU to show flexibility.

She said she was optimistic, saying: ‘What we are seeking is not just the best possible deal for us, but I believe that will also be the best possible deal for our friends, too.’

David Davis is heading to Brussels to join the latest round of talks with EU counterpart Michel Barnier today. The Eurocrat is expected to say at the end of the week that not enough progress has been made on the issues of the divorce bill, citizens’ rights and the Northern Ireland border to move on to trade talks. 

Ministers believe national leaders will stick to the line when they gather for a crunch summit in Brussels next week – although privately they remain optimistic that trade talks will begin by Christmas. 

However, the government is determined to show the EU that the option of leaving without a deal is not an idle threat.

One source said: ‘Cameron’s biggest mistake was that the EU never believed he was willing to walk away, whatever they offered him, so they offered him next to nothing. We are not going to repeat that mistake.’ 

Mrs May’s intervention came after Brussels rejected an offer to plug a £20billion black hole in the EU’s budget after the UK leaves in 2019. 

The PM said the olive branch – contained in her Florence speech last month – meant that the ball was now ‘in their court’.

But the European Commission’s chief spokesman Margaritis Schinas rejected the idea, saying: ‘There has been so far no solution found on step one, which is the divorce proceedings, so the ball is entirely in the UK court for the rest to happen.’ 

Prime minister Theresa May updates MPs on the progress of Brexit negotiations following talks in Florence last month

Prime minister Theresa May updates MPs on the progress of Brexit negotiations following talks in Florence last month

Mrs May meets sixth formers. In her Commons statement she said 'It is also our responsibility as a Government to prepare for every eventuality, so that is exactly what we are doing'

Mrs May meets sixth formers. In her Commons statement she said ‘It is also our responsibility as a Government to prepare for every eventuality, so that is exactly what we are doing’

Mrs May is pictured high fiving with primary school pupils at a school in London ahead of her statement to the Commons yesterday 

Mrs May is pictured high fiving with primary school pupils at a school in London ahead of her statement to the Commons yesterday 

The Prime Minister also met with sixth form pupils at the Dunraven School

The Prime Minister also met with sixth form pupils at the Dunraven School

The HMRC document says efforts will be made to ‘mitigate the impact on traders’ who deal with the EU and whose goods would suddenly face new tariffs and customs checks. Importers would be required to give advance notice of goods arriving in the UK.

And new lorry parks would be set up inland to handle customs checks to stop ports becoming clogged up.

Labour leader Jeremy Corbyn said the documents showed ‘no real progress has been made’.

The EU’s chief Brexit negotiator believes that speeding up talks on the ‘transition’ deal Mrs May has requested could break the deadlock in negotiations.

Michel Barnier has told European diplomats bringing forward discussions on the arrangement will help the Brexit talks to succeed.

Mrs May yesterday repeated her wish to start crafting an ‘implementation period’, which would effectively see the UK remaining part of the EU bloc for two years after Brexit in 2019.

EU leaders are expected to discuss the move in Brussels next week.  

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