The pound has kept its gains against the euro and the dollar after it leapt on Michel Barnier’s admission Britain would get a unique Brexit deal.
News of Mr Barnier’s comments in Berlin sent the pound up by around 1 per cent and the currency was still trading at around the same level this morning.
It is the highest the pound has been for several weeks – but far below where Sterling stood before the EU referendum.
Mr Barnier has repeatedly insisted Britain must choose from an existing model used by either Norway or Canada – deal the UK say are unacceptable.
The Brussels chief still insists Britain cannot have an ‘a la carte’ choice of benefits from the EU single market.
In another boost, French President Emmanuel Macron is urging EU leaders to cut a deal with Britain in a lifeline for Mrs May as she tries to avoid a no-deal.
EU negotiator Michel Barnier (pictured yesterday in Berlin) has finally conceded he would have to offer Britain a unique deal on Brexit today in the first hint of a climbdown from Brussels
The pound was trading at 1.113 euros this morning following a sharp jump off of Mr Barnier’s comments yesterday (pictured)
Sterling was down a fraction against the dollar at 1.3024 but still kept its gain from yesterday afternoon (pictured)
In another boost, French President Emmanuel Macron is urging EU leaders to cut a deal with Britain in a lifeline for Mrs May as she tries to avoid a no-deal
Brexiteers welcomed Mr Barnier’s ‘more optimistic tone’ but warned that actions speak louder and urged the EU to get on with coming up with a new offer.
A Government spokesman responded to the comments, saying: ‘Both the UK and the EU are committed to reaching the best deal possible for both sides.
‘We have put forward our proposals for this deal in our White Paper and we stand ready to work at pace with the EU over the coming weeks.’
The intervention is a significant boost for Theresa May who has spent the summer trying to win support in EU capitals for her Brexit blueprint.
Her Chequers plan – which triggered the resignation of Boris Johnson and David Davis in July – had been rejected in previous statements by EU leaders.
Theresa May (pictured yesterday being welcomed to Nigeria by President Muhammadu Buhari, who is on the right of the photo) is working furiously to get a Brexit deal done by the end of the year
Mr Barnier told reporters in Berlin: ‘We are prepared to offer Britain a partnership such as there never has been with any other third country.
‘We respect Britain’s red lines scrupulously. In return, they must respect what we are.
‘Single market means single market … There is no single market a la carte.’
The remarks appear to be a significant departure from the EU position, echoed as recently as Monday by French President Emmanuel Macron.
Government sources said they would look at the comments but played down the shift, suggesting Mr Barnier had made ‘similar’ remarks before.
Tory MP and Brexiteer Michael Fabricant said: ‘I welcome this more optimistic tone, but words are one thing, deeds are another.
‘We’ll all await the offer with interest. But with the UK being the largest export market worldwide for German cars and other products, it was always clear to me that the UK has huge leverage in these negotiations.’
In other developments today, Dominic Raab admitted that a Brexit deal could be delayed until after the October deadline – amid fears the UK could crash out without an agreement.
The new Brexit Secretary insisted that ministers are ‘ambitious’ and still optimistic a deal can be done with Brussels.
But he said that finalising the agreement could ‘creep beyond’ the EU summit on October 18 and 19, which has been the deadline for the talks.
His remarks, made in front of the House of Lords select committee on the EU, is the first time a minister involved in talks has publicly admitted the deadline could slip.
Mr Raab made the admission as he called for the EU to match the UK’s energy in coming up with a deal for the crunch talks.
He said: ‘It’s important as we enter the final phase of the negotiations to the lead up to the October council and the possibility that it may creep beyond that, we want to see some renewed energy.
‘We are bringing the ambition and substance of our white paper on our future relationship, and also some pragmatism to go the extra mile to get the deal that I think is in both sides interests.
‘We need that to be matched. Obviously.’
He said that a deal is 80 per cent done and that ‘the contours of an agreement is there’.
He added: I’m confident that a deal is in our sights.
‘We are bringing ambition pragmatism and energy and if it is matched as I expect it will be, if it is matched then we get a deal.
The chairman of the committee, Lord Boswell of Aynho, quizzed the minister on how delayed a deal may be.
He said: ‘You have indicated it could go a bit further than that – can we ask you to go a it further.’
The new Brexit Secretary Dominic Raab (pictured at the Lords select committee yesterday) said a deal could be delayed until after October this year but insisted that ministers are ‘ambitious’ and still optimistic a deal can be done with Brussels
Mr Raab said: ‘My starting point is March next year when we are leaving the EU and I work back from there.
‘We are aiming for the October council but there is some measure of leeway.’
His words are a shift in tone from the Government, which yesterday was still stressing that it is working towards the October deadline.
The PM’s spokesman said yesterday: ‘The PM has already addressed this. She has confirmed we are working to the October deadline and that remains the case.
‘We are working to the deadline. There is a deadline the Commission set out and we are working to that.’
Mr Raab also played down reports in The Guardian today suggesting that the EU’s lead Brexit negotiator Michel Barnier has failed to make himself available for face to face talks with him.
The newspaper reported that despite his assertion that he is available ’24/7′ for talks, Mr Raab had been left frustrated at his lack of meetings with Mr Barnier.
But the UK ministers poured cold water on the report today – insisting he has met with Mr Barnier several times and the two have a close working relationship.
Asked about it today, Mr Raab said: ‘In relation to whatever tittle tattle will appear in whatever newspaper, I’m in Brussels tomorrow evening for a long substantive meeting with Mr Barnier on Friday.
‘On a one to one level, we have established a good professional personal rapport.
‘I would say we have a good working relationship and the beginnings of a good personal relationship….and these things matter.’
Mr Raab is making his first appearance in front of the Lords select committee since being promoted to Brexit Secretary in July after David Davis’ shock resignation.
Mr Davis quit the role in protest at Theresa May’s Chequers proposal – a compromise deal which would mean the UK sticks to EU rules for goods but leaves the single market and customs union.
The proposal sparked outcry from Brexiteers and Tory activists who warned it would leave the UK stuck half inside the Brussels bloc and hamper the country’s ability to strike free trade deals globally.
And the EU also greeted the plan with scepticism – and it emerged yesterday that Mr Barnier threatened to boycott Brexit talks if Mrs May insisted on basing a deal on her Chequers plans.
His remarks, made in front of the House of Lords select committee on the EU, is the first time a minster has publicly admitted the deadline could slip
What customs arrangements do Norway, Turkey and Switzerland have with the EU?
Theresa May has insisted Brexit means quitting the EU customs union – so the UK can strike free trade deals with other countries.
But this means that customs checks on goods will probably need to be carried out at the border – creating the spectre of long border queues.
Critics of the PM’s approach say the UK should stay in a customs union with the bloc to avoid these hard border controls.
Below are three customs deals the EU has done with countries outside the bloc:
The Norway Option:
Norway voted narrowly against joining the EU in 1994, but shares a 1000-mile border with Sweden which is in the bloc.
The Norwegian government decided to negotiate a deal which gave it very close ties with the EU.
It is part of the EU single market which means it must accept EU rules on the free movement of people.
But it is not in the customs union – meaning it sets its own tariffs on customs coming from outside the EU and so must carry out border checks.
There are some 1,300 customs officials who are involved in policing the border with Sweden, and have invested substantial amounts in technology to make these as quick and smooth as possible.
They have IT systems which pre-declare goods to customs and they are developing a system which will allow lorries carrying pre-declared goods to be waved through.
Norway also pays large amounts into the EU budget and is governed by the court of the European Free Trade Association (EFTA).
Switzerland (border pictured) is not in the EU customs union – which means that checks on goods crossing over the border from non-EU countries are carried
The Switzerland Option:
Switzerland is one of the EU’s longest-standing trading partners, but the country voted against joining the bloc in 2001.
It is a member of the EU single market and has signed up to the Schengen area – meaning it must accept free movement rules and does not carry out passport check on other member countries.
But it is not in the EU customs union – which means that checks on goods crossing over the border from non-EU countries are carried out.
The situation tosses up some anomalies. For instance, a passenger travelling through Geneva Airport can rent a car on the French side of the border for around half of the cost of renting it on the Swiss side.
Border checks are carried out on goods but customs officials say they use intelligence to carry out spot checks, which can be carried out several miles from the border.
However, there can be long delays as goods are checked at the border.
The Turkey Option:
Turkey(its border with Bulgaria pictured) has long eyed up membership of the EU and first tried to start the lengthy application process to join in 1987.
Turkey has long eyed up membership of the EU and first tried to start the lengthy application process to join in 1987.
The country signed a customs union with the bloc in 1995 – a move Turkey’s rulers hoped would be a stepping stone on the way to full membership.
Turkey’s hopes to join the bloc faded over the past few years and have been all but abandoned under President Erdogan after he instigated a major purge of political opponents in the wake of the failed coup against him in 2016.
Under its customs union Turkey must follow EU rules on the production of goods without a say in making them.
It also means that Turkey can only strike free trade deals on goods which are negotiated by Brussels.