The Tory truce on Brexit was fracturing last night as MPs warned Theresa May they would not accept further compromises with Brussels.
The Prime Minister faced a backlash after David Davis confirmed some sectors of the UK economy could have to align with the EU after Brexit to resolve the Irish border issue.
Former leader Iain Duncan Smith – who has acted as a bridge between No 10 and Eurosceptic MPs until now – described the proposal as ‘intolerable’ and suggested it was time to walk away from the talks.
The Prime Minister had planned to return to Brussels today to try to complete a divorce deal with the EU, but this has been cancelled
Eurosceptic Cabinet ministers also complained they were being kept in the dark about the extent of the compromises, both on the Irish border and the European Court of Justice.
Meanwhile the DUP, whose ten MPs prop up the Government, made it clear it would not accept the plans put forward by the Prime Minister on Monday to secure a breakthrough on a post-Brexit trade deal.Talks with European Commission chief Jean-Claude Juncker stalled on Monday after DUP leader Arlene Foster vetoed plans for a compromise on the status of the Irish border.
The Prime Minister had planned to return to Brussels today to try to complete a divorce deal with the EU.
But the trip was cancelled last night after Mrs Foster said she would not accept plans to retain ‘regulatory alignment’ between Northern Ireland and the Republic after Brexit.
Government sources insisted that the proposal on the Irish border was only a ‘backstop’ designed to open the door to trade talks this month.
David Davis confirmed some sectors of the UK economy could have to align with the EU after Brexit to resolve the Irish border issue
A source said the proposal was limited to a few areas linked to the Good Friday Agreement, such as agriculture and energy.
But Mr Duncan Smith warned it could ‘box in’ the UK, making it a ‘supplicant’ to Brussels even after Brexit, and preventing the Government striking trade deals.
Mrs May began the day by telling the Cabinet she was ‘very close to getting agreement’ with the EU on a divorce deal, which she hopes could unlock the door to the start of trade talks. The PM told ministers there were ‘only a small number of issues outstanding’.
But a Cabinet source said the detail of the plans had barely been discussed by Mrs May at a meeting of the Cabinet yesterday.
‘There is not a lot of clarity here,’ the source said. ‘People want to be helpful to the PM in this, but they are befuddled by the approach she has taken. People want to see the detail and it is not forthcoming – that is a worry.’ Whitehall sources last night revealed that even Mr Davis did not learn that the phrase ‘regulatory alignment’ had been inserted into a proposed agreement with Brussels until Sunday.
One former minister last night warned the crisis could shorten Mrs May’s tenure in No 10, saying: ‘The PM is in a very weak position and she needs to wake up to the fact. She is making her position less and less tenable.’ One EU ambassador said: ‘We cannot go on like this, with no idea what the UK wants. She just has to have the conversation with her own cabinet, and if that upsets someone, or someone resigns, so be it.’
Tory Sir Bill Cash said any commitment to align all or part of the UK’s laws with the EU would be ‘massively difficult’ to accept.
Former Brexit minister David Jones said the move would make it difficult to strike free trade deals with countries outside the EU. He called the idea ‘dangerous’, adding: ‘If we are aligned with the EU on agriculture, for example, it would be impossible to conclude any meaningful free trade agreements with third countries.’
Jacob Rees-Mogg described the issue as an ‘indelible red line’ and voiced ‘gratitude’ to the DUP for vetoing the deal.
What’s the truth about trade across the Irish border?
Analysis by Jack Doyle
Northern Ireland to Ireland
It might be assumed that trade between Northern Ireland and the Republic formed a very significant part of the province’s economy.
But official data shows its economic relationship with the rest of the UK is much more significant.
Around two thirds of Northern Ireland’s turnover involves sales within the province.
Exports to Great Britain make up 21 per cent, while those to the Republic are just five per cent and to the rest of the EU just three per cent.
According to the Legatum Institute think tank, trade patterns from before the UK joined the EU in 1973 have proved ‘remarkably resilient’.
DUP MP Sammy Wilson has said: ‘Our main market is not the Irish Republic. It is not even the whole of the EU. Our main market is the UK, and the integrity of the single UK market is far more important to us, to people who work in Northern Ireland, than having some kind of regulatory convergence or continuance with the rest of Europe.’
Ireland to Great Britain
By contrast to the relatively small scale of its trade with Northern Ireland, the Republic has very significant trade links with Great Britain, its second biggest trading partner. More than 12 per cent of Irish exports go to Great Britain, and 18 per cent of services (compared to 1.6 per cent to Northern Ireland).
It also imports a huge amount from Great Britain, which accounts for 25 per cent of its imports. But because of the size of the two economies, the Republic has a lot more to lose in relative terms from the talks collapsing and no agreement being made on trade.
Estimates of the damage to Irish GDP from a collapse in talks suggest it could fall by up to 3 per cent. Henry Newman, of the Open Europe think tank, warns the Irish have the most to lose of any EU state from no trade deal, and are ‘playing with fire’.