Cabinet agrees position on future EU deal after day of negotiations at Chequers

Theresa May speaks during a cabinet meeting at Chequers (Joel Rouse/Crown Copyright/PA) Credit: PA Wire/PA Images

  • Video report by ITV News Political Correspondent Paul Brand

A new UK-European Union free trade area for goods will be created under Brexit plans thrashed out by ministers at Chequers.

The proposals, agreed after Theresa May summoned senior ministers to decide on plans for the future relationship with Brussels, will see the UK agree to remain in line with the EU on rules for all goods.

But under the Government's plans the UK would be free to diverge from EU rules over services, a major part of the British economy, with ministers acknowledging this will reduce the levels of access available to European markets.

Brussels will be reluctant to consider any plan which would risk splitting the single market, and ministers appeared to acknowledge this by agreeing to step up preparations for a "no deal" Brexit.

But Mrs May said she hoped the proposals would enable talks with the EU to move forward.

However, amid concern from ministers including Brexit Secretary David Davis, that his counterpart Michel Barnier and the European Commission will reject the plans, the Government also agreed to step up preparation for Britain exiting the EU without a deal.

Going into Chequers the Cabinet was split, with Brexit Secretary David Davis understood to have major reservations about both the plan and whether Brussels would even consider it seriously.

But it is understood that all members of the Cabinet have signed up to the proposals and none of them have decided to quit rather than back the plan.

The "common rulebook" for goods could reduce the UK's flexibility to strike trade deals with other countries, particularly the US which would want an agreement allowing its farm products, produced to different standards, into the British market.

It would also involve the UK paying "due regard" to European Court of Justice rulings relating to the rules Britain will share with Brussels, potentially softening the Prime Minister's red line on the jurisdiction of judges in Luxembourg.

A UK-European Union free trade area for goods is laid out in the plans. Credit: PA

But the Prime Minister said the Cabinet had agreed a "collective position" on the future of the negotiations with the EU.

"Our proposal will create a UK-EU free trade area which establishes a common rule book for industrial goods and agricultural products," she said.

"This maintains high standards in these areas, but we will also ensure that no new changes in the future take place without the approval of our Parliament.

"As a result, we avoid friction in terms of trade, which protects jobs and livelihoods, as well as meeting our commitments in Northern Ireland.

"We have also agreed a new business-friendly customs model with freedom to strike new trade deals around the world. "

Elements of the plan, which will be formally presented in a White Paper next week, were revealed in a three-page summary.

Theresa May hailed the agreement but others remain sceptical. Credit: PA

Labour described the agreement as a mere "sticking plaster" rather than the Government's final position.

Shadow Brexit secretary Keir Starmer said: "It is farcical that it has taken two years for the Cabinet to even attempt to agree a position on the basics of our future relationship with the EU.

"On previous form, whatever has apparently been agreed will struggle to survive contact with Tory MPs and members.

"This looks like a sticking plaster rather than the Government's final position. With just a matter of months of the negotiations left, Theresa May's ability to deliver Brexit continues to be in doubt."

Details of the agreement were also met with dismay from some Brexiteers.

Tory MP Andrea Jenkyns said: "Common rule book: so British businesses will continue to be a rule taker from the EU.

"I hope the details are better than the breaking headlines."

Meanwhile the EU's chief Brexit negotiator Michel Barnier said the Chequers plan would be assessed to see if it is "workable and realistic".

A round of UK-EU negotiations will take place in the week beginning July 16, he added.