Theresa May finally makes Brexit breakthrough as cabinet agree approach to negotiations

Threat of Brexiteer resignations evaporate as cabinet takes 'collective position'

Theresa May has made a breakthrough after securing the cabinet’s agreement on proposals for the UK’s future relations with the EU.

She announced from her Chequers country residence that her team of ministers has now reached a “collective position” to take in negotiations with Brussels.

Ms May indicated the UK would seek something very similar to a single market for goods and the “facilitated customs arrangement”, or FCA, which Downing Street unveiled earlier in the week.

But while the prime minister appears to have sidestepped the prospect of destabilising resignations from her cabinet, the EU’s negotiators have already indicated they will reject anything that seeks to pick and choose which parts of the single market to take part in.

Ms May made a statement following hours of discussion at the Chequers cabinet away day, which was still expected to drag into the night afterwards, as ministers hammered out the detail.

The prime minister said: “Today in detailed discussions the cabinet has agreed our collective position for the future of our 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. 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.”

The Independent understands that the commitment to maintain a “common rule book” means the UK would effectively seek to stay in a single market for goods, for the foreseeable future at least.

It is essential to any effort to convince Europe that we should be able to trade with EU countries with ‘frictionless’ borders.

Giving parliament the power to diverge from these common rules in the future was crucial to securing the support of Brexiteers for the plan, but any move to do so would be taken in the knowledge that it would cost the UK access to the single market.

However, the hope is that the UK could retain the freedom to diverge on regulations for services, something which the EU already said would make any proposal untenable.

Earlier in the day, the deal was discussed over a buffet lunch of BBQ chicken thighs, a “wheat-beets-squash” salad and feta, a Chequers estate new potato salad, estate-grown mixed leaves with summer tomato salad and pomegranate dressings.

For desert it was Chequers scones with clotted cream and estate strawberry jam, Graham’s sticky tea loaf and a fruit platter.

Ms May went on: “We have also agreed a new business-friendly customs model with freedom to strike new trade deals around the world.

“Next week we will be publishing a white paper which will set out more details of how we will be taking back control of our money, laws and borders.”

Insiders confirmed that the customs model agreed is the FCA mooted by Number 10 on Wednesday, which would see all imported goods charged the UK tariff at the border, keeping Brexiteers happy.

To minimise friction at ports, goods would then be tracked, and if they were sent on to the continent, exporters would be charged the EU tariff with money passed on to Brussels.

The plan means that the UK can theoretically sign trade deals with other countries in which it promises to lower tariffs on goods, in return for preferable access for its services.

But the promise not to deviate from EU standards on goods, means a change to regulations could not form a part of any trade deal.

Earlier in the week this appeared to be a sticking point for Brexiteers, including David Davis, who is said to have written to the prime minister saying Brussels would not accept the deal.

But his opposition, and that of other Brexiteers, appears to have withered over a formal three-course dinner starting with whisky and treacle-cured Scottish salmon.

The main course was Oxfordshire beef fillet with crispy shin and baby leeks, followed by marmalade bread and butter pudding.

Ms May said: “Now we must all move at pace to negotiate our proposal with the EU to deliver the prosperous and secure future all our people deserve.”

EU officials told The Independent on Thursday that any plan with a hint that the UK wants to be part of the single market on goods but not services would be “dead on arrival”.

They claimed they had repeatedly warned UK negotiators that this option would not work. They said it had been widely discussed among EU ministers and rejected – including, crucially, by the EU’s two most powerful players, France and Germany.

One Brussels source said: “We have been telling the UK for two years that we would not accept a single market a la carte.

“What do they come with? – A single market a la carte.”