Prospects for a Brexit deal have been dealt a severe blow after the European Union’s chief negotiator took apart Theresa May’s latest proposals – just hours after she ruled out further compromise on her side.
Speaking in Brussels after a meeting with EU national ministers, Michel Barnier raised a wide variety of serious concerns about the Chequers white paper plan for customs control and single market regulation for goods.
Mr Barnier said Ms May’s complicated proposal for customs would likely create huge amounts of new paperwork, warning: “Brexit cannot and will not justify additional bureaucracy.”
The chief negotiator, who said he had told member states to prepare for a no-deal scenario, also raised concerns about the PM’s plan to keep the UK following a “common rulebook” of single market regulations for goods.
The intervention emphasises the deadlock between the two sides, with Tory eurosceptics not allowing the embattled prime minister much room for manoeuvre in Westminster in order to meet Mr Barnier’s concerns.
The PM had hoped her white paper proposals would allow frictionless trade with the EU, but Mr Barnier said a plan to exclude UK services from following EU rules could give a “significant competitive advantage” to Britain and that agreeing to such a policy might not be in the EU’s own best interests.
Mr Barnier also suggested it would be unreasonable to exempt some goods such as animal feed from having to follow the rules, as proposed by Ms May, stating: “We have a duty of care to protect consumers in the single market, and on which basis could we accept the free circulation of goods?”
There’s no justification for us to create additional burdens on business just because the UK wants to leave
Michel Barnier, European Commission chief negotiator
The chief negotiator also said the EU could not delegate collection of its own customs duties to a country that was not a member state – suggesting that the backbone of the PM’s proposal might not even be “legally feasible”. Mr Barnier also said there would be “practical problems” determining which tariff to apply to goods and that there was a “major risk of fraud”.
But he was was careful not to reject the plan outright, phrasing his criticism as questions to the UK negotiators. Mr Barnier said the plan was positive in many ways, including the UK signing up to EU “level playing field” competition rules, the creation of a free trade agreement, and on security cooperation.
“There’s no justification for us to create additional burdens on business just because the UK wants to leave,” he told reporters in Brussels. “If you look at the political situation today, we have many reasons to keep and protect our single market, find ways of cooperating with the UK, whilst respecting their decision to leave the EU and looking at the red lines of the UK. They’re the ones who established the red lines.”
He reiterated the EU’s longstanding position that the only trade arrangement which would not cause disruption and allow “business as usual” was “Norway plus” – UK membership of the single market and customs union.
The intervention by Mr Barnier represents the first European Commission response to the PM’s white paper. Former foreign secretary Boris Johnson, ex-Brexit secretary David Davis and the majority of ministers at the Department for Exiting the EU quit government over Ms May’s proposal.
The EU official reiterated that the UK needed to agree to a “backstop” solution to the Northern Ireland border if it wanted a withdrawal agreement and did not want to crash out with no deal come March. He stated there were just 13 weeks of talks left.
Earlier on Friday, the prime minister gave a speech in Belfast in which she reiterated that she would not accept the EU’s plan for a Northern Ireland backstop.
The EU says it is focused on solving the Northern Ireland issue to prevent a no deal, but the UK has said it does not believe a withdrawal agreement would be accepted by parliament without a detailed proposal on trade such as the one in the white paper.
But Ms May said: “I continue to believe that the best way of dealing with the issue of the border between Northern Ireland and Ireland is a solution which actually means that the backstop is not necessary, because we are able to address this in our overall relationship between the UK and the EU.”
Of her white paper, she said: “It is now up to the EU to respond, not simply to fall back onto previous positions which have already proven unworkable.”
Late on Friday government sources insisted the prime minister was “standing over” her compromise plan despite the bruising back-and-forth with Mr Barnier.
But Mairead McGuinness, the vice president of the European Parliament and MEP for Ireland’s governing Fine Gael party, said the Chequers document was “a starting point, it’s not an end deal”.
She told the BBC’s Newsnight: “I think the British Prime Minister set out red lines too early on and too deeply. We are prepared to show flexibility if the British Prime Minister can show flexibility.”
Following the exchange between Ms May and Mr Barnier, Nicky Morgan, a leading Tory remainer, called on Chancellor Philip Hammond to publish the latest information about the consequences of a no-deal Brexit.
“Plans to publish technical notices to help businesses prepare are welcome, but the government must also provide details of the practical consequences for ordinary people, and its own preparations to deal with them,” she said.
“If ‘no deal’ could lead to empty supermarket shelves and medicine shortages, the public has a right to know.”
Mr Barnier said the UK was invited return to Brussels next week to urgently negotiate on the issue of the Northern Ireland backstop.