May to face pressure to ditch Chequers plan in cabinet showdown

Theresa May will come under intense pressure from leading Brexiters on Monday to ditch her Chequers proposals and back a free trade deal with the EU instead as she faces a bruising cabinet showdown in the wake of the disastrous Salzburg summit.

The former Brexit secretary David Davis and leading Eurosceptic Tory MP Jacob Rees-Mogg are among those backing a report by the Institute of Economic Affairs which is expected to set out an alternative plan for a hard Brexit departure from the EU.

The launch, attended by a series of high-profile Brexiters, comes just hours before the prime minister comes face to face with her cabinet for the first time since her humiliation at the hands of EU leaders who rejected key elements of her Chequers plan.

Immigration will be one of the key points of discussion at the hastily arranged meeting a week before Tory conference at which May is expected to argue for strict controls to reassure Brexiters and boost her leadership in the face of open revolt.

Several cabinet ministers have privately expressed dismay at the fate of May’s Chequers proposals and are understood to be advocating a move towards a Canada-style trade deal. At least two are thought to be prepared to raise the issue directly.

One cabinet source said: “Chequers in its present form is a non-starter for the EU so it’s time for us to look at the alternatives. We should at least look again at the prospect of a free trade agreement.”

However, the Brexit secretary, Dominic Raab, was unequivocal on Sunday that such a proposal was “off the table” as it would mean reverting to the EU’s backstop solution for Northern Ireland which would create a hard border down the Irish sea.

“People need to read the small print, not just of our proposals, but the EU’s proposals, because what they’re suggesting is not just a free trade deal but for us to stay locked in, or for Northern Ireland specifically to stay locked into the customs union,” he said.

Who dislikes the Chequers agreement and why?

Noisiest in their opposition are Tory Brexiters, not least David Davis and Boris Johnson, both of whom quit the cabinet in protest. They argue that the promise to maintain a common rulebook for goods and other continued alignment will mean a post-Brexit UK is tied to the EU without having a say on future rules, rather than being a free-trading independent nation.

Labour has also disparaged the proposal, expressing deep scepticism about the so-called facilitated customs arrangement system.

What about the EU?

Brussels has sought to stay positive, but has deep concerns about elements of the plan viewed as overly pick-and-mix, and thus potentially incompatible with EU principles.

Michel Barnier, the EU’s chief Brexit negotiator, says he opposes both the customs plan and the idea of alignment for goods. He also makes plain his contention that the Chequers plan contains no workable idea for the Ireland-Northern Ireland border.

But at the same time the EU has been careful to not entirely dismiss the proposals, raising the possibility it could accept some adapted version.

Who supports the agreement?

Officially, May and her cabinet, though even here the backing can seem lukewarm at times. Asked about Chequers, the home secretary, Sajid Javid, said it was the government’s plan “right now”, indicating alternative ideas could be considered.

Is it doomed?

Even May’s allies concede it will be a hugely difficult task to get the plan through parliament. Damian Green, the PM’s close friend and former de fact deputy, described the process as “walking a narrow path with people chucking rocks at us from both sides”.

On the remain side of the Conservatives, the former education secretary Justine Greening called the Chequers plan “more unpopular than the poll tax”, saying May should start again from scratch.

If anything can save the plan – and it’s an outside shot – it will be a combination of the hugely tight timetable and the fact that, as yet, no one else has yet produced a plan with a better chance of being accepted by parliament.

What happens next?

On 20 September, an informal gathering in Salzburg, Austria, will provide a snapshot of current EU thinking. Then, 10 days later, the Conservative conference could show the Chequers plan is holed below the waterline.

If it survives these tests, the proposals will then reach the crucial EU summit Brussels on 18 October, with something final needed, at the very latest, in the next two months. PETER WALKER

“Now that would be a clear carve up of the United Kingdom. It’s off the table in the terms that the EU would even plausibly at this stage accept.”

Those in cabinet backing a shift towards a Canada-style deal deny that it would lead to a border in the Irish Sea, although it would be dependent on the EU agreeing to soften its position on border checks if a Brexit deal looked within reach.

No 10 sources said that alternative proposals for the border had already been rejected by Brussels. One said: “There aren’t any easy solutions to any of these problems. We know that the idea of a Canada-style free trade deal cannot and would not happen without the backstop.”

One cabinet minister warned that colleagues should wait to see what counter-proposals to Chequers were put forward by Brussels in early October before looking at other options: “If they wholesale reject Chequers then we will have to do something before we get to no deal, but not until then.”

It comes after the foreign secretary, Jeremy Hunt, appeared to suggest that the government was pivoting away from its existing plans towards a free trade deal, as demanded by the Eurosceptic wing of the Tory party. Hunt and Brexiter Penny Mordaunt will be in New York for the UN general assembly.

There is also likely to be a standoff at the cabinet over the prime minister’s post-Brexit plans for immigration, with May and the home secretary, Sajid Javid, pushing for an end to preferential access for EU citizens and focus on a global migration scheme.

Other cabinet colleagues, led by the chancellor, Philip Hammond, and the business secretary, Greg Clark, are understood to harbour some doubts about the proposals and are likely to argue the benefits of a flexible system for skilled workers.

Sajid Javid is among this group, according to reports in the Times and Sun, which claim the home secretary is planning to propose that EU citizens be given free entry to temporarily stay in the EU for 30 months after Brexit in the event of no deal, in order to protect the economy. The reports say that during this period such citizens would then have to apply for a visa under a new migration system.

Meanwhile, leading Brexiters will publish their alternative plan, written by trade guru Shanker Singham, for a future trading relationship with the EU, setting out the benefits of striking out alone to do deals with the rest of the world. It will also suggest a new regulatory environment and present their solutions for the issue of the Irish border.

At an event in central London, key Tory figures are expected to repeat their call for May to “chuck Chequers” and adopt their proposals instead, arguing that the EU’s rejection of her plans in Salzburg meant that they were dead.

Raab also dismissed suggestions over the weekend that May could call a snap general election in the autumn to save her Brexit plans. “It’s for the birds. It’s not going to happen,” he told the BBC.

He insisted the government would keep negotiating with the EU on the basis of Chequers: “This is a bump in the road. We will hold our nerve, we will keep our cool and we will keep negotiating in good faith. I think we need to keep these negotiations going,.”

But Raab added: “What we are not going to do is be dictated to. The UK is one of the biggest economies in Europe, if not in the world. We have come up with a serious set of proposals … We are not just going to flit from plan to plan like some sort of diplomatic butterfly.”