UK Edition
Theresa May has revealed detailed plans for quitting the EU with “no deal” in a move designed to pile pressure on Brussels to begin trade talks.
The Prime Minister decided to “focus minds” by publishing draft legislation showing how the UK will implement independent trade and customs arrangements from “day one” after Brexit in March 2019.
It is the first time the Government has set out what “no deal” would look like, and is aimed at kick-starting Brexit talks which have stalled because of a row over the size of the so-called Brexit “divorce bill”.
It comes ahead of trips to Brussels by both Mrs May and her Brexit secretary David Davis in the coming days.
White papers published on Monday on customs and trade made it clear that Britain would trade under World Trade Organisation rules if it left without a deal, and would set its own tariffs and taxes on goods, as well as moving borders inland to avoid queues at ports.
It also emerged that the Department for International Trade has set up a planning unit dubbed “Project After” which is putting forward radical options including dropping all trade tariffs and joining a trade pact focussed on Asia.
Mrs May, who is trying to reboot her premiership after a calamitous Conservative Party Conference, sent a clear message to Brussels when she told MPs: “We are planning for every eventuality and you are now seeing the proof of it.”
Mrs May’s announcement in the House of Commons was welcomed by Eurosceptic MPs, but they criticised an admission that the European Court of Justice could still hold sway over Britain’s courts for all or part of a two-year transition period.
The Prime Minister also repeatedly refused to answer questions from Labour MPs over whether the Government had received legal advice saying that Article 50 was reversible.
The Prime Minister toughened her stance ahead of a visit to Brussels next week when she will attend a meeting of the European Council which will decide whether or not sufficient progress has been made on the issues of money, citizens’ rights and the Irish border to allow trade talks to begin.
David Davis will arrive in Brussels today to join the latest round of Brexit talks, but the Government has all but conceded that the EU will say no to trade talks at this stage, meaning they cannot begin before December at the earliest, when the Council next meets.
Mrs May - who told the EU at the weekend that “the ball is in their court” - hopes her latest move will persuade leaders of the other 27 EU member states that Britain is serious about walking away from the negotiating table if they are not prepared to be more flexible.
The draft legislation published by the Government sets in motion the laws that will define what Britain’s customs and trading relationship with the EU will look like after the 2019 Brexit date, though it is likely to go through multiple revisions as talks progress.
The white paper on customs says that while the UK “hopes and expects” to reach a deal on Brexit, ministers have drawn up plans for a “contingency scenario”.
It warns that the impact of leaving the EU without a deal is likely to be “greatest” at ferry ports where lorries and vans carrying goods arrive from the EU.
The paper states that to avoid delays lasting hours at the ports the Government will carry out checks “inland” as much as possible.
Mrs May is ready to commit billions of pounds to building the infrastructure needed for a no deal scenario, such as the inland customs terminals discussed in the white paper, if no progress is made by the New Year.
The trade white paper states that: “In order to ensure continuity in relation to our trade around the world and avoid disruption for business and other stakeholders, the UK needs to prepare ahead of its exit from the EU for all possible outcomes of negotiations.”
A Whitehall source said: “Hopefully this will focus minds in Brussels on the fact that we are going ahead with our preparations even if the EU refuses to start trade talks.
“They will be able to see that we will be ready on day one after we leave the EU in March 2019.”
Mrs May’s row with Brussels intensified on Monday with sources close to Mr Barnier telling The Telegraph that even if full agreement is reached on Ireland and citizens’ rights, “two out of three isn’t good enough” and trade talks will only proceed if agreement is reached on the financial settlement.
Asked if the ball was now in the EU’s court, as Mrs May had suggested, European Commission chief spokesman Margaritis Schinas told The Telegraph: “This is not exactly a ball game. There is a clear sequencing to this talks, there has been no solution found on step 1, the divorce proceedings. The Ball is entirely in the UK’s court.”
An EU official added: “This is not a ball game. I don’t think these are good metaphors. We’ve moved from card games to ball games. “Mr Barnier has played a lot of sport but I don’t think he plays tennis. A ball game metaphor suggests there are winners and losers. That’s not how Brussels operates. It is a transactional thing. Sports metaphors don’t work, at least not the ones with winners and losers.”
Meanwhile Mrs May was warned by her Chief Whip that reshuffling her Cabinet to reassert her authority will not be a “silver bullet”.
The Daily Telegraph understands that Gavin Williamson has raised concerns with Downing Street that holding a reshuffle carries significant risks.
It came after the Prime Minister indicated that she could demote Boris Johnson, the Foreign Secretary, in a reshuffle at the end of the month.
Separately Grant Shapps, the Tory MP who was outed as the leader of a coup against Mrs May last week, contested claims that the Prime Minister cannot be changed during Brexit.
In an email to Tory MPs he said: “I tend to feel that since we changed Prime Ministers during both World Wars, we have been in difficult positions before, whilst making the change.
“Either way, I have no doubt that we both believe that these views should be expressed in private and only with the intended recipient in order that she may make up her own mind, with her own timetable.”