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.
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.
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.
- The UK committing to “ongoing harmonisation” with EU rules on goods to ensure frictionless trade at ports and the border with Ireland
- A “joint institutional framework” would provide for the consistent interpretation and application of UK-EU agreements, with British courts ruling on cases in Britain and EU courts in the EU but a joint committee and independent arbitration settling disputes
- A new “facilitated customs arrangement” would remove the need for checks and controls by treating the UK and EU as if they were a “combined customs territory”
- The UK would effectively impose EU tariffs at the border for goods intended for the bloc but would “control its own tariffs for trade with the rest of the world”
- Free movement of people will end, but a “mobility framework” will ensure UK and EU citizens can continue to travel to each other’s territories and apply to study or work
Mrs May said: “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.
“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.”
Ahead of the formal announcement of the deal, Tory Brexiteers warned that Mrs May’s position could be under threat if she watered down her red lines.
Leading Brexiteer David Jones, a former minister at Mr Davis’s Department for Exiting the EU, said the proposed deal breached all three of Mrs May’s red lines of leaving the single market, customs union and jurisdiction of the ECJ.
Describing the plan as “not very good at all”, Mr Jones told BBC Radio 4’s Today that it would deliver “something less than the full Brexit we have had repeated promises of by the PM and Cabinet members”.
Andrea Jenkyns, who quite as a ministerial aide in order to speak more freely about Brexit, said she would be willing to help trigger a leadership contest if the deal left the UK “one foot in, one foot out” of the EU.
“I am not a hypocrite,” the Morley and Outwood MP said in an interview recorded for the BBC’s Sunday Politics in Yorkshire and Lincolnshire.
“I am standing up for the 17.4 million people who wanted these red lines and who wanted to ensure we did not have a half in-half out Brexit.”
And Stewart Jackson, a former MP now the senior aide to the Brexit Secretary, tweeted a link to a story about a poll warning that “Tories will lose votes if they cross Brexit red lines”.
The entire Cabinet, including ministers who are not full members but attend meetings, arrived one by one by car at Chequers on Friday morning in time for discussions to start at 10am.