Theresa May’s fractious cabinet ministers are warning Downing Street not to skirt controversial issues, including freedom of movement and services, off the table at Friday’s Chequers meeting.
As ministers were prepared for the all-day gathering with briefings in Downing Street, they told the Guardian they were concerned the focus on the details of future customs arrangements was too narrow.
Leavers believe Downing Street may be preparing to offer significant concessions on immigration to Brussels, in order to win a generous deal on services – but that discussions on Friday are likely to focus on goods.
The “third way”, as described to ministers, would involve the UK tracking goods as they come into the country, and levying EU import taxes on them only if their final destination is inside the EU. That would allow the UK to set lower tariffs and strike its own trade deals – a key demand of the leavers.
“I think you’ll come out with a customs deal; but without discussing immigration – and we’ll be back at Chequers in September,” said one government source, who expressed frustration with the indecision in Downing Street. “Whether it’s hard or soft, she needs to face down one side or the other.”
Another cabinet source loyal to the prime minister suggested it might even be a good thing if one or two pro-Brexit ministers resigned, and their backbench supporters forced a vote of no confidence in May – because she would win it. “That would shut them up,” the source said.
Allies of David Davis insisted a wide range of issues would be discussed at Chequers. Conservative MPs would then be briefed over the weekend on whatever has been agreed; and May would appear in person at the 1922 committee on Monday.
The high stakes May faces in trying to unite her party behind a Brexit plan were underlined on Wednesday by a confrontational meeting between more than 40 pro-leave MPs and the chief whip, Julian Smith.
Backbenchers from the European Research Group, led by Jacob Rees-Mogg, warned Smith that the Conservatives would be “toast” if May reneged on her Brexit promises; and complained about the prominent role of Oliver Robbins, the prime minister’s chief Brexit negotiator.
Andrea Jenkyns, an ardent leaver, stressed the backbenchers’ red lines, which include no extension to the transition period, something mooted by Greg Clark, the business secretary, last weekend.
The chief whip reportedly responded “no, no, no” in what several of those present regarded as a deliberate echo of Margaret Thatcher’s defiant stance against a federal EU.
Smith will attend the Chequers meeting, and is expected to brief ministers about the parliamentary arithmetic for different negotiating options.
Meanwhile, some pro-Brexit cabinet ministers are so concerned about May’s mooted “third way” on customs, they are considering working up a counter-proposal of their own.
“If this third way is going to be what we are being asked to sign up to, there is a mood among the Brexit members of the cabinet that they want to go back with a counter-offer,” said a senior government source.
The proposal may not be formally worded, but amount to a collective agreement. “We may socialise views on where we draw the line.”
One attendee said Smith responded by reading out the commitments in the Conservative party manifesto for last year’s snap general election, which included ending freedom of movement, and leaving the jurisdiction of the European court of justice.
At the day-long meeting, May hopes to unite her cabinet around a plan which can then be published in a formal white paper next week. Philip Hammond, the chancellor, and Clark are expected to warn colleagues of the economic risks of trade frictions.
Clark’s deputy, Richard Harrington, warned in an interview with Bloomberg on Wednesday that a no-deal Brexit would be disastrous for business. He said politicians who criticised corporations for speaking out did not “really understand how business works”.
He added: “I perfectly understand why Airbus and other companies who have so much invested in this country and employ so many people, are responsible for hundreds of millions if not billions of pounds of exports, of course they’re worried. They’ve got every right to say that.”
Harrington said that if businesses had to comply with two separate regulatory regimes to keep exporting to the EU as well as the domestic market it would be difficult to see how multinationals could continue in Britain.
Downing Street said it remained the prime minister’s position that no deal was better than a bad deal. “We are aiming to get a good deal that works for the whole country,” her spokesman said. “Her position is very clear. We are working hard to get a deal.”