Secret Brexit plan in place if PM’S deal falls

CABINET ministers have drawn up a secret Brexit “fallback” plan amid concerns that Theresa May’s Chequers deal will be killed off by Brussels.

It is based on existing EU trade deals with Canada, Japan, South Korea and New Zealand, and sources confirmed it would be put forward if Mrs May’s deal was rejected or collapsed in the face of Eurosceptic opposition.

The plan, originally commissioned by David Davis, the former Brexit secretary, is based on the EU’S trade treaty with Canada and is far closer to the deal Brexiteers want. It comes after Michel Barnier, the EU’S chief Brexit negotia- tor, effectively killed off a key element of Mrs May’s plan for Brexit on Thursday by warning that Brussels “cannot and will not” allow the UK to collect duties on its behalf.

Ministers believe that because the fallback is based on existing treaties it is far more likely to be accepted by Brussels. Mr Davis told The Daily Telegraph: “I called it the reserve parachute. It’s ready to go. It would be attractive to European countries wanting to avoid no deal and losing the £39billion Brexit divorce bill.”

The fallback option would eliminate tariffs and rely on a system of “mutual recognition” of standards on manufactured goods, as opposed to the Chequers compromise, which ties the UK to the EU’S rules on goods.

It uses World Trade Organisation agreements and “trusted trader” schemes, based on Canadian and Japanese deals, to reduce the need for customs checks. It also mirrors the EU’S agreement with New Zealand to minimise checks on agricultural goods.

A Cabinet source said: “We would go to the EU and ask for the best bits of each deal. They would be giving nothing more than they’ve already agreed with others.”

Mr Davis said the EU would reject Mrs May’s compromise because it was “trying to push us into a Customs Union” and force the UK to accept the jurisdiction of the European Court of Justice.”

He said: “If the public decides we have not met the requirements of the referendum and are delivering Brexit in name only they will punish us. The first step will be a regeneration of Ukip, with the return of Nigel Farage and a massive erosion of our vote.”

Mr Davis raised the option at Prime Minister’s Questions earlier this month. Although Mrs May did not directly respond, she said the Government had been looking at existing deals.