Se­cret ‘Plan B’ for Brexit

Cab­i­net and EU plot 11th-hour al­ter­na­tives to May’s deal as lead­ers meet in Brus­sels

The Sunday Telegraph - - Front page - By Ed­ward Mal­nick SUN­DAY PO­LIT­I­CAL EDITOR, Harry Yorke in Belfast and Peter Fos­ter in Brus­sels

CAB­I­NET min­is­ters and EU diplo­mats are se­cretly draw­ing up “Plan B” pro­pos­als for Brexit based on a grow­ing as­sump­tion that Theresa May’s deal will be blocked by Par­lia­ment.

Se­nior fig­ures on both sides of the Chan­nel are ur­gently plot­ting al­ter­na­tives to the agree­ment struck by the Prime Min­is­ter after 91 Con­ser­va­tive MPs in­di­cated that they would op­pose it in the Com­mons.

The dis­clo­sure comes as EU lead­ers meet in Brus­sels to ap­prove the With­drawal Agree­ment and “po­lit­i­cal dec­la­ra­tion” out­lin­ing the pro­posed fu­ture re­la­tion­ship be­tween the UK and the bloc after Brexit. Mrs May ar­rived at the Euro­pean Com­mis­sion’s Ber­lay­mont head­quar­ters at 6pm yes­ter­day ahead of the spe­cially-con­vened meet­ing of the Euro­pean Coun­cil.

Last night Don­ald Tusk, the pres­i­dent of the Euro­pean Coun­cil, said he would rec­om­mend to EU lead­ers that they ap­proved the deal. He added: “As a motto for to­mor­row, the words of Fred­die Mer­cury, who passed away ex­actly 27 years ago: ‘Friends will be friends, right till the end’.” To­day, in an open let­ter to the coun­try, Mrs May in­sists her deal hon­ours the re­sult of the ref­er­en­dum and says she will be “cam­paign­ing with my heart and soul” to win the Com­mons vote next month.

But sources said sev­eral se­nior min­is­ters were talk­ing up one “Plan B” idea of a Nor­way-style re­la­tion­ship with Brus­sels, un­der which the UK would have a more cer­tain “exit mech­a­nism” from the EU’s rules but would be un­able to end the free move­ment of work­ers from the Con­ti­nent.

Un­der the Nor­way op­tion, the UK would re­main a mem­ber of the Euro­pean Eco­nomic Area (EEA), with­out full EU mem­ber­ship. A Govern­ment doc­u­ment leaked to The Sun­day Tele

graph re­veals that eco­nomic mod­el­ling by the Trea­sury de­signed to al­low MPs to com­pare Mrs May’s deal to a no-deal exit would also in­clude an “EEA-like sce­nario” – in a fur­ther sign that the ar­range­ment is be­ing con­sid­ered se­ri­ously in White­hall.

The leaked doc­u­ment states that the pro­posed Trea­sury mod­el­ling is de­signed to “sup­port any ‘mean­ing­ful vote’ in Par­lia­ment on the fi­nal deal”. Tory MPs fear a se­ries of ex­ag­ger­ated claims about the im­pact of an exit with- out a deal. In Belfast, a se­nior in­sider in the Demo­cratic Union­ist Party, which has threat­ened to pull its sup­port for Mrs May’s ad­min­is­tra­tion if she presses ahead with her deal, said the party had also held dis­cus­sions with Cab­i­net min­is­ters about “a Plan B”.

Philip Ham­mond, the Chan­cel­lor, is said to be among min­is­ters who have dis­cussed the Nor­way idea in re­cent weeks – al­though an ally in­sisted he was squarely be­hind Mrs May’s plan.

Sep­a­rately, se­nior EU fig­ures are war-gam­ing a sce­nario un­der which Brus­sels could agree to ex­tend Ar­ti­cle 50, the mech­a­nism un­der which the UK will leave the bloc next March. Diplo­mats be­lieve that a re­prieve could al­low time for var­i­ous pos­si­ble out­comes, such as a new prime min­is­ter, a gen­eral elec­tion, a ne­go­ti­a­tion over a Nor­way-style Brexit, or a sec­ond ref­er­en­dum.

Mean­while, Do­minic Raab, who re­signed as Brexit sec­re­tary over the deal ear­lier this month, said there was “still time” to sal­vage Mrs May’s deal with “mod­est and rea­son­able” changes that would al­low it to pass

through the House of Com­mons. Dis­tanc­ing him­self from calls to “junk” in its en­tirety the con­tro­ver­sial in­sur­ance plan in the With­drawal Agree­ment agreed with Brus­sels, Mr Raab sug­gested that Mrs May could re­gain his sup­port – and that of many MPs – by in­sist­ing on a new “exit mech­a­nism” from the back­stop that could be sub­ject to “con­di­tions” to sat­isfy the con­cerns of the EU. He also called on Mrs May to seek changes to last week’s “po­lit­i­cal dec­la­ra­tion” – a non-legally bind­ing doc­u­ment which cov­ers the UK’s fu­ture re­la­tion­ship with the EU – so it no longer risked “shack­ling” the coun­try to rules and cus­toms ar­range­ments “over which we have no say”.

The Tele­graph un­der­stands that of­fi­cials at the Euro­pean Coun­cil have al­ready dis­cussed the terms on which they might ex­tend Ar­ti­cle 50, if they were asked by Mrs May or a fu­ture prime min­is­ter were she to fall.

Any ex­ten­sion would re­quire unan­i­mous sup­port from the 27 other EU lead­ers, and EU sources said it would likely be very lim­ited in na­ture.

“The ex­ten­sion might only be for a month or so, to make emer­gency prepa­ra­tions for a ‘no deal’,” said an EU source with knowl­edge of the think­ing of the Euro­pean Coun­cil, which is led by Mr Tusk. The source added: “The long­est an ex­ten­sion could con­tinue un­til is prob­a­bly July, when the re­sults of the Euro­pean Par­lia­ment elec­tions are cod­i­fied, and then it would only be to ac­com­mo­date a spe­cific move, like a sec­ond ref­er­en­dum. Ul­ti­mately it will be up to the lead­ers.”

Mean­while, a co­hort of se­nior Con­ser­va­tives, led by David Davis, the for­mer Brexit sec­re­tary, warned Mrs May that she was mak­ing a no-deal out­come more likely by plough­ing on with her plan. The group, also com­pris­ing Iain Dun­can Smith, Priti Pa­tel, Owen Pater­son, John Whit­ting­dale and Ja­cob Rees-Mogg, stated: “Our grave doubts about this pro­posal are shared across the House of Com­mons by mem­bers of all par­ties. By con­tin­u­ing to pur­sue it, when it is plain that it does not have enough votes to carry it through the House of Com­mons, you are mak­ing a no-deal sce­nario more likely.

“The no-deal sit­u­a­tion will in­volve some el­e­ment of risk, chal­lenge and short-term dis­rup­tion – just as the his­toric vote to leave in 2016 did. But we still be­lieve, as you once did, that ‘no deal is bet­ter than a bad deal’. It is bet­ter than a deal which would cost our coun­try £39bil­lion and hand the EU the keys to our des­tiny.”

Jean-Claude Juncker, the Euro­pean Com­mis­sion pres­i­dent, greets Theresa May at the EU head­quar­ters in Brus­sels yes­ter­day

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