Theresa May’s reported agreement with her cabinet on a future trading relationship with the EU has been criticised as based on “pure illusion” by the European council president, Donald Tusk, as frustration with the UK erupted in Brussels.



Reports that May’s inner cabinet had agreed on a policy of “managed divergence” during eight hours of talks at an awayday in Chequers were met with incredulity by EU leaders.



Tusk told reporters on Friday: “I am glad the UK government seems to be moving towards a more detailed position.

“However, if the media reports are correct, I am afraid the UK position today is based on pure illusion. It looks like the cake [and eat it] philosophy is still alive.

“From the very start it has been a set principle of the EU27 that there cannot be any cherrypicking of single market à la carte. This will continue to be a key principle, I have no doubt.”

Speaking at a summit of EU27 member states in Brussels, to discuss the EU’s budget and leadership post-Brexit, Leo Varadkar, the Irish taoiseach, also insisted that the single market was “not à la carte”.

It is believed the British government is seeking to maintain frictionless trade in some sectors by staying in lock-step alignment with EU regulation, while opening up the prospect of diverging in other areas in order to gain a competitive advantage in the international marketplace.

“It is not possible for UK to be aligned to EU when it suits and not when it doesn’t,” Varadkar said.

“The UK position needs to be backed up with real detail that can be written into a legal treaty with the EU. We are well beyond the point of aspirations and principle. We need detail.”

Senior EU diplomats said expectations were now low for Theresa May’s speech – planned for next Friday – in which she will offer her vision of Britain’s future trading relationship with the EU.

Tusk revealed he would be meeting May at Downing Street ahead of her speech, but insisted that the EU would set out its stall on the future in March whether the UK had a viable proposal or not.

“Our intention is to adopt these guidelines whether the UK is ready with its vision of our future or not. Naturally it would be much better if it were, but we cannot stand by and wait,” Tusk said.



The Dutch prime minister, Mark Rutte, who met May in London earlier in the week to deliver an uncompromising call for a clear and realisable vision from the UK government, said: “As good friends [of the British], we can bring the difficult messages like I did at Downing Street, asking Theresa May to be as clear as possible on what she wants to achieve on the second phase of negotiations.”

Rutte said the EU wanted to stay “as closely associated with the UK as possible” but the British would have to abide by European rules for a close relationship.

“For example, membership of the internal market, that means certain obligations. Membership of the customs union, that means certain obligations.”

Facebook Twitter Pinterest Jean-Claude Juncker (left) and Donald Tusk at a press conference at the EU summit in Brussels. Photograph: Geert Vanden Wijngaert/AP

Ructions within Conservative ranks are likely over attempts by rebel Tory MPs, possibly backed by Labour, to force the government to commit to remaining in some form of customs union after departure, with a new parliamentary amendment gathering support.

While May will hope her vision will unite enough of her MPs to be seen as credible, it could be a different matter with Brussels, which has repeatedly said it does not want a Brexit model where the UK chooses in which areas to diverge on regulations. Experts said the UK will most likely be accused of cherrypicking if its aim was one of targeted divergence from EU regulations.

Another conflict is expected over the rights of EU nationals arriving in the UK during the post-Brexit transition period. May’s spokesman reiterated on Friday that these would be less than those enjoyed by existing residents, an idea viewed in Brussels as unacceptable.

Charles Grant, director of the Centre for European Reform thinktank, said the approach agreed at Chequers seemed to be the so-called baskets model, where the UK would align with the EU in some areas, have some alignment in others, and none elsewhere.

“I think there’s no chance of the EU agreeing to the proposal,” he said. “The EU’s obsessed with the level playing field. It doesn’t trust any enforcement mechanism proposed by the British to police it adequately.”

May’s preferred option on new rules for EU nationals might also not survive contact with Brussels, Grant added. “My guess is May will find a way of climbing down gracefully, and giving the EU most of what it wants.”

May’s chosen approach rejects the idea of being in any form of customs unions with the EU, with the health secretary, Jeremy Hunt, stressing on Friday that this would not happen.

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When the government’s trade bill returns to the Commons, MPs will vote on an amendment proposed by a group of remain-minded Conservatives – Anna Soubry, Nicky Morgan, Sarah Wollaston, Stephen Hammond and Jonathan Djanogly – as well as Labour’s Chuka Umunna, calling for a continued customs union.

With at least four other Conservatives likely to back the amendment, it could pass if Labour supported the measure. This is, however, by no means certain.

Jeremy Corbyn is to make a Brexit speech on Monday in which he could clarify the party’s position, after he and several other Labour frontbenchers indicated they could back membership of a customs union.

Separately, May risks upsetting hardline Brexiters in her own party with a proposal to sign up certain industrial sectors, such as chemicals, to the monitoring of the relevant EU regulators, according to a report by Bloomberg.

While this would help access to EU markets, the regulators are overseen by the European court of justice, an organisation May has previously promised would have no role in UK affairs after Brexit.





