Sources on both sides hint at new optimism with talks likely to continue this week

Cross-party talks on Brexit between the government and Labour have moved on to the “nuts and bolts” of a possible compromise, Labour’s Sue Hayman has said, with sources on both sides suggesting discussions were taking a more positive tone.

Talks with senior shadow ministers and officials are likely to continue this week, including on key areas of previous disagreement that had previously been swerved, including a customs union, single market alignment and dynamic alignment of workers’ rights and environmental protections.

It is understood no new offer from the government has been put on the table but participants emerged with a new optimism about a change in tone and a feeling that there were grounds to continue discussions, a marked contrast to last week’s talks.

Theresa May’s de-facto deputy, David Lidington, who has been leading talks for the government, said he was encouraged by the “need to inject greater urgency”.

Hayman, the shadow environment secretary, said it was “a really constructive discussion” that had been “getting much more into the nuts and bolts of the detail.” She said she now believed the government was “open to moving forward in our direction”.

The government has all but abandoned plans to try to force through the Brexit deal using the withdrawal agreement bill and will instead try to devise a way to forge a compromise through new indicative votes if talks with Labour break down.

May’s spokesman said cross-party talks would continue as long as there was “still a prospect of reaching a single position to put to parliament”, but added that the prime minister would then look to bring forward “a small number of votes to try and find a way through parliament”.

Asked whether that would be votes on new options for a Brexit deal or on legislation, the spokesman said: “I’m referring to options.”

There is an acknowledgement that something new must be attempted by the government before the European parliamentary elections, even though Downing Street sources conceded that Labour was under far less pressure than the Conservatives to agree a deal by 23 May.

Government sources had previously suggested that, if the talks ultimately ended in impasse, May could use the withdrawal agreement bill to ratify the Brexit agreement and legislate for guarantees on the environment and workers’ rights. Labour could also potentially amend that legislation in order to build support for a customs union.

However, it is understood the government now believes it is unlikely to reach an agreement with Labour that would enable it to bring the bill to parliament without risking it being voted down at second reading. That would mean the bill could not be reintroduced without the government proroguing parliament.

“Without some kind of signal from Labour, that path is fraught with danger,” a No 10 source said.

Downing Street hopes it could get Labour support for a new process of indicative votes, meaning a guaranteed majority for whatever came out the other end, but that support is also not assured.

Lidington has previously hinted that a new process for determining what could command a majority in parliament was now needed, rather than a process that produced no support for any option.

“What is needed now is not just another parliamentary opinion poll where the majorities assemble against anything that’s put on the table,” he told business leaders last week.

“You actually need a process that means that parliament has to endorse a third outcome, even if that for many MPs is the second or third best of what is available.”

A government source said there was “no point” going through the same process that had previously been explored by backbenchers led by Sir Oliver Letwin. “You’d have to come up with another process, but all that is very much TBC.”

Lidington led the talks with Labour on Monday, with the chancellor, Philip Hammond, the Brexit secretary, Stephen Barclay, the environment secretary, Michael Gove, the chief whip, Julian Smith, and Gavin Barwell, the prime minister’s chief of staff.

The meeting in the Cabinet Office was held with their Labour counterparts, including the shadow chancellor, John McDonnell, and Keir Starmer, the shadow Brexit secretary.

Earlier on Monday, Downing Street in effect conceded that the Brexit deadlock would lead to the next Queen’s speech being postponed.

The prime minister’s spokesman said the government wanted to get the EU withdrawal agreement bill through parliament first.

“What we are focused on is the withdrawal agreement bill, because that is the legislation which is necessary in order to ratify our withdrawal from the EU,” he said. “That is part of the current Queen’s speech cycle and we need to finish that work.”

Bringing the speech forward could give MPs the opportunity to show there is no confidence in the government by voting it down, especially if parliament voted against the EU withdrawal bill and the Queen’s speech was used to introduce it again.