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Theresa May says Britain must 'aim high' in Brexit negotiations with EU

British prime minister Theresa May makes a statement to MPs on last week's European Council meeting in the House of Commons PICTURE: PA

Theresa May has told senior British government colleagues Britain must "aim high" in negotiations with the EU over a post-Brexit trade deal.

But there was no agreement at a meeting of the so-called 'Brexit war cabinet' over the kind of relationship Britain should seek with its former partners, with deep divisions emerging over the extent to which the UK should mirror EU regulations after withdrawal.

Brexiteers such as Boris Johnson, Michael Gove and Liam Fox – alongside defence secretary Gavin Williamson, who backed Remain in the referendum – were understood to be vocal on the need to "diverge" from the EU rulebook to maximise the opportunity for new deals elsewhere in the world.

But it is believed 'soft' Brexit backers such as chancellor Philip Hammond and home secretary Amber Rudd leaned further towards "alignment" with Brussels rules to maintain close ties with the EU in the future.

Ministers did not agree a position but there was discussion of the potential for "gradual divergence" – a step-by-step move away from EU laws after Brexit and the conclusion of a subsequent implementation period in 2021.

The ministers most closely involved with Brexit held their first formal discussion of the preferred "end state" in a 90-minute committee meeting in Downing Street.

The end state will also be discussed in full cabinet on Tuesday, but insiders suggested there would be several more meetings before a formal government position is finalised in the early weeks of the new year.

The meeting came shortly before Mrs May briefed the House of Commons on last week's breakthrough in Brexit talks, which saw the European Council agree that "sufficient progress" had been made on divorce issues to move to negotiations on the transition to a new relationship.

Mrs May set her face firmly against a second referendum on the eventual outcome, telling MPs it would mean "betraying the British people".

And she dismissed claims that the government was planning to ditch the 48-hour limit on the working week enshrined in the EU's Working Time Directive, insisting she intended to "not only maintain but also enhance workers' rights".

Labour leader Jeremy Corbyn urged her to offer a guarantee that "this government will not seek to use Brexit to water down... working or social rights in this country".

Prominent Brexiteer Jacob Rees-Mogg told her to model herself on Margaret Thatcher by showing "real metal and steel" in rejecting "hostile" negotiating terms set out by the European Commission which would involve the UK observing EU rules on freedom of movement during transition and bar it from negotiating new trade deals during this period.

Mrs May made clear that she expects the UK to leave the Common Agricultural Policy and Common Fisheries Policy on the scheduled date of Brexit on March 29 2019.

A senior adviser to EU chief negotiator Michel Barnier warned that Britain could not pursue "sector-by-sector" participation in the European single market.

Stefaan De Rynck also rejected a "buffet-style" transition away from EU membership "where one picks and chooses the bits one likes", in an event at Chatham House in central London.

Mr Barnier has also made clear Britain will not be able to "cherry-pick" advantages of different trading models with the EU.

He told Prospect magazine: "We won't mix up the various scenarios to create a specific one and accommodate their wishes, mixing, for instance, the advantages of the Norwegian model, member of the single market, with the simple requirements of the Canadian one.

"No way. They have to face the consequences of their own decision."

But Theresa May's official spokesman made clear her commitment to pursuing a bespoke deal away from pre-existing models such as Norway-style membership of the European Economic Area (EEA) or a Canadian-style free trade deal on goods

He told a regular Westminster briefing: "We believe that we can secure an ambitious deal with the EU that works for the UK and for the European Union and that we come at this from a unique perspective in the sense that we already have a strong relationship with the European Union from which to build upon."

Labour MP Peter Kyle, a leading supporter of the Open Britain campaign for close links with the EU, said the cabinet had been given a "cold dose of reality" by Mr De Rynck.

"The prime minister may have finally got past phase one by agreeing to cough up a £40 billion divorce bill, but negotiating the future relationship will prove to be far more complicated and costly.

"As ministers squabble among themselves, people are right to keep an open mind about whether this is the right future for our country."

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