Sign up here to receive the daily news briefing in your inbox every morning with exclusive insight from the BrexitCentral team Britain ‘heading for worst possible Brexit’ over freedom of movement, warns Theresa May’s former top aide… Britain risks signing up to the worst possible Brexit deal, Theresa May’s former chief of staff has warned as it emerges several Cabinet ministers want freedom of movement to effectively continue after Britain leaves the European Union. Writing for the Telegraph, Nick Timothy tells the Prime Minister she must urgently harden her negotiating strategy, adding: “The time for playing nice and being exploited is over”. Mr Timothy, one of Mrs May’s closest allies, says she has been “undermined” by Parliament and her own Cabinet and now risks being pushed into the worst possible outcome. – Telegraph (£) The Chancellor blocked meaningful no-deal planning, and refused pointblank to consider alternatives to EU financial regulations. Instead, the Treasury produced negative economic forecasts based on outcomes the Government did not seek, and leaked them to the media. It is not just the Treasury. This week, the Business Secretary has made the case for “labour mobility” – code for a form of free movement – with the EU. This not only breaches one of the Prime Minister’s red lines: it is one of Brussels’ main demands of Britain. Meanwhile, City sources say government advisers are encouraging them to speak out against its own policy. Nick Timothy for the Telegraph (£) Remainer Greg Clark should stop listening to soft Brexit woes and listen to the voices of 17.4m people – The Sun editorial The only way to escape a Brexit debacle now is to rip down all trade barriers – Ambrose Evans-Pritchard for the Telegraph (£) …as it is suggested next week’s Chequers meeting could result in the ‘softest of hard Brexits’… Next week’s crunch meeting to thrash out a final position on the customs union has been broadened out to include the full Cabinet, shifting the balance away from favouring government’s most ardent Brexiters. While it had originally been planned as a two-day overnight stay at the grace-and-favour Buckinghamshire, the first day has been scrapped and instead of the white paper being signed off by the 11-strong Brexit war Cabinet, it will now be decided by the full Cabinet of 30 on Friday. – City A.M. The crunch cabinet talks will place at her Chequers country retreat on July 6, with pro-Leave ministers preparing to resist what they fear will be a push by Mrs May for a more business-friendly exit strategy, staying close to EU rules. Boris Johnson, foreign secretary, and David Davis, Brexit secretary, are expected to lead the resistance, but Michael Gove, a frontman of the Leave campaign, has emerged as a key figure in a search for a compromise. Mr Gove told Tory MPs at a meeting on Monday night that they should accept a Brexit that would minimise business disruption, while leaving open the possibility that the exit terms might be “improved” over time once Britain has left the EU next March. – FT (£) May warns Cabinet to prepare to compromise over Brexit as EU’s stance hardens after Italian elections – The Sun …while Rees-Mogg accuses Philip Hammond of coordinating business attacks on Brexit Brexiteers have accused Remainers in the cabinet of co-ordinating business attacks on Brexit in a bid to bounce the prime minister into a soft Brexit. Jacob Rees-Mogg, head of the eurosceptic European Reform Group of Tory MPs, told Sky News he believed Chancellor Philip Hammond was behind the sudden flurry of businesses speaking up on Brexit. It comes ahead of a crunch Chequers meeting of cabinet ministers next Friday to agree detailed plans on the UK’s post-Brexit future. “I think there is cooperation between the Remainers in the cabinet and some businesses, some of the more politicised businesses,” Mr Rees-Mogg told Sky News on a visit to the Irish border town Blacklion. Asked who in the cabinet, Mr Rees-Mogg replied: “Oh, the chancellor. Boris Johnson was quite right when he said the Treasury is the beating heart of remain, that’s obvious.” – Sky News Philip Hammond accused by Jacob Rees-Mogg of co-ordinating attacks on Brexit by business leaders – The Sun Driving Jacob Rees-Mogg to the Irish border – Sky News Is H M Treasury the Enemy of Brexit? – Graham Gudgin for Briefings for Brexit > Watch on BrexitCentral’s YouTube Channel: Jacob Rees-Mogg says Remainer business sucking up to Hammond May to meet EU27 at Brussels summit today… Theresa May has been warned that time is running out to secure a Brexit deal as she prepares to face the other 27 EU leaders at a summit in Brussels. The PM will brief all her counterparts for the last time before October, when both sides hope a deal will be done on the UK’s March 2019 departure. But Irish leader Leo Varadkar said the lack of progress was “disappointing”. He said he expected fellow leaders to send a “strong message” to Mrs May that talks had to “intensify”. The prime minister, who has been under unrelenting pressure at home within her own party, has called her cabinet together for what has been billed as a make-or-break meeting at Chequers on 6 July to agree the UK’s blueprint for its future relations with the EU. – BBC News This week’s European Council summit was meant to be a milestone in the UK’s exit from the European Union. It won’t be – Charlie Cooper for Politico The EU Summit – John Redwood’s Diary …where EU leaders will give May a ‘serious’ warning over Brexit progress… Theresa May will arrive in Brussels on Thursday facing a “serious and grave” warning from fellow EU leaders about the slow progress being made on Brexit, as the continent makes preparations for a “no deal” exit. Mrs May will brief leaders over dinner on the state of Brexit negotiations, but she will be chided by other heads of government over her failure to flesh out guarantees that there will be no return to a hard border in Ireland. – FT (£) …and the PM will promise UK cash to help the EU tackle illegal migration Theresa May declared Britain will offer the EU its full support in tackling the migration crisis – now and after Brexit. And officials signalled the UK could pay more taxpayers’ money into EU programmes to stem the biggest humanitarian movement for a generation.Migration is expected to dominate an EU Council Summit in Brussels today, with Germany and Italy locked in a bitter row over a Continent-wide solution to the chaos. Angela Merkel’s interior minister is demanding the premier secures an agreement to be able to turn away migrants at the German border. Speaking ahead of today’s showdown, a senior Government official insisted it was in the UK’s interest to help Europe for years to come. He said: “We have provided resources for a number of years and will continue to do as it’s in our interest to do so. – The Sun Brussels steps up emergency planning for no-deal Brexit… The EU is quietly stepping up work on emergency plans to cope with the first days of a hard Brexit, including transitional measures to mitigate damage should the UK crash out of the bloc without an exit deal. Dubbed “the parachute” by some officials in Brussels, the provisions would in effect stagger the most severe effects of Britain’s March 2019 departure by using special arrangements for transport, financial services and customs. “Hard Brexit would be like a bomb that hits you,” said one senior European government official overseeing Brexit contingency planning. “When the pressure is so high everything becomes fluid. Once hard Brexit becomes a reality you have to do something.” – FT (£) …amidst growing German business anxiety over ‘no deal’ German opprobrium and anxiety has been directed at May’s government rather than translating into lobbying Berlin to give the U.K. a special deal on, say, single market access. The clear message from business is that whatever the costs of Brexit, maintaining the integrity of the EU single market is more valuable. And with the fire directed across the Channel, the German government has mothballed its Brexit policy-making apparatus until the fall, owing to what it sees as a frustrating silence from London. – Politico Airbus and BMW better start planning for a no-deal scenario – Brian Monteith for City A.M. > Watch on BrexitCentral’s YouTube Channel: Owen Paterson: Airbus would move to China, not the EU! Taoiseach to meet European leaders over the summer as EU splits over latest British trade proposal Leo Varadkar is set to undertake an EU charm offensive this summer in order to shore up key support for Ireland’s position during Brexit negotiations. The taoiseach intends to spend part of the Dáil break travelling across the EU to meet leaders for what he called “shuttle diplomacy”. It comes as the EU is split over new plans from Theresa May for a post-Brexit trading relationship that could result in parts of the UK economy remaining inside the single market. A draft white paper circulating in Whitehall is understood to propose binding the UK into the EU’s regulatory framework for goods. The proposals will be put to the cabinet at Chequers, the prime minister’s country house, next week before publication the following Monday. – The Times (£) Spain demands fresh assurances over Gibraltar Brexit ‘veto’, raising fears of stand-off over the Rock Spain is demanding new reassurances from Brussels over the status of its Brexit ‘veto’ over Gibraltar, raising fresh fears that the issue could derail the Brexit negotiations at the eleventh hour, the Telegraph can reveal. Three European diplomatic sources confirmed that Spain’s new socialist government is demanding that this week’s European Council conclusions explicitly reference the need for a solution for Gibraltar before any deal applies to the Rock. The Spanish intervention comes as talks over Gibraltar and Brexit remain deadlocked after breaking down six weeks ago in a row over Spanish demand for joint policing of its airport. – Telegraph (£) EU must plan for ‘worst case scenarios’ with Trump’s US, warns Donald Tusk Donald Tusk, the European Council president, has told EU countries to prepare for “worst case scenarios” as relations with the US under Donald Trump rapidly deteriorate. Mr Tusk wrote to EU states setting out his concern amid a growing trade war, but said “divisions” also go further and that Mr Trump’s behaviour threatens the West’s unity. Senior EU officials at a briefing later in the day fleshed out his message, saying the US president’s approach to international politics is “very dangerous” and represented the start of a new “worrying” American doctrine. Independent Donald Tusk’s invitation letter to the members of the European Council – EU Council Bank of England says ‘progress’ has been made on Brexit… The Bank of England said that “progress” has been made to prepare the UK financial sector for Brexit, but warns that “material risks” remain.In its latest financial stability report released today, the bank said that “progress has been made in the UK towards mitigating risks of disruption to the availability of financial services to UK end users.”The bank welcomed the passage of the EU (Withdrawal) Bill and the UK government’s willingness to put in place temporary permissions to allow European Economic Area (EEA) entities to service contracts with customers in the UK. – City A.M. Now even pro-EU Bank of England chief Mark Carney blasts Eurocrats for failing to plan for Brexit properly – The Sun …but Governor Mark Carney criticises the EU’s failure to plan The global financial system could face unprecedented disruption if the EU does not safeguard vital contracts worth £29 trillion, the Bank of England has warned. So-called derivatives contracts held between banks in the EU and the UK in order to manage risks are under threat if the EU does not follow the UK in agreeing to continuity arrangements, ahead of the Brexit March 2019 deadline. This presented a major risk of disruption for financial firms as both sides must agree on how contracts can be used in order for them to continue to be used, according to the Bank of England’s financial stability report. – Telegraph (£) Bank of England criticises EU for lack of movement on Brexit risks – City A.M. Brussels is only cutting Britain from a major satellite project ‘out of spite’ for Brexit says ex-Aussie PM John Howard John Howard says they are being ‘foolish’ to freeze the UK out of the Galileo system which it has already paid into – saying the bloc needed to stay close on security. Britain’s involvement in the scheme faces being restricted because the country would be viewed as a “potential security risk” outside the EU. Mr Howard told BBC Radio 4’s Today programme: “The only reason that the Brits are going to be excluded is out of spite because they have left Europe. “Well, that’s pretty foolish when you are dealing with such an incredibly sensitive thing as security. “I would have thought that, irrespective of what you do on Brexit, that having close security relationships between the United Kingdom and countries in Europe, particularly because they face some common challenges, would be very sensible.” John Howard says the EU are being ‘foolish’ to freeze the UK out of the Galileo system – The Sun Almost half of Germans want Merkel to resign as Italy warns survival of EU is at stake over migration crisis Almost half of Germans want Angela Merkel to resign as their country’s leader, a new poll has shown, as the German chancellor comes under renewed pressure over her handling of the immigration issue. A YouGov survey showed that 43 per cent of Germans now want her to leave office, compared with 42 per cent who want her to remain – 15 per cent did not express an opinion. Even in her own CDU-CSU coalition, 27 per cent want to see her quit. – Telegraph (£) A border-free EU could be a pipe dream if Angela Merkel’s teetering coalition comes crashing down – Peter Foster for the Telegraph (£) How Merkel broke the EU – Politico Angela’s ashes: Merkel’s grand project is crumbling – Fredrik Erixon for The Spectator Struggling to strike EU deals while sinking at home: Angela Merkel is the new Theresa May – Mark Almond for the Telegraph (£) Welsh Conservative leader ‘ousted in Remain putsch’ after criticising Airbus for Brexit warning, allies say The leader of the Welsh Conservatives has stepped down after a “putsch” by Remain supporters in the Welsh Assembly, allies have said. Andrew RT Davies said in a statement that he had tendered his resignation “with deep regret” following a meeting of all Tory Assembly Members on Wednesday morning. Sources said he had been forced out by around 12 Assembly members after dismissing a warning by Airbus that it could quit the UK over Brexit as “hyperbole”. – Telegraph (£) Brexit-backing Welsh Conservative leader Andrew RT Davies quits – BBC News Welsh Tory leader quits just days after Brexit row – Sky News Andrew RT Davies forced out as Welsh Tory leader. A struggle begins to ensure his successor is elected by Party members. – Mark Wallace for ConservativeHome Brexit transition ‘unlikely to be sufficient’, claims EU’s services industry Europe’s services industry has written to chief Brexit negotiators David Davis and Michel Barnier, urging the pair to agree to extend the transition period. Currently, the period – during which the UK will remain part of the Single Market and customs union and subject to ECJ jurisdiction – will run from March 29 2019 until December 31 2020.But there are growing fears that this will not be long enough, particularly as it becomes increasingly likely the period will be used to hammer out the future relationship rather than simply ‘implement’ the changes. – City A.M. The right Brexit deal ‘could be a wave of opportunity’ for fishermen Fishermen have demanded that Theresa May show “political backbone” in the Brexit negotiations after claims that the industry could double in size if the right deal was reached. Bertie Armstrong, of the Scottish Fishermen’s Federation, urged negotiators to “take note” of an analysis by Ian Napier of the North Atlantic Fisheries College marine centre in Shetland. He looked at the potential benefits if Britain followed the Icelandic model, with local boats landing 95 per cent of fish caught within the 200-mile limit recognised by international law. Under this scenario, the industry would be worth a predicted £1.7 billion, or £1.5 billion if British boats lost access to EU waters. Under a Norwegian-style model, with the British fleet landing 84 per cent of the fish and shellfish caught from its own waters, the UK industry could be worth up to £1.4 billion, or £1.3 billion without EU access. – The Times (£) Iain Duncan Smith: The Nazis, Maggie, the euro… the CBI always get it wrong There is a tendency among the political classes to pretend that big business has a monopoly on economic wisdom about our country’s future. As a result, the public is urged to accept, without challenge, the views of corporations and their representative bodies such as the Confederation of British Industry (CBI). According to this fashionable narrative, the insights of corporate chief executives should count for much more than the decisions of voters exercised through the democratic ballot box. The belief in the primacy of corporate opinion has been on full display in recent days. The pro-EU establishment, along with large sections of the media, has given prominent coverage to warnings by those two global giants, the aeronautical manufacturer Airbus and the car manufacturer BMW, that they might leave Britain after Brexit if the negotiations on a trade deal do not proceed to their liking, especially on customs alignment. – Iain Duncan Smith MP for the Daily Mail George Bridges: How to reboot Britain’s failing Brexit strategy Are you bored of Brexit? I don’t blame you. The bad news is that the debate, confusion and uncertainty is likely to continue for years. Yes, years. That may depress you so much that you don’t want to read any more. Quite right too. Go and enjoy the weather and the World Cup. If you are a glutton for punishment and are still reading, here’s why nothing much is going to change… Let’s start by answering the question: “Why is it that, two years since the referendum, the UK Government’s approach appears chaotic and confused?” Numerous reasons are given. The Conservative Party’s long running feud over Europe. The lack of contingency planning in the event of a vote to Leave. No clear strategic vision that answers the question of what country we want to be after Brexit. Triggering Article 50 without a clear plan. – Lord Bridges of Headley for Reaction Gary Gibbon: Brexit White Paper takes shape Olly Robbins, it seems, is attempting to get ministerial licence to pursue a series of approaches ranging from a Norway-style rule-taking approach to those with more sovereignty but less access to EU markets. There’s bound to be suspicion that only one of these approaches – the one outlining what is effectively a Norway style approach with the UK in the single market for manufactured goods and agricultural goods – is the one the EU27 would be most likely to engage with. The other more distant relationships to EU institutions proposed may be approved as negotiating lines to pursue but might be political window dressing for internal consumption and could die a very early death at the Brussels negotiating table. – Gary Gibbon for Channel 4 Asa Bennett: Despite Remainer hysteria, voters are worrying less about a ‘no deal’ Brexit Theresa May used to insist regularly that “no deal is better than a bad deal”, but these days her Brexit mantra seems to have fallen by the wayside. That has encouraged her critics to say that she has ditched any pretence that she could walk away in order to commit herself to agreeing something, no matter how bad, with her European partners. Jeremy Corbyn challenged her on this today at Prime Minister’s Questions, inviting her to take her “phoney threat…off the negotiating table”. Mrs May, to her credit, didn’t give in. She may not recite her ‘no deal’ mantra so much these days, but that is mainly because she prefers to express it differently. The language she and her ministers prefer to use is to talk about how they’re preparing for “every eventuality”. The steps being taken are both “physical and legislative”, she told a gathering of businesspeople earlier this week. – Asa Bennett for the Telegraph (£) Brian Monteith: Airbus and BMW better start planning for a no-deal scenario The EU (Withdrawal) Bill has now received Royal Assent, and over the next few days the Prime Minister will be at the European Council in a far stronger position and hopefully an emboldened mood. This does not mean that the next phase of Brexit is going to be any easier than the two years since the referendum (far from it), but for businesses to understand how to make a success of Brexit, they must accept that it is happening, understand why progress has been so slow, and plan for there being no deal. There have been some very worrying complaints in recent weeks as individual businesses and some trade associations, such as logistics and motor manufacturing, have made public their concern over the continuing uncertainty of what a deal might look like – or whether one will be agreed at all. -Brian Monteith for City A.M. Brexit in Brief Bring on the Brexit songs, England fans – Brendan O’Neill for The Spectator Malta makes a strong case to host the EU outposts of British companies after Brexit – Lord Ashcroft for ConservativeHome Will Germany’s humiliation finish Merkel, rescue Brexit and boost Trump? – Iain Martin for Reaction Why has Brexit made some people uncontrollably angry? – Andrew Marr for The Spectator Brexit Britain’s dash for growth will be a disaster for the environment – Owen Jones for the Guardian Brexit exposes the truth about the Corbyn personality cult – Nick Cohen for The Spectator Truss says higher taxes would be “a complete contradiction” of the Brexit vote. Her speech: full text. – Conservative Home Brussels ‘could risk Europe’s safety by refusing to strike a deal with UK on cyber-security after Brexit,’ ex-spy boss warns – The Sun Bank’s red light warning for EU on lack of Brexit progress – BBC News Carlos Ghosn says Nissan is ‘in the dark’ over Brexit – City A.M. Emmanuel Macron forces French schoolkids to learn about Europe’s flag and anthem to stop the country following us out of EU – The Sun PMQs: Corbyn and May on jobs threats and customs union – BBC News ‘False news’: Rees-Mogg blasts Corbyn’s Brexit jibe – Sky News The EU cannot afford for Brexit to be a success’: readers respond to Allison Pearson – Telegraph (£) Tony Blair is bored that people are bored by Brexit – City A.M.