Sign up here to receive the daily news briefing in your inbox every morning with exclusive insight from the BrexitCentral team David Davis holds crunch talks with Theresa May over her ‘too soft’ Brexit plan… David Davis was last night leading a frantic bid by senior Tory eurosceptics to talk Theresa May out of her controversial new ‘soft Brexit’ plan. In a dangerous split for the PM, the Brexit Secretary shares Leave-backing MPs’ anger that the new No10 blueprint betrays the referendum result… At the same time, Mrs May mounted her own battle against time to try to persuade senior Cabinet ministers to side with her during a make or break Cabinet showdown at Chequers tomorrow. The PM called in Home Secretary Sajid Javid and Defence Secretary Gavin Williamson yesterday afternoon – seen as two key swing votes around her bitterly divided top table… Mr Davis was coordinating a “ring round” of Brexiteer Cabinet Ministers to make sure they were “all on the same page”. An ally said the ministers would “be ready at Chequers to show very simply where promises made in the PM’s speeches were crossed by the new proposals”. The Brexit Secretary is working closely with Boris Johnson, with both confident that Mr Javid was also still opposed to collecting customs on behalf of the EU – a new system dubbed the Facilitated Customs Arrangement. Ardent backbench Leaver Andrea Jenkyns called on the Brexiteer Cabinet ministers to “show their steel” and block the blueprint, as she ominously warned that Mrs May could be ousted, saying: “Prime Ministers keep their jobs who keep their promises”. – The Sun …as he writes last-ditch letter warning that the Brexit ‘third way’ is unworkable… David Davis has written to the Prime Minister warning that her plan for Brexit to be presented to the Cabinet at Chequers on Friday is unworkable. The Daily Telegraph can reveal the Brexit Secretary has sent a letter, setting out his opposition to Theresa May’s so-called “third way” plan, amid concerns the EU will reject it out of hand. In the last-ditch letter, he says the compromise plan the Prime Minister intends to present will fail because it is simply a customs partnership with some additional technological elements. The letter expresses fears that the EU has already rejected the idea of allowing a third-party country, as Britain will be after Brexit, to police its borders and that discussing such an option is a waste of time, sources told this newspaper. Mr Davis is understood to be frustrated that Mrs May and her chief negotiator Olly Robbins are refusing to acknowledge the EU’s position, setting up the UK to fail. – Telegraph (£) May’s new Brexit plan rejected by David Davis – Bloomberg …with ministers warning May not to skirt controversial Brexit issues like immigration at Chequers… Theresa May’s fractious cabinet ministers are warning Downing Street not to skirt controversial issues, including freedom of movement and services, off the table at Friday’s Chequers meeting… Leavers believe Downing Street may be preparing to offer significant concessions on immigration to Brussels, in order to win a generous deal on services – but that discussions on Friday are likely to focus on goods. “I think you’ll come out with a customs deal; but without discussing immigration – and we’ll be back at Chequers in September,” said one government source, who expressed frustration with the indecision in Downing Street. “Whether it’s hard or soft, she needs to face down one side or the other.” … Meanwhile, some pro-Brexit cabinet ministers are so concerned about May’s mooted “third way” on customs, they are considering working up a counter-proposal of their own. “If this third way is going to be what we are being asked to sign up to, there is a mood among the Brexit members of the cabinet that they want to go back with a counter-offer,” said a senior government source. – Guardian …while Tory Eurosceptics warn the party would be ‘toast’ if Theresa May ‘welches’ on Brexit… Tory Eurosceptics have warned Theresa May that the Conservative Party will be “toast” if it “welches” on Brexit in a furious meeting as backbenchers warned that Tory splits are worse than divides over Maastricht. A group of 50 Eurosceptic Tory MPs, led by Jacob Rees-Mogg, yesterday issued a series of stark warnings to Julian Smith, the Chief Whip, amid fury about the Prime Minister’s plans for post-Brexit trade arrangements. MPs mounted a series of outspoken attacks on Oliver Robbins, the Prime Minister’s EU sherpa, and said that ministers such as David Davis, the Brexit Secretary, must be in the room during negotiations with Brussels… Mr Smith is said to have read out the manifesto during the meeting including pledges to end influence the European Court of Justice and end free movement. He is said to have insisted that the Prime Minister will follow the manifesto “to the letter”. Mr Smith is also understood to have given an “unequivocal” guarantee that the transition period after Brexit will not be extended, despite suggestions from both Leave and Remain Cabinet ministers that it could be. It comes amid warnings that the Prime Minister is facing an “almighty row” with Eurosceptic Cabinet ministers on Friday at Chequers amid accusations that she is pursuing the “softest Brexit possible”. – Telegraph (£) …as the Chief Whip tells Brexiteers: ‘if you don’t like the deal with EU, don’t vote for it’ Tory Brexiteers have been told by the chief whip that they do not have to vote for any Brexit deal they do not like. Julian Smith made the comment at a meeting of 40 Brexiteers, who warned him that the party has no future if it reneges on key Brexit commitments. Yesterday’s meeting was called after growing signs that Theresa May will try and impose the softest possible Brexit on the cabinet at Friday’s cabinet meeting at Chequers, prompting a backlash among Brexiteers… In the meeting, ERG members told the chief whip that Olly Robbins, Mrs May’s Europe adviser, must defer to ministers in every meeting, that there should be no more civil servant-led meetings and ministers must always be in the room for meetings in Brussels. They also demanded that no-deal planning should be “visible”… Mark Harper, the former chief whip, who voted Remain, said in the meeting that Mrs May must take the party with her on the proposed solution and that Downing Street should not attempt to rely on Labour votes to get through a deal that Brexiteers disliked. Mr Smith is said to have agreed. – The Times (£) ‘Best of both worlds’ May’s message to rebel ministers in Brexit breakthrough customs plan – Express Theresa May struggles to unite Tories behind post-Brexit customs plan – FT (£) Business backs latest post-Brexit customs plan, claims Theresa May – The Times (£) Jacob Rees-Mogg: Regulatory alignment is not Brexit – Guido Fawkes Can Brexiteers stomach May’s Brexit blueprint? – James Forsyth for the Spectator Will the Cabinet accept May’s soft Brexit? – James Blitz for the FT (£) The Prime Minister should tell her Cabinet tomorrow that she will pursue a pragmatic relationship with Europe for the sake of the economy – Times leader (£) There’s new hope over a sensible Brexit deal – Express editorial If Theresa May wants to woo Brexiteers, why is she getting Philip Hammond to do it? – Asa Bennett for the Telegraph (£) May’s Brexit fudge still leaves us at the mercy of the EU – Iain Martin for The Times (£) The problem with Theresa May’s Brexit compromise – Ross Clark for the Spectator May’s Brexit fudge is putting her own survival above the nation – John Longworth for The Times (£) The EU does not hold all the cards: We have a better hand than Remainers make out – Michael Fabricant MP for the Telegraph (£) > Owen Paterson MP on BrexitCentral: The rumoured ‘third way’ customs plan would spell Brexit in name only > Lord Flight on BrexitCentral: The Government should stick to its red lines and be willing to walk away if the EU doesn’t like them > Dr Graham Gudgin on BrexitCentral: Why the Cabinet should embrace MaxFac at Chequers on Friday Government sets up shadow Brexit unit to prepare for no deal The government has set up a shadow Brexit unit outside the department in charge of leaving the European Union, amid concerns that it is still unprepared for the challenges of no deal. An EU exit capability team, based in the Cabinet Office, was quietly established in May to provide support for the most complex and sensitive Brexit contingency projects. The creation of the unit has led to renewed speculation inside Whitehall that the Department for Exiting the EU itself will be abolished and responsibility for co-ordinating Brexit after next March will move to the Cabinet Office… The new team, which includes IT experts and project managers, is thought to be focusing on a small number of the most difficult 300-plus Brexit preparedness projects under way in Whitehall… A Cabinet Office spokesman said that the unit worked very closely with Dexeu “and across government” but had “no responsibility for determining policy”. Dexeu said it still had “oversight and co-ordination” of all Brexit planning. – The Times (£) Revealed: Theresa May’s secret Brexit team planning for no deal scenario if EU talks fail – Express Electoral Commission ignored evidence disproving central claims against Vote Leave The Electoral Commission is facing difficult questions this morning after it emerged they are to find Vote Leave guilty of breaking electoral law despite refusing to hear evidence that would have disproved the central claims… The Commission failed to interview a single senior Vote Leave staff member during its investigation, or at any point in the last two years. They heard evidence from the discredited whistleblowers making the allegations, yet didn’t allow Vote Leave figures to defend themselves against the claims, despite multiple attempts from Vote Leave officials to meet the Commission and provide evidence… [T]he Electoral Commission’s failure to discuss any of their accusations with Vote Leave means that many of them are just factually incorrect… This is all without mentioning the Electoral Commission’s refusal to investigate the wealth of evidence that the Remain campaign colluded on a much greater scale. – Guido Fawkes Remain campaign used same spending tactics as Vote Leave, but far worse – Guido Fawkes Pro-EU Remoaners launch new bid to overturn Brexit referendum as elections watchdog ticks off Leave campaign – The Sun Michael Gove says Electoral Commission will be ‘challenged legally’ as he distances himself from Vote Leave allegations – Telegraph The Electoral Commission is not fit for its crucial purpose – Mark Wallace for ConservativeHome Even if Vote Leave broke the rules, it is deluded to think that ‘cheating’ explains the result – Tom Harris for the Telegraph (£) Is the Electoral Commission planning equal scrutiny of the Remain campaign? – Telegraph editorial (£) > In full on BrexitCentral: Priti Patel’s dossier to the Electoral Commission on possible Remain campaign overspending > Hugh Bennett previously on BrexitCentral: The inconsistent and inaccurate claims of the Brexit ‘whistleblower’ Jaguar Land Rover claims no-deal Brexit would cost it £1.2bn a year Britain’s biggest carmaker, Jaguar Land Rover, warned that a hard Brexit would cost £1.2bn a year in trade tariffs and make it unprofitable to remain in the UK. Ralf Speth, JLR chief executive, spoke out ahead of a key meeting on Friday as Theresa May tries to finalise her plans for the UK’s future relationship with the EU… “I don’t want to threaten anybody, but we have to make transparent the implications of the move. We want to stay in the UK. Jaguar Land Rover’s heart and soul is in the UK,” said Mr Speth… Mr Speth said JLR would only move if this were the only option “to save the company”. He said: “If I’m forced to go out because we don’t have the right deal, then we have to close plants here in the UK and it will be very, very sad. This is hypothetical, and I hope it’s an option we never have to go for.” – FT (£) UK retail lobby claims there could be ‘food rotting at ports’ without Brexit deal – FT (£) Boost for UK service sector as PMI jumps to 55.1 Services sector activity in the UK economy extended its rebound in the month of June, and surprised markets to the upside, services PMI jumped to 55.1 in June versus a 54.0 reading booked in June. Markets expected 54.0 last month. The survey data indicate that the economy likely grew by 0.4% in the second quarter, up from 0.2% in the opening quarter of 2018. Sterling rose against the euro on the back of the news. – Guido Fawkes LSE’s clearing house enjoys ‘record’ half year despite Brexit uncertainty – Telegraph Tesco announces cross-Channel alliance #DespiteBrexit – Guido Fawkes City of London struggles to unite on post-Brexit regulation – FT (£) David Scullion: Does Gove’s plan really take back control of fishing? DEFRA Secretary Michael Gove has released the Government’s White Paper on fishing, heralding it as a chance to take back control of our waters and rebuild coastal communities after the disastrous EU Common Fisheries Policy. There have been many concerns over the last few years that, ravaged by the CFP, the diminished status of UK fishing would leave it vulnerable to being traded away by British negotiators.In the EU negotiating guidelines of March 2018 the EU called for an FTA to be dependent on “existing reciprocal access to fishing waters and resources”. In her Mansion House speech, Theresa May acknowledged that the EU wanted an unprecedented level of access to our fishing waters, but failed to challenge the demand. Instead she used it as a reason for the UK gaining an unprecedented level of EU market access. Therefore it’s a welcome relief to Brexiteers that the Government has published, in black and white, that becoming an independent coastal state would not be linked to a future trade agreement with the EU. However, while the White Paper on fishing is better than many feared, it does leave the door open to EU fishing in British waters in perpetuity. – BrexitCentral James Forsyth: Can Brexiteers stomach May’s Brexit blueprint? Mrs May’s approach of sidelining the Brexit inner cabinet, evenly divided between the two Tory positions, in the run-up to Chequers and, instead, meeting senior ministers individually hasn’t helped matters. The tone of these conversations riled leavers. One complains that ‘they are, basically, what can we give away?’… The second big element of May’s prospectus is her customs plan. It is neither the new customs partnership that couldn’t win over the Brexit inner cabinet nor the Brexiteers’ favoured maximum facilitation model. Instead, it is something called a facilitated customs arrangement… This new proposal is far from the kind of clean Brexit that many leavers dreamed of two years ago. But they might just be able to live with it given the paucity of other options; the government’s no-deal preparations are nowhere near as advanced as they should be and parliament may well try to suspend Brexit if there is no deal. One well-placed source predicts: ‘They’ll whine, they’ll moan. But they won’t resign.’ And how might the EU respond? It is waiting to see the actual white paper, out next week, before engaging with the UK’s proposals. But I understand that the EU, which dislikes its agreement with Switzerland, will push hard for an automatic updating of UK regulations to keep them in line with EU ones. If the EU gets its way on this, then Britain really would be a rule-taker not a rule-maker. This would make the deal considerably less appealing to Brexiteers as it would make it harder to unpick in future. – James Forsyth for the Spectator Iain Martin: May’s Brexit fudge still leaves us at the mercy of the EU Theresa May’s approach, moving crab-like towards a compromise on Brexit without owning it or explaining it clearly to the voters, has left her colleagues scrambling around in the dark and the country even more baffled… This offer rests entirely on Brussels agreeing to it at this late stage, when after two years of British faffing about the EU knows that because the prime minister failed to sanction proper “no deal” preparations in time, the UK cannot now walk away, a threat that is essential in any serious negotiation… Which is why the European Commission can then push on to demand full British alignment in goods and services, and freedom of movement, as sought by the most anti-British Brussels dwellers. This is a shameful situation for Britain to find itself in. For all its limitations, this is still a major country: sixth largest economy in the world, leading global capital market, and leading security and intelligence power in Europe. We have had two years to prepare properly and have not done nearly enough… The handling has been highly questionable, with the civil service Europe unit under Olly Robbins, the chief negotiator, directing policy. Loyal officials may see it as their job to keep the show on the road, but key cabinet ministers say they have been kept in the dark, and already the EU has had the basis of the white paper run past it in the hope that it will not kill it instantly. Rarely have the mandarins been allowed such free rein by a prime minister. This is May’s doing, which puts into context the demands from those Tory MPs and grandees saying that she must be allowed to “get on with the job”. I’m afraid the response must be that this is precisely the problem. She is getting on with the job, and in doing so has landed Britain in the position of ill-prepared supplicant. – Iain Martin for The Times (£) Asa Bennett: If Theresa May wants to woo Brexiteers, why is she getting Philip Hammond to do it? Brexiteers have good reason to feel uneasy as they prepare to chew over Mrs May’s masterplan for post-Brexit customs at Chequers on Friday. So who has the prime minister decided to hand starring roles in her efforts to find consensus? Two of her cabinet’s biggest Brexitsceptics, Philip Hammond and Greg Clark… Both men are viewed with deep suspicion by Brexiteers already. Boris Johnson described Mr Hammond’s department as the “heart of Remain”, while Jacob Rees-Mogg accused both ministers publicly of trying to “water down and dilute Brexit”. Brexiteers are not alone in being wary of ministers like Mr Hammond. A poll by ICM this March found that 45 per cent of voters surveyed thought the chancellor was doing a “bad job” in his approach to Brexit (while only 30 per cent thought he was acquitting himself)… Brexiteers will hope to stop Mrs May turning her red lines pink. But the spotlight she is set to give her Remainiest ministers will leave them thinking her mind is already made up. – Asa Bennett for the Telegraph (£) Michael Fabricant: The EU does not hold all the cards – we have a better hand than Remainers make out In the Brexit negotiations, Olly Robbins proclaims that Brussels is walking all over us, and that we are powerless to stop them. He has reportedly told ministers that the UK has little chance of reaching a bespoke agreement with the EU. This view has become commonplace among the (mostly Remain-supporting) British commentariat to echo this loudly, often with a bizarre hint of glee. But the reality of the situation is far-less clear cut… In fact, we have leverage of our own, particularly with regards to trade. We are the major export market for a number of EU countries, especially Germany, Spain, Belgium and the Netherlands… A study by Deloitte last year found that in the event of a no deal scenario, German car exports would fall by over 250,000 a year, putting 18,000 German jobs at risk. German estimates have put it as high as 40,000. – Michael Fabricant MP for the Telegraph (£) Mark Wallace: The Electoral Commission is not fit for its crucial purpose It now seems that, having investigated Vote Leave twice before and cleared the organisation, the Commission has now reinvestigated the same allegations for a third time and is reportedly planning to decide that the campaign broke electoral law in four ways. That policy of repeated reinvestigation is a bit strange in itself: is it the EC’s view that its own investigations were incapably run the previous two times? If so, were the same officials involved, or have they been replaced? Should all EC investigations be taken with a pinch of salt from now on, as they may yet be repeated and reversed? Is this third investigation final, or is it open to being undone and overturned by a fourth? Why do allegations against one side of a referendum merit multiple reinvestigations, but similar allegations against the other side don’t get investigated even once? … There’s a detail in today’s news that is even more eyebrow-raising, however. The BBC reports that the Electoral Commission carried out its repeated investigations, including this latest one, without ever interviewing any of the senior staff of Vote Leave, including those directly involved in the issues the allegations relate to… That is absolutely extraordinary – how can anyone possibly claim to have investigated allegations, or draw conclusions about their veracity, if the ‘investigators’ haven’t even interviewed the people alleged to be responsible and those around them? If the Commission has passed up offers to carry out such interviews, it’s hard to see how they can possibly claim to have a complete and informed understanding of what did and did not happen. – Mark Wallace for ConservativeHome Telegraph: Is the Electoral Commission planning equal scrutiny of the Remain campaign? There are many aspects of this exercise that are unsatisfactory to say the least. The commission at no stage interviewed senior Vote Leave staff to hear their side of the story and nor did it examine evidence that the group produced in its defence. This is an affront to natural justice. How can the commission have reached the conclusions that it has without adopting a fair and just procedure? Vote Leave says it adduced information to disprove the claims made against it, but this was ignored. If that is true, it raises serious questions about the commission’s impartiality – a statutory requirement. Vote Leave is planning a legal challenge but this could have been obviated had the EC carried out its functions properly. What is most bizarre about this long-running attempt to besmirch the Leave campaign groups that won the referendum is that equal scrutiny is not applied to the Remain side. The notion that Leave financially outgunned Remain is for the birds. Remain not only called on the entire machinery of government to bolster its case, along with big business, the EU, Labour (half-heartedly) and the BBC, it also recruited the US president… Unless there is parity in the Electoral Commission’s approach, this report will look like a politically motivated exercise timed to swing public opinion at a critical moment in the Brexit process. – Telegraph editorial (£) Comment in brief We should get rid of the EU’s pointless Parliament – Pieter Cleppe for CapX EU’s sinking ship should welcome a good Brexit deal – Tim Newark for the Express July 4 has important lessons for British independence – Madeline Grant for CapX Liberals have lost the argument on the migrant crisis. Now Europe needs to get tough – Nick Timothy for the Telegraph (£)