In a Commons statement, the Prime Minister confirmed that preparations were accelerating to get the country set for a new role outside the bloc.
Two Government “white paper” documents yesterday laid out proposals for a UK customs regime and trade policy that can be swiftly put in place in the event of a failure to agree a new deal with the EU.
“While I believe it’s profoundly in all our interests for the negotiation to succeed, it is also our responsibility to prepare for every eventuality and that is exactly what we are doing,” Mrs May told MPs.
Brexit discussions between British and EU officials – currently deadlocked over the size of a multi-billion divorce bill and other preliminary issues – resumed in Brussels yesterday ahead of a crunch EU summit next week that will decide whether enough progress has been made to move on to the issue of the future trade relationship.
At Westminster, the Prime Minister insisted that “real and tangible progress” was being made in the discussions with the EU’s chief Brexit negotiator Michel Barnier.
She said “leadership and flexibility” were needed in the negotiations but was hopeful the UK and the EU could agree a “deep and special partnership” that would benefit both sides.
“I am optimistic we will receive a positive response because what we are seeking is not just the best possible deal for us, but also the best possible deal for our European friends too,” she said.
The Whitehall policy papers set out plans for a Customs Bill that will give the Government powers to charge duty on goods, amend VAT and excise regimes and vary rates of customs duty and any quotas.
“It is only prudent the Government prepares for every eventuality,” the Whitehall policy document on future customs arrangements said.
It stated the Government “intends to introduce legislation that would allow the UK to operate stand-alone customs and indirect tax regimes as we withdraw from the EU.
“This will include the power to set customs duties, tariff rate quotas and preferences, as well as wider tariff-related provisions,” it added.
A series of “contingency” options set out in the document sketched out a customs regime that could be swiftly put in place in the event of no EU deal.
“The Government will work to ensure trade flows through the ports as seamlessly as possible,” the customs document said.
“Vehicles and their occupants travelling from continental Europe currently undergo immigration checks but are not subject to routine customs controls. In a contingency scenario where an interim period cannot be agreed, customs declarations would be required for UK-EU trade once the UK leaves the EU.”
The other document set out the principles of the UK’s future trade policy, promising to work within the international rules set by the World Trade Organisation, forecasting a new role for the country as “an independent trading nation”.
International Trade Secretary Dr Liam Fox said: “This paper is the first exciting step and sets out the principles behind an approach which will help British businesses to make the most of trade opportunities, contribute to a growing economy and create prosperity for communities up and down the UK.”
Chancellor Philip Hammond, welcoming the plans for a new independent customs system, said: “This White Paper sets out our plan to keep trade with the EU as frictionless as possible.”