Can May bounce Cabinet into backing more Brexit climbdowns?

Theresa May’s tactics to secure her Brexit deal couldn’t be clearer. She’s trying to bounce her ministers (and then MPs) to back a half-baked deal by going big on the catastrophic costs of leaving with no deal.

But voting down a deal doesn’t mean we’ll crash out of the EU. If MPs reject what the prime minister proposes, the most likely outcome will be a People’s Vote.

It seems there was no breakthrough during a lengthy Cabinet meeting today, although attorney general Geoffrey Cox claimed a “major step” in removing the final major sticking point of the Irish backstop – the insurance policy to avoid checks at the Irish border. However, Michel Barnier, the EU’s chief negotiator, told Belgian media that a breakthrough was not close.

Ministers were to be presented with two options for the Irish backstop, according to Bloomberg this morning.

1. The UK commits to stay in a customs union with the EU, but we could only leave it by mutual agreement.
2. The UK joins a temporary customs union which Great Britain can exit unilaterally but then Northern Ireland would have to remain inside the EU’s customs territory.

Both are deeply controversial politically. The first prevents the Brextremists in May’s party from realising their dream of an entirely independent trading policy – though they could still potentially pursue deals in services or goods not covered by the customs union, for example fish or agriculture. The second option would constitute a “blood red line” for the DUP, which props up May in Parliament, because it would represent a split between Northern Ireland and the rest of the UK.

The prime minister won’t get any help in the Commons from Labour for either scheme, with shadow chancellor John McDonnell saying his party would vote down any deal that keeps the UK in a customs union only temporarily.

Yesterday the Irish government was adamant that the UK should not be allowed to unilaterally call time on the Irish backstop. The rest of the EU has repeatedly said it will stand firm behind Dublin on the issue.

Leo Varadkar, the Irish taoiseach, has floated the idea of a “review mechanism” to end the backstop. None of the details are clear, but presumably it would feed into option A being put to ministers. It’s unclear whether they will buy it, especially if it leaves the EU with the ultimate decision on whether the UK can quit the backstop as seems likely.

There’s a further issue with nailing down the backstop, according to Tony Connelly, RTE’s Brussels correspondent. The EU won’t even let the UK stay in a customs union without assurances that it competes on a level playing field by agreeing to things “such as competition rules, state aid, social, environmental, health & safety rules”.

That will be a red rag to hardline Brexiters. Patriotic pro-Europeans won’t like the idea of being a rule-taker either, given that we currently have a huge say over EU rules.

Time is running out. There is talk of another Cabinet meeting this week, though its unclear whether anyone expects a deal. In May’s desperation to push a miserable deal through an unyielding political system, the “no deal” threat remains her best card. But this is a bluff – MPs always have a People’s Vote in their back pocket.

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This article has been updated to account for the fact that “option A” would allow some independent trade deals to be cut, just not for anything covered by the customs union.

This article was subsequently updated to mention the outcome of today’s undecisive Cabinet meeting.

Edited by Hugo Dixon