EU warned to give Chequers a chance or brace for no-deal Brexit

The only Brexit options available are the Prime Minister's Brexit plan and no deal, Theresa May's deputy has warned the European Union in a bid to force a compromise out of Brussels.

David Lidington called on EU negotiators to “engage with us on our positive vision of the future relationship” in a speech to French business leaders.

The de-facto deputy Prime Minister used his address to the Mouvement des Entreprises de France gathering in Paris to warn that the European Commission’s preferred Brexit plan is unacceptable.

It comes as talks between London and Brussels are set to accelerate ahead of an October target to reach a withdrawal deal for the UK, as well as map out the future relationship on trade.

Prime Minister Theresa May arrives in Abuja, Nigeria, on day two of her trip to Africa as David Lidington warned the EU over the Chequers deal. Picture: Stefan Rousseau/PA Wire

‘Backstop’ guarantees on the future of the Irish border, as well as the UK’s status in the European single market, remain challenging sticking points for negotiators.

“With exactly seven months until the end of the Article 50 process and less than two months ahead of the October European Council, we face the choice between the pragmatic proposals we are discussing now with the European Commission or no deal,” Mr Lidington told France’s largest federation of employers yesterday.

“The alternative models do not meet the level of ambition or the outcome we all want to see delivered.

“So we need the EU to engage with us on our positive vision of the future relationship.”

Stressing the historic ties between France and the UK, Mr Lidington said the countries must also pull together “because the foundations of the world order that we forged in the aftermath of war are creaking”.

“Even in Europe, dark political forces, long banished to the very fringes of society and the ashes of history, are re-emerging - feeding on resentment over inequality, stalling standards of living and rapid social change,” he warned.

The comments came as Brexit Secretary Dominic Raab, who will travel to Brussels today for further talks with EU chief negotiator Michel Barnier, said he was “confident that a deal is within our sights”.

Giving evidence to a committee of peers in a rare parliamentary hearing during the summer recess, Mr Raab hailed a “good relationship” with Mr Barnier but hinted that the timing of the Brexit talks this autumn may change.

Mr Raab told peers: “I think it is important as we enter the final phase of the negotiations in the lead up to the October council and the possibility that it may creep beyond that, we want to see some renewed energy.”

The Brexit Secretary also hinted that on the financial settlement, a no-deal scenario could affect arrangements over payments to the EU.

Suggesting that payments to Brussels could be delayed if the UK didn’t get the trade agreement it was looking for, Mr Raab said: “If we left with no deal then not only would there be a question around quite what the shape of those financial obligations were as a matter of strict law, but secondly on the timing.”

European financial centres would not benefit if UK financial services firms were barred from the single market after Brexit, Mr Raab added.

He warned EU cities who believe that a “worst case scenario” would allow them to “hive off” parts of the UK’s financial services sector that “the only winners would be the other global centres in the top 10 like Tokyo and New York.”

Speaking to reporters in Berlin after a meeting with German foreign minister Heiko Maas, Mr Barnier sparked a rally in the value of the pound by saying: “We are prepared to offer Britain a partnership such as there never has been with any other third country.”

The two men are due to meet tomorrow.