The government is to press ahead with new legislation to overwrite the Brexit deal signed by Boris Johnson earlier this year, throwing trade talks with the EU into a new crisis.
With less than four weeks to go until a no-deal, Jacob Rees-Mogg on Thursday confirmed that ministers will reinsert controversial clauses removed by the House of Lords from their Internal Market Bill.
The House of Commons leader also announced the introduction of a new Taxation (Post Transition) Bill, which is expected to include other powers to overwrite parts of the withdrawal agreement.
Ministers have admitted that their plans break international law, and the EU has said such a move would be “curtains” for talks. The precise content of the taxation bill is not yet clear, however.
Hopes were raised that negotiators could be coming close to an agreement in London on Wednesday night after a large order of pizza was seen arriving at the door of their location – a sign of working into the night.
But nothing has yet emerged from negotiations, and diplomats say there are divisions among EU member states about how to proceed.
A group of harder-line leaders coalescing around Emmanuel Macron’s France reportedly want chief negotiator Michel Barnier to hold out for more concessions from the UK and allow a no-deal to occur if necessary.
But others, such as Ireland – which has more skin in the game – have warned against such a strategy.
The Irish foreign minister, Simon Coveney, told Ireland’s Newstalk Radio: “It’s the time to hold our nerve and trust [Barnier]. And I believe if we do that, there’s a good chance that we can get a deal across the line in the next few days. There will be no further extensions. There will be no extra time.”
Mr Coveney argued that waiting until after a no-deal “would mean significant disruption, costs, stress, and blame games between Brussels and London”.
“From an Irish perspective, we get caught in the cross-fires there,” he said, adding that it would be “a very dangerous assumption” to suppose there would be a trade deal signed in 2021.
Talks are understood to still be blocked on issues like governance, fisheries and fair competition. There were however reports of progress on the latter issue, which has dogged negotiations since the beginning of negotiations.
Yet by the evening on Thursday hoped of a deal appeared to again be fading. A senior UK Government source said: "At the 11th hour, the EU is bringing new elements into the negotiation.
"A breakthrough is still possible in the next few days but that prospect is receding."
A previous deadline to get a deal sealed by mid-November is now long gone. Both sides had suggested that a text needed to be produced by this point in order to fully ratify it by the end of the year and avoid a no-deal – though it is no unheard of for free trade agreements to be introduced on a provisional basis.
The rising risk of no deal comes after the Commons Public Accounts Committee warned that the government simply had not done enough to prepare for the eventuality, with heavy disruption at channel ports extremely likely.
The National Audit Office has also said the government’s approach to Brexit means there will be economic disruption at channel ports whether there is a deal or not. The government says it is preparing for all eventualities, but would like a deal.