The DUP scuppered Brexit talks today by blocking a deal on the Irish border issue.
The Prime Minister was forced to backtrack minutes from an agreement with European Commission boss Jean-Claude Juncker after a dramatic phone call with DUP chief Arlene Foster.
Jeremy Corbyn said Theresa May’s “grubby” election attempt to buy the party’s support had sunk her.
Mrs. May has just days to salvage Brexit negotiations after a deal was vetoed by the very party she bribed with £1billion to prop up her weak Tory government.
The Prime Minister had to break off from final-round talks today as DUP leader Arlene Foster refused to back a solution to the Irish border question that would in effect separate Northern Ireland from the rest of the UK.
The dramatic last-minute intervention scuppered hopes of an agreement with EU chiefs so trade talks could begin.
Now a new fix must be found to avoid the complete disaster of having no deal on Brexit at the European Council summit in Brussels next week.
European Council boss Donald Tusk made it clear he had been preparing to move negotiations on to the second phase until the call came for more time.
He said: “I was ready to present draft EU 27 guidelines tomorrow for Brexit talks on transition and future. But UK and Commission asked for more time. It is now getting very tight but agreement at the December European Council is still possible.”
Mrs. May was said to have been on the brink of agreeing continued “regulatory alignment” between the Republic of Ireland and Northern Ireland.
It would mean that – unlike England, Scotland and Wales – Northern Ireland would abide by all EU rules on trade and customs after Brexit.
She is understood to have interrupted talks with European Commission President Jean-Claude Juncker for a phone call with Ms. Foster, who bluntly told her the unionists would not accept a deal separating Northern Ireland “economically or politically” from the UK.
The agreement was sunk, and the embarrassed PM said talks would reconvene “before the end of the week” and insisted she was “confident we will conclude this positively”.
But Labour leader Jeremy Corbyn said: “The real reason for today’s failure is the grubby deal the Government did with the DUP after the election.”
Mrs. May’s £1billion bung, dubbed a Coalition of Crackpots, assured the support of the DUP’s 10 MPs to give the Tories a narrow majority after their disastrous June election.
Eloise Todd of anti-Brexit group Best for Britain said: “Arlene Foster and the DUP are calling the shots and now are running the government. What galls me most is the DUP saying they want the same rules as the rest of the UK.
“If they believed that they’d act on same-sex marriage and abortion.”
Brussels chiefs insist negotiations cannot shift to trade talks until “sufficient progress” has been made on the divorce bill, the rights of EU citizens living in the UK and the Irish border.
Mrs. May is said to have agreed to a divorce settlement of around £50billion and is close to an agreement on citizens’ rights. Now Northern Ireland is the biggest stumbling block.
The UK has been set a deadline of this week to come up with an improved offer on these issues. It is hoped the go-ahead for future talks will be given at an EU leaders’ summit on December 15.
Speaking at a joint press conference with Mr. Juncker in Brussels, Mrs. May said: “On a couple of issues some differences do remain which require further negotiation and consultation.”
Mr. Juncker confirmed “it was not possible to reach a complete agreement today” despite their “best efforts”. But he added: “We were narrowing our positions to a huge extent today.
“This is not a failure, this is the start of the very last round. I’m very confident that we will reach an agreement in the course of this week.”
The DUP’s Brexit spokesman Sammy Wilson said the party objected to a draft document referring to “regulatory alignment” between Northern Ireland the EU.
Regulatory alignment could mean Ireland and Northern Ireland following the same rules governing trade, to ensure goods continue to move freely across a “soft” border with no checks.
But critics say that it would effectively move the customs border between the UK and the Republic into the Irish Sea.
Tonight Irish PM Leo Varadkar said he was “surprised and disappointed” the deal was not going ahead.
Leaders in Scotland, Wales, and London said that if Northern Ireland was to be offered special status after Brexit, they should be offered the same.
London’s Labour mayor Sadiq Khan said: “A similar deal here could protect tens of thousands of jobs.”
Nigel Farage called for Mrs. May to “leave office now”. Mrs. May will spend the next few days in desperate negotiations with the DUP and may be forced to return to Brussels as early as tomorrow for more talks with EU chiefs.
SO WHAT DOES THIS ALL MEAN
How close are the UK and EU to a deal?
Still, a lot to be done. The EU has said negotiations cannot move to trade talks until sufficient progress has been made on the Brexit divorce bill, the rights of EU citizens living the UK and the Irish border question.
Theresa May last week agreed on a divorce settlement of around £50billion and is close to an agreement on citizens’ rights.
The Irish issue is proving harder to solve. The Government is said to have agreed there will be continued “regulatory alignment” between the Irish Republic and Northern Ireland.
This would mean, in effect, that Northern Ireland would abide by EU trade and customs rules after Brexit.
But talks between Mrs. May and EU president Jean-Claude Juncker failed to end the deadlock.
Why did the talks fail?
The Prime Minister’s offer on Northern Ireland was too much for the DUP to stomach. A deal with the EU was sunk after Mrs. May spoke on the phone to DUP chief Arlene Foster.
Ms. Foster said her party would not accept any deal that separates Northern Ireland economically or politically from the rest of the UK.
It forced Mrs. May to withdraw her offer pending further negotiations.
Ireland’s Taoiseach Leo Varadkar was “surprised and disappointed”.
Without DUP support Mrs. May could struggle to get any legislation through the Commons, increasing the likelihood of an early general election.
What does Mrs. May do now?
The Prime Minister could walk away without a deal but that would be economically ruinous. Another option is to press ahead with the plans for regulatory alignment in Ireland, but this would smash the DUP pact that gives her a majority in Parliament.
The only solution is to find a fudge acceptable to Dublin and the DUP.
But time is running out. The PM knows that if trade talks are delayed until March several major firms will carry out their threat to move their business out of the UK.
What other problems does Mrs. May face?
The Scottish Nationalists are asking why Scotland couldn’t also get the special exemption from Brexit.
London Mayor Sadiq Khan said a similar deal in the capital would save thousands of jobs. Mrs. May also faces a backlash from Tory Brexiteers. She has now caved in on the divorce bill, transition period and access to the European Court of Justice for EU citizens in the UK.
What happens next?
Mrs. May is still hopeful that EU leaders will agree to move to trade negotiations at next week’s summit in Brussels.
This is when the real negotiations will start.
Britain wants a free trade agreement with Brussels without having to pay substantial amounts for the privilege and on similar terms to the deal, we have now.
The EU has said this is not possible and Britain cannot trade on the same terms as existing members.
Ireland offers a template for the way forward. Mrs. May could agree to continued “regulatory alignment” for the whole of the UK after Brexit.
The problem with this is that it means we are accepting EU rules without any voice at the table where they are drawn up – hardly taking back control.
It also lessens our ability to strike competitive trade deals, which was one of the Brexiteers’ main arguments for leaving.