Post-Brexit trade talks have entered their final day and the probability of a no-deal outcome looks high with government sources saying the EU's offer "remains unacceptable".
Boris Johnson will again speak with European Commission President Ursula von der Leyen on Sunday, despite pessimism from both sides.
Sources in the British government warned the offer on the table from the EU “remains unacceptable” to the UK, with the country teetering on the edge of a no-deal Brexit that is predicted to cost jobs and force food prices to increase.
The trade talks continue to be deadlocked over the thorny issues of fishing rights and the so-called level playing field “ratchet” that would tie the UK to future EU standards.
Brexit trade talks - the sticking points at a glance:
- Fishing rights: The UK wants total control over its own fishing waters after the Brexit transition period ends, with a 12 mile exclusion zone around the British Isles banning all foreign vessels. The EU wants the UK to stick to the Common Fisheries Policy, an EU agreement which gives member nations the rights to fish in European waters - more here.
- Level Playing Field: This is a concept all EU nations agree to, which ensures member nations cannot undercut others by setting their own rules on issues such as the environment, taxation and state aid. The EU says a zero-tariff trade deal is dependent on the UK agreeing to a level playing field. The UK disagrees, saying a fundamental aspect of Brexit is that the UK will be able to set its own rules.
- Governance of a deal: It's likely that any trade deal will eventually result in disputes. The EU wants the European Court of Justice to be the final authority in ruling over disputes. The UK says the ECJ should have no role and final decisions should be made by a bespoke arbiter. But the statements from both sides suggested that while further discussions would be held, substantial movement on the key issues had not been made.
Mr Johnson and his European counterpart had a dinner meeting on Wednesday in Brussels after several days of talks which appeared to have hit a stalemate.
When the pair met, they both agreed a firm decision on the future of negotiations was needed by the end of the weekend.
However, speaking on Saturday's News At Ten, ITV News Political Correspondent Daniel Hewitt said that Sunday's deadline is "self-imposed" and the two sides could decide to give themselves more time.
However, a decision must be made by the end of the year, if one if not, the UK will trade with the EU on World Trade Organization rules and tariffs.
The outlook after discussions on Saturday was described as “very difficult” but officials said the prime minister was determined to explore every option to secure a free trade agreement.
A government source said: “Talks are continuing overnight, but as things stand the offer on the table from the EU remains unacceptable.
“The Prime Minister will leave no stone unturned in this process, but he is absolutely clear: any agreement must be fair and respect the fundamental position that the UK will be a sovereign nation in three weeks’ time.”
Mr Johnson is expected to give a press conference or issue a recorded statement to update the nation once he finishes a call with Europe’s top official, but no timing has yet been given.
The Conservative Party leader and Ms von der Leyen have warned a no-deal outcome looks more likely than an agreement in the trade negotiations.
With the prime minister describing no-deal as “very, very likely”, the government has stepped up preparations for leaving the single market when transition arrangements end on December 31, with Mr Johnson taking personal control of ensuring the country is ready.
He is leading a “Super XO” committee to oversee preparations as ministers look to ensure food, medicines – including coronavirus vaccines – and other critical goods can continue to reach the country uninterrupted next year.
The Confederation of British Industry (CBI) has called for “grace periods” to be agreed so businesses do not face a “damaging cliff edge” if there proves to be no meeting of minds on a deal.
In a move likely to incense EU leaders, a government spokesperson revealed the UK had “run live exercises” that involved scrambling “naval vessels to respond to threats of illegal fishing in our soon-to-be sovereign waters” as part of readiness efforts.
It follows confirmation from the Ministry of Defence that four Royal Navy gunboats have been placed on standby to guard British waters from EU trawlers if there is no agreement – an announcement that has been greeted with anger by some senior Tories.
Reports also suggest ministers are considering beefing-up Navy powers in legislation to authorise them to board and arrest people fishing in contravention of post-Brexit rules.
Tobias Ellwood, Conservative chairman of the Commons Defence Committee, called the threat “irresponsible” and warned it would damage Britain’s international reputation.
'It's sad we're preparing to square up to a Nato ally': Conservative MP Tobias Ellwood critical of UK stance
Military officials disagreed, however, with Admiral Lord West, a former chief of naval staff, arguing that fiery past clashes between fishermen in the Channel suggested armed forces intervention could be required.
French MEP Pierre Karleskind, chair of the European Parliament’s Committee on Fisheries, called for “calm” heads when it came to working on a fisheries solution if the talks collapsed.
Brussels has called for the status quo on fishing rights to continue for 12 months in the event of no-deal – a request that appears to have been rejected after the government revealed plans to scale up patrols.
Mr Johnson, in a speech at a climate change summit on Saturday, appeared to take a dig at French President Emmanuel Macron over the fishing row.
Mr Macron is said to have threatened to veto a UK-EU deal after expressing dissatisfaction at the new quota terms being thrashed out for French fishermen.
In his closing remarks, the prime minister thanked summit co-host Mr Macron, adding that he knew the En Marche! leader “shares my keen interest in protecting the ecosystems of our seas”.
Tory MP David Jones wrote in the Sunday Telegraph the PM "must keep faith with the British people and resist any temptation to accept a sub-optimal deal that would cheat them of the sovereignty for which they voted".
The deputy chairman of the European Research Group (a group of pro-hard Brexit Conservative MPs) added: "He should by all means negotiate, if necessary, until the stroke of 11 o'clock on New Year's Eve; but if the EU still refuses a deal that fully respects our hard-won independence, he should leave the table in the knowledge that he has the full support of his countrymen and women."
On Sunday morning, Conservative former minister Sir John Redwood accused the bloc of making "empty threats".
"End the talks. The EU wants to stop us being independent. They cannot stop our trade. People and businesses buy and sell under WTO rules. The EU just makes empty threats," Sir John tweeted.
"Will the Cabinet Office stop behaving as if it believes Project Fear scares? Tell us how we will use our new freedoms from EU exit to create a more prosperous UK."