POLITICS
06/11/2018 16:20 GMT | Updated 07/11/2018 09:00 GMT

Brexit Breakthrough Hopes Rise After Cabinet Edges Towards Deal

'Thumbs up' by Dominic Raab sparks spike in the pound.

The Independent

Hopes of a major breakthrough on Brexit have risen after Theresa May’s cabinet edged closer to agreeing a deal with Brussels.

The prime minister appeared to win the backing of Attorney General Geoffrey Cox, a leading Brexiteer, for compromise plans on the key issue of Northern Ireland’s status after the UK quits the EU next year.

Ministerial sources told HuffPost UK the cabinet could approve the long-awaited Withdrawal Agreement from the EU as early as Thursday or Friday this week, followed by a special Brussels summit later this month and a Commons vote in December.

Cox said that a ‘revision’ clause in the Brexit agreement would not give the EU a veto, a major fear of many Leave-supporting Conservatives.

In one sign of the fevered atmosphere, the value of the pound soared on the money markets after the BBC’s Laura Kuenssberg tweeted that Brexit Secretary Dominic Raab had left the Cabinet meeting on Tuesday with a ‘thumbs up’ gesture. 

Whitehall sources stressed that there was “much work to do” on what was a “fabulously complicated” solution to the problem of keeping open the border of Northern Ireland with Ireland post-Brexit.

But allies of the PM were cheered that Cox had warned his colleagues that they risked a no-deal outcome if they insisted on a hardline plan to allow the UK to unilaterally pull out of any insurance policy on Ulster. 

And sources said that the separate ‘future framework’ on EU-UK trade had made such progress that it could be wrapped up quite quickly once the cabinet had made its decision.

May and Chief Whip Julian Smith are also understood to have cautioned that getting a deal done by the end of November was crucial to avoiding a last-minute rush in getting the proposals voted on in Parliament.

With the UK due to formally quit the EU on March 29 next year, and three months needed to ratify the plans, a squeezed timetable carried the risk of a “no-deal by accident” scenario, ministers were told.

The PM tried to reassure Brexiteers that while she wanted a deal “as soon as possible”, the timetable would not drive the decision-making. The agreement would “not be done at any cost”, her official spokesman said.

The EU’s chief negotiator Michel Barnier stressed the UK would have to come up with a proposal that satisfied its 27 nations that its single market would not be undermined and that there was a guarantee of no hard border in Ireland.

“There is still a real point of divergence on the way of guaranteeing peace in Ireland, that there are no borders in Ireland, while protecting the integrity of the single market,” he told a Belgian TV station.

Later, he even adapted May’s ‘Brexit means Brexit’ catchphrase to stress that a ‘backstop’ deal for Northern Ireland was crucial.

“We’re willing to consider improvements to the backstop but we need to reach an agreement for this backstop and this backstop must be a genuine backstop. Backstop means backstop. And a backstop cannot have a time-limit.”

The pound spiked in value against the dollar after Raab’s “thumbs up”. Christopher Vecchio, an analyst at Daily FX, said: “UK Brexit minister Raab leaves meeting and gives a ‘thumbs up’ - $GBP gets a bump across the board.”

The pound also hit a five month high against the euro during the spike. The Pound was quoted 0.16 percent higher at 1.30810 around noon on Tuesday.

“Isn’t it wonderful to be working in a market where a simple thumbs-up moves a currency by 40 pips?” said Jordan Rochester, an analyst at Nomura International Plc, told Bloomberg.