The government has reportedly accepted that free movement of people will have to be allowed for a four-year transition period after Brexit as ministers aim for a "soft landing".
See related How the Good Friday Agreement brought peace to Northern Ireland - and why it's now at riskBrexit 'divorce' bill: What do we really owe Brussels?May's 'settled status' will not apply to the Irish
Soft Brexiters in the cabinet are now confident they can agree on an "off-the-shelf" deal, The Guardian says, citing a "senior source".
According to the Daily Mail, the agreement was reached after Leave campaigners including Boris Johnson and Michael Gove agreed to an "implementation phase" to give business and government time to adjust.
In return, Remainers such as Philip Hammond and Amber Rudd accepted the UK will eventually leave both the single market and the customs union.
The reported settlement follows weeks of public infighting that prompted Theresa May to declare there is "no such thing as an unsackable minister", The Guardian reports.
Is there any progress on Brexit talks with the EU?
Brexit talks could grind to a halt as the UK refuses to state how much it is prepared to pay as part of the so-called "divorce bill" but British negotiators are still optimistic.
Despite warnings from EU diplomats that chief negotiator Michel Barnier is prepared to “stall” talks unless proposals are put forward by the UK, the British side "views this week’s round of talks as an opportunity to interrogate the EU’s position," a UK official told Politico.
Their stance is consistent with Brexit Secretary David Davis’s statement to a House of Lords committee that the "proper approach to get the right outcome in the negotiation" would be to "challenge" the EU’s calculations.
One EU diplomat told Politico that the UK's refusal to discuss the exit bill was jeopardising negotiations.
"If the UK is not committed to acknowledging its obligations, then there is no real conversation on this topic, which will jeopardise progress on the talks for the entire first negotiating phase," the official said.
But "it’s not all doom and gloom in Brussels," says Bloomberg's Ian Wishart.
"While Brexit negotiators acknowledged frustration on both sides on the second day of negotiations, signs of progress are also emerging, particularly on citizens rights and the Irish border."
A third round of talks takes place in August before the Brexit summit in October.
The EU has said it must be persuaded of "sufficient progress" in the negotiations on the exit bill, citizens’ rights and the Irish border before it will allow talks to move toward the issue of future trade - something both sides want to do in October.
The sticking point in the calculations appears to be over the "UK correction" secured by Margaret Thatcher in 1984, which "carries hallowed status for the Conservative party," says the Financial Times's Alex Barker.
Under the agreement, the UK receives an annual reduction in its contributions that in any given year is equivalent to 66 per cent of the UK’s net contribution in the previous year.
The EU’s insistence that the rebate is tied in any exit bill to post-Brexit agriculture payments "highlights the unexpected political snags emerging as negotiators grind through the divorce," adds Barker.
The FT estimates that the loss of the rebate would add about €10bn (£8.4bn) to the UK's exit bill, but the issue is "by far the most legally contentious element of the Brexit bill, a weakness British negotiators have repeatedly sought to exploit in talks".
The news comes as credit rating agency Moody’s warned that "no deal" would tip the UK economy into recession.
Theresa May's government have continually repeated the mantra that "no deal is better than a bad deal" but Moody’s said the outcome would trigger "significant macroeconomic disruption", leading to slower growth as unemployment and inflation rise.
It still expects an agreement to be reached between the UK and the 27-nation bloc, but Moody’s managing director Colin Ellis told The Sun: "The probability that negotiations will fail and no agreement will be reached is substantial."
The assessment came as PwC said that action by the chancellor, Philip Hammond, in his autumn budget would help offset the effects of Brexit.
“There are still downside risks relating to Brexit, but there are also upside possibilities if negotiations go smoothly and the recent eurozone economic recovery continues," chief economist John Hawksworth said.
Corbyn should join Brexit talks, says Guy Verhofstadt
The European Parliament's Brexit negotiator says Labour leader Jeremy Corbyn should join negotiations in Brussels and that last month's election result was a "rejection" of "Theresa May's vision for a hard Brexit".
"Brexit is about the whole of the UK. It will affect all UK citizens, and EU citizens in the UK. This is much bigger than one political party’s internal divisions or short term electoral positioning. It’s about people’s lives," Guy Verhofstadt said in an interview with The Independent.
"I believe the negotiations should involve more people with more diverse opinions. Some recognition that the election result was, in part, a rejection of Theresa May’s vision for a hard Brexit would be welcome."
Pressed on whether this meant opposition party leaders should be included in Britain's negotiating team, a spokesman for Verhofstadt told The Independent: "Absolutely."
Corbyn met the EU's chief Brexit negotiator, Michel Barnier, last week, along with the shadow Brexit secretary Sir Keir Starmer.
The Labour leader also received an unlikely boost from former prime minister Tony Blair, who told BBC's Newsnight: "You have to say in today's world now there have been so many political upsets it's possible Jeremy Corbyn could become prime minister and Labour could win on that programme."
Brexit Secretary David Davis is handling the second round of negotiations in Brussels today with a number of contentious issues on the agenda including the UK’s so-called "divorce bill" from the EU.
The first round of talks "was relatively perfunctory, focusing on procedure and so in practice this is the first week of full-on negotiating", says The Guardian's Andrew Sparrow.
%uD83D%uDCFD%uFE0F Watch @DavidDavisMP & @MichelBarnier as second round of UK - EU negotiations %uD83C%uDDEC%uD83C%uDDE7%uD83C%uDDEA%uD83C%uDDFAbegin in Brussels today. %u2B07%uFE0Fhttps://t.co/Riz4dbq7jT
— UKREP (@ukineu) July 17, 2017
The first issue up for discussion will be the rights of EU nationals in the UK after Brexit.
Under UK government proposals, European migrants who have lived in the country for five years will have the opportunity to achieve the same residency, employment, health, welfare and pensions rights as British nationals. But Verhofstadt recently branded the proposals a "damp squib" which risks creating a "second class of citizenship".
Also on the agenda will be the issue of the border between Northern Ireland and the Republic of Ireland, with Barnier describing the political situation there as "very very very sensitive" during the last round of negotiations.
Both the UK and the EU are "determined" to avoid the return of a hard border, or anything that could undermine the Good Friday Agreement, according to the Belfast Telegraph.
Barnier said he was "looking forward" to the talks. "We will now delve into the heart of the matter. We need to examine and compare our respective positions in order to make good progress," he added.
'The clock is ticking' on the UK's Brexit negotiations
Michel Barnier, the EU's chief Brexit negotiator, has called for Britain to clarify its position - and concede to key demands - before the second round of Brexit talks begin on Monday.
Responding to the suggestion made by Boris Johnson, the Foreign Secretary, that the EU could "go whistle" if it was expecting Britain to pay a divorce bill of up to £90bn, Barnier said: "I can't hear any whistling, just the clock ticking."
Barnier and the EU appear to have "dug their heels in" on the issue, says The Times.
In his statement yesterday "there was copious evidence of the Barnier charm", says the BBC's Adam Fleming, "but he was happy to turn on the menace, repeating several times that the UK would have to face the 'consequences' of its choice to depart the EU."
Barnier himself denied that the payment represented a ransom.
"It's not an exit bill, it's not a punishment, it's not a revenge, it's simply settling accounts," he said.
— David M. Herszenhorn (@herszenhorn) July 12, 2017
However, says the Daily Telegraph's Europe editor, Peter Foster, "the EU demand for 'transparency' is not a noble gesture, but a negotiating tactic designed to define and drive the narrative of this negotiation on its own terms."
Money will not be the only point of contention when David Davis travels to Brussels next week. The rights of EU citizens living in the UK - as well as those of Britons living elsewhere in the bloc - are also likely to prove a sticking point.
Yesterday the European Parliament's Brexit co-ordinator, Guy Verhofstadt, revealed that MEPs will seek to have a say on Britain's offer to EU citizens, The Guardian reports.
The parliament is demanding that the UK match existing rights enjoyed by EU citizens living in Britain and says Theresa May's proposed new "settled status" system would be bureaucratic and unsettling.
"We find that the proposal by the UK is absolutely not what we need," Verhofstadt said.
Supporters of Brexit have described May's offer as generous and comprehensive.
If you choose not to to apply for UK nationality, you're not a second-class citizen; you're a NON-citizen. https://t.co/DMDwc0M3fy
— Daniel Hannan (@DanielJHannan) July 9, 2017
In what Reuters describes as "a sign of the domestic dramas that have delayed Britain's response", three leaders will see Barnier separately today: the first ministers of Wales and Scotland and the Labour leader Jeremy Corbyn.
Labour and the devolved governments are pushing Theresa May to modify her Brexit plans, but Barnier said he would only negotiate with British ministers.
Brexit: Fight over EU citizens' rights could derail deal
The European Parliament has threatened to veto Theresa May's proposals on EU citizens' rights post-Brexit, calling them a "damp squib" that could create a "second class of citizenship".
In newspaper letters published across Europe, the EU's Brexit negotiator Guy Verhofstadt says the plan falls short of what EU migrants are entitled to and what UK nationals are being offered in the bloc.
He claims the UK is "falling short of its own ambitions to 'put citizens first'" and that the plan, if implemented, "would cast a dark cloud of vagueness and uncertainty over the lives of millions of Europeans".
The letter was co-written by a cross-party group of MEPs who account for two-thirds of the votes in European Parliament, who say they will reserve "the right to reject any agreement that treats EU citizens, regardless of their nationality, less favourably than they are at present."
The "strongly worded comments" will be "read across the continent", The Independent says.
Speaking today on BBC Radio 4, Verhofstadt said all EU migrants should keep their current rights rather than the government "inventing a new status".
Separately, Verhofstadt told The Mail on Sunday that "time is running out" for the UK to avert the economic damage caused by leaving the EU without a deal.
He also labelled cabinet infighting over Brexit an "unsightly war of attrition" that could have disastrous consequences for the country's economy.
Brexit: Divisions emerge in May's cabinet
Theresa May's cabinet is split over Brexit with secretary David Davis accusing Chancellor of the Exchequer Philip Hammond of taking inconsistent positions on the customs union.
Davis challenged Hammond over his desire for a transition that would extend Britain's stay in the customs union, even if that meant the UK would not be able to strike its own trade deals immediately.
Davis told a conference organised by The Times that the UK was likely to quit the customs union the day after the country's exit from the EU in March 2019. Davis added that Hammond had said "a number of things that are not quite consistent with each other" and insisted that Britain would be able to strike trade deals as soon as it left the EU in March 2019.
In a speech in Berlin, Hammond restated his view that a lengthier transition period would be required to help businesses avoid a cliff-edge shift in their trading arrangements.
The chancellor also mocked Foreign Secretary Boris Johnson's referendum campaign pledge that Britain could "have its cake and eat it."
— Bloomberg Brexit (@Brexit) June 28, 2017
The "political jockeying," as the Financial Times described it, took place in the German capital when Hammond took his soft Brexit message to a conference of German chancellor Angela Merkel's CDU party. "It was a surprise appearance that caught delegates off guard," says the paper.
Downing Street "sought to play down any differences between the two," says The Guardian, with May's spokeswoman saying both were "on the same page" about the need for an implementation period after the two-year article 50 timetable for EU withdrawal has elapsed.
"It is not in anyone's interest for there to be a cliff edge, we want to give certainty to businesses. That's the position of David Davis and Philip Hammond also."
The public divisions "suggest that May is finding it difficult to keep control of her Brexit strategy following this month's election flop," says Bloomberg.
They also risk complicating negotiations with the EU, "where officials have long complained that multiple voices speaking out on Brexit means Britain lacks a unified approach," Bloomberg adds.
Brexit: Northern Ireland border dominates talks
Northern Ireland’s border agreement dominated discussions as Brexit talks finally got underway in Brussels.
Michel Barnier, chief negotiator for the EU, said the issue added a "very, very sensitive" political dimension to the situation.
He said: "The new Northern Irish executive needs to be set up in a few days' time. At the same time, we have a new government and a new taoiseach in Dublin and of course there are the ongoing political discussions in London which we are also following closely."
Those "ongoing discussions" involve the yet-to-be-agreed power-sharing deal between the Tories and Northern Ireland’s Democratic Unionist Party (DUP) to form a majority government.
Brexit Secretary David Davis conceded that an agreement on the type of border between Northern Ireland and the Republic might not be solved until the end of divorce talks with the EU.
While Northern Ireland voted to remain in the bloc, the vote for Brexit has raised the spectre of a "hard border" between north and south and revived sectarian tensions.
However, both the UK and the EU are "determined" to avoid the return of a hard border, or anything that could undermine the Good Friday Agreement, the Belfast Telegraph reports.
Nevertheless, there are also concerns that any Tory-DUP deal could impact the peace process.
Critics, including former prime minister Sir John Major, warn the close relationship could undermine the government's role as an unbiased broker between political parties in Stormont.
Sinn Fein has also questioned how the UK government can remain impartial in talks to restore devolved government in Northern Ireland if is cohabiting with the DUP.
"It is a good question to which the government has no answer," Anthony Lester writes for Reuters.
Brexit talks begin: What will happen as negotiations get underway?
A year after the UK voted to leave the EU and three months after Theresa May triggered Article 50, formal Brexit negotiations begin in Brussels today.
However, while the European Union seems united behind its chief negotiator, Michel Barnier, the UK is in disarray.
On Sunday, Brexit Secretary David Davis was forced to reaffirm Britain's commitment to leaving the bloc, saying: "As I head to Brussels to open official talks to leave the EU, there should be no doubt - we are leaving the European Union."
However, despite his claim that "nothing had changed" following the election, "such is the collapse of [the Prime Minister's] authority that her entire Brexit strategy is being picked apart in public by her ministers, her lawmakers and her allies on the eve of negotiations", says Reuters.
According to The Independent, there is "increasing tension" in the cabinet and Chancellor Philip Hammond is ready to argue for a transitional agreement with the EU and for the UK to stay in the customs union in a bid to "soften the break".
This view was echoed by senior business figures, who "heaped further pressure" on May to change course for a softer Brexit "amid fresh warnings of the impact of immigration controls and leaving the single market", says The Guardian.
A letter from the British Chambers of Commerce, the Confederation of British Industry, the manufacturer's organisation EEF, the Federation of Small Businesses and the Institute of Directors urged the government to "put the economy first" and guarantee a final trade deal that will allow tariff-free goods to be traded between the UK and the EU.
Yesterday, a Survation poll for the Mail on Sunday found 53 per cent of the UK wants a second referendum on the final terms of the Brexit deal, a significant reversal in public opinion since Theresa May called the general election in April. This suggests there is increasing opposition among the public for a hard Brexit.
Gurnek Bains, chief executive of Global Future told The Independent: "If political leaders insist on – or enable – an extreme form of Brexit that prioritises immigration controls by taking Britain out of the single market and the customs union, they risk being on the wrong side of the electorate."
Writing in the Sunday Mirror, Labour leader Jeremy Corbyn accused the government of being "in no position to negotiate a good deal for Britain" with the EU. If the Prime Minister "can't command the support of parliament," he said, Labour is "ready to take that responsibility".
Following a disastrous week in which she narrowly survived a backbench rebellion of Tory MPs and was severely criticised for her handling of the Grenfell Tower disaster, the Prime Minister has been told by her party she has ten days to save her premiership, says The Sunday Times.
Confidence in May is in "free fall" among Tory ranks, the paper claims, and constituency party bosses have told ministers and MPs to force her from power. Dozens of MPs are reportedly ready to demand a vote of no confidence.
a senior Tory MP told The Sun: "She had better stop feeling sorry for herself, pull up her socks and start to lead — and if she can't do that she should go. Shape up or ship out."
Next year's Queen Speech cancelled
After pushing back this year's Queen's Speech as it tries to finalise a deal with the DUP, the government has taken the highly unusual step of cancelling next year's speech altogether.
Leader of the Commons Andrea Leadsom confirmed the next parliamentary session was being doubled in length to two years to give MPs more time to scrutinise "substantial amounts of legislation" caused by Brexit. It also eliminates the risk that the government would not be able to pass a Queen's Speech and would collapse halfway through Brexit negotiations.
Brexit talks: Tories could work with Labour, suggests Michael Gove
Michael Gove has hinted that the Tories may be open to working with Labour on a Brexit deal.
Speaking on BBC Radio 4's Today programme this morning, the newly appointed Environment Secretary, a leading Brexiter during last year's referendum campaign, called for a more cooperative approach to the talks.
"We need to recognise that we as Conservatives were not returned with a majority and that means we need to proceed with the maximum possible consensus," he said.
During the election campaign, Theresa May had suggested only she could deliver a favourable Brexit deal and that Labour, under Jeremy Corbyn, would act against the national interest.
However, the Daily Telegraph reports that senior cabinet ministers are holding secret talks with Labour MPs to gather cross-party backing for a soft Brexit.
This may result in the Prime Minister being forced into concessions on immigration and single market membership, the paper says. May is reported to have known about the "plot" for several days, but has not acted to stop it.
According to The Guardian, before the election, the PM "wasn’t terribly good at drawing on wisdom from within her own cabinet, let alone outside politics", but "the new parliamentary arithmetic" may force her into a broader approach.
Writing in the Telegraph, former Conservative leader William Hague said the election result required "a change both of style and substance" for the government.
He added: "The normal survival plan for a minority government is to pass little legislation, but preparation for Brexit requires a mass of complex and controversial law-making."
Gove, a leading Brexiter, called for broad cooperation in his victory speech immediately after last year's referendum.
However, former works and pensions minister Iain Duncan Smith told the BBC the idea was "made-up nonsense" and that plans for Brexit should continue apace.
Conservative manifesto rules out soft Brexit
Theresa May is asking voters to give her a mandate to walk away from Brexit negotiations without agreeing a deal, repeating her "no deal is better than a bad deal" line in the Conservative manifesto.
May said she agreed with EU leaders who did not want Britain to be "half in, half out" and said leaving the EU offers the chance to build "stronger, fairer, more prosperous Britain" based on "a new contract between government and people".
Politico said the manifesto "kills off any lingering fear (or hope)" of a 'soft' Brexit.
What does the manifesto say about Brexit? The manifesto reads: "As we leave the European Union, we will no longer be members of the single market or customs union but we will seek a deep and special partnership including a comprehensive free trade and customs agreement.
"There may be specific European programmes in which we might want to participate and if so, it will be reasonable that we make a contribution."
What has the reaction been? ITV's Robert Peston says: "The big message on Brexit of May's programme for government is that the principles she listed in her Lancaster House speech for exiting the EU - no future role for the European Court of Justice in Britain, departure from the single market and customs union, and control of immigration - will not be modified in any way."
May's intransigence could well be seen as "a rebuke to pro-European Tories not to expect a more understanding hearing from her if she increases the Tory majority in the way opinion polls suggest she will", Peston concludes.
"As versions of Brexit go, the manifesto sounded pretty tough", says Reuters' George Hay. In sticking to a commitment to shrink annual net migration from 273,000 to the tens of thousands, she is "persevering with a measure that would be economically harmful and that has never been reached".
One explanation, says Hay, is that the PM knows that immigration will exceed her target, but needs to pretend she can hit it because it is one of the reasons many Britons voted for Brexit.
"That could leave hardliners feeling short-changed after the election. But with a bigger majority, May might not need to care," he writes.
Brexit: Juncker wants me sacked, says David Davis
Brexit Secretary David Davis has accused European Commission President Jean-Claude Juncker of trying to force him out of his job by leaking negative stories to the press.
"All these stories are briefing against me trying to get me sacked," Davis told the Daily Telegraph.
He added it was in the EU's interest to ferment "difficulties back home" for Theresa May.
Last week, a German newspaper published an account of a "disaster dinner" at No 10 between Davis, May, Juncker and chief EU Brexit negotiator Michel Barnier.
In particular, the newspaper highlighted a moment when Davis is said to have annoyed the Prime Minister by highlighting a legal challenge he had brought while a backbencher over the UK's surveillance powers, for which May as home secretary was responsible.
May "was not amused", said the paper, and Juncker and Barnier apparently "asked themselves whether Davis would continue to be responsible for negotiations following the elections".
Suspicion in Westminster is that reports of the meeting were planted by the EC President's aides.
Davis said it was a "compliment" that he was being targeted.
“If they don’t want me across the table, there is a reason for that – it is in Britain’s interests, not theirs," he said.
He also said he believed Juncker had "learned his lesson" about "meddling" in British politics.
For his part, Juncker has called the leaked account a "serious mistake", although his response was vague when pressed on his involvement at an event in Germany.
He said: "I am very talented with regard to self-criticism, but I do not want to saddle myself with that."
Source : http://www.theweek.co.uk/brexit/65461/corbyn-should-join-brexit-talks-says-guy-verhofstadt