Theresa May will head to a crunch EU summit without a cross-party deal on Brexit after talks with Labour failed to secure a breakthrough.
Hopes of a compromise were dashed after it became clear in more than three hours of talks that the PM was not ready to make a “fundamental shift” in her stance.
The deadlock, which increases the likelihood that the UK will take part in European elections next month, followed fresh warnings from Tory Brexiteer ministers not to cave to Labour demands over closer economic ties to the EU.
As MPs voted to again delay Exit Day to June 30, May also faced heavy criticism from DUP leader Arlene Foster for “humiliating” herself with a plea to “beg” the EU for more time.
Although No.10 described the talks with the opposition as “constructive” and the two sides will reconvene on Thursday, the failure to get agreement in time for Wednesday means that the PM won’t be able to trumpet a Commons breakthrough to fellow EU leaders.
Shadow Business Secretary Rebecca Long-Bailey said after the talks: “There’s not really been any fundamental shift of a change in position in the deal itself, but we are hopeful that progress will be made.”
Sources close to the talks told HuffPost UK that May’s team had shown “no change in her red lines”.
“The more detailed things got, the more clear it became that fundamental differences remain on things like customs and on enforceability and deliverability of all this,” one insider said.
Shadow Brexit Secretary Keir Starmer raised in the private discussions the fact that International Trade Secretary Liam Fox had earlier warned that being stuck in a customs union would be ‘the worst of all worlds’.
“Fox showed that on deliverability, the PM may not have the authority to do any of it. The red lines remain a problem,” a Labour source said.
A key sticking point for Labour was the need for fresh legal assurances to prevent hard Brexit threats from Boris Johnson and other hardcore Eurosceptics that they could tear up EU trade deals and workers rights.
John McDonnell revealed that recent remarks by Johnson, Jacob Rees-Mogg and Attorney General Geoffrey Cox all proved the need to “entrench” any agreement with Theresa May, either through an EU treaty or domestic legislation.
″Assurances so far given around this don’t seem to meet what we are aiming for, given the climate that’s created by statements by the Attorney General, Boris Johnson - a potential leadership candidate, God help us - and also Jacob Rees-Mogg,” he said.
“Cox made that statement last week that any customs union could be overturned, Boris Johnson’s threat to any deal in the future and then Jacob Rees-Mogg this morning basically arguing that it could be overturned.”
To allay Labour fears some Whitehall sources suggested the necessary reassurances, as well as other key Labour demands on workers rights and the environment, could be incorporated into the government’s Withdrawal Agreement Bill (WAB).
During the talks ministers even suggested that the bill, which is needed for any formal Brexit process, could be finally published this week if there is a deal with Labour.
But a Labour source said the talks had laid bare that other detailed legislation such as the Agriculture Bill would have to be changed.
“They raised the idea of bringing forward the WAB [Withdrawal Agreement Bill] this week, but it’s for the birds. There’s a whole suite of legislation that needs to change if any compromise is to be reached. It points to a long extension.”
A Labour spokesman added: “We have agreed to hold further talks on Thursday in an effort to break the Brexit deadlock, and find a compromise that can win support in parliament and bring the country together.”
A No.10 spokesman said: “We have had further productive and wide-ranging talks this afternoon, and the parties have agreed to meet again on Thursday once European Council has concluded.
“We remain completely committed to delivering on Brexit, with both sides working hard to agreeing a way forward, appreciating the urgency in order to avoid European elections.”
McDonnell and Chancellor Philip Hammond joined the Brexit talks between government and opposition for the first time.
“We have maintained the discussion about entrenchment, how do we secure any deal that comes forward in the long term, particularly in the light of the statements of the last week. And how best to secure that through either domestic legislation or treaty,” McDonnell said.
In the second full day of face-to-face negotiations, the pair were joined by Brexit Secretary Steve Barclay and his shadow Starmer and Environment Secretary Michael Gove and shadow Sue Hayman.
During the four hours of planned discussions in Whitehall, others in attendance were business secretary Greg Clark and shadow Long-Bailey, as well as chief whip Julian Smith and Labour counterpart Nick Brown.
Some in government are open to the idea of offering more assurances to provide a “lock” on future prime ministers, although both sides accept that it is difficult for a current government to bind the hands of a successor.
McDonnell revealed that Labour was demanding not just a permanent link to the EU customs union but also continued alignment between British and European rules on financial services and other key sections of the UK economy.
In a clear act of defiance, Fox sent a letter to the chairman of the Tory backbench 1922 Committee setting out in detail his opposition to a post-Brexit customs union.
The letter, obtained by the Daily Telegraph, warned that such an arrangement would leave the UK unable to set its own trade policy.
“As the famous saying in Brussels goes, if you are not at the table, you are on the menu,” he said.
Earlier, Arlene Foster - whose DUP party is the main roadblock to May’s Brexit deal - was withering in her criticism of the prime minister.
“It is really quite painful to watch the PM at the moment going out to Brussels - its quite humiliating actually - what we want to see is strong leadership, we passionately believe in the UK and want it to be on the world stage to realise its capacity and its potential,” she told UTV.
“We have a PM who is going out to beg the EU for an extension even though everything should have been completed by now because you know we are now three years away from the Referendum now, three years the people of the UK Voted to leave the EU and we are still engaged in the process of a withdrawal agreement.”