Brexit: Theresa May and Jean-Claude Juncker confirm no deal today after DUP phone call over Irish border

 
Catherine Neilan
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An 11th-hour phone call between Theresa May and Arlene Foster scuppered hopes for a Brexit deal to be agreed today - putting the pressure on the UK and EU teams to make a breakthrough by the end of next week.

Ahead of a critical lunch meeting between May and Jean-Claude Juncker, MEPs revealed they had been shown a draft agreement that talked of "regulatory alignment" between Northern Ireland and the Republic of Ireland after Brexit, avoiding the need for a hard border.

However, that proposal was immediately rejected by the DUP, with Foster saying she would not accept any regulatory divergence from the rest of the UK.

City A.M. understands that Foster could not be persuaded during a last-ditch phone call with May, which took place after Foster's press conference, as the Prime Minister's Brussels lunch dragged into nearly four hours.

At a much-delayed press conference, Juncker said: "Despite our best efforts, and significant progress that our teams have made over the past few days, it was not possible to reach complete agreement today.

"We have narrowed our positions hugely today," he added. "I am still confident we can reach significant progress before 15 December. This is not failure."

Of May he said: "She is a tough negotiator. Not an easy one."

May added: "We have been negotiating hard and a lot of progress has been made... but on a couple of issues some differences do remain which require further negotiation and consultation."

Both the UK and EU had clearly believed a deal could be pushed through.

Ahead of the lunch Brexit secretary David Davis told reporters he was “hoping” Juncker would give the green light on sufficient progress, enabling both sides to finally begin discussing trade and transition.

Irish Taoiseach Leo Varadkar said he would "be making a statement on Phase I Brexit talks later today". His statement, which was given three hours later than scheduled, Varadkar said he had agreed to a text in the morning and that he was “surprised and disappointed” to hear that UK couldn’t agree to it later.

And Tusk tweeted enthusiastically: "Tell me why I like Mondays! Encouraged after my phone call with Taoiseach on progress on Brexit issue of Ireland. Getting closer to sufficient progress at December.”

Sterling had risen 0.3 per cent against the dollar in light of the positive comments, but fell back in the afternoon, when both sides had to concede that they were unable to confirm a deal.

The DUP holds a disproportionate amount of power over Number 10 relative to its 10 Commons seats, having entered into a confidence and supply agreement with May this summer in order to prop up her minority government.

The regulatory alignment proposal has also upset Scottish first minister Nicola Sturgeon and her Welsh counterpart Carwyn Jones as well as London Mayor Sadiq Khan, who said it should open up the possibility of other parts of the UK retaining Single Market membership.

However, the wording appears to be specific to the Irish border.

According to RTE, the text of one of the leaked documents states that “continued regulatory alignment from those rules of internal market and customs union which, now or in the future, support North South co-operation and protection of the Good Friday agreement”.

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