Theresa May says her cabinet has “a great opportunity – and a duty” to agree a blueprint for the UK’s future relationship with the EU.
Before Friday’s crunch Chequers meeting she said she wanted “ambitious new trade deals” and an agreement “in the best interests of the UK and the EU”.
The PM must resolve splits within the cabinet over the shape of Brexit.
She is expected to propose keeping the UK aligned with the EU on trading rules for goods but not services.
Once ministers reach an agreement on the UK’s proposal, the EU can then choose to accept or reject the plan.
Ministers have been told they will have to hand in their phones and any smartwatches on arrival at Chequers, a 16th Century country house in Buckinghamshire.
Cabinet Office Minister David Lidington said the proposal would include a common rulebook on some sectors – like industrial goods and agricultural goods – for “practical” supply chain reasons.
He told BBC Radio 4’s Today programme: “I’m pretty confident we will end up with a concrete position which everybody is able to sign up to.”
But Brexiteer ministers are understood to be unhappy with the plan. Seven Brexiteer cabinet ministers met at the Foreign Office on Thursday evening.
And David Jones, a former minister at the Department for Exiting the EU said Mrs May’s proposal looked set to breach her “red lines” on leaving the customs union, single market and jurisdiction of the European Court of Justice.
Former Education Secretary Nicky Morgan, who campaigned to stay in the EU, said any ministers who do not like the deal agreed on Friday should consider resigning from cabinet, rather than “undermining” it afterwards.
A dramatic day in store at Chequers
BBC Political Editor Laura Kuenssberg
Often the hype about a political event is in inverse proportion to the drama of what actually comes to pass. Maybe not this time.
To say that Brexiteer ministers are a bit miffed with Mrs May’s plan, which they only received in its entirety on Thursday afternoon, is an understatement.
There is plenty in there that they don’t like, and it’s easy to see why.
The Times reported a senior government source saying anyone who resigned during or after the meeting would have to relinquish their ministerial car immediately and either take a taxi or walk to the nearest station, about two miles away.
Ahead of the meeting, Mrs May said: “The cabinet meets at Chequers… to agree the shape of our future relationship with the European Union.
“In doing so, we have a great opportunity – and a duty. To set an ambitious course to enhance our prosperity and security outside the European Union – and to build a country that genuinely works for everyone.
“We want a deal that allows us to deliver the benefits of Brexit – taking control of our borders, laws and money and by signing ambitious new trade deals with countries like the US, Australia and New Zealand.
“This is about agreeing an approach that delivers decisively on the verdict of the British people – an approach that is in the best interests of the UK and the EU, and crucially, one that commands the support of the public and Parliament.”
Why is the summit happening?
There have been differing views within the cabinet about how closely the UK should stick to EU rules after Brexit, and what compromises should be made to achieve “as frictionless as possible” trade.
After months of tension and disagreement, the prime minster is gathering the entire cabinet at her country retreat, Chequers, with the aim of agreeing a UK proposal on how future relations should work.
After the meeting, the government is expected to publish a White Paper setting out its plans in detail.
That would then be the subject of negotiations with the EU – which might have different ideas.
What does the cabinet need to agree on?
Ministers have yet to agree what they want to replace the UK’s membership of the EU’s customs union, which allows for tariff-free trading between members.
One of the key issues is the need to avoid new border checks between Northern Ireland and the Republic of Ireland when the UK is outside the customs union.
The EU and UK say there can be no return to a hard border. But Eurosceptic MPs have warned Mrs May against tying the UK to the EU after it leaves, saying this will prevent it from striking its own trade deals with other countries.
Meanwhile 46 other Conservative MPs have written to Mrs May urging her to listen to the voice of business and target a deal which enables “frictionless trade to continue”.
What is the proposed trade plan being discussed?
It is understood that the new customs proposal will be put forward on Friday which would allow the UK the freedom to set its own tariffs on goods arriving into the country.
Technology would be used to determine where the goods will ultimately end up – and therefore whether UK or EU tariffs should be paid.
Downing Street says it is confident the arrangement would be partly in place by the end of the proposed transition period in December 2020 – with the system being fully operational by the next general election, due in 2022.
On regulations, it is understood that the UK would closely mirror the EU’s rules on some goods but not services – but Parliament would be able to decide where to deviate.
Minister David Lidington said there could be a common rulebook on industrial products, as components have to cross borders repeatedly, and agricultural goods which would be held up by veterinary checks.
However, the arrangement has not been explained in full – and it is not clear whether the cabinet will back the plan, or whether the EU will agree to it.
A source close to Brexit Secretary David Davis refused to comment on a Daily Telegraph report that he had already told Mrs May the plan was unworkable.
The UK is due to leave the European Union at 23:00 GMT on 29 March 2019.
But to allow time for parliaments in the UK and the EU to approve whatever deal is agreed, the aim is for the framework for future relations to be agreed this autumn.
But the UK government has not, as yet, settled on what its post-Brexit relationship with the EU should look like, amid the divisions over what to do about customs.
EU leaders last week told Mrs May it was time to “lay the cards on the table” if a Brexit deal was to be done on time and said the most difficult issues were yet to be resolved.
Businesses have also been stepping up the pressure on the government. The British Chambers of Commerce warned the prime minister this week that firms were running out of patience over the lack of progress in Brexit talks.
A number of high-profile businesses, including Jaguar Land Rover, Airbus and BMW, have warned that leaving the EU without a deal could see production relocated.