The PM will travel to Brussels tomorrow to meet with European Commission President Ursula von der Leyen after they spoke on the phone last night.
The sticking points between the EU and the UK continue to be governance, fisheries and a level playing field.
Sir Bill Cash, chairman of the European Scrutiny Committee, told the Prime Minister that they will be ‘watching’ with ‘great diligence’ over what he proposes and they hope their confidence in him will be justified.
The warning came after the Government dropped controversial powers in the Internal Market Bill enabling it to breach the Brexit Withdrawal Agreement and break international law.
Ministers had enraged the EU by arguing the provision was needed to protect the trading relationship between Great Britain and Northern Ireland in the event of no-deal.
But Cabinet Office minister Micheal Gove announced today that an agreement on Brexit divorce issues, including border checks and trading rules for NI, had been reached ‘in principle’.
He told Sky News there will be ‘a small number of proportionate checks’ on food products going into NI that will be ‘as light-touch as possible’, with more details expected to be unveiled in the Commons tomorrow.
Following the day of dramatic developments Sir Bill said: ‘We will be watching all these matters with great diligence and with a constructive approach because I trust when we’ve been through the full proceedings on [the Taxation Bill] and finalising the Internal Market Bill, we will hope and trust that the confidence is entirely justified and there’ll be no impairment of our sovereignty of the United Kingdom – which is what this is all about.’
The discussions on the Internal Market Bill are separate from the trade talks, which remain deadlocked, but the agreement could improve relations between the two negotiating teams.
Boris Johnson has said he is ‘optimistic’ about getting a Brexit deal but admitted ‘it’s looking very, very difficult’.
He and von der Leyen said in a joint statement released this evening: ‘As agreed on Saturday, we took stock today of the ongoing negotiations. We agreed that the conditions for finalising an agreement are not there due to the remaining significant differences on three critical issues: level playing field, governance and fisheries.
‘We asked our Chief Negotiators and their teams to prepare an overview of the remaining differences to be discussed in a physical meeting in Brussels in the coming days.’
The level playing field refers to the extent to which the UK will follow EU rules following Brexit, while governance involves how the two parties will enforce any deal and resolve disputes.
Fishing, which has long been a sticking point, relates to the UK’s demand that fisherman have the right to all fish in its waters.
In contrast, the EU wants access for its boats in a quota system, which shares fish among member states.
Johnson’s cabinet met on Tuesday morning and a spokesman said it was unified around the current position.
He said: ‘We obviously want to continue to try to reach a free trade agreement, that has been our position throughout.
‘But the cabinet also agrees that any agreement must respect our sovereignty and allow us to take back control of our money, laws and borders.’
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