May arrives for Brussels summit to seal Brexit deal

European Union leaders will give their seal of approval to Theresa May’s Brexit deal on Sunday as MPs at Westminster were warned rejecting it would cause “economic chaos”.

A summit in Brussels will go ahead after Spain claimed the UK and European Union had agreed to its demands for guarantees over the status of Gibraltar.

Spanish Prime Minister Pedro Sanchez had threatened to block the summit over the issue but later said “Europe and the United Kingdom have accepted our demands”.

Madrid’s foreign minister Josep Borrell went further, saying the agreement is “highly positive for Spain” and “the most important” since the Treaty of Utrecht in 1713 under which Gibraltar was ceded to the UK.

Mrs May ignored questions about whether she had compromised on Gibraltar as she arrived in Brussels for talks with European Commission president Jean-Claude Juncker and European Council president Donald Tusk ahead of the summit.

The diplomatic spat which threatened to derail the Brexit process was resolved after a clarification about the position and emergency talks between Mr Sanchez, Mr Tusk and Mr Juncker.

A letter from the UK’s ambassador to the EU Sir Tim Barrow confirmed the Withdrawal Agreement imposes no obligations regarding the “territorial scope” of future agreements – Spain wants to make sure it has a say over how any UK-EU trade applies to the Rock.

But the UK has also made clear it will negotiate future agreements on behalf of all territories for whose external relations it is responsible – including Gibraltar.

Liberal Democrat Brexit spokesman Tom Brake said Mrs May had “caved in” and “appears to have cast the people of Gibraltar aside”.

He said: “She has conceded that Gibraltar won’t necessarily be covered by a future trade deal, simply another example of why what she has negotiated is completely unacceptable.”

Following the resolution of the row, Mr Tusk sent out formal invitation letters to EU leaders for the summit, saying the Brexit deal reached by negotiators from the UK and Brussels “found the best possible compromise”.

He said: “I will recommend that we approve on Sunday the outcome of the Brexit negotiations.

“No-one has reasons to be happy. But at least at this critical time, the EU27 has passed the test of unity and solidarity.”

Mrs May also faced domestic difficulties as the Democratic Unionist Party held its conference in Belfast – with Boris Johnson making a guest appearance.

Chancellor Philip Hammond sought to reassure the DUP over its “understandable concerns” about the Northern Ireland backstop provisions aimed at preventing a hard border with Ireland.

But he told BBC Radio 4’s Today programme he believes the deal on offer is better for the UK than remaining in the EU, stressing it will help heal the divisions caused by Brexit.

“It’s a way of leaving the European Union with minimum negative impact on our economy,” he said.

“Economics is not the only consideration – we also have to look at the political healing process, bringing our country back together because countries that are disunited and divided are not successful countries.”

With MPs including the DUP and scores of Tories from both the Remain and Leave wings of the party set to oppose the Brexit package, Mr Hammond issued a stark warning about the impact of rejecting it.

“If the meaningful vote is lost we are in uncharted territory,” he said.

“We will be faced with potential economic chaos. I am sure we would get a very negative reaction from the business community, from investors, from the markets.”

In her conference speech, DUP leader Arlene Foster said: “The reality is that if we are to secure a better outcome than is currently on offer, then the only option is to look beyond this current draft Withdrawal Agreement and work in the time ahead for an improved outcome.”

Mr Johnson, viewed as a potential leadership rival to Mrs May, was given a rousing reception at the conference.

He said the UK is on the verge of “making a historic mistake”, adding: “Unless we junk this backstop, we will find that Brussels has got us exactly where they want us – a satellite state.”

He set out a series of demands, including a commitment in the Withdrawal Agreement for a “super Canada” trade deal, a provision to withhold “at least half” the £39 billion divorce bill until trade talks are concluded, and a dedicated Cabinet minister for no-deal planning.

Meanwhile, the Daily Telegraph reported the Home Office has drawn up plans to issue low-skilled migrants with 11-month visas “with restricted entitlements and rights” while they are living in the UK as part of the post-Brexit immigration system.

Alternative plans could allow EU migrants aged between 18 and 30 to live and work in the UK for two years, with a strict cap on numbers.

The Government will abolish the cap on highly skilled “tier 2” migrants entirely, the report said, with the plans set out in the week beginning December 3 – a week before the crunch Brexit vote is expected in the Commons.