March 8, 2019 / 10:25 AM / a month ago

REFILE-As vote looms, Britain tells EU: Give ground or risk Brexit chaos

(Corrects date in dateline to March 8)

* PM May to say EU faces big decisions in next few days

* Key votes due in UK parliament next week

* Britain due to leave the EU in three weeks’ time

* Little sign of breakthrough so far

* Foreign minister Hunt says deal with EU is possible soon

By Alistair Smout and James Davey

LONDON, March 8 (Reuters) - British Prime Minister Theresa May was planning to turn up the pressure on the European Union on Friday to break an impasse in Brexit negotiations with a speech saying the bloc would be damaged too if Britain left without a deal.

British lawmakers vote on the deal for a second time on Tuesday, less than three weeks before Britain is scheduled to leave the EU; so far there is little sign of May getting the concessions that she says would reverse her previous defeat.

“History will judge both sides very badly if we get this wrong,” foreign minister Jeremy Hunt told BBC radio on Friday.

The two sides are at loggerheads over the so-called Northern Irish backstop, which seeks to prevent the return of physical border controls between Northern Ireland and Ireland - the only land frontier between the United Kingdom and the bloc.

May wants legally binding assurances from the EU that Britain will not be trapped permanently in the backstop, which involves keeping Britain in a customs union with the bloc.

Many business leaders are alarmed at the prospect of leaving the bloc’s single market, which underpins many of their operations, with no transition arrangements to soften the shock of Britain’s biggest political and economic change in more than 40 years.

A survey of recruiters showed on Friday that employers held off from hiring permanent staff in February, adding to signs of growing nerves in Britain’s otherwise strong labour market.

May was due to give a speech later in Grimsby, a heavily ‘leave’-supporting area, saying that the EU must now give ground on the backstop to help push through the deal, which was defeated in parliament in January by a record margin.

“EU MUST CHOOSE”

“Just as MPs will face a big choice next week, the EU has to make a choice, too. We are both participants in this process. It is in the European interest for the UK to leave with a deal,” May was due to say, according to pre-released extracts.

“We are working with them, but the decisions that the European Union makes over the next few days will have a big impact on the outcome of the vote.”

May has said that if her plan is defeated on Tuesday, lawmakers will be able to vote on Wednesday and Thursday on whether they want to leave the bloc without a deal, or ask for a short delay to Brexit.

Her top lawyer returned empty-handed from negotiations with the EU this week, and the EU told Britain to rework its Irish backstop proposal by Friday.

“We are now in a state when we are discussing proposals we have rejected months ago,” an EU diplomat said.

Attorney General Geoffrey Cox was not due to return to Brussels on Friday, but he or another member of the government could travel over the weekend if talks between junior officials progress.

Foreign minister Hunt said some progress had been made in the last few days and it was “entirely possible” to reach a deal in time for the vote:

“We want to remain the best of friends with the EU, that means getting this agreement through in a way that doesn’t inject poison into our relations for many years to come.”

Keir Starmer, Brexit spokesman for the opposition Labour party, said on Thursday it was “increasingly clear Theresa May will not be able to deliver the changes she promised to her failed Brexit deal”.

He said the Grimsby speech “looks set to be an admission of failure”. (Editing by Hugh Lawson)

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