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A draft plan for Brexit to be proposed by Tory Eurosceptics includes significant tax cuts, as well as more eyebrow-raising ideas such as a new military expeditionary force to defend the Falklands and a domestic-built missile defence system, according to a leaked version.

The document from the European Research Group (ERG), which corrals the bulk of the hard Brexit-supporting Conservative MPs, also argues for a so-called invisible customs frontier on the Irish border, with any checks carried out away from the frontier.

After extracts of the leak were carried by several Sunday newspapers, the ERG’s head, Conservative MP Jacob Rees-Mogg, said it was an early draft, mainly focused on assuaging worries about how an exit could see the UK reliant on World Trade Organisation (WTO) terms.

Amid a concerted effort by the ERG and allied groups to derail Theresa May’s Chequers plan, the group’s counter-proposals are intended to refute the charge that Tory Eurosceptics have no coherent ideas of their own.

As expected, the reported leaked version would see the UK propose a Canada-style trade deal with the EU, with none of the alignment or common rules proposed by Chequers. If that was rejected, the paper says, the UK would leave without a deal, on WTO terms Falklands.

A no-deal Brexit would mean the estimated £39bn final payment to Brussels would instead be largely used for the NHS, the document argues. Another “Brexit bonus” would come from cuts to income and capital gains tax, business rates and stamp duty.

Less expected was a plan to create a rapid reaction military expeditionary force to allow swift deployment to protect places such as the Falkland islands.

There is also a proposal for a defence planning to include “the insurance of a nuclear missile shield to deter aggression”, the Mail on Sunday said, an idea seemingly based on the US strategic defence initiative, commonly known as “star wars”.

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