Theresa May postpones customs decision after ministers disagree

Theresa May has postponed a decision on Britain's future customs relationship with the European Union, asking officials to draw up revised proposals after her senior ministers failed to agree a common approach. The cabinet's Brexit sub-committee met on Wednesday after Eurosceptic Conservative backbenchers called on the prime minister to abandon one of her two customs proposals.

Reports after the meeting suggested that Ms May's new home secretary, Sajid Javid, and defence secretary Gavin Williamson joined Brexiteer ministers to oppose the proposed "customs partnership", which would see Britain collect tariffs on behalf of the EU. Ministers opposed to a hard Brexit, including chancellor Philip Hammond and business secretary Greg Clark, spoke in favour of it.

The European Research Group (ERG) of 60 MPs led by Jacob Rees-Mogg dismissed the customs partnership as unworkable and urged the government to focus exclusively on a second option of a customs arrangement known as Maximum Facilitation or MaxFac, which would use technological and administrative measures to make customs controls less intrusive.

Mr Rees-Mogg denied that the group was threatening to move against the prime minister unless she took the customs partnership off the table.

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“There is no question of there being an ultimatum. This is a paper that has been produced on a specific aspect of policy that would not work, that would not effectively take us out of the European Union. It would leave us de facto in both the customs union and the single market,” he told the BBC

Housing minister Dominic Raab, who campaigned for Brexit, said those opposed to the customs partnership option appeared to be winning the argument.

“I always keep an open mind on this because I do think when it comes to Brexit we are going to be forging a distinct path, the UK, not taking some off-the-shelf model. But I suspect actually in terms of delivering the two things that we need, which is to stay out of the customs union but also avoid the hard border as a matter of principle but also workability, at the moment the way I read it is that those in favour of max fac are winning the argument,” he said.

Third option

At prime minister's questions in the House of Commons on Wednesday, Ms May said there were "a number of ways" to deliver frictionless trade and avoid a hard Border in Ireland, fuelling speculation that the government is looking at a third option in an effort to unite the cabinet. Asked about the prime minister's remarks, her spokesman said the government's ideas on the customs relationship were evolving.

“Work has been ongoing on two options; that work has been proceeding. Ideas are obviously evolving as we go along; the prime minister said there’s a number of options of ways to proceed,” he said.

Labour's Stephen Doughty, who supports a campaign for a second referendum on leaving the EU, said the government was negotiating with itself about customs options Brussels has already rejected, and the government's negotiation with itself was going about as well as its negotiations with the EU.

“With less than six months to go before the final Brexit deal is supposed to be agreed, Ministers are still fighting among themselves about which of their two discredited customs proposals to persist with. Our European negotiating partners, who have for good reason already dismissed both proposals as unworkable, must be baffled as to what on earth the government wants,” he said.