Theresa May’s hopes of persuading her party to back her customs partnership plan have been boosted after Tory remainers suggested they may be prepared to support it.
The leading Tory backbenchers Anna Soubry and Dominic Grieve, who have spearheaded the rebel drive to remain in the customs union, said their main priority was to ensure that frictionless trade was delivered in the final deal.
It raises the prospect of them eventually withdrawing a customs union amendment to the trade bill, on which the government faces defeat, and so bolstering the prime minister’s chances of getting her Brexit deal through the Commons.
The development comes before a cabinet showdown over Britain’s post-Brexit customs arrangements, and after the foreign secretary, Boris Johnson, publicly criticised May’s proposed system as crazy and claimed it would not give Britain control of trade policy.
Whitehall officials believe they can persuade Brussels that a redrafted version of May’s preferred plan is workable, despite EU negotiators previously describing it as “magical thinking”.
A customs union is an agreement by a group of countries, such as the EU, to all apply the same tariffs on imported goods from the rest of the world and, typically, eliminate them entirely for trade within the group. By doing this, they can help avoid the need for costly and time-consuming customs checks during trade between members of the union. Asian shipping containers arriving at Felixstowe or Rotterdam, for example, need only pass through customs once before their contents head to markets all over Europe. Lorries passing between Dover and Calais avoid delay entirely.
Customs are not the only checks that count – imports are also scrutinised for conformity with trading standards regulations and security and immigration purposes – but they do play an important role in determining how much friction there is at the border. A strict customs regime at Dover or between Northern Ireland and the Republic of Ireland would lead to delays that will be costly for business and disruptive for travellers. Just-in-time supply chains in industries such as car making could suffer. An Irish peace process built around the principle of entirely unfettered travel between north and south could be jeopardised.
The Brexit inner cabinet rejected the proposal by six to five at a crunch meeting last week, leaving Brexit cabinet sources insisting it was a “dead parrot” and No 10 conceding there were “unresolved issues” that required further work.
Downing Street sources denied the prime minister was planning to take the issue to a full meeting of her cabinet, where the plan would get majority backing, suggesting she wanted to win over her Brexiter critics in the inner cabinet with redrafted proposals instead.
May delivered a mild rebuke to Johnson after he told the Daily Mail that the customs partnership, one of two options considered by the inner cabinet, would be unacceptable.
Her official spokesman pointed out that the customs partnership model had been in existence for months, along with an alternative plan for a hi-tech streamlined customs arrangement, and that the whole cabinet had already signed up to it.
While Number 10 defended an intervention by the business secretary, Greg Clarke, at the weekend as “entirely in keeping” with government policy, May’s spokesman refused to be drawn on whether the same was true of Johnson’s comments.
Downing Street was also rumoured to be trying to win over the home secretary, Sajid Javid, and the defence secretary, Gavin Williamson, who both came out against May’s plans at the inner cabinet. However, sources close to Javid denied he was having his arm twisted.
In the next few weeks May faces the return of the EU withdrawal bill to the Commons after a string of government defeats in the House of Lords on proposals such as staying in the customs union.
Grieve warned that the Commons, where the prime minister has a wafer-thin majority propped up by the Democratic Unionist party, would be similarly robust.
But support for May’s partnership plan from the leading remainers, while angering the Brexiters, could make it more likely that she will avoid a damaging defeat on staying in the customs union, which Labour has said it will support.
Soubry said: “All that I care about is what any agreement delivers. If it delivers the huge benefit of our membership of the customs union and indeed the single market, which is what British business is desperate for, I don’t care what you call it.”
Grieve told the BBC: “I think you will find that there is an overwhelming number of members of parliament who think that a continuing relationship with the EU facilitating frictionless trade is absolutely essential for our economic interests.”
A third remainer MP said: “The louder the Brexiters shout, the more clear it is that they realise they aren’t going to win this one. May is shifting our way.”
There was also pressure on the prime minister to more firmly rebuke Johnson for his remarks, with Grieve saying he could not understand why she had chosen not to sack him.
One MP, who did not want to be named, said: “I cannot think of another occasion when a foreign secretary or any other senior minister has publicly denounced the prime minister’s policy in this way. It’s in utter disregard of any rule of collective responsibility. He’s completely out of control. There’s nothing May can do about him.”
But the former Tory leader and senior Brexiter Iain Duncan Smith backed Johnson for speaking out. He said: “We were led to believe last week that that was it, and they were going with the maximum facilitation process, which was also the government’s plan. But it turns out over the weekend, somehow, it’s been raised from the dead.”
Cabinet opponents of the customs partnership plan are backed by the influential European Research Group of Tory backbench MPs. Its chair, Jacob Rees-Mogg, has said the proposal amounts to membership of the customs union and the single market “by another name” and said Johnson’s criticism “hits the nail on the head”.
