Theresa May insists her Brexit EU customs plan is not dead

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Downing Street insisted plans for a customs ‘partnership’ with the EU are not dead today despite Boris Johnson condemning them as ‘crazy’.

The Foreign Secretary brought the bitter Cabinet row crashing into the open with a dramatic intervention in which he warned that the proposal would create ‘a whole new web of bureaucracy’.

The outspoken attack, in an interview with the Daily Mail, raises the prospect that Mr Johnson could quit if Mrs May does not drop the idea.

But the issue of Brexit was not raised at all at a Cabinet meeting today.

The PM’s spokesman said officials were currently working as a ‘priority’ on the customs union idea and the ‘Maximum Facilitation’ option favoured by Brexiteers.

The spokesman pointed out that Mr Johnson had previously signed up, along with the rest of the Cabinet, to considering both options. 

Theresa May (pictured arriving at Downing Street with husband Philip this morning) is fighting to save her proposals for a customs partnership with the EU

Boris Johnson attended Cabinet today after savaging Theresa May's post-Brexit trade plans

Boris Johnson attended Cabinet today after savaging Theresa May's post-Brexit trade plans

Boris Johnson attended Cabinet today after savaging Theresa May’s post-Brexit trade plans

Asked whether Mrs May had urged ministers to carry out their discussions in private, the spokesman said: ‘Not in Cabinet, no.’

No10 said the PM still had ‘full confidence’ in the Foreign Secretary. 

Cabinet sources confirmed that the issue of Brexit had not been mentioned at all at the session this morning.

Amid mounting pressure on Mrs May to find a way through the impasse, leading Tory Eurosceptic Jacob Rees-Mogg said Mr Johnson had ‘hit the nail on the head’ – and also suggested Britain would be much more ‘aggressive’ in negotiations with Brussels he was PM.

But there was a backlash from Tory Remainers, who raged that Mr Johnson’s stance was ‘disgraceful’ and he must ‘wake up to reality’.

Brexiteers fear No10 wants to ‘rebadge’ the customs partnership blueprint and force it through despite heavy criticism from a powerful Cabinet subcommittee last week.

But Mrs May has pushed the ‘War Cabinet’ showdown back from this Thursday to next week as she struggles to find a compromise solution.  

Under the partnership concept, officials would track shipments into the UK and collect tariffs for Brussels on goods ending up in the EU.

However, in his interview Mr Johnson said that would simply lead to more red tape.

‘It’s totally untried and would make it very, very difficult to do free trade deals,’ he added. 

‘If you have the new customs partnership, you have a crazy system whereby you end up collecting the tariffs on behalf of the EU at the UK frontier. 

‘If the EU decides to impose punitive tariffs on something the UK wants to bring in cheaply there’s nothing you can do.

‘That’s not taking back control of your trade policy, it’s not taking back control of your laws, it’s not taking back control of your borders and it’s actually not taking back control of your money either, because tariffs would get paid centrally back to Brussels.’

Business Secretary Greg Clark, pictured in Downing Street today, has been pushing for a softer Brexit

Business Secretary Greg Clark, pictured in Downing Street today, has been pushing for a softer Brexit

Brexit Secretary David Davis was also at the Cabinet meeting today - although the future of trade with the EU is not formally on the agenda

Brexit Secretary David Davis was also at the Cabinet meeting today - although the future of trade with the EU is not formally on the agenda

Business Secretary Greg Clark, pictured left in Downing Street today, has been pushing for a softer Brexit. David Davis (right) was also at the Cabinet meeting today – although the future of trade with the EU is not formally on the agenda

Greg Clark, the pro-Remain Business Secretary, insisted on Sunday that the partnership idea was far from dead and warned thousands of car industry jobs could go if Britain did not stay in some form of customs union.

Within minutes of Mr Clark talking up the plan, the pro-EU CBI and the British Chambers of Commerce issued statements backing his position.

But Mr Johnson said: ‘Colleagues in Cabinet have different concerns about different aspects of the argument and it’s entirely right that they should make their points.

‘But we should be looking at the opportunities and thinking confidently about the UK and believing what we can do rather than succumbing to a sort of Project Fear mark 2,3,4,5,6.’

The PM’s spokesman told reporters today: ‘There are two customs models that were put forward by the Government last August and most recently outined in the Prime Minister’s Mansion House speech which the entire Cabinet was signed up to.

‘Following last week’s sub-committee meeting, it was agreed that there are unresolved issues in relation to both models and that further work is needed.

‘The Prime Minister asked officials to take forward that work as a priority.’ 

Mr Rees-Mogg raised the temperature further by suggesting Mr Johnson would take a ‘more aggressive’ approach to Brexit if he became PM – although he claimed there was ‘no desire’ to replace Mrs May.

Leading Tory Eurosceptic Jacob Rees-Mogg (pictured with some of his children at a fair in his East Somerset constituency yesterday) said Britain would be much more 'aggressive' in negotiations with Brussels if Mr Johnson was PM

Leading Tory Eurosceptic Jacob Rees-Mogg (pictured with some of his children at a fair in his East Somerset constituency yesterday) said Britain would be much more 'aggressive' in negotiations with Brussels if Mr Johnson was PM

Leading Tory Eurosceptic Jacob Rees-Mogg (pictured with some of his children at a fair in his East Somerset constituency yesterday) said Britain would be much more ‘aggressive’ in negotiations with Brussels if Mr Johnson was PM

Health Secretary Jeremy Hunt today

Health Secretary Jeremy Hunt today

Commons Leader Andrea Leadsom strolled up Downing Street in the sunshine today

Commons Leader Andrea Leadsom strolled up Downing Street in the sunshine today

Health Secretary Jeremy Hunt and Commons Leader Andrea Leadsom strolled up Downing Street in the sunshine today

‘The EU knows if they don’t support and help Theresa May to get a deal, there is the risk of having somebody much, much more aggressive, which they don’t want,’ Rees-Mogg told the Telegraph. 

‘I think that’s helping her. By being a Remainer, by being moderate, by being courteous, she is doing a highly competent job in negotiations. I don’t think they would like to have Boris Johnson, do you? That’s a strength of her position. Banging the table doesn’t always get results.’ 

Fellow Brexiteer Bernard Jenkin said the partnership idea amounted to ‘self-deception’.

WILL WOBBLY WILLIAMSON CHANGE SIDES?

The Defence Secretary could be persuaded to change sides and back amended plans by Theresa May for a customs partnership with the EU after Brexit, sources said.

They said if the Prime Minister comes back to the table with a tweaked model, Gavin Williamson will look at the options and then decide.

He is not firmly on either side, sources told the Mail.

But last night those close to him said they would not be drawn on what position he would take. 

They simply said he would do what is in the ‘best interests of the country’.

The customs partnership, backed by Mrs May, was rejected by the Brexit ‘war’ cabinet last week in a knife edge 6-5 vote.

Mr Williamson and Home Secretary Sajid Javid both opposed the partnership.

Mrs May has been repeatedly urged by Brexiteers to abandon the partnership option, which critics said would keep the UK tied to EU rules.

But there are claims she is planning to make a fresh attempt to push the controversial plan for post-Brexit customs ties with Brussels.

She is expected to present a ‘tweaked and rebadged’ version of the same proposal at a fresh meeting on Thursday, and will urge ministers to fall in line behind the proposals.

Eurosceptic ministers fear that Mr Williamson, who voted Remain but who has switched to the Eurosceptic camp, could be ‘peeled off’ by Mrs May, according to the FT.

A spokesman for Mr Javid declined to comment on whether he could change sides.

‘I think the Prime Minister is very anxious to try to bring the whole party together around some kind of compromise proposal and the argument is going on about this. I think in the end she will have to drop it because it will prove unworkable,’ he told BBC Radio 4’s Today programme. 

‘I think it is a bit of an act of self-deception to say that we are leaving the customs union but we are still going to apply the common external tariff to all the imports coming in from the EU.’

But Tory former minister Baroness Altmann said the intervention by Mr Johnson was ‘disgraceful’ and the UK needed to ‘wake up to reality’. 

‘We need to stay in CU and EEA to ensure future success,’ she wrote on Twitter.

Conservative former attorney general Dominic Grieve said Mr Johnson’s decision to speak out was ‘regrettable’, but said he could understand why Mrs May was willing to put up with his ‘outbursts’.

Mr Grieve told BBC Radio 4’s World At One: ‘I have an old-fashioned view of what Cabinet responsibility entails, which is that the discussions within Government on any given matter are confidential until the time is reached that the Government has a collective decision.

‘At that stage, if you don’t like the collective decision you have to resign.

‘I don’t think he is in any way inhibited by normal propriety in government.

‘I can well understand that seeing the difficult issues that we are having to confront, which are very divisive, the Prime Minister should accept these rather extraordinary bursts of misbehaviour by Boris.’

Mr Johnson made his comments in an interview with the Daily Mail during a two-day visit to Washington DC. 

He hailed the ‘massive opportunity’ of a US trade deal and said a ‘rich and deep’ agreement could be reached only after a clean break from the EU.

‘You can’t do that if you remain locked in the lunar pull of Brussels, the tractor beam of Brussels,’ he said. 

‘There’s a discussion going on, and we haven’t resolved this, but some of the ideas would make it very difficult for us to do meaningful free trade deals.’

On Northern Ireland he said that if Britain chose to change its laws on imported goods or foods – as is often required under trade deals – that would inevitably mean checks at the border. 

‘It only solves the Northern Ireland border question if you force companies to prove that an imported tariff-reduced good has been consumed in the UK and if you insist on complete regulatory alignment with the EU rule book,’ he said.

‘Otherwise if Britain chose to vary its laws in any way at all on goods and agrifood, then logically you would need checks at the border.’

The Foreign Secretary warned against being locked into the EU’s structures: ‘That’s not what the Americans want to see, what they want to see, like all our friends, is a confident free-trading Britain able to do its own deals.’

A senior White House source said last night that Donald Trump was determined to do a ‘great’ trade deal with Britain.

The source also said the US President was looking forward to coming to the UK in July but signalled some nervousness about possible protests.

‘The President is keen for Britain to get out of the EU so we can get on with doing a great trade deal. He’s surprised it’s taking so long,’ the source said. 

‘He is looking forward to coming over and he wants people to be positive about that.’

Mr Johnson warned that opponents of Mr Trump’s visit risked damaging the economy.

‘Overwhelmingly the people of the United Kingdom will want to hear from the President of the United States,’ he said.

‘America is our number one export market. Trade with America is worth $100billion a year. 

‘There are a million people in the US employed in British firms just as there are a million people in the UK employed in American firms.’

In January Mr Trump repeated his determination to secure a US–UK trade deal, saying: ‘As you know you are somewhat restricted because of Brexit, but when that restriction is up we’re going to be your great trading partner.’

Mr Johnson has made a series of pointed and carefully-timed interventions in the Brexit debate since entering government, often to the dismay of Downing Street.

In September last year – before a major speech by Theresa May in Florence – he wrote a 4,000-word ‘Brexit manifesto’ that prompted accusations of backseat driving.

What are the options on the table for a customs deal with the EU? 

With time ticking away on the Brexit negotiations, the Cabinet is still at daggers drawn on the shape for future trade relations with the EU.

The government has set out two potential options for a customs system after the UK leaves the bloc.

But despite a series of tense showdowns at Theresa May’s Brexit ‘War Cabinet’ ministers continue to be deadlocked over what to do.

Meanwhile, Brussels has dismissed both the ideas – and warned that negotiations could stall altogether unless there is progress by a key summit next month.  

Despite a series of tense showdowns at Theresa May's 'War Cabinet' (pictured in February) ministers continue to be deadlocked over what to do

Despite a series of tense showdowns at Theresa May's 'War Cabinet' (pictured in February) ministers continue to be deadlocked over what to do

Despite a series of tense showdowns at Theresa May’s ‘War Cabinet’ (pictured in February) ministers continue to be deadlocked over what to do

OPTION 1 – CUSTOMS PARTNERSHIP 

Under the so-called ‘hybrid model’, the UK would collect EU import tariffs on behalf of Brussels.

Britain would be responsible for tracking the origin and final destination of goods coming into the country from outside the EU. The government would also have to ensure all products meet the bloc’s standards.

Firms selling directly into the UK market would pay the tariff levels set by Brussels – but would then get a rebate if Britain’s tariffs are lower. 

Supporters of the hybrid plan in Cabinet – including Theresa May, Philip Hammond and Greg Clark – say keeping duties aligned up front would avoid the need for physical customs borders between the UK and EU.

As a result it could solve the thorny issue over creating a hard border between Northern Ireland and the Republic.

Mrs May has been advised by the chief whip that the hybrid option could be the only way of securing a majority in parliament for a Brexit deal. 

But Brexiteers regard the proposal as unworkable and cumbersome – and they were joined by Sajid Javid and Gavin Williamson in criticising it at a tense ‘War Cabinet’ meeting last week.

There are fears the experimental system will either collapse and cause chaos, or prevent the UK from being able to negotiate free trade deals around the world after Brexit.

Mrs May has instructed official to go away and revise the ideas. Eurosceptics are braced for her to bring back the plan with only ‘cosmetic’ changes, and try to ‘peel off’ Mr Javid and Mr Williamson from the core group of Brexiteers.

They are also ready for Mrs May to attempt to bypass the ‘War Cabinet’ altogether and put the issue before the whole Cabinet – where she has more allies. 

OPTION 2 – MAXIMUM FACILITATION

Boris Johnson (left) and Liam Fox have been pushing for the 'Max Fac' customs option

Boris Johnson (left) and Liam Fox have been pushing for the 'Max Fac' customs option

Boris Johnson (left) and Liam Fox have been pushing for the ‘Max Fac’ customs option

The ‘Max Fac’ option accepts that there will be greater friction at Britain’s borders with the EU. 

But it would aim to minimise the issues using technology and mutual recognition.

Goods could be electronically tracked and pre-cleared by tax authorities on each side.

Shipping firms could also be given ‘trusted trader’ status so they can move goods freely, and only pay tariffs when they are delivered to the destination country.

Companies would also be trusted to ensure they were meeting the relevant UK and EU standards on products.

Senior ministers such as Boris Johnson, Michael Gove and Liam Fox believe this is the only workable option. 

But Remain minded Tories such as Mr Clark insist it will harm trade and cost jobs in the UK.

They also warn that it will require more physical infrastructure on the Irish border – potentially breaching the Good Friday Agreement. It is far from clear whether the government would be able to force anything through parliament that implied a hard border between Northern Ireland and the Republic.  

The EU has dismissed the idea that ‘Max Fac’ could prevent checks on the Irish border as ‘magical thinking’.

WHO’S IN BREXIT WAR CABINET AND WHERE DO THEY STAND?

Prime Minister Theresa May

Backed Remain, has since insisted she will push through Brexit, leaving the single market and customs union. 

Cabinet Office Minister David Lidington 

A strong Remainer during the referendum campaign, recently made clear he has not changed his mind about it being better if the country had chosen to stay in the bloc.

Chancellor Philip Hammond

Seen as one of the main advocates of ‘soft’ Brexit in the Cabinet. Has been accused of trying to keep the UK tied to key parts of the customs union for years after the transition ends. 

Home Secretary Sajid Javid 

Brought in to replace Amber Rudd after she resigned amid the Windrush scandal, Mr Javid was seen as a reluctant Remainer in the referendum.

Many thought the former high-flying banker would plump for the Leave campaign, but he eventually claimed to have been won over by the economic case. He is likely to focus be guided by evidence about trade calculations in discussions over how closely aligned the UK should be with the EU.

Foreign Secretary Boris Johnson 

The Brexit champion in the Cabinet, has been agitating for a more robust approach and previously played down the problems of leaving with no deal. 

He is unhappy with plans for a tight customs arrangement with Brussels – warning that it could effectively mean being lashed to the EU indefinitely.

Environment Secretary Michael Gove

Has buried the hatchet with Mr Johnson after brutally ending his Tory leadership campaign in the wake of David Cameron’s resignation.

Thought to be less concerned with short term concessions that Mr Johnson, but focused on ensuring the UK is free from Brussels rules in the longer term.

Brexit Secretary David Davis 

A long-time Eurosceptic and veteran of the 1990s Maastricht battles, brought back by Mrs May in 2016 to oversee the day-to-day negotiations.

He has said the government will be seeking a ‘Canada plus plus plus’ deal from the EU. 

International Trade Secretary Liam Fox

Another Brexiteer, his red lines are about the UK’s ability to strike trade deals with the rest of the world, and escaping Brussels red tape. 

Business Secretary Greg Clark  

On the softer Brexit side of the Cabinet, Mr Clark has supported Mr Hammond’s efforts to maintain close links with the customs union.

Defense Secretary Gavin Williamson 

A close ally of the Prime Minister and viewed by some as her anointed successor. He is believed to be siding with the Brexiteers on customs arrangements and the need for Britain to be able to diverge from EU rules.

Northern Ireland Secretary Karen Bradley 

Supported Remain but a relatively unknown quantity on the shape of a deal. Replaced James Brokenshire, another May loyalist, after he resigned on health grounds last month. 

What are the options for the border between Northern Ireland and the Republic after Brexit?

Theresa May and Jean-Claude Juncker agreed the outline of a divorce deal in December

Theresa May and Jean-Claude Juncker agreed the outline of a divorce deal in December

Theresa May and Jean-Claude Juncker agreed the outline of a divorce deal in December

Theresa May and the EU effectively fudged the Irish border issue in the Brexit divorce deal before Christmas.

But the commitments to leave the EU customs union, keep a soft border, and avoid divisions within the UK were always going to need reconciling at some stage. Currently 110million journeys take place across the border every year.

All sides in the negotiations insist they want to avoid a hard border between Northern Ireland and the Republic, but their ideas for how the issues should be solved are very different.

If they fail to strike a deal it could mean a hard border on the island – which could potentially put the Good Friday Agreement at risk.

The agreement – struck in 1998 after years of tense negotiations and a series of failed ceasefires – brought to an end decades of the Troubles.

More than 3,500 people died in the ‘low level war’ that saw British Army checkpoints manning the border between Northern Ireland and Ireland. 

Both London and Dublin fear reinstalling a hard border – whether by checkpoints or other means – would raise tensions and provoke a renewal of extremism or even violence if people and goods were not able to freely cross.

The DUP – which opposed the Good Friday Agreement – is determined to maintain Northern Ireland inside the UK at all costs, while also insisting it wants an open border. 

The UK blueprint:

The PM has made clear her favoured outcome for Brexit is a deep free trade deal with the EU.

The UK side has set out two options for how the border could look.

One would see a highly streamlined customs arrangement, using a combination of technology and goodwill to minimise the checks on trade.

There would be no entry or exit declarations for goods at the border, while ‘advanced’ IT and trusted trader schemes would remove the need for vehicles to be stopped.

Boris Johnson has suggested that a slightly ‘harder’ border might be acceptable, as long as it was invisible and did not inhibit flow of people and goods.

However, critics say that cameras to read number plates would constitute physical infrastructure and be unacceptable.

The second option has been described as a customs partnership, which would see the UK collect tariffs on behalf of the EU – along with its own tariffs for goods heading into the wider British market.

However, this option has been causing deep disquiet among Brexiteers who regard it as experimental. They fear it could become indistinguishable from actual membership of the customs union, and might collapse.

Brussels has dismissed both options as ‘Narnia’ – insisting no-one has shown how they can work with the UK outside an EU customs union.

The EU blueprint:

The divorce deal set out a ‘fallback’ option under which the UK would maintain ‘full alignment’ with enough rules of the customs union and single market to prevent a hard border and protect the Good Friday Agreement.

The inclusion of this clause, at the demand of Ireland, almost wrecked the deal until Mrs May added a commitment that there would also be full alignment between Northern Ireland and the rest of the UK. 

But the EU has now translated this option into a legal text – and hardened it further to make clear Northern Ireland would be fully within the EU customs union.

Mrs May says no Prime Minister could ever agree to such terms, as they would undermine the constitutional integrity of the UK.

A hard border:

Neither side wants a hard border between Northern Ireland and the Republic. 

But they appear to be locked in a cyclical dispute, with each adamant the other’s solutions are impossible to accept.

If there is no deal and the UK and EU reverts to basic World Trade Organisation (WTO) relationship, theoretically there would need to be physical border posts with customs checks on vehicles and goods.

That could prove catastrophic for the Good Friday Agreement, with fears terrorists would resurface and the cycle of violence escalate.

Many Brexiteers have suggested Britain could simply refuse to erect a hard border – and dare the EU to put up their own fences. 

Brussels can’t bear to see us succeed: Commentary by Iain Duncan Smith

Business Secretary Greg Clark, who told the BBC that the customs partnership remained on the table

Business Secretary Greg Clark, who told the BBC that the customs partnership remained on the table

Business Secretary Greg Clark, who told the BBC that the customs partnership remained on the table

At the EU referendum almost two years ago, the British people heroically saw through Project Fear.

In their determination to embrace national independence, they refused to be intimidated by the deceitful scaremongering about our supposedly apocalyptic future after Brexit.

Yet the Establishment has never accepted the democratic verdict of the electorate. 

Unable to imagine life without the EU’s rule, devoid of any real faith in Britain’s capabilities, key elements of the political class have embarked on a systematic campaign to obstruct and emasculate Brexit.

That relentless hostility shone through most recently in debates in the House of Lords, where unelected, unaccountable peers lined up to sneer at the public’s wish for national freedom.

Too much of this spirit of fearfulness and surrender has infused our side in the negotiations with the EU over withdrawal, leading to a catalogue of concessions in return for little.

In the same vein, the Civil Service, those past masters at delay, keep pushing for an ever longer transition period in the hope that institutional inertia may ultimately thwart Britain’s departure. 

Now the Establishment is refusing to let go of its new weapon: the customs union.

Over the weekend, Business Secretary Greg Clark told the BBC that the Theresa May’s proposed new customs partnership – a fudged version of the customs union that was rejected by her Brexit cabinet only last week – remained on the table.

An arrangement of this kind is necessary, he declared, otherwise the British economy will suffer and trade will shrink. 

Gazing into his crystal ball, Clark specifically warned that 3,500 car jobs at Toyota could be at risk without the customs deal.

Whether intentional or not, these comments echo the same old soundtrack of alarm that always accompanies calls for submission to Brussels. 

But Project Fear did not work in 2016 and it will not work now.

That is partly because, as has been well-rehearsed in recent days, the new customs partnership would create a bureaucratic nightmare, hurt our economic prospects, hit our global trade and undermine our democracy.

The jewel in the crown of Brexit will be the ability to reach our own trade deals around the world, particularly with the fast developing nations of Asia – something that Brussels simply cannot stomach. 

In their efforts to hype concerns about Brexit and be as obstructive as possible, EU officials, Dublin and the pro-EU brigade here talk endlessly about the difficulty of the Irish border.

In reality, the ‘Irish question’ has been cynically seized upon and ‘weaponised’ by fearmongering Remainers who hope to cajole us into staying put.

No one actually wants a hard border. 

As John Thompson, the head of the HMRC, has made clear, with goodwill and imagination, the problem is easily resolvable, especially since Britain and Ireland have operated a common travel area since 1923.

Indeed, the whole question of a customs arrangement with the EU has been grossly exaggerated by the Remain lobby. 

Only about 12 per cent of Britain’s GDP involves exports to the EU, while just 8 per cent of British companies trade with EU.

Most of our economy is based on the domestic market, which suffers from Brussels’ protectionist policies that push up prices and increase burdens on businesses.

Freed from the dead hand of Brussels, consumer costs – especially of food – will fall and enterprise will flourish. 

It is absurd to cling to the idea, eagerly peddled by the anti-Brexiteers, that the EU is some kind of engine of economic growth.

Just the opposite is true. EU officialdom is the enemy of jobs and innovation, as is reflected in its cripplingly high rates of unemployment, especially among young people, in EU countries like Spain and Greece.

And EU-led stagnation is bound to worsen in the coming years, as Brussels presses ahead with its cherished ideological project of further political integration.

That will mean more taxation in the name of harmonisation, more regulation, more centralised governance, more streams of directives.

Britain will have to be part of that if we end up in a customs union.

Brexit gives us the chance to break free from the continuing destruction of our sovereignty. That is what the British public recognised in 2016.

Tragically, however, the Establishment, reflected in its doom-mongering asides, remains mired in timid defeatism, reluctant either to challenge the EU or contemplate change.