Theresa May’s cabinet is embroiled in a fresh Brexit row — just days before a vital four-hour showdown.
The Prime Minister’s advisers are drafting plans to form a new customs union with the EU for the free trade of goods but not services.
The members of the split Brexit war committee will hold meetings on Wednesday and Thursday to reach a final position.
The two morning meetings have been scheduled to last two hours each.
The Prime Minister’s advisers are drafting plans to form a new customs union with the EU for the free trade of goods but not services
Backers of Chancellor Philip Hammond say the plan would solve myriad issues, including that of the Irish border.
Mrs May was said to be keeping ‘an open mind’ on the Brexit negotiations, according to Downing Street.
However, Liam Fox, the International Trade Secretary, said: ‘It is very difficult to see how being in a customs union is compatible with having an independent trade policy.
Dr Fox said: ‘It is very difficult to see how being in a customs union is compatible with having an independent trade policy.
International Trade Secretary Liam Fox said: ”It is very difficult to see how being in a customs union is compatible with having an independent trade policy’
‘We have to be outside of that to take advantage of those growing markets.
‘One of the reasons we are leaving the European Union is to take control and that’s not possible with a common external tariff.’
During his visit to China, he told Bloomberg TV: ‘We would be dependent on what the EU negotiated, and we have to be outside of that to take advantage of those growing markets.’
Foreign Secretary Boris Johnson and Michael Gove will this week also warn against joining a post-Brexit customs union.
They and Mr Fox will say Britain must be able to strike free trade deals after it leaves the EU as the issue is debated for the first time by senior members of the Government.
It comes after Theresa May yesterday insisted Brexit would go ahead even if a Whitehall analysis said it could harm Britain’s economy.
The Prime Minister said she would look at forecasts for the impact of leaving the EU but it was crucial the government ‘does what the British people want us to do’.
Mrs May also dismissed criticism of her leadership and handling of negotiations, saying she believed a transition deal will be negotiated by March and repeating that she had no intention of quitting.
The defiant stance came amid a huge row over a leaked study that suggested the economy will take a hit whatever deal is done with Brussels.
UK plc would be up to 9 per cent smaller in 15 years time than if it remained in the bloc, according to the assessment.
But the document sparked a furious backlash from Eurosceptics who condemned it as the latest tranche of Project Fear.
Brexit minister Steve Baker was forced to apologise last night after delivering a veiled jibe about civil servants producing evidence in a bid to stop Brexit.
In a round of broadcast interviews as she wrapped up her trip to China this morning, Mrs May made clear that the economy was not the only consideration in Brexit.
‘It’s important of course that the government looks at the analysis that is available,’ she told ITV News.
‘But of course it’s also important that the government does what the British people want us to do — the British people want us to leave the European Union and that is what we will be doing.’
Mrs May was shown the Yuyuan Garden in Shanghai after spending the trip pushing for more trade with the guant economy
The Prime Minister, pictured meeting schoolchildren with husband Philp in Shanghai yesterday, said she would look at forecasts for the impact of leaving the EU but it was crucial the government ‘does what the British people want us to do’
Mrs May said she did not believe Britain had to choose between the EU and the rest of the world.
‘I don’t believe that those are the alternatives,’ she said.
‘What the British people voted for is for us to take back control of our money, our borders and our laws and that’s exactly what we are going to do.
‘We also want to ensure that we can trade across borders.’
She added: ‘What I favour is a deal, an arrangement for trading with the European Union which is going to be good for trade between the UK and the European Union and good for jobs in Britain.’
Mrs May also backed Mr Baker after he was forced to retract comments in the House of Commons yesterday about the actions of civil servants.
Mrs and Mr May did a walkabout in Shanghai yesterday as the three day visit drew to a close
Mr Baker told MPs he had heard an ‘extraordinary’ claim from Charles Grant of the respected Centre for European Reform think-tank that evidence was being manipulated in Whitehall.
But Mr Grant hit back insisting that he had not said the Treasury was deliberately concocting dire warnings to keep Britain in the customs union.
Mr Baker retracted his remarks after a recording of the exchange emerged with Mr Grant stating that the Treasury is ‘determined’ to stay in the customs union – but not going further.
The row erupted as Theresa May’s allies fought to quell anxiety that she is ‘going soft on Brexit’ and getting ready to change her position and keep the UK in the EU customs union.
Eurosceptics have warned that they will not accept BRINO – Brexit In Name Only – and leadership chatter has been rising.
Other backbenchers are also unhappy about the government’s ‘timid’ domestic policies, and are demanding that Mrs May becomes more bold or makes way for someone else.
Mrs May set a collision course with Brussels yesterday by promising to reject calls for EU citizens who come to the UK during a transition phase to have permanent residency right.
Tory MP Johnny Mercer yesterday gave conditional support to the PM, saying she is the ‘best and the only option’ to lead the Tories ‘at the moment’.
He told BBC Radio 4’s Today programme that Mrs May was ‘in a very difficult position’ over Brexit.
Allies of Mr May (pictured with husband Philip in Shanghai yesterday) have been fighting to quell anxiety that she is ‘going soft on Brexit’
‘This is what people voted for, people did know there was going to be a period of uncertainty,’ he said.
‘Like anybody else, I would like to see a vision on it.’
There are ‘fundamental questions’ she needs to answer but ‘there is no point going into a negotiation saying ‘this is what I want from it’ and showing all your cards straight away,’ he acknowledged.
The Plymouth Moor View MP insisted that Brexit was ‘not the defining issue’ of the Conservative Party. With an eye on May’s local elections, he said: ‘We need to see more vision, we need to give people something to vote for.’