Theresa May has been warned that her government could ‘collapse’ if she goes ahead with plans for a customs partnership with the EU against the wishes of Brexiteers.
The Prime Minister faces a showdown in a meeting with her Brexit ‘war cabinet’ today after sixty Eurosceptic Tory MPs sent a 30-page report to Downing Street savaging the plan.
The damning report – compiled by the European Research Group, which is led by Jacob Rees-Mogg – claimed the plan would ‘festoon the entire economy with burdensome controls, while crippling the ability of the UK’ to negotiate trade deals.
The Prime Minister faces a showdown in a meeting with her Brexit ‘war cabinet’ today after sixty Eurosceptic Tory MPs sent a 30-page report to Downing Street savaging the plan
Boris Johnson (right), Michael Gove, David Davis (left) and Liam Fox will also form a united front against the proposal, a source said
Downing Street has reportedly been warned in correspondence that accepting the customs partnership deal would bring about the ‘collapse’ of the Government. Pictured: Environment Secretary Michael Gove, who is said to be willing to form a united front against the plan
It has become such a divisive issue for the group that sixty of its backers have threatened to withdraw their support from the Government in Parliament, sources told The Daily Telegraph.
Boris Johnson, Michael Gove, David Davis and Liam Fox will also form a united front against the proposal, a separate source said.
The move would effectively paralyse the Government’s ability to pass bills in the Commons – where Mrs May has a meagre majority of 13 – and could bring her premiership to an end.
Downing Street has reportedly been warned in correspondence that accepting the customs partnership deal would bring about the ‘collapse’ of the Government.
One European Research Group source told The Telegraph: ‘We have swallowed everything so far – but this is it.
‘If they don’t have confidence in Brexit we don’t have confidence in them. The Prime Minister will not have a majority if she does not kill off the NCP [New Customs Partnership].’
Liam Fox (pictured in Downing Street today) stopped short of saying explicitly that he would quit if Mrs May changed course, but left little doubt about his intentions
Brexiteers fear Mrs May will side with Mr Hammond, Business Secretary Greg Clark and her chief Brexit adviser Olly Robbins, who are championing the idea.
The leading Brexiteers fear it would effectively keep the UK inside the EU’s customs union and wreck hopes of an independent trade policy.
‘The four are unambiguous in thinking this is a terrible idea,’ the source said.
Mr Gove has described the plan as ‘bonkers’ and Dr Fox yesterday hinted he could even resign if it went ahead.
Mr Davis, who has dismissed the proposal as ‘blue sky thinking’, is also reported to have told friends he could quit. Aides played down the prospect of a walk-out however.
The four hope to ‘peel off’ Defence Secretary Gavin Williamson and new Home Secretary Sajid Javid, both former Remainers.
Jacob Rees-Mogg urged the Prime Minister to abandon the partnership plan and challenge Remainers in Parliament who want to keep Britain inside the customs union.
The Eurosceptic MP said the partnership proposal, which has the backing of Chancellor Philip Hammond, would ‘result in the worst of all worlds and make us a vassal state’.
The Prime Minister is expected to warn ministers the proposal is the only one that can resolve the Northern Ireland border problem and get through Parliament.
One Whitehall source said the PM was more concerned about the prospect of a defeat in Parliament by diehard Remainers led by former attorney general Dominic Grieve than by the risk of a mutiny by Tory Eurosceptics.
‘The bottom line is, she is more afraid of Grieve than she is of Iain Duncan Smith,’ the source said.
Another source said Mrs May could try to fudge the issue at today’s two-hour meeting to prevent destabilising the Government ahead of tomorrow’s local elections.
But if a deal is signed off it could be approved by the full Cabinet as early as next week.
Cabinet sources played down the prospect of immediate resignations, suggesting Eurosceptic ministers would rely on Brussels killing off the proposal later in the year.
Opinion in Mrs May’s 11-strong Brexit war cabinet is finely balanced. Friends of Mr Javid acknowledge he has held ‘bracingly Eurosceptic’ views for years, but point out that he is a pragmatist who ended up backing Remain in 2016.
Mr Williamson is opposed to the UK remaining in any customs union. But allies suggested he could be swayed by his loyalty to the PM. Today’s meeting has been called to discuss the Government’s two options for future customs dealings with the EU.
The ‘new customs partnership’ would require officials to track the final destination of all goods entering the UK and hand over relevant tariffs to Brussels on goods ending up in the EU. It would also require alignment with EU regulations in some sectors.
The second option – known as ‘maximum facilitation’ – is a looser arrangement, which would use technology to streamline customs controls, particularly at the Irish border.
The four hope to ‘peel off’ Defence Secretary Gavin Williamson (pictured) and new Home Secretary Sajid Javid, both former Remainers
The Prime Minister is expected to warn ministers the proposal is the only one that can resolve the Northern Ireland border problem and get through Parliament
The EU has raised doubts about whether controls could ever be seamless enough to prevent the need for a hard border on the island of Ireland.
Eurosceptic MPs have warned that Mrs May could face a leadership challenge unless she opts for a clean break with Brussels. One former minister said: ‘This would be the final straw.’
Unconfirmed reports earlier this month suggested that EU officials had dismissed both UK proposals. Mr Davis yesterday told the House of Lords EU committee: ‘The Commission did push back on both.’
Downing Street fears the Government’s hands could be tied if Remainers in Parliament rally round an amendment to the Trade Bill tabled by former Tory Minister Anna Soubry to keep Britain in a customs union.
Insiders believe the partnership idea could buy off enough rebels to avoid defeat.
Downing Street last night insisted the scheme could be delivered on time.
The damning report – compiled by the European Research Group, which is led by Jacob Rees-Mogg (pictured) – claimed the plan would ‘festoon the entire economy with burdensome controls, while crippling the ability of the UK’ to negotiate trade deals
A No 10 spokesman said: ‘We are leaving the customs union and won’t be joining a customs union. We have put forward two proposals for addressing the customs issue in general and they will be discussed by the Government further.’
Yesterday, Dr Fox ramped up the pressure on May over Brexit – making clear he is ready to quit if she drops her red line on leaving the customs union.
The Trade Secretary said any form of customs union with the EU would be ‘unacceptable’ and worse than the UK’s current membership terms with the bloc.
The PM has repeatedly pledged that there will be no customs union after Brexit, but is struggling to find a way of reconciling the demands of Brexiteers and Remainers.
Tory rebels are threatening to side with Labour and other parties in a Commons vote on staying in the customs union expected next month.
They say keeping the ties are the only way to protect the economy and prevent a hard Irish border.
The Lords has already passed an amendment to the EU Withdrawal Bill designed to maintain a customs union – although ministers believe it is so loosely worded as to have little real impact.
But Eurosceptic Tories say they could move against Mrs May unless she holds the line on the crucial issue and ensures the UK can strike trade deals around the rest of the world.
The Cabinet met yesterday but is not thought to have discussed Brexit.
A key moment could come tomorrow when a powerful sub-committee meets to thrash out the UK’s position – although it could delay a final decision.
Brexiteers have been trying to kill off a plan for a ‘customs partnership’ with the EU, which would see the UK collect taxes on behalf of the bloc.
Dr Fox said yesterday that staying in any form of customs union was not an option.
‘I don’t think we can stay in the customs union for a number of reasons, the main reason being that we would be in a worse position than we are today,’ he told BBC Radio 4’s Today programme.
‘If we were in a customs union with the European Union we would have to accept what the EU negotiated in terms of market access to the UK without the UK having a voice.
‘That’s worse than the position in which we found ourselves today in the European Union.
‘I don’t think there is a customs union that could ever be acceptable.
‘If we are in a customs union of any sort we will have less ability to shape Britain’s future than we have today. That is not what the public voted for.’
Dr Fox refused to say explicitly that he would quit if Mrs May changed course, but left little doubt about his intentions.
‘Getting no answer you can draw your own inferences,’ he said.
Mrs May’s task might have been made more difficult by Amber Rudd’s resignation amid the Windrush fiasco.
The Cabinet has been carefully designed to represent both Europhile and Eurosceptic factions within the Tory party – with Mrs May theoretically having a casting vote.
But while Ms Rudd was a full-hearted Remainer, it is not clear where her replacement Sajid Javid will fall in the debate.
He was seen as a reluctant backer of EU membership during the referendum two years ago.
The PM – pictured chatting with pupils at Brooklands Primary School in Sale, Manchester yesterday – is facing a battle to hold the Cabinet together behind her Brexit plans
Trade Secretary Liam Fox (pictured right arriving for Cabinet with Boris Johnson today) said any form of customs union with the EU would be ‘unacceptable’
Mr Javid, pictured on his way to work this morning, is set to play a crucial role in the looming clashes over a future trade deal with the EU. But Ms Rudd, pictured leaving her London home today, has returned to the backbenches
Amber Rudd was thought to have been backing Mrs May ahead of a crunch showdown on the customs union in the Brexit ‘war Cabinet’ sub-committee (pictured together in February). But it is unclear where Mr Javid will fall on the issue