May Faces Internal Revolt Over Customs Plan
Prime Minister Theresa May is facing an internal revolt this afternoon at the Brexit Sub-Committee meeting as cabinet members prepare to take up arms over two options for customs union membership.
The Government will consider two options for Britain’s future relationship with the EU. The first “customs partnership”, which has the backing of Chancellor Philip Hammond and Business Secretary Greg Clark, would remove the need for new customs checks at the border. The UK would collect tariffs set by the EU customs union on goods coming into the UK on behalf of the EU. If those goods didn’t leave the UK and UK tariffs on them were lower, companies could then claim back the difference.
The second is a “highly streamlined” customs arrangement, which would minimise customs checks but not altogether remove them; it would involve the use of new technologies and trusted trade schemes. It’s thought this would allow companies to pay duties in bulk every few months as opposed to each time a good crosses a border.
It’s been revealed that Brexit Secretary David Davis, Foreign Secretary Boris Johnson, Trade Secretary Liam Fox and possibly Environment Secretary Michael Gove will object to the “customs partnership”, in a move that could threaten to topple Theresa May from her job.
It’s understood that these powerful Brexit figures believe that the “customs partnership” will not allow Britain to fully extract itself from European rules and regulations and would not be free to formulate its own agreements with other countries. An ally of Mr Davis has said that he is “not relaxed” over the issue and has made his “scepticism clear in public.” The Prime Minister may have to circumvent her own Brexit Secretary in the meeting this afternoon. Foreign Secretary Boris Johnson is expected to back Mr Davis and Mr Gove is not expected to put up much of a fight.
However, the Daily Mail has reported today that Liam Fox is prepared to resign over the issue, finding the customs partnership “completely unacceptable.”
It is not just cabinet members who are currently putting pressure on the PM however. Lord Macpherson of Earls Court, a cross-bench peer and former Permanent Secretary to the Treasury, has labelled the move as a ‘bonkers’ move, made merely to keep Europhile Tories on side.
Prospect of “customs arrangement” may keep europhile Tories on side pro tem. But I fear it is neither negotiable nor implementable. #bonkers
— Nick Macpherson (@nickmacpherson2) May 2, 2018
Lord Macpherson has been joined by leader of the Eurosceptic MPs, Jacob Rees-Mogg who has labelled the customs partnership as “deeply unsatisfactory.” Last night Rees-Mogg on behalf of his research group the European Research Group (ERG) handed the Prime Minister a 30-page document detailing their opposition to the proposal.
Eurosceptic’s argue that such an agreement would could see the UK collect tariffs on behalf of Brussels, which would lead to a complicated and unworkable relation ship. They subsequently point to the fact that the EU has rejected the idea from the UK previously and that the situation is unlikely to change. Finally and crucially, they argue that entering such a relationship with the EU would not provide the UK the freedom to go and strike their own trade deals, without being tied to the restrictions of EU regulations. They believe that it is the “single market by another name.”
The meeting this afternoon will be a great test for the Prime Minister. Nevertheless, we should not expect a final decision to be announced today. As David Liddington, the cabinet office minister and one of those attending the meeting, indicated today, a final decision may not be reached, with the full cabinet expected to consider the issue.