Brexit war cabinet mired in trenches over customs plan

PA Wire On Monday the unelected House of Lords attempted to tie the hands of the Government

Business leaders do not like British Prime Minister Theresa May's preferred post-Brexit customs option, according to the consultancy group KPMG.

A customs partnership- believed to be the preferred choice of chancellor of the exchequer Phillip Hammond- would see the United Kingdom collect European Union tariffs on the bloc's behalf on goods from outside countries and could go some way to addressing the Irish border problem.

The debate over a future customs relationship with the bloc will be "a vital part of any future trade deal, as the United Kingdom exports 50% of its goods to the EU", says the BBC's Kamal Ahmed.

New Cabinet members Sajid Javid and Gavin Williamson both came out in the meeting against the "customs partnership" model, under which the United Kingdom would collect tariffs on behalf of the EU.

A CRUNCH meeting of Theresa May's "Brexit war cabinet" last night failed to agree over plans on the future of the customs union.

Prominent pro-Brexit Conservative legislator Jacob Rees-Mogg said the idea was "deeply unsatisfactory".

Earlier this month European Union chief negotiator Michel Barnier's team called both options "unworkable", but "British Brexit officials say special scorn was reserved for the second "max fac" option, which would still leave a customs border in Ireland", reports the FT.

In a meeting which ran over to last two and a half hours, May told colleagues that the final arrangement must ensure there is no hard border between Northern Ireland and the Republic and no customs border down the Irish Sea, and leave trade with the remaining European Union "as frictionless as possible". But any solution would aim to avoid the need for physical border checks on the island of Ireland.

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Shortly before a meeting of ministers to discuss the plans - and just months before London hopes to strike the final deal in October - May's spokesman said ideas for a solution were "evolving".

Former Brexit minister David Jones told BBC's Newsnight: "Certainly there would be a lot of very disappointed Brexiteers if we were to end up in a customs partnership".

But that scheme is being strongly opposed by Chancellor Philip Hammond.

He denied he was "making threats" but the Conservatives have only a slim majority in the House of Commons and May could not survive a rebellion by ERG MPs.

In Brussels, where negotiations have all but reached a standstill and both the current proposals are considered nonstarters, all sides watched for signs of a fresh offer from the United Kingdom, three senior officials said.

The easiest way to solve the problem, May's critics say, is to stay in the customs union or negotiate a new one along the lines proposed by the main opposition Labour Party.

Throughout the two years since Britain voted to leave the European Union, May has avoided binary decisions, seeking instead to weave a compromise path by bringing both Brexiteers and Remainers along with her by picking off one contested issue after another.

"The Prime Minister's calculations have got to include exactly what reaction there would be from the parliamentary party and the wider Conservative Party if we were to enter into that sort of relationship".

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