Theresa May clashed with Jacob Rees-Mogg over the Irish border issue last night as she mounted a desperate bid to win over MPs to her Brexit plans.
The PM Theresa May and the senior Brexiteer crossed swords after all backbenchers were summoned to Downing Street for briefings on the government’s rival customs blueprints.
The meetings were called as Mrs Theresa May struggles to defuse the mounting Tory civil war on Brexit – with her Cabinet at daggers drawn on the shape of future trade.
The premier is facing the threat of a potentially catastrophic revolt by ministers if she tries to force through the ‘customs partnership’ she is thought to favour – which would see the UK collect taxes on behalf of Brussels and then offer businesses a rebate.
But whips also fear she has no chance of getting the Brexiteers’ ‘Maximum Facilitation’ proposal through the Commons. That would rely on technology and trusted trade schemes to keep trade fluid and avoid a hard Irish border.
Meanwhile, at least a dozen Tory Remainer rebels are threatening to side with Labour in a looming vote on whether to stay in the customs union – something Mrs Theresa May has repeatedly ruled out.
There are growing signs of EU frustration about the impasse. The bloc’s chief negotiator Michel Barnier jibed last night that there had only been a ‘little progress’, and suggested Britain was acting more like a country at the beginning of an accession process than one that had a plan to leave.
At a meeting attended by Mr Rees-Mogg last night, Mr Mrs Theresa May was said to have ‘slapped him down very hard’ for suggesting Britain could merely refuse to enforce a border between Northern Ireland and the Republic if there is no deal with the EU.
The premier is said to have responded that EU rules would oblige the bloc to construct infrastructure even if the UK did not – and warned against actions that would cause fury from moderate nationalists.
One Tory who was in the room told The Times: “She slapped him down very hard. Everyone thinks he knows what he’s on about but she got him on facts.
‘She was absolutely firm and passionate about the Irish position. I got a sense she realises what really matters.”
Mr Rees-Mogg has insisted his exchanges with the PM were ‘very cordial’.
But in an article for the Daily Telegraph today, he urged her to act with more “firmness and tenacity”.
He accused the EU of treating Britain with “disdain” and using the Irish border issue to undermine Brexit.
If Brussels or Dublin “insist upon rejecting all the practical approaches that we propose” the UK ‘will simply have to leave with no deal”, he insisted.
Sources at the presentations yesterday said No 10 chief of staff Gavin Barwell admitted that plans for a customs partnership – which was the Prime Minister’s preferred option – could deter foreign firms wanting to do business with the UK.
The complex scheme, described as ‘blue sky thinking’ by Brexit Secretary David Davis, would see the UK collecting EU import tariffs at the border and passing them to Brussels.
While firms would be able to claim rebates in cases where the UK set lower tariffs, Mr Barwell is said to have conceded that the administrative burden could be offputting for some businesses.
But he is also said to have warned MPs of problems with the so-called ‘Max Fac’ alternative.
MPs were told it would not fully solve problems surrounding the Irish border, where the PM has ruled out checkpoints and cameras.
Yesterday’s meetings were offered to all Conservative MPs, as Mrs Theresa May tries to reassure all sides of the party that she is trying to act in the national interest.
After introductory comments from the Prime Minister, Mr Barwell set out the pros and cons of the customs partnership and Max Fac options, shown side by side ‘like a price comparison website’, according to one MP who attended.
Mr Barwell said neither option would work ‘in its current form’ but that two Cabinet working groups were refining them in the hope of finding a solution.
The Brexit War Cabinet is meeting again later as work continues to try and break the deadlock. But backbenchers have been told not to expect any breakthroughs at this stage, as the working groups are expected to take weeks to draw up revised proposals.
Jeremy Hunt delivered an extraordinary rebuke to Boris Johnson yesterday for publicly branding the customers partnership idea ‘crazy’ – suggesting the Foreign Secretary should ‘belt up’ and focus on working with colleagues on a compromise.
He accused Mr Johnson of handing Brussels a negotiating advantage by revealing divisions.
Pro-Brexit ministers fear that the customs partnership would lead to the UK staying in the customs union by the back door, wrecking hopes of Britain forging its own trade policy.
Mrs May’s former deputy Damian Green suggested she was likely to side with Cabinet Brexiteers but could insist on a longer transition before new arrangements come into effect.
But her official spokesman said there were ‘no plans’ to extend the customs transition beyond the end of 2020.
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.
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 Theresa 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 Theresa 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 Theresa 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
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’.