May’s new customs plan could involve technology and tariff alignment

With the cabinet's Brexit away day at Chequers approaching on Friday, prime minister Theresa May's backbenchers sought in the House of Commons on Monday to secure commitments from her in advance. For the most part, she was happy to oblige, reassuring one Conservative that Brexit did indeed still mean Brexit and another that the interests of business were close to the top of her agenda.

She offered some specific commitments, notably when she told veteran Eurosceptic Bill Cash that remaining in some form of European Economic Area (EEA) like Norway would not deliver on the referendum vote. But she gave no details of her new proposal on customs, which she plans to offer the cabinet instead of the two options that have been under consideration until now.

These were a customs partnership, which would see Britain collecting tariffs on behalf of the EU on imports transiting through the country but possibly imposing a different tariff on imports destined for the British market. The other, known as “maximum facilitation” or MaxFac, would seek to use technological and administrative measures to reduce friction on the borders.

The new proposal, according to some reports, would involve maximum facilitation but would also keep British tariffs aligned with those of the EU. The prime minister is also expected to propose that Britain should remain in full regulatory alignment for goods but not for services.

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Vassal state

For hard Brexiteers in the cabinet and on the Conservative backbenches, such an arrangement would leave Britain as a “vassal state” after Brexit, reduced to the status of a rule-taker from Brussels. Jacob Rees-Mogg’s warning on Monday that May risked splitting her party as Robert Peel did in the 1840s, was an open threat to her own position as well as to her Brexit deal.

The intensity of the hostile reaction to Rees-Mogg from mainstream Conservatives on Monday was striking, with ministers accusing him of everything from insolence to running an “ideological clique”. Backbenchers were blunter, with senior Conservative MP Nicholas Soames telling Rees-Mogg to “shut up”.

The response to Rees-Mogg served as a reminder that, although the hard Brexiteers enjoy the support of much of Britain’s conservative press, they represent only about a fifth of Conservative MPs. Hardcore Remainers form a smaller bloc, with most of the rest favouring a relatively soft Brexit that will do as little damage as possible to the British economy.

It is to this mainstream that the prime minister will appeal as she seeks to negotiate a compromise with her cabinet on Friday. After that, she faces the more daunting challenge of persuading the EU to take her proposal seriously.