Whitehall source says defence secretary will be asked to name his price to break deadlock

Pro-Brexit ministers fear Downing Street will try to pick off the defence secretary, Gavin Williamson, in the coming days – to break the cabinet deadlock and secure a majority for Theresa May’s favoured customs plan.

A two-and-a-half-hour meeting of the prime minister’s Brexit subcommittee ended without agreement on Wednesday, after the home secretary, Sajid Javid, sided with hardline Brexiters to reject a new customs partnership.

Williamson, who was rapidly promoted from chief whip to defence secretary, was the least vocal of those expressing doubts about the customs partnership on Wednesday. “They’ll call him in and try to promise him something; they’ll ask him what his price is,” said one Whitehall source.

The customs partnership, favoured by Downing Street, would see Britain collect tariffs on the EU’s behalf. Brexiters fear it would be bureaucratic for businesses and could limit the UK’s capacity to diverge from EU rules in future.

But its backers, who include the chancellor, Philip Hammond, and the business secretary, Greg Clark, believe it is the only plan that has a chance of avoiding a hard border in Ireland.

Q&A What is a customs union? Show Hide A customs union means that countries agree to apply no or very low tariffs to goods sold between them, and to collectively apply the same tariffs to imported goods from the rest of the world. International trade deals are then negotiated by the bloc as a whole. For the EU, this means deals are negotiated by by Brussels, although individual member state governments agree the mandate and approve the final deal. The EU has trade deals covering 69 countries, including Canada and South Korea, which the UK has been attempting to roll over into post-Brexit bilateral agreements. Proponents of an independent UK trade policy outside the EU customs union say Britain must forge its own deals if it is to take advantage of the world’s fastest-growing economies. However they have never explained why Germany manages to export more than three times the value in goods to China than Britain does, while also being in the EU customs union. Jennifer Rankin

Pro-Brexit ministers prefer the alternative of maximum facilitation, or “max fac”, in which technology would be used to minimise cumbersome border checks. Brussels has rejected both plans as unworkable in their present form.

The government first outlined the two proposals last August, but the prime minister has yet to secure the backing of her cabinet colleagues for one plan. The resignation of ardent remainer Amber Rudd has left the Brexit inner cabinet deadlocked.

No vote was taken on Wednesday, but insiders said six of the 11 members spoke against the customs partnership plan. The chief whip, Julian Smith, attends the meetings, but Downing Street said on Thursday he was there in a “non-voting capacity”.

May faces another headache, however, getting either of the two customs options through the Commons. There were suggestions last night that she is considering delaying key bills until the autumn to try to avoid a damaging defeat.

Smith was said to have warned the prime minister that she does not have the numbers needed to prevent around 20 Remainer Tory MPs siding with Labour to amend the customs bill and the trade bill to stay in the customs union.

It would mean waiting until a final withdrawal deal is agreed at a Brussels summit in October before holding a Commons vote, which would leave only a short window to pass other major Brexit legislation before leaving the EU on 29 March next year.

Jacob Rees-Mogg’s powerful backbench European Research Group, which sent the prime minister a 30-page report opposing her preferred plan, believes it has Williamson’s support against the customs partnership option, which Rees-Mogg has called “cretinous”.

The defence secretary used a speech at the Churchill War Rooms earlier this week to argue that “in a post-Brexit world, our only limit will be our imagination”.

Asked about support for the customs partnership, an ally of Williamson said: “Gavin will look at the options and do what he believes is the right thing for Britain.”



The Brexit secretary, David Davis, told MPs on Thursday that both the government’s two options remained on the table. “Both of these approaches have merits and virtues, both have some drawbacks and that’s why we’re taking our time over the discussion on this,” he said.



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Whitehall officials are hastily working on refining both plans, despite the fact that one was rejected by May’s Brexit subcommittee.

Davis has told allies he hopes to find a way through the cabinet impasse in the next week – though he doesn’t yet know how.

The chancellor and business secretary have urged their colleagues to reach a resolution as soon as possible, or risk businesses losing confidence in being able to trade freely with the EU after Brexit.

Downing Street sources acknowledged the “urgency” of reaching a conclusion about which approach the government will seek to negotiate with Brussels.

Answering questions from MPs, Davis refused to set a deadline for choosing one of the two options. “It’s frankly incredibly important that we get this right, not just for trade but for the extremely sensitive issue of maintaining the peace process in Northern Ireland,” he told the Commons. “I don’t undertake to put an artificial deadline on something as important as that.”

Privately, Davis backs the max fac option, though he has loyally kept both plans alive in public. He told MPs the customs partnership was “a brand new idea: it’s never been tested anywhere in the world”.

The prime minister’s spokesman sought to play down the significance of Wednesday’s deadlock. “There’s an ongoing process of putting together the plans that will allow us to leave the EU in the smoothest possible way,” he said.

Davis also reiterated the government’s commitment to leaving the customs union, a policy for which it is unclear whether May could command a majority in the Commons.

Senior civil servants are believed to have told ministers that highly complex new technology for Britain’s borders will take years to be ready, meaning the UK will be unable to leave the customs union before 2023, prompting Brexiter fears the delay will be used to thwart Brexit.