Theresa May and her team "will not be crying into our beer" if they are forced to stay in a customs union.

May's advisers believe a U-turn could force the International Trade Scretay Liam Fox and the foreign secretary Boris Johnson to resign.

However, the government faces a series of parliamentary defeats over the issue and is increasingly resigned to surrender.

A Customs Union U-turn would go a long way to resolving May's difficulties preventing a hard border with Northern Ireland and the EU.



LONDON — Theresa May is preparing to surrender over her promise to leave the Customs Union with senior advisers to the prime minister telling the Sunday Times that she is now willing to live with a Commons defeat on the issue.

The prime minister and her Cabinet have repeatedly promised that Britain will leave the EU Customs Union and not join any similar arrangement, after Brexit.

However, plans to follow through with this commitment were defeated in the House of Lords earlier this week and ten Conservative MPs have already signed an amendment to the government's Trade bill which could force a rethink. The government is also facing a parlimentary defeat on a debate over the issue next week.

As a result May's senior advisers now privately concede that a U-turn could be inevitable with one reportedly telling a meeting last month that the prime minister and her top team "will not be crying into our beer" if they are forced to think again about cutting customs ties with the EU.

Such a U-turn would be popular with business leaders and go a long way to resolving May's difficulties in preventing a hard border with Ireland after Brexit.

However, it would also be hugely controversial with senior members of the Cabinet, with Downing Street now believing that the International Trade Secretary Liam Fox and the Foreign Secretary Boris Johnson could both resign.

In one meeting attended by Oliver Robbins, May’s chief Brexit negotiator, government officials predicted that while some Cabinet Brexiteers such as the Environment Secretary Michael Gove and the Brexit Secretary David Davis would accept an about-turn, Johnson and Fox would likely quit. Johnson has previously said that staying in a customs union would be "worse" than remaining in the EU.

Hardline Brexiteer Conservative MPs have privately warned the prime minister that any further retreat on Brexit could lead to an attempt to topple her.

"The only thing that will save her now is if she makes clear that there will be no more backsliding," one member of the anti-EU grouping the European Research Group led by Jacob Rees-Mogg told Business Insider earlier this year.

Conservative MP Andrew Bridgen told BI last month that any further retreat would prevent him from backing the final Brexit deal.

"If they want my support for the final deal they can't move away from the prime minister's '[Mansion House] speech," Bridgen said.