Theresa May’s Chequers compromise to result in ‘softest possible Brexit’
Theresa May's "third way" on the UK's future relationship with the EU is looking increasingly likely to steal elements from both customs options as she hopes to end the divisions among her Cabinet team at Chequers this Friday.
Morning Wire understands it will take much from the so-called max fac option, beloved of Brexiters, which uses technology to facilitate a smooth process at the Irish border, while incorporating some of the new customs partnership, preferred by the Prime Minister and advisers such as Olly Robbins.
According to the BBC, the critical component of the original NCP proposal which will be included in the final plan is that the UK will collect duties on imports at the rate of the European Union's common customs tariff, making the UK in effect the EU's tax collector.
The BBC argues this will result in "the softest possible Brexit" – although sources have previously told Morning Wire the compromise was more likely to yield "the softest of hard Brexits".
That would allow the UK to strike new trade deals with third countries while effectively remaining in the custom union, as a way of avoiding a hard border in Ireland.
As previously reported by Morning Wire, there will also have to be a high degree of alignment on product standards and regulation, effectively creating a Single Market for goods.
However this proposal has already been rejected by at least one Brexiter.
Backbencher Bernard Jenkin tweeted last night: "Cabinet will not agree this on Friday, or govt wd be playing into the hands of EU/Remainers: this deal wd deliver Brexit but without any of its freedoms or advantages."
Fellow Tory Owen Paterson, who is a board member of Leave Means Leave, said: "The so-called ‘third way’ solution to our future customs relationship with the European Union is little more than a rebrand of the ‘New Customs Partnership’ which the Government presented last year. At the time, the proposal was unacceptable and this ‘new’ approach retains all of the worst deficiencies of the old."
It is understood members of the Eurosceptic European Research Group (ERG) met with chief whip Julian Smith yesterday to warn him of the repercussions to the party in general – and Theresa May in particular – if any red lines were crossed.
On services, it appears the Prime Minister is hoping to strike a deal whereby preferential rights may be offered to EU citizens in return for improved market access. However, that would go against new home secretary Sajid Javid's plan to create a level playing field for all would-be immigrants by adopting an Australian-style points system.
Either way, by Friday May will have to convince pro-Leave Cabinet ministers including Boris Johnson, Liam Fox and Michael Gove that she is not undermining the whole point of Brexit, while keeping Remainers who fear massive disruption to business, such as Philip Hammondand Greg Clark.
Morning Wire understands that Brexit secretary David Davis told his Cabinet colleagues that the Brexit white paper will be published on 9 July – next Monday – leaving little time to resolve any disagreements that may remain after Friday's summit.