Government at risk of 'collapse' as May warned by 60 Tory MPs Brexit customs partnership will sink her

Theresa May

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Theresa May has been warned her government will "collapse" if she does not abandon plans for a post-Brexit customs partnership with the EU.

Sixty eurosceptic Tory MPs from the European Research Group, led by Jacob Rees-Mogg, have sent the Prime Minister a 30 page report detailing their opposition to the plan.

Number 10 have been directly warned in correspondence that accepting a customs partnership will lead to a "collapse" of the government because it would mean Mrs May cannot deliver a clean break from the EU and would lose the support of Brexiteers.

Sources have told the Telegraph that the Tory MPs will consider withdrawing support for Government Bills in Parliament, which would lead to legislative paralysis and put Mrs May’s future as leader in doubt.

The threat of rebellion grew when David Davis wrote to Mrs May in recent days arguing “strongly” against the idea.

Mrs May is expected to choose between a customs partnership and an alternative “highly streamlined” customs arrangement when the Cabinet’s Brexit negotiating sub-committee meets on Wednesday.

Mrs May and Philip Hammond, the Chancellor, are expected to make the case for a customs partnership, but the ERG, which has remained loyal despite a string of Brexit concessions, has made it clear that choosing a customs partnership would cross a red line.

One senior minister said the decision would be “a critical moment in our nation’s history”.

There have been reports that Brexit Secretary Mr Davis will consider resigning if the customs partnership becomes the preferred option.

The threatened rebellion would be the biggest of Mrs May’s premiership and the ERG memo has made clear the strength of opposition to her plan. 

One ERG source said: “We have swallowed everything so far – but this is it. If they don’t have confidence in Brexit we don’t have confidence in them. The Prime Minister will not have a majority if she does not kill off the NCP [New Customs Partnership].”

Mr Rees-Mogg added: “The customs partnership is incompatible with the Conservative party manifesto.”

A copy of the report, obtained by The Daily Telegraph, dismantles the argument for a customs partnership which Brexiteers fear will keep Britain effectively in a customs union with the European Union after the UK leaves in March next year.

Reports have suggested Brexit Secretary David Davis will consider resigning if the customs partnership becomes the preferred option
Reports have suggested Brexit Secretary David Davis will consider resigning if the customs partnership becomes the preferred option Credit: Hannah Mckay/REUTERS

The ERG insists the Government must stick with an alternative customs arrangement which would use technological solutions and trusted trader status schemes to solve the issue of the Irish border.

On Tuesday, Liam Fox warned he could quit as Trade Secretary if Mrs May tried to keep Britain tied to the customs union after Brexit.

The ERG has chosen to speak out now after supporting Mrs May over previous concessions to the EU, including the £38billion bill to leave the EU, as well as surrendering control over fisheries and allowing freedom of movement during the transition period until the end of 2020.

A mass meeting of ERG members has now been called for Tuesday next week – the day the full Cabinet is expected sign off on the deal hammered out today by the Brexit sub-committee.

Iain Duncan-Smith, the former Tory leader, said opting for the partnership would leave the Government “bogged down in a complete and total mess”.

Iain Duncan-Smith, the former Tory leader, said opting for the partnership would leave the Government “bogged down in a complete and total mess”
Iain Duncan-Smith, the former Tory leader, said opting for the partnership would leave the Government “bogged down in a complete and total mess” Credit: Paul Grover for the Telegraph

He said: “The customs partnership is a non-starter and that report kills it stone dead. People have gone along with an awful lot of stuff but we are getting to the point when we really have to make clear decisions about what we want, not what the EU wants.

“Their use of the Northern Ireland border has been a shameless process by the EU and we should have called it out a long time ago.

“Now is the opportunity to say [to the EU] ‘enough’s enough’ – you either want to make an arrangement or you don’t.”

The report was personally handed to Mrs May last week by Tory MPs and sent to Sir Jeremy Heywood, the Cabinet secretary, Gavin Barwell, Mrs May’s chief of staff, and Julian Smith, the Chief Whip, on Sunday.

The document, titled “Memorandum – the New Customs Partnership”, sets out a series of reasons why the Government should not accept it as a way to trade with the EU after Brexit.

The memorandum says a customs partnership would prevent the UK from having regulatory autonomy and effectively eliminate the UK’s independent trade policy. It also warns that the inevitable consequence of regulatory alignment is that Britain would not be able to negotiate its own trade deals with non-EU countries.

The memo also makes clear how a customs partnership would mean firms would end up paying higher EU tariffs just to avoid red tape.

It concludes that there are “serious risks that we would reach the next election having not really left the EU, with no deals elsewhere, and with the EU...running negotiations with third countries with whom we currently have trade agreements through the EU.

Michel Barnier, the European Union's chief Brexit negotiator, and Ireland's Taoiseach Leo Varadkar were together on Monday 
Michel Barnier, the European Union's chief Brexit negotiator, and Ireland's Taoiseach Leo Varadkar were together on Monday  Credit: CLODAGH KILCOYNE/REUTERS

“With no capacity to act decisively in the WTO [World Trade Organisation] or improve our own regulatory environment, six years after the referendum, this would be intolerable for the electorate.”

It came as Number 10 said the Government will be “robust” in its response to a House of Lords defeat which potentially gives Parliament a decisive say on Brexit.

The amendment to the EU Withdrawal Bill - which would give MPs the power to stop Brexit without a deal, or make Theresa May return to the negotiating table - was approved by 335 votes to 244 on Monday night in the House of Lords.

Number 10 said the cabinet had expressed "strong disappointment" with the vote, adding: "We wish for the bill to go through in the same way it left the Commons."

 

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