Instead of abandoning it, No10 has told civil servants to make some tweaks to it — in the hope of making it more acceptable. “The new customs partnership is dead in its current form but a customs partnership isn’t,” warns one Government source.
Why does all this matter? Well, the customs partnership idea, which would involve the UK collecting tariff revenues on the EU’s behalf, would make the UK a much less attractive country to do trade deals with.
To be fully effective, it would also require the UK to essentially copy all EU regulations on goods.
With the scheme also leading to the European Court of Justice getting involved in Britain’s affairs, it would not be “taking back control”.
But even after the remarkable rebuff it received from the Brexit inner Cabinet on Wednesday, despite the Prime Minister putting her authority on the line by making clear her support for it, No10 won’t give up on the idea. It believes that, with a few changes, it can be made to work.
Ministers are now bracing themselves for a huge effort from Theresa May’s allies to get them to change their minds.
Already, No10 is telling ministers that what really matters is getting out, and that once the UK is no longer a member of the EU, all these problems can be ironed out at a later date.
I understand that one minister has even been warned that the whole Brexit project might collapse without a customs partnership.
The argument is that there is “no deal” without a customs partnership, which the Government views as being key to solving the Irish border question.
Without a deal, Parliament could turn on Brexit.
The Chief Whip has also told Cabinet colleagues that he hasn’t got the votes to defeat a customs union amendment in the Commons. So, the best way to see that off is to embrace a customs partnership instead.
But the local election results show that the Tory vote is becoming more and more Leave dominated. Number crunchers estimate that 70 per cent of Tory voters are leavers.
As one influential Tory warns, this means that if Mrs May loses Brexit Secretary David Davis or Boris Johnson from the Cabinet over the customs partnership “and is seen to be selling out Brexit, the Tories will be utterly screwed electorally”.
Another problem with the customs partnership idea is the message it sends the EU.
As one insider tells me: “The EU is trying to force us into a false choice between a customs union and no deal — and we’re encouraging that by not being clear enough in our negotiating position.”
Rather than trying to pressure ministers into backing her customs partnership idea, Mrs May should tell the EU she wants a free trade deal with sensible customs arrangements that keeps red tape to a minimum.
Once she has been clear, she might find the EU more willing to negotiate.
Party must reach out to remainers
THE country is there for the taking. The local election results show neither Labour nor the Tories are able to break the political stalemate.
If these results were replicated at a General Election, we would have another hung parliament.
It is easy to declare that the country is permanently split, and that’s why no party can win a big majority. But I don’t think that’s right.
Rather, the problem is that neither Labour nor the Tories are capable of reaching out.
If Labour was led by a working-class leader from the Midlands who stood up for the country, then they would be on course for a proper majority. Equally, if the Tories were led by a Brexiteer whose upbeat, optimistic vision could appeal in Remain areas then they would be beating Corbyn comfortably. Indeed, these local election results suggest that Labour under Corbyn has stalled – that it hasn’t kept up the progress it made in last year’s General Election.
Now, Labour are highly unlikely to change leader before the next election.
Jeremy Corbyn and his allies have seized control of the commanding heights of the Labour Party, and the new members who so fervently believe in him wouldn’t back a challenge to him whatever Labour MPs do.
But the Tories will almost certainly change their leader before 2022. These results are a reminder that they need to show they have delivered on Brexit by the time of the next election. Government whips have been calling round to ask Tory MPs what they think of handing the NHS a funding boost on its 70th birthday in July, and how they would pay for it.
These results suggest they would be well advised to portray this money as the beginning of the Brexit dividend for the health service.
This might stick in the craw of Tory Remainers, but voters now expect them to deliver on Brexit promises.
When the Tories pick their new leader they need to go for someone with cross-over appeal – someone who can firm up their support among Leave voters but reach out to Remainers too.
BERCOW'S PLAN TO QUIT NEXT YEAR
I am told that Bercow, who is currently under pressure over bullying allegations, doesn’t feel he can say this publicly. But I am assured that this is his plan. It remains to be seen whether the knowledge that Bercow will go will curtail calls for him to quit.
Many in the Commons feel the claims against him must be properly investigated if Parliament is to show it is serious about protecting its staff. Senior figures in Government are also keen to see the back of him because they suspect him of encouraging Labour’s use of an arcane procedural device – “a humble address” – to try to winkle embarrassing information out of ministers.
Cabinet in gap trap
PENNY MORDAUNT presented to Cabinet on the gender pay gap this week.
She turned in an assured performance less than 24 hours after being appointed minister for women and equalities, telling ministers to demand a plan to close the gender pay gap from the sectors covered by their department.
But as one female Cabinet minister points out, no one mentioned the elephant in the room – the fact that the second most senior woman in the Cabinet had to quit her job, only to be replaced by a man.
Only five of the 23 full members of the Cabinet are women. The Government might want to concentrate on improving this balance before they lecture business any more.
PHILIP HAMMOND and Michael Gove are clashing over the powers of the post-Brexit environmental regulator.
The Environment Secretary wants it to have the same power to hold the Government to account that the European Commission has. But the Chancellor is sceptical. Senior Treasury figures tell me he does not think it is sensible or necessary to continue these restraints post-Brexit.
The dispute is causing some raised eyebrows. One Whitehall source describes it as part of the “constant war” between the pair. The two obviously disagree on Brexit.
But Hammond is also deeply unenthusiastic about Gove’s green agenda.
James Forsyth is political editor of The Spectator.
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