Theresa May insists: We will quit customs union after Brexit

Downing Street insists Theresa May is sticking with plans to leave the customs union

Downing Street insists Theresa May is sticking with plans to leave the customs union

It follows a heavy defeat for the Government in the Lords last week, with peers overwhelmingly backing an amendment to the flagship EU Withdrawal Bill which seeks to keep the option of Britain staying in a form of customs union. The government has already been defeated on the issue in the House of Lords.

Leaving the customs union would mean Britain can negotiate its own free trade deals with non-EU countries.

But her critics - including a group of around 15 Tory MPs - argue that such an agreement would be backed by exporters and would solve problems over the future status of the Irish border.

The prime minister's problem is that her approach does not command a majority in parliament, where fears about the impact of leaving the customs union on British manufacturers and on the Border in Ireland are growing as Brexit approaches.

In two editorials that Blanchard says are sure to be "pored over by No. 10", the Daily Mail warns the PM that staying in the customs union would be "an utter humiliation", while The Sun says: "It is welcome news that Theresa May has reiterated Britain will leave the customs union - and The Sun will hold her to it".

Downing Street rejected BBC reports that the issue could be treated as a motion of confidence in Mrs May's government. "While the system has many strengths, its provisions remain under-equipped to effectively govern the global trade in services", he said Monday.

The dilemma facing May is how to avoid physical infrastructure on the border between Northern Ireland and the Republic while Britain is outside the customs union and single market.

The Prime Minister's spokesman said she remained committed to two plans on a future customs relationship which she set out a year ago.

May has said she wants to leave the trade regime, which sets tariffs for all European Union member states, so that the United Kingdom can strike better deals with countries such as the USA and Australia. The first was a "hybrid model" in which Britain would collect European Union tariffs on behalf of Brussels. It was in the Tory manifesto and Downing Street reiterated this stance on Monday.

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They are either a "customs partnership", under which Britain mirrors the EU's rules and collects duties on behalf of Brussels, or a "highly streamlined" arrangement using technology to minimise disruption for imports and exports.

When the United Kingdom leaves the EU, VAT liabilities will have to be assessed by customs officials at borders unless some new arrangement is in place.

After a massive defeat on the issue in the House of Lords, pro-European Tory MPs are set to voice their concerns over withdrawal from the customs union on Thursday.

Speaking on a local election campaign visit yesterday, Mrs May insisted that would not change course.

'Coming out of the customs union means that we will be free to have those deals, deals that suit the United Kingdom, ' she told the BBC on a local election campaign visit to a firm in the West Midlands.

Rees-Mogg believes that after leaving the union, the United Kingdom should phase out all tariffs, in order to reduce consumer prices and stimulate competition.

Ten Conservative peers joined forces to back the move, including former universities minister David Willets.

Accusing ministers of acting for purely "doctrinal" reasons, Lord Pannick said: "This Bill should not be used as an excuse to reduce the legal rights which we all enjoy against the state".

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