Why Theresa May is heading for a major Brexit U-turn on the customs union

  • Brexit analyst Mujtaba Rahman says Britain is still probably heading for continued customs union membership after Brexit.
  • The customs union would go a long way to solving the issue of avoiding a hard border in Ireland.
  • Rahman says May could bring forward a Commons vote on the issue.

LONDON – Theresa May’s high-stakes discussions with her Brexit war cabinet this week looked like a victory for the hard Brexiteers, but they’re still likely to end up defeated on the issue which has come to dominate Tory infighting more than any other.

That’s according to Mujtaba Rahman, Brexit analyst and managing director at the Eurasia Group consultancy, who said the UK “basecase” remains ultimately customs union membership after Brexit, with a 55% probability. He says Theresa May could bring forward a key vote in the Commons to force the issue on Brexiteers.

How did we get here?

May’s meeting on Thursday with her most senior Cabinet colleagues did not go to plan. The PM and her chief Brexit negotiator Olly Robbins hoped to persuade them of the merits of their “customs partnership” proposal. That arrangement would see the UK collecting customs duties for the EU while being able to set lower tariffs for goods remaining in the UK

But following Home Secretary Amber Rudd’s departure, her replacement Sajid Javid rebelled against May after only two days in office, meaning May was outnumbered 6-5 on the issue. Brexiteers felt the plan was unworkable, and too similar to the current customs union which they oppose vociferously.

So, May’s favoured option – which she painted as a compromise between leaving the customs union and avoiding a hard border in Ireland – was opposed by her Brexit war cabinet. The proposal has also been rejected by the EU, where it was described as “magical thinking.” That leaves May with few options: Brexiteers would like to see the UK pursue a “maximum facilitation” option which uses technology to facilitate the movement of goods at the Irish border, but experts warn that would see the return of a hard border and customs checks, something that threatens to derail the Good Friday Agreement which brought relative peace and stability to the region.

Why May could bring forward a Commons vote

That, says Rahman, is why customs union membership remains the likeliest possibility. There is no easy option for May: if she does end up pushing for customs union membership, many pro-Brexit MPs, including several in her cabinet, have threatened to resign. That, says Rahman, is why the PM could use a Commons vote – which she has delayed – as a front to make a retreat on the issue.

Here’s Rahman (emphasis ours):

“We believe May will now likely bring forward the delayed House of Commons votes on a customs union, with the objective of using the 20 to 25 pro-EU Tories to see off her hardliners by forcing through an amendment saying the Government should seek a customs union with the EU.

“The Brexiteer ministers’ action in blocking May’s customs partnership makes it more likely that the pro-EU Tories stick to their guns and support a customs union. Indeed, this group is telling Downing Street that if the Government cannot reach a position, it should hand the matter to Parliament. In other words, the pro-Europeans are offering to support May’s objective of a customs partnership if she faces down the Eurosceptics, despite threats by backbenchers to bring her down.”

So far, May shows no signs of budging. The Sun reported on Friday that the PM will delay to other votes on the Customs and Trade bills until Autumn because she fears MPs would vote in favour of amendments which would ask her to negotiate in favour of customs union membership.

As with all Brexit issues though, the time will come when she is forced to make a concrete decision. That is likely to be sooner rather than later.

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