May rules out customs union with EU in new bid to pacify Tory rebels
Theresa May has categorically rejected keeping Britain in any form of customs union with the EU in a significant victory for Brexiteers ahead of two crucial cabinet meetings this week.
Downing Street said it wanted to "put to rest" arguments that have raged for weeks about whether the UK would join a customs union after Brexit.
Following reports that Eurosceptic Tory MPs were plotting a coup if Mrs May bowed to the will of Remainers, sources close to the prime minister insisted customs union membership was off the table. A Number 10 source said: "We must be free to sign trade deals with the rest of the world... so it is not our policy to stay in a customs union."
It represents a significant change in stance from Mrs May, who as recently as Friday refused to rule out being part of a customs union.
Later this week, the British cabinet's Brexit sub-committee will meet twice, to discuss what Britain wants from a future trade deal with the EU.
Downing Street acted after Amber Rudd, the Remain-supporting Home Secretary, alarmed Eurosceptics by hinting that a cabinet compromise was close.
Ms Rudd said: "I have a surprise for the Brexiteers, which is the committee that meets in order to help make these decisions... is more united than they think. I think that we will arrive at something which suits us all.
"There may be - there will be choices to be made within that - but we all want the same thing which is to arrive at a deal that works for the UK."
Sources in the cabinet's Leave camp said Ms Rudd's suggestion of harmony was "fanciful" and Dominic Raab, the Leave-supporting housing minister, insisted the UK would not be in "any form of customs union" with the EU because Britain "would have our hands tied in negotiating free trade deals with other parts of the world".
A Downing Street source said: "To put this to rest, we are categorically leaving the customs union...
"We have brilliant companies in the UK and we want to strengthen their opportunities to export. We would not want to do something that limits those opportunities.
"So it is not our policy to stay in the customs union. It is not our policy to stay in a customs union."
Mrs May instead wants "a highly streamlined customs arrangement between the UK and the EU" with trade being "as frictionless as possible" while still striking deals with the rest of the world.
Critics in Brussels have said such a "have cake and eat it" demand is impossible.
Another possibility being examined by Mrs May is a "customs partnership" with the EU, "aligning our approach to the customs border in a way that removes the need for a UK-EU customs border", which would be good news for Ireland's Border with the North. Brexiteers are likely to argue that such close alignment with the EU would stand in the way of global trade deals.
Mrs May and David Davis, UK Brexit secretary, will meet Michel Barnier, the EU's chief Brexit negotiator, in Number 10 today ahead of a week of negotiations in Brussels to discuss the terms of a transition period. (© Daily Telegraph, London)