May’s Brexit meeting to end in ‘long grass’ and ‘fudge’ amid standoff over customs, cabinet sources say

Stalemate in London mirrors stalemate in Brussels, with 'no significant progress' since March, according to EU officials

Theresa May’s efforts to unite her divided cabinet over Brexit at a crunch meeting of top ministers is set end to in “more fudge” and “long grass”.

Ms May will use the Brexit “war cabinet” of senior figures to again try to find a way out of the standoff about what customs relations to adopt after Brexit, but senior sources say no decision will be reached.

The EU wants future customs relations agreed at a summit in June, but Downing Street insiders pointed towards the October summit, when the final Brexit deal is expected to be sealed, as the moment when clarity might finally emerge.

Ms May also spent much of Monday welcoming Tory backbenchers in to No 10 to brief them on her thinking, with the government unsure of whether it can win a string of pending Commons votes on Brexit.

The cabinet subcommittee on Brexit will reconvene on Tuesday after breaking into groups to develop Ms May’s two options – a “customs partnership”, with closer EU customs ties to avoid an Irish hard border, or “max fac”, with looser customs ties, but a harder border.

With the last gathering ending with the cabinet split on which to opt for, one source close to the group said: “There will be more fudge I expect, and more kicking into the long grass.”

After some briefing suggesting in recent days that the prime minister is now leaning towards the Brexiteer favoured “max fac” option, another cabinet level source went on: “Nothing is decided yet. Everything is still on the table.”

But patience with the lack of progress was growing on both sides of the channel, with some backbenchers beginning to wonder if the government is capable of reaching a consensus.

Ms May had groups of Tory MPs into Downing Street on Monday to give them a presentation on her approach, including the two customs options.

One Conservative backbencher told The Independent: “There’s only so much long grass to keep kicking stuff in to.

“Eventually, what you kick in will go all the way through and fall off the Brexit cliff edge the other side.”

There is also deadlock in parliament at the moment with remaining progress on three pieces of Brexit legislation stalled, because the government is unsure it can win votes related to the customs union, among other things.

The stalemate in London comes as talks in Brussels have also ground to halt, with EU ministers reporting “no significant progress” on any of the main withdrawal issues since March, including the Irish border and related customs matters.

Speaking at a separate event in Brussels on Monday evening, chief EU negotiator Michel Barnier said full talks on the future relationship had not even started, despite getting the green light at a summit in March.

He added: “There is still a lot of uncertainty. Negotiations on the future with the UK have no started yet. We have had first exploratory discussions.”

Ms May had tried to steady nerves about her approach with an article on Sunday, in which she asked the British public to “trust me” on Brexit.

Her supporters hoped it would draw a line under public spats on customs. Health secretary Jeremy Hunt even issued a “belt up” message to foreign secretary Boris Johnson after he called the “partnership” model – thought to be favoured by the PM – “crazy” last week.

Mr Johnson was more sedate when asked about his differences with Ms May ahead of the subcommittee meeting, saying: “I think it was absolutely right that she expressed it in that way [in her article on Sunday].

“What we need to do is, as she said, come out of the customs union in such a way as to enable us to have frictionless trade with no hard border in Northern Ireland and to do unhindered, unimpeded free trade deals with the rest of the world. We think that is possible, she thinks that is possible, so that is the way forward.”

The “customs partnership” plan would see Britain collect tariffs on the EU’s behalf at ports and airports, passing on a share of the money to Brussels – then if the UK sets different tariffs from the EU, traders would claim refunds from HMRC for goods that stay in Britain.

Olly Robbins, Ms May’s Europe adviser, regards the partnership as a means of avoiding a hard border in Ireland, while keeping the UK out of the European customs union. Close aides of Ms May have also called it “intellectually perfect”.

But Downing Street has been privately warned that the customs partnership proposal could collapse the government, with the Brexit-backing European Research Group having organised a critical report backed by 60 MPs.

The group’s chairman, Jacob Rees-Mogg, has called the proposal “cretinous” and “deeply unsatisfactory”, and argued that it would “not get us out of the European Union, which is what people voted for”.

The other option, a “streamlined arrangement”, is viewed more favourably by Brexiteers in both the cabinet and on the back benches.

It is known as “maximum facilitation”, or “max fac”, and would see the UK outside any customs union, but with some controls at the border between Northern Ireland and the Irish Republic.

Backers say a “trusted trader” scheme and remote monitoring of the border would limit physical infrastructure.

But it would still essentially mean a hard border on the island of Ireland. Critics claim this would break the Good Friday Agreement, risking peace in Northern Ireland.