Thousands of jobs at risk if Theresa May drops Brexit 'customs partnership' plan with the EU, business secretary suggests

Tory divisions laid bare as Brexiteer immediately hits back with warnings over ‘Project Fear’

Thousands of jobs could be put at risk if Theresa May’s plans for a “customs partnership” with the EU are scrapped, business secretary Greg Clark has suggested.

Mr Clark, one of the most pro-Remain members of the cabinet, laid bare the party’s deep divisions on the issue as he made the case for the prime minister’s preferred post-Brexit customs plan.

The proposals – under which the UK would collect import tariffs on behalf of the EU – have enraged Brexiteers, who see the move as a betrayal of Ms May’s promise to take Britain out of the customs union and the single market.

Prominent Tory Eurosceptic Jacob Rees-Mogg dismissed the warnings as “Project Fear” and said that the customs partnership plan would amount to keeping the UK in the EU.

It comes as Ms May has sought to quell a revolt among MPs by insisting she would take Britain out of the customs union, while both wings of her Brexit war cabinet remain deadlocked over the right approach.

Mr Clark said the plan was still on the table and outlined the impact of new customs checks on the car giant Toyota – casting doubt over the future of its 3,500 UK employees.

He told the BBC’s Andrew Marr Show: “I was talking this week to the global president of Toyota motors. They are making a big decision as to where the next motor plant should be in Europe.

“We have a very successful one in Deeside, in North Wales, but there are choices as to whether that should be located on the continent.

“Between that plant and the plant in Derbyshire there are 3,500 people employed. The nature of that business is that over 50 per cent of the parts come from out of the country. They come through every hour of the day and night ... It’s just in time manufacturing. It is highly efficient.

“What we have always said is we will have a customs agreement that has the minimum of frictions. Now that is crucial.”

Ms May’s customs plans will help firms as it would mean you can import parts without border checks or paperwork, he said.

Mr Clark added: “But it’s not perfect, because what it means is that if we have imports from other countries where we’ve abolished the tariff, there has to be an arrangement where you pay back.”

He also opened the door to extending a transition period on customs with the EU, saying it could be a case of implementing a new customs arrangement “as soon as you can do” rather than 2020 when the transition would expire.

It could take until 2023 to put new infrastructure in place, he added.

Former home secretary Amber Rudd, who resigned last week over the Windrush scandal, immediately tweeted her support of Mr Clark’s plans.

Business leaders also welcomed Mr Clark’s comments, saying it was important to maintain the status quo on frictionless trade until a new arrangement is in place.

However Mr Rees-Mogg, chairman of the powerful European Research Group (ERG) of Tory Brexiteers, said it would be “odd” for Ms May to back a policy that effectively breached her commitment on leaving both the customs union and single market.

He told ITV’s Peston on Sunday: “This Project Fear has been so thoroughly discredited that you would have thought it would have come to an end by now.

“We trade successfully all over the world. The delays on goods coming into Southampton are tiny.

“We will have control of goods coming into this country – we will set our own laws, our own policies, our own regulations, and therefore we will determine how efficient the border is coming into us.”

A decision on the government’s preferred customs option has been postponed after the Brexit war cabinet failed to reach agreement last week.

Pro-EU MP Anna Soubry, one of the Tory Brexit rebels, urged Ms May to resist the “ideologues” within her party.

She told the BBC: “I don’t think they represent the best interests of British business, and therefore our economy, and therefore the people of our country, and Theresa needs to sort them out and see them off.”

Fellow rebel Nicky Morgan, a former cabinet minister, said: “Just because people shout loudest or have the loud voices in cabinet doesn’t mean that they represent the majority of Conservatives.”

Writing in The Sun on Sunday, the prime minister said she had an “absolute determination to make a success of Brexit, by leaving the single market and customs union and building a new relationship with EU partners that takes back control of our borders, our laws and our money”.

She said the UK was “making good progress towards that goal and we will carry on doing so with resolution in the months ahead”.