Brexit: Theresa May flies out to win Angela Merkel’s support for customs plan, despite 'smugglers paradise' fears

Details of new 'facilitated customs arrangement' finally revealed - ahead of talks in Berlin

Theresa May has flown to Berlin in a last-gasp bid to win Angela Merkel’s support for her new “third way” plan for customs rules after Brexit, amid EU fears that it will be a smugglers paradise.

The details of what No 10 is calling the “facilitated customs arrangement” (FCA) were finally revealed, ahead of the prime minister jetting out for talks with the German Chancellor.

The proposal – which combines Ms May’s original plan for the UK to collect EU tariffs with smart technology to smooth the process – is certain to face Brexiteer criticism that the UK would remain under Brussels’ wing.

However, it also appears likely to be rejected by the EU for potentially allowing smugglers to pay a lower UK tariff at a British port before moving goods on to the EU single market.

Last month, Guy Verhofstadt, the European Parliament’s Brexit coordinator, told MPs: “We cannot outsource our competences on customs duties. That will not happen.”

David Davis, the Brexit Secretary, declined to comment on a report that he sent a letter to the prime minister, warning her the FCA plan is certain to be rejected.

The “third way” was not expected to be revealed before Friday’s crunch cabinet meeting at Chequers, but Downing Street has now set out its key points.

The UK would leave the EU's “common external tariff”, gaining the freedom to set its own tariffs on goods arriving into the country.

Under Ms May’s previous “customs partnership” plan, firms importing goods to the UK would have paid EU tariffs at the border – then claimed back the difference if the goods are for the domestic market and the UK introduces a lower fee.

The government now promises tracking technology to determine where the goods will ultimately end up, allowing the correct tariff to be paid on 96 per cent of items.

The UK would still collect the tariffs on goods destined for mainland Europe, passing them on, and operate the partnership plan for the 4 per cent of goods where the end destination could not be proved.

Britain would also agree to maintain “full regulatory alignment” with Brussels on goods, seen as essential to avoid the return of a hard border in Ireland.

That will be opposed by many pro-Brexit MPs, who fear it would destroy their dream of striking new trade deals around the world.

A group of more than 40 Eurosceptic MPs held a stormy meeting with Julian Smith, the chief whip, to warn they would not accept a deal that keeps Britain in the EU in all but name.

In Berlin, Ms May will urge Merkel to at least agree not to dismiss out of hand the new British plan when it appears in the form of a white paper next week.

When an early draft was circulated in Brussels, some officials warned it still bore the hallmarks of the UK trying to “have its cake and eat it”.

No 10 is now expected to briefing Tory MPs on Saturday morning on the agreement it expects to strike with the cabinet at Chequers, to try to get them onside.

The Commons will still have the opportunity to vote for Britain to remain in the customs union – the solution much preferred by the EU – the week after next.