Sajid Javid joins hard-Brexiters to derail PM on customs plan

Downing Street sources insisted the customs partnership, which would see the UK levy tariffs on behalf of Brussels, had not been formally rejected.

But Rudd’s departure appears to have left the key cabinet subcommittee deadlocked over how to negotiate Britain’s departure from the EU.

During the two-and-a-half-hour meeting, Javid added his voice to those of Liam Fox, David Davis, Boris Johnson and Michael Gove, all of whom expressed concerns about May’s preferred approach.

“They’ve lost and they know it, and they’re trying to find a way out,” said one senior Brexiter. “It’s a dead parrot.”

Allies of Javid suggested that while he had concerns about the customs partnership, he was not signalling that he would automatically support the hard-Brexiters in future.

The Bromsgrove MP backed the remain camp during the 2016 general election – but he is a longtime Eurosceptic. Before he was appointed home secretary, he waded into the row about whether the UK should remain in a customs union, tweeting, “British people gave politicians clear instructions through EU referendum. Includes leaving the Customs Union, an intrinsic part of the EU.”

The hard-Brexiters prefer an alternative, maximum facilitation, or “max fac”, proposal, which relies on technology to keep border-checks to a minimum, and Javid gave them his backing at the meeting on Wednesday, regarding this plan as more practical.

Brussels has expressed reservations about both proposals, and dismissed the government’s approach to resolving the Irish border problem as “magical thinking”. Talks on Britain’s future relationship with the EU27 are essentially deadlocked, as Brussels awaits a steer from the government about which plan it wants to pursue.

Labour MP Tulip Siddiq, of the anti-Brexit group Best for Britain, said: “We are 331 days until UK becomes a third country under EU law, and the government can’t decide between two options already rejected by the other side of the negotiation. It is farcical. The Brexit war cabinet is more like a warring cabinet that is split completely down the middle. They have no plan and no clue.”

The Guardian understands neither of the two options will go forward in their present format to the meeting of the whole cabinet next week.

Instead, No 10 is expected to do some more detailed work on both options and recall the Brexit subcommittee in a few days’ time, raising the prospect that May could return with an amended “hybrid plus” model, that could be more acceptable.

“They’re both serious proposals, and they both pose a different set of challenges, which need to be addressed,” a Downing Street source said.

While no vote was taken, Brexit sources claimed the balance of the meeting was 6-5 against a customs partnership, with defence secretary Gavin Williamson also “leaning away” from it.

The defence secretary, Gavin Williamson, spoke critically of the customs partnership, but was not vocal in favour of the max-fac option either, one source said. “He wasn’t leading the charge against it, but both he and Sajid made clear that they had significant reservations about the partnership option.”

Hard-Brexit sources added that May appeared “genuinely surprised” at the “robust” interventions from colleagues sceptical about the partnership approach.

However, proponents of a soft Brexit countered that with chief whip Julian Smith present, there were 12 people in the room – although Smith is understood not to have made his stance clear.

The chancellor, Philip Hammond, and his allies fear the “max fac” approach would not meet the government’s pledge of avoiding a hard border in Ireland.

Peers inflicted a fresh defeat on the government in the House of Lords over the Irish border issue on Wednesday evening, backing a cross-party amendment supported by former Tory minister Chris Patten.

The amendment would commit the government to avoiding any Brexit deal that would jeopardise the Good Friday agreement, and passed by 309 to 242, a majority of 67 and the latest of a series of hefty losses on the withdrawal bill.

When the legislation comes back to the Commons, the government is likely to urge MPs to vote to reject this and a series of other amendments, including one aimed at forcing them to pursue a customs union.

May has delayed a series of contentious votes, including on the customs and trade bills, to which backbenchers have laid a series of amendments aimed at keeping the option of a full customs union with the EU on the table.

A customs union, which is now Labour’s policy, would allow tariff free trade with the EU after Brexit, but would commit Britain to imposing EU tariffs on goods coming from outside the EU and prevent it from striking independent trade deals.

Cabinet ministers at Wednesday’s Brexit subcommittee were unamimous in favour of the government’s policy of leaving the customs union, Downing Street sources said.

They said May had underlined the fact that remaining in a customs union with the EU after Brexit would leave Britain with less power over its own trade policy than it has today.

During the meeting, sources said business secretary Greg Clark and Hammond both sought to impress on their colleagues the urgency of providing business with a clear answer to the question of what customs arrangements they are likely to face in future.

Brexit secretary Davis and Eurosceptic colleagues believe the customs partnership would be cumbersome and bureaucratic – while backbench leavers, led by Jacob Rees-Mogg, claim that it would be “deeply unsatisfactory”.

Mogg’s European Research Group submitted a 30-page report to No 10 in advance of Wednesday’s meeting setting out the model’s shortcomings.