Defeated and Besieged, Theresa May Faces a Customs Union Nightmare

Tony Blair and Theresa May have little in common.

Where their fortunes converge in their similarity to the rat in Whack-a-Rat of village fete mythology. Both have opponents who like to ‘have a go’. Yet whereas Blair’s nimbly avoids his opponents’ blows, May’s rat just sits and takes the blows.

Fourteen defeats in the House of Lords, a Foreign Secretary who calls her policies “crazy”, and a PMQs thrashing from Jeremy Corbyn. It looks bad for the Prime Minister.

There is a looming European summit in June before which May needs to impose order so that she can go into talks with an agreed position.

The issue that is haunting the Prime Minister is the Customs Union. Her party is divided on the issue. While there is probably a parliamentary majority for remaining in the Customs Union, her hardline fringe are resisting any compromise.

Johnson even went so far as to tweet that Labour’s disappointing night outside London at the local elections was due to their Customs Union policy. Absurd, but the subtweet was a swipe at the boss.  

Remaining in the Customs Union would be a betrayal of Brexit voters, they say. So is eating a continental breakfast these days.

Labour’s Customs Union policy is - to borrow a description - ‘bollocks’ but the direction of travel is clear. So Corbyn was right to seize on the issue at PMQs: he is at one with his party and it shows a Labour responsibility towards the issue of avoiding a ‘hard border’ with Ireland.

May is trapped by her past. In appointing Liam Fox as International Trade Secretary, she gave an early sign that Britain was to leave the Customs Union which prevents individual members from negotiating bilateral trade deals in favour of a common European tariff.

Her Lancaster House speech declared she did not want a future arrangement to be “half in, half out”: “A Global Britain must be free to strike trade agreements with countries from outside the European Union too,” she declared.

A customs partnership is not a soft Brexit

May’s preferred policy would Britain will leave the Customs Union but still collect tariffs on behalf of the EU for good imported from outside, then reimburse companies - if UK tariffs were lower - for goods that remain in the UK. The customs partnership would allow goods to move freely across Europe, while still allowing Britain to negotiate its own free trade deals.

A customs partnership is not a soft Brexit. Britain would still be at the back of the queue for future trade deals. It could be a replacement that solves the issue of the Irish border though and better protects manufacturing jobs at risk.

How exactly a customs partnership is in any way a betrayal of Brexit except if you maintain a visceral, irrational dislike of anything to do with the European Union is unknown. The further absurdity of Brexiters’ opposition is that Johnson supported the plan when outlined by May in her Mansion House speech but now opposes it as being ‘untried’.

Leaving supranational government structures is of course ‘tried’ by countries across the world everyday which is why so many Brexiters campaigned for it.  

Brexiter insistence that leaving the Customs Union become an issue of confidence is a nonsense. The Fixed-Term Parliament Act means confidence issues stand alone, and are not linked to particular issues or bills. It is a toothless threat, and would only work if after Remainers voted against leaving the Customs Union, Brexiters then voted to bring down the government in an unrelated vote of confidence.

There is the potential for this issue to rip the Tory party into pieces. There is a sensible majority in the House of Commons. MPs such as Anna Soubry and Dominic Grieve are willing to coalesce around May’s plan. The question they want to know is if it can work.

The other question is: what do the EU 27 make of the Customs Partnership. That is the big unknown. Leo Varadkar has called it an idea that could be made to work in other forms. That may - or may not influence others. The Tories’ failure to agree a line might merely encourage them to maintain a position of the Customs Union or nothing.

If it is not an option, then which way does May jump?

the hardliners might be forced to compromise or derail Brexit

Surely she has little choice: Sajid Javid’s promotion onto the Brexit strategy committee gives it a majority against both the Customs Union and May’s compromise, but Parliament will vote on a deal.

That is why May is content to take the blows. She cannot risk making her position clear. If she reveals a Customs Union deal when Brexit itself is at stake, the hardliners might be forced to compromise or derail Brexit.

Ironically, they may end up voting for what they least believe in, all because of a pig-headedness now.  

It may be that May faces a no-confidence vote from uncompromising Brexiters. The Brexit European Research Group, chaired by Jacob Rees-Mogg, has sixty members - more than enough to trigger a ballot.

Brexiters may snarl and threaten. They can try to replace May. They might even succeed. But to what end? A new leader would still not have the numbers in Parliament for an unequivocal break.

Brexiters cannot replace reality. Try though some might.

More about the author

About the author

Educated at Durham University and UCL, Graham is Disclaimer's editor and a regular contributor. He has written for numerous publications including Tribune, Out Magazine and Vice. He has also contributed to two books of political counterfactuals for Biteback Media, Prime Minister Boris (2011) and Prime Minister Corbyn (2016).

A democratic republican lefty, he struggles daily with the conflict between his ingrained senses of idealism and pragmatism.

Follow Graham on Twitter.

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