Britain may stay in the EU customs union beyond 2021

The agreement could see Britain remain within the EU’s common external tariff until a future customs arrangement is ready in a temporary fix designed to avoid a massive jolt for business and a hard border in Northern Ireland.

Importantly, it would allowing ministers to say they have formally left the EU customs union which remains a key plank of Theresa May’s Brexit policy.

Cabinet infighting has prevented any serious movement on Brexit for weeks and officials hope the new proposal might be acceptable to the EU as an alternative to the disputed “backstop” proposal of keeping Northern Ireland within the EU’s customs union.

People voted to leave, they did not vote for a perpetual purgatory

Jacob Rees-Mogg

Such a deal could also keep Mrs May’s DUP allies happy by avoiding a border in the Irish Sea while potentially winning Brexiteer support as a temporary measure before the whole of the UK exits the EU’s customs area.

One official said: “Basically it’s keeping in the external tariff until the new system is ready.

“It would have to include a sunset clause. Both sides would need this. The question is how you find the language to persuade the Irish.”

Mrs May agreed the need for a backstop in December to persuade EU leaders to begin Phase 2 of the talks but later rejected the legal language proposed by the EU in the draft withdrawal agreement as something “no UK prime minister could ever agree to.”

Theresa May

Theresa May’s Cabinet is split over her customs union plans

The draft “backstop” as it stands keeps Northern Ireland in the EU’s “customs territory” and creates a customs border in the Irish Sea.

But the proposals have not gone down well with hard Brexiteers who want a “maximum facilitation” customs option.

The so-called ‘max-fac’ would create a customs border between the EU and the UK using technology and other special measures to avoid a hard border between Northern Ireland and the Republic.

Max-fac would take several years to set up but the customs union extension would allow extra time for its implementation.

Irish border

The Irish border conundrum remains a serious sticking point in Brexit talks

Tory European Research Group chairman Jacob Rees-Mogg said: “The risk of the Government using all its mental energy on the fallback position is that they create a position that is more attractive than a permanent deal.

“We have gone from a clear endpoint, to an extension, to a proposed further extension with no endpoint.

“The horizon seems to be unreachable. The bottom of the rainbow seems to be unattainable.

“People voted to leave, they did not vote for a perpetual purgatory.”

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