May risks Brexit backers’ wrath with ‘customs plan’

Bloomberg

Prime Minister Theresa May is preparing the ground to keep the UK inside the European Union’s core trade rules for years after Brexit, a move that risks a rebellion from euroskeptics who could force her out.
May’s inner Cabinet has agreed a plan to keep the UK aligned with the EU’s tariff rules for longer as a last resort measure designed to solve the intractable problem of the Irish border, according to people familiar with the matter. Ministers discussed the idea and are likely to propose it formally to European negotiators in Brussels in the coming weeks.
The plan faces major hurdles ahead. In the UK, it will be unacceptable to Brexit campaigners in May’s Conservative Party, some of whom are privately threatening to mount a leadership challenge if she fails to deliver a clean break. European officials have also expressed skepticism about the proposal.
Applying the EU’s tariff across the whole of the UK would be a major concession from May, potentially limiting her scope for striking free trade deals in goods with countries outside the bloc. The freedom for the UK to set its own tariffs on imports is a key demand from the Brexit campaign.
But Brexit negotiations are deadlocked on the question of the Irish border. Even pro-Brexit ministers now see that a compromise on this might be necessary.
The EU is demanding an insurance clause to make sure no border emerges on the island of Ireland. The EU’s own “backstop” proposal is unacceptable to May as it would sever Northern Ireland from the rest of the UK. She reiterated that point in a meeting in Sofia on Thursday with European Council President Donald Tusk and EU Commission President Jean-Claude Juncker, her spokeswoman, Alison Donnelly, told reporters in London.
“The prime minister said that the UK would shortly put forward its own backstop proposal in relation to customs,” Donnelly said. Ask to elaborate if the proposal would go beyond customs to include regulatory matters, she said “it’s in relation to customs.”
The EU side has made clear that customs alone won’t be enough to prevent a hard border, and having the same rules on either side will have to be part of any backstop.
May reiterated that the UK will “be leaving the customs union” and will negotiate “future customs arrangements” instead. But briefing reporters in London, May’s spokeswoman repeatedly declined to say if the country would still be bound by the EU’s common tariff rules. “The backstop is a fallback and we do not want or expect it to happen,” she said.