Pro-Brexit Tory MPs concede staying in EU customs union into next decade is 'only viable option'

Verdict backed by Jacob Rees-Mogg and other leading Brexiteers – because of cabinet’s failure to agree what kind of trading and customs arrangements it wants

Pro-Brexit Tory MPs have agreed that staying in the EU customs union into the next decade is likely to be the “only viable option”, in a new report.

The cabinet’s failure to agree what kind of trading and customs arrangements it wants after the UK leaves the bloc is condemned by the Brexit Committee.

It concludes that, because neither option put forward by No 10 will be ready by the end of the planned transition in December 2020, remaining in the customs union for longer will be inevitable.

Significantly, the select committee’s members include Jacob Rees-Mogg and other leading Brexiteers – and its report is unanimous despite splits over key Brexit controversies in the past.

The committee also raises the alarm over the failure to explain how the rights of British citizens in other EU countries will be protected after Brexit.

While the Home Office had at least announced what EU citizens in this country will need to do, other member states “don’t appear to have begun to plan”, the MPs warn.

The criticisms come after HMRC appeared to torpedo the technology-based “max fac” proposal favoured by Brexiteers, after revealing it would cost businesses up to £20bn a year.

However, Theresa May’s preferred “customs partnership” – which would see the UK collect EU tariffs – has also been rejected by Brussels and cannot be implemented before 2023 anyway.

“We are rapidly running out of time to get new trade and customs arrangements in place,” said Hilary Benn, the committee’s Labour chairman.

“Given that ministers are indicating that neither of the two options being discussed are likely to be ready by December 2020, when the transition period ends, the UK will in all likelihood have to remain in a customs union with the EU until alternative arrangements can be put in place.”

The conclusion comes after Ms May told the EU she would accept a so-called backstop option to avoid a hard Irish border, keeping the UK partially aligned with customs rules after 2020.

The prime minister still argues it is unlikely to be needed, but the Brexit Committee disagrees and urges No 10 to set out “any contingency plans as a matter of urgency”.

Its report concludes: “The secretary of state [David Davis] has ruled out any extension of the customs union but, in the absence of any other plan, such an extension will be the only viable option.”

Mr Benn stressed that the clock is ticking to agree a solution for the Irish border, saying: “The EU is expecting clarification from ministers by the time of the European Council meeting in June about how the backstop will work.

“The government needs to come forward with its proposals as soon as possible to demonstrate how an open border, with no checks and no infrastructure, can be maintained.”

The Home Office has been criticised for failing to guarantee the full rights of the 3 million EU citizens in this country and for making them pay for “settled status” after Brexit.

But Mr Benn said the situation was more alarming for British ex-pats, warning: “EU member states don’t appear to have begun to plan for or communicate how British citizens will be able to regularise their stay.

“Ministers should seek urgent clarification from other member states on this because British citizens need to know where they stand.”