Brexit: Britain to propose keeping customs rules for 'interim period' to avert border chaos

'It looks like the new unified position in the Cabinet is to return the Government to the territory of wanting to have their cake and eat it'

Critics claim the policy is mired in confusion (Getty)

Britain will today propose keeping the same customs rules with the EU for an “interim” period after Brexit to avert border chaos, sparking fresh accusations that policy is mired in confusion.

Ministers will tell Brussels they want a “temporary customs union” for several years, amid evidence that businesses are already pulling investment because they fear the harm to trade from a cliff-edge exit in 2019.

They will then ask for “alignment” on customs – making clear that, although Britain would leave the EU’s existing arrangements, the Government hopes little would change on the ground even in the long term.

The proposal will be greeted with relief by business leaders as a big step back from Theresa May’s threats that “no deal is better than a bad deal”, made before her election setback.

However, there are huge doubts over whether EU leaders will accept the plan – after two cabinet ministers insisted that Britain must also be free to seek trade deals with non-EU countries, from day one after departure.

Under the rules of the customs union – a free trade area, charging the same tariffs on imports from outside – members are barred from negotiating their own trade deals with other countries.

The Open Britain campaign immediately condemned the Government for “wanting to have their cake and eat it”.

Chris Leslie, a Labour MP and supporter, said ministers were promising smooth customs, but with “absolutely no detail about how such a miraculous new system will be achieved”.

“It looks like the new unified position in the Cabinet is to return the Government to the territory of wanting to have their cake and eat it,” Mr Leslie said.

“It is a fantasy to pretend we can have the freest and most frictionless trade possible with our largest partner when the Government remain intent on pulling Britain out of the customs union.”

And Vince Cable, the Liberal Democrat leader, agreed, saying: “The only way to guarantee ‘free and frictionless’ trade with the EU is to stay in the customs union and single market.

“No matter how they try to dress it up, the Conservatives are currently heading for a chaotic Brexit that will leave Britain poorer.”

In seeking identical customs rules for a temporary period, ministers are accepting there is no time to strike a permanent deal before 2019, after months of warnings from business groups.

Without a deal, there are fears of enormous queues at Dover and other checkpoints, huge disruption to trade and a need for many hundreds of extra customs staff.

Now the Department for Exiting the European Union will argue a temporary customs union can deliver the “freest and most frictionless possible trade in goods between the UK and the EU”.

It will say it can “provide certainty for businesses in the UK and the EU and ensure that businesses only have to adjust once to a new customs relationship” – at the end of the transition.

In the interim, both sides would have time to implement “technology-based solutions to make the customs regime as smooth as possible” when permanent arrangements are introduced.

Brexit Secretary David Davis will also float an alternative plan for a highly streamlined customs partnership with the EU, to prevent the need for a customs border.

But, on Sunday, Chancellor Philip Hammond and Liam Fox, the International Trade Secretary, penned a joint article insisting on “the freedom to sign bilateral free trade agreements” immediately.

The article triggered accusations that Mr Hammond had “come to heel” and sided with the Brexiteers, who prize the alleged benefits from leaving the customs union.

In the same way, Brexit-backing Conservatives will flex their muscles if the EU insists there can be no new customs union unless Britain agrees not to seek outside trade deals.

The British Chambers of Commerce said the “reactions of EU negotiators” would be crucial and urged ministers to make striking an agreement their top priority – ahead of new trade deals.

“Business needs to see the Government’s resources focused on the conclusion of a successful customs deal with the EU,” said Adam Marshall, its director general.

The “future partnership paper” will be released in Theresa May’s absence, after she stayed on holiday for longer than expected, only returning to Downing Street on Thursday.

Ministers will also argue that their customs union plan can also solve – at least temporarily – the dispute over the future border between Northern Ireland and the Republic.

Britain wants to use smart technology and spot checks to police the flow of goods between the two countries after Brexit, angering the Irish Government.

Dublin fears the impact on the peace process in the North and has pushed for the Irish Sea to become the post-Brexit border with the UK instead.

A separate “position paper” on Northern Ireland will follow later this week, as the Government seeks to counter the EU’s criticism that its aims for Brexit are a muddle.

The documents are crucial to persuading Brussels that the UK is serious about meeting its tests on the divorce settlement – allowing negotiations on a post-Brexit trade deal to begin.