May pushes for interim customs deal to prevent Brexit chaos

The government will today announce the plan as it begins to flesh out its negotiating stance in talks over Britain’s future relationship with the bloc.

Ministers have been warned that the imposition of customs checks at ports risks economic damage, huge delays and even lengthy motorway queues.

To avoid that prospect, ministers are proposing an “interim period” of “close association” between the UK and the EU customs union under which goods can be bought and sold tariff-free.

One possible approach, they say, would be to operate a temporary UK-EU customs union.

During this period, the government would attempt to hammer out new trade deals with major trading partners, including forging a new relationship with the EU.

The government believes it can broker a “streamlined” deal with the bloc, building on the existing lack of tariffs within the union.

The proposal will be spelt out in the first of several government papers published in coming weeks which will set out Mrs May’s approach to Brexit.

Ministers argue that the move would give businesses more time to prepare for the eventual new customs regime.

The Department for Exiting the European Union, headed by Brexit Secretary David Davis, said its goal is “to secure as frictionless trade as possible with the EU alongside the ability to forge trade deals around the world”.

It said the government wanted to demonstrate Britain’s “desire to ensure our exit from the EU is smooth, orderly and successful”.

The proposal strikes a different note from the joint declaration by Chancellor Philip Hammond and Liam Fox, the International Trade Secretary, at the weekend that the UK will be “outside the customs union” during the transition as it will become a ‘third country’ not party to the EU treaties”. The plan could run into resistance in Brussels where negotiators could question why Britain should enjoy the benefits of the customs union while standing outside it.

Josh Hardie, the CBI’s deputy director-general, said: “It is encouraging to see these papers propose a time-limited interim period and a customs system that is as barrier-free as possible.

“We at the CBI have always been clear that new ideas on crucial issues like this should be brought to the table quickly.”

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

“Anything else risks creating more red tape for business, longer queues at our borders and higher prices for consumers.”

The Labour MP Chris Leslie, of the Open Britain campaign group, accused ministers of “wishful thinking”.

He said: “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.

“Ministers claim we can leave the Customs Union and yet still achieve ‘the most frictionless customs agreement anywhere in the world’, but with absolutely no detail about how such a miraculous new system will be achieved.”

Adam Marshall, director general of the British Chambers of Commerce, said most businesses were more concerned about future customs arrangements with the EU than future trade deals.

He added: “At this stage, it is critically important to keep a number of different options open in order to achieve this goal.

“While we await the detail of the government’s customs position paper, and the reactions of EU negotiators, business is clear that a smooth transition to new arrangements is needed, and multiple adjustment costs must be avoided.

“In the long term, we should aim to avoid imports and exports being subjected to two sets of customs checks, and to ensuring the smoothest possible future trade relationship between the UK and EU.”

A position paper on the fraught issue of the border between Northern Ireland and the Republic will published tomorrow, ahead of the third round of Brexit negotiations in Brussels at the end of the month.