May in Talks With Feuding Cabinet Members on Brexit Proposal

(Bloomberg) -- Theresa May is holding one-to-one talks with cabinet ministers in an attempt to win their support for her Brexit plan after surprising them with a new proposal for a customs deal with the European Union, people familiar with the matter said.

May's efforts to unite her top team come ahead of a crucial meeting of her cabinet at her country estate Friday, when ministers are due to agree Britain's blueprint for its future relationship with the EU. Pro- and anti-Brexit ministers have been split over how closely to stick to the EU's trade regime, leaving negotiations with Brussels stalled.

Ministers have been fighting over two possible options for how customs should work after the divorce. Now a third way has been found, a government official confirmed Monday.

The cabinet will be asked to consider a proposal for future customs arrangements that will be a “significant step forward” from the two previously announced models and the new plan will “give us the best of both worlds,” the official said.

The proposal caught ministers by surprise and senior cabinet members remained in the dark on the details Monday night, with at least one doubting he'll be briefed before Friday, officials said. Brexit-backing ministers are seeking assurances from the prime minister that she's not going to dash their hopes for a clean break from the EU, people familiar with the situation said.

Tensions on the subject of Brexit, never far from the surface among Conservatives, broke out into an open row on Monday, with leading Brexiteer Jacob Rees-Mogg warning May that she could split the party and leave it out of power for decades if she went for a close relationship with the EU. His words provoked a backlash from other Tories, with Foreign Office Minister Alan Duncan accusing him of “insolence” and being in a minority. But Duncan's boss, Boris Johnson, then moved to Rees-Mogg's defense, saying he had a right to speak.

Rees-Mogg said on a podcast posted on the ConservativeHome website on Tuesday that if the premier were to strike a deal that secures only “a promise of good faith” from the EU on the post-Brexit relationship in exchange for a 39 billion-pound ($44 billion) divorce payment, he'd oppose it in Parliament.

"What I've been trying to do is to support the prime minister's position and to remind people that any implementation deal will have to get through Parliament, and if it's a bad deal that doesn't meet the manifesto commitments, people won't vote for it,” he said.

The Cabinet will hold its usual weekly meeting on Tuesday morning.

According to reports, May's team have been warned there are effectively only six weeks left for meaningful negotiations with the EU ahead of the October summit when the final Brexit deal and future trade framework are due to be signed off. Talks on the free-trade accord that the U.K. wants with the EU haven't even started -- because May hasn't given the EU enough detail on what she wants.

Brexit campaigners like Johnson, Trade Secretary Liam Fox and Michael Gove, the environment secretary, objected to May's preferred option for a close customs “partnership” with the EU. They feared it would bind Britain too closely to the EU tariff regime and thereby limit the country's freedom to strike trade deals with the rest of the world.

The other option -- a streamlined arrangement known as “maximum facilitation” -- would use technology and trusted trader schemes to minimize the need for goods checks at the border. This is critical because both the U.K. and the EU have committed to ensuring no hard border is erected at the land frontier with Ireland.

The EU had reservations about both options.

--With assistance from Kitty Donaldson, Thomas Penny, Robert Hutton and Alex Morales.

To contact the reporter on this story: Tim Ross in Brussels at tross54@bloomberg.net

To contact the editors responsible for this story: Flavia Krause-Jackson at fjackson@bloomberg.net, Emma Ross-Thomas, Robert Jameson

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