Customs arrangements after Brexit –the options

Theresa May and her Brexit war cabinet are considering how to deal with customs arrangements after leaving the European Union.

The prime minister has ruled out staying in the existing European customs union, which allows frictionless trade between member states, but requires them to apply uniform external tariffs, preventing them from striking their own trade deals.

So what are the options under consideration?

1. A “customs partnership”. This would involve the UK collecting tariffs on behalf of the EU on goods arriving at its ports and airports. If Britain develops its own lower tariff rates, companies would be able to claim refunds from HM Revenue and Customs on products which remain in the UK.

Backers: The scheme was dreamt up by Mrs May’s representative in Brexit talks, Olly Robbins, as a means of preserving frictionless trade – particularly at the Irish border – while giving the UK the freedom to strike deals outside the EU. The prime minister is widely thought to favour it, though she has not committed herself publicly to any option.

Critics: The European Research Group of around 60 eurosceptic Tory backbenchers has warned it would be Brexit in name only. The group’s chairman Jacob Rees-Mogg describes it as “cretinous” and says it breaches the party’s manifesto commitments. The European Commission is said to view it as unworkable. 2. The “streamlined customs arrangement”. This relies on new technology to make movements of goods as frictionless as possible. Larger companies could register as “authorised economic operators”, declaring imports and exports electronically and automatic number plate recognition could log movements across the Irish border.

Backers: This is thought to be the favoured solution of Brexit Secretary David Davis, though he has admitted it is based on “blue sky” thinking.

Critics: The European Commission

has raised concern over suggestions the system would require customs exemptions for small businesses, which could fuel smuggling. Police have warned any physical infrastructure – like cameras on poles – could become the target of attack by sectarian groups and criminals. 3. The “backstop”. This is the only option included in the draft legal text of the UK’s Withdrawal Agreement drawn up by the European Commission. It would effectively see Northern Ireland remain part of the customs union, so goods can flow freely across its border with the Republic.

Backers: This is regarded in Brussels as a “least-worst” option, in the absence of an improved proposal from the UK. It has the merit for the EU of resolving concerns about a porous external border without disrupting the Good Friday Agreement.

Critics: Mrs May has said no prime minister could ever accept it, as it would effectively create a customs border down the Irish Sea. It is fiercely opposed by the Democratic Unionist Party.

Jacon Rees-Mogg has dismissed one of the suggestions as being “cretinous”.