Sign up here to receive the daily news briefing in your inbox every morning with exclusive insight from the BrexitCentral team Cabinet ministers poised to back max fac customs option as Irish border solution breaks Brexit deadlock… Two well-placed sources told City A.M. ministers were “coalescing around” max fac, but with enough modifications that it could be presented as the PM’s mooted third way, as a “face-saving exercise for everybody”. Max fac – which would allow so-called “trusted traders” to cross the Northern Ireland and other EU borders freely, aided by technology – took a bruising last week when HMRC boss Jon Thompson suggested it could cost businesses £20bn a year. But allies of Gove – who backs the proposal – told City A.M. that ministers had not been briefed on the figure, and that it was “probably bullshit”. The Institute of Economic Affairs (IEA) estimates the cost at closer to £5bn in a paper which has been circulated among decision-making ministers. The critical breakthrough is thought to have come from a new solution to the Irish border question. The proposal involves pre-approving trusted traders, while enforcing island-wide standards on areas such as meat. Proponents of this idea suggested it was virtually identical to existing standards and would not result in the feared border down the Irish Sea. – City A.M. …as David Davis proposes 10 mile-wide trade buffer zone along Northern Ireland border… David Davis is devising a new Brexit plan to break a talks deadlock by giving Northern Ireland joint EU and UK status as well as a border buffer zone. Under the radical blueprint, the province would operate a double hatted regime of European and British regulations at the same time, so it can trade freely with both. The Brexit Secretary is also drawing up a 10 mile-wide buffer zone the length of Northern Ireland’s 310 mile border with Ireland. Dubbed a ‘special economic zone’, it will be for local traders such as dairy farmers – who make up 90 per cent of the cross border traffic – and share the same trade rules as south of the border. The two plans will together eradicate the need for any border check points, which is a major EU demand. But both run the risk of infuriating the DUP, whose 10 MPs are propping up Theresa May’s minority government. – The Sun David Davis radical scheme to give Northern Ireland joint UK and EU status may enrage DUP – Express Brussels will thwart Davis’s Irish border plan — we must start ‘no-deal’ preparations now – The Sun says Irish border issue serves Remainers and Eurocrats – Express editorial …while Police Service of Northern Ireland calls for recruitment of hundreds of extra officers for border The PSNI is preparing to ask the British government for millions of pounds to fund hundreds of officers along the Irish border after Brexit… Both the Irish and British governments have insisted there will be no physical infrastructure on the border, but it emerged yesterday that there are plans to retain police stations near the Republic. The PSNI is preparing a case to appeal for additional funding to prepare for the aftermath of Brexit. The estimated number of extra officers required is understood to be between 300 and 500. “All we are doing is saying, ‘Let’s do some sensible planning that will enable us to be match-fit to be ready for the post-Brexit era,’” Mr Hamilton told BBC Northern Ireland yesterday. – The Times (£) Northern Irish police ask for more funds to protect border – Guardian Irish justice minister Charlie Flanagan says Ireland will not seal frontier but does not rule out some physical infrastructure at border – The Times (£) Fox urges Brussels to avoid US trade war as EU mulls retaliatory sanctions against Trump Britain is calling on Brussels to step back from a trade war with the United States after President Trump imposed new tariffs on EU imports. The US levied a 25 per cent duty on steel from the European Union, Canada and Mexico yesterday, prompting anger from governments and business leaders. Wilbur Ross, Mr Trump’s commerce secretary, also announced a 10 per cent tariff on aluminium… Brussels had already been drawing up a “hit list” of US goods for retaliatory tariffs, including Harley-Davidson motorcycles, bourbon whiskey and Levi jeans. Up to €2.8 billion worth of products could face tariffs of 25 per cent as early as this month… Liam Fox, the trade secretary, said yesterday that Britain “does not rule out” countermeasures or a challenge in an international court. However, he urged calm on all sides to avoid a full trade war. “It would be a great pity if we ended up in a tit-for-tat trade dispute with our closest allies,” he told Sky News. – The Times (£) Trade war fears as US slaps tariffs on EU steel and aluminium – Sky News Markets drop as White House confirms steel and aluminium tariffs to hit European Union, Canada and Mexico – City A.M. Brussels set to retaliate over Trump tariff move – The Times (£) Trump’s trade war is back on – James Forsyth for the Spectator Why Trump’s trade war with the EU and China could end in disaster – for all sides – Telegraph (£) All US tariffs will do is alienate its allies – Telegraph editorial (£) President Trump’s imposition of steep tariffs on steel and aluminium imports will damage global growth and the US economy. Allies should persuade him he’s wrong – Times editorial (£) EU set to let British students remain part of Erasmus programme Brussels on Wednesday extended an olive branch to the United Kingdom, opening the door for British youngsters to take part in its Erasmus program even after the country leaves the EU… Thomas Jorgensen from the European University Association said he views the change in Erasmus rules as a direct consequence of Brexit… The previous system limited the countries that could access Erasmus’ student, teacher or volunteer grants to EU countries plus accession countries, those in the European Free Trade Association and countries covered by the European Neighbourhood Policy. Wednesday’s proposal adds a new category, allowing any country to join Erasmus as long as it agrees to a “fair balance” of contributions and benefits — meaning countries must pay to take part… “I would not be surprised to see [similar language on international participation]” added in the Horizon text, Jorgensen said, in order to have “a coherent system.” – Politico Brexit department DExEU ‘to be absorbed by the Foreign Office next year’ The department in charge of Brexit could be absorbed by a beefed-up Foreign Office after the UK leaves the European Union next year, it has been suggested. Discussions over the future of the Department for Exiting the European Union (DExEU) have begun in Whitehall, with a merger with Boris Johnson’s department now on the cards. Politico reports that senior officials in Westminster believe that David Davis’s department cannot continue operating as a standalone entity beyond 2019 because it would send the wrong signal that Britain has not truly left the EU. According to one insider, the Government feels it has “give people concrete evidence that we’ve left the EU. That has to happen as soon as we’ve left.” – Telegraph Hello Brexit, goodbye Brexit department – Politico Whitehall sources insist EU exit department ‘will carry on’ – Express Cabinet outcasts visit PM to demand ‘sensible Brexit’… Three of Theresa May’s former cabinet ministers have requested a “sensible Brexit, please” at a meeting with the prime minister. Amber Rudd, Justine Greening and Damian Green were spotted leaving Downing Street on Wednesday. The trio, who all backed Remain at the EU referendum, are reported to have told Mrs May to ignore louder voices on the Remain and Leave wings of the Conservative Party. They also urged the prime minister to keep the UK closely aligned to the EU’s single market and customs union after Brexit, according to The Times. – Sky News Remainer Tory MP threatens to report Brexiteers for harassment after email campaign calling for her to resign – Daily Mail …as senior Labour MPs defy Jeremy Corbyn to demand second Brexit poll Two senior Labour MPs have called for a second referendum on the UK’s departure from the EU in a public split with the party leadership. Tonia Antoniazzi and Anna McMorrin, who are parliamentary private secretaries to members of the shadow cabinet, backed calls for a vote on the final Brexit deal. They are among 12 Labour MPs, council leaders, Welsh Assembly members and MEPs who signed the statement from Wales for Europe, a cross-party campaign group. – The Times (£) Hard left launch campaign to shift Labour position on Brexit – Guardian Left-wingers to tour Britain in campaign to convince Jeremy Corbyn to block Brexit – Independent Car production accelerates despite Brexit export fears… April was a bumper month for the British car industry, as the number of motors rolling off production lines increased by 5.2 per cent compared with last year. A total of 127,952 cars were built last month, boosted by new and updated models, the Society of Motor Manufacturers and Traders said. Despite concerns over the impact of Brexit, four out of five of the vehicles were exported. Manufacturing was up by 7.3 per cent for the home market and by 4.7 per cent for overseas sales. – The Times (£) …as growing number of firms expecting positive impact when UK leaves the EU Firms’ confidence is rising as more expect a positive impact from Brexit, a survey says. Overall confidence — a mix of business prospects and economic optimism — rose three points to 35 per cent this month. The level, on Lloyd’s Banking Group’s monthly index, hit its highest since January… Bank economist Hann-Ju Ho said: “Confidence is rising. Firms seem to be brushing off the first-quarter slowdown, with levels hitting a four-month peak in May.” … Forty-six per cent, up from 41 per cent, expected a rise in staff roles. Those expecting a fall remained at 16 per cent. – The Sun UK shoppers more optimistic in May but could drag economy down with Brexit fears – Bloomberg Italian President finally approves formation of Lega-5Star coalition government… Giuseppe Conte will be sworn in as prime minister of Italy on Friday, at the head of a populist government of the 5Star Movement and the League. Once installed in Rome, the new government is likely to take a Euroskeptic stance and clash with Brussels on the EU budget, immigration and European sanctions against Russia, where it favors a more conciliatory stance. Conte, who was a little-known law professor until being propelled onto the national political stage this week, unveiled a Cabinet team that includes 5Star and League leaders Luigi Di Maio and Matteo Salvini as vice premiers. The Cabinet secured the approval of President Sergio Mattarella late on Thursday. He had refused to approve Conte’s first Cabinet line-up because it included a Euroskeptic economist, 81-year-old Paolo Savona, as the proposed economy minister. On their second attempt at proposing a Cabinet, the populist alliance insisted on giving Savona a ministerial post anyway — ironically, as EU affairs minister, where he will ensure there is plenty of confrontation with Brussels. – Politico Italian anti-establishment leaders reach deal to resurrect coalition – City A.M. Italy’s president approves populist Rome government – FT (£) Ministers fear Italy’s political crisis will distract EU chiefs from Britain Brexit deal – The Sun Italy turmoil accelerates outflows from Europe – FT (£) Could a eurozone crisis benefit Brexit? – James Forsyth for the Spectator …amidst Italian anger at Juncker after Commission chief says they need to ‘work harder’… Italy’s new deputy prime minister accused the president of the European Commission of making a “shameful and racist” attack on Italians minutes after reaching an agreement for the formation of a new populist government yesterday. Matteo Salvini, leader of the far-right League, reacted angrily to reports that Jean-Claude Juncker had told MEPs that Italians needed to work harder and be less corrupt. “With the next government we will ensure that the rights and dignity of 60 million Italians are respected,” Mr Salvini said, adding that his compatriots expected collaboration and not insults from Europe. The clash could be the first of many involving the new Eurosceptic government. – The Times (£) Juncker prompts Italian ire with ‘more work’ jibe as European Parliament President Tajani slams remarks as ‘unacceptable’ – Politico German MEP risks fury after saying Brussels could take control of Italy’s spending if a eurosceptic Government is formed – The Sun Europe has a democracy problem – Douglas Murray for the Spectator > Austin Mitchell on BrexitCentral today: The European Union versus democracy …while Spanish Prime Minister Rajoy is set to be toppled in no confidence vote today Mariano Rajoy’s time as Spain’s prime minister is almost certainly over after the opposition Socialists secured parliamentary backing to oust the conservative leader. A majority of Spanish lawmakers on Thursday said they would back Socialist leader Pedro Sánchez’s motion of no confidence in the PM in a vote on Friday. If they are as good as their word, Rajoy will be out — and become the first leader of the country to be ousted in such a way — and Sánchez would immediately replace him as prime minister… The Socialists launched the initiative to oust Rajoy following a court ruling earlier this month in which 29 people, including former senior officials from the prime minister’s conservative Popular Party (PP), were sentenced to a total of 351 years in prison for corruption. – Politico Eurocrat corruption, brawls and bullying exposed Disciplinary records show that 12 civil servants employed by the European Commission were punished for misconduct, while another 11 escaped with a formal warning. In three separate cases, civil servants were demoted after it emerged that they had lied or omitted key details about their financial circumstances to access extra benefits funded by European taxpayers. One of those officials was found to have received “substantial financial benefits over several years to which they were not entitled.” In another incident, an EU civil servant was demoted after a physical altercation with a colleague at a public event… It was brought to light following a freedom of information request by The Red Cell, a British eurosceptic think-tank. “This report demonstrates why the UK was right to vote to leave the EU,” said Dr Lee Rotherham, The Red Cell’s director. Once taxpayer money ends up in Brussels, people there too often forget it where it comes from. There’s no real sense of ownership and accountability. But it doesn’t come from a magic EU money tree. It comes from ordinary hardworking people’s payslips.” – Telegraph Fury as Euro judges back MEP Janus Korwin-Mikke over his claims women should earn less than men because they’re ‘weaker, smaller and less intelligent’ – The Sun European Medicines Agency warns of higher-than-anticipated staff losses in Brexit move away from London Europe’s drug watchdog is bracing for higher-than-anticipated staff departures due to its Brexit-induced move to Amsterdam, raising pressure on the agency that oversees medication safety for about 500 million people. A host of issues, including the effect of local labor laws on short-term contracts, could boost employee losses at the European Medicines Agency beyond 19 percent, the level it estimated last year, Executive Director Guido Rasi said in an interview at its headquarters in London’s Canary Wharf district. Hitting that target will be “very challenging,” he said… U.K. experts carry out about a fifth of the EMA’s work, and drugmakers have also expressed concern that the supply of medicines could be disrupted if Britain isn’t part of the European drug-approval process – Bloomberg Lord Lawson denies accusations of Brexit ‘hypocrisy’ over French residency application Remain campaigners said Lord Lawson’s French residency application made him look “like a hypocrite”. But the peer rejected the claim and said the row was a storm in a teacup, telling the Telegraph it was “well known” he lived in France. He said he had applied for residency following a request to do so from the French authorities. He said: “It is well known that I live in France and have done for many years. I have mentioned this frequently in Brexit debates in the House of Lords and elsewhere. It was the French authorities who recently asked me to apply for what they call a carte de sejour.” – Telegraph Anti-Brexit group Best for Britain jump on Lord Lawson’s French residency application with ‘hypocrite’ jibe – The Sun Philip Collins: Let’s drop the pretence Brexit can be stopped The hope of Remain campaigners is that power is now passing to parliament and that the two chambers can correct the error the people made in the referendum. This is, surely, in the end, an illusion… Even if an election could be forced, which is hard to envisage, Jeremy Corbyn will not lead an election campaign dedicated to the demand for a second referendum. He doesn’t really care. Even if he did, an election victory itself does not dispense with the referendum. The popular will has two forms and the stark truth is that the only way to cancel the first referendum is with a second. But all the people who need to consent don’t want one, chief among them the prime minister and the majority of the public. – Philip Collins for The Times (£) Charles Moore: The EU should go the way of the British Empire To understand how the European Union works, and how it doesn’t, it helps to think of it as an empire. Empires are not fashionable just now, but they have their uses. At their best — Rome, Britain — they are capable of upholding common standards, preserving peace and prosperity, and helping civilisation flourish. The EU has often achieved some of these things. But when empires are challenged by significant numbers of their inhabitants, their fundamental lack of legitimacy is exposed. The EU has now reached this stage because of imperial overstretch and imperialist doctrines — the euro and mass immigration being the most important. Anti-imperial independence movements take many forms. Brexit is one. The Italian revolt — a financial version of Spartacus’ rebellion — is another. The determination of the Visegrad 4 to control their borders is a third. In the short term, empires can squash these uprisings — look how brutally Brussels and Berlin put down the Greeks — but they lose in the end. Their more intelligent leaders recognise this. Britain eventually saw the writing on the wall and invented the Commonwealth as a decorous retreat. The EU should do likewise, and re-form as a friendly association of free countries, trading freely. Perhaps a nice name for it would be the Common Market. – Charles Moore for the Spectator The Sun: Brussels will thwart Davis’s Irish border plan — we must start ‘no-deal’ preparations now We admire David Davis’s imaginative effort to resolve the Irish border question. But we fear he’s wasting his energy. It might win over the Cabinet and even, at a pinch, the DUP. Brussels will bin it in seconds. That’s because they blew this “problem” up specifically to thwart Brexit. They don’t want it fixed. They believe it could keep us just where they want us — helplessly and permanently under their thumb in a customs union. And Italy’s eurosceptic revolt will only worsen their intransigence… The mutually beneficial trade deal The Sun always hoped for is vanishing into the distance. Our Government knows it. Yet scandalously it is failing to prepare us to walk away, as we may have to. Chancellor Philip Hammond vetoes the necessary spending. He and Theresa May will both be to blame if we face no-deal chaos on Brexit day. David Cameron foolishly had no contingency plan for a Leave vote. But it would be infinitely more negligent not to put serious money behind “no-deal” preparations now. – The Sun says Joan Hoey: Brexit in the balance The Brexit negotiations are stuck in a stalemate. The EU is playing hardball on everything from the UK’s participation in the Galileo satellite navigation programme and the European Arrest Warrant to the Irish border issue. It scents weakness. Confusion and chaos reign in the UK government, where internal disagreements over Brexit have become paralysing… May now appears to have reached a dead end. The EU is using the Irish border issue as leverage to extract more concessions from the UK. It says that by the June summit it needs a “self-standing backstop” to prevent a hard border in Ireland, and to finalise the withdrawal treaty by October. A deal now looks increasingly unlikely. Time is running out, and the EU does not seem to be in the mood for compromise… Brexit outcomes are finely poised between two stark alternatives. The UK stays in some form of customs union and possibly remains subject to Single Market rules, effectively not leaving the EU (“Brexit in name only”). Alternatively, Brexiteers replace May, fight new elections on a pro-Brexit ticket, and adopt a tough stance in the negotiations. Britain must pick a side soon – Brexit hangs in the balance. – Joan Hoey for City A.M. Jacob Rees-Mogg: We need to leave the customs union to honour the Brexit vote We have sent man to the moon, the bottom of the ocean, survived war, plague and the creation of the internet yet there are those who tell us that leaving the European Union’s customs union is a problem that makes solving Fermat’s Last Theorem look like a doddle. This is manifestly not the case – the problem, in so far as it exists, is purely political and based on a number of false premises. The main false premise is that it is not possible to leave the customs union and keep the Northern Irish border free of new infrastructure. This has been denied clearly on multiple occasions by the head of HMRC Jon Thompson and by his Irish opposite number Niall Cody… The last false premise is that there is some happy compromise waiting to be discovered. However, customs union membership is binary and Leave won… The truth is that leaving the EU’s customs union is necessary to keep faith with the referendum result and reap the benefits of Brexit. If we remain in it we will accept EU laws, collect EU taxes and have ourselves a trade policy where we are without any say – a vassal state. Outside we can get to work on increasing our trade, creating jobs and opportunities and reducing the cost of food and clothing for our consumers. – Jacob Rees-Mogg for the Express The Who’s Roger Daltrey on backing Brexit, and why rock music peaked in 1971 When the subject turns to politics, the effusive frontman really gets going. He is proudly working-class (“You can’t escape it if you’re British, can you? You don’t buy your way out of it mate, that’s for sure”) but not particularly fond of Labour. “It pains me to say it, but in my life a Labour government comes in with incredible optimism and leaves the country in the s—.” Then he catches himself. “I shouldn’t go into this, I’m digging a hole for myself.” He complains that talking about politics brings him too much grief. Remarks in favour of Brexit were widely criticised in liberal music circles. “I’m not anti-Europe, I’m anti-Brussels, but people don’t get the distinction.” Daltrey launches into a passionate but well-informed rant about the lack of democratic accountability in the European Union. “That’s why I’m so angry about it,” he says. “I want someone at least answerable to me that I can say ‘f— off, you’re useless!’” – Neil McCormick interview Roger Daltrey for the Telegraph (£) Brexit in brief The eurozone needs a Trump to shake it up – Ed Conway for The Times (£) Abramovich’s Chelsea retreat carries a Brexit warning – Lionel Laurent for Bloomberg The Tories’ biggest future challenge is not Brexit: it’s AI, and the chaos it could unleash – Jeremy Warner for the Telegraph (£) Commission refuses to release Michel Barnier’s contract – Politico (€) Bercow’s new anti-Brexit car sticker: ‘Don’t blame me I voted Remain’ – Guido Fawkes British Overseas Territory citizenship rules ‘still unfair’ – BBC News Migrants leave Calais to target Normandy ports instead – The Times (£) Barclays to tighten lending to Brexit-affected UK economy, says Staley – BBC News Eton provost in charge of decision whether to make commemorative coin to mark Leave victory – The Times (£)