Sign up here to receive the daily news briefing in your inbox every morning with exclusive insight from the BrexitCentral team DUP threatens to bring down Theresa May’s Government if it crosses Customs Union red line… The DUP has warned it will bring down Theresa May’s Government if Northern Ireland is forced to stay in the Single Market or Customs Union after Brexit. Nigel Dodds, the leader of the Democratic Unionist Party at Westminster, said his party would vote against the Government if any of its “red lines” on Brexit were crossed… David Davis, the Brexit Secretary, said he would have personally “failed” if the UK has to stay in a customs union after Brexit. He also suggested that the EU was posturing when it last week ruled out Britain’s solutions over the Irish border as he insisted Brussels was simply setting out “opening positions” for negotiations… Andrea Leadsom, the Leader of the Commons [said]: “Genuinely, I cannot understand why anybody accepts leaving the EU but staying in the Customs Union. That’s the worst of all worlds.” – Telegraph The EU is seizing on divisions in Parliament to pursue maximalist ideological demands. It is specifically using the neuralgic issue of the Irish border to stop Britain leaving the customs union, and therefore to stop Britain restoring sovereign self-government. The mask dropped last week when EU officials engaged in what they called a “systematic and forensic annihilation” of Theresa May’s proposals for a loose customs arrangement. In fact, they did no such thing. They simply refuse to discuss any creative compromise on the issue. The tactic in these talks is to ridicule legitimate British proposals… There is a dishonesty to this whole discussion. The EU is blowing smoke over Ireland, promiscuously invoking the Good Friday Agreement and creating an overwhelming sense that solutions are impossible. In reality, the customs union does not in itself resolve the Irish issue. Nor does it make any difference in itself to the pace of lorry flows through the port of Dover, another media canard… It covers only goods where the EU has the advantage, but does nothing for services where Britain has the upper hand. – Ambrose Evans-Pritchard for the Telegraph (£) Irish EU commissioner urges May to rethink customs union stance – Guardian Varadkar rejects Davis’s hi-tech border solution – The Times (£) Northern Ireland civil servant warned May’s Irish border plan was flawed nine months ago, leaked letter reveals – Telegraph (£) UK says Irish Brexit border answer may not come until 2021 – Bloomberg Dodds warns against the “annexation” of Northern Ireland – Andrew Gimson interview for ConservativeHome Northern Ireland pushes Brexit talks toward fresh crisis – Tom McTague for Politico > Hugh Bennett on BrexitCentral last week: The EU is cynically exploiting the Irish border to try to keep Britain under the thumb …as Brexit supporters demand May sticks to plan for clean customs break… Brexit-backing Conservatives held private talks with Theresa May to demand that the U.K. prime minister sticks to her plan for a clean break with the European Union. At the meeting, which took place in the prime minister’s office on Tuesday, May reassured euroskeptics she will deliver the kind of Brexit they want, according to two people familiar with the conversation. The gathering was convened amid reports that May might be getting ready to buckle on her red line to quit the customs union… May is now facing pressure to go a step further and ditch what is said to be her favored option for a new customs and tariff regime. The so-called “customs partnership” plan would involve the U.K. collecting tariffs on the EU’s behalf and then refunding companies whose goods are destined for end-users who are not based in countries operating the bloc’s tariffs. The plan is far too complicated and won’t work, according to Tory critics, who are said to include Foreign Secretary Boris Johnson, Brexit Secretary David Davis, Environment Secretary Michael Gove and Trade Secretary Liam Fox. – Bloomberg …while it emerges government paid consultants £680k for ‘cretinous’ customs union plan… The U.K. government paid private sector consultants hundreds of thousands of pounds to help design a Brexit customs arrangement — only for the EU to dismiss it almost as soon as it landed in Brussels. Government records show the U.K. tax authority, Her Majesty’s Revenue and Customs (HMRC), spent £680,000 on a contract with consultancy firm McKinsey & Company to, among other things, assess the “commercial feasibility” of the “new customs partnership model.” … Brexiteers in May’s party have also criticized her “customs partnership” plan — known in Whitehall as the “hybrid model.” Leading Euroskeptic Jacob Rees-Mogg described it as “completely cretinous” and a “betrayal of common sense.” – Politico The EU “customs partnership” is one of the most half-baked ideas in economic history – Graeme Leach for City A.M. …as a former Turkish diplomat warns that striking a Turkey-style customs deal would reduce Britain to “semi-colonial status”… Britain has been warned against the dangers of striking a customs union deal with the EU which leaves it with “semi-colonial” status. A former top Turkish diplomat said a replica of his country’s agreement would not be the “most intelligent” choice for the UK. Mehmet Ogutcu, who helped negotiate Ankara’s customs arrangement, revealed some Turkish politicians feel being in the customs union has reduced them to rule takers from Brussels. He explained Turkey has “not been in the decision making process at all” when it comes to EU trade deals but still has to accept their terms. His remarks came as it emerged EU officials are considering consulting Britain – but not giving us a vote – if the Government U-turns on the Customs Union. – The Sun UK won’t get a seat at the table but could get a ‘say’ if it stays post-Brexit customs union, claims EU official – Bloomberg …and MPs prepare to debate a symbolic motion seeking a customs union today Pro-Remain MPs who chair Commons committees have tabled a motion calling on the Government to keep open the option of staying in the customs union in Brexit negotiations. But because the four-hour debate is deemed to be backbench Commons business, the Government will abstain if there is a vote after the debate and insist the outcome is not binding. After defeats in the House of Lords on the customs union over the past week, the important votes in the Commons on the customs union will come next month when the EU (Withdrawal) Bill returns from the Lords. – Sky News Theresa May to issue 50-page dossier of Brexit trade demands to outmanoeuvre Brussels… The PM’s Brexit war cabinet gave the green light to the bold bid to set the running for the summer’s tense negotiations ahead of an October deadline. The document will lay down a draft text of what Britain wants to see in the political statement with the 27 EU leaders over their future relationship with the UK. The EU outmanoeuvred Britain during divorce deal and transition period talks by laying down its own terms first, setting the agenda… The draft document – which will cover trade and security deals – could run to more than 50 pages. It will be published as early as next month. A Whitehall source said: “We have learned from the EU’s tactics of the last two rounds. “We are not going to wait for Michel Barnier to box us in again. The PM wants us to set the agenda now, and the pace too.” The EU only wants rough guidelines agreed for a future trade deal, along with the final divorce settlement by October for national Parliaments to then ratify them. Britain wants to force the pace to agree as much detail as possible on the future relationship before Brexit on March 29 next year to persuade Tory MPs that the £39bn divorce bill is worth paying. – The Sun May and Brexit inner circle agree to draft dossier of trade and security deals in bid to steer upcoming talks with Brussels – City A.M. …as David Davis tells MPs ‘political declaration’ could be converted into treaty by March 2019 Britain can agree a trade deal with the EU before Brexit day, David Davis has said… Both sides want to agree the terms of the UK’s withdrawal at a summit of European leaders in October, allowing the British and European parliaments and other national legislatures time to approve any deal. At the same summit, the government wants to secure a “political declaration” setting out the intention for the UK and the EU to sign a free trade agreement once the 21-month transitional period is over… Asked by the Commons Brexit select committee whether treaty negotiations would spill over into the transitional period, the Brexit secretary replied: “No, not inevitably. Bear in mind, you’ve just left out a six month lacuna, between October of this year and March 2019. So it will not inevitably spill over.” – The Times (£) Parliament won’t be able to change the Brexit terms even if they vote to stay in customs union, says David Davis – The Sun UK will be in weak position if MPs reject Brexit deal, says Davis – Politico Eurocrats ridicule David Davis trade ‘fantasy’ – The Times (£) David Davis tries to calm fears over a customs union reversal – Tom Goodenough for the Spectator Ministers suffer fresh Lords defeat over Brexit ‘power grab’ Theresa May’s Brexit plans have suffered another bruising defeat in the House of Lords as peers demanded curbs to the “heavyweight” powers set to be granted to ministers by the flagship EU exit bill… Critics have argued that the so-called Henry VIII powers amount to a “power grab” by ministers, and peers from across the House of Lords today backed an amendment seeking to rein in the powers. Peers voted 349-to-221 in favour of a cross-party amendment from crossbencher Lord Lisvane which rewords the Bill to say the powers can only be used if “necessary”. – PoliticsHome Lords inflict further defeat on May over key Brexit Bill – Bloomberg > On BrexitCentral: Running tally of how the House of Lords voted on amendments to the EU Withdrawal Bill at Report Stage No urgency in Brexit planning, MPs warn MPs say they have “grave concerns” at the lack of progress made by the government’s business department in preparing for Brexit. The Public Accounts Committee said the department was one of the most heavily involved with the UK’s EU departure. But the committee’s chairwoman [Labour MP Meg Hillier] said it was “operating in a parallel universe where urgency is an abstract concept”… [T]he committee said it was “alarmed that the department has made virtually no attempt to re-order its priorities”. It said it doubted the department’s ability to deliver “numerous IT systems” that would be required when the UK leaves the EU. The committee said that in January, when it took evidence for its report, “extraordinarily, the department had not yet started to procure any of these systems despite them being required by March 2019 in the event of a no-deal scenario”. – BBC News > Victoria Hewson on BrexitCentral: Ministers must set up new customs processes, whatever the final outcome of the Brexit talks Scottish Government urged to reconsider Brexit deal Theresa May has urged the Scottish government to reconsider its opposition to Brexit legislation after “considerable changes” by Westminster. Welsh ministers agreed a compromise over the EU (Withdrawal Bill), and Mrs May said it was disappointing that Holyrood ministers had not followed suit. David Davis, the Brexit secretary, told MPs that talks were still taking place to secure the support of the Scottish government… After Westminster offered to include a “sunset” clause, which would curb its influence after seven years, and seek consent before legislating on common frameworks, the Welsh government agreed. Scotland has refused. – The Times (£) > Brian Monteith on BrexitCentral: Nicola Sturgeon is playing a high-stakes Brexit power game Handful of rogue EU countries holding Britain back from tough sanctions on Kremlin-linked oligarchs, Philip Hammond reveals The Chancellor lifted the lid on the block as he expressed Britain’s frustration during a grilling with MPs. The rogue nations are suspected to be Austria, Greece and Italy. Britain and Brussels chiefs want to follow the US’s lead in targeting suspect Russian billionaires and their assets across Europe. The move would turn the screw on President Putin over the Salisbury nerve agent attack and aiding poison gas attacks in Syria. Mr Hammond told the Commons Treasury Select Committee that the UK supports America’s action. But he added: “I think it’s probably fair to say there are varying degrees of appetite within the EU for further pressure on these individuals. One of the challenges working within the European Union is one is required to build a consensus of 28, which frankly means operating at the lowest common denominator”. – The Sun Graeme Leach: The EU “customs partnership” is one of the most half-baked ideas in economic history Last August, the government set out two options for the UK outside of the customs union. Neither received intense scrutiny at the time, but thankfully that has now changed. The first option was a highly streamlined arrangement based around technology, cooperation, and indeed reality (the fact that almost 98 per cent of container traffic is not physically inspected and is pre-cleared): it entailed removing any need for a hard border with the EU. The second option was the proposed “customs partnership” with the EU, and it is this arrangement which is now under the spotlight, up for discussion at this week’s meeting of the cabinet’s Brexit sub-committee. However, any discussion is a waste of time. It is one of the most half-baked ideas in economic history. It should never have seen the light of day. It should have been strangled at birth… The proposal bears all the hallmarks of an EU-leaning Whitehall bureaucracy intent on trying to hoodwink ministers and the general public… Under the partnership proposal, the UK would not only be collecting the EU’s CET and enforcing its tariff rate quotas, alongside its own tariff schedule. It would also have to enforce the EU’s non-tariff rules as well. UK officials would have to police both regimes. This is completely bonkers. – Graeme Leach for City A.M. Mark Garnier: How I, a keen Remainer, have learned to accept Brexit As an enthusiastic, but defeated, Remain campaigner, I have first-hand experience of the Kubler-Ross model of the five stages of grief: denial, anger, bargaining, depression. Yet it is without a shadow of a doubt that my time as a trade minister has led me to complete the fifth stage – acceptance – far quicker than many of my colleagues from the Remain campaign… Trade deals tend to tackle goods before services. Our economy flourishes on our wide service industry and it is a great, significant export. The EU single market in services is alarmingly shallow, given where we had hoped we should be by now. It is important – vital – that we secure access for our whole economy, including services, to the EU post-implementation, but it is not the whole opportunity for our service industries. Britain leading the way in 21st century trade deals can pioneer services as part of those deals… But none of this can happen if we stay within the, or a, customs union with the EU. There can be no global opportunity. There can be no network of trade deals, attracting more businesses to the UK for a fresh set of opportunities. There can be no global British leadership for free trade and all the good that brings. – Former trade minister Mark Garnier MP for the Telegraph (£) Asa Bennett: The threat to the House of Lords from incensed Brexiteers is very real Jacob Rees-Mogg attracted a lot of attention with his coruscating critique of Theresa May’s approach to Brexit, but another target of his ire was noteworthy: the House of Lords… “When it challenges the democratic will, as it is doing now, then we get fed up with it and think it has very little legitimacy and needs to be challenged,” Mr Rees-Mogg declared yesterday. “Their lordships are playing with fire and it would be a shame to burn down a historic House… they may have to decide whether they love ermine or the EU more.” … If they hadn’t rushed to scoff at him, they might have realised that there is palpable Leaver discontent about what they have been doing. That is best exemplified by the soaraway success of a petition demanding a referendum on abolishing the House of Lords due to its “disproportionate amount of influence and power which can be used to frustrate the elected representatives of the people”. – Asa Bennett for the Telegraph (£) When we leave the EU, the Government should focus on the House of Lords – Fergus Kelly for the Express Mark Field: Closer ties to Japan await us at the end of the road to Brexit Japanese businesses now see prospects for a positive path forward. They are adopting a pragmatic approach to their contingency planning. As Masayoshi Matsumoto, chairman of the Kankeiren (Osaka’s equivalent of the CBI), told me: “the UK is now free to forge its own path”. Newfound Japanese optimism on Brexit was the icing on the cake during my visit. I was delighted to keep up the progress on a relationship that is blossoming in every sense. I met the Trade Ministry to discuss progress on a new economic partnership with Japan, based on the EU-Japan Economic Partnership Agreement. Japan is also the second biggest non-European source of FDI into the UK, and thanks largely to this great Asian nation, a vehicle comes off a production line in the UK every 20 seconds. – Foreign Office Minister Mark Field MP for City A.M. Comment in brief Jacob Rees-Mogg is the leader Britain needs to stand up to the EU like none has dared since Thatcher – Nigel Farage for the Telegraph (£) Like the Windrush children, EU nationals raised here have a moral right to UK citizenship – Daniel Hannan MEP for ConservativeHome Windrush scandal shows ‘Brexitland’ still values immigration and is not hateful of foreigners – Brendan O’Neill for The Sun Tory Brexit rebels could put Jeremy Corbyn in Downing Street – Stephen Pollard for the Express News in brief American meat is safe for UK trade deal, US farmers say – BBC News UK in ‘preliminary foothills’ of EU financial services talks – Bloomberg Brussels ‘will have huge say’ on immigration after Brexit, Andrea Leadsom admits – The Sun Royal Mail still won’t mark Brexit – but does find time to celebrate OWLS – The Sun