Sign up here to receive the daily news briefing in your inbox every morning with exclusive insight from the BrexitCentral team Theresa May told Brexit rebels: back me or we hold an election… Theresa May threatened Conservative rebels with a general election this summer if they defeated her plans on customs after Brexit. Tory whips issued the warning to Remain-backing MPs, led by the former ministers Stephen Hammond and Nicky Morgan, minutes before a crucial vote last night that would have kept Britain inside a customs union. The prime minister survived the vote by a majority of six, although 12 of her MPs walked through the opposition division lobbies in defiance. One rebel revealed the threats by Chris Pincher, the deputy chief whip. “[Pincher] said they would pull the third reading of the [trade] bill and call a vote of confidence. He said we’d be responsible for a general election and putting Jeremy Corbyn in No 10. It was appalling behaviour. Totally disgraceful.” – The Times (£) …before winning a knife-edge customs union vote… The government has survived an attempt by pro-EU Conservative MPs to change its post-Brexit trade strategy. The MPs wanted the UK to join a customs union if it does not agree a free-trade deal with the EU. But the government, which says a customs union would stop it striking new trade deals, won by 307 to 301. Ahead of the vote, Tory MPs were told a defeat would lead to a vote of no confidence in the government, sources told the BBC’s John Pienaar. – BBC News …with the help of Labour Leavers… Four rebel Labour MPs could have helped Theresa May keep her job after they voted to save the government from humiliation on a critical Brexit vote. Pro-EU MPs lost a bid to make the UK change its Brexit strategy in favour of joining a customs union, if it does not agree a free-trade deal with the EU. Theresa May was saved from the humiliating reverse by the votes of four Labour Brexiteers – and one currently sitting as an independent – who backed the Government in the crucial division. – iNews Fury at the 12 Tories who promised to back Theresa May on her Chequers plan but then went back on the deal – Daily Mail Remainers threatened No 10 into backing soft Brexit, then reneged – Guido Fawkes Theresa May survives knife‑edge Brexit customs vote – The Times (£) PM sees off Tory rebellion to scrape through Brexit vote – Sky News Government’s not so cunning plan for early summer break is scrapped – Katy Balls for The Spectator The arm-twisting, ‘dirty tricks’ and gambles that helped Theresa May avert Brexit defeat – Telegraph (£) Theresa May survives again (but with a broken party) – Politico Jo Swinson says Tories broke Brexit vote agreement – BBC News …after losing a vote to Remainers on the EU medicines regulatory network Remainer rebels and Labour MPs have defied Theresa May over her Brexit policy, ensuring the government seeks participation in the European medicines regulatory network as part of its negotiating objectives. The amendment, which was tabled by former minister Phillip Lee, was passed 305 votes to 301 – a majority of just four. During the debate, Hammond was asked repeatedly to back down. – City A.M. How the factions line up – The Times (£) Full list of Conservatives who rebelled on Trade Bill amendments – and the Labour Leavers who rebelled the other way – Mark Wallace for ConservativeHome Boris Johnson expected to make Commons resignation speech today Mrs May must face the 1922 Committee of backbench Tory MPs today after two days of furious mud-slinging on the Government benches. Boris Johnson, who resigned as foreign secretary over the Chequers agreement, is also expected to intervene by making his resignation speech in Parliament after PMQs, though allies said Mr Johnson will not make any personal attacks on Mrs May. – Telegraph (£) No-deal Brexit ‘would leave EU financial system worse off than UK’, says Bank of England Governor The European Union’s financial system will come off worse in a no-deal Brexit, Mark Carney told MPs, as another chaotic day in Parliament threatened to tip Britain closer to a scenario he said would also have “big economic consequences” at home. The Governor of the Bank of England warned that the negative consequences on the continent of failure to agree terms would be “cold comfort” for Britain as the City would effectively be cut off from EU. Mr Carney gave evidence to the Treasury Select Committee, chaired by leading Remain rebel Nicky Morgan, that the consequence on the continent of no deal would be “extreme fragmentation of the European capital market”. “There’ll be a shortage of capital collateral capacity in the EU without question, which will take some time to adjust to”, Mr Carney said. – Telegraph (£) Carney sees ‘big’ consequences in no deal Brexit – Sky News … as Airbus and Rolls-Royce look to stockpile parts Britain’s two biggest aerospace companies Airbus and Rolls-Royce are looking to stockpile parts in the event of a “no-deal Brexit” as a senior executive warned that the consequences of crashing out of the EU would be “criminal”. Airbus has already begun building up parts and examining its supply chain to see how customs red tape could hurt it, chief operating officer Tom Williams told the Farnborough air show. Mr Williams, the most senior Briton in the pan-European company, said that if the company was damaged by Brexit, it would be “criminal”. – Telegraph (£) Airbus threat is pie in the sky – Patrick Benham-Crosswell for ConservativeWoman Aerospace exports to fuel UK trade as industry growth swells Aerospace is the UK’s second fastest growing export sector, according to new research which comes in the week of the industry’s biggest event of the year.Exports in the aerospace sector are set to grow 3.7 per cent a year up until 2021, making the sector second in its growth only to food and beverage exports, data from Wyelands Bank and the Global Trade Review has found. Last year aerospace exports from the UK were worth $21.5bn (£16.3bn), with projected growth potentially generating an extra £796m a year. – City A.M. EU brushes off Chequers plan and focuses on Irish border The European Union has serious doubts over the government’s political stability but will string Theresa May along in negotiations while focusing on boxing Britain into a controversial “backstop” over the Irish border. Leo Varadkar, the Irish prime minister, insisted yesterday that Brexit negotiations remained on track despite Eurosceptic amendments to the government’s plans. While noting “political instability in London and turmoil in Westminster”, he said that developments “shouldn’t give us cause for panic, and certainly shouldn’t give us any reason to change our position”. – The Times (£) Penny Mordaunt threatens to block all British aid money to EU projects Aid chief Penny Mordaunt last night threatened to stop all British aid money going to EU humanitarian projects in an explosive new row with Brussels. She accused the EU of putting the world’s poorest at risk by blocking millions of pounds going to British aid organisations because of Brexit. Ms Mordaunt let rip at Brussels over revelations the European Commission is discriminating against UK charities and aid organisations by telling them they will be dropped from aid projects if Britain leaves the EU without a deal next year. She told the Commons International Development committee that 20 per cent of all EU aid funding is spent by British NGOs. Ms Mordaunt said: “We are clear that the European Commission must remove these disclaimers it is using to hinder British Aid organisations from delivering the common goal of alleviating poverty which would hit the world’s poorest people hardest. – The Sun Sir John Major blasts Leave ‘fanatics’ as Tory civil war breaks out Sir John Major accused “fanatical” Tory Brexiteers of going to “almost any lengths” to ensure that their vision of leaving the EU prevailed as open warfare broke out in the party yesterday. Conservative MPs traded insults and accusations over Theresa May’s Brexit blueprint with the backbencher Nadine Dorries accusing her colleague Anna Soubry of “losing the plot” and making one of the worst speeches that she had ever heard in the Commons. The former minister Phillip Lee, who resigned last month over the prime minister’s handling of Brexit, said the behaviour of Brexiteers represented “the worst experience I’ve had in eight years”. – The Times (£) EU inks its largest trade deal ever with Japan The European Union and Japan today signed a free trade deal that creates the world’s largest open economic area, covering nearly one third of global GDP. Both sides hope that the deal will counteract any damage done to the role of free trade by recent US protectionist policies, ahead of a looming trade war with China. EU officials expect the deal to boost the EU economy by 0.8 per cent, and Japan’s by 0.3 per cent over the long term.”We are sending a clear message that we stand against protectionism. The EU and Japan remain open for cooperation,” said European Council president Donald Tusk.- City A.M. Smiths Group revenues to take a hit from new EU medical devices regulation Engineering firm Smiths Group said this morning that it will take a hit to revenue as a result of new EU regulations on medical devices.The FTSE 100 group has had to temporarily suspend some of its devices in Europe in advance of rules due to take effect in 2020, as one of its service providers has lost certification for some products.This combined with the termination of two contracts in the US means the Smiths Medical division will take a two per cent hit to revenue, the company said.Meanwhile, Smiths reported an update for the 11 months to the end of 30 June, which saw overall revenue rise three per cent on an underlying basis. – City A.M. Britain’s Brexit dividend for the NHS ‘swallowed up’ by divorce payments Theresa May was yesterday accused of gambling with the UK’s finances – as experts said there was no Brexit dividend for an NHS bonanza. The Office for Budget Responsibility (OBR) said any savings on EU contributions had already been “swallowed up” by other promises made, such as divorce payments, supporting farmers and access to EU agencies. And they claimed the PM’s £20billion NHS commitment will have to come exclusively from tax hikes or spending cuts. Even then, the plans will leave a £2.8billion shortfall in what the NHS is projected to need by 2022-2023, the OBR said. OBR chief Robert Chote told The Sun: “The question is in the wider political climate how easy will it be to get tax rises or spending cuts through Parliament in order to pay for this.” – The Sun Electoral Commission accused of being ‘motivated by political agenda’ The Electoral Commission has been accused of being “motivated by a political agenda rather than uncovering the facts” after it concluded a leading Brexit campaign group broke electoral law during the EU referendum. Vote Leave has been fined and is now facing a police probe after the commission said its investigation found “significant evidence” of joint working between the lead organisation and another campaign group, BeLeave. But Vote Leave has responded with fury to the commission’s report and said it was “confident that these findings will be overturned”. Meanwhile, the commission claimed Vote Leave had “resisted our investigation from the start” and had “refused to co-operate”. But a spokesman for the group rejected the claim and said it was “astonishing that nobody from Vote Leave has been interviewed” by the commission in relation to the investigation “despite Vote Leave repeatedly making it clear they are willing to do so”. – Telegraph (£) Electoral Commission email reveals they refused to speak to Vote Leave – Guido Fawkes Keir Starmer: Labour will never support Theresa May’s flawed Brexit blueprint Like many of you, I have watched with anger, frustration and despair at the Government’s handling of Brexit. Shambles is an overused word in politics, but over the past week the Tories have brought a whole new meaning to the word. At the start of the month, Cabinet ministers travelled to the Prime Minister’s country retreat finally to discuss their plan for Brexit. It had taken the Government two years to get that point. The plan then unravelled within a matter of days. Senior members of the Government resigned. And to top it all off, she tried to order her MPs to go home early for summer to avoid any further embarrassment. It would be funny if it wasn’t so serious. The question then turns to what Labour think of the Government’s plan. On that I have a very clear message for Theresa May – if you think Labour will support your fatally flawed Chequers’ agreement, then you have another thing coming. – Keir Starmer for the Daily Mirror Austin Mitchell: If Remainers win their fight for a second referendum, they may be in for the shock of their lives All the pompous complaints about President Trump’s interference in our politics can’t conceal the fact that he was right. Our efforts to fulfil the people’s will and get out of the European Union have been a model of incompetence; more Whitehall farce than demonstration of the art of the deal. Britain’s performance since the electorate voted to come out of the EU, the lack of foresight or planning, the weakness of the Government, the splits in the parties and the clamour of fear from the vested interests makes one wonder whether our political system is any longer fit for purpose. The pickle we are in has given rise to predictable new demands — led by the Tories’ former Education Secretary Justine Greening — for a second referendum. She and fellow Remainers hope the lamentable state of the negotiations will convince the 17.4 million who voted to leave Europe of the errors of their ways. I wouldn’t be so sure. The public just want us to get on with Brexit. They are angry over Europe’s bullying, and bored rigid by a political class that’s not just incompetent, but utterly self-centred. – Austin Mitchell for the Daily Mail John Curtice: ‘Betrayed’ and deserting the Tories for Ukip: what the polls say about Leave voters after Chequers It seems May’s Brexit deal is unpopular, confusing and disappointing for many voters No less than eight polls wholly or partly about Brexit have been conducted since the Cabinet gathered at Chequers on July 6. Both the statement about Brexit that was issued at the end of that meeting and the white paper published the subsequent Thursday have received a critical response in some quarters, including not least amongst many who campaigned to Leave. – John Curtice for the Telegraph (£) Thousands of disgruntled Tory Brexit voters have joined UKIP since Theresa May’s crunch Chequers summit, party insiders claim – The Sun It’s not a question of whether Theresa May will lose her job, but when – and thousands of readers agree – Allison Pearson for the Telegraph (£) Francis Elliott: Tory turmoil could lead to a far‑right revival Our views on race, immigration and Brexit are full of contradictions. But taken together, this jumble of prejudices and ideas is about to change the shape of British politics. The return to dominance of the two main parties, which saw Labour and the Conservatives share around 80 per cent of the vote, was one of the most surprising consequences of the referendum two years ago. It left many in the centre ground pining for a new party. But it now seems likely that it’s on the right, rather than on the middle ground, that a new force will appear. In three recent polls, Ukip has seen an uptick at the expense of the Conservatives. – Francis Elliott for The Times (£) Comment in Brief Could Brexit save Britain’s wildlife? – FT (£) A second referendum would be an insult to the people, a stunt worthy of a banana republic – Robert Halfon for ConservativeHome Only ignorance stands in way of a real Brexit now – John Redwood MP for The Commentator A second referendum? The poll data suggests Greening’s idea would be a total disaster for the Conservatives – James Frayne for ConservativeHome The barriers to a referendum on the final Brexit deal – Kenneth Armstrong for Reaction Who governs Britain? – Stephen Daisley for The Spectator The Single Market for Services in the EU – Paul Brewer for Briefings for Brexit As a Brexiteer, the Chequers plan is not what I would have written, but it is a compromise I can live with – Anna Firth for ConservativeHome News in Brief Sir Vince Cable’s Brexit vote absence ‘a bit unfortunate’ – BBC News Watchdog takes aim at NHS ‘Brexit dividend’ – Sky News Employment rate hits record-high as unemployment continues to fall and wages increase by 2.7% in past year – The Sun Trump to host European Commission chief Jean-Claude Juncker on July 25 – Reuters What is the 1922 Committee, who are the members of the Tory group and why is it so important to Theresa May? – The Sun