Sign up here to receive the daily news briefing in your inbox every morning with exclusive insight from the BrexitCentral team Theresa May faces showdown over customs plan at Cabinet sub-committee today… Theresa May faces a showdown with David Davis and other cabinet Brexiteers today as she tries to convince them of the merits of a customs plan that will keep existing EU tariffs. Boris Johnson, the foreign secretary, Liam Fox, the trade secretary, and potentially Michael Gove, the environment secretary, are likely to raise their objections to Mrs May’s plan at a meeting of cabinet’s Brexit sub-committee. The “customs partnership” option is backed by Philip Hammond, the chancellor, and Greg Clark, the business secretary, who hope it will avoid a hard border in Northern Ireland while maintaining the right to strike trade deals with non-EU countries. – The Times (£) Inside Theresa May’s Brexit War Cabinet, where Tory battles rage – Bloomberg May’s Cabinet still split down the middle on EU customs negotiations – The Sun Remaining in customs union is Brexit in name only – John Longworth for the Telegraph (£) Theresa May’s ‘customs partnership’ is a doomed half-measure – The Sun editorial > Marcus Fysh MP on BrexitCentral today: Why a “New Customs Partnership” with the EU should be a non-starter …as she is warned Government is at risk of ‘collapse’ if she backs customs partnership Theresa May has been warned her government will “collapse” if she does not abandon plans for a post-Brexit customs partnership with the EU. Sixty eurosceptic Tory MPs from the European Research Group, led by Jacob Rees-Mogg, have sent the Prime Minister a 30 page report detailing their opposition to the plan. Number 10 have been directly warned in correspondence that accepting a customs partnership will lead to a “collapse” of the government because it would mean Mrs May cannot deliver a clean break from the EU and would lose the support of Brexiteers. – Telegraph (£) A powerful group of Brexiteer Tory MPs have delivered an ultimatum to Theresa May that they will vote against her EU deal if she tries to force through a customs partnership. The Daily Express has learnt that a number of Tory MPs on the European Research Group (ERG) of Brexit supporting MPs have written personal letters to the Prime Minister ahead of her crunch meeting of the Brexit war cabinet on Wednesday. This followed Brexiteer Tory peer Lord Ridley being sent to Downing Street deliver a stark warning from the group to Mrs May’s chief of staff Gavin Barwell on Monday night that any customs union or partnership “is absolutely unacceptable” to the ERG. – Express Why Eurosceptic Tory MPs say a customs partnership is unworkable – Telegraph (£) Tory Brexit revolt could sink Theresa May’s government – Daily Mail Brexiteers send customs ‘ultimatum’ to Theresa May – BBC News Peers say they now have a ‘veto’ on Brexit as Fox accuses them of ‘thwarting the will of the people’… A Labour peer said Theresa May has given the House of Lords a “veto” over Brexit. Baroness Hayter said peers will “mark the Government’s homework” over its negotiations with Brussels. Yesterday, the Lords voted by 335 votes to 244 for a “meaningful vote” in the Commons that would give MPs the power to force ministers to reopen talks with Brussels in the event of a “no deal” Brexit. – Telegraph (£) Liam Fox has accused Lords of trying to “thwart the will of the British people”, after the government suffered a major defeat at their hands. Three amendments were passed by the unelected upper house, with one strengthening parliament’s hand if it rejects the final Brexit deal.The amendment, which was supported by 19 Tory rebels, means parliament could now force negotiators back to Brussels if they do not approve the terms put to them in October. Speaking ahead of a regular Cabinet meeting, the the International Trade Secretary said such a move could lead to the UK being in the EU “indefinitely”. – City A.M. Peers ready for clash over Brexit bill – The Times (£) List of pro-EU peers who voted to force soft Brexit on UK riddled with expenses cheats and those with vast EU pensions – The Sun Ministers need to face down the rebels in Parliament and tell Brussels we do not seek a customs union – Nick Timothy for The Sun …as Labour Lord keeps job despite voting for a second referendum… A Labour frontbencher has kept his job despite defying the party’s whip by voting in favour of a second referendum last night. Shadow health minister Lord Hunt of King’s Heath yesterday backed a cross-party amendment to the EU (Withdrawal) Bill that could pave the way for a public vote on the final EU deal. It was one of three major upsets inflicted by the upper house on the government. Hunt, who was one of 51 Labour peers to go against his party, was hauled in for a “b*llocking” with Baroness Smith of Basildon, who leads the party in the Lords, and shadow chief whip Lord McAvoy, – City A.M. …and May promises ‘robust response’ to latest Lords defeat The Prime Minister has told her Cabinet the government will launch a “robust response” to the amendments waved through by the House of Lords last night [Monday]. Three amendments to the EU Withdrawal Bill were approved by peers, including one which could force negotiators back to Brussels if the final deal is not approved. During this morning’s Cabinet meeting, ministers including Brexit secretary David Davis expressed their “strong disappointment” with the vote, adding: “We wish for the bill to go through in the same way it left the Commons.” – City A.M. The anti-Brexit House of Lords has just signed its own death warrant – Brian Monteith for City A.M. > LISTEN on BrexitCentral’s YouTube channel: Jonathan Isaby tells Nick Ferrari that Remainer Lords are empowering Brussels May urged to call general election to crush Remainer plot… Theresa May is being urged to put the Tories on general election alert in a bid to crush the Remainer plot aimed at sabotaging her Brexit plans. Eurosceptic ministers have told the Prime Minister that the threat of a snap poll is needed to bring pro-EU rebels into line. One Brexit-backing minister said: “There could be a general election this summer. With the Remainers becoming so intransigent, the Prime Minister may need to call their bluff by going to the country.” – Express …as Brexit talks resume this week Brexit talks between British and European Commission officials will resume later this week in Brussels, following a warning from Brussels that time is limited to solve the Irish border issue. Chief negotiator Michel Barnier on Monday said the border issue needed “substantive” progress before the European Council summit at the end of June. There are just four more rounds of meetings scheduled before the summit, with officials having paused their meetings last week to take stock. – Independent EU has ‘pushed back’ on UK customs proposals, Davis tells Lords… David Davis, the Brexit secretary, has admitted that the EU has “pushed back” on the two proposals from the government purportedly showing how the UK could leave the customs union but still maintain near-frictionless trade with the EU after Brexit. Two weeks ago, after the Daily Telegraph reported that both proposals had been rejected by the EU, Downing Street played this down, saying it did not recognise the claims. Today Davis effectively admitted that the reports were accurate. Giving evidence to the Lords EU committee, he also reaffirmed his view that it was important to get a “pretty substantive” deal on a future trade relationship finalised alongside with the withdrawal agreement in the autumn. – Guardian …and says he is open to ‘association agreement’ with the EU after Brexit… Brexit Secretary David Davis said he has “no intrinsic objection” to the U.K. entering into a so-called association agreement with the EU after Brexit. Speaking to the House of Lords’ European Union committee on Tuesday, Davis said a proposal from the European Parliament for such a post-Brexit arrangement may have merit depending on its terms. “Some association agreements are stepping stones to membership — you’ve got Ukraine, for example — and so it depends what’s included,” he said. We would not, for example, want to see it bring [European Court of Justice] jurisdiction in. But as a sort of concept, I have no intrinsic objection to it.” – Politico …but warns of a ‘tussle’ to include the City in Brexit deal David Davis has warned that financial services will be a key battle ground in negotiations for the future trading relationship with the EU.The Brexit secretary this afternoon told the Lords’ EU Committee he expected “something of a tussle over financial services, over the extent of the financial services chapter”. There would be many areas, such as professional qualifications, which could present “back pressure”, he said. “That’s the sort of thing I would expect to have some issues with”, Davis explained. – City A.M. Britain to launch its own solo space project after row over EU’s Galileo programme… Theresa May will launch Britain’s own space programme after an extraordinary Brexit row exploded over Eurocrats torpedoing Britain in secret. The PM is tasking aerospace experts to begin work on the UK’s own satellite-operated navigation system for the first time. She is acting after losing patience with Brussels negotiators, who are refusing to allow the UK to continue to participate fully in the EU’s Galileo space programme after Brexit. But The Sun can reveal that EU officials are at the same time withholding a vital negotiating document from EU member states that could open the way to a Brexit compromise. – The Sun …as ‘annoyed’ Hammond seeks to sabotage EU’s Galileo Philip Hammond wants to sabotage the EU’s €10bn Galileo satellite navigation project by attempting to disrupt the transfer of sensitive encryption technology from Britain. In an escalation of a row over UK participation in Galileo after Brexit, the chancellor told cabinet colleagues last week that the government could seek retribution after Brussels proposed banning British companies from sensitive parts of the project. – FT (£) Digital tax revolution will be delayed by Brexit A digital revolution of the UK tax system planned by HMRC is being postponed, because tax collectors and customs officials are too busy getting ready for Brexit. Previously the taxman had been working towards a deadline of 2020 by which time traditional tax returns were supposed to be virtually redundant and replaced by digital versions. But experts have said that the delay now means this target is unachievable. – Telegraph (£) Richard Tice: We will not sit by as an unelected cartel tries to dismantle Brexit bit by bit The challenges to Brexit yesterday in the unelected House of Lords were a direct attack on British democracy. By acting in such a manner, the Lords are accelerating the case for their own demise; more and more people would now view this as good news. It was Parliament, including the House of Lords, who outsourced the vote on the EU to the people. By their own admission during the debate yesterday, they now aim to stop Brexit because the people had the cheek to vote the wrong way. They are working hand in glove with the Stop Brexit brigade in the House of Commons. – Richard Tice for the Telegraph (£) Ian Kearns: Forget Brexit, the EU may be on the brink of collapse The Brexit debate is nothing if not insular. While the business, media and political elite in London obsess over the kind of future relationship the UK should have with Brussels, few seem to have noticed that the EU itself may soon collapse. If and when it does, the fall will be all the more shocking precisely because so many eyes have not been kept on the ball. The stark truth is that since the financial crisis of 2008 eurozone leaders have tried and failed to put the single currency on a secure footing. – Ian Kearns for CapX Fion Anastassiades: Canada has good reason not to want a customs union with Brussels. Take note, Britain With politicians vigorously debating what the UK’s future economic relationship with the EU will look like, public opinion remains mixed; experts are assessing the implications of a customs union versus a free trade agreement and businesspeople are excited, worried or unsure. The UK should welcome this debate and move head-on into laying the groundwork for comprehensive free-trade agreement with the EU. 50 years ago things were much different. – Fion Anastassiades for the Telegraph (£) Comment in Brief The great immigration stitch-up – Laura Perrins for ConservativeWoman All we ever seem to talk about is trade – John Redwood’s Diary Brexiteers must stop living in a fantasy world – Daniel Finkelstein for The Times (£) Beware of Greeks bearing fresh spending plans – Willem Marx for City A.M. Brexit was meant to be a moment of renewal, but it’s been turned into a morale-sapping mess – Philip Johnston for the Telegraph (£) Trade brings prosperity which brings security. The case for it needs political champions today – Liam Fox’s trade speech on ConservativeHome What’s wrong with deporting illegal immigrants? – Rod Liddle for The Spectator News in Brief David Lidington appeals to Nicola Sturgeon to help deliver orderly Brexit despite no powers deal – Telegraph (£) Markets await Trump’s deals – City A.M. Brussels looks to link EU payouts to justice standards – Politico Home Office in row over claims staff given bonuses for deporting illegal immigrants – The Sun New Home Secretary Sajid Javid plans to slash immigration targets and replace it with a new annual quota – The Sun Unionists are criticised for Michel Barnier snub – The Times (£)