Prime Minister Theresa May is poised to back Brexiters' favoured 'max fac' customs arrangement.
As first revealed by City A.M., the highly streamlined or “maximum facilitation” route, backed by Leavers including foreign secretary Boris Johnson, is being brought forward after a month of ministers thrashing through the details.
The alternative, the new customs partnership or NCP, had originally been favoured by May and others including chancellor Philip Hammond and business secretary Greg Clark.
However it has taken significant hits to its credibility, not least over its viability, as the system relies on UK collecting tariffs on behalf of Brussels for goods that are travelling via the UK on their way to the EU.
Max fac has also struggled to win outright support because it is thought it does not solve the Irish border question. However a modified version, expected to be positioned as a third way, is thought to address these issues.
Sources told City A.M. it is now expected that the option will appear in the government's delayed Brexit white paper, which is likely to be published very shortly after this month's European Council.
Yesterday the government adopted a last-minute amendment to its EU Withdrawal Bill stipulating that negotiators would seek a “customs arrangement as part of the framework for the future relationship” with the EU after Brexit.
Tabled by Oliver Letwin, it was backed by Remainers including Nicky Morgan and Stephen Hammond as well arch Leavers Jacob Rees-Mogg and Bill Cash.
It followed a last-ditch meeting with the Prime Minister and her backbenchers, telling would-be rebels to consider “the message parliament will send to Brussels this week” as she urged them to back the government against the Lords’ amendments to the EU Withdrawal Bill.