UK cabinet split over issue of customs union membership
Disagreements over membership of the EU's custom union will likely lead to a resignation by either Chancellor of the Exchequer Philip Hammond or International Trade Secretary Liam Fox, according to an unnamed senior cabinet minister. Fox supports a clean break from the customs union to allow the UK greater flexibility in forming trade deals outside the EU, whilst Hammond, and increasingly Foreign Secretary Boris Johnson, believe that the extra costs and tariffs would have a negative impact on British businesses and jobs.

The formal union sees goods pass between member states without any checks, delays or tariffs

A MAJOR Cabinet split on Brexit is brewing over whether to sever all links with the EU on customs controls, The Sun can reveal.

One of Theresa May’s top table team has even predicted there will be resignations from it over the tinderbox issue.

5 One of Theresa May’s top table team has even predicted there will be resignations Credit: Getty Images

Whether to push for Britain to stay in the EU’s customs union is shaping up to be the biggest dilemma for the PM’s Brexit negotiating strategy.

The formal union – an element of the single market - sees goods pass between member states without any checks, delays or tariffs.

On the "hard Brexit" fringe of the Cabinet, International Trade Secretary Liam Fox is pushing for a clean break from the customs union to give the UK the maximum ability to strike trade deals elsewhere in the world.

5 On the 'hard Brexit' fringe of the Cabinet, International Trade Secretary Liam Fox is pushing for a clean break from the customs union Credit: Reuters

5 But he is pitted against Chancellor Philip Hammond Credit: PA:Press Association

But he is pitted against Chancellor Philip Hammond and, increasingly, Foreign Secretary Boris Johnson, The Sun has been told.

Both Tory heavyweights have serious fears over the extra costs that delays and tariffs will inflict on British businesses and jobs.

One Cabinet minister told The Sun: “In my view, there is no way Liam and Philip can ever agree on this.

“They are ideologically too far apart, and one of them will end up walking.”

The senior minister added: “Who will it be? Liam in my view, because Prime Ministers can’t lose their Chancellors.” Another Cabinet minister added: "This is where the rubber is really hitting the road.

“I think what we do with the customs union will be the crux of our whole exit deal”.

The Sun has also learned that Brexit Secretary David Davis is also studying plans for a Turkey-style compromise.

5 And increasingly Foreign Secretary Boris Johnson Credit: Getty Images

In a “win-win” agreement, the Ankara government is signed up to the customs union for some types of goods, but is free to crack trade deals away from the EU with some other neighbouring countries too.

Separately, the key Cabinet minister’s aide risked angering No10 yesterday by slapping a new red line on Britain’s departing deal with Brussels.

Mr Davis’ parliamentary private secretary Stewart Jackson insisted Mrs May will refuse to pay any contributions into the EU budget after we leave.

5 Brexit Secretary David Davis is also studying plans for a Turkey-style compromise Credit: EPA

So far, Mrs May has outlined only two red lines – imposing full immigration controls and freeing the UK from any jurisdiction of European judges.

The PM has refused to be drawn on whether she will continue to send some cash to Brussels as a potential bargaining chip.

Tory Mr Jackson said: “We are in the business of honouring the faith and trust that the British people put in us”.

Downing Street slapped down Mr Jackson last night to say his red line claim on any EU budget contributions after Brexit was just "a personal view".