Brexiters appear to be making their peace with the idea of staying in the customs union after Brexit – albeit only as a temporary solution – as it becomes an increasingly probable option.
The government has suffered a triple-whammy of disappointments this week – defeat over an amendment in the House of Lords, a new Commons motion on the matter tabled by senior MPs and a rejection of the UK's Irish border proposals – which have made the issue live once more.
Pro-Leave sources told City A.M. that some "sensible" Brexiters were increasingly coming around to the idea, as long as it was positioned as a finite extension to the transition period.
This would allow more time for a solution to be found, and give more breathing space to resolve logistical changes, but critically it would give the government an opportunity to rebuild its majority without being reliant on the DUP, one Westminster insider said.
Environment secretary Michael Gove is thought to back the option in principle. Earlier this year City A.M. revealed he was leaning towards a position that could pave the way for the government to push for a “customs arrangement” with the EU – something which arch-Brexiters have warned would be a betrayal of the referendum result.
It is seen as something "other Brexiters could live with", a second source added, although not indefinitely.
"I don't think in 10 years time we are realistically going to be in a situation where other countries will have a say on our trade deals. Thats not going to happen," he said.
Hardliners are unlikely to be happy with the suggestion. Similar suggestions in the past have been rejected outright as a denial of the referendum result.
But the government might not have an alternative: if some form of compromise is not found, there is a very real risk that talks could collapse completely, the sources suggested.
That was underlined by comments made by the EU's chief negotiator Michel Barnier, who told broadcaster France2 "there are still difficulties, still a risk of failure".
He added: "On 25 per cent of the text, we dont have agreement. If there is no agreement, there is no orderly withdrawal, there is a disorderly withdrawal and there is no transition."
During the same interview he dismissed any suggestion of an "a la carte" option on the Single Market.
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