UK will "categorically" be leaving the EU customs union after Brexit

Downing Street has moved to placate opposition from the Tory backbenches by insisting the UK will "categorically" be leaving the EU customs union after Brexit.

The Cabinet Brexit sub-committee will meet on Wednesday and Thursday, with ministers at odds over the kind of trading relationship the UK should pursue after leaving the EU.

Brexiteers such as Boris Johnson and Michael Gove are lobbying for a clean break from the EU, while former Remainers like Philip Hammond and Amber Rudd want to see close links maintained to avoid damage being done to the economy.

Theresa May has so far refused to say what her preference would be, but a Number 10 source said: "It is not our policy to stay in the customs union, it is not our policy to stay in a customs union."

The Sun reports that May will offer either a customs "partnership" or a "highly streamlined customs arrangement" to replace existing rules.

And The Times says one compromise could be asking eurosceptic colleagues to sign up to a time-limited extension of certain elements of the existing customs arrangement.

One unnamed figure said they would expect Environment Secretary Michael Gove to back such a compromise, even if it puts him at odds with other eurosceptics such as Boris Johnson.

“Michael is being given latitude to do what he wants in Defra in the expectation of absolute loyalty on other things," the source said.

Another source said the plan was an example of the Prime Minister doing "what any good leader does: divide and rule".