EU’s chief negotiator Michel Barnier is out of order with customs deal assumption — and PM must have a plan B

IT wasn’t what Theresa May would have wanted just before she went on holiday.

But on Thursday, Michel Barnier made clear that the European Commission could not accept her proposed customs plan, blowing a hole in her elaborately constructed Brexit strategy.

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Those close to May are trying to downplay the EU chief ­negotiator’s criticisms.

One source tells me: “We are in a negotiation. Things are said.” While one Cabinet minister remarks: “It is not a great surprise. He’s been saying no all along.”

This minister’s view is that it is now “up to the member states” what happens next.

But they aren’t likely to come to the rescue of May’s customs plan. I understand just a handful of them are interested in it.

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Most of them don’t want to let the UK collect tariffs on the EU’s behalf or to have to collect tariffs for the UK ­themselves. The sheer bureaucratic complexity of the scheme doesn’t make it appealing.

So, what happens next? Well, as May has told the Brexit Inner Cabinet, Barnier’s real aim is to keep Britain in a customs union with the EU.

His calculation is that faced with a choice between a customs union and no deal, Britain will buckle.

The attraction to the EU of keeping the UK in a customs union is that it will keep the pattern of trade much the same as it is now.

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There won’t be any free trade deals that cut the cost of, say, Australian wine and reduce European producers’ share of the UK market.

But Barnier is making a dangerous assumption in thinking Britain will accept a customs union in the end.

May has repeatedly said that she doesn’t want one. In the unlikely event of her changing her mind on this, more ­ministers would resign from her Cabinet (two are already on the verge of quitting, according to their colleagues) and more letters would go in demanding a vote of no confidence in her.

It is hard to imagine her surviving this. Brexiteers would argue that if the EU won’t accept May’s proposal, the UK should turn to the “max fac” customs plan.

This doesn’t eliminate all checks at the border, but uses technology to hugely reduce them and speed things up.

The EU, though, will say that this doesn’t solve the Irish ­border problem and match what May committed herself to in December. It was this worry which led to her rejecting “max fac” in the first place.

Some ministers are now beginning to whisper about whether, in these circumstances, some separate arrangements for Northern Ireland would be so terrible. But May herself would never go for this.

One Cabinet minister warns a separate deal for Northern Ireland would bring down the Government, “I can’t see how the DUP would accept that and we can’t govern without them”.

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This minister says that May has made a “bold and fair offer to the EU” and if they won’t work from that “we’re not going to end up with a deal with them”.

There is a strong sense among ministers that the UK can’t carry on with Barnier saying no and the Government offering up concession after concession. In the words of one, “we shouldn’t sell the soul of the nation to have a deal with the EU”.

Is no-deal the most likely outcome, then? Well, not yet.

Some in Government believe they can reverse the EU’s threat — pointing out that if there is no deal there will be a hard border in Ireland. They hope this message might make the EU more amenable either to May’s customs plan or to a “max fac”-style solution.

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What’s for certain is that May’s meeting with other EU leaders in September is ­shaping up to be crucial. But May must make sure she goes to that meeting with a plan B.

If Merkel, Macron and Co want more and more ­concessions on Chequers, May must simply change course and ­propose a Canada-style free trade deal.

She should tell EU leaders — and Ireland’s Leo Varadkar in particular — that the choice is between that and no deal, with all it would mean for the Irish border.

CHEQUERED SUMMER BREAK FOR MPs

NUMBER 10’s great hope is  that  the summer holidays will lead to Tory MPs calming down and coming  back more prepared  to accept  Theresa May’s ­Chequers compromise

But MPs who are back in their ­constituencies  are telling me that they are getting  even more stick  than they  expected about her proposals.

One  Tory predicts that time spent  in the constituency will “put a fire underneath MPs before they  come back, rather than calming them down”.

PM must step up the hard sell

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THERESA MAY’S fundamental flaw as a politician is on display again. She is simply not very good at selling things.

This was her problem in the General Election campaign and it is her problem now as she tries to persuade a sceptical public of the merits of her Brexit plan.

Her trip to the North East this week was a case in point. Here was a chance to try to sell the deal directly to voters. But May failed to take it.

She didn’t come with anything new to say, she didn’t ask voters to put themselves in her shoes or make a charismatic case for it. As one Cabinet minister laments: “She’s uncomfortable with ­people, including her own ­colleagues.”

But May needs to sell this plan. If she cannot turn public opinion on it around – at the moment only 12 per cent of voters think it would be good for Britain – then she won’t be able to get it through Parliament.

As May goes on her summer hols, she should be thinking about a big address to the nation in September where she makes the case for her plan. It could be her last best chance to save it.

THE most alarming thing about Labour’s anti-Semitism scandal is that the extent of concern across the Jewish community about how Labour is dealing with the issue hasn’t been enough to make the party change course.

It is now hard not to conclude that Labour’s refusal to simply accept the full International Holocaust Remembrance Alliance definition of anti-Semitism is worryingly sinister.

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A BUMPY RIDE FOR POLITICS

BUCKLE up: British politics is going to be even more volatile and unpredictable over the next two years than it has been over the past two.

It is tempting to put this all down to the Brexit effect, and that is – obviously – part of it.

But what is striking is how volatile politics is right across the Western world. In the EU, the new populist Italian government will announce its budget in September, which could cause major problems in the eurozone.

In Germany, a regional election could further destabilise the coalition there.

While Spanish politics is about to be riled by it becoming the new centre of the migrant crisis.

Meanwhile in America, August promises to be the most dramatic month yet in the presidency of Donald Trump  as his own lawyer appears to have turned on him.

None of these situations is exactly the same.

But there is a common root to this volatility: The aftermath of the financial crisis and the challenges posed by the fact it has never been easier to try to move from the poor world to the rich world.

Until Western governments come up with answers to these questions, politics will be extremely volatile.

• James Forsyth is political editor of The Spectator.