Jacob Rees-Mogg urges May to revive her no-deal threat to Brussels

Jacob Rees-Mogg has urged Theresa May to revive her threat to leave the EU without a deal if Brussels continues to take an uncompromising approach in the Brexit negotiations.

Rees-Mogg, the chair of the European Research Group, which represents about 60 of the most pro-Brexit Conservative MPs, used an interview on Sunday on BBC One’s The Andrew Marr Show to claim that the UK could be more intransigent because it was in a much stronger negotiating position than people realised.

Despite being the favourite among Conservative members to be the next party leader, he said he had no wish to replace May in No 10 – but did not unequivocally rule it out.

He told Marr he was concerned the UK was losing out in the talks because the concessions were “all very one way”. He s he did not want May to walk out of the process but suggested the government should offer an ultimatum.

“We are paying a very large amount of money, £40bn, and in return we want a trade deal. Everything else is essentially incidental to that,” he said.

“The £40bn is of great importance to the EU because after March next year it still has 21 months of the multiannual financial framework, and it expects that to be funded by the UK. It would have to cancel projects or get more money out of the Germans if it doesn’t get our money.

“Nothing is agreed until everything is agreed. Therefore we should reiterate that and say, quite clearly, if we don’t get the trade deal we want, you don’t get the money. And that’s a very strong negotiating position.”

If the UK were to refuse to pay the so-called Brexit bill, the withdrawal agreement due to be finalised in the autumn would collapse and the UK would leave the EU on 29 March 2019 without any transition period.

In 2017, at the start of the negotiation process, May talked up the possibility of the UK leaving with no deal, saying it would be better than a bad deal. When pressed, May has tended to repeat the line, but in practice ministers have all but abandoned the notion, largely because there is an acceptance that the short-term impact of a no-deal Brexit on the economy would be disastrous.

Rees-Mogg said he thought May was wrong to state in her Mansion House speech that the UK would not leave Ireland to sort out the border issueon its own. He claimed that under article 24 of the General Agreement on Tariffs and Trade (Gatt), the UK and Ireland could leave current border arrangements in place provided they said they were working towards a free trade agreement.

When it was put to him that Sir Ivan Rogers, a former UK ambassador to the EU, had said the claim the UK could leave Irish border arrangements as they were after Brexit was “legally untrue”, Rees-Mogg responded that Rogers would be “better informed” if he read article 24.

The backbencher also dismissed the claim from Jon Thompson, the head of HM Revenue and Customs, that the “maximum facilitation” customs plan favoured by Brexiters could cost British business up to £20bn a year.

Rees-Mogg said Thompson was “a very capable man”, but added: “Whether his figure of £20bn for the cost of administering “max fac” is right, I don’t know. That would be 5% of our combined EU trade, and it seems a very high figure, and much higher than other countries, or than what we’re already doing.”

The Tory MP also said that he supported May, whom he described as “the most impressive and dutiful leader that this country has had”.

A customs union is an agreement by a group of countries, such as the EU, to all apply the same tariffs on imported goods from the rest of the world and, typically, eliminate them entirely for trade within the group. By doing this, they can help avoid the need for costly and time-consuming customs checks during trade between members of the union. Asian shipping containers arriving at Felixstowe or Rotterdam, for example, need only pass through customs once before their contents head to markets all over Europe. Lorries passing between Dover and Calais avoid delay entirely.

Customs are not the only checks that count – imports are also scrutinised for conformity with trading standards regulations and security and immigration purposes – but they do play an important role in determining how much friction there is at the border. A strict customs regime at Dover or between Northern Ireland and the Republic of Ireland would lead to delays that will be costly for business and disruptive for travellers. Just-in-time supply chains in industries such as car making could suffer. An Irish peace process built around the principle of entirely unfettered travel between north and south could be jeopardised.

Asked if he had what it took to be prime minister himself, he said: “I don’t wish to be prime minister. I’m very happy being a backbench member of parliament.”

He ruled out challenging May for the Conservative party leadership, saying it was “a ridiculous idea”. Under Conservative party rules, a contest would only take place if May lost a no-confidence vote, meaning that she would not face a direct challenge in an election for her job.

Rees-Mogg seemed to rule out backing a no-confidence move, saying: “The prime minister has my full support to remain as leader of the party.”