LONDON (Reuters) - Chancellor Philip Hammond rejected a call from a leading employers group on Tuesday to keep Britain in a customs union with the European Union after Brexit, saying it was not needed to keep trade running smoothly.
Hammond, speaking to business leaders, said the government understood a set of post-Brexit customs priorities set out by the Confederation of British Industry, including avoiding delays at borders and no extra red tape.
"But we do not agree that staying in a customs union is necessary to deliver them," he said, adding the government was continuing to work on its alternative options.
Earlier, CBI President Paul Dreschler said remaining in a customs union was currently the only workable option for Britain to avoid transport delays and administrative burdens for firms, as well as a hard border between Ireland and Northern Ireland.
"There’s a ready solution out there," Dreschler said. "It’s our Plan A - to choose to stay in a customs union with the EU, unless and until a better alternative can be found."
Prime Minister Theresa May has previously rejected keeping Britain in a customs union with the EU. Brexit supporters are staunchly opposed to the option because it would prevent Britain from striking trade deals with countries around the world.
But a source familiar with discussions in the government said last week that London was considering a backstop plan that would apply the bloc's external tariffs beyond December 2020, alarming some Brexit supporters.
British foreign minister Boris Johnson told Bloomberg on Tuesday that May had to get on with taking Britain out of the EU's trading rules as quickly as possible.
Jacob Rees-Mogg, a lawmaker in May's Conservative Party who heads a group of parliamentarians pushing for a clean break with the EU, told website Conservative Home he had "doubts" about May and questioned whether the government wanted to leave the bloc.
In his speech on Tuesday, Hammond said Britain's telecoms industry needs to make "full-fibre" broadband available to 15 million homes and businesses by 2025 as part of a push to modernise the country's infrastructure.