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1 March 2018updated 09 Jun 2021 9:58am

Theresa May’s claim that an EU customs union would “betray the British people” isn’t credible

There is no evidence that voters crave global free trade. 

By George Eaton

At Prime Minister’s Questions, Theresa May did not merely argue that a customs union with the EU (as proposed by Labour) would be the wrong policy for the UK. It would, she declared, “betray the vote of the British people”. May argued that the denial of the freedom for the UK to strike its own trade deals would be unacceptable.

And yet there is little evidence that the voters share this view. The free movement of people, the EU’s opaque structure and weariness with austerity were all significant factors in the result – but opposition to the customs union was not.

It was, however, a defining passion of the Brexiteers (such as Michael Gove, Liam Fox, Boris Johnson). For them, exit from the customs union, would herald the birth of a freewheeling, buccaneering “global Britain”. Rather than being shackled to Brussels, the UK would be liberated to strike valuable trade deals with China, India and “the Anglosphere” (the US, Canada, Australia and New Zealand).

Yet there is no majority in parliament or the country for the policies this would entail: low taxes, low regulation and cheap imports. Most Leave voters crave more state intervention, not less. Mindful of this, the Brexiteers are careful to speak in generalities, rather than particulars.

A free trading, “global Britain” would devastate the UK’s agriculture sector. The mere prospect of chlorine-washed chicken from the US was enough to divide the cabinet last year. Without the negotiating heft of 27 other member states, the UK would struggle to achieve beneficial trade deals. The US would demand greater access to agriculture and the NHS. India and China would demand more visas (a problem for immigration-averse voters).

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And, most problematically of all for the government, British departure from the customs union would force the creation of a hard Irish border (an outcome Theresa May has repeatedly ruled out).

The same voters who the Prime Minister claimed a customs union would “betray” have been shown by polls to favour one. On this, the public’s intuitions are correct: the costs of leaving the customs union outweigh the benefits. Indeed, the government’s own analysis suggests that the UK would lose between 2 per cent and 8 per cent of GDP over 15 years from a “hard Brexit” (withdrawal from the single market and the customs union), while new trade deals with the US and others would add no more than 0.6 per cent.

By ruling out any customs union with the EU, and branding it “a betrayal”, May has left herself with no room for compromise. Faced with the prospect of parliamentary defeat on the issue, she has already deferred a vote on the subject.

What May truly fears is not “betraying” the British people but betraying the Tory Brexiteers (who have the power to bring her down). Trapped between the demands of her party and those of the EU (and, indeed, reality), the Prime Minister is left to hope, like Mr Micawber, that “something will turn up”. The day is fast approaching when she will be forced to concede that it won’t.