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8 January 2018updated 04 Aug 2021 2:42pm

Yes, we leave the EU customs union after Brexit. That doesn’t mean we can do without one

Labour believes the option of the UK forming a customs union with the European Union should be kept on the table. 

By Pete Dowd

Though months have passed since the Prime Minister triggered Article 50, guaranteeing our exit from the European Union, many fundamental questions about the UK’s future relationship with the world remain. 

The Government has tabled two pieces of legislation that are designed to set the framework for our future trading relationship with other countries, both due to be debated this week.  Just as with the EU (Withdrawal) Bill, these amount to a vast power-grab by Ministers, who will effectively ‘take control’ from parliament should they proceed uncontested. 

This is particularly evidenced in the Bill to create a customs framework. Due to this Government’s chaotic negotiations with the EU to date, any framework that we put in place to deal with the flow of goods across our borders will have to respond to every eventuality from the Brexit talks. This includes a no deal scenario, a free trade agreement or the UK forming a customs union with the EU. 

Labour recognises that there is a need for the UK to have a framework in place to create a customs and tariff regime irrespective of the outcome of the Brexit talks. However, we are wholly opposed to yet another power grab from an increasingly chaotic and divided Conservative Government.

The British people did not vote ‘to take powers’ back from Brussels only to hand them over to unaccountable ministers and civil servants in Whitehall. That is why we want to ensure that any future UK customs regime must be answerable to Parliament, which will have the final say over the setting of tariffs.

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The imposition or lowering of tariffs has the power to kill off or promote whole sectors of the economy. Such power should not be left in the hands of Liam Fox and Philip Hammond, who would oversee a race to the bottom by cutting wages and workplace rights, and destroying what is left of the UK’s manufacturing base. Instead it must be used responsibly and be subject to proper Parliamentary oversight, which is why Labour will ensure that any proposed changes to tariffs must be voted on by the House of Commons. 

A nightmare scenario of gridlock at UK ports and lorry queues stretching as far as the eye can see must be avoided at all costs. Yet this Government still continues to do Brexit on the cheap and refuses to fully fund and resource Her Majesty’s Revenue and Customs, despite the ambitious target of a fully operational customs system by early 2019. We will continue to press the Government to increase HMRC’s resources and staff to ensure frictionless movement of goods at UK ports. 

Of course, much of our future customs and tariff regime will be dependent on the outcome of the Brexit negotiations. However, it is completely nonsensical for the Government to be limiting itself and closing off options at such an early stage. It is stating a legal fact to say that when the UK leaves the European Union, we will also be leaving the EU Customs Union. But Labour believes the option of the UK forming a customs union with the European Union should be kept on the table as a possible end destination. This would meet the objectives of ensuring frictionless movement of goods trade, putting UK jobs and the economy first, as well as respecting the result of the referendum.  

The EU is not the only customs union in the world. Several other customs unions already operate globally and more are in the pipeline, with negotiations currently taking place in the Middle East, parts of Africa and between New Zealand and Australia. The Southern African Customs Union is the oldest in the world, comprising Botswana, Lesotho, Namibia, South Africa and Swaziland. Mercosur has ensured the fluid moment of goods between South American countries since the early 1990s. And the Caribbean Community has similarly provided for frictionless trade across the Caribbean since 1973. 

None of the above provide a blueprint for the UK’s future relationship with the EU. Clearly customs unions are ordinarily designed to address trade in goods, while the negotiations towards a new UK-EU relationship must also address trade in services, cross-border government procurement, regulatory equivalence and a host of other issues. Yet merchandise trade is still hugely important, and a new customs arrangement will be essential if we are to avoid the chaos of border tailbacks as soon as we leave the EU.

The complexities of the negotiations on the UK’s future relationship with the EU are all too clear, that is why we need a government that will be bold and imaginative. Instead, the Conservatives have shown themselves to be feckless and unwilling to meet the gravity of the task at hand. Woefully divided, they are hell bent on stealing more powers from Parliament to give to themselves.

Make no mistake, Labour will continue to fight these attempts to degrade and devalue our democracy. We have set out the principles underpinning what we would like to see achieved from the negotiations with the EU, and we will press the Conservatives further to demand that this country gets a deal that works for the many and not just a privileged few. 

Peter Dowd is the Shadow Chief Secretary and the Labour MP for Bootle. 

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