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Mon, 1 June 2020

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The House Live All
By Andrew McQuillan
Press releases

Liam Fox warns Theresa May that Brexit customs union would be 'worst of both worlds'

Liam Fox warns Theresa May that Brexit customs union would be 'worst of both worlds'
4 min read

Signing up to a customs union with the European Union would represent the "worst of both worlds", Cabinet minister Liam Fox has said.

In a clear warning to Theresa May as she tries to hammer out a Brexit agreement with Labour, the International Trade Secretary said signing up to a customs union - a key demand of the Opposition - would kill off any hope of Britain striking independent trade deals after it leaves the EU.

The intervention came in a leaked letter to the 1922 Committee of Conservative backbenchers obtained by The Telegraph newspaper and sent after a meeting with Tory MPs last week.

In it, Dr Fox warned: "We would be stuck in the worst of both worlds, not only unable to set our own international trade policy but subject, without representation, to the policy of an entity over which MPs would have no democractic control.

"This is something that Labour do not presently seem to understand. As I said at the meeting, in such a scenario the UK would have a new role in the global trading system.

"We would ourselves be traded. As the famous saying in Brussels goes, if you are not at the table, you are on the menu."


The letter emerged as talks between Labour and the Government on a potential Brexit deal continued in Whitehall.

The two sides have been locked in discussions since last week, with Jeremy Corbyn's party repeatedly urging the Prime Minister to cross her longstanding Brexit red line of quitting the EU's customs union, which sets a common tariff for goods imported into the EU and allows tariff-free trading of goods between member states.

Labour frontbenchers Sir Keir Starmer, Rebecca Long-Bailey, John McDonnell and Sue Hayman will sit down with Cabinet ministers including David Lidington, Stephen Barclay, Philip Hammond today as the two sides try to thrash out an agreement.

But, in his letter to 1922 Committee chairman Sir Graham Brady, Dr Fox said a customs union between the UK and EU would not be a "meeting of equals".

"A customs union - where the UK was obliged to implement the common customs tariff - would allow the EU to negotiate access to UK markets as part of EU trade policy, irrespective of the interests or wishes of the UK," he said.

"It will be able to offer full access to the world's fifth biggest market as part of any EU offer, without the need to balance this access by negotiating on key UK offensive interests."

The Cabinet minister also made clear that he believed membership of a customs union would "potentially damage Britain in international trade disputes" and "stymie the UK's ability to open markets around the world to the UK's service sectors".

Campaigners for a second Brexit referendum - who have been warning against a deal between Labour and the Government - seized on the latest intervention from Dr Fox.

Labour MP Jo Stevens of the People's Vote campaign said: “The Trade Secretary’s letter shows that a customs union deal will not only leave Britain poorer with real costs to industries and families but will also disillusion millions of Leave voters who will feel it is leaving Britain as a rule taker and breaking many of the promises made in the last referendum."


Mrs May is touring European capitals ahead of a crunch summit tomorrow, urging German Chancellor Angela Merkel and French president Emannuel Macron to allow Britain to delay Brexit until 30 June.

But the EU's chief Brexit negotiator Michel Barnier suggested in a press conference on Tuesday that Brussels may not agree to a long extension to Article 50 without the UK agreeing to back a customs union.

"There is one point that needs to be stated quite clearly; that these ambitions, with regard to future relations, which could for example consist of adding to a free trade agreement... for example a customs union - we are willing to improve and amend the political declaration rapidly, within a few hours or days," he told reporters.

"But the request we await and expect from the UK as a result of this cross-party dialogue is one that needs to respect the principles underlying the approach of the European Council and the European Parliament, and respect what we are and what we will continue to be."


Conservative Brexiteers have already reacted with fury to the idea that Mrs May could junk the Conservatives' 2017 pledge to quit the customs union in a bid to get her deal through the House of Commons.

Tory eurosceptic Mark Francois wrote to Sir Graham on Monday, warning that Mrs May would "destroy" the Tory party if she stayed in post and sought to strike a deal with Labour.

Baffled by the Brexit customs union row? Our handy plain-English explainer has you covered

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