Fox stokes Cabinet row over quitting the customs union

BRITAIN will not benefit from Brexit if it stays in the EU customs union, Liam Fox warned yesterday.

The International Development Secretary exposed a Cabinet rift by ruling out future membership of the union with Brussels.

Dr Fox said Britain would never be free to strike its own trade deals if it remained shackled to the EU.

However, Chancellor Philip Hammond and Business Secretary Greg Clark are pushing to stay in a customs union for goods.

Officials are looking at whether trade in goods could be covered by a customs union arrangement, with services governed by an independent policy. Downing Street said yesterday that Mrs May still had an open mind on the issue.

Dr Fox said: ‘It is very difficult to see how being in a customs union is compatible with having an independent trade policy. We have to be outside of that to take advantage of those growing markets.

‘One of the reasons we are leaving the European Union is to take control and that’s not possible with a common external tariff.’ His comments came as the Prime Minister said she would press ahead with Brexit regardless of warnings it could hit the economy in the short term.

The customs union is an arrangement that allows goods to be traded freely around the EU, and subject to a common external tariff with the rest of the world.

But it places severe restrictions on independent trade negotiations by member states.

Britain’s policy is to leave the customs union after Brexit and negotiate a customs arrangement with the EU so Britain can continue ‘near frictionless’ trade.

The Government received a boost yesterday after the boss of Spanish- owned TSB said European firms would not ‘ cut their own throats’ by punishing Britain after Brexit.

Paul Pester said: ‘We hear a lot of inflammatory background noise but businesses are more savvy. We have a much more flexible and agile economy than people realise.’