PM backs Brexiteers on quitting customs union
But Eurocrats insist UK will face obstacles in trade deals
THERESA May has rejected Treasury plans to keep Britain in a customs union with the EU for years – despite Brussels’ claims it will make new trade barriers ‘unavoidable’.
Chancellor Philip Hammond has been privately pushing for parts of the economy to stay in the customs union until Britain has trade deals with nations such as the US, China and Japan, which could take years.
The Treasury, backed by Business Secretary Greg Clark, believed it was winning this argument within government.
But Whitehall sources last night said the Prime Minister had rejected the idea and was committed to making a clean break with the customs union once the Brexit transition period is over in 2021.
A source said: ‘I don’t doubt this idea is being discussed somewhere in Whitehall, but it is not being discussed in Downing Street. We are leaving the customs union and we are not rejoining it.’
It came after No 10 tried to calm Eurosceptic nerves by releasing a ‘categoric’ statement that it was ‘not our policy to be in a customs union’.
Eurosceptics welcomed the decision. Jacob Rees-Mogg said: ‘There are concerns that there are some people close to government who are trying to undermine the Government’s own policy.
‘It’s now been made clear we’re not having the customs union, [it] is a reiteration of policy…the only person who seemed to be disagreeing with [it] was the Chancellor of the Exchequer, and he ought to read up his constitution and think more carefully about what collective responsibility means.’
Former Tory leader Iain Duncan Smith said: ‘It looks like this idea from the Treasury has been strangled at birth.’
Some Eurosceptic MPs remain cautious, however, and have threatened to vote down provisions in the Taxation (Cross Border Trade) Bill which would let the UK rejoin a customs union after Brexit.
Ministers insist the provisions are needed to allow a continued customs union between the UK and its crown dependencies, such as the Channel Islands.
But one Tory Eurosceptic said: ‘If we’re really leaving the customs union then I’d be delighted. But if
‘We are leaving and we are not rejoining it’
we are, then why are we legislating to create the power to go straight back in?’
Speaking after talks with Mrs May and Brexit Secretary David Davis yesterday, the EU’s chief Brexit negotiator Michel Barnier said ‘the time has come to make a choice’. He added: ‘We need clarity about the UK proposals for future partnership. The only thing I can say, without a customs union and outside the single market, barriers to trade on goods and services are unavoidable.’
Mr Barnier also pledged to ‘accelerate’ Brexit talks, saying there was ‘not a moment to lose’.
Mr Davis said the UK wanted a comprehensive free trade agreement while being able to make deals across the rest of the world. ‘There’s no doubt about it, we are leaving the customs union but we are aiming for a good future for Britain,’ he said.
Downing Street played down Mr Barnier’s remarks, saying: ‘As with all these matters it’s the start of a negotiation and you would expect to see some opening positions.’
The PM’s official spokesman said: ‘We want the future customs arrangement to be as frictionless as possible and we think we can achieve that … it is in the interests of both the UK and the EU.’
Senior ministers are due to hold talks tomorrow to thrash out the Government’s position on the UK’s post-Brexit relationship with the EU. A second meeting will take place on Thursday.
Pro-EU Tories suggested they could join forces with Labour to keep Britain in the customs union. Ex-minister Anna Soubry, who has tabled a cross-party amendment to the new Trade Bill, said: ‘The PM wants frictionless trade with the EU…the only way to achieve that is being in a customs union.’
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