Hammond: I’ll prove Britain can flourish in customs union

PHILIP HAMMOND is preparing to challenge Liam Fox to prove that Britain’s trade deals after Brexit will compensate for the losses it faces from leaving the EU’S customs union.

Treasury officials have drawn up an analysis which questions whether Britain will be able to line up free trade arrangements with non-eu countries that outweigh the cost of leaving the customs union.

The Chancellor wants Britain to retain associate membership of the customs union during an “implementation period” after Brexit to ensure it can continue to enjoy “frictionless” border arrangements. However, Dr Fox, the International Development Secretary, says Britain needs to leave the customs union so it can exploit the trading opportunities provided by Brexit.

The customs union enables tarifffree trade between members of the EU while also reducing administrative and financial barriers such as customs checks and charges. But it also means Britain cannot strike its own free-trade deals with non-eu countries.

Mr Hammond said last month that developing new customs arrangements after Brexit would be difficult. He said: “To do this in the context of our wider objectives will be challenging. It will almost certainly involve the deployment of new technology.”

Mr Hammond has vowed to put business first in Brexit talks, and said that immigration would not be “shut down” but rather “managed” after Brexit.

He said: “We recognise that this is a negotiation, and our negotiating counterparts will have their own priorities. When the British people voted last June, they did not vote to become poorer, or less secure.”