Business leaders call for a ‘partial’ customs union as Balls report highlights uncertainty

BUSINESS LEADERS are suggesting a “partial customs union” as a compromise plan for future trade with the European Union after Brexit.

The Institute of Directors (IoD) said its proposals would cover industrial goods and processed agricultural products and would help maintain the competitiveness of key industries.

With business groups pressing the Government for more information on trading arrangements post-Brexit, the IoD said it would support a “bespoke” deal with European counterparts.

A customs union similar to Turkey’s agreement with the EU could be used as a base to build a broader free trade agreement, it was suggested.

In its report, the IoD said its suggestion would allow the UK to forge its own trade agreements alongside EU negotiations.

Meanwhile, most British firms want the UK to remain in the customs union after Brexit, a survey has indicated.

The Harvard Kennedy School study was carried out by researchers including former Shadow Chancellor Ed Balls, inset, and involved interviews with more than 80 small and medium-sized firms and trade associations. The former Morley and Outwood MP said: “It is the most detailed, indepth study of the views of small and medium-sized businesses which has been done academically since the referendum.” The overwhelming majority who expressed an opinion want to stay in the customs union, the report said.

The large majority also want to stay in the single market after Brexit, believing that securing a free trade agreement (FTA) would be an inferior option to remaining a full member.

Mr Balls said: “They say they don’t know where we are going in terms of the end state or the transition. What we are hearing here from small and medium-sized companies is they are very fearful this uncertainty and potential for a hard Brexit could cause quite big damage to the British economy.”