May clears way for copycat customs union with Europe6 January 2018 | 03:45 | The Times
The future customs relationship with the EU could be one of the biggest political issues this year as Labour edges closer to pledging to stay in a union with the EU even if it stops Britain striking independent trade deals.
Mrs May has given herself maximum room for manoeuvre in a trade bill that will be debated in the Commons on Monday and Tuesday, in a move that could cause jitters among Brexit supporters.
Clause 31 of the bill allows the government to establish “a customs union between the UK and the country or territory”. The Commons library said that this clause gives the government power to implement any customs union with the EU. The revelation raises questions over whether a future customs agreement with the EU could restrict Britain’s trade policy.
Philip Hammond has confirmed that Britain will leave the customs union but some in the Treasury have been sceptical about the economic benefits that new trade deals will bring, given the potential disruption at ports. This is likely to continue to be a difficult issue for the government, with some Tory MPs also cautious about completely ripping up the current arrangements.
Paul Blomfield, shadow Brexit minister, said: “Theresa May’s decision to sweep the customs union off the table before negotiations began was utterly reckless, so it’s positive that the Treasury is rethinking this approach. Labour has been clear that remaining in a UK-wide customs union with the EU is a viable option, subject to negotiations.”
Nicky Morgan, chairwoman of the Treasury select committee, asked the chancellor to explicitly rule out the UK participating in a customs union with the EU. In response, Mr Hammond said yesterday that he wanted a customs arrangement “that facilitates the freest and most frictionless trade possible between the UK and EU and allows us to forge new trade relationships.”
In a letter to the Treasury select committee, he said the priorities included making trade “as frictionless as possible . . . and establishing an independent international trade policy”. Ms Morgan said: “It was widely thought that being in a long-term customs union with the EU had been ruled out by the government. But the chancellor’s letter confirms that this is not the case.”
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