Sunday Telegraph: PM must tell UK what customs union costs

The Prime Minister needs to go on the rhetorical offensive. With the Lords sabotaging Brexit, and Remainer ministers scenting blood, Theresa May must look to the public, delivering a powerful speech to break the deadlock and reject the protectionist customs union for good.

Being inside the customs union costs Britain billions of pounds each year. UK shoppers overpay for non-European imports, due to common external tariffs protecting inefficient producers elsewhere in the EU. Four fifths of these revenues go to Brussels. They’re particularly steep on clothing, food and footwear, hitting poorer UK shoppers hardest – which is unfair. To divert “money we send the EU to the NHS instead”, we must be outside the customs union. Stick that on the side of a bus.

Staying in the customs union after Brexit means charging EU tariffs with no say in setting them – the “vassal state” argument. This is the ghastly deal foisted on Turkey – an unproven partner state trying to join the EU. Britain is not Turkey – Brussels is trying to keep us and our money in.

Customs union membership also means implicitly accepting EU regulations, de facto single market membership. That makes it doubly impossible for Britain to cut trade deals with other nations, one of the main Brexit benefits. Dim Parliamentarians say the customs union is an elegant compromise, but it’s the worst of both worlds. A compromise like leaping halfway over a chasm. And it makes a mockery of the June 2016 vote to take back control of our laws, borders and money.

The EU‘s trade agreements are anyway unimpressive in range and not particularly helpful. Brussels struggles to cut such deals as member states’ interests often conflict. That’s why, after 60 years of trying, the EU has no free trade agreements with major players like the US and China. EU deals in force cover under 10pc of the global economy and are generally skewed towards French and German, not British, interests. Sizeable economies with EU deals – like South Korea and Mexico – now want bespoke bi-lateral UK agreements.

Finally, the customs union is unfair, insular and backward looking. It harms some of the world’s poorest nations, hindering their exports of processed agricultural products – you got that Labour MPs? In the early Seventies, when Britain joined, the EU bloc comprised over 30pc of the global economy. As global commerce has shifted east, that share has fallen – to under 15pc once Britain leaves. It is mad for a competitive economy like Britain to hide behind a tariff wall harming our consumers and discriminating against 85pc of the world economy.

A UK-US trade deal looks doable. Switzerland struck a Chinese deal and so can we. Secure these and the UK will be in a free-trade zone covering 40pc of the world economy – blowing the EU‘s deals away. An EU-UK trade deal on top – ultimately in their interests – would put that share well over 50pc, with Britain helping to usher in a new age of global free trade.

These arguments are credible, easily explained and will appeal to a broad audience. May should have been making them since taking office, preparing the world for Brexit, and must do so now.

To read Liam Halligan’s piece for the Sunday Telegraph in full, click here.

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