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Staying in the customs union would be a risky bet for May

22 January 2018

4:59 PM

22 January 2018

4:59 PM

There’s renewed speculation in Westminster that Britain might end up staying in the customs union. The CBI is calling for the UK to stay in a customs union with the EU and Labour is expected to move to backing customs union membership soon.

The argument goes that because customs union membership does not require free movement, it is compatible with the referendum result. Big exporting businesses tend to like the idea as it would ease most of the bureaucratic problems in moving goods around post-Brexit.

But I don’t think Theresa May will go for this idea. If Britain stays in the customs union, then it can’t do comprehensive free trade deals with other countries; all it could do would be services only agreements. Without the prospect of these free trade agreements, it is much harder to make the economically positive case for Brexit. Also, a UK that can’t negotiate its own trade deals would clearly not have taken back control. Added to this, staying in the customs union would shake the unity of May’s Cabinet. It would make many, and not just the Brexiteers, wonder what the point of leaving is. 


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