UK-EU Customs Union

Lord Dodds of Duncairn Excerpts

Thursday 29th January 2026 Lords Chamber

[Lord Dodds of Duncairn (DUP)]

My Lords, I warmly congratulate the noble Baroness, Lady Gill, and the noble Lords, Lord Docherty and Lord Doyle, on their excellent maiden speeches. I look forward to that yet to be made, and to the valedictory speech of the noble Lord, Lord Offord.

Under a customs union, the EU would strike deals in its own interests, while the UK would be required to apply those terms automatically, without any guarantee of reciprocal access or consideration. Countries negotiating with the EU would have no obligation whatever to offer the UK equivalent market access, yet we would be bound to trade terms we did not negotiate. There is a constant underplaying of or failure to grasp the asymmetry this creates, with obligations imposed in this country but no corresponding duties on third countries.

Having said that, I want to highlight where we are as a country in real terms regarding a customs union, because there seems to be a reluctance to face up to reality, and it has not been mentioned thus far in this debate. We need to face the fact that this country has already acquiesced in precisely such a customs arrangement, not merely in theory but in practice, through the Northern Ireland protocol/Windsor Framework. It is not an inevitable outcome of Brexit, as some would say, but a choice—the wrong choice—about how to manage trading arrangements.

We have a situation, which is either not noticed by people or deliberately ignored, in which part of this United Kingdom is today subject to the European Union customs code and single market rules: rules it does not make and cannot amend. In 2026 in Northern Ireland—part of the United Kingdom—EU law, not UK law, applies dynamically in over 300 areas of law, covering goods manufacturing and agri-food production, never mind the effects of EU VAT rules, state aid rules, Article 2 requirements covering human rights and equality legislation, and all that. So, in debating the pros and cons of the customs union and the single market in the abstract, how can anyone not have regard to the fact that we already have such arrangements in reality for one part of our country?

The Windsor Framework formalises a reality in which internal trade within the United Kingdom is governed by rules made abroad and enforced with no democratic control. A July 2025 report from the Federation of Small Businesses found that the Windsor Framework has created significant disruption to internal UK trade, with over one-third of businesses having stopped trading between Great Britain and Northern Ireland, while 58% report moderate to significant challenges. It says it is fuelling confusion and cost, breaking down UK internal market connectivity rather than resolving trade barriers. It says it is creating a “labyrinth” of bureaucracy, making it harder to move goods within the UK than to export globally.

Whether noble Lords are for or against a customs union for the UK as a whole, one thing that is not sustainable is having one part in the customs union and the rest out of it. That is not acceptable or sustainable. It is complex and unnecessary. It raises impediments to our prosperity. It erects barriers between us in Northern Ireland and our largest market in Great Britain. The cost is being paid by consumers, manufacturers and businesses. Fundamentally, it is a breach of democracy. Laws being made for British citizens in Northern Ireland are being made by a foreign entity in its interests, with no input, role or vote for any elected representative from the people of Northern Ireland, either in the Northern Ireland Assembly or at Westminster. That is an unsustainable position. We must take this into account in any debate regarding the customs union, the single market and the reset.