UK-EU Customs Union

Lord Fox Excerpts

Thursday 29th January 2026 Lords Chamber

[Lord Fox (LD)]

My Lords, the noble Baroness, Lady Gill, and the noble Lords, Lord Docherty, Lord Doyle and Lord Pitt-Watson, all gave excellent speeches, and all demonstrated the differences, and the different approaches, that they will bring to these Benches, from which the whole House will benefit. Welcome to them. The noble Lord, Lord Offord, in his hustings—I mean valedictory—speech, set out why, in one sense, I will miss him, and I give him a cheerful wave as he heads north. This has been a fascinating debate, and I thank my noble friend for causing it.

As one of the vice-presidents of the Liberal group on the NATO Parliamentary Assembly, I met this week with the Finnish president of the group and the other VP, who is Canadian. The purpose of the online meeting was to work out how we as a group, within the NATO PA, should be responding to the unprecedented attack on the cohesion and values of the western alliance.

I raise this because the political environment to which we were responding, and the implications of this, would have been unthinkable a very short time ago. At the heart of what we were discussing is how we all work together, not just in the High North and not just in defence, but economically and politically, and at a values level. The scale of the change means that last year’s view has changed so dramatically from this year’s view. This pace of change has pushed the world to levels of uncertainty that transcend contemporary experience in this country.

Given this acceleration into political mayhem, I wondered, how will this debate shape up? What new ideas will the Brexit promoters produce? How are they reacting to the new reality? Well, noble Lords were here too and have heard that those opposing this Motion remain very firmly where they were just after the referendum. To the noble Lord, Lord Jackson, I say, yes, it has been traumatic for the Liberal Democrats; it has been traumatic for the country; and it has reduced the wealth of the country. That is a good definition of trauma.

When Boris Johnson told the country he was “getting Brexit done”, he ambiguously offered some sort of 19th-century version of the UK, while at the same time promising to use all the levers of the state and increase public spending to level up—which was more like a 1960s version of British government.

Of course, he achieved neither, choosing instead to do things completely differently. For example, as was mentioned, having “taken back control” of our borders, Mr Johnson went on to welcome nearly 1 million people per year to the UK under lawful migration. Levelling up never got off the ground. At the same time, those who had called for “Singapore-on-Thames”—which seemed to ignore there was another part of the country—were frustrated both with him and his temporary successors. Perhaps the only bright spot for these devotees was joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership: I thought I would give it its full name at least once today.

The reality is that, as my noble friend Lord Newby and others set out, Brexit has had a catastrophic effect on our economy, depriving the Exchequer of perhaps £40 billion, perhaps £95 billion over a period. Inward investment has dropped, our exports to the EU have reduced by about 18% from 2019 levels, and food exports are down by a massive 30%.

Yet still the proponents of Brexit continue. Some double down; some say it was the wrong Brexit; some see Covid as the unique source of its failure; and many more try to blame the current Government for everything, saying it is all their fault. To be clear, the totally botched exit deal with the EU and the subsequent fiasco was the work of the Conservative Government. It was all their own work. In spite of the bravado, many of them know that the number on the side of that famous campaign bus, far from being positive, is a big negative number.

The noble Lord, Lord Dodds, raised the really important point of the position of Northern Ireland. Without going back too far, I remember that many of us warned the Government of the day that this would be a problem. That view was decried. “It will be all right”, they said. Well, the noble Lord, Lord Dodds, has described the fact that it is not, and it remains a very present problem.

It is easy to forget how inept and how flyblown the Conservative Brexit Governments were who delivered us to this point. So, it is good that noble Lords remind us of that from time to time.

Although many noble Lords may be in denial, beyond Westminster, there is certainly greater realisation from the British people about how poorly Brexit is serving them. I agree with my noble friend Lord Newby that there is now much stronger and, indeed, majority public support for getting the UK back into the heart of Europe. This shift would help the Government to move on what they say is their primary mission: growth. The truth is, Labour will not succeed unless it gets our economy growing strongly again, and the best and perhaps quickest way to do that is in a customs union with Europe.

More than this, and returning to the conversation with my NATO PA colleagues, we agree that the western alliance has to stand up to President Trump and push back against his bullying. We know that we have to do that together. Economic ties are part of a process of pushing back against that bullying.

Some will say, “At least we have our Brexit freedom”, and they have. Well, freedom works only if you spend it wisely. The Prime Minister will, no doubt, come back from Beijing waving investment promises from President Xi: promises that will stretch the balance between risk and reward and make very little impingement on our huge deficit of £40 billion to £50 billion with China.

Meanwhile, the India-UK FTA has been hailed as a great breakthrough. As we know, it does not give increased access for services, and most of the benefit from the sale of goods will be in five to 12 years’ time. The EU now has one, which Brussels boasts includes

“tariff reductions that none of its other trading partners have received”.

In that regard, I ask the Minister to confirm that the EU deal is indeed better than ours, as Brussels says. Can she write to me with the details on where the differences are?

Our freedom has yielded Beijing’s possible investment, India’s slightly improved access for goods, some minimal uptick that will come from CPTPP and a very fragile agreement with the USA, which exists as long as Donald Trump decides it should continue. This is the freedom dividend and I am sure that noble Lords can see that it offers only a tiny fraction of what we have lost. That is why I am supporting this Motion. It is time that the UK set out in a clear and unambiguous way the UK’s long-standing aspirations for a renewed and much closer relationship with the EU.

My noble friends Lord Newby, Lord Razzall, Lord Stephen and Lord Wallace have done a wonderful job in setting out how a closer relationship would benefit the UK. I suspect a majority of noble Lords will not have been swayed to support our entry to a customs union, but, save for a few speeches, there has been a general softening of the approach to Europe, particularly on the Government Benches, and I welcome that softening.