Brexit: EU Customs Union

Lord Callanan Excerpts

Wednesday 7th February 2018 Lords Chamber

[Baroness Ludford]

To ask Her Majesty’s Government what future relationship they plan between the United Kingdom and the European Union Customs Union.

[The Minister of State, Department for Exiting the European Union (Lord Callanan) (Con)]

My Lords, the Government made clear in the Prime Minister’s speech in Florence and subsequently that we will be leaving the EU customs union. In the Government’s customs future partnership paper published last August we put forward two possible approaches to the UK’s future customs relationship with the EU. The specific approach we take will of course be subject to the outcome of the negotiations.

[Baroness Ludford (LD)]

My Lords, I am grateful for the Minister’s certainty, but it does not seem to be shared by all members of the Cabinet who are speaking out. Indeed, when on Friday Mr Olly Robbins gives EU negotiators a,

“UK update on the future relationship”,

as the agenda foresees, I suspect that all he will really be able to tell them will be, “My political bosses are incapable of making up their minds. Can you please tell us what to do?”

[Lord Callanan]

Was there a question there? I am sure that, if Mr Robbins gives any kind of update, being the good, efficient civil servant that he is, he will want to reflect government policy.

[Lord Forsyth of Drumlean (Con)]

My Lords, will my noble friend confirm that when we leave the customs union we will be able to end the scandalous discrimination against developing countries and others where there are very high tariffs on food, clothing, textiles and other goods? Can he give an example of some of the high tariffs that we will be able to avoid, thus reducing the costs to British consumers?

[Lord Callanan]

I thank my noble friend for his question. He is, of course, right. Leaving the EU offers us the opportunity to have our own independent trade policy not contracted out to the European Commission. There are many opportunities that will present themselves, and eliminating some of the extremely high tariffs on agricultural products is one of them.

[Baroness Hayter of Kentish Town (Lab)]

My Lords, in an open letter this morning the British Chamber of Commerce has almost begged the Government to spell out what they actually want from the relationship with the EU. It said quite bluntly that those who are elected to govern now have to make a choice—it is make your mind up time. Will the Minister send a little memo to the Brexit sub-committee which is meeting today to urge it, for the sake of the country’s economy and not just for party unity, to look at jobs first and decide that whatever is best to get jobs and the economy going will be what drives the negotiations?

[Lord Callanan]

I totally agree with the noble Baroness that of course we should have regard to jobs created in the economy. No doubt she will be delighted to know that last week we announced the lowest unemployment totals in the UK for 42 years. I am sure that the Labour Party will want to join us in welcoming that record.

[Lord Hannay of Chiswick (CB)]

My Lords, the Minister said, correctly, that in August or September the Government referred to two options. They did not describe them; they just referred to them. I think that one of them was called “blue sky thinking by the Secretary of State for DExEU”. With all the resources of the British Government behind them, what have the Government done to fill out those two options since then? Will the Minister perhaps share that information with the House?

[Lord Callanan]

As the noble Lord is aware, we published a future partnership paper and put forward two proposed options for the UK’s future customs relationship. The first is a highly streamlined customs arrangement consisting of negotiated and unilateral facilitations, aiming to simplify requirements on UK-EU trade. The second is a new customs partnership. They are both comprehensive options that will be studied.

[Lord Tomlinson (Lab)]

My Lords, if the Government have made their position so clear, why is not only the Cabinet meeting but the sub-committee on Brexit meeting twice this week in order to determine among themselves what government policy is?

[Lord Callanan]

The noble Lord will be aware that the Cabinet meets once a week and that sub-committees regularly consider all aspects of government policy. This is a particularly important aspect of government policy, so we will want to go through all the options in great detail

[Lord Pearson of Rannoch (UKIP)]

My Lords, are the Government aware of the Civitas research which shows that, if the Eurocrats force us to trade on World Trade Organization terms, EU exporters will pay us tariffs of some £13 billion a year, while ours will pay them only some £5 billion a year—a nice little profit to us of some £8 billion? So would it not be generous of us to offer to leave our free trade just as it is, while taking back our law, borders, fishing, agriculture and sovereignty generally?

[Lord Callanan]

I am sure that the noble Lord is a believer in free trade. Nobody on either side wants to get into paying tariffs. We want a bold and ambitious economic partnership, as the Prime Minister has made clear.

[Lord Wallace of Saltaire (LD)]

My Lords, will the Minister accept that some of us listening to the Government’s debate are getting a little confused about what the exact distinctions are between “the” customs union, “a” customs union and a customs “arrangement”? Since Ministers use the terms “a customs union” and “a customs arrangement” regularly to describe what we want, could the Minister help us by explaining exactly what the Government mean by them?

[Lord Callanan]

I can certainly agree with the noble Lord that the Liberal Democrats are confused, if that is what he is asking me to do. The term “customs union”, as he will know, has a specific legal formulation.

[Lord Low of Dalston (CB)]

My Lords, how is regulatory alignment between the Irish Republic and Northern Ireland to be maintained if we leave the customs union?

--- Later in debate ---

[Lord Callanan]

We are currently formulating the legal agreement implementing the phase 1 agreement, where we, alongside the EU and the Irish Government, committed to having no hard border in Northern Ireland. All of the options will be considered in the second phase, but we are committed to that option.