Leaving the EU: Customs

Lord McLoughlin Excerpts

Wednesday 16th May 2018 Commons Chamber

[Paul Blomfield]

I would, of course, and I am frankly distressed that those who favour the most destructive Brexit are so casually willing to dismiss that if it gets in the way of their objectives.

Let me return to the breadth of support for a comprehensive customs union outside the House. The director-general of the CBI, Carolyn Fairbairn, has described it as a non-ideological and practical solution. Crucially, she pointed out:

“If we don’t break the impasse on this customs decision, everybody will be affected—manufacturers, services companies, retailers. An awful lot hangs on this now.”

Her view is shared across business and the trade unions.

Those who seek the deepest possible rupture with the EU, no matter the cost, have been developing their arguments against a customs union, so let me address them. Some have warned that being in a customs union raises prices for food and clothing through the common external tariff. I hope that they will also reflect on the response of British farmers and clothes producers to their idea of unilaterally cutting our tariffs, presumably to zero.

I have also heard the absurd argument that developing countries would be disadvantaged by a customs union with the EU. Current customs arrangements serve developing countries well, as 49 of the poorest countries have tariff-free access to the EU market through the “Everything but Arms” policy. If the approach would be so damaging, perhaps the Government will explain why they propose to replicate the entire EU regime on market access for developing countries—the general system of preferences—after Brexit.

The most frequent objection, of course, is that a customs union would prevent us from signing trade deals with other countries—it would. That sounds significant, but the significance is largely symbolic. We can and do trade with non-EU countries without trade deals. The EU is our biggest trading partner, but the US is our biggest national trading partner, and that is without our having a trade deal. Some people talk about increasing trade with China once we are free of a customs union, but Germany trades four times as much with China as we do.

[Sir Patrick McLoughlin (Derbyshire Dales) (Con)]

How helpful does the hon. Gentleman think that the publication of all these documents would be to the people we are trying to negotiate with?

[Paul Blomfield]

The right hon. Gentleman misses the point. He should listen to his own International Trade Secretary, who has talked clearly about a customs union not preventing us from increasing trade.

--- Later in debate ---

[Mr Lidington]

I am deeply old-fashioned in my views, and I believe it is an enormous privilege to serve in a Cabinet. I also believe that discussions should be frank and unconstrained within the Cabinet, and that Cabinet Ministers should agree on a collective Government policy and be prepared to defend that policy in public afterwards.

[Sir Patrick McLoughlin]

Does my right hon. Friend agree that if such a motion were to be passed, less would be said in Cabinet papers and they would no longer contain the same candour? That is something that we should try to get away from. We had quite a bit of it between 1997 and 2010, when decisions were not taken through collective Cabinet responsibility.

[Mr Lidington]

My right hon. Friend speaks from experience, and he is completely accurate in what he says.

The third principle was mentioned by my hon. Friend the Member for Dover when he talked about international relations. All Governments have to negotiate with other sovereign Governments and with international organisations, and it is a cardinal principle of our system of government that Ministers and officials need to be able to prepare the British negotiating position in private. Indeed, as recently as December 2016, that was also the view of the right hon. and learned Member for Holborn and St Pancras (Keir Starmer), who said:

“I fully accept that the Government will enter into confidential negotiations…I do…accept that there is a level of detail and of confidential issues and tactics that should not be disclosed, and I have never said otherwise.”—[Official Report, 7 December 2016; Vol. 618, c. 223.]

It is a source of sadness to me that he appears to have departed from that position in lending his name to the motion on the Order Paper today. I would be happy to take an intervention from him if he wishes to explain to the House why he has abandoned the view that he championed two years ago.