Leaving the EU: Customs

Debate between Madeleine Moon and Matt Western

Wednesday 16th May 2018 Commons Chamber

[Mrs Madeleine Moon (Bridgend) (Lab)]

Let us make no mistake: the only way to ensure tariff-free and frictionless trade, as well protecting against a hard border on the island of Ireland, is to remain in the customs union.

The Secretary of State for Exiting the European Union told me in a recent debate that the Canada-United States border was an example of a customs arrangement that the Government may seek to replicate. However, the Irish Prime Minister, having visited that border, said:

“I saw a hard border with physical infrastructure, with customs posts, people in uniforms with arms and dogs.”

That is not what we want for the border in Ireland.

[Matt Western]

Having visited Detroit and that border between the US and Canada in February, I can confirm that it takes an average of eight minutes to get through, and that it is what a hard border looks like, with X-ray machines and so on. There would be serious friction on such a border.

[Mrs Moon]

It is good to hear such first-hand experience in the House. Clearly such an option is unacceptable for peace in Ireland and the efficient customs regime that we seek. Donald Tusk has effectively said that if Ireland does not find the UK’s offer on the border acceptable, the EU will not allow negotiations to move on to trade. If we also consider the fact that the Irish Prime Minister has said that the US-Canada border example

“is definitely not a solution”,

it is clear that the only way forward is to remain in the customs union.

My constituency of Bridgend has the largest Ford engine factory in Europe. The automotive sector is critical to the wellbeing of many families throughout my constituency—on average, around 12,000 families are linked to work with that factory. According to the Society of Motor Manufacturers and Traders, the introduction of tariffs on trade with the EU because of our leaving the customs union would significantly increase costs. A 10% tariff on finished vehicles would cost the industry £4.5 billion, increasing the price of cars imported to the UK from the EU by an average of around £1,500. Tariff costs and custom burdens on such a highly integrated supply chain would undoubtedly disrupt and undermine the competitiveness of UK manufacturing, and that is without the common standards and rules mentioned by my right hon. Friend the Member for Wolverhampton South East (Mr McFadden).

The Government have said that one of their strategic objectives is

“ensuring UK-EU trade is as frictionless as possible”.

Automotive experts have made it crystal clear that customs barriers and tariffs would be crippling for their industry. As frictionless as possible is just not good enough. It is no secret that the single market and customs union have been vital for the competitiveness of the sector. In the UK, it has made more than £71 billion in turnover and supports more than 800,000 jobs. That is not something that we can toss away lightly.

To protect jobs and to protect the automotive industry, the Government should be actively seeking to avoid any customs tariffs whatsoever. The only way to do that is in the customs union. My constituents deserve to know what future the Government are taking them towards. They have the right to make the ultimate decision, based on the facts—facts that were denied to them at the time of the referendum. Let them have those facts now, and let us know what the Government know about the risks we are taking as a result of their line of taking us out of the customs union.