Leaving the EU: Customs

Paul Blomfield Excerpts

Wednesday 16th May 2018 Commons Chamber

[Paul Blomfield (Sheffield Central) (Lab)]

I beg to move,

That an humble Address be presented to Her Majesty, that she will be graciously pleased to give directions that the following papers be laid before the House: all papers, presentations and economic analyses from 1 January 2018 up to and including 16 May 2018 prepared for the European Union Exit and Trade (Strategy and Negotiations) Cabinet sub-committee, and its sub-committees, on the Government’s preferred post-Brexit customs arrangements including a Customs Partnership and Maximum Facilitation.

This is, frankly, a desperate state of affairs. We are two years on from the referendum and five months away from the deadline for the withdrawal deal, but the Government still cannot agree on the most basic of Brexit issues: our future customs arrangements. Each week we see a new attempt, and each week we see it fail, with a Cabinet—a war Cabinet—and two Sub-Committees of warring factions. Yesterday we at least saw some agreement: the agreement to kick the ball down the road for another month as the Government agreed to publish a White Paper on their negotiating position, but without any agreement on what will be in it.

The Prime Minister is clearly in a difficult position. Every time she tries to make progress, a Cabinet Minister is waiting to trip her up. As an Opposition, it is tempting for us to dwell on the Government’s misfortune but, frankly, this is too important. The lives of millions of people across the country depend on us getting Brexit right, and if the Government cannot, Parliament needs to take responsibility, because there is a majority in this House that believes in a sensible approach to delivering the decision of the referendum. That starts with our customs arrangements, which is why we have tabled this Humble Address motion to seek the publication of the papers and analysis on the Government’s two post-Brexit customs options: the Prime Minister’s favoured proposal of a customs partnership, which has of course been dismissed by the Foreign Secretary as “crazy”; and the so-called “maximum facilitation” option, which the Secretary of State for Business, Energy and Industrial Strategy rightly warned would put jobs at risk. Both have faced serious criticisms of their technical detail and may be illegal, according to the Chancellor of the Duchy of Lancaster and Minister for the Cabinet Office.

The Brexit Secretary, who is unfortunately not in the Chamber, has dismissed the customs partnership as “blue sky thinking”, but when looking at the maximum facilitation option, I was struck by his words. I want to quote him precisely:

“Faced with intractable problems with political pressure for a solution, the government reaches for a headline grabbing high-tech ‘solution’. Rather than spend the resources, time and thought necessary to get a real answer, they naively grasp solutions that to the technologically illiterate ministers look like magic.”

Those were the words of the Brexit Secretary. As it happens, he was speaking in 2008 about ID cards, but was he not prophetic in anticipating today’s “intractable” problem? However, it is not intractable; there is a solution.

It is clear to everyone that the Government are in a total mess, locked in a fight over two options, neither of which is practical or acceptable to the EU, but this House has an opportunity to sort out the mess. There is a majority that respects both the result of the referendum and our duty to protect the livelihoods of the people we represent. The right hon. Member for Preseli Pembrokeshire (Stephen Crabb) rightly described the conflict in the Cabinet as an “ideological cage fight”, adding that Parliament may soon be “making the decisions”. Frankly, it would make a better job of it. There is a majority for a new and comprehensive customs union, both here and beyond the House, among all those who recognise the importance of protecting our manufacturing sector, of securing frictionless trade with the EU, and of honouring our obligations on the Good Friday agreement and the border in Ireland.

[Catherine West (Hornsey and Wood Green) (Lab)]

Will my hon. Friend give way?

[Paul Blomfield]

I will give way briefly, but I am conscious of time and of the number of Members who wish to speak—interventions will cut into their time.

[Catherine West]

I thank my hon. Friend for giving way and I heed his admonition. Does he agree that peace in Northern Ireland and the Republic of Ireland is crucial, especially given the background work done by Members on both sides of the Chamber and everyone’s heartfelt desire to maintain peace in our time?

[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.

[Jeremy Quin (Horsham) (Con)]

Will the hon. Gentleman give way?

[Paul Blomfield]

I am happy to give way—I enjoy the cut and thrust of debate—but interventions will cut into the time for other Members to speak.

[Jeremy Quin]

The hon. Gentleman talks about missing the point. I do not want to be rude, because he is making an interesting speech about the customs union, but the actual subject of the debate is whether or not these documents should be released. We are talking about an important constitutional precedent. We have been run by Cabinet government since George III. The hon. Gentleman has not even addressed that as an issue.

[Paul Blomfield]

I intend to address it as an issue as I conclude my remarks, so I will come back to that.

The Government’s own analysis shows that none of their ambitious proposed new trade deals will go anywhere near compensating for the loss of a customs union with the EU. Free trade agreements with the United States, China, India, Australia, the Gulf and south-east Asia would add just 0.3% to 0.6% to our GDP, but moving to a comprehensive free trade agreement with the EU would hit our growth by 5% over the next 15 years. Despite the number of air miles that the International Trade Secretary has clocked up, India has said that it is in no rush to strike a trade deal with us, while Japan has said that it is prioritising the EU for a trade deal.

Working with the EU in the future and seeking deals for a market of 650 million, we can build on the full or partial free trade agreements that we already enjoy with 68 other countries through the EU, as well as the EU deals just concluded with Japan, Singapore and Mexico. If we are confident about our country, and if we are ambitious for its future, we should recognise that we have nothing to fear from a new, comprehensive customs union and everything to gain. It is the best way to support jobs, particularly those 2.1 million in manufacturing, and it is an essential step towards avoiding a hard border in Northern Ireland.

When we previously heard the argument about playing into the hands of those with whom we are negotiating in the EU27, it was as bogus in relation to the other papers that have been released as it is to these papers. Members who insist on a customs partnership or the maximum facilitation model should be confident that the Cabinet papers will stand up to parliamentary scrutiny, and the constraints that were laid down previously provide for the confidentiality that is right for this place. Others who share concerns about those models should also want them to be subjected to proper scrutiny.

This is one of the most important decisions faced by the country since the second world war, but the Cabinet is unable to agree. Parliament therefore has a deep responsibility to stand up for the people whom we represent, and we need access to the information in order to do so. I hope that the House will approve the motion.