Dominic Walsh

Would adding a customs union to the Brexit deal really be so bad?

It has been nearly a month since cross-party talks between the government and Labour began, and there is still no sign of white smoke. If the two sides do reach a deal, it is likely to involve movement from the government towards Labour’s key demand – negotiating a ‘permanent’ customs union with the EU after Brexit. Both the Telegraph and the Mail report this morning that the Prime Minister is inching towards a customs union, which she increasingly sees as the only way to get a version of her deal through parliament.

There has already been a pre-emptive backlash against the idea. Foreign Secretary Jeremy Hunt has warned that ‘there is a risk that you would lose more Conservative MPs than you would gain Labour MPs.’ He may have a point – Maria Caulfield, a Tory MP who voted against the deal the first time, but for it on the second and third occasions, tweeted yesterday, ‘I will not be voting for a customs union… A customs union is not leaving the EU.’ The second point, of course, is demonstrably untrue, but more on this later.

On closer examination though, it is hard to sustain the argument that formally adding a customs union would make May’s deal exponentially worse. For starters, the existing deal contains a ‘single customs territory’ as part of the backstop. Indeed, Labour’s absurd refusal to vote for a deal that effectively contains a customs union, because they want a ‘permanent’ customs union instead, has been a significant contributor to the ongoing impasse.

Of course, the backstop is designed to be replaced by something else, whereas Labour call for any customs union to be ‘permanent.’ However, the truth is that a customs union-style future relationship cannot be made ‘permanent’ at this stage.

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