This article was originally published on Comment Central
Following rifts within the Government over what the future relationship between the UK and the EU will look like, on Sunday evening, Downing Street swiftly moved to repeat the Prime Minister’s commitment that Leaving the EU means Leaving the Customs Union. Number 10 clarified it is not Government policy to be within ‘the’ or even ‘a’ Customs Union, in what should be seen as a victory for a ‘Real’ Brexit.
In reality, this shouldn’t come as much of a surprise. In Prime Minister Theresa May’s Florence speech in September last year, she declared “The UK is leaving the EU. We will no longer be members of its Single Market or its Customs Union.”
While Mrs May has remained emphatic that Brexit and leaving ‘the’ Customs Union are synonymous, dissenting voices have worked to undermine this. The Chancellor, Philip Hammond, and his cabal of Remainers, including the ongoing lobbying by big business, have – at every opportunity – sought to frustrate a ‘Real’ Brexit in favour of a ‘Brexit in name only’.
With Sunday’s clarification however, the PM seems to be ruling out “aligning with” the EU Common External Tariff in any significant way, slapping down the Remainers in her Cabinet. In practice then, we should now be on the path to regaining our right to set and implement our own tariffs and customs arrangements.
While an agreement regarding customs and trade with Brussels will doubtlessly be needed as we prepare to Leave, the Government must remain committed to their current policy.
Even after Sunday’s comment was released, many within the media continued to harp on about the supposed economic catastrophe that awaits us if we dare to Leave the Customs Union. This is, of course, ridiculous and needs to be refuted.
To Leave the EU while remaining within any Customs Union or Agreement with the EU, would also tie us into the Common External Tariff and deprive us of one of Brexit’s greatest benefits. The freedom to sign new international trade deals with the world’s emerging markets; complete independence from the European Court of Justice; and the ability to reduce tariffs on everyday essentials (reducing their cost by as much as 20%) must not be squandered.
Recent research by eminent economist Professor Patrick Minford suggests the UK has suffered from a reduced growth rate, of about 6% (£120 billion) over the last 30 years due to the EU’s policies, such as the Customs Union. This is in total contrast to the current media narrative. Once outside the EU, it has been forecast Britain’s GDP will spike by 9%, amounting to a one-off gain of £180billion, as we begin trading on WTO tariffs.
While Remoaners continually drone on about the EU’s great successes in an attempt to keep us shackled to the Customs Union, the reality is entirely different. You would think if the EU was such a great success, it would have concluded deals with the world’s 3 largest economies decades ago. Yet, no deals have been signed with the United States, China or Japan.
Our Prime Minister has already begun laying the groundwork for deals with both the US and in the course of the last couple of weeks alone, with China. In contrast to this, it took the EU over 7 years to negotiate a barebones trade deal with Canada!
The EU has continually failed to achieve these deals mostly because they require the consent of 28 separate EU countries, all of which are lobbying for different, and often contradictory special interests. The EU’s ridiculous Directives also limit the scope of potential trade deals. By insisting goods conform to certain, unnecessarily complicated, standards, the EU alienates potential trade partners. This all means it will continue to restrict opportunities for the EU when it comes to negotiating any deals in the future.
An independent Great Britain will not suffer from these complicated restrictions as we will be free to negotiate our own terms in our own time, and for our benefit – not 27 other Member States.
In his press conference after meeting with Brexit Secretary, David Davis on Monday, the EU’s Chief Negotiator, Michel Barnier, talked of the United Kingdom outside the Customs Union, facing “unavoidable” barriers to trade. This throws the entire negotiation over a Free Trade Agreement into doubt, as the EU attempts to use bullying tactics to get its own way. The UK must prepare to walk away from the EU without a deal, and the Government must stand firm against capitulating to the EU’s demands.
Without a Free Trade Agreement between the EU and the UK, trade would seamlessly transition into World Trade Organisation rules. As Kwasi Kwarteng, Parliamentary Private Secretary to Philip Hammond pointed out, tariffs on most goods are quite low, averaging less than 3% under this system.
What Kwarteng failed to mention however, is these very proposed tariffs would apply both ways! Not only would the UK have to pay to export, but so too would the EU.
Professor Minford has also predicted the UK would gain billions of pounds in tariff revenues if imposed on EU exporters operating under WTO rules, because the EU sells more to us than we sell to them. It would be outrageous for the British Government to consider paying for access to a market in which we are running a trade deficit!
And on the asinine point that without being in the Customs Union we’d face mile long lorry queues at Dover, this is nothing more than propaganda and a continuation of Project Fear. Even if we revert to WTO rules, and tariffs need to be collected, this can easily be done online, as it is in fact done at the moment – within the existing tax system.
Customs officers are as likely to inspect every container or truck’s inventories to check the correct tariffs have been paid, as HMRC are to send officers to every single corner shop in the UK to ensure VAT is paid on all transactions! Like VAT, external audits are far more likely to be used in the majority of cases.
While Downing Street’s comments on Sunday were welcome news, as Brexit supporters are by now very aware, the Government is not above going back on its word. In order to actually Get Britain Out of the EU, we must Leave the Customs Union – whatever it may come to be called. A Customs Union by another name would simply be a Customs Union through the back door. By demonstrating an inability to formulate an independent trade policy – and the inevitable continued subjugation to the European Court of Justice – would be completely unacceptable to the United Kingdom.
Daniel Huggins is a Research Executive at cross-party grassroots campaign Get Britain Out