Government Minister Backs Customs Union

Today Wimbledon MP and Government Health Minister Stephen Hammond has written to constituents expressing his support for “a Single Market and Customs Union style solution.” Stating that he believes that a “Hard Brexit and no deal are not acceptable outcomes”, Hammond is playing fast and loose with collective responsibility. The manifesto he was elected on, and the referendum result he purports to respect directly contradict him…

Hammond hinted yesterday that he would resign to try and prevent a No Deal Brexit. Today he has broken another manifesto commitment…

This is a big change of tune from last week when he was reportedly one of the linchpin backers of the Malthouse Compromise. The Government can’t allow Ministers of the Crown to go around freestyling like this if they are serious about getting the whole party on board…

Sajid: I Am “Totally Against” a Customs Union

Firm line from Sajid against a customs union. It’s a “complete non-starter”…

Fox: Customs Union “Would Not Be Delivering Brexit”

Trade Secretary Liam Fox has come out fighting against some senior Remainers in the Cabinet who are reportedly pushing for membership of the EU’s Customs Union. He told the BBC that Customs Union membership would not be delivering Brexit.

“We would have to apply European trade law without having a say in how it’s made, and we would also have to apply what’s called the common external tariff, which would restrict our ability to make agreements outside the European Union’s ability to do so. It would not be in my view delivering Brexit.”

Leaving the EU in control of our trade is the opposite of taking back control…

Barnier’s Deputy Says Backstop Will Be Used to Lock UK In

Theresa May has often insisted that Brexiteers should simply swallow the backstop, unpalatable as it is, because there is little chance of it ever being used. This argument has taken a hammer-blow overnight with multiple reports from Brussels that Sabine Weyand, Barnier’s deputy who leads the EU’s negotiations at a technical level, has been telling EU ambassadors that the EU plans to use the backstop as the basis for the future relationship with the UK locked into the customs union and “level playing field” arrangements on social and environmental policy. Confirming all of Brexiteers’ warnings about the UK becoming a permanent vassal state…

According to The Times, Weyand told EU ambassadors:

“We should be in the best negotiation position for the future relationship. This requires the customs union as the basis of the future relationship… They must align their rules but the EU will retain all the controls. They apply the same rules. UK wants a lot more from future relationship, so EU retains its leverage.”

Weyand also said that the UK would be forced to concede on fisheries, one of the last remaining red lines May is attempting to cling to, saying that the UK “would have to swallow a link between access to products and fisheries in future agreements”. The gaping hole at the heart of the Government’s Brexit strategy is that it has not made any preparations to leave the customs union or single market in any meaningful sense. The EU knows this and is exploiting it mercilessly.

Ironically, the one thing it does do is bring the Government’s position almost entirely into line with Labour’s, the only difference being that the Government is still claiming that the customs union and level playing field arrangements will be temporary, while Labour – and evidently the EU – want them to be permanent. May has zero chance of getting the deal through Parliament on Tory and DUP votes alone, with the DUP further hardening their opposition to the deal overnight, however the Labour frontbench is still continuing to dangle the possibility of a shock decision to back the deal. This might be May’s only hoping of getting the deal through Parliament but it would surely signal the death knell of her leadership…

No.10 Hard-Selling Backstop With Trade Bill Bluster

Guido hears that Number 10 has been telling Cabinet ministers that they must accept the backstop or else rebel MPs will amend the Trade Bill to force the UK to stay in a customs union outright. Not exactly sending out a strong signal that Downing Street believe the merits of the backstop will speak for themselves…

This appears a red herring to Guido for a number of reasons:

As the Labour Lords pointed out, the Government hasn’t even scheduled the Lords Committee stage of the Bill yet, so it will not be making its way back to the Commons any time soon. Any deal will likely be wrapped up long before it does…

Additionally, for all that Downing Street likes to play up the chances of being defeated in the Commons on a customs union, the fact is that every time the Commons has voted on a customs union in the past, there has been a majority against it.

And even if the Government is defeated on a customs union amendment, they can ultimately just drop the Trade Bill – there is nothing so essential in it that needs to be passed into statute right now. The Government has wriggle room on the Trade Bill, not on the backstop…

Braexit? Bolsonaro’s Economic Guru Slams South American Customs Union

New Brazilian President Jair Bolsonaro’s “economic guru,” Paulo Guedes, has suggested that the country could head for a ‘soft Braexit’ from the continent’s fledgling EU-like supranational organisation Mercosur, the ‘Southern Common Market’.

Following the EU model, Mercosur has recently established a parliament with direct elections scheduled for 2020. It has even proposed a single currency, the ‘Gaucho’. The Union consists of Argentina, Brazil, Paraguay, Uruguay, and Venezuela, although the latter has been suspended since November 2016.

Guedes, who is touted as becoming a “super minister” in Bolsonaro’s administration, has slammed the agreement and particularly its customs union, as bad for the economy, calling it a “cognitive prison.” 

“Am I only going to trade with Venezuela, Bolivia or Argentina? No. We will trade with the world, with more countries. We will do commerce. What if I want to trade with other countries?”

Brazil is a country of 210 million people. Leaving Mercosur’s customs union could be a game changer for boosting world trade…

Irish Allow Remote Customs Checks

As Guido was travelling through Dublin Airport last night, he noticed the remote customs checks the Americans have, 3,000 miles away from the US border. The Republic of Ireland are perfectly happy with the principle of remote customs clearance, except for when it’s politically convenient not to be…

Two-Faced Government Minister Fighting to Keep UK in Customs Union

Leaving the Customs Union has been a central plank of May’s Brexit policy since the Lancaster House Speech in January 2017. It has even survived Chequers, so far…

However, in the Summer 2018 edition of the Westminster Conservatives members’ magazine Blueprint, local MP and Foreign Office Minister Mark Field writes:

“As I am a Minister in the Foreign and Commonwealth Office, I am duty bound to support the government in the voting lobbies on Brexit related legislation but I do recognise the concerns that have been expressed by many, particularly with regard to the border between the Republic and Northern Ireland. I continue to make the case behind the scenes for a customs union type arrangement to assist exporting businesses and address the Irish issue…”

Why is a government minister going on the record to oppose one of the central policies of his own government? Another naughty Field for May to run through…

Civil Service Working on Continuing Customs Union Membership

The Department for International Trade is interviewing for a ‘Business Support Manager’. The second bullet point in the five “key areas of responsibility” gives away that the department is developing policy about membership of the Customs Union. This directly breaks one of Theresa May’s most important red lines…

“Customs Union: with G7 support, leading BEAT’s [Business Environment Advisory Team] engagement with those developing the policy about the UK’s membership of the Customs Union, as it develops.”

Trade Secretary Liam Fox has consistently said that “no form of customs union is acceptable after Brexit” and that membership of one would constitute “a complete sell-out of Britain’s national interests.” His department seems to disagree…

UPDATE: The DIT have been in touch to say that the description was “incorrect,” despite the job description referencing the Customs Union twice.

“This job description was incorrect – the government has made very clear that the UK is leaving the Customs Union. We will establish a new and ambitious customs arrangement with the EU that will allow us to maintain as frictionless trade as possible in goods between the UK and EU.”

Guido hears that interviews began today…

Max Fac, But in Customs Union For Ages

Newsnight’s Nick Watt reckons Number 10 will eventually plump for Mac Fac, but we will stay in a customs union for a very long time before we get there. Which carries the risk that we might never leave…

Labour and Remain Voters Want Full Control of Trade Policy

A new poll from BMG for Change Britain finds that an overwhelming majority of voters – and clear majorities of Remain and Labour voters – say Britain must be completely free to strike its own trade deals after Brexit. 71% of voters agreed that we must be free to negotiate our own trade deals with other countries without involvement of the EU. Which means, Theresa and Jezza, not being part of any form of customs union.

Keir Starmer should take note, as 64% of Labour voters demanded the freedom to strike new trade deals. 60% of Remain voters agreed. Starmer has never managed to explain his unicorn policy of getting the EU to let us join a customs union that also allows us to strike our own free trade deals with other countries. This poll is effectively a resounding rejection of Labour’s customs union policy by Labour voters.

A majority of Remain voters also agreed that Brexit meant taking back control of trade policy, and 58% of Remainers said the referendum result must be respected. Both Number 10 and Starmer should take note – even Remainers want Brexit done properly…

German Companies Back Brexit Britain

Officials in Germany’s economic powerhouse state of Hesse – home to significant industry and the major financial centre of Frankfurt – say Brexit has had no negative effect on business. Prof. Mathias Mueller, President of the Frankfurt Chamber of Commerce and Industry, explained:

“Exports to the UK totalled 4.1 billion euros in 2017, which was 6.5 percent of Hessen’s exports… The sectors most affected include automobiles and automotive parts, since many Vauxhall automobiles sold in the UK are essentially “Made in Hessen”. Traditionally important export goods from Hessen are also chemical and pharmaceutical products as well as electro-technical products.”

He continued:
“Many local companies have also invested in the UK. According to statistics of the German Bundesbank, Hessen’s direct investment in the UK amounts to nearly 21 billion euros. Hessian companies employ 39,000 people in the UK. Conversely, British companies in Hessen employ as many as 60,000… 

“Business is running as usual, a ”Brexit shock” has not occurred and most companies are so experienced in international trade that they can deal with problems such as customs clearance, different national licensing processes, site-specific legal norms and the like. In general, the issues confronting companies with Brexit are nothing new.” 

Meanwhile, a nationwide poll by the German Chambers of Commerce and Industry found that even if the framework conditions for future business are not yet clear, companies that are invested in the UK will stand by their commitments. More than 91% of companies replied to the question of possible relocations away from the UK with “no”. Look forward to seeing this reported in the FT…

May Customs Union Gaffe

The PM’s spokesman quickly clarifies that she meant “future customs arrangement”, not “future customs union”. Phew!

Customs Decision Has Been Coming “Next Week” For Three Weeks

For three weeks in a row now, Number 10 has been putting off the decision on customs until “next week”.

Wednesday 2 May: Cabinet sub-committee meeting splits 6-5 in favour of Max Fac. Number 10 declines to hold an official vote. Decision delayed “until next week”.

Tuesday 8 May: Cabinet meeting. Customs is the elephant in the room, not discussed at all. Conversation put off until next Cabinet sub-committee.

Thursday 10 May: May cancels plan to discuss customs. Cabinet sub-committee instead told to go away into two groups and study proposals further. Still no decision.

Tuesday 15 May: Cabinet sub-committee meeting. Decision now expected “next week”. What will they tell us next week?

And this is without mentioning that Number 10 is considering delaying the Commons vote on the customs union until the autumn, which would wreck our negotiating hand. And appears to be considering extending the transition period for customs, which would further delay Brexit. C’mon Theresa, get on with it…

Thornberry: Labour Want to Remain in THE Customs Union

Emily Thornberry told the Today programme – twice – that Labour wants to stay in the customs union.

“What we want to do, is we want to remain in the customs union. We don’t want any faffing around with any of the nonsense that the government is coming up with in relation to alternatives to the customs union. We want to remain in the customs union.”

This appears to be a radical shift in policy from Labour, who previously said they want to leave the customs union and then join a new customs union after Brexit. Thornberry was clear that Labour now wants to stay in the customs union. Unless she doesn’t understand it?

UPDATE: Clarification of Thornberry comments from Labour source: “Emily agrees with our policy which is to seek to negotiate a comprehensive UK-EU customs union, with the UK having a say over future trade deals and arrangements.” Well, it was early in the morning…

684 Days Since the Referendum, the Government Doesn’t Have a Policy on Customs

684 days have passed since Britain voted for Brexit. Theresa May has been Prime Minister for 664 days. There are just 325 days – ten months – until we are supposed to be leaving the EU. Still, the UK government does not have a policy on customs. 

Boris has given an interview to the Mail today in which he brands Number 10’s customs partnership proposal “crazy”. Guido has outlined the problems with it here. The customs partnership is dead in its current form, but the papers are full of speculation Downing Street is going to plough ahead with a rehashed version of the model rejected by the Brexit sub-committee last week.

Just as worryingly, Number 10 is putting off the decision yet again. Customs won’t be discussed at Cabinet today, we are told, nor at the next meeting of the sub-committee on Thursday. There are reports that the Commons vote on customs may even be delayed until the autumn, as May desperately tries to fudge what is already a fudge. Continually delaying the decision on customs is becoming a dereliction of duty. The uncertainty is harming the economy. The vague UK position is encouraging Brussels to wind down the clock and keep us in a full customs union. If Number 10 delay any further, the choice will be between a customs union and no deal, outcomes no one wants. Get on with it…

8 Reasons Brexiters Cannot Accept Customs Partnership

Crunch time for Theresa May. She is being told to drop her hybrid ‘customs partnership’ by a majority of her Brexit sub-committee – DD, Boris, Gove, Fox, Williamson and Saj – as well as the European Research Group of Brexiter MPs led by Jacob Rees-Mogg. These are the eight reasons Leavers want May to ditch Olly Robbins’ customs partnership…

  • It would see the UK collect tariffs on behalf of Brussels. Importers would then have to prove their products weren’t leaving the UK in order to claim the tariff back. It would be extremely complicated and ultimately unworkable.
  • It won’t be accepted by the EU. It would require them to change customs processes across Europe, which they will never agree to. Indeed they have already rejected it.
  • Having to pay EU tariffs up front, and having to meet the administrative burden of proving their products are UK not EU-bound, would clearly make the UK a less attractive trade partner to non-EU countries and businesses.
  • It wouldn’t eliminate friction. There would still need to be checks at the border, as rules of origin will still need to be monitored.
  • It would inevitably lead to regulatory alignment – essentially staying in the single market for goods – keeping EU rules without any say. This would harm our ability to negotiate trade deals with non-EU countries. It would be a worst of all worlds outcome.
  • It weakens our hand for the rest of the negotiation. It suggests the UK hasn’t made its mind up on whether we really want to leave the customs union, incentivising Brussels to offer us a nightmare binary choice of a customs union or no deal.
  • Number 10 privately believes the customs partnership will not be able to be implemented until 2022, well beyond the end of the transition period.
  • If May persists with her customs partnership plan, it ramps up the chances of no deal. It risks betraying the result of the referendum and forcing Brexiters to put their letters in and blow up the negotiation.

The customs partnership is a customs union in all but name. It won’t be acceptable to Brexiters. May hasn’t publicly committed to the customs partnership – it is not too late for her to reject it, having consulted with Cabinet colleagues, and choose the Max Fac technology-based option. Big day ahead, putting off this decision further is only going to harm the negotiation…

Fox: No Form of Customs Union is Acceptable

About time Liam Fox spoke up for his department and made the case for rejecting any form of customs union. Fox told the Today programme that no form of customs union is acceptable and suggested he would resign if the government attempts to further fudge the issue. As Guido reported yesterday, Sajid Javid joining the Brexit sub-committee could tip the balance away from Number 10’s ‘customs partnership’ towards the Brexiters’ preferred Max Fac solution. It’s make your mind up time…

Could Saj Tip Balance on Brexit Sub-Committee?

Sajid Javid’s appointment has significant implications for Brexit. He also replaces Rudd on the Cabinet Brexit sub-committee, which meets this week to discuss the controversial May / Robbins “customs partnership”. When Rudd was on the committee, the customs partnership sceptics were seemingly outnumbered. What does Saj think? He was a Remainer but he has been clear that he wants to leave the customs union and be able to sign trade deals. Could he tip the balance away from May’s customs partnership towards the Brexiters’ preferred Max Fac option?

UPDATE: More on this from Gary Gibbon.

Mogg: Number 10’s Customs Partnership Is a ‘Cretinous Betrayal of Good Sense’

Jacob Rees-Mogg has denounced Number 10’s customs partnership as a “betrayal of good sense” at an Open Europe event in the Commons this afternoon. The Mogg was clear May’s hybrid model was not acceptable to Brexiters:

“It’s completely cretinous… it’s a betrayal of good sense, I cannot understand why government is faffing around with this system.

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