UK-EU Customs Union

Lord Frost Excerpts

Thursday 29th January 2026 Lords Chamber

[Lord Frost (Non-Afl)]

My Lords, I am delighted to follow the noble Lord, Lord Offord. As he says farewell to this Chamber, I congratulate him, on behalf of the whole House, on his forthright but reflective valedictory speech. We overlapped only very briefly as Ministers in the last Government, but, as I think we all know, the noble Lord served that Government with an energy and determination that were very much needed at times.

If I may say so, not least because it was a step that my own party stopped from me taking at the last election, I admire the noble Lord for having the courage to relinquish his seat in this House and move properly to elective politics. I have little doubt—and, having heard what we have heard, I am sure that none of us can have any doubt—that he will be an effective and tenacious campaigner in Scotland. I wish him personal fulfilment in this new project and whatever follows it.

I turn to the subject of this debate. Here we are again. This is nth instalment of the long-running box set series of the British establishment’s obsession with being in customs union with the European Union. This has lasted 10 years. We saw it straight after the Brexit referendum, and, as early as January 2017, the noble Baroness, Lady May, in her Lancaster House speech, spoke of a “customs arrangement”, rather than leaving the customs union properly. By 2018, the then Cabinet Secretary, Jeremy Heywood, had invented the Heath Robinson-style dual customs arrangement—a Schrödinger’s customs union that apparently left us both in and out of the customs union at the same time. The 2018 withdrawal agreement would, of course, have kept the whole country in a customs union with the EU and given the exit keys to the European Commission.

Finally, the then Prime Minister, Boris Johnson, and I, did what had to be done. We took Great Britain out of the customs union—Northern Ireland, as we then hoped, was to follow later—giving us freedom of trade and the ability to set our own regulations. Until that point, we had seen nothing but a complete lack of confidence in Britain’s ability to trade with the EU, as we did, and do, successfully with the rest of the world.

However, here it is again; the obsession has returned. Just as everyone has got used to the new situation, with remarkably little difficulty, the same voices return. It seems that the Government increasingly want to wind the clock back. This is simply a grasping after nurse—a search for a refuge from hard decisions in the warm and deadening embrace of the Brussels institutions.

The arguments against doing this are just as strong as they have always been, and we have heard many of them today. First, trade deals under the customs union give third countries preferential access to our market but do not give us preferential access to theirs. Secondly, we get no say in EU negotiating positions and no assurance that our interests will be protected. Thirdly, as we are told, we do not get even proper friction-free participation in the EU’s market unless we join the single market as well. I am grateful to the noble Lord, Lord Newby, for at least being honest in saying that that is also his policy objective. Fourthly, we lose our ability to lower our own tariffs, which we have done for third-country food that we do not produce ourselves. Even the Government reduced some tariffs last year, and they made a point of saying so. Fifthly, we would have to undo our own trade agreements. Is it seriously suggested that, having joined, we should now leave the CPTPP and our trade deal with India to join the EU’s putative deal, which will have been negotiated with none of our interests in mind? It makes no sense.

The Lib Dems know this. They know more. I think that is why they claim to think they can negotiate some sort of special customs arrangement—oddly enough, one that excludes agricultural goods, even though that is the area in which, under the reset, we will be joining the single market. I can tell them that the EU does not do this sort of bespoke agreement, and we should have learned that in the years after the referendum. As for the Government, they are already dipping a toe in the customs union water by agreeing to follow the CBAM rules of the EU. Some Ministers appear to be for, some against, and I hope the Minister will be able to clarify.

This is all displacement activity. Being part of the customs union again makes sense for only one reason: if you want to start going back towards the EU. It is the Monnet method of one thing leading to another. That is why we hear the calls to rejoin the customs union. I urge its proponents to be honest: if they want to rejoin, they should admit it. They should make that case to the British people and see how far they get. Meanwhile, I hope—although not with great expectation, I am afraid—that today will be the last we hear of the nonsense on the customs union.