Customs and Borders

Debate between Angus Brendan MacNeil and Simon Clarke

Thursday 26th April 2018 Commons Chamber

[Mr Clarke]

In essence, not having a veto is not having control on the outcome. An agreement would be negotiated for us that we would either have to live with or reject. There is no sensible outcome we could live with over which we have no control.

It gets worse. Turkey can sign free trade agreements with other non-European Union countries only if she has the EU’s permission—we would have to get clarity on whether that would apply in this instance. I suspect Turkey only subjects herself to such a humiliating state of affairs because she continues to hold out the hope of becoming a full member of the European Union.

The state of affairs for Britain would be far worse, infinitely worse, than remaining a member state of the European Union, where we at least have a seat at the table when it comes to our trade deals.

[Angus Brendan MacNeil]

Has the hon. Gentleman considered that Turkey might be staying in the customs union for economic advantage? Has he thought about the economics of the situation?

[Mr Clarke]

I do not believe that it is to our economic advantage. Turkey has long prized EU membership as a status symbol, but I do not believe the economics add up.

Those lobbying for a customs union know that staying in the customs union without a voice at the table would be worse than being a fully signed-up member, as was made more or less explicit by the hon. Member for Pontypridd (Owen Smith) when he said that we would need to stay in the single market as well as the customs union, which goes a long way towards revealing the true motivation of many who make this argument—they see it as a stepping-stone to undoing the people’s vote to leave.

We need to remind ourselves of why the leave campaign lobbied to leave the customs union in the first place. The EU has been slow at negotiating trade deals on our behalf, not least because there are 28 members states on one side of the negotiating table. The EU’s trade talks with Japan have taken 61 months and are still awaiting ratification. By contrast, it took Switzerland 28 months to settle its deal with Japan. EU trade talks with the US have been ongoing for 64 months now, with no sign of progress, whereas the US managed to negotiate trade deals with Canada in 20 months, Australia in 14 months and South Korea in 13 months. At the time of the referendum, the EU had managed to negotiate trade agreements with only two of the UK’s 10 largest non-EU trading partners.

Not leaving the customs union would also fatally damage the prospects for the idea that, more than any other, has captured the imagination of the Teesside public since our vote to leave. A free port at Teesport, which is a project championed by Tees Valley Mayor Ben Houchen and me, would be an enormous boost to local industry and provide a great incentive to reshore jobs to the South Tees mayoral development corporation site. That goes directly to the point that the hon. Member for Newcastle upon Tyne North (Catherine McKinnell) made about north-east jobs. There has been enormous buy-in from local people and businesses to this idea, and people are genuinely excited about what it would mean. However, a free port will not be possible if we do not leave the customs union.

Some people try to maintain the argument that free ports are possible within the EU. The reality is that those zones that exist are glorified bonded warehouses—places where people can defer tax, duty and VAT. What Ben and I are saying is that within the Tees free port there will be the potential for significant tax and regulatory divergences, but that will be stymied if we remain in a customs union.

Outside a customs union there are other significant advantages.