UK-EU Customs Union

Lord Tugendhat Excerpts

Thursday 29th January 2026 Lords Chamber

[Lord Tugendhat (Con)]

My Lords, I too congratulate the maiden speakers on their contributions. Time restricts me from saying more, but time does not diminish the warmth of my welcome to them, and I look forward to hearing from them on many occasions in the future.

When I began to consider this Motion from the noble Lord, Lord Newby, my mind went back to when I was in the Army during my national service in the 1950s. We were forever being told, in lectures on tactical exercises, that time spent in reconnaissance is rarely wasted. It enables one to see whether the objective is attainable, how best to go about it, whether there should be a direct or flanking movement, or whether indeed it is worth while in the first place.

Of course, I agree with the noble Lord, Lord Newby, and others who have spoken in favour of his Motion, that we must improve our access to the European Union for trade and goods. I agree that removing obstacles to do that ought to be a high priority of the Government—I believe that it is—and it is certainly something that industry is crying out for, especially the smaller companies, which were worst hit by the agreement we signed when we left the EU. It is also one of the most obvious ways in which we could improve our rate of growth. However, I must say that I doubt whether setting an ambitious and clearly defined objective such as a customs union is the best way to proceed, quite apart from the other disadvantages of the union which a number of my noble friends have pointed out. It could all too easily turn out to be the diplomatic equivalent of laying siege to a castle that never falls.

I say that because, sadly, the EU in recent years has all too often shown itself unable to reach the internal agreements necessary to take big initiatives. Its decision-making process has atrophied since—not because—we left. One has only to look at the failure to carry forward the single market or to achieve a capital markets union. The ambitious Draghi plan has remained largely a dead letter.

Perhaps more relevant to those examples, let us look at what has happened to the proposed trade deal with the Mercosur group of Latin American countries. It was first mooted, I believe, some 25 years ago, and serious negotiations began in April 2019. The agreement was finally signed this month, only for the European Parliament to refuse to ratify it and refer it to the European Court of Justice, which at best means a further delay.

My fear is that if we set our cap at the customs union, quite apart, as I say, from other issues, we could become embroiled in protracted negotiations that would embitter relations and lead, if not to failure, at least to disappointing results. Far better, in my view, is to identify a number of specific and often technical issues on which agreements would create a balance of tangible benefits for both sides. I have in mind very much the kind of agenda the Government are already pursuing.

I believe that if the UK and the EU can reach agreements on prosaic matters of this kind that could create a habit of co-operation between us, that might lead on to a more ambitious framework that, instead of drawing on the models of the past, is suited to the circumstances of the present and of the future.