Labour has vowed to continue to push for its own alternative Brexit proposals, including a customs union, after Theresa May’s withdrawal agreement was heavily defeated last night.
MPs rejected the prime minister’s deal by 149 votes, forcing another vote today on whether to block a no-deal exit before 29 March.
An announcement this morning that the government would temporarily slash tariffs to zero for 87% of imports in the case of no deal will “put the wind in the sales” of the Labour party and rebel Tories who back a customs union, says ITV News.
May has repeatedly ruled out remaining in the trade bloc, but hoped the threat of a softer Brexit would win over wavering Brexiteers ahead of yesterday’s meaningful vote, reports The Guardian.
Conservative chief whip Julian Smith even suggested to MPs that a permanent customs union was the most likely outcome should May’s deal be defeated, as parliament would take control of the process and there was significant support for it among parliamentarians, says the newspaper.
So what are the pros and cons of leaving the common tariff area?
Pros of leaving the customs union
Hard Brexiteers warn that staying in a customs deal with the EU will prevent the UK from negotiating future trade deals.
May herself has been vehement in her desire for Brexit Britain to be a “global leader in free trade”, arguing in her Mansion House speech that it would be a “betrayal of the British people” to stymie its potential by joining a customs union.
Environment Secretary Michael Gove has tweeted that “the referendum vote was clear - we need to take back control of trade - that means leaving the protectionist customs union”.
Arch Brexiteer and chair of the European Research Group Jacob Rees-Mogg has argued that staying within a customs union would leave the UK paying Brussels huge sums each year while having no say on rules and regulations imposed on business and commerce.
Rees-Mogg believes that, after leaving the union, the UK should phase out all tariffs in order to reduce consumer prices and stimulate competition.
Cons of leaving the customs union
Those in favour of remaining in the customs union argue that cutting trading ties would severely damage the UK economy.
Last year, a leaked government report predicted that leaving the customs union would reduce the growth of the UK economy by up to 8% over the next 15 years.
The Confederation of British Industry has called for the UK to remain in the customs union, while the Labour Party has also backed a similar arrangement.
Leaving the customs union would also mean mandatory customs checks for every lorry between the UK and EU until a free trade deal is struck with Brussels, potentially causing major delays, Sky News reports.
“There seems zero chance of having infrastructure in place by 2019 to deal with the customs checks that would be required,” the broadcaster said last year.
Crucially, keeping the customs union would also “go some way to resolving the thorny question of the Irish border, and would allow the UK to keep its red line of controlling immigration”, says Bloomberg.
“Turkey has a customs union with the EU but isn’t in the bloc or the single market,” the news website notes.
