Ministers will hold talks with EU officials next week.
Senior figures in Labour have warned that Britain would be pushed back towards open borders with Europe if it were to rejoin the European Union’s customs union. Allies of Sir Keir Starmer say proposals from some Cabinet ministers to re-enter the EU’s customs union risk triggering demands from Brussels that the UK restore freedom of movement, effectively reopening the UK’s labour market to the bloc.
The warning comes as the Government prepares for a crucial week in its attempt to ‘reset’ relations with the EU after years of strained ties following Brexit.
The UK left the EU’s customs union and single market at the end of the Brexit transition period on December 31, 2020. Since then, economists and policymakers have continued to debate the impact the decision has had on the British economy and trade with Europe.
All 27 member states of the EU participate in the bloc’s customs union. This means they apply the same import tariffs to goods entering the EU from the rest of the world, while allowing goods that have cleared customs to circulate freely between member states without additional tariffs.
Because of this common external tariff, individual EU countries cannot set their own tariffs or negotiate independent trade deals with non-EU nations. Instead, the European Commission conducts trade negotiations on behalf of the bloc
Some trade agreements require the approval of all EU member states, particularly those covering areas such as services, investment, intellectual property and cultural sectors.
Downing Street sources are said to be increasingly frustrated that members of the Cabinet have publicly floated the idea of a closer trading arrangement with the EU, a move viewed internally as undermining the Prime Minister while delicate negotiations with Brussels are ongoing.
Senior Labour sources told The Telegraph that “performative” Cabinet ministers who wish to enter the trade bloc had “clearly not thought it through” as Britain would be forced to restore freedom of movement.
Ministers including David Lammy, Peter Kyle and Wes Streeting have suggested that a customs union with the EU should at least be considered as part of efforts to boost economic growth. Supporters argue that reducing trade barriers with Europe could benefit British businesses and exporters.
Business Secretary Peter Kyle has argued it would be unwise not to at least examine the benefits of a customs union, while Foreign Secretary David Lammy has pointed to examples of other countries that have secured trading arrangements with the EU without full membership, the news outlet reported.
Critics inside Labour, however, have said such proposals risk blurring the party’s position on Brexit and could be seen by voters as an attempt to reverse the result of the 2016 referendum.
According to officials, Brussels would almost certainly insist on greater access to the UK labour market, something that could lead to the restoration of freedom of movement, a policy repeatedly ruled out by Starmer.
