Ruling out a customs union risks jobs and undermines peace in Northern Ireland

Published date
05 Feb 2018
Today, Downing Street has again ruled out any form of customs union with the EU, after days of speculation that Theresa May was preparing to soften her stance.

All the relevant analysis shows that leaving a customs union with the EU will cost jobs and undermine the Northern Irish peace process – so it’s disappointing to see cabinet members treating it as a political football.

As Frances O’Grady put it today, “by ruling out a customs union, the government is choosing to put up barriers to trade with Europe”. Without a customs union with the EU, the UK will be left on the wrong side of the common external tariff, which if it’s bad for countries outside the EU would be bad for us too.

Businesses would face billions of pounds in additional costs thanks to increased paperwork and delays at ports, as Unite analysis has shown. This would put jobs on the line across the country. And inevitably, we would see a hardening of the border on the island of Ireland.

At the very least, there would be customs checks equivalent to those on Sweden’s border with Norway, which would have severe economic and social consequences for Northern Irish communities.

The government’s response to queries about these barriers is to promise a “highly-streamlined” customs arrangement that uses “technology-based solutions” to address the challenges of customs procedure.

But the government has allocated no additional funds to upgrading the customs system, and experts argue that it would be impossible to sufficiently upgrade customs procedures by end of the transition period – currently scheduled for the end of 2020. Indeed, as PCS, the union representing customs officials in HMRC, has pointed out, we’re already struggling to run customs systems for non-EU goods thanks to government cuts and office closures.

No good reasons

But even if we shift our view from the costs of ditching the customs union, it’s clear that the benefits are nothing to write home about either.

Tariffs with the rest of the world are already low. And developing countries – including much of the Commonwealth – already have tariff-free access to the UK through the EU. What’s more, the current signs indicate that our new trade deals with non-EU countries would be bad, Transpacific Partnership-style deals that strip away working people’s rights and threaten to increase privatisation in public services.

On Brexit day, Britain will automatically be excluded from hundreds of treaties and agreements signed by the EU. It’s naive to assume all the parties involved will rush to sign new deals with the UK immediately after we leave the customs union. 

So when it comes to abandoning a customs union with the EU, the cons column is packed and the pros column is bare. The Brexit extremists in the Conservative Party can’t be allowed to hold the reins on this.

Our analysis clearly shows that the best way to protect jobs, rights and livelihoods is through continued membership of the single market and customs union. So government should put working people first and keep those options on the table.