"It was widely thought that being in a long-term customs union with the EU had been ruled out by the Government. But the Chancellor’s letter confirms that this is not the case."
The government has not ruled out remaining in a long-term customs union with the EU after Brexit, the Treasury Committee announced this morning.
Nicky Morgan, Chair of the Treasury Committee, wrote to Chancellor Philip Hammond asking him to explicitly rule out the UK participating in a customs union with the EU as part of its end-state relationship.
Morgan said the Chancellor "has declined to do so in his response".
The EU Customs Union is established by the EU Treaties. After Brexit, the Treaties will cease to apply to the UK, and so the UK will no longer be a part of the EU Customs Union.
However Morgan says in his evidence to the Committee, and subsequent correspondence with her, the Chancellor did not rule out participation in a different customs union with the EU as part of the UK’s end-state relationship.
He did, however, note that the decision on future customs arrangements would be “guided by what delivers the greatest economic advantage to the UK, and by three strategic objectives: ensuring UK-EU trade is as frictionless as possible; avoiding a ‘hard border’ between Ireland and Northern Ireland; and establishing an independent international trade policy”.
Commenting on the correspondence, Morgan said: “It was widely thought that being in a long-term customs union with the EU had been ruled out by the Government. But the Chancellor’s letter confirms that this is not the case.
“It is vital that the Cabinet reach agreement on these central questions about the UK’s future relationship with the EU, as a matter of urgency.”