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Analysis

Is Theresa May jumping for joy over customs union defeat?

by Hugo Dixon | 19.04.2018

Was the prime minister doing high fives in private with her husband last night? The massive defeat over customs in the House of Lords helps get Theresa May out of a tight spot over the Irish border, so long as it is upheld by MPs.

Pro-Europeans should be less thrilled. Of course, we don’t want the return of border controls in Ireland. But staying in a customs union with the EU while quitting the bloc would be pretty miserable.

Hardline Brexiters will, of course, go bananas if the House of Commons back the Lords over a customs union when legislation returns to the lower house next month. We’ll get an early taste of MPs’ views in a backbench debate next week.

Jacob Rees-Mogg and his cabal have bought the baloney about how we’ll stride the world like Elizabethan buccaneers if we are free to cut our own trade deals. But what can they do if Parliament tells the government to stay in a customs union? There’s no point in kicking May out. It’s not as though that would change the parliamentary arithmetic. Indeed, if a hardline Brexiter took over, it would be even worse.

The prime minister obviously can’t advocate staying in a customs union herself. Rees-Mogg would have her guts for garters. But being told to do it by our sovereign Parliament is totally different.

Staying in a customs union on its own doesn’t solve the Irish border problem. We’ll also need to follow EU rules for goods and agriculture. But it would be a big step towards avoiding border controls. So May should be jumping for joy.

Pro-Europeans shouldn’t jump for joy

But this is not a time for high fives for pro-Europeans. The issue is not the Brexiter point that we won’t have an independent trade policy if we stay in a customs union. We are in a much better position to cut good deals across the globe with the clout of the EU, the world’s largest economy, behind us. Alone, we risk being bullied.

The issue is rather that we currently have a big say over the EU’s trade policy. If we stay in a customs union but lose our voting rights, Brussels will be calling the shots. When the EU clinches trade deals with say America or China, the best we’ll be able to do is tag along. That’s not good for our power or our pride.

What’s more, a customs union would merely protect trade with the EU in goods and agriculture. It would do nothing for our world-class services industries, which are worth 80% of our economy.

The only way to avoid border controls in Ireland, protect our services industries and keep driving the EU’s trade policy is to cancel Brexit. And the best way to get that is via a people’s vote on the Brexit deal.

The risk is that pro-Europeans celebrate too much over the government’s customs union defeat, think they’ve avoided the hardest Brexit and stop fighting.

Taste for rebellion

But there’s a more optimistic scenario. Like somebody who loses their virginity and discovers the pleasures of sex, Parliament may be getting a taste for rebellion over Brexit.

First, the Tory “mutineers” rebelled over a meaningful vote in the House of Commons last December. Now peers have defeated the government by 348 votes to 225 over a customs union. They also voted yesterday by 314 to 217 votes to stop the government weakening protections EU law gives to employment, health and equality without primary legislation.

The Lords have perhaps seven more chances to defeat the government over the EU withdrawal Bill in coming weeks – although MPs is unlikely to back all their victories.

With luck, these important skirmishes will get Parliament fit for the really big battle over a People’s Vote in the autumn. This is the main prize. We mustn’t lose sight of it.

InFacts is a founding member of the People’s Vote campaign.

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The sentence about a backbench debate was added shortly after publication

Edited by Luke Lythgoe

6 Responses to “Is Theresa May jumping for joy over customs union defeat?”

  • Hugo, with respect, I don’t think you understand what the Lords actually voted for.

    It wasn’t that the UK should stay in the customs union, at all.

    It merely required the government to report on the possibility of negotiating ‘A’ customs union with the EU (it didn’t refer to ‘THE’ existing customs union).

    What is being portrayed by people who should know better is nothing like what was actually voted on.

    Assuming the govt. decides not to challenge the amendment all it needs to do is issue a statement saying it considered a customs union and decided against it.

    Hardly a glorious victory / huge defeat.

  • You are right and, of course, the Customs Union is small fry compared with the Single Market-especially for services.However, I have taken from the vote an indication-especially because of the larger than expected majority, that there may a mood change and an emboldening of the Remainers. We knew it would be hard to get a proper and informed debate but this is, maybe, a small beginning.And people may be hearing messages , eg from the IMF today, that trying to sort single trade deals is virtually impossible today so we should stick with what we have

  • Baby steps. The Customs Union would be 50% of the battle, putting an end to the “global Britain” argument. Debate on “A” Customs Union might at least force Theresa May to define her Customs Partnership concept, whereby there are extremely light customs procedures in Northern Ireland and Dover, while still being able to make external trade deals. You cannot attack, what you do not understand. Theresa May cannot defend, what she cannot explain.

  • The Customs Union, or a marginally modified version of it, would be a big step forward to ending this colossal nonsense and over 2-1 of the public are in favour of it. For those of us in manufacturing, it is key and it destroys the only argument; albeit transparently phony; that resonates with some people. That of Britain as a global trading super power.

    India have said again that the EU is their main aim for a free trade deal, not the UK. The WTO is being crushed by Trump and is already damaged having achieved little new for decades. While Japan is on a fast track for a free trade deal and so reportedly is Brazil. The EU is also talking to Australasia, China and USA and is well ahead of the UK in doing so.

    Switzerland managed a fast free trade deal with China, but the power of China meant that it was able to get one way free trade into Swiss markets for the first 15 years. The UK is far closer to Switzerland’s position.

    The fiction of the UK being better at achieving trade deals that the EU has been blown apart by the government’s incompetence in negotiations, Fox’s embarrassingly threadbare pickings after a year of travel and the unassailable size of the EU’s home market and extended free trade areas.

    I feel the runes are now with the Remain side and this will end either with a super soft andrex labrador puppy brexit, or we’ll be back in after most people realise how pointless and damaging this has been.

  • PB, you are right. May has already said the amendment will not require the government to change course. (I doubt anything short of an atomic powered steam roller would do that in any case). However, I’m going to wait eagerly for the report she produces on the feasibility of a customs union. It should be interesting to see how she can do it without either breaking the agreement she made with the EU last December or upsetting the DUP.

  • Hilarious how people talk about a “battle”. Is that a battle against democracy? the 52%? or being in charge of our own country?