The next big question: A hard or soft Brexit?

Labour may change its position on leaving customs union

February 23, 2018 09:26 pm | Updated November 28, 2021 07:57 am IST - London

Britain's Prime Minister Theresa May leaves 10 Downing Street in London, Britain February 21, 2018. REUTERS/Peter Nicholls

Britain's Prime Minister Theresa May leaves 10 Downing Street in London, Britain February 21, 2018. REUTERS/Peter Nicholls

Hopes that Britain could have a “softer” exit from the EU have risen this week, amid expectations that the Labour Party will shift its policy stance and back remaining in a customs union, and after a Cabinet meeting, at which attempts to reconcile different positions within the ruling Conservative Party, took place. British Prime Minister Theresa May is set to give another speech on the government’s Brexit strategy next week.

Officially the government remains committed to exiting the customs union — the system under which the EU operates as a single trading bloc, with common external tariffs and customs barriers, and must negotiate joint trade deals with non-EU states. In January last year, in a key speech at Lancaster House, Prime Minister May outlined the central tenets of the government’s exit strategy which included leaving the customs union.

“ I want Britain to be able to negotiate its own trade agreements,” she said. On Friday, Health Minister Jeremy Hunt echoed these sentiments, ruling out the possibility of Britain remaining in the customs union, which he insisted would not leave Britain free to pursue the trade policy that it wished.

Hopes remain high

Nevertheless, hopes remain high ahead of a key speech due to be given by Labour leader Jeremy Corbyn on Monday in which he is expected to clarify the party’s stance on Brexit by pushing for Britain to remain in the customs union. A change in the Labour stance could have a significant impact – allowing for the possibility of pro-Brexit rebels with the Conservative party allying with the Labour Party and Liberal Democrats on key legislation.

On Friday, Labour MP Chuka Umunna, Conservative MP Anna Soubry and others tabled an amendment to the Trade Bill, currently going through Parliament, that would commit Britain to remaining in the customs union. ”I understand many others will add their names today,” said Ms. Soubry.

On Thursday, Ms. May and members of her Cabinet gathered for a discussion at the Prime Minister’s country retreat, Chequers, to seek to resolve internal differences over the shape of Brexit. While some such as Mr. Hunt favour a “hard” Brexit and a complete break with the EU, others such as Chancellor Philip Hammond believe a preferable option would be maintain much of the existing relationship.

Last month, Mr. Hammond faced anger from some within his party after telling delegates in Davos that the government would pursue just “modest” changes to its relationship with Europe.

Speaking on the BBC following the meeting on Thursday, Mr. Hunt said Britain would be pushing to adhere to EU rules and regulations on a “voluntary” basis, pointing to the auto industry, whose supply chain was heavily integrated with Europe. However, the plan — which appears to have been thrashed out at the Cabinet meeting — is likely to face a muted response in Brussels, which has repeatedly stressed that Britain would not be able to “cherry pick’ the deal it struck with Europe.

Practical answer

Business groups have also continued to lobby for customs union membership. A customs union was the “practical, real world answer” that solved some of the toughest questions, including over the future of the Irish border, and challenges faced by business, Carolyn Fairbairn, head of the Confederation of British Industry, said in January.

Alongside the debate on the customs union, the question of a second referendum continues to surface, with commentators across the political spectrum arguing that the hugely divergent positions on the precise character of Brexit, necessitated a second vote.

“We need to see what Brexit really does mean following the negotiation. Debate it in Parliament. And then, if no agreement can be reached there, put it back to the people so that they can say whether the Brexit proposed is what they want or not,” wrote former Prime Minister Tony Blair in The Independent on Friday.

Best for Britain, an anti-Brexit campaign group has continued to build support, raising over £200,000, with billionaire investor George Soros donating £400,000 to the group and pledging further matching funding. It is set to roll out a campaign across the U.K. in coming weeks.

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