Reeves: UK Cannot Rejoin Customs Union, Cites Trade Risks

Rachel Reeves has taken a thinly veiled swipe at Cabinet ministers who want Britain to rejoin the EU customs union. Speaking at a Bloomberg event in Davos, Switzerland, the Chancellor said the UK could not “go back in time” to rejoin the union and warned attempts to do so would put Britain’s trade deals with other countries at risk. Wes Streeting, the Health Secretary, and David Lammy, the Justice Secretary, have signalled their support for Britain rejoining the customs union. Mr Streeting said last year it had brought “enormous economic benefits” to Britain before Brexit while Mr Lammy said it was “self-evident” that Brexit had damaged the British economy. Ms Reeves said Britain was working on building on last year’s trade deal with the EU and on setting “new ambitions” for the relationship at a summit later this year. She added: “We can’t go back in time. And since we left the EU, we have done trade deals with India, with the US, with Korea. And obviously you would lose some of the benefits of those trade deals if you were to re-enter a customs union.” A customs union would eliminate trade barriers between the UK and EU by allowing goods to move between countries without additional paperwork or taxes. However, it would also tie Britain’s trade policy to Brussels, stifling potential new free trade deals with other countries. Ms Reeves said: “Things like the benefits of the deal we did with the US for our automotive sector, the deal that we have with India is better than the deal that any other country has with India. “I hope businesses see in Britain a country that has returned to stability, that is bringing investment, is changing the way the economy is open to business, open to trade, open to investment and open to talent as well.” She also branded the idea of a leadership challenge to Sir Keir Starmer “stupid”, saying: “Even if someone did have the stupid idea of challenging the Prime Minister, it is incredibly difficult to do so.” Speculation that Mr Streeting and Angela Rayner are gearing up for a leadership battle have been rife in Westminster for months. Ms Reeves appeared to rule out more tax rises in her Spring Statement on March 3, insisting that measures to increase the financial buffer she had to balance the books had put the Government in a “strong position” not to do more. She urged families and businesses to keep “cool heads” over the prospect of higher US tariffs. The Chancellor said a calm approach to Donald Trump’s threat of additional tariffs over Greenland was needed, adding that the approach had “served us well last year”.