Motion for leave to bring in a Bill (Standing Order No. 23)

I beg to move,

That leave be given to bring in a Bill to place a duty on the Secretary of State to enter into negotiations with the European Union to agree a customs union between the United Kingdom and the European Union;
and for connected purposes.

Up and down the country, businesses know it, the public feel it and it is time that this House found the courage to lift our whispered voices and admit it: Brexit has been an abject economic failure. It has choked business investment, shattered economic resilience, strangled trade, shrunk the economy and left every single one of us poorer. The economic benefits of Brexit were only ever illusory and a mirage—the kind of shimmering promise you see in the desert in the midday heat that lures you towards it, only to find it always agonisingly out of reach; a promise that dissipates altogether as the cool of the evening returns. Well, that chill has descended, and now we can see clearly that the promises of 2016 and the oven-ready deals of 2021 were nothing more than the lukewarm figments of political opportunists who sought, and in some cases still seek, advantage in populism, in fragmentation and in fear.

Far from “taking back control”, today our country feels more precarious than ever. We lurch from crisis to crisis, uncertain of who we are, what we stand for or whether our children will be better off tomorrow than those who came before. Far from becoming a buccaneering “global Britain”, the United Kingdom is today weaker and more isolated than at any point in our recent history. Far from lowering food and living costs or slashing regulation, British businesses are now buried under 2 billion bits of red tape that stretch 15 times around the circumference of the Earth, all while the cost of living spirals even higher. Far from securing the transformative trading arrangements they promised, the Government have delivered only Australia and New Zealand deals worth a combined 0.1% to UK GDP and exposed British farmers to tougher competition and diluted protections. The India deal would add just 0.13%, and the much-heralded US agreement has shrunk from a growth opportunity into damage limitation following Trump’s tariffs.

Meanwhile, we have erected new barriers to our largest market, the European Union, which continues to represent around half of our global trade. The result? Tiny wins at the margins and a massive permanent hit at the core. That is not “global Britain”, and nor was it ever going to be. It is economics by consolation prize, and the country is paying the price.

Just last month, the National Bureau of Economic Research, a leading US think-tank, published a decade-long analysis concluding that Brexit has reduced UK GDP by between 6% and 8%. The House of Commons Library shows that Brexit is now costing the Treasury up to £90 billion every single year in lost tax receipts—money that could be supporting our NHS, our defence spending and our public services. In practical terms, the average Briton today is between £2,700 and £3,700 worse off than if we had remained in the European Union. That is the reality of the Conservatives’ botched Brexit deal.

Let me put this plainly. The most dishonest campaign in modern British political history promised that Brexit would save £350 million a week. Instead, Brexit is now costing this country £250 million every single day—[Hon. Members: “Rubbish!”] That is why we have the highest tax burden in 70 years. That is why families face sky-high Bills. That is why we remain trapped in a cost of living crisis. This is the lived reality of the very working people the Government claim to champion, but for whom they show neither the resolve nor the political will to protect. Conservative Members and Reform Members behind me may chunter, but it is the former leader of the Conservative party and Prime Minister, Sir John Major, who has noted:

“Brexit is a flop. It will not leap up from its death bed.”

The Liberal Democrats believe that the most effective route to sustainable economic growth in our country is to rebuild our relationship with the European Union, our single most important trading partner. Just last week, the Prime Minister himself said:

“The Brexit deal significantly hurt our economy…so for economic renewal we must keep reducing frictions and move towards a closer relationship with the EU.”

That view was echoed by the Deputy prime minister, who described a customs union as an inevitable “journey of travel”. My Bill would propel us along that journey. It proposes a UK-EU customs union covering most goods, with a formal mechanism for UK consultation on new EU trade deals that affect us. It would lift the man-made constraints that are strangling our small and medium-sized enterprises, many of which have stopped trading with Europe altogether. This Bill is on the side of British business.

The Federation of Small Businesses is clear that the greatest burdens fall on firms with the fewest resources to adapt. Crocus, one of the largest horticultural businesses in the UK based in my Surrey Heath Constituency, tells me that trade barriers add friction, inflate supply chain costs and cause damaging delays at our borders. Others warn that British-developed innovations risk being lifted and relocated to the continent—British ideas nurtured by British universities lost because electoral expediency was placed above economic reality.

Even if the Government stayed within their own self-defeating red lines, which merely replicate, of course, Theresa May’s failed framework, a better deal with Europe could generate £25 billion extra per year for the Treasury. But the British public and British businesses want this Government to go further and faster. At a time when Office for National Statistics data shows rising numbers of young Britons leaving to work overseas, we have a national duty to support growth, ease household pressure and give young people a compelling reason to build their futures here in the UK.

As my party’s former Northern Ireland spokesperson, I worked across the political divide to consider the practical implications of the Windsor framework. Red lanes, green lanes, parcel movements across the Irish sea—these barriers still hamper our internal market. A bespoke customs union would cut costs, smooth trade and reduce daily frictions for businesses in Northern Ireland. Those who value the Union should see more clearly than anyone that co-operation strengthens it far more than isolation ever could.

We do not strengthen the British economy by raising barriers to the market that takes 41% of our exports. We strengthen it by removing the barriers that were created so that a weak Prime Minister could pretend to be tough. A survey by the British Chambers of Commerce shows that nearly half of exporters cite customs procedures as their biggest barrier and 39% cite documentation complexity. The message from businesses is unambiguous: reduce friction and unleash growth.

A closer economic partnership with Europe is also a matter of our national security. Russia is defined by military expansionism and destabilisation. China grows more coercive and authoritarian by the year. Under a second Trump Administration, the United States has demonstrated a willingness to threaten and coerce even its closest allies in pursuit of hemispheric pre-eminence. In its recent national security strategy, the US welcomes

“the growing influence of patriotic European parties” and says its goal

“should be to help Europe correct its current trajectory”— a clear signal of intent to interfere in allies’ domestic politics. In an increasingly fractious multipolar world, we must stand closest with those who share our values, our trade and our common security.

If we are serious about lifting this country out of stagnation, we must get Britain growing again, get Britain exporting again and make Britain competitive again. A bespoke UK-EU customs union would cut red tape, unlock investment and restore certainty to British business. To sit on our hands is to choose stagnation. To oppose this Bill is to prolong the cost of living crisis. To reject it is to hold back the small and medium-sized businesses that form the backbone of our economy.

Today the House has a clear choice: we can remain on a path of managed decline, or we can choose a future built on growth, confidence and opportunity. We can unleash once again the resilience, creativity and innovation of British business. I commend this Bill to the House.

I call Simon Hoare to speak for no more than 10 minutes.

I rise to oppose the Bill—for those who know me, yes, I did say “oppose”, and smelling salts are available through the usual channels, I am sure.

I listened intently to what my friend Dr Pinkerton had to say, and he said it with great passion and his typical eloquence. He and I have worked together on Northern Irish issues and other issues since he entered this place. It is a pleasure to do so, and I am sorry that we are on separate sides this afternoon.

It might be cheeky of me to remind the hon. Gentleman that, of course, his party was the first party in this place that actually suggested a referendum on Britain’s continued membership of the European Union. That is something often missed off Liberal Democrat leaflets—maybe they are too busy “winning here” to remind themselves of that.

The hon. Gentleman also declared, as a matter of fact, that the United Kingdom, post its membership of the European Union, is weaker and isolated. I honestly cannot fathom how he can arrive at that conclusion. The convening powers of the scenes outside Downing Street yesterday when we stood with allies in support of Ukraine, the recent state visits of the US President and the German President, and the fact that this country is head of a Commonwealth, a leading member of NATO and a permanent member of the Security Council do not suggest to me a country that is weaker or more isolated—far from it. The two are entirely separate things.

The proposal in the Bill deserves to be opposed for four reasons. I say that as somebody who voted to remain part of the European Union in the referendum and campaigned strongly to do so, but I accepted the result of the referendum, as most people on the Conservative Benches did. I say to the hon. Member, whom I woke up to in my ear—[Interruption.] Before anybody worries about that, I was in my bedroom and he was on Radio 4—at least that is the story I am telling everybody. He said that we could be like Turkey—that was the relationship he was suggesting to the listeners of the “Today” programme—but Turkey aligns trade policy and tariffs with the common external tariff for industrial goods. It has no say on EU trade decisions, agriculture or services. I say respectfully to him and his colleagues that that in no way can meet the fundamental essay question that the electors of this country gave to us through that referendum decision. They wanted us to forge our own destiny. Whether that was going to be a path that was without a ripple or stumble-stone, nobody knew, but that was the instruction which the British people gave, and democrats of good faith said, “We will abide by that decision.” The hon. Gentleman’s argument may be liberal with a small l, but democratic it certainly is not.

The first reason is that the proposal in the Bill would fundamentally undermine the welcome and energetic efforts of His Majesty’s Government, principally led by Nick Thomas-Symonds, to continue to grow that iterative process of a relationship with the European Union without being part of it. That endeavour deserves the united support of all right hon. and hon. Members in this House because it will deliver, as always intended through that organic process, identification of creases and an attempt to iron them out. We all want to see small, micro and medium-sized businesses flourish and prosper. We all want to see an increase in trade with the European Union and the uplifting benefit that that will have to all our citizens. But the proposal before us in the Bill is not the way to achieve it because, as I say, it would fundamentally undermine the good offices of the Government in trying to achieve what it seeks to achieve.

My second point is that business needs certainty. With the exception of about six who survived the 2015 cull, I am afraid that not many on the Liberal Democrat Benches served in this place when we were trying to deliver Brexit. But the one thing they would have taken away had they been here—and thankfully, they were not—was that business wanted certainty. Slowly but surely, but with a certain degree of typical UK energy, flare and élan, businesses are now meeting the new trading regimes, and businesses up and down the country—small, medium, large and micro—are making a decent fist of it. We wish them well.

The process that the Government have under way is designed to—[Interruption.] Madam Deputy Speaker, if the Liberal Democrats wish to shout like this is some sort of Harrogate Lib Dem spring fair, they can feel free so to do. Quite what Harrogate has ever done to deserve them, I do not know, but I will leave that to the good folk of Harrogate—we wish them well. To embark upon a customs union approach analogous to that of Turkey would be a mistake, because it would engender more uncertainty in the minds of British businesses just as they are settling their trading patterns and getting their heads around things, with the hope and promise that those creases will be further ironed out in the work that the Government are doing, through the right hon. Member for Torfaen.

The third reason is that, unless they met the requirements of the European Union, the trade deals that we have already entered into would have to be rewritten or scrapped. We are in the foothills of trying to maximise the benefits of those trade deals. They were never easy to deliver, but to start to unpick them now would show a degree of bad faith and certainly uncertainty in the collected and settled mind of the political class of this country.

The fourth reason, which I would suggest is probably the most compelling to even the most ardent rejoiners in Parliament, is that the European Union does not want it. The European Union now sees us for what we are. Whether we like it or not, we are a third country. This motion is an enormous arrogance. I cannot speak for all of them, but I have had the lucky and favourable opportunity of talking to senior EU officials about this very proposal. There is neither interest in nor appetite for it. They want to engage with the UK Government, as they are doing, in the organic evolution of what we have.

However—this is where we must look at it from the other end of the telescope—as far as the political leadership of the European Union are concerned, they have spent quite enough time dealing with the needs of the United Kingdom. They are very happy to engage in the tidying-up exercise and the Government’s spreading-out proposals, but to start from scratch, in some sort of perverse groundhog day approach to our withdrawal from the European Union is an utter nonsense. They are not interested in that, they do not want to go back to day one, they are perfectly happy with how things are, and they want to see it evolve.

For those four clear and compelling reasons, I say to colleagues across the House—whether they were ardent Brexiteers, ardent remainers or maybe even the one or two who were not entirely sure—this Bill should command no support, it has no merit, and it should be voted against should a Division be called.

Question put (Standing Order No. 23).

The House divided: Ayes 100, Noes 100.

In accordance with precedent, I will cast the casting vote Aye, to allow further debate. The Ayes have it, the Ayes have it.

Question accordingly agreed to.

Ordered,

That Dr Al Pinkerton, Ed Davey, Daisy Cooper, Wendy Chamberlain and Calum Miller present the Bill.

Dr Al Pinkerton accordingly presented the Bill.

Bill read the First time; to be read a Second time on Friday 16 January 2026, and to be printed (Bill 345).