TUC: Hammond and Fox are in harmony while taking us over the Brexit cliff-edge


Philip Hammond, the chancellor, and Liam Fox, the international trade secretary, published a joint article in the Sunday Telegraph yesterday in a desperate attempt to put Conservative Party unity ahead of the national interest. But, behind the fake harmony, there was no good news for working people or British business.

Despite appearing to accept the argument advanced by – among others – the TUC and the CBI for a transitional period after the end of the article 50 negotiating period in March 2019, the two feuding cabinet ministers also called for an impossible “have cake and eat it” vision. Their piece implies that Britain could secure tariff-free, barrier-free trade with the rest of the EU while being outside the single market and customs union. And that they could achieve all of that by a year next March.

The TUC believes we should keep open the option of staying in the single market and customs union, at least for a transitional period – as the CBI does – and maybe longer.

Hammond and Fox wrote: “We are both clear that during this [transitional] period the UK will be outside the single market and outside the customs union and will be a ‘third-country’ not party to EU treaties. But we are also clear that during this period our borders must continue to operate smoothly; goods bought on the internet must still cross borders; businesses must still be able to supply their customers across the EU and our innovative, world-leading companies must be able to hire the talent they need, including from within the EU.”

Nowhere in the article do they explain how leaving the customs union can be achieved by March 2019 without facing the EU’s external tariff, which is what being outside the customs union means! That tariff – over 10 per cent in many sectors of manufacturing and food goods – would make British exports more expensive at a stroke, leading to wage and/or job cuts across our exporting  sectors.

Nor do they say how – other than by staying in the single market – rules of origin and other paperwork requirements will be avoided, or services traded freely. And nowhere do they explain how working people’s rights will keep up with European workplace rights, once that is not required by single market membership. And the same goes for most consumer and environmental rights. Having different standards from the rest of Europe would at least mean costly extra paperwork and might even keep our services out of the rest of Europe altogether, affecting jobs and wages in the up to 80 per cent of our economy accounted for by services.

Some people hope that Britain will eventually be able to secure all these benefits from outside the single market and the customs union through a “deep and comprehensive free trade agreement” with the rest of the EU. But very few people – and no-one with actual experience of negotiating such deals – think it can be done in time to slot into place by March 2019.

That’s presumably why Fox and Hammond only implied that trade after March 2019 will be tariff-free and barrier-free. All they actually promise is “smooth”, although even that meaningless description is unlikely to prove true. What they are actually holding out is the prospect of a deeply damaging Brexit – precisely the cliff-edge they claim they are trying to avoid – come April Fool’s Day 2019.

Unless they change course, the bad joke will be on British workers and the British economy.

PS. The show of unity lasted fewer than 24 hours, as the Telegraph reported last night that a fellow cabinet member claimed Hammond views Fox with contempt and that their truce would fall apart.

Owen Tudor is head of EU and international relations at the TUC.

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