Fox warns European Union over tariff war

It is the strongest signal yet that Britain is plotting a "hard exit" from the European Union.

Liam Fox, the international trade secretary, said that he wanted a deal with the EU "at least as free" as the present arrangements.

He said anything else would be bad for all the people of Europe, whatever some politicians on the continent might say about the need to show Britain that leaving the EU is not cost free.

He also suggested he wanted Britain to take its seat as an independent member of the World Trade Organisation after Brexit.

At present, Britain's membership is as part of the EU and some argue that Britain joining the WTO as an independent member will be a long and difficult process.

I asked Dr Fox if he agreed with car manufacturers in Britain who said yesterday that tariffs between the UK and the EU could lead to job losses.

"Protectionism never actually helps anybody at all," he answered.

"And as we move into the post-Brexit arena, we want it to be as free and open as possible.

"And don't just look at it from the UK perspective; the European Union has a massive surplus in goods with the UK.

"Who does it harm more if we end up in a new tariff environment?

"Does it harm more, those who sell more to the UK, or the UK?

"It is in everybody's interest that as we move forward we have at least as free a trading environment as we have today.

"Anything else may not harm the politicians and the institutions, but it will harm the people of Europe and it is the people of Europe who should be at the forefront of our thoughts during that period."

'A problem'

I also asked him about his comments that British business had grown too "fat and lazy" to take advantage of global trade opportunities.

"Well, first of all, I do understand why, the media loves splashes even if they are not always the words we actually say," he said.

"But let's stick to the important point here, which is we have a problem, that too few of our exporters - of our companies are now exporting.

"As a share of our GDP, if you compare our exports to say Germany there's a huge difference.

"If you look at total trade, imports and exports makes up about 57% of our total GDP - [it's] 86% in Germany.

"We have an increasing current account deficit that needs to be closed.

"And we need to ask ourselves how we can do that. What are the reasons why not all companies are performing?"