Liam Fox: Cabinet ‘argument’ over customs union

Liam Fox has said he's facing an "argument" in cabinet to prevent Theresa May conceding a customs union to the Labour party

Liam Fox is to raise concerns in cabinet at the failure of his party to highlight the "totemic" issue of an independent trade policy in a nationwide leaflet for the European elections.

The international trade secretary confirmed that he is facing an "argument" in cabinet to prevent Theresa May conceding a customs union to the Labour party.

In an interview with BBC Newsnight Dr Fox also said he expects voters to use the European Parliamentary elections to register a protest at the UK's failure to leave the EU.

The cabinet minister added that if the UK fails to ratify the prime minister's Brexit deal by the EU's October deadline then the UK should be prepared to leave the EU without a deal rather than revoking article 50.

Dr Fox was speaking to Newsnight during a visit to Iceland to drum up new trade deals with countries outside the EU after Brexit.

Commenting on the US-China trade talks taking place today in Washington, Fox also said "in a trade war, there are never any winners. There are only casualties"

'Independent trade policy a benefit of Brexit'

The international trade secretary indicated he had concerns after the Times reported that the Tory election leaflet for the European elections failed to make any mention of an independent trade policy.

Downing Street has said that one of the benefits of leaving the EU - and thereby leaving the customs union - will be the ability of the UK to sign its own trade deals.

The leaflet said the prime minister is working "tirelessly" to pass a "workable deal" which would allow the UK to take back control of its money, laws and borders; to leave the Common Fisheries Policy and the Common Agricultural Policy; and to protect jobs, security and the UK.

He said: "Well I certainly will be wanting to be raising at cabinet that we retain that as a central plank of our European policy: that having an independent trade policy, enabling Britain to navigate the shifting seas in trade policy, is an essential prerequisite for taking back control."

Dr Fox added: "I haven't seen the leaflet. But I would say that [an independent trade policy] was one of the totemic elements of leaving the EU. And the prime minister has been very clear that an independent trade policy is one of the key asks in this.

"It has to be a real independent trade policy not something that is called an independent trade policy but isn't. [That] is why I can't accept membership of a customs union on a permanent basis because that would not be an independent trade policy."

An independent trade policy is a sensitive issue at the moment for Brexiteers because Labour is demanding in the cross party talks that the UK should agree a permanent customs union with the EU.

Senior Tories say that the prime minister is offering Labour a customs arrangement which would preserve core elements of the customs union until the 2022 election.

Asked if he would resign if the prime minister conceded a customs union, Dr Fox said: "Oh I have no intention of losing that argument. It is far too important.

"That is why I decided to remain in the cabinet and fight for those elements I believe in, including that a customs union would not be a good idea for the UK.

"Any argument around a customs union I want to be there at the table making the case why it is bad for the UK."

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In his interview Dr Fox said Britain should be prepared to leave the EU next October if the EU refuses to extend article 50 again.

At that point the UK would be faced with the choice of leaving with no deal or halting Brexit by revoking article 50.

"The EU may decide that it is time for us to leave and they don't want any extension beyond that period.

"The longer we take in this process the more the chances are of revocation and simply defying the voters and not having Brexit at all or leaving without a deal.

"I don't find leaving without a deal particularly palatable but I find it much more palatable than not leaving at all."

Dr Fox said he expects Conservative voters to register a protest in the European elections though he confirmed he would be voting for his party.

"Voters will rightly be frustrated that they are being asked to vote for an institution they have already voted to leave," he said.

"So I wouldn't be surprised if voters use it as a protest."

In a swipe at Nigel Farage's Brexit party, he said: "It is very easy to be a one policy party when you don't have any responsibility for actually being the government."

The international trade secretary said he hoped Brexit would provide an opportunity to improve links with Iceland which is not in the customs union but which is in the single market through the European Free Trade Association.

He said: "Iceland is a very important partner for the UK, it is an important NATO partner, potentially in terms of energy security and of course it is estimated that up to 95% of British fish and chip shops are dependent upon cod and haddock produced by Iceland."