Philip Hammond squares up to Fox over EU customs union
- Chancellor is determined to secure a transition deal as Brexit takes placeÂ
- Liam Fox's job of striking trade deals is dependent on quitting customs unionÂ
- The customs union allows for tariff free and customs free trade across Europe
- But it completely bans member countries from striking third country trade dealsÂ
Philip Hammond is set to demand the Trade Secretary prove Britain will be better off if Brexit includes quitting the customs union.
The Chancellor wants Liam Fox to prove the case that the ability to strike trade deals after Brexit will make up for losing tariff free access to the EU.
The customs union is a critical part of the economic infrastructure that makes up the EU single market, which allows easy free trade across Europe.
But in return it bars members from making their own agreements with third party countries.Â
Philip Hammond (left) is set to demand Liam Fox (right) prove Britain will be better off if Brexit includes quitting the customs union (both pictured in Downing Street)Â
Mr Hammond is demanding the Brexit deal includes a transitional period on leaving the customs union and single market even if this delays Britain's ability to strike third party deals.
Dr Fox, whose job as international trade secretary is to seek trade deals, believes Britain needs to get on with exploiting the opportunities of Brexit.
The row, revealed today by the Telegraph, lays bare divisions in the Cabinet about the kind of Brexit deal Britain should pursue.Â
Mr Hammond said last month that developing new customs arrangements after Brexit would be difficult.
He said: 'To do this in the context of our wider objectives will be challenging. It will almost certainly involve the deployment of new technology.'
Mr Hammond has vowed to put business first in Brexit talks, and said that immigration would not be 'shut down' but rather 'managed' after Brexit.
The row lays bare divisions in the Cabinet about the kind of Brexit deal Theresa May (pictured leaving No 10 today) should pursue
He said: 'We recognise that this is a negotiation, and our negotiating counterparts will have their own priorities. When the British people voted last June, they did not vote to become poorer, or less secure.'
But Dr Fox has warned Britain cannot 'part leave' the European Union and must go 'full steam ahead and get the job done'.
In the aftermath of the election, he told the BBC: 'We've set out the sort of deal that we want, a deal that's good for European citizens in the United Kingdom and British citizens in the European Union; that's good for British business, that enables us to trade maximally with the single market; that means there's as little friction at our borders as possible, giving Britain simultaneously the freedom to develop new trading agreements elsewhere.'
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