Ed Davey on Kuenssberg: EU/UK customs union would do more for economy than anything Government is doing

Ed Davey had his first Sunday morning outing on the media of 2025 with an interview on the BBC’s Sunday with Laura Kuenssberg.

As we’ve hit half a decade since the awful reality of Brexit, the conversation was mostly about our desire to see a UK/EU Customs Union to get our economy growing again. He said:

What I am arguing is if we can have a UK EU Customs Union we can tear down the trade barriers that the Conservatives put up for our exporters and get that growth far more quickly than anything Rachel Reeves and Labour are saying at the moment

Ed did well to get that point across. If I had to nit-pick, I’d have given a few examples of how our exporters have been done over by the crappy deal we have at the minute. I’d have mentioned the £4 billion that Brexit has taken out of our economy and how getting into a customs union could get at least some of that back and help jobs and growth here.

He could also have highlighted the polls which suggest that only a third of people think that Brexit has been a success. Clearly the public know fine that they have been completely done over and are open now to attempts to repair the damage.

I might also have dropped the spectre of Donald Trump inspired economic warfare in as well and how we and the EU would be in much better shape to deal with that if we worked together. I mean, we have a US administration whose members seem to want to make things as difficult as possible for our Government to achieve even its own modest aims to boost their political allies on the extreme right wing.

I’ve summarised the interview below. What do you think?

LK: Do we really want to go there again?

When I talk to families and businesses, they are worried about the cost of living and can we get the economic growth to pay for public services, health, education, crime, all those issues they care most about. The questions for politicians is how’s the best way to get that growth for public services and to get prices down. What I am arguing is if we can have a UK EU Customs Union we can tear down the trade barriers that the Conservatives put up for our exporters and get that growth far more quickly than anything Rachel Reeves and Labour are saying at the moment

LK: We’d have to give them something. Who’s got the appetite for that?

I’m not sure I agree with you. I think it could be done far more quickly. We are talking about a customs union which was there before. There are models – Turkey’s customs union with the EU has been there for a long time.  There would be some negotiation but it wouldn’t be like what we saw before and the benefits would come up quicker. We can engage with Brussels to tear down more barriers. We think a youth mobility scheme like the EU are proposing isn’t a terrible idea. We would have to negotiate over the details but the idea of allowing the freedoms for our young people to travel, work and live across the EU and our employers have the opportunity to have access on a temporary basis to young people from the EU would be good for our economy.

LK: But net migration is too high, you’ve said

We think in that negotiation we should go for a capped scheme. We have capped schemes with Canada, Australia, Korea and Japan and they work incredibly well. You’ have visas for 2 or 3 years and then people would go back so it wouldn’t add to net migration.

LK: Conservative leaders found to their cost that the EU wouldn’t cap migration

The Conservatives sold Britain out in Europe. They failed to act properly.

LK: Wouldn’t a customs union sell us out because we’d have to follow the rules and be a rule taker rather than a rule breaker.

We’re a rule taker at the moment. People see it on their breakfast tables all the time with the bottle tops being attached so they get recycled. That’s an EU regulation. Companies are taking those rules so they can export and grow.  If that means doing what we are already doing to get prices down and economic growth then let’s do it.

She then tackled him on relative growth rates in EU.

What it shows is that Europe would be keen for a UK trade agreement. The whole point of trade deals is that you get more growth. My argument is that trade deals are mutually beneficial. We would benefit, Europe would benefit.  You are playing into my argument that it would help us and it would be easy to get because it is beneficial to the EU as well

LK: What’s your evidence that the EU is willing to put this on the table for us?

You can listen to what they’ve said with regards to a pan European/Mediterranean convention which is not a full customs union but it would be an important step towards that. My challenge to Keir Starmer is to go to Brussels tomorrow and open negotiations for a full EU/UK Customs Union. That could start by the EU signing up to the Pan European/Mediterranean Convention. That would be a good first step but we should have as our goal at the latest by 2030 a full EU UK Customs Union.

LK: For the Liberal Democrats, isn’t this a first step to what you hope would eventually happen,  going back into the EU.

I don’t think anyone will be surprised that the Liberal Democrats are pro European and in the long term, we want to be back at the heart of Europe. But let’s also be clear that is a long way off, regrettably. Our relationship with our European friends has been so damaged by the Conservatives on all levels that our European colleagues don’t trust us. We need to be realistic about that. It’s going to take some time. I said this at the election. We put forward a set of proposals that over this Parliament we could begin to rebuild the relationship painstakingly and I think we could potentially turbo charge that if Keir Starmer goes and opens negotiations for a full customs union.

LK: Lib Dems have not capitalised on the unpopularity of the Government. What is Reform getting right that you are getting wrong?

In the last Parliament, you asked me that question and we surprised you at the General Election by getting our best result in 100 years. We are going to be the surprise of the next election. If you look at what we are doing in Parliament, it’s Liberal Democrats who are holding the Government to account. I set our MPs a task of being the best opposition. The Conservatives are being the worst opposition we’ve ever had. They are divided. They have no credibility on the economy and the NHS and they are chasing after Reform. It’s the Liberal Democrats who are holding the Government to account whether it is on Winter Fuel Payments, on the appalling tax on family farms or national insurance. We are putting forward alternative policies.

On this programme last time we talked about social care and the Government have come forward with proposals for a cross party review which we have argued for. But they have a 3 year timetable, Laura, and we think it could be done this year. It is essential to do that that for millions of carers but also to sort out the NHS. If you don’t sort out social care, you won’t sort out the NHS.  We are the ones leading that argument.

 

* Caron Lindsay is Editor of Liberal Democrat Voice and blogs at Caron's Musings

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5 Comments

  • Craig Levene 2nd Feb '25 - 5:50pm

    Very strong statement from Downing Street this weekend. No SM membership, no FOM, no return to the EU.
    LK was right to highlight the stagnating growth across the major EU economies. Collective mediocrity all round.

  • Mark Morris 2nd Feb '25 - 6:05pm

    I appreciate not every reader of this site is a Sunday Times reader, but my goodness they have a good report today on the UK dairy industry has been hit so hard by Brexit. Worth checking out the report if you can.

  • Mark Frankel 3rd Feb '25 - 8:43am

    Trump is driving us back towards Europe.

  • Martin Pierce 3rd Feb '25 - 9:09am

    I agree Caron. After years of being afraid of our own shadow on Europe it’s really heartening to see Ed come out strongly on the customs Union. I agree with your ‘nitpicks’ too Caron, though I think they are just constructive advice for next time. I would add another one – explaining what the customs Union is (and isn’t). Most people out there probably have no idea what it is and why it would be a good idea to join.

  • I agree with Caron’s article and Martin’s comment.

    There is a further point we should make. The numbers show that private sector investment in the UK stalled in 2016 – following the uncertainty
    created by the Referendum result.

    So it’s about investment as well as trade. Investment is key to productivity and growth.

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