Liberal Democrat leader Sir Ed Davey will call for a new customs union with the European Union in a speech on Thursday. The policy, which would prevent tariffs and customs checks on each other’s goods but prohibit separate trade deals, is opposed by the UK government. However, Davey will argue that it would help the UK deal with the incoming administration of US President-elect Donald Trump and “turbocharge” the economy. Party sources said the policy was pragmatic rather than aimed at rejoining the EU. Sir Keir Starmer, who leads the UK’s opposition Labour Party, has called for reset in relations with Brussels but has ruled out rejoining the customs union or single market.
After a disastrous performance in the 2019 general election, the Liberal Democrats last year gained 72 seats, campaigning on issues other than the EU. However, rejoining the bloc remains the party’s long-term aim. Davey will also criticise the government for rejecting a new customs union and urge it to negotiate such a deal with the aim of forming a fresh customs union by 2030. In his speech, he will accuse Conservative politician Kemi Badenoch of wanting to go “cap in hand” to Trump and accuse Reform UK leader Nigel Farage of being “more interested in advancing Trump’s agenda over here than the UK’s interests over there”.
Davey will argue that the UK needs to be dramatically more ambitious and take more urgent action “not just tinkering around the edges of the botched deal the Conservatives signed four years ago”. He will say that the UK’s trading relationships with European neighbours or with Canada and India can be strengthened more quickly than through seeking a new deal with the US. Trump is known to have threatened to impose tariffs on US imports after re-entering the White House next week.
Inflation rates have recently fallen, providing some respite for ministers, but the cost of UK government borrowing has reached historic levels and the value of the pound has decreased sharply in the past week
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