Westferry Times – Political & Economic Analysis
By Richard Brown
A renewed push for a UK–EU customs union is gathering momentum as economists warn that the current post-Brexit trading system is imposing crippling costs on businesses while leaving a £90 billion annual hole in public finances. Proponents argue that re-entering a customs arrangement — without rejoining the single market or EU membership — could restore economic stability, lower prices for consumers, and free up billions to support families facing the cost-of-living crisis.
The Economic Reality: A £90bn Hit From Brexit
Since the UK’s departure from the EU Customs Union and Single Market, the Office for Budget Responsibility (OBR), the Institute for Fiscal Studies (IFS), and the Centre for European Reform have all highlighted the long-term fiscal damage.
The numbers are stark:
- £90 billion a year lost: The UK economy is now estimated to be 5% smaller than it would have been without Brexit — equivalent to around £90bn per year, according to OBR and CER modelling.
- £40bn in lost tax revenue: A smaller economy means weaker tax receipts, contributing to the UK’s ongoing fiscal pressures.
- £7bn per year in extra paperwork costs for exporters, according to HMRC estimates.
- A 15% drop in UK–EU trade volumes, noted by the LSE Centre for Economic Performance.
These figures paint a consistent picture: the post-Brexit trade model is not delivering economic independence — it is imposing economic penalties.
How a New Customs Union Would Help
1. Eliminating costly border checks
A customs union would restore tariff-free trade without rules-of-origin checks, removing one of the largest sources of friction for UK exporters and importers.
Businesses currently must prove that goods are sufficiently “British” or “European” to avoid tariffs. This bureaucracy often costs more than paying the tariffs themselves.
2. Lower costs for consumers
The British Retail Consortium estimates that post-Brexit import costs have increased shop prices by between 3–8%. Food inflation has been especially severe.
A customs union would reduce supply-chain friction, bringing down:
- Food prices
- Raw materials costs
- Transport and logistics overheads
3. Supporting small and medium-sized businesses
SMEs have been hit hardest by Brexit paperwork. Many have simply stopped exporting altogether. A customs union could re-open EU markets to thousands of smaller exporters priced out of trade by compliance burdens.
4. Strengthening Government finances
By removing trade friction and boosting growth, Treasury modelling suggests a customs union could restore up to half of the £90 billion annual economic loss — unlocking tens of billions for:
- NHS waiting list backlogs
- Social care reform
- Cost-of-living support for vulnerable families
- Investment in rail, roads, and energy security
Political Feasibility: What Type of Customs Union?
Advocates suggest a bespoke arrangement similar to:
- Turkey’s customs union with the EU (covering manufacturing and industrial goods)
- UK–EU veterinary & phytosanitary alignment for food products
- A deeper agreement allowing participation in EU supply chains
This would not require rejoining the Single Market, ECJ jurisdiction, freedom of movement, or EU membership. It is a pragmatic, middle-way option.
Who Supports the Proposal?
Major voices from across the political spectrum — including former Conservative ministers, Labour MPs, trade unions, and business associations — have argued for a customs union:
- CBI (Confederation of British Industry): Repeatedly warned that trade friction is “holding UK growth back.”
- British Chambers of Commerce: Urging a “Swiss-style” alignment to cut exporting burdens.
- Institute for Government: Highlighting customs barriers as the top Brexit pain point.
- IFS & OBR: Implicitly supporting the case by publishing the fiscal impact of current arrangements.
Public opinion is also shifting, with multiple polls showing majority support for closer EU trade ties without rejoining the EU.
Editorial Opinion – Westferry Times
“The UK must confront economic reality.”
At the Westferry Times, our view is clear:
The UK is paying a heavy price for a hard Brexit deal that was negotiated at breakneck speed, without proper impact assessment or long-term planning. The result? A £90bn annual economic wound, hundreds of thousands of lost export relationships, and an unprecedented strain on public services.
A customs union would not solve every problem — but it would stem the bleeding.
It would offer:
- Stability for businesses
- A fairer deal for consumers
- A pathway to repairing Government finances
- A reduction in red tape
- A pragmatic, politically achievable compromise
Most importantly, a customs union respects the Brexit vote while recognising that Britain cannot thrive by erecting barriers with its largest trading partner.
It is not a return to the past; it is a correction toward a sustainable future.
Conclusion: A Necessary First Step
A new customs union would not erase Brexit, but it would:
- Reduce business costs
- Boost exports
- Bring down household bills
- Strengthen the NHS and social care budget
- Restore economic credibility
For a country facing weak growth, overburdened public services, and a cost-of-living crisis, the case is not ideological — it is practical, evidence-based, and grounded in the national interest.
The UK needs to chart a more sensible course. A customs union with the EU is the necessary first step.
