UK businesses rule out EU customs union return, CBI says

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UK firms reject EU customs union

Highlights

CBI director-general Rain Newton-Smith says UK businesses are not seeking to rejoin the EU customs union, focusing instead on new trade deals.
Government estimates project the current reset with Europe would lift UK GDP by only 0.3 percent over 15 years, highlighting limited economic upside.
Newton-Smith warns UK industry risks exclusion from EU value chains due to Brussels' protectionist policies like the Industrial Accelerator Act, urging UK-EU supply chain cooperation.

Business stance on Brexit options

As reported by the Financial Times, CBI director-general Rain Newton-Smith says British businesses do not want to revisit the Brexit referendum and are not seeking to rejoin a customs union with the EU. She says companies accept that Brexit has imposed costs, but argues the debate has moved on as the UK pursues trade agreements with countries including India and Gulf states.

Newton-Smith says business leaders are no longer pushing for the customs union option that some might have supported five years ago. Her comments place the UK's largest business lobby group at odds with politicians on the left who are urging a deeper rapprochement with Brussels, including potential future re-entry to the single market or customs union.

That political debate is intensifying as Andy Burnham signals support for rejoining the EU at a later date, while Liberal Democrat leader Ed Davey calls for a closer relationship with Europe. At the same time, Prime Minister Keir Starmer's stated red lines continue to rule out joining a customs union, returning to the EU single market or accepting free movement of people.

Trade-offs for UK industry and Europe ties

Newton-Smith says closer regulatory alignment with Brussels can help only where it clearly serves the UK's economic interest, warning that alignment is not a universal solution. She says business must be closely consulted on the benefits and trade-offs of any move to readopt EU rules through the single market route.

Government estimates say the current reset with Europe would lift UK GDP by 0.3 percent over 15 years, a modest gain compared with the larger economic hit previously associated with Brexit. A summit planned for July 11 to cement the arrangement is postponed after Starmer's resignation on Monday triggers a power transition.

Newton-Smith also warns that the UK risks exclusion from continental value chains as Brussels advances more protectionist industrial policies, including buy-European measures such as the Industrial Accelerator Act. The Department for Business and Trade says ministers are working with EU counterparts to protect UK-EU trade and supply chains and to address concerns around Made in Europe policies.

Our earlier coverage of Keir Starmer’s resignation explained how the UK’s rapid turnover of prime ministers has been driven by post-Brexit political fragmentation and persistent economic strains, keeping markets cautious about the country’s direction. We also noted that Starmer’s departure set up another leadership transition, with Andy Burnham emerging as a leading contender amid ongoing uncertainty about future policy.

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