Lib Dems target backbench Labour MPs ahead of key legislative push on customs union

EMBARGO: Immediate Release

The Liberal Democrats will table an amendment to upcoming legislation that would place a legal duty on the Government to begin negotiations on a customs union with the EU, in a bid to force a fresh vote on the issue.

It comes after the Liberal Democrats won a vote on their customs union bill in December after winning the support of 13 Labour backbenchers. The Liberal Democrats are now looking to win over scores more Labour MPs to back their customs union amendment to the EU Reset Bill in a bid to force the Government to change course. Unlike the party’s 10 minute rule bill, this amendment would carry legal force if approved.

The EU Reset Bill is expected to be brought forward by the Government in January. It is set to be a major piece of legislation setting out the Government’s new relationship with the EU.

The Liberal Democrats are set to launch a grassroots campaign to persuade Labour MPs to back their push for a customs union.This will include targeting Labour MPs with local elections in May who have  pro-European constituencies, including in inner London, Cambridge and Sheffield.

Recent analysis from a leading US think tank found that Britain’s economy is currently around 8% smaller than it would have been if it weren’t for Brexit. A hit of that scale corresponds to roughly £3,700 in lost GDP per capita, according to separate estimates by the House of Commons Library. The Library also estimated that an 8% hit to our economy would amount to roughly £90 billion a year in lost tax revenue.

The Prime Minister’s own chief economics adviser suggested that a customs union could bring growth to Britain’s economy, while David Lammy said it was “self-evident” that a trading partnership of that nature would boost growth.

Ed Davey, Liberal Democrat Leader, said:

“Businesses are drowning in red tape and families are paying the price for the appalling Brexit deal left by the Conservatives. But so far the Labour government has been far too timid, only tinkering around the edges when it comes to rebuilding our ties with Europe.

“This year, the Prime Minister must finally get a grip on the cost-of-living crisis by negotiating an EU-UK customs union, to boost growth and put money back in people’s pockets.

“Liberal Democrats stand ready to work with Labour MPs and others across Parliament to force the Government to change course.”

Lisa Smart MP, Liberal Democrat Cabinet Office Spokesperson, said:

“A customs union is the single biggest lever the Government could pull to boost growth and bring down the cost of living.

“The Liberal Democrats will use every opportunity we have to force this Labour Government to rebuild Britain’s ties with Europe.

“This is about backing British businesses, unleashing economic growth and getting the best possible deal for the country.”

ENDS

Notes to Editor

The Liberal Democrat amendment would place a duty on the Government to begin negotiations with the EU on establishing a bespoke UK-EU Customs Union.

The party would seek to secure a meaningful vote on this amendment at either Committee stage or Report stage, as the Bill moves through the House of Commons. The amendment is likely to include:

• Placing a duty on the Government to begin negotiations with the EU on establishing a bespoke UK-EU Customs Union;
• Establishing a deadline of 2030 for agreeing and implementing a Customs Union;
• Calling for the proposed Customs Union to cover most goods, except agricultural products; 
• Calling for the proposed Customs Union to include an obligation placed on the EU, whereby when the EU is negotiating free trade agreements (FTA) with other countries and blocs, those third-party countries are required to enter into parallel FTA negotiations with the UK.

A 2025 paper by the respected US think tank the National Bureau of Economic Research (NBER) found that by 2025, Brexit had reduced UK GDP by 6% to 8%. The paper is available here.

The House of Commons Library provided separate estimates illustrating what a 6% to 8% reduction in GDP might mean in terms of GDP per capita and foregone tax revenue. The Library estimates that if 2024-25 UK GDP per capita were 8% below a hypothetical non-Brexit UK, it would be approximately £3,700 lower. According to the Library we can also roughly estimate that an 8% reduction in GDP corresponds to around £90bn in foregone tax revenue. This is if we assume that nominal GDP is also 6%-8% lower in NBER's research and that the 2024-25 tax-to-GDP ratio remained at 34.7%.