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  1. ITV Report

Liam Fox warns against Labour plans for customs union post-Brexit

Credit: pa

The international trade secretary Liam Fox has hit back at Jeremy Corbyn's plans for the UK to join a new customs union with the EU after Brexit, saying it would be "a complete sell-out of Britain's national interests".

The prominent Brexiteer's warning comes a day after the Labour leader unveiled a shift in Labour's Brexit stance, confirming the party will back a UK-EU customs union to ensure tariff-free trade.

Mr Corbyn's initiative has set the scene for possible defeat for Theresa May in an upcoming Commons vote on the Trade Bill.

A leading Tory opponent of hard Brexit, Dominic Grieve, said "many" of his colleagues saw the customs union as an issue where they should be "pragmatic and not ideologically-driven".

And senior Tory backbencher Sarah Wollaston told the BBC: "There isn't a parliamentary majority for a hard Brexit," adding "there is going to have to be a compromise here".

As rule takers, without any say in how the rules were made, we would be in a worse position than we are today.

It would be a complete sell-out of Britain's national interests.

– Extract from Liam Fox's upcoming speech

Mr Fox used a speech in London today to warn a customs union would constrain the UK from taking advantage of future trade opportunities.

Remaining in the existing customs union would mean accepting EU rules on trade in goods without any say in how they are made, he said.

It would limit the UK's ability to reach new trade agreements with fast-growing economies and to develop new ways for poorer nations to trade their way out of poverty.

But Mr Fox's former top official said leaving the customs union would be like "giving up a three-course meal for the promise of a packet of crisps".

Sir Martin Donnelly, who left his role as permanent secretary at the Department of International Trade last year, said 60% of UK trade is either with the EU or the countries it has trade agreements with, and that any divergence from Brussels rules would deal a blow to British services which would not be compensated for through deals with nations like the US.

The Prime Minister is to set out her Government's vision for Brexit in a long-awaited speech on Friday.

A proposal agreed at a marathon Cabinet meeting at the PM's official country house Chequers is understood to involve a promise to keep UK standards as high as European ones, as well as the creation of a dispute mechanism for cases where Britain wants to go its own way.

This was immediately branded "pure illusion" by European Council president Donald Tusk.