Panoramic View

Customs Union rears its head as we hinted a week ago

Joe Garcia

Theresa May has secured concessions from Brussels to keep the whole of the UK in a customs union after Brexit - avoiding a hard Irish border, that was the claim by The Sunday Times. No sooner had the paper’s first edition hit the streets, that No.10 Downing Street tried to rubbish the report.

But it did not deny it, instead it said it was ‘speculation’. This can only mean that the essence of the customs union is correct, although it could be that it is still to be finalised.

I can say that with some authority, because for many years I used to write for the Sunday Times, and when I had an exclusive report, the UK government of the day would come up with some strange words to avoid having to confirm it!

The agreement now reported by others would avoid the European Union’s “backstop” solution that would have treated Northern Ireland differently from the rest of Britain.

It will also include an “exit clause” designed to convince Brexiteers that remaining in the customs union is only temporary, the newspaper said.

The Irish border has proved the biggest obstacle to a deal, with both sides vowing not to reinstate a hard border between Ireland and Northern Ireland for fear of destabilising the peace agreement.

Preparations for a final deal are reportedly “far more advanced than previously disclosed”, and will lead to a document of around 50 pages being published.

This week’s Sunday Times was as precise as saying that the cabinet would meet today to discuss Mrs May’s plan, and she hopes there will be enough progress by Friday for the European Union to announce a special summit.


Would Gibraltar have to join the Customs Union at some point? That was the headine in a report I wrote on Monday last week which now gains some added relevance. Because if Britain were to remain in the Customs Union, would Gibraltar be expected to join, as we never joined the Customs Union when, with Britain, we joined the EU in 1973.

Close on the heels of recent observations made by the Spanish foreign minister Sr Borrell, the Chief Minister suggested, related to it or unrelated, that Gibraltar should consider applying to join the Customs Union, presumably to help make a soft frontier possible.

This is the question I posed to Mr Picardo last week : If Spain applies a soft frontier at Gibraltar, would it be out of goodwill or in return for concessions? And apart from considerations flowing from VAT/import duties, unless there are concessions on immigration/emigration situations, Spain could at any time impose travelling restrictions at the frontier for other reasons.

He denied that there would be any concessions, and added: “Our considerations of entry into the Customs Union - which is to be studied in future as I told the House - is designed to increase revenues, not reduce them.”

Several years before Spain joined the European Community, the UK carried out an exhaustive study into the implications for Gibraltar flowing from Spanish entry. Confidential documents acquired by PANORAMA showed that questions such as Gibraltar joining the customs union, VAT and CAP were put under the microscope.

A draft paper outlining the implications for Gibraltar was circulated to relevant UK government departments towards the end of 1979. After agreement by all departments, the paper was issued in final form in November 1979.

As I said in last week’s article, the final paper was considered by Foreign Office ministers before it was sent to Gibraltar for distribution, in confidence, to Gibraltar ministers and officials.

It follows that at that early stage, the implications for Gibraltar were already being considered and agreed. Before Spain joined in mid 1980s, the Gibraltar position was quite clear.

When Gibraltar joined the EU with Britain in 1973, it had been agreed that Gibraltar would not join the customs union, VAT and CAP.

As I recalled last week:, “In accepting this solution, Gibraltar Ministers at that time expressed the view that Gibraltar’s ultimate aim should be full participation in the Community.”

So, it is not suprising that Gibraltar would wish to reconsider joining the Customs Union, and now that a deal affecting the UK is being put under the microscope, our own position might well be considered.