The UK would be \u201cfoolish\u201d to embrace the seemingly \u201csimple solution\u201d of a new customs union with the EU in an effort to boost economic growth, business secretary Peter Kyle has said despite growing fears of a trade war with Donald Trump. <\/p>\n
Health secretary Wes Streeting and justice secretary David Lammy have in recent weeks talked up the benefits of a customs union, while Trump\u2019s threat of fresh tariffs over Greenland over the weekend has prompted some Labour MPs to push for closer ties with Brussels. <\/p>\n
But Kyle told the FT that the idea \u2014 which has also been promoted by the Liberal Democrats and the Trades Union Congress \u2014 was \u201cutopian\u201d and, if pursued, would take many years.<\/p>\n
\u201cWhen it comes to a customs union, I understand why Lib Dem utopianism is so seductive,\u201d Kyle said in an interview. \u201cIt took us four years to leave the customs union [between 2016 and 2020]. Do people really think we can join the customs union quicker than it took to leave the customs union?\u201d<\/p>\n
\u201cI think at the moment it would be foolish to slip towards what would be simple solutions,\u201d he added, citing the two decades Turkey spent negotiating a customs union with the EU. <\/p>\n Kyle, who became business secretary in Sir Keir Starmer\u2019s cabinet reshuffle <\/a>last September, said he was a pragmatic Europhile. \u201cWhat gives me anxiety is growth this year\u2009.\u2009.\u2009.\u2009that gives me more concern than not being in the customs union.\u201d<\/p>\n The EU customs union allows for the free circulation of goods within the bloc once a common external tariff has been paid.<\/p>\n While the US president\u2019s threat to increase tariffs<\/a> on eight European countries, including the UK, had not been entirely surprising, Britain was fortunate to have a \u201ccalm, methodical, steadfast\u201d prime minister in Starmer, Kyle said ahead of a visit to the World Economic Forum in Davos. <\/p>\n \u201cWith the swiftness and the stridency with which the Trump administration acts there is a tendency to think everything is new,\u201d Kyle said, sitting in his Whitehall office alongside Dante, a Catahoula leopard dog. \u201cWhat you do expect with Donald Trump is the unexpected; this isn\u2019t our first rodeo.\u201d<\/p>\n Trump diluted some of the global tariffs<\/a> he threatened on \u201cliberation day\u201d last April. Washington could potentially be persuaded to find a compromise to suit all parties, he added. <\/p>\n \u201cBoth sides are putting their countries first, if you think of a Venn diagram there is a sizeable chunk in the middle and we have always been able to show respect for the other\u2019s viewpoint,\u201d Kyle said. <\/p>\n At Davos, Kyle and Chancellor Rachel Reeves are likely to face criticism from global business leaders over the UK government\u2019s big tax rises since it took office in July 2024 \u2014 as well as its contentious package of pro-worker employment reforms.<\/p>\n Kyle, formerly science and technology secretary, said his overarching priority was achieving faster economic growth. Asked if he hoped ministers would be able to cut taxes by the next parliament, he replied: \u201cIt\u2019s what I dream of every night.\u201d<\/p>\n As business secretary Kyle, one of the modernising \u201cBlairites\u201d in the cabinet, has a portfolio that spans the government\u2019s industrial strategy to new post-Brexit trade deals with other countries.\u00a0\u00a0<\/p>\n In recent weeks Kyle has been at the forefront of attempts to soften the impact of changes to business rates for hospitality companies, after the sector criticised measures set out in Reeves\u2019 November Budget. <\/p>\n Kyle said it was important \u201cthat people know we get it\u201d, adding: \u201cMy message to Treasury has always been, \u2018let\u2019s get this right, and let\u2019s just listen very carefully\u2019.\u201d<\/p>\n On Tuesday he will announce new proposals to make investigations by the Competition and Markets Authority, the UK\u2019s antitrust regulator, quicker and more proportionate. <\/p>\n A dedicated review to scrap excessive paperwork for farmers is also being launched to cull some of the estimated 150 separate regulations that cost agricultural businesses \u00a3590mn a year. <\/p>\n Kyle said he was determined to cut red tape, claiming the recent decision to end the requirement for companies to prepare a director\u2019s report would eventually save UK businesses \u00a3230mn a year.\u00a0<\/p>\n He now plans to take a new task force from the Department for Business and Trade into other Whitehall ministries to cut unnecessary regulations, starting with those covering agritech and health and safety.\u00a0<\/p>\n Elsewhere, the auto industry has urged ministers to rethink the \u201czero emission vehicle mandate\u201d, under which a certain proportion of new cars sold in Britain must be battery powered, with that percentage climbing every year until 2035.<\/p>\n Kyle said he was listening to carmakers\u2019 calls to water down the mandate, in line with a recent softening of EU targets, <\/a>and stressed that he would be a \u201cchampion\u201d for the sector.\u00a0<\/p>\n \u201cI want to create the circumstances [so] that they can flourish\u2009.\u2009.\u2009.\u2009I will always be open to what any manufacturing sector in this country says will make the difference between stagnation and decline,\u201d he added. <\/p>\n![\"A](\"https:\/\/images.ft.com\/v3\/image\/raw\/https%3A%2F%2Fd1e00ek4ebabms.cloudfront.net%2Fproduction%2F6b489bfe-5c1f-4375-b987-ed596c629cd7.jpg?source=next-article&fit=scale-down&quality=highest&width=700&dpr=1\")
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