Leaving EU customs union could lower GDP by 4.5% by 2030

Leaving the European customs union could lower Britain's GDP, according to three reports which were circulated at a Brexit cabinet meeting.

The Guardian reported that the economic reports said quitting the customs union would cause GDP to fall by 4.5% by 2030 and jam the country’s ports and hinder trade.

The prediction was made in studies from the Treasury, the National Institute of Economic and Social Research and Centre for Economic Performance and London School of Economics, carried out before June’s EU referendum using a Norway-style model, which involves staying in the single market but outside the customs union.

Cabinet ministers were also told that the leaving the customs unions would clog some ports such as Dover and Holyhead due to increased checks on vehicles.

The customs union, which includes all 28 EU states plus Turkey, Monaco, Andorra and San Marino, and non-EU UK territories Jersey, Guernsey and the Isle of Man, allows members to trade goods without customs levies but impose tariffs on goods coming from outside the union.

It also negotiates trade deals as part of the union and not as individual countries.

There is an ongoing discussion on what type of relationship the country should seek with the EU, either a ‘hard’ Brexit - the UK would trade under World Trade Organisation rules and curb migration, or a ‘soft’ Brexit - a negotiated bilateral agreement with less favourable access to single market and no commitment to the free movement of people.

Meanwhile, the High Court said on Tuesday it would rule "as quickly as possible" on whether MPs, not the government, can trigger Article 50 of the Lisbon treaty, the formal process of leaving the EU, which Theresa May said she would trigger by the end of March.

MPs are to debate Britain’s strategy to leave the EU in Parliament and it is suggested that they may also have a vote on the final terms of the deal.

On Thursday, the prime minister is to travel to Brussels to update the EU on Brexit.