Tales from the cities

The Urban Vote.

To Westminster earlier this week for a Centre for Cities event on the state of parties in England's urban heartlands.

Overall, it is a gloomy picture for Labour, and Gordon Brown in particular, based on the findings of a year-long piece of analysis by Ipsos MORI. In one sense the data collected between February 2009 and February 2010 has been overtaken by events - namely the rise in popularity in of the Lib Dems and their leader Nick Clegg. But the figures remain instructive for a number of reasons, including one that may give rise to Labour optimism.

First, the study shows what the researchers call "latent" support for Clegg and his party that has now broken through. Across all the cites surveyed, Clegg enjoyed an aggregate net approval rating of 13 per cent, against 7 per cent for David Cameron and -34 per cent for Gordon Brown. Clegg's numbers will have certainly gone up; Cameron's likely to be in decline. And given today's fun and games Brown's poor ratings may yet fall lower.

 

 

 

Second, they show just how Labour has suffered in its traditional urban base (see figures 1 & 2). Paradoxically, "buoyant" cities such as Reading and Brighton (those with strong economies, private sector job growth and relatively high salaries) are far less likely to vote Labour in 2010 than they were in 2010, while "struggling" cities such as Hull, Stoke and Hastings remain Labour in bigger numbers.

 

 

 

Third, some hope for Labour. Assuming the Lib Dem surge is largely at the expense of the Conservative vote in urban areas which are home to key marginal constituencies, the Tories could be deprived of some target seats. In the Birmingham area, for example, the Tories have designs on Lib Dem-held Birmingham Hall Green and Birmingham Yardley. These have just got more difficult to win while seats such as Solihull are not beyond Nick Clegg's grasp.

 

Jon Bernstein, former deputy editor of New Statesman, is a digital strategist and editor. He tweets @Jon_Bernstein. 

Getty
Show Hide image

What is the EU customs union and will Brexit make us leave?

International trade secretary Liam Fox's job makes more sense if we leave the customs union. 

Brexiteers and Remoaners alike have spent the winter months talking of leaving the "customs union", and how this should be weighed up against the benefits of controlling immigration. But what does it actually mean, and how is it different from the EU single market?

Imagine a medieval town, with a busy marketplace where traders are buying and selling wares. Now imagine that the town is also protected by a city wall, with guards ready to slap charges on any outside traders who want to come in. That's how the customs union works.  

In essence, a customs union is an agreement between countries not to impose tariffs on imports from within the club, and at the same time impose common tariffs on goods coming in from outsiders. In other words, the countries decide to trade collectively with each other, and bargain collectively with everyone else. 

The EU isn't the only customs union, or even the first in Europe. In the 19th century, German-speaking states organised the Zollverein, or German Customs Union, which in turn paved the way for the unification of Germany. Other customs unions today include the Eurasian Economic Union of central Asian states and Russia. The EU also has a customs union with Turkey.

What is special about the EU customs union is the level of co-operation, with member states sharing commercial policies, and the size. So how would leaving it affect the UK post-Brexit?

The EU customs union in practice

The EU, acting on behalf of the UK and other member states, has negotiated trade deals with countries around the world which take years to complete. The EU is still mired in talks to try to pull off the controversial Transatlantic Trade and Investment Partnership (TTIP) with the US, and a similar EU-Japan trade deal. These two deals alone would cover a third of all EU trade.

The point of these deals is to make it easier for the EU's exporters to sell abroad, keep imports relatively cheap and at the same time protect the member states' own businesses and consumers as much as possible. 

The rules of the customs union require member states to let the EU negotiate on their behalf, rather than trying to cut their own deals. In theory, if the UK walks away from the customs union, we walk away from all these trade deals, but we also get a chance to strike our own. 

What are the UK's options?

The UK could perhaps come to an agreement with the EU where it continues to remain inside the customs union. But some analysts believe that door has already shut. 

One of Theresa May’s first acts as Prime Minister was to appoint Liam Fox, the Brexiteer, as the secretary of state for international trade. Why would she appoint him, so the logic goes, if there were no international trade deals to talk about? And Fox can only do this if the UK is outside the customs union. 

(Conversely, former Lib Dem leader Nick Clegg argues May will realise the customs union is too valuable and Fox will be gone within two years).

Fox has himself said the UK should leave the customs union but later seemed to backtrack, saying it is "important to have continuity in trade".

If the UK does leave the customs union, it will have the freedom to negotiate, but will it fare better or worse than the EU bloc?

On the one hand, the UK, as a single voice, can make speedy decisions, whereas the EU has a lengthy consultative process (the Belgian region of Wallonia recently blocked the entire EU-Canada trade deal). Incoming US President Donald Trump has already said he will try to come to a deal quickly

On the other, the UK economy is far smaller, and trade negotiators may discover they have far less leverage acting alone. 

Unintended consequences

There is also the question of the UK’s membership of the World Trade Organisation, which is currently governed by its membership of the customs union. According to the Institute for Government: “Many countries will want to be clear about the UK’s membership of the WTO before they open negotiations.”

And then there is the question of policing trade outside of the customs union. For example, if it was significantly cheaper to import goods from China into Ireland, a customs union member, than Northern Ireland, a smuggling network might emerge.

 

Julia Rampen is the editor of The Staggers, The New Statesman's online rolling politics blog. She was previously deputy editor at Mirror Money Online and has worked as a financial journalist for several trade magazines.