Alison Carnwarth: “I sometimes... don’t go to sleep at all because I’m anxious”

Why did Alison Carnwarth quit? Her last interview gives a few clues.

Alison Carnwarth has just quit her position on Barclays' board, continuing a series of resignations which has included Marcus Agius, Bob Diamond and Jerry del Missier.

Her statement read: “With regret I have concluded that I am no longer able to devote sufficient time to my role as a director of Barclays given my other commitments.”

She cited no other reasons, and her decision has left people speculating. But her most recent interview, given to economia magazine, gives a few clues. Here's an extract:

“None of us can be proud of how all this [Bob Diamond's renumeration package] was portrayed to the great British public.” She’s keen to point out that she is aware of the mood in the country, and what “people have had to put up with, ordinary people like you and me. When I’m not doing my job I’m an ordinary person. “But, remuneration and risks aside, to sit on the board of somewhere like Barclays, you have a window on how the world is working. You see where the capital flows are around the world, you see where the liquidity is, and you see where the stresses are in the financial system.”

Like any ordinary person, she worries. “I sometimes wake up worried – or don’t go to sleep at all because I’m anxious,” she says. “That’s not so good. Last night I lay awake fretting about something. I then have to stand up and somehow all the worry drains out of my feet, or I write things down."

She said that "a lot of pressures" had come to bear on the remuneration committee.

“It’s not easy, and we don’t always get it right. We clearly didn’t get it right this year. The shareholders were a little upset, although they weren’t upset in the same way as we’ve seen at other companies; our proposals did get through. But, whereas in previous years we would have got perhaps 85% voting in favour of our remuneration report, this year it was just over 70%. So clearly there were some major institutions that were not in agreement with what we did, and we must try to communicate better.”

“I’m very sensitive to the general feeling out there, when people are miserable and unemployed."

The full interview can be read in Friday's economia.

Barclays. Photograph, Getty Images.
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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.