A bold vision?

The talk at conference, a desire to hear a bold vision from Gordon Brown and Charles Clarke's curren

The New Statesman party is usually the first big event of Labour's annual conference and you can get quite a sense of how the week may pan out.

This time Charles Clarke was an early arrival keen to spread the word about his Sunday Times article in which he cheered on the idea of a leadership contest.

Clarke's not a popular figure in Manchester just now - neither with delegates nor senior party figures. Leave aside John Prescott's attack branding the former home secretary a "bitterite". One senior Labour figure told me that they could neither understand what had happened to Clarke - nor what he thought he was playing at.

"He's been there right at the centre of things for years and now look at him. What's he think he's doing?" they asked angrily.

I've been going to these conferences for nearly a decade and this is an odd one. Especially if you think back just a year. Then the atmosphere at the NS bash was feverish as we all speculated about a snap election.

It was virtually the only conversation. How things change and the talk now is whether Gordon Brown can survive.

Curiously it may be that fears over the economy are his best allies just now. It would be rash to trust either David Cameron or George Osborne with such a challenging situation. This needs more than a background in PR or the enthusiastic efforts of a former chorister - actually I don't know that about George but it just seems to fit.

After the NS party I went back into the security zone. Alistair Darling was having a drink with Neil Kinnock in one of the hotel bars and the Unite union bash was in full swing.

Some people at least seemed to be trying to have a good time and most seemed agreed that the prime minister is liable to come out of conference stronger than he went in. After that it will depend on what sort of direction he can give his party - and his government.

If nothing else it's time to shine the light on the Tories and their superficial transformation.

David Miliband does that writing on our conference blog. The foreign secretary pours scorn on Lexus Dave's progressive pretentions and insists Labour can win the next election. But it needs to set out a bold vision.

"The Tories now claim to agree with our goals. But David Cameron says that “progressive ends will best be met through conservative means.” And that is the new con, in Cameron’s conservatives. You cannot deliver progressive ends by Tory isolationism from Europe and Tory anti-statism."

In the meantime everyone is looking to see just what Brown's bold vision is.

Ben Davies trained as a journalist after taking most of the 1990s off. Prior to joining the New Statesman he spent five years working as a politics reporter for the BBC News website. He lives in North London.
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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.