Mehdi Hasan asks: Should social democrats mourn the departure of Chris Huhne?

The ex-Energy Secretary isn't exactly the lefty he's made out to be.

So Chris Huhne has gone off to defend his innocence in court. Arise Ed Davey!

If the former Energy and Climate Change Secretary is found innocent, will he become a lightning rod for left-wing, anti-coalition dissent on the Lib Dem backbenches? Much is made, for example, of his SDP past.

I was on BBC2's Daily Politics earlier discussing the fallout from the resignation, and host Andrew Neil made the same point on air that he'd made earlier on Twitter:

Clegg's nightmare: Huhne found innocent and rises from backbenches to lead social democrat wing of Lib Dems

It's a point also made by Benjamin Ramm, editor of the centre-left Liberal magazine:

Chris Huhne should not be underestimated: he remains a key figure in the party. Huhne successfully portrayed himself as an outsider, playing on his SDP background to appeal to the Left of the party - despite being a contributor to the Orange Book - and has made it known that he would have favoured a Lib-Lab coalition.

I'm not sure I buy this. Some points to consider:

1) Huhne, a multimillionaire ex-employee of the ratings agency, Fitch, was a contributor to the notorious Orange Book and is believed to have only adopted a leftist stance to try and justify his "insurgent" campaign for the Lib Dem leadership, up against the "Establishment" and centre-right candidate Nick Clegg, in 2007.

2) Huhne spent a great deal of time in the run-up to the 2010 general election briefing journalists that a deal with the Conservatives - whether confidence-and-supply or full coalition - was not out of the question and something he'd be happy to support.

3) Huhne, as David Cameron acknowledged in his response to the former's resignation letter this morning, was one of the lead negotiators on the Lib Dem side during the coalition negotiations in May 2010 and, thus, one of the architects of the subsequent, right-wing Con-Dem coalition.

4) One of the Labour negotiators told me once that he was "shocked" at how hostile Huhne had seemed towards a coalition deal with the Labour Party and how he'd walked into the negotiating room calling for Tory-style in-year spending cuts - in direct contradiction to the Lib Dems' own pre-election position on the timing of austerity measures.

5) In August 2010, it was Huhne who was put up by the Lib Dems alongside Tory chairman Sayeeda Warsi in the coalition's first, joint, party-political press conference. Huhne (falsely) claimed that Labour overspending, rather than a collapse in taxation, had been the cause of the record budget deficit and then nodded along as Warsi bizarrely accused Labour politicians of "illegal" and "criminal" behaviour over their handling of the economy.

6) Huhne voted for every single one of the coalition's "regressive" cuts to spending on public services, infrastructure and the welfare state over the past 21 months. As Labour peer Helena Kennedy told him on Question Time in June 2010: "You are providing the sheep's clothing for a very rapacious government that is going to cut spending." On the same show, Labour's Peter Hain rightly castigated the then Energy Secretary for trying to draw a (false) comparison between the British and Greek economies: "No serious economic commentator, and you used to be one before you got into government, believes our economy is anything like Greece."

Then again, having said all of this, I have to also admit that there was no one else in Cabinet who stood up to Cameron and Osborne in the way that Huhne did - over, for example, the negative Tory campaign during the AV referendum and over the Tories' links withe City - which is why the Cameroons won't be sad to see the back of him. Plus, given the size of his ego and his ambition, an innocent, revitalised Huhne could just choose to attack the coalition from the backbenches, and from the left, in order to further his own career, regardless of the fact that his recent record suggests he isn't a lefty. But my own suspicion is that his political career is over.

Mehdi Hasan is a contributing writer for the New Statesman and the co-author of Ed: The Milibands and the Making of a Labour Leader. He was the New Statesman's senior editor (politics) from 2009-12.

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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.