Cameron was foolish to disregard the Lib Dems

The PM put his party before the coalition and the Lib Dems will punish him for it.

So, now it’s war.

As the reshuffle unfolded, my timeline was full of fellow Lib Dems asking "Is Cameron actively trying to piss us off?" And frequently it did feel like that. But of course the truth is, Cameron wasn’t really bothered what we thought. That wasn’t what this reshuffle was about. Neither was it really about a strategy to win the next general election - a lurch to the right seems unlikely to hoover up enough votes from UKIP to compensate for the seats the Tories would have won if the boundary changes had gone through.

No, this reshuffle was all about Cameron making sure he was still leading the party at the next election. He can’t afford to think much further than that, so weak is his position currently. He had to appease his backbenchers. And it may have worked for now – although how his stomach must have churned when he heard Nadine saying how much she liked the reshuffle.

But it is a very short term strategy. Yes, promoting the Patersons, Graylings and Hunts of this world may have secured Cameron’s position for a while longer. But just how angry will those same backbenchers be when they still can’t get their favourite policies through. Because it wasn’t Cameron stopping them having their way before. It was the Lib Dems.

There’ll be no third runway at Heathrow. There’ll be no tearing up of the Greenbelt. Even with no Ministers in the MoD (odd move that, Nick) there’ll be no Trident. I doubt if Norman Lamb will allow Jeremy Hunt to introduce his favourite homeopathy treatments into the NHS. There’s going to be a lot of crossed arms, shaking of heads, and great big "no’s". And however good a Chief Whip Andrew Mitchell may turn out to be, that won’t be much cop if the MPs standing in the way are in a different party. Cameron may have decided not to think about the Lib Dems when he reshuffled merrily away yesterday. But it was a foolish decision.

So while Cameron’s cabinet changes may allow him to empathise with his recalcitrant backbenchers for a while, soon the old frustrations will bubble up again. Because he hasn’t solved his real problem. He didn’t win the last general election. And sooner (if the Lib Dems can help it) or later they’ll punish him for it.

Richard Morris blogs at A View From Ham Common, which was named Best New Blog at the 2011 Liberal Democrat Conference.

It wasn't Cameron stopping the right from having its way. It was the Lib Dems. Photograph: Getty Images.

Richard Morris blogs at A View From Ham Common, which was named Best New Blog at the 2011 Lib Dem Conference

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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.