Shouldn't Justine Greening resign over the West Coast fiasco?

The former Transport Secetary described the bidding as a "fair and well established process".

So, when did David Cameron know about the West Coast Main Line contract debacle? I only ask because normally the Secretary of State responsible for a major tender like this would be considering their position. In response to loud and vociferous complaints, the individual in question described the bidding as a "fair and well established process", and only opened an inquiry into the process after a threat of legal action from one of the bidders - an inquiry which concluded that "regrettable and completely unacceptable mistakes" had been made by the Transport Department.

Add in the £40m compensation it is estimated that we, the taxpayer, will have to pay to the losing bidders, plus the questions it raises over the award of every other rail tender – and normally that Secretary of State would face the prospect of "more time with their family" right now. But that hasn’t happened because the Secretary of State in charge of the department while this fiasco was going on was moved in the reshuffle.

I always wondered about the ‘too opposed to Heathrow’ excuse that was given for moving Justine Greening. Firstly, she was the MP for Putney and her views on the third runway were well known before Cameron put her in Transport. To move her just 11 months later over Heathrow would actually suggest a complete political misjudgement in the first place. Secondly, Greening had stuck rigidly to the official Tory line on Heathrow – no change in view before 2015.  She said nothing about after 2015 - that’s a dangerous line to try and hold in West London. Sacking her for that was harsh, to put it mildly. And while the new Secretary of State for Transport describes himself as neutral on a third runway, the new transport minister, Simon Burns, has said: "Just as I am opposed to a second runway at Stansted, I am equally opposed to a third runway at Heathrow. This is environmental vandalism and will dramatically increase our carbon dioxide emission levels. The government should be encouraging better use of regional airports rather than concentrating on travel around London".

All of which suggests either Cameron cocked up his evil plans once again or that Heathrow wasn’t the main reason for moving Greening out.

Which takes me back to the original question. When did Cameron know about this debacle? And did it have anything to do with moving Greening? And I’d add a third question – isn’t there a case for her resigning over this fiasco anyway?

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

Justine Greening was moved from Transport to International Development in last month's cabinet reshuffle. 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.