PMQs sketch: Vince on the naughty step

From the far end of the House, Cable peered up the bench at "the quad" on the budget issue.

The secretary of state for business, innovation and skills, the Right Honourable Dr John Vincent Cable, was back where he belonged today: on the Government's naughty step.

He had gone to ground last night after a day of pre-budget mischief-making but was forced back out into the open as MPs gathered for prime ministers' questions. It is here that the choreography of the coalition can be studied as positioning on the government front bench is as eagerly studied as Sir Alex Ferguson's Saturday team sheet.

There is a spot well down the bench where those out of favour with Number 10 and its power brokers can skulk - either happily because they are close enough to the exit to bolt or sadly because they are on the way out.

Both options applied to Health Secretary Andrew Lansley who recently set a coalition record for occupying it. Indeed, some thought he had been there long enough to claim squatters' rights.

But Vince, who had already spent several PMQs there, was never likely to give it up for long, and in making his return yesterday, allowed a grateful health secretary the opportunity to at last find a quiet corner to hide in. The relief of knowing in advance that the naughty step was already booked for the session was obvious on the faces of other serial offenders like Justice Secretary Ken Clarke, whose own chances of an early return cannot have been hurt by Liberal Democrats pronouncing him "one of us".

But Vince's decision yesterday to confirm recently written doubts about the government's lack of strategic direction on growth two weeks before the budget made him the naughty step's obvious occupant.

You could tell just how much trouble he was in by the placing of Eric Pickles, the man who gives a whole new meaning to the phrase "cabinet heavyweight", right next to him.

Vince adopted a scowl so redolent of those figures carved in stone above the doors of the Minster in York, the town of his birth, that you would think the original masons must have met his ancestors. But it is more likely tied to his exclusion from the main decision making over the budget and its effects. He believes he should be part of both because of his present job and his experience as a working economist.

Instead he could only peer up the bench in the direction of "the quad", the Coalition's own Gang of Four, who have reserved the right to sort out the way ahead.

Apart from the Prime Minister and the Chancellor, Vince has had to swallow his leader and Deputy PM Nick Clegg as a member, not to mention Danny Alexander who had been sent out to buy some sweets and came back as chief secretary to the Treasury.

Indeed PMQs had hardly begun before Dave was asked if he shared Vince's doubts about the government's direction of travel. The PM said no, but all eyes switched to Chancellor George, following reports that the two previous best buddies were presently using separate song sheets. From mansion tax to child credits, scrapping the 50p income tax rate to squeezing pension benefits for the better off, the Tory side of the coalition equation have found themselves with the dilemma of working out which group of their own supporters to hit most.

This was not lost on the usually raucous ranks of the recidivist wing of the party who were significantly quieter during the interchanges.

All of which made life easier for Ed Miliband as he perfected his Dave technique by calmly asking the PM questions about the detail of government policy, a subject on which he does not have a GCSE.

Ed first pleased his own side by asking what message Dave had for someone about to lose all his tax credits unless he finds extra work at a time of record unemployment. Then he added to Tory discomfort by asking what message he had for those among the squeezed middle about to lose child benefits.

The Tory side was ominously quiet as the Prime Minister said life was about difficult decisions.

As Vince prepared to escape from the overhang that is Eric Pickles, nominations for next week's naughty step were already flooding in with the field being led by Tory MP Nadine Norries.

Sadly, Nadine does not qualify, as she is not on the front bench and, following an intervention in the FT yesterday, it is up to the reader to calculate her chances as the PM was asked for his comments on the following:

"The problem is that policy is being run by two public schoolboys who don't know what it's like to go to the supermarket and have to put things back on the shelves because they can't afford it for their children's lunchboxes. What's worse, they don't care either."

Vince almost smiled.

Peter McHugh is the former Director of Programmes at GMTV and Chief Executive Officer of Quiddity Productions

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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.