PMQs sketch: Cameron gets pulled back into the doldrums

Miliband decided to split the torture in two today.

One of the great mysteries of modern politics is how the leader of the Labour Party manages to smuggle a sharp pointy stick past Commons security every week to poke the Prime Minister. Ed produced it with his usual flourish just after noon today and proceeded to chase Dave around the dispatch box for the 30 minutes of the fun known to regulars as Prime Minister's Questions.

We all know the PM has been in the doldrums since the Chancellor produced THAT budget six months ago, but each week he hopes to recover. In fact, so good, relatively speaking, were last week's economic indicators that he had high hopes this would be his week. But such is the disarray within Tory ranks the every time he thinks he's about to climb out of the smelly stuff one of his own pulls him back in again.

You could tell treachery was afoot by the volume of support he got from his own side during today's spat with Ed Miliband over that most unifying of party policies - Europe. The latest row is over a planned increase in the EU budget, which has Tory sceptics snarling and ready to force a vote this evening demanding it be cut instead. Spotting this passing bandwagon, Labour climbed on board leaving Dave, as Ed was happy to point out, with only his embarrassment to keep him warm.

With Ed and his cohorts ready to join Tory rebels in the lobby this evening, the sound of support for the PM from those who intend to vote against him doubled in decibels, leading Speaker Bercow to call for calm. But there was even more pleasure on the opposition benches as the Speaker took his own opportunity to remind Dave that PMQs were not questions from the PM but for him."I've told him ten times," he said as Dave slumped in his seat.

Normally, Ed takes his full six questions to turn the screw as tightly as possible on the PM, who seems to have abandoned any attempt to hang on to his temper. But he decided to split the torture in two today, leaving Dave sweating over the second bout as he paid lip service to MPs whose questions filled the gap. To Labour's great pleasure, the day had begun with another clash between the coalition partners over energy policy. Just last week, the Lib Dem Energy Secretary, Ed Davey, had gone into a major sulk when Dave announced plans for energy companies to give everyone the lowest tariffs - although he didn't really mean it. 

Well, Davey had his bottom lip way out again today when one of his Tory juniors appeared to announce the end of the Lib Dem plan for renewable supplies by sticking a wind farm on every street corner. What was the policy, demanded Miliband, and none of your business was the reply. But even Dave knew this was merely another pre-lunch taster on the way to the main course.

Six months ago, when Chancellor George was still in the game, he commissioned Michael Heseltine to take a look at the economy in a move intended to demonstrate his confidence in criticism. And so it was with some pleasure that Miliband read out this paragraph from Lord Hezza's conclusions: "The message I keep hearing is that the the UK does not have a strategy for growth and wealth creation."

George stared off into the space reserved for those who have uttered the immortal phrase, "beam me up Scotty", only to find out it does not work. By now, the volume button had been turned up so high that the Speaker uttered the dire warning that if it continued they would be kept back after class. The thought of being late for lunch clearly worked, and MPs headed off to work out how to vote on Europe later. Dave looked like someone planning a sandwich at his desk.

David Cameron poses on the door of number 10 Downing Street after buying his remembrance poppy from army officers. Photograph: Getty Images.

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.