Why the Tories are happy for Clegg to bash them

The Conservatives recognise that a revival in Lib Dem support is crucial to their electoral success.

A slightly unusual thing happened at Deputy Prime Minister's questions today. Nick Clegg had a go at the Tories. This in itself is not as unusual as many readers of The Staggers might think (nor as common as many Lib Dems would like) but what was remarkable was the target. Not a ragtag of Tory backbenchers (though the ever-reliable Peter Bone teed it up for him beautifully), but the Conservative chairman, Grant Shapps. In response to rumours that the Tories think the Lib Dems will do a "cash-for-boundaries" deal, Nick quipped:

I've already read in the press, reports that the chairman of the Conservative Party wishes to strike a deal with us on boundaries in return for a party funding deal. I suppose, Mr Speaker, finally that’s a get rich quick scheme that he’s proud to put his name to!

So, why does Nick suddenly feel able not only to say a confident "no" to proposed Tory policy, like welfare cuts, but also to start openly mocking his cabinet colleagues?

Well, partly it must be irresistible at the moment. Given the list of Conservatives in the cabinet whose position has appeared untenable at various points in the last few months – Jeremy Hunt, Andrew Mitchell, Shapps, and now Justine Greening – it must be like shooting fish in a barrel. And, partly, we are now more than halfway through the current Parliament, and the Richard Reeves positioning strategy moves from Phase A to Phase B (just 30 months too late, but, still, we’re there now).

But it's also because the Tories probably know that the received wisdom that a collapse in the Lib Dem vote benefits them is wrong. As this excellent analysis shows, such an outcome is far more likely to benefit Labour. So, bizarrely, the Tories probably need to allow the Lib Dems to do a little better in the polls if they are to stand any chance of winning a majority at the next election. Therefore, they have to take some poking from their coalition partners with a certain stoicism. It’s a short term loss for a long-term gain.

It also puts Labour in a tight spot strategically – spend the next two years bashing the Lib Dems and there’s far more chance of an electoral reward at the ballot box. But should, having made a lot of enemies in the Lib Dem camp, they fail to get over the line – what then?

For now, the Tories know that, in the absence of the boundary changes, their best hope for electoral success lies in a revival in Lib Dem fortunes. They’re going to have to take a lot more Grant Shapps jokes from their coalition partners in the coming months.

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

Nick Clegg speaks at the Liberal Democrat conference in Brighton last month. 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.