Can Labour learn to love localism?

Miliband must move swiftly to advance his promise to break with his party's centralising habits.

It is symbolic of the last Labour government's severe addiction to centralisation that in a few weeks the party is holding its local government conference for the first time in eight years. By contrast, it was notable that in his underestimated speech at the weekend, Ed Miliband radically committed his party to breaking the centralising habit.

Later, at the same Fabian Society conference, Hilary Benn, the shadow local government secretary, went further, lambasting the "2,000 performance indicators" that Blair and Brown’s government had posted out to Whitehall’s seeming subjects in the country. In a passionate speech, Benn went so far as to suggest that regional development agencies could now never come back. Moreover, he argued, the coalition’s "City Deals" programme, which allows local areas to negotiate the devolution of economic and other powers on a bespoke basis, should be extended to counties and beyond. But three short months from nationwide county council elections, halfway through this government, and with another Spending Review looming, how can "one nation" Labour make such language concrete?

The urge to devolve power is not of course entirely alien to Labour cabinet ministers. Tony Blair created the Welsh Assembly and the Scottish Parliament. As local government secretary, David Miliband began to explore "double devolution" before being moved. John Denham went further, lifting some central regimes and opening up the pernicious Prevent programme, with its tight correlation of Muslim headcount to "Islamic threat".  Since then, the coalition has taken a torch to hundreds of regulations, rules and circulars that defined the Brownite approach to governance.

However, for all the purported successes of the coalition’s City Deals, they have been opposed at crucial moments by the Department for Work and Pensions, the Department for Business, the Department for Transport and the Treasury. This means Labour has to  change the way that it shadows these departments even before it decides on any of their futures. Naming and shaming the centralising instincts of individual ministers might be a start. Indeed, if the Labour leader is to confirm his localising intent, he and Ed Balls, with Jon Cruddas, have to win the argument against mass-produced policy with every shadow minister in advance of the general election, rather than wait and hope that it will all work smoothly when red boxes return.

Labour’s newest MP - and erstwhile leader of Lambeth Council - Steve Reid, is compelling in this regard. In a complex world, he argues, where citizens experience huge variety at work, "on demand" leisure, and where localities compete in myriad ways, the clunky targets of "deliverology" no longer have meaning, if they ever did. So "why not abolish DCLG"? But even this rhetorical radicalism may be cautious given the ongoing resource scarcity that will define future administrative hopes.

If local economic growth and an integrated and innovative approach to making work pay are the future watchwords what is the point of BIS and DWP? Cannot Leeds or Bristol make better strategic choices about their transport needs than the DfT?  And how much additional civic margin could be unlocked in straitened times by reducing the Treasury’s heavy hand, which George Osborne has done little to undermine. It will not be easy for Labour to decide which central government departments it should let go before 2015.

Benn, it transpires, has asked local authorities to let him know "which powers" they want decentralised in order to build enterprise, justice and inclusion when Labour returns to power. Angela Eagle is beginning to move in a similar direction at Transport. Both represent the spirit of Miliband’s Labour, with its fresh attention to building our common life across all our social institutions, rather than imagining their bland and stultifying purpose in technocratic isolation. But similar boldness will need heavy political cover from Labour’s leader and perhaps even a fundamental conversion on the part of Balls, now that he knows is safe in his job.

When Miliband addresses Labour’s local government leaders in a fortnight’s time in Nottingham we will begin to see how his first speech of the year links to the themes he now wants to drive into the heart of the party’s ethos. Having raised the standard of decentralised, participative and socially responsible localism in London, his audience in the East Midlands will listen with anticipation for signs of a further advance. More than most, they will know how much ground  there is to cover if Labour’s newly declared abstinence from extreme centralism is survive any tendency to relapse.

Francis Davis is a fellow at ResPublica and visiting fellow in civic innovation at Portsmouth University business school

Ed Miliband has pledged that the next Labour government will seek to decentralise power. Photograph: Getty Images.
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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.