What the Lib Dems need to do to get back on track in 2013

Stopping the worst excesses of the Tories is not enough. The party needs radical new policies.

We’re bumping along in the polls at around 10 per cent, we have the most unpopular leader of all the major political parties, and in the last three Westminster by-elections we came third, fifth and eighth, losing our deposits in two of the three campaigns. You might think the Lib Dems go into 2013 with a large black cloud hanging overhead and an awful sense of impending doom. You’d be wrong.

The grassroots are surprisingly chipper. In the most recent Lib Dem Voice survey (fieldwork just before Christmas), 77 per cent of respondents said they continued to support the party being in coalition, 61 per cent said they thought the party was on the right course, and (hold onto your hats) 58 per cent said they were either "very satisfied" or "satisfied" with Nick’s leadership.

How come? Well, partly it’s the Pollyanna lurking inside every Lib Dem. Doing less than spectacularly in mid-term polls is the default expectation for most grassroots members (even if by-election disaster after disaster is something of a novelty), so this doesn’t feel like particularly alien territory for most folk. It’s also true when you look at local election results – and when we think about the 2015 general election, we think of it at a local level – we’ve done rather better in 2013 than most people realise.

And many in the party genuinely look at the good things the Lib Dems have achieved in government – 2 million out of income tax altogether, the pupil premium, Green Investment Bank et al – and think actually, for doing all that, unpopularity is a price worth paying. And that’s a fair point. But I can’t help but feel the party may have listened to the Prime Minister’s call for the country to approach 2013 with a sense of realism and optimism a tad too literally.

So here’s my two pennies' worth for the next 12 months if the Lib Dems are going to get back on electoral track.

We have a ‘new’ positioning of the party as the only repository of both economic competence and social justice. Of course, it’s not new– Nick announced it at conference in September 2011. But it’s not really stuck has it? Might I suggest that this may have something to do with the fact that demonstrating economic competence during the worst economic malaise for 80 plus years is quite tricky? Ditto social fairness, when the last government before you has spent all the money, and you’ve got your coalition partners introducing a benefit cap and apparently encouraging words like ‘feckless’ and ‘workshy’ to be bandied about.

So if that’s the strategy, fine – but we’ll need some rather better communications to get it resonating than we’ve managed to date. Might I suggest ditching the HQ line of ‘the Lib Dems are working to build a stronger economy in a fairer society, enabling every person to get on in life’ for the rather snappier ‘Lib Dems represent the head and the heart’. Folk might actually remember that.

And while stopping the worst excesses of the Tories is as important as ever – the snoopers' charter being just a starter – that won’t be enough. Neither will shouting ‘well, what would you do then?’ on a continuous loop at the Labour Party. We need some new, exciting policy initiatives of our own. Our newly elected federal policy committee needs not just to be thinking about the general election manifesto for 2015. It need to be presenting conference very quickly with some radical new thinking for debate and agreement. And then we need to be presenting it to the country.

As a party, we spent too long on our non-differentiation strategy with our coalition ‘partners’ – and we are now similarly in danger of thinking that if we shout at the Tories about how awful they are for the next 30 months, all will be right in the world. It won’t. We have 12 months to show the country we are still the radical, reforming and creative political party the members all joined. And if we do that, combined with our record to date, we’ve got a half a chance.

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

Nick Clegg delivers a speech to the Centre Forum at The Commonwealth Club on December 17, 2012 in London. 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.