Labour and Unite at war: McCluskey accuses party HQ of a "stitch-up"

The Unite general secretary hits back after Labour announces the end of the "union join" scheme and suspends Unite candidate Karie Murphy from the party.

After weeks of criticism over Unite's alleged manipulation of the Falkirk selection process, culminating in the resignation of Tom Watson earlier today, the Labour machine has swung into action tonight. The party has announced the end of the "union join" scheme, which allowed trade unions to pay the first year's subscriptions of party members they recruited, and has suspended Karie Murphy, the Unite-backed candidate in Falkirk, and Stephen Deans, the chair of Falkirk CLP, from the party. Here's the full statement:

“We announced on 26th June that the General Secretary was going to review membership procedures.

“Ed Miliband is determined to uphold the integrity of Parliamentary selections and, therefore, as a result of that review we have several more measures to announce today.

In the light of the activities of Unite in Falkirk we will end the ‘union join’ scheme.

“Union join was established before Ed Miliband became Leader of the Labour Party with the aim of legitimately encouraging ordinary members of trade unions to become members of the Labour Party.

“However, due to the results of Unite in Falkirk it has become open to abuse but also open to attacks from our opponents that damage Labour. 

“In particular it was a mistake to have a scheme where others pay for people to join the party. Ed Miliband has today ended the scheme. Ordinary members of trade unions should join Labour and they will continue to be encouraged to do so, but that cannot be through schemes that can be tied to individual parliamentary selections or open to attack from our opponents.

“We have also suspended two members of the Labour Party from holding office or representing the Labour Party.

“They are: Karie Murphy and Stephen Deans who is the chair of Falkirk CLP.

“There have been allegations that they may have been involved in a breach of Labour Party rules. These relate to allegations concerning potential abuse of membership rules.

“The administrative suspension means that you cannot attend any party meetings and that they cannot be considered for selection as a candidate to represent the Labour Party at an election at any level.”

In a letter to Labour general secretary Iain McNicol this evening, Len McCluskey has responded by accusing the party HQ of a "stitch-up" and demanding an independent inquiry into the Falkirk affair. Here's his letter in full:

"Simply a ‘stitch-up’ [the report] designed to produce some evidence, however threadbare, to justify predetermined decisions taken in relation to Falkirk CLP. 

"Even on the basis of this flimsy report, it is clear that these decisions cannot be justified. There is no emergency which would justify imposing these undemocratic restrictions, since any real problems could easily be addressed before embarking on a parliamentary selection process. 

"The report has been used to smear Unite and its members. Even if the allegations of people being signed up to the party without their knowledge were true, this had nothing whatsoever to do with my union. 
  
"It is noteworthy that members of the shadow cabinet have been in the lead in initiating this attack upon Unite. Have they had sight of this report while I, the leader of the union put in the frame, has not had the courtesy of a copy? 

"The mishandling of this investigation has been a disgrace. I, however, am obliged to uphold the integrity of Unite, and I can no longer do so on the basis of going along with the activities of a Labour party administration in which I can place no trust. 

"I will therefore be publicly proposing that an independent inquiry be held into all circumstances relating to Falkirk CLP and the conduct of all parties involved, including Unite, the Labour party centrally (including the Compliance Unit) and in Scotland, the officers of the CLP itself, and all those who have sought or are seeking nomination as the Labour PPC. 
  
"Unite will cooperate fully with such an inquiry, and draw appropriate conclusions from any findings regarding our own behaviour. I trust that you will support such an inquiry, will direct all Labour party employees to cooperate with it and encourage other individuals to do likewise." 

Unite general secretary Len McCluskey. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

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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.