Ed Miliband speaks at the Scottish Labour conference on March 21, 2014 in Perth. Photograph: Getty Images.
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Is Ed Miliband a lucky general?

The party's visceral attacks on the Lib Dems show it is staking everything on a majority. 

I think it’s fair to say the latest Labour Party Election Broadcast (PEB) hasn’t received universal acclaim, with folk on all sides asking "what were they thinking of?"

I was fortunate enough to spend some years working side by side with the three partners who formed Lucky Generals, the ad agency that produced the broadcast for Labour. I can tell you that they are creative, accomplished and – most pertinently – highly intelligent individuals. Indeed, one of them has received more awards for advertising effectiveness than anyone else in the business.

So they won’t have produced that PEB on a whim because they thought it would be funny or out of creative indulgence. They’ll have produced it because it will deliver strategically against what they have been told are the Labour Party’s goals. And I think that probably tells us quite a lot about Labour’s 2015 general election strategy. That strategy is, to use a technical term from adland, "shit or bust"; or in political parlance, it’s the 35 per cent strategy.

As the political arithmetic under the constituency boundaries means Labour only needs to poll the 35 per cent it currently polls to win a majority (as opposed to 42 per cent for the Tories), Labour appears to have decided to hold on to what it's got. That PEB is designed to do two things to the Lib Dems. It tells disaffected voters from 2010 who have defected to Labour why they should stick with them. And it puts two fingers up to the Lib Dems in terms of any future coalition negotiations. Despite some evidence to the contrary, it seems Labour really still do resent the "Gordon has to go" red line put down by the Lib Dems in 2010.

But by basically now making it very difficult to see how the Lib Dems can ever now go into a coalition with the party responsible for that ad, Labour is saying "we must win a majority in 2015" – or decide to try and run a minority government.

The latter would probably last until autumn – when after a no confidence vote, the Tories, well-funded, basking in the difficulties thrown up by Labour running a minority government for six months and with a new leader (step forward, Boris) – will streak home again in a second general election. So, it all comes down to – can Labour win a majority at the first time of asking in May 2015?

Lucky Generals is named after the Napoleonic quote - "I have plenty of clever generals but just give me a lucky one". Ed Miliband must hope he is just such a lucky general. But to all those in the Lib Dems railing at the PEB and gnashing their teeth, can I suggest an alternative Napoleonic quote? "Never interrupt your enemy when he is making a mistake."

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

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.