Michael Gove arrives at Downing Street ahead of the weekly cabinet meeting on February 4 2014. Photograph: Getty Images.
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Free schools have become a bad news story for the Tories

The combined attacks by the Lib Dems and Labour are further weakening public support for Gove's project. 

After David Laws's thinly-disguised sally against Michael Gove at the weekend, today brings fire from another wing of the government. The Guardian reports that the Treasury (or at least the yellow half of it) has ordered Gove to bring the budget for free schools "back under control". This after he was accused of raiding £400m from the Basic Needs budget for primary school places to fund his flagship programme. Once viewed as the height of Tory-Lib Dem cooperation, education has become a central point of antagonism.

The row over funding is the third significant disagreement between the coalition parties in this area in recent months. Last October, Nick Clegg denounced Gove as an ideologue for allowing the permanent use of unqualified teachers in free schools and academies (coinciding with the row over the Al-Madinah institution). Then in February, Laws argued that Ofsted should be given new powers to inspect academy chains having criticised the Education Secretary's decision to dismiss Labour peer Sally Morgan as the organisation's head. Now, concerned by the continuing primary school places crisis, the Lib Dems question Gove's funding priorities. 

The result is that free schools, regarded by many Tories as the coalition's greatest achievement, have become a bad news story for the government. When the coalition was first formed, Labour frequently complained about the "two-against-one" dynamic that saw the Conservatives and the Lib Dems unite to trash their economic record. In the case of education, the same force is now pulling against the Tories. Both Labour and the Lib Dems argue for an end to the use of unqualified teachers in state schools, for tougher inspections of academies and for the government to prioritise funding of new primary school places, rather than new free schools (a significant number of which open in areas with a surplus of places). 

Free schools have never been as popular as their admirers in Westminster assume. A recent YouGov survey for the Times found that just 27 per cent support them, with 47 per cent opposed. Sixty six per cent agree with Labour and the Lib Dems that the schools should only be able to employ qualified teachers and 56 per cent believe the national curriculum should be compulsory for all institutions. On the ground, parents are voting with their feet. Research by Labour found that just 49 (28 per cent) of the 174 free schools opened since 2011 reached their capacity for first year intake. 

It would be one thing to lavish state funding on free schools were there an overall surplus of places. But it is another when an extra 240,000 primary school places are needed by this September merely to keep pace with the birth rate. Yet at present, a third of free schools are located in areas without a shortage of places. 

Gove's defence is that the schools offer parents choice in areas where there may no be shortage of places but there is a lack of good schools. As he said last year: "We have more than doubled funding for new school places and we are also setting up great new free schools, which are giving parents a choice of high quality school places in areas Labour neglected". The Department for Education emphasises that it has provided an additional £5bn to councils to create new places, double the amount spent by the last government over the same period. 

But it is far from clear that this will prove sufficient. As Conservative councillor David Simmonds, an executive member of the Local Government Association, has warned, "the process of opening up much-needed schools is being impaired by a one-size-fits-all approach and in some cases by the presumption in favour of free schools and academies." Both Labour and the Lib Dems agree, encouraging voters to do likewise. Just as the economy is coming for the right for the Tories, it seems that education is going wrong. 

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.