David Cameron holds a press conference at the end of the two-day European Council summit at the EU headquarters in Brussels on 21 March 2014. Photograph: Getty Images.
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PMQs review: Cameron should be wary of playing to the eurosceptic gallery

The PM's blast against Jean-Claude Juncker delighted his MPs - but he'll let them down in the end.

Today's PMQs was one of those statesmanlike occasions that could be summarised as "Does the prime minister agree with me that the world is a dangerous place?" Ed Miliband devoted all six of his questions to the crisis in Iraq, with no hint of disagreement with Cameron. The PM used the session to announce that humanitarian aid to the country would be increased from £3m to £5m and hit back at the isolationists in his party and others by insisting that Britain would be "playing its role". While declaring that "it would be a mistake to believe that the only answer to these problems is the hard attack of direct intervention", he added: "I'd also disagree with those people who think this is nothing to do with us and if they want to have some sort of extreme Islamist regime in the middle of Iraq, that won't affect us. It will."

In response to Miliband's question on Iran, in which he supported the reopening of the British embassy but warned that the country "does not support a vision for a democratic and inclusive state in Iraq", Cameron replied that the rapprochement with Iran should be done on "a step-by-step basis" and "with a very clear eye and a very hard head" due to the "appalling things" that happened to the British embassy in 2011.

It was an appropriately serious-minded and sober exchange, later unwisely attacked by the Tory Treasury Twitter account, which tweeted: "Another week with no question from Ed Miliband on the economy. No credibility and no #longtermeconomicplan"

The most politically notable moment of the session, aside from Peter Tapsell's quixotic call for parliament to impeach Tony Blair for war crimes, came when Cameron was asked about Jean-Claude Juncker's bid to become EU commission president. After Labour's Ben Bradshaw mockingly asked how his campaign to stop Juncker was going, Cameron seized the opportunity to deliver a eurosceptic blast against the arch-federalist. He declared:

I don't mind how many people on the European Council disagree with me: I will fight this right to the very end. And what I would say to my colleagues on the European Council, many of whom have expressed interesting views about both this principle and this person, if you want reform in Europe you've got to stand up for it. If you want a change in Europe, you've got to vote for it. That is the message I will take and that is the right message for this country.

The Tory backbenches lapped it up, crying "more, more!", but Cameron should be wary of playing to the eurosceptic gallery. If he fails in his bid to block Juncker's candidacy, a significant number of them will view that as a good reason to leave the EU altogether, but he will not. The gap between Cameron, who ultimately believes that EU membership is a positive good for Britain, and the anti-EU fanatics on the Tory benches remains as wide as ever. He should not fall into the trap of trying to appease the unappeasable.

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.