Iain Duncan Smith has had to defend the progress of Universal Credit. Photo: Getty
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That families can only just claim Universal Credit shows how disastrous it has been

The government’s reformed benefit programme is being rolled out to parents in the northwest today, revealing its slow progress.

Iain Duncan Smith, the Work and Pensions Secretary, has extended his “revolutionary” reformed welfare programme to some families in Britain for the first time today. The fact that parents, and initially just in parts of the northwest, are only just able to claim Universal Credit shows how much of a disaster the scheme’s implementation has been.

The term "Universal Credit" has quickly become a byword for government incompetence, IT failure, missed deadlines, and over-promising ministers, as it has encountered obstacle after obstacle, and been severely delayed as a result.

Although the problems with the scheme are well-known now, it is worth pointing out that this intended “revolution” in welfare distribution has been watered down to a very slow evolution. As the BBC reports, tens of millions of pounds had to be written off due to technical problems with the IT programme and also, according to reports, only 20,000 people are claiming it, rather than the 1m envisaged for this time by the DWP. Though Duncan Smith on the BBC’s Today programme this morning insisted that the number of people claiming is actually 40,000, this is still significantly lower than what was once the target.

The people already enrolled on the Universal Credit scheme so far have been single people and couples with no housing costs or family, ie. the simplest demographic to which to provide welfare, due to it being the least complicated in terms of the benefits it claims. Universal Credit prides itself on “simplifying” welfare provision by combining six existing benefits into one, so the focus so far on the least complicated claimants shows it is only very tentatively being rolled out.

On Today, Duncan Smith refused to accept that his scheme had so far only been targeting the “low-hanging fruit” of benefits claimants, saying, “we have deliberately set out to roll it out so each individual bit is tested… we’re now doing families. This is being deliberately done like this.

“It’s about making sure people can cope as they go into work, they can stay in work… If we do it carefully, and land it safely, they’re far better off.”

When asked about the ultimate deadline, due to the targets consistently having been revised down over the years, he said “it starts rolling out nationally from next year” and that rather than the original deadline of the bulk of people being on it by “approximately the end of 2017”, “we should have everybody on it by 2019”. He admitted that the initial deadline had been “artificial in the first place”.

Anoosh Chakelian is deputy web editor at 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.