Monday, 26 February 2018

Labour’s Customs Union Shift Could see Corbyn Prime Minister by Summer

The Labour party leader, Jeremy Corbyn, gave a speech in Coventry today, which had been trialled over recent days, confirming that Labour is in favour of the UK being in a custom’s union with the EU, once we leave the organisation. It had become clear weeks ago that Corbyn’s thinking was shifting in this direction.He said he wanted “a new, comprehensive UK-EU customs union” after Brexit.

The move has been welcomed by business representatives the CBI and the Institute of Directors, and even former Tory chancellor, George Osborne. All of the uncertainty caused by the government’s prevarication on what form Brexit should take, has been making businesses worry, and to put off investment decisions because the future export/import regime is so ambiguous.

Corbyn was careful to say that the customs union wouldn’t be the same as the existing one the UK is a member of, but a new ‘bespoke’ one. He said he wanted the UK to have some influence over new EU trade deals, so that if they were judged not to be the Britain’s interest, then they would not apply. 

This might be easier said than done, as it looks suspiciously like the ‘cherry picking’ that the EU has ruled out, but this might depend on what form the customs union exactly is in the end. Emily Thornberry, the shadow foreign secretary, has said that the new customs union would look very similar to the existing one.

Turkey is in the customs union, but not in the EU. The deal means that EU goods are exported tariff free into Turkey, but there are tariffs on Turkish goods imported into the EU. Turkey is allowed to strike trade deals beyond the EU but must obey customs union rules. The deal doesn’t cover all sectors either, farming produce is exempt as are services. So, this kind of approach might not deliver the full benefits we enjoy now, and maybe wouldn’t solve the problem of re-instating a hard border in Ireland.

So, there is still some way to go before we can see this as a good solution to all of the barriers that Brexit throws up. But it is a promising start, in that it does give the EU something to work with, as opposed to the government’s wishful thinking on what the EU will agree to in whatever relationship we end up with once we leave. It does at least offer some hope of a reasonable break with our European partners of 45 years, and is perhaps the outline of a deal.

What is does do though, is that it puts the government, and the prime minister in particular in a difficult position. There are said to be around 20 Tory rebel MPs, who are prepared to vote for an amendment in the Brexit Bill, that would commit the government to staying in a customs union with the EU. This is enough to defeat the government, if all opposition parties vote for the amendment as well, which is what Corbyn appears to have signalled today.

The vote on the amendment should have been in March, but the government has put this back to April or possibly May this year. This is because they know the amendment is likely to be carried, and it gives the government’s whips extra time to work on the rebels.

My money is on the vote being pushed back to after the local authority elections in May, which are expected to be disastrous for the Tories, especially in London. Government thinking may be that the shock of big losses for the Tories will make some of the rebels wary of defeating the government. They will say that it could lead to a general election where Labour triumphs.

It could though be better to get the Brexit amendment vote over and done by the time of the local elections, and so go for April. Either way, these two events could well trigger the fall of the prime minister, and the government as a whole. There is no constitutional reason to hold a general election if the customs union amendment is passed, only if the government loses a vote of no confidence. The Tory rebels may not want to cause a general election, and could vote with the government.

Conversely, the government might make the amendment into a vote of confidence, to try and scare off the rebels. This would be risky indeed, as there is no reason why this should be the case. It would be a self-inflicted defeat by the government, so the rebels may leave them to it. High stakes indeed.

These things though can get a momentum behind them, and if there is huge pressure from the media and public to hold a general election, to ‘clear the air’ around the Brexit process, and it could come as early as June this year.

Bring it on I say, let’s elect a sensible government, that puts the needs of the country first, rather than holding the Tory party together, and keeping Theresa May in Downing Street at the same time. This is a more important matter than party politics and personal political careers.     

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