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Labour’s EU ambiguity – constructive or bewildering?

by Simon Tilford | 07.07.2017

One of the more bewildering things about Britain’s current politics is the spectre of a socially liberal, internationalist Labour Party apparently siding with the English, nationalist right wing of the Conservative Party over Brexit. The Labour leader, Jeremy Corbyn, says Brexit is a settled matter and refuses to condemn the Tories’ policy of taking Britain out of the EU’s single market. What is going on?

There are three ways of explaining how Labour can back a policy that promises to do such damage to the economic well-being of its voters. The first is that the party is ready to subordinate everything to the concerns of Labour MPs in marginal constituencies in the Midlands and the north of England. Many traditional Labour voters in these areas are rightly angry about stagnant wages and poor housing, and believe that immigration is at least partly to blame.

But it is dishonest for Labour MPs to claim they are sticking up for the interests of working class voters by backing Brexit. These regions stand to lose most from Britain leaving the EU as they are the most dependent on trade and investment with the rest of the EU.

The second explanation is that it is just strategic ‘triangulation’. With the government backing a hard Brexit, all Labour needs to do to retain the support of working class voters opposed to freedom of movement and pro-EU voters is to signal that it favours a softer Brexit than the Tories. According to this line of reasoning, Labour has little to gain electorally at this point from coming out against exiting the single market; it will only make sense to do so once Conservative Party unity on the issue has crumbled and popular opinion has turned against Brexit.

Will Britain’s worsening economic situation turn public opinion against Brexit and enable Labour to do a U-turn? That is possible but it is a risky strategy. Because it has joined the government in backing exit from the single market, Labour is unable to hold the Conservatives to account for the damage Brexit is doing to the economy.

The third possible explanation is ideology. For most of the last 30 years Labour was strongly pro-EU, but the party has always included a hard left that sees the EU as a Trojan horse for neo-liberalism. And the party is now led by this wing, which opposes the free movement of goods, services and, especially, capital.

The Labour left resents what it sees as a constraint on its freedom to intervene in the economy – even though plenty of EU member states pursue successful industrial policies of the kind Labour says it wants to introduce.

The Labour Party cannot assume that Remain voters will continue to give it the benefit of the doubt over Brexit. Constructive ambiguity may have worked at June’s general election, but Labour will have to take a stand– and lay the basis for a parliamentary coalition against leaving the single market – if it is to avoid ending up as split over the issue as the Conservatives.

Labour needs voters to make the connection between the coming economic downturn and Brexit. That way it can offer a realistic alternative policy, leading back to growth via single market membership. This requires it to be open about the costs of leaving the single market and to demonstrate to voters that their concerns about freedom of movement can be addressed without Britain leaving the single market.

To this end, Labour needs to be far more radical about addressing the underlying reasons for hostility to free movement of labour: shortage of housing, strained public services and job insecurity. The party could commit to a massive house-building programme by allowing local councils and housing associations to borrow, and by taking aggressive steps to combat land hoarding by private developers. A big programme of infrastructure investment in the Midlands and North would do much to reassure people in these regions that they had not been forgotten.

Less progressive perhaps, but politically salient, would be a drive to tighten up Britain’s labour market regulation and enforce EU rules more rigorously. Britain could raise the level of qualifications workers need to do certain jobs, such as in construction, and beef up enforcement of the minimum wage. It could use existing flexibility with EU law to crack down on EU migrants who do not have jobs and cannot support themselves. The UK authorities could vigilantly enforce EU rules such as the agency workers’ directives and join French calls for reform of the posted workers’ directive, which allows foreign workers to avoid tax and social security contributions for limited periods of time.

Some combination of these measures could help to address the perceived unfairness of freedom of movement without inflicting huge damage on the economy. And by taking some of the steps at its disposal, Britain might well gain a more sympathetic hearing from the EU for its call for an emergency brake on immigration.

Labour’s current policy of constructive ambiguity on Brexit is not the win-win approach its advocates claim. The party leadership needs to make the case for single market membership and demonstrate what can be done to address the concerns about freedom of movement while remaining within the single market. If it does not, it will struggle to show that it has a better solution to the economic downturn caused by Brexit than the Tories have, and risks ending up as divided as its opponents.

Simon Tilford is deputy director of the Centre for European Reform. The full version of this article can be found at www.cer.eu/

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Edited by Alan Wheatley

4 Responses to “Labour’s EU ambiguity – constructive or bewildering?”

  • One salient feature of Corbyn’s stance on Brexit is his wish to give state aid to British firms, which includes his plans for renationalisation. This falls foul of EU competition policy. I think all the other considerations are secondary to this.

  • Not so sure I support this pessimism.

    A little earthquake happened today, and no one seems to have noticed it yet.

    On Wednesday, the CBI, at its annual bash, declared that the UK MUST stay in the Single Market, the Customs Union and accept the rulings of the ECJ until any new trade agreements are agreed.

    Fine.

    But this means accepting everything that goes with EU membership except the rapidly vanishing rhetoric of the Brexit Brigade and as no such comprehensive trade agreements won’t come about until the end of our solar system, this approach, if agreed by government, would mean the whole nasty dream of the last year has lifted.

    So what’s the real earthquake and the good news ?

    This.
    In a press release sent out by Labour HQ today, Keir Starmer said the following (and I quote via copy and paste)

    “Theresa May’s Brexit strategy risks a cliff-edge for the economy and is a threat to jobs and investment” – Starmer

    Keir Starmer MP, Labour’s Shadow Secretary of State for Exiting the EU, commenting on the CBI Director-General Carolyn Fairbairn’s speech on Brexit said:

    “Today’s speech from the CBI underlines what Labour has been saying for months: that Theresa May’s Brexit strategy risks a cliff-edge for the economy and is a threat to jobs and investment.
    “Labour agree that we need an early commitment to ensure strong transitional arrangements, and that these should be on similar terms to those we currently enjoy. Without that commitment, and without a bridge to new trading arrangements with the EU, there will be growing uncertainty for businesses and investment decisions will be delayed.
    “Labour are clear that jobs and the economy must come first in the Brexit negotiations. It is time the Prime Minister and the Brexit Secretary listened to the growing concerns from businesses and the Treasury and changed their reckless approach.”

    Although ultra coded, it is clear what he is saying, and the broadsheets are already beginning to interpret it that way. This time next year Labur could be the Government. A welcome development.

  • Agreed.

    Presumably the WTO would not be particularly happy with widespread state aid either. The UK hard left are anti-trade and want to focus on the UK working class. The poor in China and India etc is not a priority for them and they don’t see any problem in shutting our imports from low income countries.

    In fact, they feel morally justified in doing so – arguing that they are shutting out goods made by ‘exploited’ workers. The likes of Corby and his ilk are what I call ‘iso-nationalists’ i.e. have an anti-trade outlook and want to ‘focus on our own (mainly white) UK poor’. This nationalistic viewpoint allows them to share a bed with the far right.

    • A really interesting comment… and actually spot on…
      I also suspect the fact that Kier Starmer has released the statement tat he has as an official response is indicative that the far left of the party are going to have to trim their cloth