Expert View

As Tories Fall out Over Brexit Labour Gives Helping Hand

by Denis MacShane | 24.07.2017

What summer mosquito has bitten Labour? As government ministers and Tory MPs are in almost open warfare on Brexit and the hardline Brexit cabinet members like Michael Gove and Liam now admit that freedom of movement will have to be maintained well after the cut-off date on 29 March 2019 up pops Jeremy Corbyn to tell the BBC’s Andrew Marr that come what may Labour is committed to leaving the Single Market.

With the clear possibility of the next general election seeing a win for Labour as Mrs May has less purchase on power than Ted Heath in 1974 or John Major in 1997, Corbyn is flashing a signal to every foreign investor that if Labour were to win there would no longer be full unfettered access to the world’s largest single market of 450 million mostly well-off consumers.

For London’s Mayor Sadiq Khan watching the daily reports of re-locations of thousands of tax-paying jobs from the capital’s foreign finance houses to Frankfurt, Dublin and elsewhere, and now move of the $7 billion US MarketAxess bond trading platform to Amsterdam, it must be beyond belief that his party leader can  say such things so blithely. Doing so is to condemn London to becoming a smaller, poorer city that is less and less attractive to world money which has its pick of more pro-business cities to choose from, as well as to discourage global manufacturing firms from adding to their big investments in Labour’s heartlands of the Midlands and North-East.

Corbyn said that to stay in the single market meant staying in the EU. Several Labour MPs have pointed out that Norway and other European Economic Area member states are in the single market but are not signatories to EU Treaties and can stay out of collective policies such as those on fisheries and agriculture as well as the customs union.

It does seem bizarre that none of the Islington coterie of lawyers who control Labour’s European policy seem to know how the EU works. Here, so that they can inform themselves during their summer holidays, is a helpful guide provided by the European Free Trade Area, which Britain happened to help found in 1960:

Corbyn did at least say that there was no Labour decision on customs union membership.  Staying in the EU customs union would be the only guarantee of keeping an open border in Northern Ireland and not reverting to customs-clearance control on the more than 2 million lorries, vans and cars that use 200 roads to cross between the UK and the EU member state Ireland every month.

But then up pops Labour’s shadow trade secretary, Barry Gardiner, to declare on BBC Radio 4’s Westminster Hour that for Labour “You leave the customs union because only member states of the European Union are members of the customs union.” Turkey is de facto a member of the EU customs union (apart from agriculture) and again Labour’s ignorance of how the EU works is worrying.

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Gardiner dismissed EEA membership even though 49 Labour MPs backed a Commons amendment urging the UK to look at the “Norway model” of being out of the EU but in the EEA. But in an extraordinary statement Gardiner said “To adopt the Norwegian situation would be to become a vassal state.” It is not clear how Norway’s sister party – also called the Labour Party – will react to their nation being described as a “vassal” state.

Gardiner is right that Norway has to abide by EU rules including freedom of movement, has to incorporate amendments to single-market law into Norwegian law, and has to pay contributions into the EU budget. But there is a large consensus in Norway that this is preferable to seeking to hinder economic and trade contact with Europe, which Corbyn’s single market policy and Gardiner’s custom union policy would entail.

Thus MPs of both main parties go off for their long summer break offering no clarity to the nation on a way forward out of the Brexit imbroglio. For the many Labour MPs and councillors hoping to see their party, not just the Lib Dems, become the voice of common sense on Europe this is an unhappy, disappointing development after the exuberance of seeing Theresa May humiliated in her June 8th election.

Denis MacShane is a former UK Minister of Europe and former Labour MP. His new book “Brexit, No Exit. Why (in the End) Britain Won’t Leave Europe” has just been published by IB Tauris.

Edited by Bill Emmott

5 Responses to “As Tories Fall out Over Brexit Labour Gives Helping Hand”

  • To be fair to Barry Gardiner he did mention Turkey in his second sentance (which you did not quote). It seems he understands a bit more about how the EU works than most of the front bench.

    Full quote is

    “I just want to point out the issues around the customs union, we leave the customs union because only member states of the European Union are members of the customs union.

    “Other countries like Turkey have a separate customs union agreement, but the trouble with that is that it gives you an asymmetrical relationship with the third party countries that the EU does a deal with.

    “So the EU could do a deal with another country – let’s say America – which we would be bound by in the UK, we would have to accept the liberalisation of our markets, we would have to accept their goods coming into our markets on the terms agreed by Europe which could be prejudicial to us but we would not have the same access into America’s markets, we would be bound to try and negotiate it but why would America give us that access when it’s got all the liberalisation of our market that it wants.

    “It’s a disaster.”

  • Not one of InFacts best articles! I heard Barry, who was very clued up. I also heard the Norwegian PM last year advising the UK not to adopt their solution, where you have to obey the rules but have no say in them. That sounds like ‘vassaldom’ to me.

  • Gardiner merely exposed the paucity of the Labour leadership’s thinking. It is true that all non-EU positions are inferior to EU membership, and yet Labour’s leadership tall in meaningless pieties about a pro Jobs Brexit – when they should know that the best pro Jobs position is staying in.

    No, Jezza and his gang are all hard Brexiteers though they can’t explain why. It is shameful that they are enabling a hard right Tory Government – may history judge them very harshly.

  • What hope is there that pro-EU and more level headed Labour party members will be ale to challenge this policy (or lack of) at conference? After all, most unions are pro single market and customs unions.