What do we know about Brexit and what should Labour do?

Apologies for a long post. Its that bloomin’ Brexit again! I should state a view from the outset. The starting point is Britain’s place in a world dominated by international corporations and a global financial elite, trade blocs and regional powers. Britain has neither empire, nor commonwealth, nor special relationship with the USA to rely on. It might strike out on an independent socialist path but, given the international context, socialism in one backward country in 1917 probably had rather better prospects. If the present world order falls apart anyway – and it might – Britain would find itself fighting the other cats in the sack as it sinks to the bottom. The inescapable conclusion is that the battle socialists want to fight against capital and for economic democracy should, if possible, be fought in Europe rather than outside.

Having said that, what do we think we know about Brexit?

  • A small majority voted in favour of leaving the EU;
  • ‘Sovereignty’ (democracy within the nation) i.e., politics not the economy, was the key motivator for the leave vote along with immigration, though immigration was often an aspect of the argument about sovereignty;
  • If anything Brexit opinion has hardened so that even remainers say ‘get on with it’. The Lib Dem promise to re-open the question with a referendum didn’t cut any ice with voters;
  • You can’t have the economic benefits of the single market without the political costs of free movement, supremacy of EU law, and contributions to the EU budget unless you get a bespoke deal which lets you have Boris Johnson’s cake and eat it;
  • We are trapped, as we were before the referendum, between the appeal to politics (sovereignty) and economics (the single market);
  • We might buy time by agreeing with the EU a ‘transition’ period e.g., temporary membership of the European Economic Area until a wider, bespoke agreement is reached (or not), but the question of the destination has to be answered.

There will either be a [i] bespoke deal (Labour and the Tories would both like this) that gives the maximum economic benefits with minimal political costs (unlikely), [ii] soft Brexit membership of the single market with all the other conditions of membership that voters rejected, [iii] hard Brexit without a trade agreement and potentially damaging economic consequences. Labour’s first duty would be to spell this out. And, incidentally, expose all the nonsense about ‘not revealing our negotiating hand’. The only people that it is being concealed from is the British public.

Labour wants a ‘soft’, membership-of-the-single-market (jobs-first) Brexit. But, as in the referendum campaign, this reduces the EU question to economics when it was ‘politics wot won it’. They will have to spell out the compromises that would be entailed on free movement, EU law and budget contributions. Compromise in all three areas could win public support but even then, a bespoke deal is unlikely. The simplest form of soft Brexit would be membership of the European Economic Area (EEA) where access to the single market  entails all the main obligations and costs of EU membership with none of the political rights. It would be a ridiculous outcome for an economy the size of the UK to be sharing a peripheral status with Iceland, Liechtenstein, and Norway on the margins of the continent, carrying the same obligations and significantly less control. You might, at a pinch, defend this if it was a temporary staging post, en route to somewhere else, but not otherwise.

Labour rightly rejects ‘hard Brexit’ but not all forms of soft Brexit are acceptable. What Labour must avoid at all costs is being saddled with responsibility for a soft Brexit that the Tories might now negotiate, running to Labour for shelter from their own eurosceptics.

Above all Labour’s purpose over the next two years should be to pin the responsibility for any deal with Europe on the Tories. If they go for soft Brexit, expose the political costs. If they go for hard Brexit, the economic consequences. If there is a transitional arrangement expose the direction  of travel. Neither Labour nor the public can be certain of anything until the Tories outline their European settlement in two years time. Until then Labour should take no responsibility for what ‘ought’ to be done. The message for the Tories is ‘You got us into this mess, you get us out of it. If you fail, Labour will step in and clear up your mess’.

To try to reopen the question of EU membership now, as the Lib  Dems and Tony Blair did, would be a mistake but two years from now it might well be possible. If it isn’t, and there is no bespoke deal or transitional arrangement in sight, hard Brexit would preferable to ‘soft’ servitude on the margins. Membership of the EU still trumps both.

Meanwhile Labour should set out in a  series of speeches, publications and consultative events the real choices that people are faced with, and try to extend that discussion to Europe through its links with continental socialist parties.

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Cross Party Brexit?

Maybe it was a Brexit election after all? From the following day, and with increasing force, people are saying that hard Brexit is now impossible, that there is a parliamentary majority for soft Brexit – essentially membership of the single market and customs union – and that there should be a cross party vehicle of some kind to achieve consensus. Labour should steer clear of it.

First because there is unlikely to be consensus when the politicians have the courage to spell out what soft Brexit means. Even a bespoke deal rather than e.g., access to the single market via membership of the European Economic Area (EEA) will involve big compromises on free movement, EU law and budget contributions and there isn’t much sign of EU flexibility on any of this. Membership of the EEA alongside Iceland, Liechtenstein and Norway would bring all the obligations without any of the rights that go with membership.

Second, because it will offer shelter to the Tories who got the country into this mess in the first place and haven’t yet paid the full political price. When the outlines of what they want to achieve, and what they actually achieve, in negotiations with Brussels becomes clear they will be politically vulnerable as never before. Labour should not come riding to their rescue, or take any responsibility whatever for the kind of soft Brexit that a majority of Tories now probably want.

And finally, it will be seen as a parliamentary political stitch up. There will be the usual claptrap about putting the interest of the country before party but it won’t disguise the fact that MPs would be trying to impose an agreement that none of their constituents actually voted for.

Labour should instead take the issues out to the country, explain what a ‘jobs-first’ (soft) Brexit means and ask the people about the kind of compromises the negotiators should make. When politicians talk about not revealing their hand in negotiations the only people being kept in the dark are the people that elected them.

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Labour’s Manifesto

Or Labour’s Santa vs. The Tory Scrooge according to Jonathan Freedland in the Guardian. He  thinks Labour largesse will be rejected despite the popularity of the party’s proposals because people still believe Labour crashed the economy in 2008. You might trust a doctor who tells you a glass of red wine is good for you, but reject the same advice from an alcoholic. There is some uncomfortable truth in this but it only reinforces the very austerity trap that Labour is trying to avoid. It is the ultimate catch-22: you only demonstrate virtue in this conversation by cutting everything to ribbons in order to rebuild it.

There is a way out but Labour hasn’t found it. Instead of fiscal responsibility rules and pledges to balance current expenditure and only borrowing to invest, all copied from the Gordon Brown play book, Labour would have to show that the economy is dangerously dysfunctional and must be radically reformed. The first target should be the financial institutions and practices that brought economic ruin, then a radical critique of private sector responsibility for low productivity and lack of investment across industry and services. Instead of trying to restore and repair there should be radical restructuring proposals to address the imbalances between sectors and regions.

But there is nothing like this, nothing even remotely radical. Labour will have a ‘firm ring fence’ between retail and investment banking, not their separation; there is nothing about the financial practices that crashed the economy, but Labour will stop banks closing local branches where people need them! There will be a much needed £250bn for renewing infrastructure and a further £250bn mobilised by a National Investment Bank that will bring in private capital to fill existing gaps in lending by … private banks! Other than additional investment the industrial strategy amounts to encouraging  strategic industries to replicate the model of an Automotive Council staffed almost entirely by CEOs and senior executives. Nothing remotely radical or strategic .

This really is old-fashioned, soft-left, tax-and-spend socialism. Even the proposals on public ownership are driven by the interests of consumers in lower prices. It is also, of course, humane, generous, well-intentioned, and infinitely preferable to the calculated meanness of the Conservatives and I will certainly vote for it. At some other time and place it might even have attracted a good deal more public support than it is likely to get as May rallies the nation against those Europeans. But when the bloodletting begins in the Labour Party after 8th June, the left should not waste any time defending the Manifesto. And if it defends Corbyn, who really does represent the left in the Labour Party, it will have to examine its own politics as well as his.

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The Mélenchon Uprising

In France, Mélenchon, the candidate of a ‘left movement’ has drawn level with other leading contenders in the first round of the presidential election on Sunday (23rd April). If he goes into the second round with Le Pen Brexit will be a little local difficulty compared with what is in prospect for the EU.

Mélenchon offers reforms a-plenty, and no mincing of words. From reconstituting the republic to green economic planning Mélenchon’s programme overflows with ideas.  He will put a stop to financialisation of the economy (separate retail and investment banking, tax financial transactions, control the movement of capital); create a public bank to finance small and medium size enterprises; introduce sweeping measures to limit exploitative employment contracts (the précariat); set maximum salaries for directors of companies, tax all salaries above e400,000 a year at 100%, and increase the minimum wage while reducing the working week and restoring retirement at 60. And there is more, much more.

Is there any overall ‘shape’ to the program? What does it amount to? What kind of society will the reforms produce? That is much more difficult. I was going to say it was ‘Corbyn on steroids’ because there are a lot of ‘policies’ but it is not clear what they add up to but that is not right. The policies are so much bolder, and there is at least a glimpse of the social model it aims to create. But it is only a glimpse. The core rationale is provided by its environmental commitments and populist nationalism. Of the two, the latter is more striking.

The environmental commitments are serious and far reaching, including a proposed withdrawal from nuclear power, but its defining characteristic is its nationalist perspective. ‘The defence of our industrial sovereignty’ against multinationals and international finance requires the ‘relocalisation’ of production, support for French jobs and French industry in place of free trade treaties, and controls on the free movement of capital and goods. His stance on Europe follows from this. Plan A proposes sweeping renegotiation of existing treaties and the reform of European institutions to end central bank independence, devalue the euro, end free trade treaties and adopt a strategy of ‘protectionist solidarity’. France would unilaterally withdraw from the ‘stability pact’ which drives austerity, but if plan A did not lead to an acceptable result, plan B effectively ends the country’s EU membership.

Olivier Tonneau in the Guardian describes it as a plan to save Europe not destroy it; Mélenchon offers co-operation with all nations on the basis of real equality in setting limits to globalisation and the destructive effects of unrestrained competition. All this is true but there is no mistaking the ‘put France first’ motif. Mélenchon’s ‘L’Avenir en Commun’ has more the feel of an ultimatum than the opening of negotiations.

And for all the references to the public good, and to a socially and environmentally responsible republic, the vision remains one of France reformed rather than an invitation to build a new social model.

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Don’t agree an election on June 8th!

How desperate am I, writing this on an unread blog on the morning after Jeremy Corbyn agreed to holding an election on 8th June? If there is a reason for 5-year parliaments it is precisely to stop prime ministers exploiting their position to go to the country when it suits party advantage. Ignore all the macho drivel about ‘being up for it’. Labour is not ready, and it is no shame to say so. Insist on an election when we know the shape of the deal she actually seeks in Brussels. An election now, on current projections, will give her a free hand to do whatever she likes. It really is blank political stupidity to agree an election now.

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Labour possessed by demons

I don’t mean evil spirits – although there are a number to choose from –  I mean the almost inexplicable seizures of emotion followed by uncontrollable spasms indicating severe psychological trauma. How else explain the bizarre pursuit of Ken Livingstone. If it was only the Labour Party we might be more relaxed about it but the same demons seem to have gripped society and its servile media too.

Livingstone made some very stupid statements about Hitler’s supposed support for Zionism on the basis of some stray historical facts he twisted out of recognition. He was doing so in a good cause: supporting Naz Shah, the victim of an earlier anti-Semitism witch hunt. Now he is being subjected to the same bullying, the same demands for confession, contrition and apology to which she already submitted. And despite the judgement of Labour’s own disciplinary committee the pack is in full cry for his expulsion with Corbyn adding his authority to the demands for apology.

If stupid remarks that lots of people found offensive were all punished in this way free speech would be a thing of the past. Why was it not sufficient for people to properly ridicule Livingstone’s historical notions without resorting to anathema and excommunication? Because Livingstone, despite his protestations to the contrary, is a closet anti-Semite? I don’t think so. It is because a cultural virus has taken hold that twists respect for different opinions into a demand that no offence is taken and that ‘safe spaces’ are created where offensive opinions do not have to be confronted. It is not just about anti-Semitism. We have heard the same dispiriting chorus about religious sensibilities, racism, sexism and sexual politics. But just now, anti-Semitism seems to have corned the market in ‘offence’, exploiting liberal cultural confusion to denounce anything that smacks of criticism of Israel as anti-Semitism.

The guardians of anti-Semitism have their own political agenda and they have been joined by all sorts of others with an axe to grind that they would like to bury in Corbyn’s head. Corbyn himself has so little understanding of all this that he is an accomplice in his own isolation. Sadly, yet another example of the lack of political leadership in a party paralysed by  the substitution of factionalism for politics.

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A Question for Ebbw Vale

Nick Clegg went to Ebbw Vale for Newsnight and came away with the comforting conclusion that the vote against Brexit was driven by a nostalgia for the full-employment steel-and-coal past among the old, and found comfort from interviewing the young who were not obsessed by immigration.  No wonder vote remain lost.

Here is a question for Ebbw Vale, and maybe even Clegg. Leave voters wanted ‘to take back control’: what did they want to take back control of, and from whom?

On the face of it, control of borders, and control from Brussels. But is control really about borders and Brussels? Take the water that comes out of your tap. In Ebbw Vale it is supplied by Glas Cymru, a not-for-profit company that paid £1 for a failed privatised water business but in much of the UK water is in the hands of financial consortia, many of them foreign owned. A Canadian pension fund is lead owner of water in Anglia, a Hong Kong based consortium in the North East, JP Morgan and the Americans lead in Southern Water, and Australian money dominates on the Thames. What happened to borders and control?

Before you conclude that the dimwits from Ebbw Vale to the Thames can’t see their hands in front of their faces consider this. Public opinion almost certainly thinks utilities like water should be in public hands, but in the end these are decisions to do with the ‘economy’, with ‘business’, with economic efficiency and not democracy, the control that people should have over their lives.

Until democracy encompasses economy/business a gulf will remain between the arguments of remainers fretting about access to the single market and leavers celebrating their new found sovereignty.

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