Why Corbyn’s Brexit campaign matters

I sometimes think discussions with Corbyn supporters is a bit like talking to one half of a couple going through a bad patch in their relationship. Let’s call them PLP and LPM. There is no doubt that for many years PLP had taken LPM for granted. And as a friend to both you can wholeheartedly agree that PLP’s flirtation with austerity in recent years was a serious breach of trust, and more generally a very foolish thing to do. You agree that in those circumstances LPM getting into bed with Corbyn was quite understandable.

But you can see that Corbyn is no good for LPM. Their relationship is going nowhere. What is more PLP is, perhaps as a result, full of remorse. Austerity has long gone, and PLP is promising almost everything LPM wants. You know that when LPM and PLP work together they are a great couple, perhaps even a winning couple. Yet when you try to say this to LPM you either get the hurt of an aggrieved party (how can I ever trust them again), or worse still the poisoned words of despair (that even at their best as a couple they were no better than anyone else).

So when I ask how can you expect Corbyn with only the confidence of 20% of his MPs to get many votes, I’m told that the PLP should not be able to dictate who the leader is, as if that somehow negates my point. [1] Life with Corbyn may be going nowhere, but it is all PLP’s fault. When I point out Corbyn’s major mistake during the Brexit campaign, I’m told it probably had no effect so why should it matter.

But it does matter. What Corbyn and his team decided to do as part of their Brexit campaign was to rubbish Osborne’s claims about the economic harm Brexit could do. They were rubbishing the key part of the Remain campaign. That decision was certainly an embarrassment for that campaign, and for his own PLP colleagues. It was a slap in the face for academic economists, 90% of whom did think that Brexit would be harmful.

Not only was it the wrong thing to do for those reasons, but it also puts Corbyn in a far weaker position after the Brexit vote. Let me quote a comment from that earlier post from Mike Berry, who knows a thing or two about the media. He says it was

“a gargantuan, colossal and highly stupid strategic error. If Corbyn, McDonnell and the rest of the shadow cabinet had repeated endlessly the warnings of economists about what would happen and continued this after the results, day after day after day on all the main media outlets they would now be in a very strong position because they would be able to conclusively pin the responsibility for the negative economic consequences of Brexit on the Tories. They could have forced the Tories to own the slump and shredded their deserved reputation for economic competence for a generation. Deeply disappointing.”

So why did they make such a big error? According to this report, “the Shadow Treasury team vetoed a story developed by Labour’s policy team for Shadow Chief Secretary Seema Malhotra, which warned of the effect of Brexit on the value of sterling.” It goes on: “Those close to the Shadow Chancellor felt that the independence referendum in Scotland had shown how Project Fear went down badly with Labour voters. McDonnell’s Economic Advisory Council (EAC) would have felt the sterling crisis idea was counter-productive too, one source said.”

It was blindingly obvious, from either macro theory or from market reaction to polls, that sterling would depreciate sharply if the UK voted Brexit. Mike Berry’s point continues to apply. But the reason given for not going with this is bizarre. Leaving the EU, as with Scottish independence, will have serious economic consequences for the UK and Scotland respectively. To not mention this, or worse still trash others that do, because it might not be believed is extraordinary logic. (It is like saying a lot of people do not believe in man made climate change, so let’s start supporting climate change denial.)

It is fine to talk about some of the issues the Remain campaign was ignoring, like workers rights, but you can do that without rubbishing what other people on the same side are saying.

What added insult to injury when I read this account was the reference to the EAC. The EAC certainly did not say that Corbyn should discount economists claims about economic costs, or that the likely exchange rate depreciation should not be mentioned. Some of us may have said that talk of some kind of financial crisis similar to 2008 was going over the top, but that is completely different. (A substantial depreciation is not a financial crisis.) It’s not good to misrepresent the EAC as a cover for bad decisions. You do not need to take my word for this. To quote from the statement five of us made after Brexit and Danny Blanchflower’s resignation: “we have felt unhappy that the Labour leadership has not campaigned more strongly to avoid this outcome”.

The reaction of Corbyn’s supporters to all this is to respond to a very different accusation, which is that Corbyn helped lose the Brexit vote. But that is something that is virtually impossible to decide. The issue for me is not whether Corbyn in undermining the Remain campaign influenced the final vote, but that he did it in the first place.

One possibility of course was that he was quite happy to undermine that campaign because of his own ambivalence towards the EU. After all, he did take a holiday during the campaign (imagine if Cameron had done that), and he didn’t actually campaign that hard. But let us instead take him at his word. What we have then is a major strategic failure by him and his team, a failure that will have consequences for the future.

A large part of politics over the next few years will be about Brexit. The Prime Minister is extremely vulnerable on this issue given the splits in her party. There is a huge difference between the various forms of Brexit, and a united Labour party with a passionate advocate of European engagement leading it could help influence events. If there is an economic downturn as a result of the uncertainty over Brexit the government must be made to own that downturn in voters eyes. You cannot do that if the leader of the opposition said the downturn wouldn’t happen.

Let me end with a quote from a recent article by Martin Jacques. While I disagreed with his unqualified description of New Labour as neoliberal, I think he gets Corbyn exactly right in this quote.

“He is uncontaminated by the New Labour legacy because he has never accepted it. But nor, it would seem, does he understand the nature of the new era. The danger is that he is possessed of feet of clay in what is a highly fluid and unpredictable political environment”

I know it has only been a year. I know recent betrayals still hurt. But the road Labour is currently on leads nowhere, and the longer it takes for the membership to realise that the more damage is done. Once you stop seeing the alternative through jaundiced eyes it is so much better.

[1] Logical consistency often goes out of the window in such discussions. I’m asked how can I know that this no confidence vote will damage Labour in a General Election by the same people who tell me Corbyn’s current unpopularity in the polls is because Labour is split.

Postscript [07/09/2016] It now looks like the reason why the explanation given for not supporting (or indeed trashing) economists analysis of the benefits of the single market reported and discussed above were bizarre is because they were a diversion. This report and this from George Eaton show clearly that Corbyn and McDonnell do not support membership of the single market.