Winner of the New Statesman SPERI Prize in Political Economy 2016

Wednesday 25 July 2018

Fake News UK style

So yesterday Jeremy Corbyn gave a speech which journalists had been given advance notice of. The Independent tweeted “Jeremy Corbyn to highlight economic 'benefit' of Brexit as he demands UK stop relying on 'cheap labour from abroad'” and referenced an article by their political correspondent Ben Kentish. As you might expect, the great and the good piled in to condemn the speech as anti-immigrant and pro-Brexit.

I was alerted to all being not what it seemed by this tweet from Financial Times Chief Political Correspondent Jim Pickard. He wrote: “Corbyn team is complaining that his words about "cheap labour" have been taken out of context and on this occasion they are absolutely right: he was talking about "imports" made abroad with cheap labour, not cheap labour coming here - here's the relevant passage. Please retweet.” My interest was aroused, but I could not find a copy of the speech online because it had not been given yet.

An example of the advantages of twitter follows. I asked in a tweet if anyone could provide me with the speech, and I received both the press briefing and the ‘check with delivery’ speech itself. You can now read the final speech in full yourself here, or watch an excerpt here. I then did something I do not think I have done before, and quickly composed a thread about the speech. The rest of the day saw lots of people using my own thread to correct others who had reacted to the original Independent tweet. If anyone wanted to notify me about anything else yesterday I’m afraid it has been lost in a mountain of what seems like thousands of notifications referencing my thread.

What we can say for certain is that the Independent’s tweet, which at the time of writing has not been withdrawn, is very misleading. Corbyn was not giving a speech about the benefit of Brexit, and the ‘cheap labour’ he referred to was that used to produce imported goods. Instead the speech was all about the active industrial policy that a Labour government would put in place to help manufacturing industry, which made sense as he was addressing a manufacturers organisation in Birmingham.

But surely he must of said something about the benefits of Brexit? The speech said this: “exporters should be able to take proper advantage of the one benefit to them that Brexit has already brought – a more competitive pound.” He suggested they had not because of the absence of any industrial policy. His statement about a benefit to exporters of the depreciation is innocuous.

To many Corbyn supporters this is just par for the course - it is happening all the time. I am no Corbynista, but I would agree. Much of the media, both Labour friends or foes, appears happy to distort things the Labour leadership says to an extent that I cannot remember happening to another Labour or Conservative leader in my lifetime. The macro evidence for this is the 2017 election, where Labour destroyed the accepted wisdom that election campaigns made little difference to the polls.

Labour’s extraordinary surge in the three weeks of the campaign is far too large to be due to just some mistakes by the Conservatives. The more plausible explanation is that both parties had direct access to the media, and for the first time voters were seeing the parties and their policies directly, rather than being filtered through media interpretation. This also helps explain why Labour’s position in the polls began to steadily deteriorate soon after their election bounce: the media filter came back on, with a constant stream of negative stories about Labour and its leadership. I have talked before about the contrast between coverage of Labour’s antisemitism problem and the Conservative’s islamophobia problem.

That is the context in which to see the events I described yesterday. A very small example of a much bigger and very serious problem. There is of course a lot you can say about the speech that is not misrepresentation. Is it right to be so focused on manufacturing when so much of our economy involves services, for example? Did it appear to promote an insular UK? For my own part I would be very critical to the reference to cheap labour. The reference occurs in the following sentence:

“We’ve been told that it’s good, even advanced, for our country to manufacture less and less and to rely instead on cheap labour abroad to produce imports while we focus on the City of London and the financial sector.”

This is a standard argument on the left against financialisation and City dominance, but the words ‘cheap labour abroad to produce’ are completely unnecessary, unless someone was trying their hand at dog whistling.

Can the misrepresentation of that tweet be forgiven in wanting to make this a story about Brexit? Well there is a Brexit story in the speech, and it is the opposite of the one suggested by the tweet. Corbyn is always accused of being a Lexiter: wanting to leave the Single Market so that he can use state aid to support domestic industry. Here is what he said on that:

“Too often, we have been told by Conservatives who are ideologically opposed to supporting our industries that EU rules prevent us from supporting our own economy. But if you go to Germany you’ll struggle to find a train that wasn’t built there, even though they’re currently governed by the same rules as us. When the steel crisis hit in 2016 Italy, Germany and France all intervened legally under existing state aid rules but our government sat back and did nothing. We have made clear we would seek exemptions or clarifications from EU state aid and procurement rules where necessary as part of the Brexit negotiations to take further steps to support cutting edge industries and local businesses.”

That, I would suggest, is not what a Lexiter would say.


  1. A better point on manufacturing abroad is we are allowing manufacturing ability and some argue technology to be handed over to totalitarian regimes [China] with aggressive foreign policies and who dump steel and other products?

  2. It was all going fine, and then

    "That, I would suggest, is not what a Lexiter would say"

    One in Corbyn's position with his constraints and agenda?

    Of course it is, given his position and political strategy.

    I'm perfectly capable of reading the speech for myself and seeing if it matches the tweeted headline.

    What I'd prefer from a macroeconomics blog is some analysis of whether the proposed ending of procurement based upon competitiveness and replacing it with a national preference rule would be a good or bad thing overall. My instincts and basic knowledge tell me bad, but I'd be interested to have a careful economic analysis of whether this 'home preference' rule has any sense behind it? Has it worked in France? Is it the basis for German success? As far as I am aware the answer to those questions is no, but unlike you I don't hold myself out as an economist.

    I'd also like to know whether the proposed policy of trying to favour manufacturing over services makes any sense at all? Is there any serious prospect of the manufacturing making up more than 10% of the UK economy? Could the long term fall in employment in manufacturing really be reversed by sensible policies? Is the cost worth it?

    You are of course at liberty to write about what you want, but your expertise lies in the area of what Corbyn said, not in pointing out the mismatch between a tweet and a speech we can all read. 6th formers are able to do that.

    1. 'I'd also like to know whether the proposed policy of trying to favour manufacturing over services makes any sense at all?'

      Surely the appeal of manufacturing (and of resource extraction – think "TRUMP DIGS COAL") is that they produce a product which can be sold outside the local area, and therefore can bring money into an impoverished locality?

      The only service industries which are similarly independent of local purchasing power are either those which serve tourists, or those which produce an information-only product which can be distributed electronically (but because such products are infinitely replicable, the total number of jobs available in this sector is very limited: this is perhaps one reason why the Internet is dominated by Google, Facebook, Amazon and other monopolistic firms).

  3. 'the words ‘cheap labour abroad to produce’ are completely unnecessary, unless someone was trying their hand at dog whistling.'

    Is there always a discernible line between referencing the wide-spread concerns about a race-to-the-bottom of a global labour market and xenophobic dog-whistling?

    1. "Cheap labour abroad" is simply the most precise way to put it. There's no need for him to say "cheap labour abroad, but it doesn't mean I hate foreigners" unless one is guilty until proven innocent.

  4. I too object to "cheap labour from abroad" correctly understood in context. The standard left ideology is pro-immigrant but, at least not so pro-international trade. The conflation underlines the fact that the two issues involve the same extremely poor people becoming less poor.

    Somehow people can see themselves as egalitarian if they want an equal income distribution among people within national borders. I don't see how anyone can think this is morally relevant*.

    The facts that cheap labour abroad becomes less cheap if we don't protect and this is very important to the now poorly paid workers abroad don't seem to be accepted by lefties. How can they explain current living standards in China ? Jeff Faux** asserts that ordinary chinese haven't benefited (in other words they Trump the data with fantasies.

    * I also don't see how anyone can think that the location of someone's birth or the identies of their parents can be morally relevant, so I see no trace of any possible justification for any restrictions whatsoever on immigration, so I guess I should just give up on the whole discussion, because my views are so far from the mainstream that I have nothing useful to contributed.

    Faux lives in my home town Washington DC and is the founder of the EPI which is a trade union finances think tank, where other people including Larry Mishel do really excellent research (including the basis for the 3rd chapter of my PhD dissertation).

    1. Consider that allowing open borders is then morally necessary.

      Even a country like the United States doing it (solo) would then be inundated by hundreds of millions of poor people. (But not the world's poorest, who can't afford the trip.)

      Even without a language barrier, that disruption is bound to be terrible for the economy. Better build a few houses!

      Thinking that birthplace and ancestry can't make you an inferior person is laudable. Forgetting all about living standards in order to try and prove how laudable you are isn't.

    2. Have you missed the fact that China doesn't actually practice free trade?

      And would you allow a billion Chinese the right to settle in the UK? Or indeed insist that Brits be allowed to settle in China at will, regardless of what the Chinese wanted?

      Although I didn't like New Labour, it's true the left was locked out of power for 18 years because the rich and middle class didn't want their gains redistributed away. Similarly, you don't have enough votes from working people if you tell them you're not going to reduce their unemployment and allow their pay to rise because workers in poor countries we trade with are first in the queue.

      And if we have a moral imperative to redistribute to the poor, then if we only do it for poor foreigners and not poor at home, we're not following that imperative.

  5. "That, I suggest, is not what a Lexiter would say."

    Can you clarify? Perhaps I'm being dumb. I'd have thought that is exactly what a Lexiter would say?

  6. Thank you for your clarification. I read the report of the speech in the Guardian which concentrated on his comment about the passport contract and a lot of nonsense about a comparison to Trump. I even commented on what I thought was his fairly nationalistic remark of his about passports.

    There was no indication in the Guardian report that he was basically willing to work within state aid rules agreed with the EU, which I take to be the meaning of your last quote. This looks to me like a fairly serious piece of misreporting which you have done something to clear up.

    There are only a few months to go to avoid a take over of our country by the Trump Organisation and Jeremy Corbyn is the de facto leader of those who want to stop this. Misrepresenting his views is therefore a serious matter.

  7. The problem for Corbyn is surely that because of his reluctance to make Labour a focus for remainers to oppose this Brexit sh*tshow in Parliament, and his practised ambiguity on the subject, no-one really knows whether he is a Lexiter or not - but there is a strong suspicion that he is. Therefore tweets like the Independent's merely play to people's existing suspicions as being entirely believable in a way that the same tweet about, say Anna Soubry, would not.

  8. The reference by Corbyn to seeking exemption from certain EU rules on state aid clearly indicates that he only sees this as being possible if the UK is no longer a member of the EU. If he regards such exemptions as important and can only be achieved outside the EU then he is a Lexiteer. The fact that in or out of the EU the UK would not be granted such an exemption if it wishes to continue trading freely with the EU is beside the point. It does however suggest that Corbyn's support for the idea puts him in the cake and eat it brigade.

    1. He explicitly mentioned France and Germany doing this while inside the EU. No part of that statement ties Labour industrial policy to Brexiting.


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