Winner of the New Statesman SPERI Prize in Political Economy 2016

Friday, 28 September 2018

Would a Corbyn Brexit heal the nation or wound Labour?


Just suppose May fails to get a deal, or her proposed Withdrawal Agreement (WA) fails to be passed by a majority of MPs. Suppose for some reason this results in an election that Labour wins. Labour have not pledged to have a referendum in those circumstances, and I think this is more than triangulation. It is increasingly clear that the Labour leadership want to do a Brexit deal with the EU.

I think it is also becoming clear that this deal will be essentially Brexit in Name Only (BINO): we stay in the Customs Union and Single Market. The Labour leadership will want assurances on nationalisation as well as other elements in their manifesto, and the EU will give the (substantial) assurances it can without changing EU policy in any way. Labour will I suspect also come back with a package on Freedom of Movement that involves enforcing the existing rules (EU nationals have to find work within 3 months) and any other sweeteners the EU care to throw them. That all adds up to BINO.

The key characteristic of BINO (which is what gives it its name) is that everything it does can be achieved by staying in the EU. As far as any sweetners are concerned, it is plausible that the UK is more likely to get those being part of the EU than being outside it. All that BINO achieves is to give up a direct say in how the EU evolves, and giving that up without any compensation cannot be in the national interest.

So why would Labour bother to do this? The answer I think is that they want to keep the minority of Labour voters who still favour Leave voting Labour. When the leadership says that they must respect the referendum result they do not really mean that it is undemocratic to hold another referendum: they are not that stupid. What they mean is that they do not want to antagonise Labour Leavers. In addition they believe that BINO with sweeteners would convince enough Labour Leavers that Labour had got the job done, and these voters would not worry too much about the details.

Before getting on to whether they are right, it is worthwhile noting that this has nothing to do with the Labour leadership being Leavers at heart. In a smart tactical move, Corbyn in his closing conference speech said he would back a WA that came from May if she delivered “a deal that includes a customs union and no hard border in Ireland, if you protect jobs, people’s rights at work and environmental and consumer standards - then we will support that sensible deal.” The inclusion of Ireland and protecting jobs means in practice staying in the Single Market. You just wouldn’t make that pledge if you wanted Lexit.

Of course exactly the same question arises for Theresa May and the Conservatives, if as I suspect the EU is not prepared to extend the backstop to the UK and so BINO is the only deal that avoids an Irish border anywhere.

So would BINO heal the wounds opened up by the original referendum or would it satisfy no one? A positive argument would start by suggesting that most Remainers will not mind losing any say in the EU, because they would be so relieved that we had avoided a hard Brexit. The people who should be worried about this loss of sovereignty are Leavers, but they will be more concerned with actually leaving. And both groups will be relieved it is all over.

The argument against is that BINO is clearly inferior with being a member of the EU, so Remainers will know we have done something that is clearly nonsensical. Leavers on the other hand will be convinced (by the Brexit press in particular) that this result is a sham Brexit, and therefore a betrayal of the original referendum, which is roughly how May herself has described it. As time goes on both sides will forget that the government was fulfilling a democratic mandate, and instead blame it for agreeing a Brexit that nobody likes.

I don’t see how it is possible to know which of these outcomes will come to pass, which in turn means a government that enacts Brexit is risking a lot. Of course politicians are used to taking risks, but these risks normally involve trying to achieve something they think will do the country, or part of it, some good. It is somewhat novel to take risks to achieve something that in itself does nothing but reduce the country’s influence and sovereignty.

9 comments:

  1. Pointless speculation. Zero chance of an election. The government can't be forced into one and will not hold one of their own accord. The next election is on 5 May 2022.

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  2. The premise seems very odd to me. Why would there be an election? Why would there be two thirds of the current Parliament who will vote for one? Given how unlikely that is, it seems very odd to claim " the Labour leadership want to do a Brexit deal with the EU." They know they won't be in a position to do so, not being fools.

    Labour's position is obviously one to maximise votes, not unnaturally. That means being ever so slightly more Remain-y than the Tories, whilst ensuring Brexit happens and they don't own it.

    Labour as a consequence will vote against any Tory deal (or at least will whip against it) but not support any referendum.

    What needs to be answered is what happens in those circumstances, not some extremely unlikely scenario where the Tories decide to commit harikari.

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  3. Thank you for this Simon. If I may ask a question... while the weight of opinion within economics supports the view that Brexit would result in something like a 5-10% reduction in long-term potential output, is there any good work which is trying to look at the distributional changes? I have seen rhetorical assurances that this will 'hit the poorest the hardest', and while I don't doubt that will be the case in the short-term (as is true of almost any economic shock), perhaps the Corbyn team are betting on their ability to lead a progressive redistribution favouring the relative position of Labour voters in the medium term?

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  4. I think the BINO option, though inferior to membership, allows some face-saving for those who voted leave. I read that people have become bored with Brexit and want it over with. This is a route to give something to the 52% as well as the 48%, and avoid economic disaster. This is politically important. Should young people at a future date want us to be members again, keeping the close economic relationship eases the process.

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  5. Bino may be the only outcome. We have always been semi detached from the EU, we didn't join the Eurozone or the Schengen area for example. Add this to the 52/48% referendum result and to me that indicates that only the softest possible brexit can fill the bill. MOGG and Johnson are still lying to us about trade deals why else is May trying to boogie in Africa? A trade deal with the rampant capitalism of the USA will be the certain end of the NHS. I've believed since Atlantic Bricge that this is Liam Fox's goal.
    In a trade deal with the USA we still get to produce and sell loads of arms and also keep getting dragged into Middle East wars. Good for profits. And that will suit the tories, their hedge funds etc.
    We can only hope that a Corbyn led government improves the lot of enough of the people to stop them blaming how brexit was handled.
    A second referendum cannot now happen before we leave! No matter how much many wish to remain. The only other thing that could happen is if someone has the guts to stand up and say cancel brexit, because even if a peole's vote said remain after we'd left the EU would never let us rejoin on the current terms. I think Labour are doing the only thing possible in the circumstances.

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    1. Something else is possible which is to try and withdraw the Article 50 notification. It may or may not be legally possible.

      I'm a Remainer, but you should realise the former europhile David Owen campaigned for Leave partly because he believed EU competition law meant that it would not be possible to reverse marketisation of the NHS. You should also realise TTIP which the EU has been involved with has been criticised on similar grounds.

      There is no reason to think a trade deal with the US (although I am sure we don't need one myself) would lead to us supporting their wars more than now. The EU's greed and stupidity enabled Russia to take over Crimea.

      Since the Tories find it so difficult to get anything accomplished over Brexit there's little reason to think they really can sign "rampant capitalism" trade deals and get them enacted by Parliament.

      Ppl like Ann Pettifor keep insisting the EU is somehow the social democratic alternative to the market-fundamentalist Tories while noting it's been going in the other direction for many years. It's not Schroedinger's social democracy which is both living and dead. It's Thatcherite. That's why she wanted the Single Market.

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  6. In any election (I mean during the election not after as you assume) the Tories will say that Labour's policy is BINO and does not respect the referendum result. This is likely to happen no matter what Labour say and I suspect there will be a large swath of Labour Leave voters who will not like this at all and may vote accordingly.

    As you have said BINO is nonsense and this would weigh heavily against Labour.

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  7. "The key characteristic of BINO (which is what gives it its name) is that everything it does can be achieved by staying in the EU."
    Does this hold for changing the colour of the passports back to blue?

    Worth noting again that BINO fixes Ireland but leaves Gibraltar at the mercy of whatever Spain insists on as a condition of the post-Brexit trade agreement. There aren't very many Gibraltarians, but still ten times as many (34,000) as there are Falkland Islanders (ca. 3,400), and Maggie Thatcher went to war for them.

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  8. At the party conference Corbyn promised to create 400,000 skilled jobs by building thousands more wind turbines, insulating millions of homes, and installing a solar panel on every “viable” roof in Britain. At the same conference Labour hedged their bets on Brexit. Taken together, they raise an important issue. If we were to remain in The EU under Free Movement, who would be the beneficiary of the new jobs? Under EU rules, which companies would benefit from the new energy contracts?

    Given that there is mainly full employment in the construction sector, isn't there a risk that the contracts would be scooped up by EU companies and the jobs be taken by an additional influx of 400,000 EU citizens?

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