Winner of the New Statesman SPERI Prize in Political Economy 2016

Tuesday 11 December 2018

Are the Labour leadership attitudes to Brexit just the austerity story all over again?

with a short coda on yesterday's events

Labour party voters overwhelmingly want Labour to come out in support of remaining in the EU, because it is the right thing to do. But apparently allies of Corbyn say that private polling and focus groups conducted by the party suggest that doing so risks preventing Labour from winning the next general election. Does this debate ring any bells? It certainly does for me. The debate over austerity took exactly this form within Labour from 2010 to 2015.

Austerity, like Brexit, was clearly a bad policy in the sense of making pretty well everyone worse off. But austerity, like Brexit, was popular among many voters, because they believed what they were told about its desirability. Just as the EU was about to open the floodgates of Turkish immigration to the UK, so austerity was required to prevent the bond vigilantes causing financial havok.

Labour began 2009 by ignoring the deficit and embracing an expansionary fiscal policy to end the recession. But later, while still in government, they began to talk about the need to support the recovery and reduce the deficit. In opposition this became a message of moderation: Osborne’s cuts were too far too fast. Before the 2015 election they were pledging to be “tough on the deficit”, even though their actual policy involved substantially less austerity than Osborne’s plans. After that election defeat some senior Labour figures suggested Osborne’s fiscal policy had merits.

This gradual change in message had very little to do with a changing view about the economics. [1] Instead it seems pretty clear it was about one thing only: austerity was popular. In good part this was because the media overwhelmingly adopted the austerity narrative, and so Labour found it almost impossible to argue for an alternative (standard macroeconomic) narrative. In the end some Labour politicians decided that if you couldn’t beat them you had to join them. This helped lead to Corbyn’s victory.

Labour’s policy on austerity during the 2015 election was a classic example of triangulation. Talk the talk on austerity but through detailed policy signal to your base that there would be much less austerity under Labour. Under the leadership of Corbyn, Labour’s policy on Brexit has followed a similar triangulation path. Indeed the parallels are even closer. If we equate the referendum with the 2010 election, before both we had some compromise towards austerity/Brexit (with Brexit Corbyn campaigning separately and did not endorse Remain’s economic case), and after both Labour triangulated, conceded the austerity/Brexit case but promising to reduce the economic cost.

The lesson from austerity is that Labour made two clear mistakes. The first, before 2010, was to muddle the message by arguing to both encourage the recovery and reduce the deficit at the same time. Will history view the leaderships acceptance of the 2016 result, and its consequent failure to point out the contradictions within Brexit, in the same light, or will they see it as essential to avoiding a 2017 general election that was all about Brexit? [2] The second mistake was to triangulate for too long, and miss the point where voters began to turn against austerity. With the gap in favour of Remain in the polls widening, have we already passed that point [3]?

Brexit, like austerity, is based on a huge lie. It reduces any politician who is persuaded that to keep votes, they too have to peddle the lie. It is pathetic watching senior Labour figures pretend that they, rather than the other side, can produce a Brexit unicorn: leaving the EU and increasing sovereignty without any economic cost. If you argue that these politicians have to demean themselves in this way to avoid losing votes, then you have also to accept that Labour before 2015 were right to accept some degree of austerity.

But whatever the rights and wrongs of this argument, we have now reached a critical point with Brexit. A clear majority of the country no longer believe in the Brexit unicorn. Labour’s membership overwhelmingly do not. Until now the decisions over Brexit have been made elsewhere, so Labour could just about get away with triangulation. But very soon Labour will have to make up its mind. [4] Is the Labour party of Corbyn and McDonnell strong enough to survive betraying its supporters over by far the biggest issue of the day? The parallel with austerity suggests not.


I wrote this before May decided to delay (cancel?) what is now laughably called the meaningful vote, but also before the confirmation that the UK could revoke A50 unilaterally. One of the many unfortunate consequences of her actions is that Labour will continue to delay the day they finally accept they have to campaign to end Brexit. Waiting for the right moment to table a no confidence motion may be like waiting for Godot (just before May finally allows a vote in late March, anyone?). This in turn will make that eventual move to supporting a peoples vote look even more opportunistic.

But Labour’s dithering over Brexit is the least of our current problems. On the 26th November 2016 I wrote a post called “A Little English coup”. I argued that Brexit represented a coup against our pluralistic parliamentary democracy. I was attacked for using emotive language, and I wondered whether I had let emotion get the better of me. But consider what just happened. Parliament was on the point of overwhelmingly rejecting May’s deal, which could have led to a process whereby parliament debated over the best way forward. That is what should happen in a parliamentary democracy. Instead, May intends to waste time so she can present the same choice when there is no time for such a debate, all the while saying with a straight face that a second referendum would damage UK democracy. It is uncertain whether she needs to come back to the house on 21st January. Maybe not quite a coup, but a serious attack on parliamentary democracy nonetheless.

[1] A caveat might be that in office the Treasury had been able to persuade Darling about the need to quickly cut back on the deficit more than they might have been able to persuade Brown or Balls.

[2] While the 2017 election argument is compelling, a counter argument is that with a Labour leadership firmly committed to arguing the case for staying in the EU, Labour’s popularity would have been higher and there would therefore have been no 2017 election.

[3] A comparison many people make is with the Iraq war: popular at the time but when it all went wrong everyone decided they had been against it from the start. There is another structural similarity: with both cases we have had large popular movements against a policy that is backed by both major parties. Will the Labour party leadership be on the wrong side of both these popular movements?

[4] Labour’s policy of aiming to get a general election and if they won to then negotiate their own version of Brexit would be disastrous in practice. They would in all probability agree something pretty close to BINO. That would be a disaster for Labour. Any thoughts that at least the minority of Labour Leaver voters who are left would be grateful will be short lived. The Tories would become united in their opposition to the deal. Together with the right wing press they would attack Labour for reducing UK sovereignty with no gain. Many Labour Leavers would be able to see the evident truth in that claim. Fairly soon Labour Leavers would be condemning Labour for having given away UK sovereignty. This is the curse of Brexit - it destroys anyone who tries to implement it because all forms of Brexit are worse than staying in the EU, and are certainly worse than the fantasy promises that were made in 2016. Implementing Brexit, in short, is a vote loser.


  1. "...a process wherby Parliament debated over the way forward."

    Would a heavy defeat for the Government really have created a suitable environment for a calm, measured, and thoughtful debate to determine the best approach ?

    Somehow I doubt it.

  2. If you look at the detail of what Labour are and aren't calling for - and the lack of anything like May's 'red lines' in particular - I think it's arguable that Labour's position is *already* 'remain and reform', but for the small detail of honouring the referendum result - and they'll cross that bridge, presumably, when they've made it clear that their Brexit 'deal' (a) is a good thing and (b) isn't possible.

  3. There is a simpler explanation, the leader of the Labour is committed to Brexit. While Corbyn is leader Labour will not back staying in the EU. He will peddle to unicorn line about pro jobs BREXIT and hope that May crashes us out the EU absolving him of any responsibility. Its good politics, his hands are clean (to remainers he was on side; to leavers he did not implement staying in) and its all the Tories fault.
    No one gives a stuff about the country in all this.


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