Winner of the New Statesman SPERI Prize in Political Economy 2016

Saturday 29 December 2018

What will happen if Labour enable Brexit

There are some in the FBPE community that claim that Brexit could have been stopped if the Labour leadership had abandoned Brexit. This is either arguable if applied to 2016 or just simply wrong since 2016. But in the turmoil that is likely to follow the vote on the Withdrawal Agreement in January, the Labour leadership will play a crucial role. This post is about what happens if Labour enable Brexit in any way. I am not suggesting they will (and hope they do not), but right now this is a significant enough possibility to be worth writing about.

The attitude of Corbyn loyalists is that Remainers have nowhere else to go besides Labour. If Labour enable Brexit, this will have no noticeable impact on how Remainers vote in any General Election. They dismiss a poll that suggests Labour could lose a large number of votes by attacking the poll: it was funded by the People’s Vote campaign, or who believes polls. A more thoughtful criticism is that you are bound to get a large number in any question that highlights Brexit, but general elections will be fought over many issues. In short, Remainers on the left will always vote Labour.

I would agree that one poll tells you little about any future general election, but what it does do is show the intensity of feeling over the Brexit issue. I think many in the Labour leadership and Corbyn loyalists fail to understand this. They prefer instead to misplace Remainers as the centrist enemy, and see attacks on Corbyn over Brexit as just one more means by which the centre and right of Labour attack Labour. This is a serious mistake.

That Brexit is more than just another issue or a passing fad seems clear. After the 2016 vote, around half the Remain vote was prepared to accept the result, but the other half was not. Through two years when the two major parties and the BBC regarded the decision as made and irreversible, Remainers built various organisations with the aim of reversing the vote. They held protest marches around the UK that gradually grew in size, culminating in the biggest march on London since the Iraq war protest. Polls now suggest the Remain vote is more committed than the Leave vote, with a majority over either the WA or No Deal bigger than Leave’s margin in 2016.

Where does this passion and energy come from? It is obviously a big issue, but would the kind of Brexit favoured by Corbyn and some Labour and Tory MPs (close to BINO) really be such a big deal compared to staying in the EU? On an emotional level I think there are three reasons why it would be. First and foremost is the question of identity. Many people in the UK regard themselves as also European, and any form of Brexit is clearly a way of cutting the UK off from the rest of Europe. Second, I think there is a strong feeling that leaving the EU represents the triumph of ideological over rational argument. Once you let a campaign of the right won by illegal means triumph, you open the doors to more of the same. A third factor is empathy for the position of European migrants in the UK, who are often friends, neighbours or colleagues.

If a skeptical Labour leadership want to know what would happen if they enabled Brexit, the best comparison I can suggest is how they felt after parliament voted to put UK troops alongside US troops in the Iraq invasion. The objection that there is no comparison because thousands of people died because of Iraq is beside the point. I’m not saying they are events of comparable importance, and they are completely different in nature. These things do not work on a kind of utilitarian rational level, but a more emotional sense of betrayal. In the case of Brexit a betrayal of identity, of evidence based policy making, and the wellbeing of our friends, neighbours or colleagues.

If you put these points to Corbyn loyalists you get a variety of responses that go from the misguided to downright depressing. The best, but misguided, is that a compromise is required to ‘heal the nation’. It is misguided for reasons I set out at length here. Anything close to BINO does not ‘take back control’, it does not give more resources to the NHS, and it will not end Freedom of Movement. In short, a soft Brexit fails to give Brexit voters what they voted for, and that will be quickly pointed out to them if they do not realise it themselves. Another response is that Labour cannot afford to lose the votes of Labour leavers in critical seats. Quite why Labour are more likely to lose Leave voters in these seats than Remain voters is never specified. The worst argument I have heard is that Corbyn is just following Labour policy agreed at conference: if you cannot see why that is the worst argument you are probably a Corbyn loyalist. [1] Actually that is not quite true, because the worst arguments are Lexit arguments, but I and many others have addressed them elsewhere. [2]

I have to be doubly careful in posts like these because I am what one Corbyn loyalist described as an ‘arch-Remainer’. The emotions I ascribe to many of those who campaign for Remain are also my own. Like many of the other economists who made up the Economic Advisory Council I resigned because I saw the current leadership as too content with the referendum result. As a result I am not an impartial observer, so I need to be especially careful that what I write about Remainers as a whole is factually based. No doubt what I say in this post will be dismissed for exactly that reason [3]. But what cannot be dismissed is that there have been two major grassroots movements in the last 20 years in the UK that managed to put more than half a million people on the streets of London, and there is a distinct danger that Labour will be on the wrong side of both of them.

What the precise consequences of Labour enabling Brexit would be are impossible to say. Less enthusiasm and less votes for sure, but who knows whether they would be critical when it came to the establishment of a new party or a general election. The more relevant question is why take this significant risk. I have to return to my comparison with austerity. Pre-Corbyn Labour collapsed in part because they toyed with accepting full-on austerity at just the point that austerity was becoming unpopular. Right now Corbyn Labour are toying with enabling Brexit because they worry about Leave votes that are now moving to Remain. When Brexit will not get you free from state aid, will not heal the nation, and will just lose you votes, it is time for the Labour leadership to put ideology aside and help take the issue back to the people.  

[1] The overwhelming majority of Labour members are Remainers, and want a People’s Vote. What is agreed at conference is heavily influenced by the leadership.

[2] What I would add is that Lexit contains a similar contradiction to Brexit. Just as Brexiters cannot get a trade agreement with the EU without accepting the backstop, so any trade deal with the EU (including being part of the Customs Union) will require following EU rules on state aid. So the only form of Lexit possible is No Deal, which is a hell of a price to pay to avoid state aid rules.

[3] As someone put it to me in a tweet, this is exactly what someone who supported Owen Smith would say. Which is something of a tautology as the only significant policy difference between Smith and Corbyn was Brexit.


  1. I would characterise Corbyn's leadership as 100% ideological, therefore to call for ideology to be put aside is either unrealistic or effectively a call for Corbyn to go.

    Doesn't sound likely to me.

  2. I cannot - after several attempts - register to receive your emails. I get an auto message - on here - saying
    "You are already listed on the mailing list of mainly macro. FeedBurner has emailed a new subscription confirmation message to"
    But it hasn't! I have had no message to my email, can you help?
    I assume you will delete this message which is not a comment, but can't see how else to contact you to get your blog emailed. Thanks.

  3. "the only significant policy difference between Smith and Corbyn was Brexit." good lord

  4. Politely and respectfully does not the argument that Labour does not have the votes to affect Brexit taken to its corollary would suggest no need for an opposition party?

  5. As one of those who support Corbyn AND remaining in the EU, I find many of your comments highly insightful and pertinent. They are the same arguments and statistics as I've attempted to point out to the Lexiters who appear wedded to the Eurosceptic position, at least whilst Corbyn also seems to support it.

    Corbyn's position may have originally made some sense, since polls suggested that any firm policy position on Brexit (Remain or Leave) was damaging to Labour support, resulting in the ambiguous or 'don't mention the elephant in the room' policy which served them well in the 2017 General Election. However, as you say, there is now evidence for an electoral benefit adopting a public vote, as more Labour Leave supporters finally realise what a disaster Brexit is, and demographic changes result in greater Leave support generally.

    Despite this, Corbyn's position appears unmoved, ideological and consistent with his own pre-leadership era. However, ideology didn't stop him accepting the 'examples' of the International Holocaust Remembrance Alliance 'definition' when placed under overwhelming pressure from his party, despite being a life long and dedicated pro-Palestinian supporter. So I'm tempted to hazard another explanation.

    Think of this as a political strategist. Corbyn needs to force a General Election to gain power relatively quickly. However, Labour doesn't quite have the numbers to force a no confidence vote in the government to enable this. So what's the best game plan? Surely it's to adopt the APPEARANCE of being pro-Brexit, to encourage the Tory rebels to think they need to offer a no-confidence motion in return for a people's vote. The Rebels won't vote for a General Election lightly, so it's no good offering them something that is already Labour policy! This way, both sides get something they want, Labour a chance of a General Election and the Rebels (along with most of the Labour party) a people's vote.

    Of course this might not work, not least because party democracy during conference forced a mention of a public vote into Labour policy. The Tory Rebels are also fully aware Corbyn might cave in, as he did with the IHRA 'definition' when subject to pressure. The risk is that the clock is ticking, and the mechanisms to stop a no deal Brexit remain unclear.

    1. Perhaps Jeremy Corbyn has had a lot of experience judging moods in the country and the ability to calculate the odds of success and failure. I find it odd that those that support the EU are so convinced that they are right, when the evidence coming out of Europe prove them wrong. The other small point is that if they support Jeremy Corbyn then they must realise that those calling for a second referendum have their own agenda which is just to use every trick in the book to get rid of him, which is why they peddle the myth of calling for a second referendum which can't even be organised in time.

      There is of course a possibility of the Tories losing DUP support if the Tories trap them into a backstop without end, then an election is decidedly possible, which is why Jeremy will persist in calling votes of no confidence.

      Not least of course it exposes all those who prefer a Tory government to Labour, such as the Libdems and DUP Tory enablers.

  6. "When Brexit will not get you free from state aid"

    So are you saying that there is zero chance that Corbyn will be able to secure a deal that allows him to nationalise our utilities and support struggling industry like steel? Even if he changes may's red lines on migration etc?

    It's quite clear that as long as we remain in the eu this will be v difficult.

  7. Or you could say that roughly a third of Labour supporters back Leave along with two thirds of Conservative supporters... so Brexit cannot be resolved as a party issue no matter what you want.

    Whatever happens half the electorate (roughly) will not get what they want. Almost any outcome runs a risk of fracturing the Conservatives, but Labour is also at risk. The strongly Remain Lib Dems are a dead duck and post-Farage UKIP have lost the plot.

    There is no current political party that addresses Remain/Leave properly... because it doesn't suit party leaders. They will reap what they sow, which at the moment is mostly confusion.

    In view of the confusion I'd suggest that it would be pragmatic to go for a clean Brexit now, see how things turn out, and then decide whether or not (and how) to re-engage with the rEU. Probably too big an ask for those already committed to Remain/Leave as a matter of 'belief'.

  8. You say there are three reasons why this is such an emotional issue for the remainers. I would add a fourth. Having a democratic voice in Europe is crucial. As a voter in a strongly Tory constituency, I have in effect no voice in Westminster, and my right to elect an MEP is therefore all the more important. The way in which we are about to lose our voice in Europe, exemplified by Mrs May being sidelined at meetings of the Council of Ministers, is a huge national humiliation. On the question of uniting the people, nothing is less likely to do so than the implementation of Brexit. We are facing years of continuing negotiations about trade in goods and services, during which the voices raised on both sides will be even shriller than they are now. If the PM believes that we remainers will just go away after March she is deluded. Ditto Jeremy Corbin. The only way to unite the country is to avoid this whole fiasco.

  9. As I see it Corbyn believes in Brexit because the rules on state aid and the Growth and Stability Pact might seriously affect Labour's ability to carry out its agenda so it would try to become free of these perceived constraints.

    A Peoples Vote would be very divisive and likely much closer than Remainers like to believe; in other words it would resolve nothing. If Remain did win the Leavers would remain resentful and, if there were trouble in the EU in the future, in my view certain, then there would be a call for another referendum for precisely the same reasons: "circumstances have changed and we know more than we did".

    This issue is divisive and will remain so for some time.

  10. The problem with this pro remain article is precisely because it attacks a decision already made from a perspective that it is wrong.

    Jeremy Corbyn is not the issue here, but has been framed by some centrists as such, and this whole article is based on Centrist assumptions that they know that staying in Europe will be the best solution, when Europeans themselves are campaigning on the streets against the very principles they are so sure is in our best interest.

    I would flatly point out as someone who voted remain, that the next time round (if a second referendum is called) I will be voting to come out, because Europe is nothing more than a Neo-Liberal nightmare that is spreading poverty and misery around Europe exactly the same as it is here, witnessed by the riots on the streets of Paris, If you listen carefully to what those people are saying, you will understand the same situation they describe as it is here.

    There is absolutely no economic grounds for staying in Europe, which is why this article is heavy on Centrist rhetoric and light on detail. EUROPE IS A NEO-LIBERAL CONSTRUCT which has been steadily handing wealth and power over to corporate sector and written off large swathes of the populace, that is not going to be sustainable and those that support it, ignore its implications because they choose to forget what history has taught them.

    Professor Mark Blyth is now world renowned and gets to the heart of the subject Europe and the EU. He calls this Centrist philosophy Trump-ism which it rightly is, instead of considering the structures created in the EU over the last 30-40 years that is leaving governments powerless to to effectively run their economies, they adopt fear tactics and platitudes to describe outcomes which just can't be proved.

    These are the real issues facing all of us in the EU and can be verified whereas the assumptions espoused in this article just can't.

  11. Excellent insight into how betrayed people would feel if Labour enable Brexit. All Labour MPs should read this.

    You mention Labours concern over state aid rules. Please see my husbands letter below.

    EU and State Aid Rules

    Using the excuse of state aid rules to pursue Brexit against the interests and opinions of both Labour members and voters is ridiculous and shows a very poor understanding of what is possible under the current EU arrangements. For example both France and Germany use state owned banks to provide low cost capital for the development of their industries.

    To take KfW of Germany as an example, it is owned by the state, raises money commercially using bonds backed by the state (ie: at subsidised rates), pays no taxes and has various branches including one specialising in providing start up capital to SMEs (Small and Medium Enterprises). It has assets of over €500 bn. This has been one of the secrets behind Germany’s industrial strength over the last few decades allowing its industry to out-compete British industry which has received no such state support. KfW also holds state shareholdings in major organisations such as Deutsche Post, Deutsche Telekom and Commerzbank.

    The only recent British initiative in this area has been the Green Investment Bank set up by the coalition government in 2012 but it was on a much smaller scale (£2.3bn), never received wide support from the Conservative side of the coalition and was then privatised by being sold off to Macquarie in 2017.

    The lack of imagination in British politics in the area of industrial policy including state support to industrial growth is stark. The Shareholder executive sees itself as simply holding assets until they will be privatised and has no vision for how to use or grow their portfolio to support the economy. The only area that seems to be of any interest to them is that of defence. As the former Chair of a $2bn multi-lateral organisation on behalf of the UK, I am speaking from experience and not simply conjecture.

    But if Germany, France and other states can do this under existing EU rules, there is nothing to stop the UK doing the same given enough imagination and creativity. To use this as a the main reason to leave the EU displays a breathtaking lack of quality advice and I urge you to urgently invest in researching what is possible under existing rules.

    Yours Faithfully

    Andrew Maclean

  12. Simon, Corbyn on Brexit seems a good example of Carlo M. Cipolla Third Basic (and Golden) Law of Human Stupidity: "A stupid person is a person who causes losses to another person or group of persons while himself deriving no gain and even possibly incurring losses"

  13. I have let my Labour MP know that Labour supporting brexit moves my vote to the Lib Dems. With a 240 majority he might listen as he replaced a Tory last time round.


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