Winner of the New Statesman SPERI Prize in Political Economy 2016

Sunday 6 January 2019

Lexit misdirection

Just as Brexiters have heavily influenced the way the mainstream media understand Brexit, so Lexiters have heavily influenced the way those in the Labour party understand Labour’s policy towards Brexit. In both cases we have an argument based on ideology dressed up with spin designed to persuade others.

The main focus of this post is the argument that Labour has to support Brexit because otherwise it will lose lots of seats in any General Election. But I want to start with state aid. This idea that the EU’s state aid rules would hinder Labour policy has a structural similarity with the famous £350 million a week claim of the Brexiters. The debate then focuses on how much of the idea is true, just as the Brexit debate was about how much we paid to the EU. But in both cases we are being led to ask the wrong question.

In the Brexit campaign the debate should have been about whether the public finances would deteriorate as a result of Brexit, rather than by how much they would improve. In the case of Lexit the debate should be whether the state aid that a Labour wants to do that the EU would prevent would benefit the economy by enough to more than offset the loss due to lower trade and general chaos if we leave with no deal. Why no deal? Because being part of the EU Customs Union is sure to be accompanied by restrictions on the use of state aid. So, just as with Brexit, the Lexiters goals can only be accomplished by forsaking any kind of close economic relationship with the EU.

There is far less analysis of this more appropriate question, probably because any reasonable analysis would conclude that the costs of tearing up all our trade agreements with the EU far exceeds any benefit from a bit of extra state aid. Some Lexiters respond to this by trying to discredit the science of gravity equations: occasionally in a manner that is simply laughable.

Lexiters, and also many others, were on more solid ground when they argued immediately after the referendum that Labour had to support Brexit to win another General Election. Triangulation was suddenly fashionable on the left, and it worked perfectly in 2017. Because Labour were officially supporting Brexit, May was unable to make the debate all about Brexit. But because Labour talked about a Brexit that did no economic harm, they also captured the Remain vote.

The key fact from the referendum was that the Remain vote was concentrated in large cities rather than small cities and towns, so something like 60% of Labour constituencies voted Leave. But public opinion has changed since the 2016 referendum. That change may not be large, but it is enough to shift many previously Leave constituencies to Remain. Some analysis suggests Remain constituencies are now in a slight majority, and in addition that a majority of marginal seats also support Remain.

There is a second factor that weakens support for Leave. We are now talking about specific and realistic ways of leaving, rather than the fantasy of your choosing promoted by the Leave campaign in 2016. It is not at all clear that Leavers who want No Deal should prefer May’s deal to Remain and vice versa. Reality has taken the passion out of many Leavers. In contrast, a long campaign against the odds has helped increase the passion among many Remainers, and it is now Remainers rather than Leavers who are more determined to vote in any second referendum.

You can see this in a poll undertaken by YouGov [1]. It asked the following questions, with the total Conservative and Labour percentage vote in each case (don't knows included in total but not shown).

If there were a general election held tomorrow, which party would you vote for?
How would you vote if there was another general election before the UK leaves the EU and the Conservative Party support going ahead with Brexit, but the Labour Party and the Liberal Democrats are opposed to Brexit?
How would you vote if there was another general election before the UK leaves the EU and the Conservative and Labour Parties both support going ahead with Brexit, and the Liberal Democrats are opposed to Brexit?

Labour opposing Brexit does shift some votes from Labour to Conservative, but this is partially offset by some Remainers switching to Labour, meaning that the Conservative lead does increase from 2 to 6 if Labour declares against Brexit. However if Labour declares for Brexit, Labour’s vote collapses, giving a Conservative lead of 12.

These numbers should not be taken as a realistic projection of what would happen, because voters are primed to think about Brexit alone rather than other issues. (They are also primed to think about switching from Labour to the LibDems, rather than Greens for example.) But what this poll does indicate is that the number of Remainers Labour would lose by enabling Brexit is much greater than the number of Conservative voters they would attract, and the number of Leavers they would lose if they declared against Brexit.

The poll also shows (contrary to some claims by Remainers) that Labour’s current (as of mid-December) strategy of ambivalence is the optimal one in terms of maximising their vote. As in 2017, being formally for Brexit but also being either the best chance of stopping Brexit or of getting a softer Brexit, is a vote winning strategy, exactly as triangulation theory suggests it should be. But if Labour are forced to choose, as they may well be this month [2], this poll shows that the Lexiter argument that to maximise their vote the party has to choose supporting rather than opposing Brexit is not supported by the evidence we have.

[1] Should we discount this poll because it was paid for by a Remain organisation? This is what Brexiters often do to discredit evidence. The poll would only be suspect if it was carried out by a non-reputable company, or if the question asked was a leading one. This is why I have included the exact question in this post. On when who funds research matters see here

[2] Some Remainers also claim that Corbyn has already failed to stop Brexit. I can see no good evidence for this claim. However if the leadership recommended or even allowed abstaining on a crucial vote that allowed Brexit to happen, then Brexit would quite rightly be seen by Remainers as enabled by Labour, because by abstaining Labour were critical in allowing Brexit to go ahead. This is confirmed in a follow-up poll to the one discussed above released today. 


  1. Your article assumes the only possible options are a very close customs union/single market deal, or no deal.

    Many countries have comprehensive trade deals with the EU that do not have any state aid principles. I can't find anything to suggest CETA or the EU-Japan Economic Partnership Agreement contains state aid provisions. I doubt Singapore or Korea have allowed such terms either.

    You're proposing a false choice of deep integrated deal or no deal.

    1. It also seemingly assumes that Lexiters' only interest is in getting the right to use state aid. Maybe that would be good and maybe it would be bad, but there were also the New Cambridge types who thought it was important to leave the EU for economic growth because we would be able to control the balance of payments, which constrains it.

      I assume lack of interest in the balance of payments argument hurt No in 1975 and Lexiters this time round


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