Winner of the New Statesman SPERI Prize in Political Economy 2016

Tuesday, 5 February 2019

There will never be a better time than immediately after Brexit to form a new political party


As the vote of no confidence by 80% of Labour MPs after the referendum result showed, Corbyn is at his most vulnerable over Brexit. The 2017 election result may have wiped memories of this painful period, but to say that it shows the vote of no confidence didn’t matter goes too far. Unfortunately Labour still lost in 2017, as their powerlessness over Brexit shows. How do we know that the perception that Labour MPs were deeply unhappy with their leader did not cost Labour in 2017 the crucial votes that prevented them forming a government?

Voters seem currently as divided on Brexit as they are by party, and most Labour voters and members want to stay part of the EU. There will therefore be no better time for centrist Labour MPs who are pro Remain to break away and form a new party. When Brexit happens there will be a lot of bitterly disappointed people around questioning where to go from here. That a few Labour MPs have been talking about the possibility of forming a new party is an open secret.

Unfortunately Corbyn has done virtually nothing for members and voters that closely identify with Remain. Hopes have been kept alive by Keir Starmer and occasionally John McDonnell, but neither attended Corbyn’s recent talks with the Prime Minister. The overriding impression given by the leadership and its supporters is that they do not want to antagonise Labour Leavers, and Remainers have nowhere else to go besides Labour. It is never a good idea to give the impression to those closest to you that you take them for granted.

If the objective of this new party is to remake UK politics it is almost certain to fail. But that is not what is important. The key issue is how much damage it can do to the two major parties. One of the lessons of the last two years is that the Conservative vote is pretty solid. Brexit is in a way their Falklands: an issue where they can ramp up the nationalism to maximum and their voters will forget the incompetence and damage to this country their government is inflicting on them. The minority of Conservatives who can see through this will be scared by stories (often false) of what a radical Corbyn government will do.

The new party therefore seems to be mostly a threat to Labour. This is true in part because our future trade relationship with Europe will play a major part in politics from now until the next election. (Those who think that Leaving the EU in March or whenever will stop politicians talking about Brexit will be very disappointed.) If the new party pledges to fight for staying in both the Customs Union and Single Market after we leave the EU, that will tempt Remain voters, because Labour only speak of a close relationship with the Single Market. There is a world of difference between being close and being in: ask any trading firm why. Staying in the Single Market requires Freedom of Movement, and this would allow the new party to attack Labour on immigration, where its recent actions have also made them vulnerable from the perspective of liberal Labour voters.

The problem a new party has is the MPs that are likely to be part of it will find it hard to major on radicalism. Will they really champion immigration, or instead fall back on anti-immigration rhetoric? If they match Labour’s economic radicalism with a kind of nostalgia for how things were before 2016, they will find to their cost that this nostalgia is not widely shared. All of these things mean that the party will fail to capture most Labour supporters. However when it comes to winning the next election Labour do not have supporters to spare. To lose some to a new party could mean another five years for this disastrous Conservative government,

What we can be sure of is that the media, pretty well all of the media, will big the new party up as much as they can. The reason they will do this is that a new party is a threat to Labour rather than the Conservatives. A consequence of the media blitz will inevitably be that some votes, mainly Labour votes, will follow. So whatever line the new party takes, if they are pro-Remain they are quite likely to be a threat to Labour come the next election. 

In economics we talk about ‘barriers to entry’ that prevent new firms entering a market. Some of these are intrinsic, like set up costs for a new firm. But existing firms in the market can also influence whether new firms enter or not. Corbyn’s Brexit strategy so far seems designed to create a ready market of customers who are dissatisfied with Labour’s policy on Brexit. In other words Corbyn is currently creating the conditions in which a new party could enter, and survive for long enough to cost Labour the next election. 



15 comments:

  1. Or, this could be the moment for the Lib Dems' redemption, no?

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  2. The Labour Party is in real trouble here.

    Most Tories I know, including myself, are pretty happy with where the Conservative party is. Leave the EU, in some form, ditch May, get a leader who has a positive vision of a UK outside the EU, then get a mandate. You make think people talking about "Freedom for the UK" are jingoistic idiots, and you may be right, but here is an opportunity for the Tories to become the Liberation Party.; the party that successfully got the UK out of the EU and steered a course for a new relationship. And as we all know, Liberation Parties tend to become the default governing party for decades after - think Congress Party, ANC.

    In contrast, Labour is hopelessly split. The pro-EU camp has a real problem in that it is blatantly clear that if the UK rejoins the EU in the near future will not be as an equals, but as a second tier country that gets the scraps from the Franco-German axis. Good luck arguing that case. The Corbyn/McDonnell faction has a problem in that they are unpleasant people whose favoured economic model as testified in many speeches over recent years is now a humanitarian disaster.

    So, who in Labour has the intelligence, wit, and personality to create a road map back to a cohesive vision, a united party, and a programme that can win a General election? I'm just not seeing who can do that at the moment. Someone who could be acceptable to both Remain and Leave. Lisa Nandy?

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    1. The lack of vision here is staggering, it seems to me that people forget, that Labour was 20 points behind at the beginning of the polls last round and got within a whisker of taking office.

      The EU is nothing but a distraction, whilst you pontificate over which party has the best EU policy most in this country are struggling to make ends meet. The EU is an economic disaster due to the Central Bank and the Euro, yet most do not have the slightest clue of its significance, yet want to cling to the EU like limpets clinging on to the Titanic.

      As you are obviously a Tory, it ill behoves you to be complacent, people really aren't that daft to support a party that inflicted the levels of misery on them that this vile party has.

      People will have a simple choice at the next election, a progressive Labour party, or range of political colours representing Neo-Liberal fundamentalism, which will not be any choice at all.

      The so called Centrists think they can hoodwink people as they have done in the past, forgetting of course they also have history.

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    2. I think you're right that if the Tories pull of Brexit without much noticeable damage then they will gain credit, and this is why hysteria and carelessness from liberal Remainers like SW-L and its attempt to influence Labour policy is a potential threat to the left. Avoid a recession and cut immigration and May would look "good" to voters.

      Can you link me to even one speech where Jez or McDonnell say their "favoured economic model" is somehow Venezuela?

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    3. Pretending that Venezuela is a basket case just goes to prove your lack of enlightened viewpoint. Venezuela has been under sustained attack from a world power ever since Chavez got elected.

      The have systematically undermined their economy from sanctions to financial interference. I know you probably know this but what really disturbs me is the levels people go to in the western world to lie about these facts.

      We all know that democracy has became a sham but in reality the Trumps of this world are living on borrowed time, waves of protest are building up throughout the western world.

      For those that really would like to get the real picture on Venezuela this is just one documentary among many that spells it out for you. https://www.youtube.com/watch?v=_fV-C1Ag5sI

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  3. Do you mean out of the Labour Party or from the Conservatives?

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  4. You managed to write this without once mentioning the Liberal Democrats. Voters have a liberal Remain party to vote for right now.

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  5. Corbynism lets be frank failed the working class as it downplays Brexit, economically and politically, now leading to the dreadful economic calamity soon to kick off. Brexit was begat by UKIP and the Tory Nationalist Right Wingers. Corbyn has lost his support for colluding with Brexit horrors of which Nissan, Airbus, Jaguar Land Rover , General Motors are but the tip of the iceberg. Half a billion consumers in a tariff free seamless single market beckons while Brexit island behind borders threatens.
    The Left will not relinquish their Labour toy and their extremism will tighten its grip. We need a progressive party of the centre left , pro- business, proEU, appealing to all groups , pro public services, but not class war based. Neither main party appeals to most voters who repeatedly long for a party of intelligence and pragmatism not stubbornness or dogma or limited leadership.

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    1. Peter: I fear you miss what comfortable middle of the road people always do, people are suffering badly in this country, we have had forty years of the nonsense you believe in, and is precisely why working people voted out. People like yourself never listen but are so convinced of their own views without a shred of evidence.

      Do you realise just how bad things are in Europe and why people are on the streets protesting, Germany depending on who's forecasts you believe is either in recession or heading that way, the richest country in Europe with the highest trade surpluses.

      But enough of that I'll let this academic say the rest for me:

      https://vimeo.com/293497876

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    2. While Jezza's stance on Brexit is completely opaque, it was lack of intelligence from the previous two Labour leaders who didn't throw their full weight behind fiscal stimulus that led to his election as leader. Nissan is an invalid example since the EU has ratified a trade deal with Japan which removes the tariffs on cars, removing the original reason for the Sunderland plant.


      When the EU has not clearly increased economic growth, it is hardly even pro-business to be pro-EU. Unless of course you own shares in one of the multinationals who are enjoying tariff-free trade. But the net budget contribution by the UK is worth about the same. Is it "progressive" of me to pay taxes so those shareholders can have higher dividends, without higher growth?

      I don't doubt Brexit could cause a major recession though.

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  6. I say please bring it on these Neo-Liberal centrists will no doubt enjoy their five minutes of glory, but will disappear into the dustbin of history just like their predecessors.

    Brexit will happen whether Labour are in power or not, these fly-by-night politicians have no allegiance to anyone except the corporations they hope will support them.

    A one issue party doesn't have a viable political future and we all know that they prefer the Tories to the Labour Party, judging by their voting record, try as they may they can't dent Jeremy Corbyn's position in the Labour Party because he represents what we all want. It's policies that matter not personalities. That's what these charlatans are bereft of.

    The EU is a corporate State - once the real debate starts and we open up the Maastrict and Lisbon Treaty the gloss will start to fall off the EU and people will start to understand how Europe could treat a country like Greece.



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  7. I agree with your analysis that a new party will primarily weaken the Labour party and give cause to the Tory's to stay huddled together in their uncomfortable embrace to remain in power. The damage this will do the the country in unknown, but if we take this administration add the disastrous coalition and square it with Thatcher's reign, what remains of the UK will be much the poorer, angrier and denuded of more of its natural habitats.

    I also agree with your opinion of our 4th estate who's bias seeps through to every corner of society from the value of choice of primary schools to the power of the Premier League (when was the last time an English team won 'Big Ears'?) Another impediment to any form of radical party is the state apparatus in particular the police, that would in the event of mass movement successfully shut it down. Unlike in France where on the whole the police allow protest they just don't seem to like them in Paris.

    However I sense that there might be an opportunity for an insurgent new party with a radical though not implausible agenda of electoral reform aligned with a New Deal style focus on investment in a green economy and staying as close to the EU as possible. At some point the British must realise that the financialisation of our economy has divided the country leaving the golden triangle rich and the rest poor. The danger I guess is Brexit will lead to more deflation leading to greater nationalism and an even more strident Tory party.

    Maybe Corbyn is playing a blinder and will drag Theresa May across the divide leave us with a moderate Brexit but I doubt it as per your previous post.

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  8. Just a reminder if Galtieri hadn't invade the Falklands (or even if had done it 12 months later), then Thatcher wouldn't have had a second term and there would have been an SDP Government. The victor has rewritten history but the reality is that the Gang of Four were very very unlucky in their timing and this shouldn't be taken as representative of what might happen to a new party in future.

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  9. Saffron Rainey how do you explain uefa?

    The champions league is well organised and pretty much free from corruption. One of the best football teams in Europe will win it every year.

    My own explanation for this is that one thing European peoples have in common is the belief that football is more important than culture or politics.

    The way to get more European cooperation might be to redefine more activities as sport. If business were redefined as sport an organisation on similar lines to uefa might be able to more effectively regulate it than the current set up.

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