There are options for Labour – it must now pick an approach to Brexit, writes Joe Carberry
Labour’s response to Theresa May’s plan for hard Brexit has been confused –both opposing it and seemingly claiming credit for it. This is an unsustainable contortion. But this can be an opportunity the party should take.
Our country will be poorer and we must expose the idea that the rewards of being in the single market and customs union can be reaped outside. It was notable that after a speech in which the prime minister identified auto manufacturing and financial services as two key sectors Toyota warned of the costs of her plan and HSBC announced jobs would be leaving the United Kingdom.
It is often said that the UK will seek to replicate the European Union-Canada Free Trade Agreement. Canada has only partial access to the EU single market, without full access for key sectors and without immediate mutual recognition of professions. Neither Canada nor any other country with a free trade agreement with the EU has the same access to EU markets that being in the single market brings. As EU leaders have been clear, it will stay this way.
Canadian firms that export to the EU have to comply with EU product standards and technical requirements, as will we. Many Canadian products are dependent on approval by EU authorities before they can be sold in the single market, as ours will be. The importance of the single market hinges on having a single rule book that its members co-author. We will now have to follow it without participation, putting us at competitive disadvantage.
Outside the customs union we will face quotas and tariffs on goods. Regardless of the customs co-operation agreement we make, businesses will face new bureaucratic hurdles. This will hit UK-based manufacturing and raises concerns over the North-South Irish border.
Within the EU the UK is party to trade deals with over 50 countries. Each will now have to be renegotiated – almost certainly as weaker agreements as we will no longer be in the half-billion-strong single market. The illusion of new deals and a beautiful photo op with Donald Trump will not make up for lost trade.
This is not inevitable and there is no mandate for it. Many ‘Leave’ campaigners said we would stay in the single market. The prime minister herself said last year that completing the single market would mean ‘a dramatic increase in economic growth for Britain’. Throwing this away is a political decision that has been taken without the option of a softer UK-EU settlement being explored (which can include action on immigration).
Labour should argue that there was an alternative which could have better protected the economy; that we will not accept public finances being put at risk for the sake of an unachievable migration target that if reached would harm the economy further. This is not anti-Brexit, but anti the Tories’ interpretation of it. In seats up and down the country mini campaigns to protect local sectors should be launched. Pre-article 50, specific assurances should be sought.
The general election will likely be in early 2020. If we are by then out of the EU and in the process of dislocating from the single market and customs union we will face severe economic turbulence. Labour should prepare now to be in a position to argue then that this is the result of Conservative political decisions. This will in turn give greater credibility to future Labour proposals on how to get out of the mess we are sadly likely to be in.
Another option for Labour is to make a virtue of embracing the government’s plan. Say we believe control of migration justifies economic uncertainty and highlight our shift; say we will back the prime minister in delivering the best possible deal and that this should be above party politics. Be David Cameron voting for academies in 2006 and if the economy turns change tack and hope voters won’t notice, like Cameron in 2008 abandoning Labour spending plans.
This has, in my view, the downside of adopting a migration policy that advocates denying our economy of valuable skills and the workforce we need; proposes a system which has as its premise the argument that there are too many migrants in the UK but will barely cut numbers; and will compound the underlying issues of economic exclusion which drove the Leave vote. But this seems the only political strategy that can accompany calls for a tiered visa system seeking stringent cuts to migrant numbers. Just ask which of these better aligns with Labour values.
Whether to vote for article 50 is the wrong debate: there is a majority and it will pass. The key is to continue to argue to be close to Europe and expose the consequences of the government’s proposed rupture. The Parliamentary vote that matters, then, is the final one. Leaving with no deal would be catastrophic so Parliament should be able to amend the deal through ongoing scrutiny and if the final vote is lost article 50 talks should be extended not ended.
The government has proposed a painful path for the UK and Europe. Theresa May has chosen. So must Labour.
Joe Carberry is co-executive director of Open Britain. He tweets at @
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