Opinion – What Labour should do about Brexit

Labour’s front bench is under relentless pressure to adopt a formal position of permanently maintaining Britain in the internal market of the EU and the Customs Union.

Pro-EU campaigners are engaged in a war of attrition, hoping they can grind the party down. They demand nothing less than a complete about turn on the pledges made in the popular June 2017 manifesto in which Labour promised to exit the EU and end freedom of movement.

Despite the “Norway option” being the position of the Liberal Democrats, the SNP, TUC and many rank-and-file party members, it is right that the Labour leadership keeps its nerve on the issue and refuses to budge.

People can change their minds in a democracy – although on Brexit, voters’ minds are fairly entrenched.

The academic Matthew Goodwin has noted that unlike many other political issues, the vote to Leave (or Remain) in the EU was more an expression of deeply held values and beliefs about Britain’s destiny in the world.

At the moment we are in danger of democracy being hijacked by a handful of metropolitan elites and those who shout the loudest.

Similarly, the voices of over half a million Labour Party members are very important. But so too are the interests of more than 12 million Labour voters who do not follow politics closely and just want to see the country make a success of leaving the EU.

The referendum mobilised more people than any other democratic plebiscite in our history. Crucially, millions that voted for Brexit were working class people and residents living on council estates who had become disaffected with all the mainstream political parties.

To betray these people now would be a hammer blow to the idea that we live in a real participatory democracy.

Understandably, for those who campaigned to Remain, our impending departure from the EU is like losing a close relative. Indeed, Shadow Brexit secretary, Keir Starmer, deployed a similar analogy when he talked about how some MPs are still “looking back in grief”.

Yet, it is time for Labour to look forward and positively embrace a fairer post-Brexit Britain.

This means the party must articulate a distinctly socialist and social democratic vision of what can be achieved when we are fully outside the institutions of the EU – particularly after the transition ends.

Of course, that requires negotiating maximum tariff-free access to the single market and a new customs partnership with the EU to ensure frictionless trade and an invisible border in Northern Ireland.

These goals are possible in the next round of negotiations. But it will require a united front from both the government and Her Majesty’s loyal opposition to secure such a deal.

After all, why would the EU want to give the UK a good deal if it thinks it can capitalise on divisions at home and keep Britain in the EU in all but name? As President Macron was keen to point out on his recent visit to the UK: “Single market membership is at the heart of the EU.”

The four freedoms are indivisible, including open door migration within the bloc and ongoing financial contributions into the EU’s budget.

So why are some Labour MPs and MEPs arguing for us to remain at the heart of the EU, to echo Macron, but without any of the levers to shape the rules that will affect individuals and businesses for generations?

How would any of this be compatible with “respecting the referendum result” as the Labour leadership has said on so many occasions?

It is particularly disrespectful to our European friends to ask them for a form of EU membership that they are simply unable and unprepared to offer. It is why all roads lead back to the Lancaster House speech and the negotiated deal currently being pursued by the government.

That is the massive elephant in the room that pro-Remain MPs are just comprehensively failing to grapple with.

Staying in the single market is a democratic cul-de-sac – unless the real intention is simply to overturn the referendum result by stealth.

In the business-as-usual politics of Westminster, some colleagues and the media are trying to present a choice between a “hard Tory Brexit” and a “jobs first Brexit”.

In reality, both slogans are a chimera. We either remain in the EU or we forge a completely new path outside the bloc.

The mandate from the electorate is the latter, which is why Jeremy Corbyn is resisting calls to u-turn on the party’s general election manifesto, as well as avoiding giving succour to a second referendum at this stage in the process.

Looking ahead to the next scheduled general election, the Labour Party has an opportunity to embrace Brexit and put a new social democratic settlement in its place.

We should be leading the debate on what a fair, managed migration policy looks like. As an internationalist party, that means creating a level playing field for skilled workers to come to Britain from anywhere in the world, as opposed to the preferential employment access only on offer in the EU.

Of course, new migration agreements with third countries should be reciprocal and win broad public support.

If Malaysian nurses are coming to work in our NHS, then British people and businesses should be getting preferential access to these fast-growing overseas markets in return.

Likewise, IT workers coming from Bangalore on work visas should be reciprocated so that our tech entrepreneurs can easily open businesses in a growing India. Surely this is what is meant by Global Britain.

Labour can use the new powers to forge independent trade agreements around the world to lock in a more ethical foreign policy.

Relations with the Saudi regime, for example, would be a lot better if a bilateral trade deal had made it clear that British arms sales are for self-defence purposes only and not to be used to bomb innocents in Yemen.

The dispute mechanism of a formal bilateral trade agreement would allow the UK government far more leverage with the Saudis than we have at present.

Another area on which Labour can lead is what to do with the “Brexit dividend” – the ending of massive net budget contributions to Brussels – and what that means for the redistribution of power, wealth and opportunity in our country.

Starting with power: the law-making competencies returned from Brussels present an opportunity to create a truly federal United Kingdom. Abolition of the House of Lords could make way for a new Senate of the Nations and Regions, proportionally and indirectly elected from the devolved administrations and city regional governments in England to scrutinise UK-wide legislation that affects all communities.

Farming, fisheries and most taxation should be fully devolved to Scotland, Wales and Northern Ireland. This would be a massively democratic and inclusive form of governance, binding our precious 300-year-old economic and political union even more tightly together.

The 40-year-old Barnett formula should be replaced by a new UK-wide fiscal solidarity pact. This would see Brexit heartlands in the Midlands and North of England receive higher levels of public expenditure per head than they do now, with block grants devolved to city region governments and metro mayors.

Free from EU state aid restrictions, Labour should enable city regional governments to create 100 per cent public sector-owned social house building companies and, crucially, borrow against capital assets which would include the development of tendering protocols that favour local businesses.

This would include market subsidies for key workers, renters and first-time buyers who can demonstrate a strong local connection, ending the social cleansing in some cities, where so many families have been driven out, or unable to secure an affordable home.

With automation and the “gig economy” moving apace, it is clear that the traditional income tax base that states require to fund public services can no longer be relied upon. For a modern socialist government, this points to a shift – over time – from taxing income and production to taxing more unproductive wealth, land banking and speculation.

Like the innovation of the “plastic bag tax”, we need to find smarter ways to levy the more conspicuous and environmentally damaging forms of 21st century consumption.

A good example of early progress in this regard is Michael Gove’s proposals for farming subsidies “in exchange for public goods” once we have left the inefficient common agricultural policy. This approach has already won plaudits from parts of the Left-leaning environmental lobby.

The corporate profit-shifting culture and neo-liberal framework of the EU is a roadblock to this kind of radical fiscal and environmental reforms. You only have to see the treatment of Greece and the European Commission’s enforced sale of “valuable state assets” to understand the point.

Moreover, less than one third of the EU’s over 500 million population currently live under centre-left governments.

The reality therefore is that for some time we can expect to see the continuation of the kind of neo-liberal policies in the European Council that favour the interests of the few, not the many.

The rigging of the economic rules by big business and corporate interests at EU level does not favour either member states or small businesses deciding on a more entrepreneurial or divergent regulatory path.

In short, neo-liberalism influenced by multinational corporations is no friend of the entrepreneurial state when it seeks to put social innovation, mutual forms of public ownership and massive long-term investment more centre-stage.

At the moment, our active labour market policies cannot provide preferential treatment for skills training and employment support to British nationals and home-domiciled students.

The European Court of Justice has ruled that EU nationals must be treated the same on application of these policies as British citizens. But outside the EU we could once again offer free lifelong learning and maintenance grants to citizens – without the Treasury blocking the policy on the grounds it would amount to an open-ended spending commitment to millions of EU citizens who might travel here to benefit from the offer.

Take, for example, the current higher education student loans system: over £1.2 billion remains unpaid by EU nationals who have simply absconded without paying, essentially free-riding off British taxpayers.

A universal basic income is another social policy reform a future centre-left government would struggle to implement inside the EU.

The Shadow Chancellor, John McDonnell, is said to be looking seriously at this policy for the next Labour manifesto. Giving every person below retirement age a basic income of £150 per week, whether they have a job or not, is simply a pipe dream for the left if the reality means it would operate as a magnet for “benefit tourism” from the EU.

These radical social policies are only possible outside of the EU’s directives on social security which prevent “discrimination” on the basis of nationality.

We only have to recall the difficulties David Cameron faced when trying to curtail the abuse of the UK’s generous universal child benefit system. These payments – around £36 million per annum – are routinely sent abroad by EU nationals “exercising their treaty rights” under EC regulation 883/2004.

Outside the treaties of the European Union, Labour can win the next general election by explaining to young people and working families how more progressive policies can be introduced once we have fully left the EU.

The renationalisation of companies that have become too big to fail, like the privatised utilities and the railways, is more likely to happen outside the EU. The introduction of preferential housing, employment and educational schemes – including the abolition of student tuition fees – are only possible and affordable if they favour people with a local connection.

For those critics concerned about “socialism in one country”, Labour can forge a truly internationalist agenda that supports workers in developing countries by reducing tariff barriers.

Above all, it is time for parts of the left to stop painting Brexit as a complete disaster and embrace the many socially progressive opportunities that it provides for our own citizens instead.

Tom Bewick is a Labour councillor in Brighton and Hove where he was chair of the local Vote Leave campaign in 2016. This article was first published by Brexit Central.