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QUESTIONS AND ANSWERS ON THE UK’S AND LABOUR’S BREXIT POLICY OPTIONS

Where are we now?

Negotiations between the UK and the EU over Brexit could hardly have been worse handled. Preparations by the government or anyone else for a Leave outcome from the 2016 EU referendum were woefully inadequate, providing endless scope for undermining the relatively robust position advanced by the Prime Minister in her earlier Brexit speeches.   It was a fatal mistake for the UK to agree to discussing the border in Ireland, citizenship and money before trade. 

This triggered the UK into making heavy concessions before discussions on trade and other central issues had even begun. The general election then deprived the House of Commons of any majority in favour of walking away from a bad result, handing more negotiating cards to the EU. Negotiations can seldom be conducted successfully unless there is the threat in the background that no deal is better than a bad one. Finally, the role of members of the House of Commons and especially the Lords in weakening the government’s hands with wrecking amendments to the Withdrawal Bill, combined with divisions over the authorship and sources of influence over of the recent White Paper, has left the country looking more and more divided.

 

How did we get to the outcome at Chequers and subsequently?

It was this sequence of events which led to the stance adopted by the government at Chequers on Friday, 5th July 2018. Unwilling to see any obstacles to free movement of goods between the UK and the EU27, there was no stomach for any arrangements other than for the UK effectively staying within both the Single Market and the Customs Union, even if nominally outside the EU. Even if the EU27 accept the terms agreed at Chequers, which is far from certain, this would produce, the worst of all outcomes, with the UK having swathes of its commercial and economic policies determined by the EU27, with little control over them being exercised by the UK. It will leave us still paying large sums of money net to the EU budget every year; with the European Court of Justice still effectively supreme over UK law; probably with little or no control over our borders; still in large measure in the Common Agricultural Policy and probably some of the Common Fisheries Policy too; with the UK continuing to have a massive balance of payments problem with the EU27; and unable to have a free hand in negotiating trade treaties with other countries.  In fact, the final position is likely to be even worse than this as the EU drives a harder and harder bargain with the UK, regarded as a third country with little willingness to fight for anything better and thus forced to make one concession after another. It would be an extraordinary outcome for the fifth or sixth largest economy in the world to find itself in large measure controlled by a foreign organisation which may well not have our interests at heart – or aligned with ours – for much of the time.


What is likely to happen?

It is far from obvious that the way events have developed is going to provide any kind of stability in either the short or longer term. When the deal on offer comes back to Parliament in October or November 2018, it is not at all certain that there will be a majority in either the Commons or the Lords to approve it. If the government’s negotiating stance is then voted down, we may be getting very close to there being no deal, in which case the default position would be for the UK to have to trade with the EU on World Trading Organisation (WTO) terms. There may be pressure in these circumstances to hold another referendum but this may not provide the route to the UK staying in the EU which some of its proponents support. This is because, if the expiry of the Article 50 period occurs before the new referendum takes place, the UK would by then be out of the EU and not then be voting to stay within the Union but applying to re-join it, probably with obligations to join the Eurozone and without our existing budget rebate. This is why, in the end, there probably will be a majority in Parliament for the government’s deal, however, bad it is.


What will be the long-term implications of a bad deal?

This kind of outcome is not, however, likely to produce any long-term stability in our relations with the EU. There will be so much discontent in the country at our diminished and subservient position vis à vis the EU, that Euroscepticism as a major political force is bound to continue in the UK, with all its negative consequences in terms of splitting our major political parties, and distracting attention from many other problems faced by the UK which require urgent attention. The history of the last 40 years strongly suggests that the type of relationship between the UK and the EU which is likely to be stable is one which is on an inter-governmental basis, rather than as the UK being part of the EU’s political project. It is a tragedy that the government’s current negotiating stance leaves no room for recognising this longer-term need for a different but more stable relationship than the one we have at present.

 

Where does this leave the Labour Party?

The vast majority of Labour MPs voted for Remain during the 2016 EU referendum and probably a majority of them would not be unhappy to see the UK remaining in the Single Market and the Customs Union. It is possible, therefore, that when it comes to the crunch vote in the autumn, that at least some Labour MPs will vote with the government, offsetting the votes against a deal by dissident Conservatives, thus providing the government with a majority. This may be a tactic which will be acceptable to Remain orientated Labour supporters, clustered in Remain areas such as London and university towns, but it may also have dire impacts on Labour support elsewhere.  Recent polling evidence indicates that there has been something like a 10% swing among C2, D and E Labour voters, from Labour to Conservative, with many of these voters living in marginal seats in Wales, the Midlands and the North which Labour has to win it if is ever to form a majority government again. Since it is Brexit which has been at the top of the political agenda for months it is hard to believe that this swing away from Labour has nothing to do with the fact that many of these people voted Leave in 2016 and now feel that the Labour Party in Parliament is not following through with Brexit in the way they expected that it would. The fact that almost 70% of the seats held by Labour MPs had Leave majorities when the EU referendum was held reinforces the significance of these trends and highlights how difficult it may be to reverse them.


What about democracy more generally?

There is also a wider national problem. Rightly or wrongly, a majority of the UK electorate voted Leave in the EU referendum. They did so after they had been promised by the government that, whatever the result of the referendum, its outcome would be respected.  When the referendum was held, 17.4m people voted for Leave, a larger number than had ever voted before for any party, individual or cause. This was followed by a very large majority of MPs voting for the triggering of Article 50 in March 2017, shortly before the general election where the manifestos of both the major parties clearly stated that they accepted the result of the referendum and were pledged to making sure that Brexit was implemented. It is clearly the case, however, that a large proportion of the political leadership of the UK, while nominally still supporting the pro-Brexit stance which their manifestos promised, is in practice doing its best to undermine it. This is a deeply disturbing development. Democracy means accepting results even if you do not agree with them, not supporting only voting decisions with which you are in accordance. If trust in the competence, goodwill and sense of fairness of our political elite is critical to making representative democracy work, thus avoiding support for moderate policies waning and political extremism or mindless populism holding sway, then the sort of behaviour we have seen from so many MPs and peers may come at a very high price.


What can be done now to rescue the situation?

It is not clear now that there is now any good Brexit solution available to us. The choice may turn out to be between accepting a really poor deal from the EU27 or, even at this late stage, opting not, unfortunately, for the kind of agreed Clean Brexit deal which might well have been on the table eighteen months ago, but for one which is now much more likely to be rushed and problematic. Even so, because there clearly is now a risk of a “no-deal” scenario, we should prepare for it. Clearly, the more organised we are for this outcome the more manageable it is likely to be. It is also possible that, in the end, this may turn out to be better bet than accepting a really harsh deal from the EU27. Staying in the Single Market and the Customs Union with no say on how they develop may buy off the opposition of some of our major manufacturing companies, but at a high long-term costs. An unstable and very unpopular overall outcome, whose impact will drag on and on, may in the end be a worse outcome than some disruption, whose costs in competitiveness will very probably be offset by a steep fall in sterling as the UK leaves the EU in difficult circumstances. Considering all the efforts made to undermine it, the UK economy has held up reasonably well since the 2016 referendum. It will very probably continue to do so whatever the outcome of the current Brexit negotiations. We may just need to hold our nerves while we resist giving more and more away.

Labour Leave shares a number of viewpoints from external commentators, both Leave and Remain, without necessarily endorsing any of the viewpoints therein.


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