Henry Newman is Director of Open Europe.
In what might turn out to be the final twist of August’s media silly season, Keir Starmer last weekend redefined his party’s Brexit policy. Labour’s latest position is for the UK to remain members of the Single Market and the Customs Union for a transition. This “limited period” will (conveniently) last “as long as is necessary”. Sir Keir went on to suggest that “a form of customs union with the EU is possible” when this interim period ends, and dangles the possibility of a “new single market relationship”.
Three months ago, John McDonnell told Robert Peston that staying in the Single Market would be interpreted as “not respecting” the referendum result. When Tony Blair later suggested that the EU might compromise on free movement to help the UK stay in the Single Market or in an outer tier of a reformed EU, the Shadow Chancellor retorted that Blair hadn’t “listened to the nature of the debate going on in the pubs, the clubs and school gates”. McDonnell said that Labour could “negotiate access to the single market” but would “respect the referendum result”.
By mid-July, Jeremy Corbyn was arguing (incorrectly – with reference to Norway, for example), on the Marr show, that being in “the Single Market is dependent on membership of the EU”. Marr pressed the matter, asking: “let me be absolutely crystal clear, we leave the single European market because we leave the EU?”. The Labour leader replied that EU membership and the Single Market are “inextricably linked”. Marr tried again: “so we have to leave the single market?” and Corbyn answered “yes”. That “yes” has now become “no”.
Flip-flopping on policy is an odd way to provide certainty to business. Sir Keir has spent weeks insisting that structures don’t matter compared to outcomes; now he has decided that they do. Just before the summer, shadow ministers were fired for voting to stay in the Single Market. Will they now be re-instated? When does the next verse of Labour’s Brexit Hokey Cokey come? And has anyone tipped off Barry Gardiner?
Just a month ago, Gardiner wrote that staying in the Customs Union would be a “disaster”. The Shadow Secretary of State for International Trade also claimed that it “is not possible” to stay in the customs union on leaving the EU. He argued that “the only members…are the member states of the EU” – and, with the technical exception of Monaco (a principality smaller than the Square Mile), this is true. That’s why Philip Hammond sticks to a careful formulation about how the UK will leave the Customs Union at the end of the Article 50 process, even if he backs the UK exactly mirroring EU customs with a parallel tariff structure. How does Sir Keir propose to resolve things? He hasn’t said, but the only real option seems to be for the UK to spend time and effort negotiating a complex transition deal to keep us in the customs union. That’s the very thing for which Sir Keir criticises the Government.
Last weekend, Sir Keir promised that Labour will “be absolutely clear” about its policies. But the new policy provokes other profound (and unanswered) questions. The Single Market is not a distinct institution of which the UK can neatly remain a member once it leaves the EU. Staying in would almost certainly entail the UK remaining within (or rejoining) the European Economic Area, and probably joining the European Free Trade Association (or agreeing a complex ad hoc deal). Sir Keir fails to mention either institution, let alone weigh up the pros and cons of their temporary membership. After this transition, Sir Keir suggests that Labour would require a deal which protects “the benefits of the Customs Union and the Single Market”. Although his earlier impossible demand to keep the “exact same benefits” has been diluted, it’s still a tall order.
In its manifesto, Labour promised to “respect the referendum result…and put the national interest first”, while committing “to prioritise jobs”. This policy has also shifted. Last weekend, Sir Keir wrote that Labour will “always put jobs and the economy first”. (Ignoring the irony given his party leader’s seeming penchant for Venezuelan economics). The inevitable corollary of that prioritisation is that democracy, the will of the people, and respecting the referendum result are all secondary. Sir Keir himself suggested that the prospects of a “good deal” are “diminishing fast”. Does prioritising the economy mean that Labour would retain membership or a transition indefinitely if a “good deal” (undefined) is not put on the table by Michel Barnier?
Ever since the referendum, Labour’s position on Brexit has been in flux. Reading Philip Stephen’s Politics and the Pound this summer was a useful reminder of the evolution of Conservative divisions over Europe in the 1980s. (And indeed of Margaret Thatcher’s regrets over pushing for the creation of the Single Market in the first place). But I’d also recommend, David Butler and Uwe Kitzinger’s volume on The 1975 Referendum. For during the 1970s, it was the Labour, rather than the Tories, which was rent with divisions over Europe. This week’s policy change is yet more evidence that things may have come full circle. Because, despite the Conservative Party’s disagreements over Brexit, the Government’s position actually seems clearer than Labour’s (although further clarity from Theresa May is certainly overdue, as I have previously argued on this site).
Some have tried to suggest that Labour’s current Brexit policy will cause the Government significant problems. I’m not yet convinced. The crucial question will be whether Philip Hammond moves his position. If he sticks to arguing that Britain will automatically leave both the Single Market and Customs Union, while proposing a transition that broadly continues the status quo, then it’s likely he will persuade most remain Tory MPs to stay with the Government. (Why would they back Labour’s position of staying in the Customs Union and Single Market when the Chancellor, with his reputation for mastery of detail, has ruled out that course? Why would they back that Labour position, when the Government’s position will obtain a broadly similar outcome, from their point of view, for a transition?) And of course, the Conservative Whips can expect some Labour MPs to back its more pro-Brexit position.
Labour’s latest policy risks serious trouble ahead. The new position will be welcomed by metropolitan, Remain-voting areas and younger voters, but not by Labour’s more traditional heartlands. A long transition could push the question of Brexit well into the next Parliament. Surely that would only further expose the deep divisions in the Labour party. Despite Sir Keir’s best attempts to provide new clarity, Labour’s thinking is still too muddled. If the Conservatives can keep cool heads and back the Prime Minister when she lays out more detail, than they can set about exposing Labour’s inconsistencies, particularly on free movement. But if instead it’s all infighting and briefing wars, then Tory wars risk being the only show in town.