12 reasons why Labour should oppose Brexit

Labour MP Jess Phillips says she wants to stop Brexit, despite the fact that the majority of people in her constituency probably voted Leave.

Everything is Remain Minus. Every deal shrinks the economy in some way.

If I lose my seat because I chose to do what I felt was the right thing for the people where I live and they don’t like that, I’ll live with that.

I wonder, though, whether she would lose her seat. Opinion is changing fast in Labour areas and among Labour voters. Two years on, a better-informed electorate is beginning to see the potential damage Brexit will cause.

Many on the left of the party are concerned too. At a Love Socialism, Hate Brexit event in the House of Commons, frontbencher Clive Lewis warned that Labour would be destroyed if it allowed a Tory Brexit.

Is there any other sort of Brexit, though? Isn’t any form of Brexit a Tory Brexit? From the beginning, leaving the EU was a Conservative Party project. By failing to oppose it, the Labour Party risks losing the support of many of its voters and of colluding in doing even more damage to those areas already hardest hit by the economic downturn and the austerity policies that followed.

Here, then, is why Labour must campaign to stay in the EU.

1. Brexit has already damaged the economy

Earlier this week, the Office for National Statistics published figures showing that 2018 was the worst year for economic growth since the financial crisis a decade ago. The UK was already at the bottom of the OECD investment league table but the last year saw four consecutive quarters of declining business investment.

As the FT’s Chris Giles commented:

The effects of Brexit were stamped all over the national accounts data.

Economists have been calculating the Brexit effect on the economy for more than a year and most agree that it has cost Britain between 1.5 per cent and 2.5 per cent of gross domestic product.

According to the Resolution Foundation, real household incomes are on average £1,500 lower than they would have been had the UK voted to stay in the EU.

2. There is ‘no jobs’ first Brexit

The damage Brexit has caused is likely to get worse once we actually leave. Every Brexit scenario, apart from those where we stay in the customs union and single market, will increase trade friction. There is no way that making trade more difficult than it is now can do anything other than  UK’s economy. Whether or not the forecasts turn out to be right is neither here nor there. As Giles Wilkes remarked:

I can’t forecast what my weight will be next year. I can accept analysis that eating a pound of butter a day will make me much fatter.

We can’t forecast the damage to the economy accurately but we can be absolutely certain that putting barriers in the way of trade will damage it.

Even if we manage to replicate our current EU trade deals (which is looking unlikely) and sign similar agreements with other large economies, it still won’t make up for the loss of the frictionless trade we currently enjoy with and through the EU.

Around 30 per cent of the entire value of UK exports, goods and services, is made up of inputs to products that are finished in the EU. The assumption of frictionless trade has led to the development of EU-wide production lines that are dependent on just-in-time trade. Border checks will slow that trade down and will encourage EU manufacturers to look for alternative suppliers.

This relocation of supply chains is already happening, as firms shift their business to the rest of Europe. Ford’s announcement this week that, like other car manufacturers, it is preparing to move business abroad, is an inevitable reaction to the likely disruption Brexit will bring to its business.

A sizeable portion of our trade and GDP is at risk from the post-Brexit barriers to trade. There is a good reason why countries have worked hard to bring down trade barriers over the last few decades and why so few have deliberately raised them. There are no opportunities from Brexit, only costs in the form of reduced economic growth.

3. Brexit is likely to hit Labour-voting areas hardest

The government’s EU Exit analysis published last March showed the North East and West Midlands taking the hardest hit, with London coming off relatively unscathed. Analysis by the Economic Statistics centre of Excellence at the end of last year suggests that this is already starting to happen. The economic gap between the north and south of England has widened since the EU referendum.

This is not surprising given that any increase in trade barriers after Brexit is likely to hit manufacturing hardest. A study by the Institute for Fiscal Studies found that process, plant and machine operative jobs are most at risk from Brexit.

In any case, an economic slowdown is always likely to hit those with the lowest resources, in terms of savings, income and job security, the hardest. Even if the impact of Brexit is felt fairly evenly across the income distribution, as some studies suggest, a real income loss of 4 percent has far worse consequences for those less well-off who spend a greater proportion of their income on food, energy and housing.

Labour voters are worried about Brexit

It is not surprising, therefore, that Labour areas have seen the biggest shifts in opinion against Brexit. As early as last summer there were signs that opinion in Labour areas was shifting, with some seats that had voted Leave now showing Remain majorities. There are signs that public opinion has shifted. According to most surveys, including the largest, the British Election Study (BES), around two-thirds of Labour voters voted Remain. A recent report by transport union TSSA now puts that figure at 76 percent. It warned that Labour could lose seats by failing to oppose Brexit.

This will come as no surprise to Manchester University’s Rob Ford who has been arguing for some time that losing Remain voters is far more dangerous for Labour than losing Leave voters.

If a seat voted 52% Leave, and it is a Con-Lab marginal, then it is very likely that a *large majority* of Lab votes in that seat will come from Remain supporters (and a large majority of Con votes from Leave supporters).

It should be, but never is, obvious that “appeal more to Leave voters” is not the only strategy for winning/holding such a seat, nor will it usually or necessarily be the best one.

If you lose even one Remainer for each two Leavers gained, you’re stuffed

Taking Remainers for granted would be unwise. The TSSA report contained this interesting observation:

Brexit energises Labour Remain voters far more than Labour Leave voters and this explains why Labour failing to oppose Brexit will have a far more significant impact on the Labour vote than if it actually opposes Brexit.

There is a big risk for Labour in being seen as the midwife of Brexit. There may be some in the party who hope that a catastrophic Brexit will be blamed on the Tories but this won’t wash with the voters. Younger voters, in particular, see Brexit as a Conservative project and associate it with austerity. They will be bitterly disappointed by anything less than a full-throated opposition.

4. Brexit is a Conservative project

Those young voters are right. The people who care about Brexit, those that really want it, are predominantly middle-class voters.

The Brexit vote is often depicted as a working-class revolt but as Danny Dorling says, according to Ashcroft polling data, ABC1 voters made up 59 percent of the Brexit vote – higher than their proportion of the general population. A majority of working class voters might have voted for Brexit but fewer of them turned out. It was the middle-class voters who made it happen.

Working class people were much more likely not to vote, whereas middle-class people, particularly older middle-class people voted.

And your typical Leave voter was a conservative Tory voter who wasn’t rich but wasn’t particularly poor.

As IpsosMORI reports, it is these middle-class and middle-aged to elderly voters who see Brexit as the most important issue by some distance.

In contrast, as the TSSA report says, Labour Leave voters are less bothered. Many people voted Leave because they were, understandably, fed up with the degradation of their areas and the ongoing slide into insecurity. The referendum gave people a chance to upset the system and they took it. Now, though, it is not their greatest concern. As the TSSA report found:

Labour Leave voters are less concerned about Brexit than Leave voters generally and Labour Remain voters speci cally. Labour Leave voters are more concerned with bread and butter economic issues, austerity and cuts to welfare bene ts. Only 36% of Labour Leave voters list the UK leaving the EU as one of the top three issues facing themselves and their families, compared to 58% for Conservative Leave voters and 60% for Labour Remain voters.

As Jess Phillips remarked, nobody is coming into her constituency surgery and bending her ear about Brexit:

Every time a Tory MP on news saying “I’m hearing that people want us to leave now” or “people want out of the customs union” I want you to know they are hearing it from about 5 people in the tearoom of the commons. I’m in a leave seat and my constituents never ever say this stuff

— Jess Phillips (@jessphillips) October 18, 2018

Many of her constituents have more pressing things to worry about.

5. Leave voters are no more left-wing than remain voters

The Remain cause is often disparaged as ‘centrist’ by some in the Labour Party, in an attempt to suggest that supporting Brexit is somehow more authentically left-wing. However, as Bristol University’s Paula Surridge found, BES data shows that, on economic questions, Labour Leave voters were no more left-wing than Labour Remain voters. The same is true of Conservative voters. It was social rather than economic conservatism, support for things like moral values and tougher sentences, that distinguished the Leave vote.

However, she also noted that the traditional left-right divide is still the strongest influence on general elections. This suggests that, given what we know about the concerns of Labour Leavers, the best way to appeal to them is with economically left-wing policies that will reverse the impact of insecurity and austerity, rather than a pitch to social conservatism, ground on the Tories or UKIP will always win.

6. The EU would not prevent Labour from implementing left-wing policies

One of the mainstays of the Lexit argument is that EU rules would prevent a left-wing government from implementing its policies, particularly on state aid.

However, as the IPPR pointed out in its report in January, EU rules allow plenty of scope for more state intervention and France and Germany already do a lot more of it than the UK.

Our analysis suggests that, contrary to claims that the EU seriously inhibits an active industrial policy, there is extensive scope for member states to pursue state aid measures. EU rules allow for the use of state aid for purposes ranging from regional development and environmental protection to R&D and SME nancing. Moreover, EU law is of cially neutral on the matter of state ownership and does not prevent nationalisation.

An analysis of Labour’s 2017 manifesto by two trade lawyers found nothing in EU law that would get in the way of any of the manifesto commitments. As barrister George Peretz concluded:

It would be a serious mistake to rule out single market membership, or any other deep trading arrangement with the EU, on the false basis that they are a major obstacle to a Labour government seeking to widen public ownership or support industrial development.

The EU’s state aid rules are designed to prevent the sort of pork-barrel politics where governments bribe large companies with tax breaks. They are not there to stop the nationalisation of railways or public utilities. It is possible for the UK to stay in the EU and to have a government that is a lot more left-wing than any it has had previously.

8. If Labour enables Brexit it is finished in Scotland

Much of the debate around Brexit takes place with an England-centred slant. Scotland, which voted clearly to Remain, is often forgotten. However, it will be extremely difficult for Labour to win a parliamentary majority without regaining many of the Scottish seats it lots to the SNP. The trouble is, if it fails to oppose Brexit it is likely to lose most of the ones it still has.

Labour is already losing members in Scotland and recent polls suggest a swing to the SNP that would see Labour losses while leaving the Tory seats in Scotland intact. This loss of Labour support would, of course, be permanent if Brexit were to lead to Scottish independence but even without it, the sense that Labour facilitated Brexit is likely to alienate voters and keep Labour from an overall majority for a generation.

9. Free Movement – it’s about rights, not numbers

The term ‘Free Movement’ is open to misunderstanding and therefore exploitation by the unscrupulous. It is not about the freedom to travel, it is about the freedom to work somewhere with equal rights to local workers. If we accept that a modern economy will always have a certain level of immigration (and when compared to many others the UK’s isn’t that high) ask yourself this:

Who is least likely to demand a pay rise? Who is least likely to join a trade union? Who is least likely to make a fuss if managers suddenly change working patterns? A worker who has the same rights as the local staff, who can walk out and get another job or claim unfair dismissal, or a worker whose very right to be in the country is dependent on the job and the employer?

By opposing ‘Free Movement’, right-wing politicians can appeal to anti-immigrant sentiment without actually opposing immigration. Arch-Brexiter John Redwood let the cat out of the bag in his now infamous ‘take your money out of the UK’ article. Here is what he said about immigration:

As firms use up all the available easy-to-employ labour, they simply bring in large numbers of people from overseas from places where unemployment remains very high, or where wages remain low.

Right-wing politicians of the free-market variety are not against immigration. What they don’t like, though, is immigrants with rights. After Brexit, workers from the rest of Europe will still come to the UK, only now they will be on less favourable terms than local workers. It doesn’t take too much thought to see who is most likely to benefit from that.

10. Sovereignty – big is beautiful

Much has been made of the sovereignty argument for Brexit but leaving the EU is lily to diminish the UK’s sovereignty rather than enhance it. As the trade experts keep telling us, the world is dividing into trading blocs, each with its own regulatory regime. The only countries that negotiate with the EU on an equal footing are China and the USA. As the FT’s Robert Shrimsley put it:

The world is organising into trading blocs and that to be a mid-sized country outside one is to get the chlorinated end of the chicken.

At the moment, the UK is one of the countries that sets the rules. Outside the EU, it will be one of the countries that has to abide by someone else’s rules. The US has made it quite clear that the UK will have to accept its standards on food and pharmaceuticals if it wants a trade deal. To get an idea of what being in the US trade orbit is like even for a large economy, just ask the Canadians.

Being part of the EU is also essential if we are going to stand up to large multinational corporations. The power of these global behemoths can only be checked by governments acting together. The financial crisis of 2007-08 illustrates the problem. The USA managed to make a profit on its bank bailout in a way that smaller countries couldn’t. This is purely a question of size. In America, the government bullied the banks, forcing them all to participate the rescue scheme for their sector. European countries, acting alone, didn’t have the same leverage.

In the Washington Post last week, Anne Applebaum remarked on the UK’s powerlessness in the face of monied elites and concluded:

The E.U. is probably the only power in Europe — maybe even the only one in the world — with the regulatory strength to change the culture of tax avoidance. And since 2016, it has been slowly enacting rules designed to do exactly that. Britain, once it leaves the E.U., may well be exempt.

British industry might suffer after Brexit, and British power will be reduced. But the gray zone — where politics meets money, where foreign money can become domestic, where assets can be hidden and connections concealed — will survive. Perhaps that was the point all along.

If we are to have any hope of curbing the power of big corporations and tax avoiding billionaires, we can only do so as part of a larger bloc. It’s no wonder, then, that rich men want us to leave.

The paper sovereignty gained by Brexit will be worthless when it comes to a face off against large trading blocs and powerful financial interests. Real sovereignty is simply a function of power and that is what we are throwing away when we leave the EU.

11. The mandate for Brexit is weak

To do something as drastic as undoing 45 years of foreign and trade policy ought to require a much clearer mandate than 37.4 percent of the electorate.

Under the government’s most recent trade union law, to organise industrial action affecting public services, a union needs the support of at least 40 percent of those entitled to vote. Anything less would see the action declared illegal in the courts. As employment lawyer Darren Newman pointed out, 37.4 percent would not give sufficient democratic legitimacy to justify a work-to-rule on the London Underground. How, then, can it be enough to bring about the greatest change to the UK’s foreign relationships since the Second World War?

12. Voters are entitled to be asked “Are you sure?”

Given the narrowness of the vote and the fact that there has been a lot more public discussion since the referendum than there was before it, it is only fair to ask people to confirm their decision.

Some 2 million new voters have joined the electorate since the referendum and most of them want the chance to vote on Brexit. Others have changed their minds. Things have moved on since the narrow vote two years ago. We don’t know what the Will of the People is on Brexit now. The only way to find out is to ask again.

You can’t even delete a file on your computer without being asked whether you are sure. It is crazy to take such a momentous decision for the country without checking that this is what people really want.  At the very least there should be failsafe that says ‘are you really sure you want to do this?’

 

A few days after the referendum, Resolution Foundation boss David Willetts remarked that Brexit was the vote of the excluded and the insulated. The insulated will be fine. These are the middle-aged to elderly shire Tories who really want Brexit; the people who have been banging on about it for years. The excluded, though, will get the rough end of it, as ever.

Labour has much more to lose from a disastrous Brexit than the Conservatives. Most of its members are against it and most of the people it represents will suffer disproportionately from the fallout.

For the past two years, many Labour MPs have been worried that opposing Brexit would see them punished at the ballot box by working class voters committed to Brexit. But the extent  of working class Brexit support has been overhyped and there are strong signs that  ground is now starting to shift. Furthermore, even among Labour’s Leave voters, the commitment to Brexit is nowhere near as strong as it is among Conservative voters.

Labour voters are more likely to punish their MPs for allowing an unnecessary job-destroying catastrophe. For Labour MPs it is less of a risk to campaign against Brexit than it is to blindly plough on with it because they think it’s what their supporters want. Brexit is not and never was Labour’s project. It has its roots in conservative middle England and it will be severely damaging for most Labour voters. Labour should put all its energy and resources into opposing Brexit before it damages both the party and the country beyond repair.