The oad to a soft Brexit

The oad to a soft Brexit

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The UK election result has been a game changer. The electorate has turned down the Theresa May/Daily Mail offer of a hard Brexit and the threat of walking away from the negotiations with the European Union. The result is a rebuff to May and all her ministers claiming that ‘no deal is better than a bad deal.’

The new parliamentary arithmetic means that the road is now clear for negotiating a soft Brexit. That means accepting the result of the June 23 referendum but recognising that for reasons of economics, geography, history and culture a close working partnership between the UK and the Continent is in the interests of both parties. Hence, the UK should seek a partnership and cooperation arrangement with the EU across a whole range of areas – the economy, security, culture, the environment, research – where it has vital shared interests with our closest neighbours.

Furthermore, events are pushing the EU as well as the UK in that direction. First, after the latest terrorist horrors in Manchester and London, who is seriously going to suggest that the UK should pull out of its intelligence sharing and security cooperation with European police and counter-terrorism services? Second, the disastrous performance of President Trump in Saudi Arabia, at NATO and the G7 has given renewed momentum to the desire amongst European leaders for greater self-reliance. The swift declaration with the Chinese government upholding their joint commitment to the Paris agreement on climate change after Trump’s announcement of US withdrawal is an early example. Third, the election of Emmanuel Macron as the new French President adds a new powerful, political figure pushing for collective action at the European level.

The main political obstacle remains migration. The May government has argued that the UK must pull out of the Single Market and the Customs Union because membership of either is incompatible with the UK controlling its own migration policy. This view is regularly echoed by EU leaders and Commission President Juncker. I have shown previously in Social Europe why this is not the case.

The Treaty of Rome is not a neoliberal free for all. Importantly, this is also the view of Jean Pisani Ferry, the author of Emmanuel Macron’s Presidential policy programme and now his chief economic adviser. Nine months ago Ferry wrote a pamphlet for the influential Bruegel think tank with four other senior EU policy makers entitled Europe After Brexit that argues that in an increasingly volatile world, neither the EU nor the UK has an interest in a divorce that diminishes their influence, especially as the balance of economic power shifts away from the North Atlantic world. The authors propose a new form of collaboration between the EU and the UK, a continental partnership which would consist of participating in the movement of goods, services and capital and allowing some additional labour mobility, as well as in a new system of inter-governmental decision-making and enforcement of common rules to protect the homogeneity of their deeply integrated economies.

On migration, the Bruegel authors suggest managed labour mobility is required for the interdependent parts of the European economies to function smoothly and to enable firms to transfer staff to other countries easily, but there is no legal necessity for unrestricted movement.

The precise form that those arrangements on a managed migration policy within the single market between the UK and the EU could take are a matter for negotiation but the starting point should be that all options including membership of the Single Market a la Norway or the Customs Union a la Turkey are on the table. These are crucial because the central economic issue is not about trade but about integrated production flows. Serious European politicians and policy-makers know that economics has leapt the boundaries of their relatively small nation states. The optimal economic area is now Continental in scale. In Europe, all the main production processes rely on integrated supply chains operating across borders. As British Chancellor Philip Hammond said in Berlin, trans-national arrangements are needed that “allow the complex supply chains and business relationships that criss-cross our continent to continue.”

Up to 10,000 freight vehicles a day pass through Dover. Around 4.4m lorry journeys are made between the EU and the UK each year. On a recent 30 minute trip along the M6 in the Midlands I passed lorries from Belgium, the Czech Republic, Germany, France, Netherlands, Poland and Spain. That is the physical reality of cross-European supply chains and integrated production. These are visible indicators of how interdependent the UK and Continental economies have become. That is why it is so crucial to both the UK’s and Europe’s economic well-being that this tariff-free, seamlessly productive, economic activity is retained.

The realities of inter-dependence are not just economic. Will it help UK universities and institutes if the country withdrew from Europe’s common research and exchange programmes? Does the UK want to be part of European-wide efforts to address climate change? These are the questions posed by Brexit.

Here is an unexpected opportunity for Labour. The Conservative party is deeply divided on the issue with its main ideologues backed by a virulent press set on a hard Brexit. The Liberal Democrats are currently a marginal force. Throughout the general election Jeremy Corbyn’s team took the political initiative with a clear focus on ending austerity. Yet Labour cannot afford to rest on its laurels: it has to sustain its momentum and that requires a clear position on the defining strategic issue of this Parliament. Labour’s anti-austerity, growth programme can only be realized if the country has the least damaging of Brexits. Elements within the Corbyn leadership remain attached to the autarchic ‘socialism in one country’ dreams of the alternative economic strategy. Yet Corbyn knows that those days are gone. A modern Left has to be comfortable dealing with an interdependent world. Managed astutely, Labour could be the hegemonic force bringing together an alliance of actors able to oppose the May government and the Daily Mail and establish a new collaborative relationship with Europe. For starters, his Labour negotiating team should:

Bring together all MPs regardless of party who want to pursue the soft Brexit option. They should re-draft the terms of the UK negotiating position and seek to win Parliamentary approval for it
Approach business and financial organisations, universities, research and scientific institutions and civic associations with an offer to help build a new cooperative partnership with Europe
Open informal discussions with key policy-makers across Europe, working with them and opinion-formers to lay the ground for a new partnership

Calls for a second referendum are dead. They hampered both the Liberal Democrats and the SNP in the election. But what is possible is the negotiation of a proper, collaborative partnership with the EU. It will be complicated and difficult but the opening is now there. Can Labour bring together a progressive alliance to take it?

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