The new government’s goals are modest. But economic reality may force it to follow changing public opinion.
In its campaign for the general election in the United Kingdom in July, Labour generally kept a low profile on the UK’s departure in 2020 from the European Union. In government, the party said, it would not seek to rejoin the EU—not even the customs union or the single market—despite the outgoing Conservatives being on the defensive on this issue.
Public opinion now firmly holds that ‘Brexit’, stemming from the referendum to that effect in 2016, was a mistake. Only 31 per cent say it was the right decision—indeed, some polls suggest over 60 per cent would vote to rejoin the EU if that question were put to a referendum now.
Improving relationships
What Labour did say in its manifesto was that it would pursue ‘an improved and ambitious relationship with our European partners’. And, since the election, it has moved swiftly to re-establish cordial contacts.
Concretely, the new Labour government is likely to seek, first, to reduce some of the barriers to UK-EU trade. This would include a veterinary agreement, mutual recognition of professional qualifications, visa exemptions for touring performers (such as musicians and actors) and regulatory alignments in key sectors such as chemicals.
An opportunity to do this could arise through the scheduled ‘review’ of the post-Brexit trade and co-operation agreement, concluded when Boris Johnson was premier, due next year. But on that there are various views on mainland Europe about whether the fundamentals can be revised.
A second goal would be to negotiate a security agreement with the EU. This could turn out to be of great significance, given the situation in Ukraine, especially if Donald Trump were to be re-elected as president of the United States in November. It would include security in the widest sense—not just military co-operation but sanctions, cybersecurity, counterterrorism, fighting traffickers, combating climate change and more. The German ambassador to Britain recently advocated a UK-EU ‘security and co-operation agreement’, which would also include agriculture and visa rules.
A third avenue would be to rejoin some of the EU’s technical agencies (at least as an observer or associate member), such as Europol. Finally, the shared commitment to achieve ‘net zero’ greenhouse-gas emissions remains to be built on, with co-operation on climate and energy presumably embracing cross-border energy interconnectors and the EU’s Carbon Border Adjustment Mechanism.
This is all well and good. And the new administration might also seek renewed participation in the Erasmus+ student-mobility scheme. The Johnson government pulled out despite the withdrawal arrangements specifically providing for continued involvement—a piece of gratuitous cultural vandalism.
Over-cautious
But the realities of government may force Labour to go further, more quickly. The biggest challenges it faces are the catastrophic state of the public finances and the lethargy of the economy.
After years of austerity, there are pressures for higher public spending on multiple fronts. Yet with both public debt and taxes as shares of gross domestic product heading towards levels not seen since the aftermath of the second world war, finding an extra £3 billion here or £4 billion there has become the subject of intense debates. These figures are however dwarfed by the £40 billion a year of lost tax revenue caused by Brexit.
Economic ‘growth’ was very much the maxim of Labour’s campaign. Yet growth cannot be rekindled while ignoring the annual 4 per cent loss to GDP attributed to Brexit by the Office of Budgetary Responsibility, the lost trade with the UK’s main export market (and main source of its supply chains) and the extra transaction costs on businesses imposed by Brexit.
Labour’s over-cautious red lines at the hustings—no to rejoining the customs union, no to full single-market membership—will severely limit the potential improvements it can bring in government. There will be costly border checks for as long as there is a customs border. Frictionless trade in goods (no extra conformity tests, value-added-tax forms, export permits, labelling requirements and so on), including with the wider European Economic Area, will remain a chimera unless the UK aligns with the single-market rules and standards it helped set and endorsed as a member. And there will be little scope to improve trade in services—even for touring performers and musicians—without some freedom of movement.
Biggest beneficiaries
What is holding the new government back? It seems to be a belief that full participation in the single market would require full restoration of the freedom of movement enjoyed by EU citizens. This is seen as an insurmountable obstacle, given the public concerns about record levels of immigration to Britain. Yet most migration to Britain is from outside the EU, which is (as it always was) a matter for national regulation. Within the limits of international law, it is for the UK itself to decide how open or restrictive it wants to be.
The lesser (now much less) migration from the EU was part and parcel of free movement, of which Britons were actually the biggest beneficiaries, with more of them living in other member states than was the case for any other nationality. This freedom was not however unconditional: those exercising it had to find work or be self-sufficient—conditions which Britain failed to enforce, but could if free movement (perhaps referred to as ‘conditional free movement’ to emphasise this point) were to be restored. Nor was it a cost to the UK exchequer: EU citizens in Britain paid far more in taxes than they received in benefits and services combined.
Far from enabling the UK to ‘take back control’ of its borders, Brexit has removed key tools for so doing. In the EU, Britain could use the internal agreement that asylum-seekers should be processed by the country in which they first arrived. One could waive that rule, as Germany did. But Britain used it to send thousands of asylum-seekers back to the member state of initial arrival—something it can no longer do.
The UK was also able to participate fully in the EU’s system of co-operation among police and intelligence forces. This meant it could, when needed, obtain information on individuals when they arrived at the border, from fingerprints to criminal records. It also meant co-operating to fight international gangs of people traffickers. Brexit was a shot in the foot as regards its supposed major benefit of controlling the border.
Maybe popular
If economic reality forces the Labour government to go further, and at least to rejoin the single market and the customs union—even if that includes ‘conditional’ free movement with EU members—it will find that this does not throw up as many problems as it fears. It may even be popular.
Many businesses, universities, artists and others want it. So do Labour Party members. Above all, if the tracker polls show that public opinion continues its gradual but relentless shift in favour of rejoining the EU, then surely these smaller steps, at least, should be easier.
Richard Corbett is a former member of the European Parliament for Yorkshire and Humber and former leader of the Labour group in the parliament.