Labour has a chance to keep the United Kingdom in the single market - we should take it

By On June 07, 2018

Labour has a chance to keep the United Kingdom in the single market - we should take it


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Representing a constituency in the Black Country which voted heavily to leave the European Union, I understand that working class disaffection was a big driver in that vote. People wanted a better deal, a better chance and felt too often things had been done to them instead of for them or with them.

There is no simple "EU or non-EU" solution to these discontents. Instead we need a plan to ad dress the sense of unfairness and lack of opportunity which afflicts much of the country â€" something on the scale and ambition of a new Marshall Plan for working class communities.

Yet the Brexit questions is central to our ability to deliver such a plan because Labour must always be concerned with jobs, prosperity and economic strength.

In opposition you get very few chances to shape events. But now and again, a chance presents itself. There is one such opportunity next week when the Commons votes on whether or not to stay part of the European Economic Area after Brexit.

Staying part of the EEA would mean, in effect, remaining part of the single market for both goods and services.

We would not be part of the E U institutions, not be subject to ever closer union, or to common EU defence policies, but economically we would be staying part of the European economic system.

It would mean no need for extra paperwork for exports and imports. It would guarantee that common standards would be adhered to covering both goods and our world leading service industries (which are not covered just by staying in a customs union). These common standards would also mean no diminution in workers’ rights, consumer standards or environmental standards â€" all things the Labour has rightly prioritised. There would be no need for businesses and jobs to relocate to the EU. And, together with Labour’s support for membership of a customs union, it would mean no need for a hard border in Northern Ireland.

The economic consequences of staying in the single market rather than going for a free trade agreement are huge. The Government has estimated â€" in the assessment the Brexiters love to h ate - that the difference to public borrowing of an EEA type agreement and a Free Trade Agreement is around £38bn a year. £38bn a year could make a substantial impact on addressing some of the legitimate grievances that led people, many of them in working class constituencies who felt they did not get a decent chance from the way the economy currently works, to vote for Brexit in the first place.

£38bn a year could pay for significant improvements to schools, for more apprenticeships, for better infrastructure, support for industries of the future where Britain can excel. It could pay for more police on the streets to help communities feel safer. It could boost the research capacity of our universities. It could build a lot of new houses.

Or it could be used for none of these things but rather frittered away on the costs of the extra borrowing n eeded because we decided not to pursue this route. In that case these funds would not be available to buy extra school places, build more houses or train skilled workers for the future.

Politically this option has a possible, though not guaranteed, chance of majority support in the Commons. Twelve Tory MPs have tabled an amendment to the Trade Bill supporting the EEA. If the Labour frontbench supported the Lords EEA amendment to the EU Withdrawal Bill, together with SNP, Liberal Democrat and some Tory support there is a fighting chance that Parliament could actually shape the kind of Brexit we have in the interests of jobs, prosperity and living standards. Even if it didn’t win there is a strong case that the substance of the argument should make us support that outcome.

Yet rather than support this, the Labour frontbench has tabled an alternative to the EEA amendment. This amendment is being sold externally to the press as a big policy shift to staying part of the single market by an alternative route and being sold internally to Labour MPs as a way of appealing to MPs who don’t want to remain part of the single market. It cannot be both of these things.

In truth, the frontbench amendment is not a big policy shift. It is hard to escape the conclusion that it is a device designed to kill the chance that Parliament has before it of the UK remaining part of the single market.

Why would the Labour frontbench want such an outcome?

It is claimed that the frontbench amendment offers an alternative route to the same end â€" staying part of the single market. If that’s the case the only difference between the two is that the EEA agreement has existed and operated for over 20 years while no such free trade “single market” agreement exists with any other country. And EU spokespeople have been c onsistent in saying none will be on offer either. Saying you can secure the same level of market participation as we have now through a free trade agreement is very similar to the argument the Tories have been making since the Brexit vote.

It is claimed that being part of the EEA will make us rule takers. It is true we would have less say than as EU members but the UK voted to leave the EU and thus voted to leave our seat at Europe’s rule making table. And if the bespoke agreement suggested includes signing up to EU single market rules for the future in order to secure market access then the rule taker objection applies just as much to that as to the EEA. The rule taker argument is not a reason to reject the EEA when every option outside the EU leaves us with no seat at the table.

It is claimed that EEA membership would not solve the Northern Ireland border issue because there is a border between Norway (part of the EEA) and Sweden (part of the EU). But Norw ay is not what anyone is arguing for because it is not part of the EU customs union â€" which why the hard border with Sweden is there. Labour supports being in a customs union with the rest of the EU, so that objection falls.

Finally, we say we want to guarantee workers’ rights and avoid a race to the bottom. Supporting the EEA would guarantee all the European standards â€" including Labour standards â€" in an international treaty and protect them from being downgraded by a right wing Tory government free to do what it wants once we are outside the EU. Who would you rather trust with workers’ rights â€" an internationally agreed treaty or the right wing nationalists of the European Research Group?

It is hard to know the real motivations behind the decision not to support the EEA amendment. It may be the old tune of socialism in one country and seeing the European economic system as a bosses club. It may be the idea, shared with the Tories, that we can get a free trade agreement which gives us everything we like without any of the obligations we may like less.

Whatever the reason, the consequence is clear. By tabling its own amendment in order to kill the EEA amendment passed by the Lords, the Labour Front bench is passing up Parliament’s best chance of legislating for the UK to stay part of the EU single market. This is a moment where it is possible to shape the country’s future direction, not a search for “a form of words”. If Labour’s leadership genuinely doesn’t want to be part of the single market, they would be better coming out and saying so.

To a Tory Government tying itself in knots over their own endless internal negotiations and incompatible red lines, sadly, the tabling of Labour’s amendment will have come as a relief. The Brexiteers will have read it and thought there and then that they were off the hook, though as the debate in the Lords showed, you can never be entirely sure what w ill happen until the vote itself.

The EEA on its own will not answer the many legitimate grievances that helped fuel the Brexit vote. But our capacity to deal with those grievances

and to give hope to working class communities is much diminished if we make decisions which render the country poorer than it would otherwise have been and which prevent the prosperity needed to fund the public services and the other ambitions we hold dear. Surely it is better to use every chance we have to forge a path that makes our priorities possible rather than killing off an opportunity to preserve jobs, trade, living standards, leaving us paying for the bills for a hard Brexit instead.

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Pat McFadden is a former shadow minister for Europe and sits on the Committee on Exiting the European Union.


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