Corbyn’s EU speech: right direction, but still serious misunderstandings

Jeremy Corbyn has made his much-trailed major speech on the EU.  As widely trailed, Corbyn appears to have accepted the principle of a customs union with the EU.  It was a fascinating and wide-ranging speech, although still concerned, as ever, with generalities rather than detailed policy proposals.

Corbyn structured the speech around three main themes: the need to put British people’s jobs and living standards first; the need for unity within the UK, including the absolute imperative of maintaining the Good Friday Agreement and of not playing the UK’s constituent nations off against one another; and the need for international co-operation on global issues like climate change.

There were many warm words here about the benefits of European co-operation. As expected, he talked about the need for bespoke agreements to secure a Customs Union and a Single Market.  Crucially, the language has changed; there is a recognition (not shared by all participants in the debate) that it is pointless to talk about “the” Customs Union and Single Market as to be a full member the UK would have to accede to the EU treaties, i.e. remain a full EU member.  At last, the Labour Party in Westminster appears to be moving towards the much more coherent Welsh Labour formulation of “full and unfettered access” that Carwyn Jones – the Labour First Minister of a UK nation that is uniquely exposed to the impacts of Brexit – uses.  The point is that Corbyn was acknowledging that his avowed aim of a “jobs first” Brexit can only be achieved if trade and investment can be undertaken on the same basis as they are now.  A long and rather didactic exposition of how supply chains work sounded as if Corbyn was trying to convince himself as much as his audience, but at least he’s showing evidence of beginning to grasp this point.

A key misunderstanding, however, remains – that current EU rules on State Aids and trade liberalisation would inhibit a Labour Government from carrying out its manifesto commitments – remain intact.  Corbyn said that any bespoke deal in relation to the Single Market would need to include exemption from State Aid rules that required privatisation and liberalisation – but he and his team appear not to understand that that is simply not what State Aid rules do.  The right of Member States to decide what parts of the economy are in the state sector is guaranteed by Article 354 of the Treaties – and of course by the principle of subsidiarity.  Corbyn argues that the UK would need to disapply  State Aid regulations to support investment in poorer regions of the UK – but Article 107(3) of the Treaty already grants explicit power to do that.  State Aid regulation is really about preventing governments from  using public funds to support private concerns to undermine the Single Market and fair competition – but Corbyn still appears simply not to get this.   And his failure to do so seriously undermines his credibility on this key issue.

And all of this is a reminder that Corbyn is, quite clearly, setting out a negotiating position.  He wants a bespoke deal on the Single Market and Customs Union, and for the UK to participate in EU institutions like Euratom, but he gave little understanding that this comes at a price.  The obvious one is that the EU will  – rightly – require accession to the four freedoms – free movement of goods, capital, services and labour; yet John McDonnell has argued that that is not on the table, because it does not respect the referendum.  Which brings us to the conundrum: ultimately you cannot achieve a “jobs First” Brexit – let alone protect the Good Friday Agreement (which Corbyn rightly said must be done) – unless you do that.  Without the recognition that you have to respect the Four Freedoms, and pay into the EU institutions, you are simply – like the Tories – trying to have your cake and eat it.

Finally, Corbyn spoke about the need for the UK not to be a “rule-taker” after Brexit – governed by decisions in which the UK has not been involved.  But the inexorable logic is that any meaningful relationship with the EU – one that preserves the Good Friday Agreement, and means that trade and investment between the UK and EU can continue on its current terms – means that the UK will be a rule-taker.

And the intellectual problem for Labour remains – that the only way in which, ultimately, the UK will have a meaningful seat at the table is by remaining a full member of the EU.  But leaving completely will mean economic catastrophe, and the deregulatory race to the bottom that Corbyn clearly and explicitly wants to avoid (the most passionate part of Corbyn’s speech was – understandably – his declaration that the NHS will never be for sale under a Labour government making post-Brexit trade deals).

Something has got to give – and the Labour leadership does not yet appear to have reached a place where it understands this.  And the conflict between “respecting” the Referendum – and delivering a progressive UK in which the conditions are in place for investment and creating high-quality jobs – is becoming more obvious by the day.

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