Corbynism is impossible within the Single Market

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July 27, 2017 by Paul Goldsmith


In 1986, Jeremy Corbyn voted against the Act of Parliament that created the EU Single Market. He saw it as a Thatcherite creation that looked to extend her free market principles across the whole of Europe. Corbyn also voted No in the 1975 EC Referendum and against the Maastricht Treaty in 1992, which was key in creating the Euro, upgrading freedom of movement to EU citizenship and changing the name of the European Community (co-operation) into the European Union (integration). Just for good measure, the Labour leader voted against the Lisbon Treaty in 2008, which was the last major integrating treaty, amongst many things making the EU a legal entity in itself, giving it authority to enter into trade deals for instance. 

This didn’t happen because Corbyn is a complete eurosceptic, has an issue with immigration or is a sovereignty fanatic, it happened because the economic policies that form the backbone of Corbynism, which to me is a form of democratic socialism with an almost complete trust in the state to control the means of production, exchange and distribution, cannot legally work within the confines of EU law. Corbyn believes in activist state aid, the state ownership of as much production as possible, the prioritisation of public producrement and managing trade to try to ameliorate its effect on Britain’s workforce. All of this is illegal under European law. 

Then you can add to that the requirements of the EU growth and stability pact (which sets limits on deficits and debts) and the related behaviour of the European Central Bank as a response to the Eurozone crisis. Corbyn attacks the latter in a phone call to Venezuelan President Nicolas Maduro in 2014 just after the death of Tony Benn (see 1:54 here). 

This doesn’t make Corbyn a Brexiter. In fact our research for our book found instead that he is better described as indifferent to Europe. He has been absent for some votes on it and barely ever spoken up in Parliament about it. Since Corbyn is congenitally incapable of faking enthusiasm about anything, he couldn’t muster it during the EU Referendum. Now, though, he and the people around him realise that Brexit gives them an opportunity to propose the policies they really believe in with an actual chance of them being able to be implemented, which would have been impossible within the EU.

Outside the EU, a Corbyn Labour government can subsidise any firm it wants to keep alive, regardless of market conditions. It can nationalise what it wants. It can run up deficits and debts to its heart’s content. It can introduce protectionist policies to defend what it considers to be strategic industries or simply to protect jobs in the more heavily unionised industries. It can put limits on immigration, particularly of construction workers, an area Corbyn targeted in an interview recently (click here for that), even though it will of course make the housebiulding programme he insists he would implement far more expensive. It can even introduce VAT on private schools to pay for things (not allowed under EU rules as education is deemed ‘socially useful).

This is why Corbyn is ignoring the pleas and protests of the louder sections of the left who argue that since the majority of Labour supporters are against Brexit, and pro staying in the Single Market if Brexit does go ahead. They may think that, but it is less important to them as his other policies. Nationalising rail, ending austerity, abolishing tuition fees – all these are more important to Labour voters than the EU. It they were less important, they would have voted Liberal Democrat in the last election. 

This puts the left in an odd position. Remainers, most of them left leaning, point to the slowdown in the economy and the warnings from banks and multinational companies that they will move operations out of the UK unless Brexit is reversed or they get the deal they want. This amounts to business being able to veto the electorate’s decision. Now imagine Corbyn wins, and gets his mandate for nationalisation, ending austerity and raising taxes on companies and the rich. Think of the fuss the likes of the CBI will make about that. They will tell us that members are going to move thousands of jobs out of the country. Suddenly, those now calling for a second referendum would see calls for a second general election so that voters would be allowed to think again about such radical policies which the business world don’t like. 

The truth is, a Labour Party that wants to get Brexit reversed or at least stay in the Single Market needs to get rid of Jeremy Corbyn. Good luck with that!

But the left needs to be very careful about running with the idea that business should be able to veto decisions made by the electorate. If Labour had won the recent election, Corbyn would have had a mandate for extensive nationalisation, ending austerity and higher taxation on companies and the well-off. Big business would certainly have cut up rough about all that. There would have been warnings from the Confederation of British Industry about its members moving thousands of jobs out of the country. Would those calling for a second EU referendum be calling for another general election so voters could think again about supporting such a dangerously radical policy? Probably not.

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