Scribblings

UK Labour should look to rejoin the EU

This week, an article in the Financial Times caught my attention. Headlined, “Reeves to limit deregulatory drive as she seeks closer UK ties with EU” I wondered if this was a precursor to the UK deciding to apply to join the EU – there is not such thing as “rejoin” – or, perhaps, the announcement of a plan to look to join the Single Market through the European Economic Area, like Norway.

But no, it was just another UK Labour politician admitting that Brexit was wrong and economically damaging, but not having the courage to suggest reversing it. Just another suggestion that a way should be found to give the UK all the economic benefits of the Single Market without the concomitant obligation of free movement of people, a cornerstone of the Single Market.

According to the Financial Times:

Rachel Reeves has vowed to seize the “biggest prize” in global trade with a new push to build ties with the EU, as the UK chancellor prepares to pull back from a potential clash with Brussels over habitat rules. Setting out plans for closer economic and security ties with the EU, Reeves on Wednesday heralded plans for an unwinding of Brexit, declaring: “The biggest prize is clearly with the EU. The truth is economic gravity is reality.” Reeves said Britain was prepared to unilaterally align with Brussels’ rules to try to build trade with the bloc.

Speaking at the London School of Economics at an event organised by the Brussels-based Bruegel think-tank, Reeves said:

“There are three big economic blocs: US, China and Europe. “We will always seek every opportunity to grow our economy and these trading relationships but ultimately only one of these is on our doorstep, and so the biggest prize is closer integration with Europe.”

Reeves is also pushing the EU not to penalise British companies with the EUs’ new “made in Europe” plan, saying: “We are Europe too and need to be part of that. The EU doesn’t have the luxury of saying we can exclude countries that share our values.”

All of which begs the obvious question: If all of this is the case, then why did you leave the EU? Further, if all of this is true, why do you not look to rejoin the EU?

We know the answer to these questions. Because rejoining the EU, or even the Single Market, would involve a return to the free movement of people. This is something this Labour government, with its obsession with immigration, cannot accept under any circumstances, and so it ties itself in knots looking for European economic benefits without European obligations. Boris Johnson best described this as “cake and eat it, also known as “cherry picking”.

Now, to be honest, I have never seen anything wrong with attempts at “cherry picking”. It happens all the time in the business world, and certainly in my own field of labour relations. It is a strategy of trying to maximise your benefits while minimising your costs. Nothing wrong with that. It is a rational strategy.

But it will only work if you have the leverage to pull it off. You can only “cherry-pick” from a position of strength, not of weakness. And the UK, with Brexit, has put itself in a position of weakness with the EU, not to mention leaving itself vulnerable to the other two economic superpowers, the US and China. The lingering belief on the part of some in the British elite that the UK is still a world power and not a medium-sized country off the Eurasian landmass unhinges judgment.

During the past week, EU leaders met in a castle outside Brussels to consider how to reboot the EU economy. Now, we need some perspective. The EU is still one of the richest regions in the world, but it faces challenges. The rise of the Chinese car manufacturers, for example, is driving a stake through the heart of the European auto industry, with more than 100,000 jobs on the line over the coming years. Of course, the competition is unfair because of Chinese state subsidies, but that is the world we live in.

An even bigger problem is demographic change. Europe, like much of the rest of the world except for Africa, is an ageing continent. We grow old and live longer because of advances in medical science and because we are well nourished in our younger days. At the same time, the number of births is below the replacement rate of 2.1 per family, well below in the cases of some countries. A declining population drains away the finances needed to sustain welfare systems, especially as public pensions take an increasing share of national budgets.

But the obvious solution, to allow migration to replenish the population, is politically unpopular everywhere. Just this week, it was announced that Switzerland is to hold a referendum to limit the population to 10 million by banning migration into the country. And we have the far-right Reform candidate in a byelection in the UK, the former academic Matt Godwin, on record as saying that families that do not have children should be heavily taxed, so as to boost the “indigenous” UK population, generally taken to mean the white population. Of course, in both cases it is racism by another name.

I know that neither Switzerland nor the UK are EU members, but the positions on migration and population symbolised by the proposed referendum and Goodwin’s views can be found in most EU countries and are behind the rise of far-right parties.

So, yes, Europe has its own problems to grapple with, and there is little or no political bandwidth to listen to special pleadings from a UK looking for bespoke deals. EU leaders can read UK newspapers and know that, as things stand, Labour is on course to lose the next general election. A potential Reform/Tory government would move to reverse any deals that the EU would make with the Labour government. Why make a deal in the knowledge that it will be torn up before the ink is even dry?

Labour would be better off announcing that it intends to apply to join the EU after the next election and take on the bitter Brexiters. Better to go down fighting than not to fight at all. At least, it is a strategy. Does anyone in Labour have a better one?