Say No to a Customs Union

James Stafford & Florence Sutcliffe-Braithwaite

The Labour party is currently gripped by a controversy about how best to respond to Theresa May’s offer to renegotiate the Political Declaration attached to her government’s Withdrawal Agreement (WA) with the European Union.

This has sharpened a strong Brexit dividing line within the PLP and the wider party. An influential faction supports the idea of compromise with May, persuading the government and the EU to amend the Political Declaration to include a commitment to a future customs union between the UK and the EU. The alternative course is one of confrontation, making Labour support for the WA conditional on support for a second referendum.

Renewal has spoken out against the compromise position on a number of occasions, most recently in our last editorial. Our fundamental position is that the party should reason from its international obligations and its long-term strategic interests, rather than splitting the difference between ‘Leave’ and ‘Remain’ and hoping the whole thing will just go away. 

A customs union is not a real solution to the economic or political problems raised by Brexit. It is a pseudo-solution borne of the fevered never-never land of Westminster Brexit politics: filled with myths and fears and false solutions, and unable to think about the country or the continent in a rounded fashion, or with any eye to a medium or long-term future.

It doesn’t fix enough of the economic problems with leaving the EU to avoid a sizeable hit to future growth and productivity. It doesn’t resolve the Northern Irish issue, because deeper regulatory alignment is needed to eliminate border checks on livestock and agricultural goods, whether on the island of Ireland or in the Irish Sea. (Labour are right to demand additional ‘dynamic alignment’ with the EU on regulatory issues, partly to get around this problem; but it seems less than likely that May will offer much more than a bare customs union combined with the ‘non-regression’ clauses already contained in the WA).

Because it keeps the EU state aid regime intact, a customs union diesn’t deliver the kind of policy autonomy that most Lexiters want. It it certainly won’t satisfy the Tory right or the new Brexit party. It will still take years to negotiate and involve lengthy transition arrangements. It could be vetoed and rewritten by any country (and by some subnational authorities in some member-states) at the end of that negotiation. A Withdrawal Agreement that fulfills the minimum basic legal and political requirements of leaving the EU has already produced a complete meltdown in Britain’s political system. What’s going to happen when government ministers are being routinely humiliated by the Parliament of Wallonia, in the fourth year of treaty negotiations?

The Political Declaration is not a binding treaty and the European Commission is legally disbarred from agreeing any final future relationship while the UK remains a member. It’s a pipe-dream that compromise now will provide certainty or resolve the issue.

At a turning point in European history, signing up to a customs-union Brexit will leave the Labour party using its vital voice in the continent’s future to advocate for a narrow, dated, undemocratic variety of integration, founded on the negative commitment to abolish tariffs but with no constructive vision of a collective European political or social space. The EU isn’t collapsing. It’s being remade by a host of vital and contradictory forces: the far right, resurgent Green and social-liberal parties, and a bureaucracy that knows the global winds are shifting away from free trade and the Pax Americana. A fresh financial crisis is just around the corner. This is the worst possible moment for British left to end up semi-detached and mired in domestic electoral tactics.

It’s worth thinking here about the parallels with the Scottish Independence referendum. The morning after the vote, David Cameron banked Scottish Labour’s support for the cross-party Better Together campaign and then switched tack to English nationalism, sealing his triumph in 2015. This is exactly what the next Conservative leader will do to a Labour party hemmed in by May’s desperate last gambit: become the party of no deal, leaving Labour holding the ring as the party of ‘Theresa May’s Deal’. 

We might have expected an Yvette Cooper or Andy Burnham-led Labour party to have ended up in this position. To see a Corbyn-led party fall for such an obvious trap is more painful. There are upsides and downsides to having a left Labour leadership. One of the clear upsides should be that the party doesn’t persist in making unprincipled, short-termist policy choices on the basis of half-formed ideas about respectability and public opinion.

Insisting on a second referendum, of course, carries its own risks, primarily stemming from the tin-eared incompetence of the official Remain camp. The parliamentary obstacles, to both a May-Corbyn accord and a demand for a second referendum on the existing WA vs Remain, remain formidable. Any new referendum should present a clear-cut choice between a Tory Brexit owned by Theresa May, and an insurgent Remain campaign led by the Labour party. That’s why making support for the WA conditional on a second referendum is so important. 

Had Brexit been better handled, by a Conservative party less bent on self-destruction, compromise might have been possible. But if it ever was, it isn’t any more. This is existential battle, for Labour, for the UK, for Europe. It’s time to fight.  

James Stafford and Florence Sutcliffe-Braithwaite are the Co-Editors of Renewal