Labour’s Brexit dilemma

18 months after the referendum, our politicians are at last debating end-state Brexit. The question however is not ‘what does Britain want?’. It is ‘can Britain get what it wants?’ and if it can’t, what then?

Broadly, we know what Britain wants. Most voters, businesses and politicians, would settle for something like the version of Brexit Theresa May outlined in her Lancaster House speech at the start of the year. The UK would enjoy a status somewhere between the ‘associate’ relationship of Norway and the comprehensive economic agreement struck with Canada. Britain would not be in the internal market or tariff zone but, when compared to Canada, would have broader access to the EU market and more regulatory harmonisation. And the deal would include preferential migration status for our fellow Europeans although not free movement of people as we know it today.

But there are two huge roadblocks on the route to Lancaster House. First, it is not clear that this version of Brexit would be acceptable to the rest of Europe. From a British perspective, Lancaster House might represent a ‘Goldilocks’ deal – neither too close nor too distant. But could the EU27 ever see a half-way house between Canada and Norway as a proportionate, balanced new set of rights and responsibilities, rather than the UK trying to ‘have its cake and eat it’? Michel Barnier and other key players on the EU side say the UK faces a binary choice, with no third way.

That hurdle has been clear ever since the referendum but recently a second barrier to the middle-ground Brexit has started to loom large. Regardless of what the rest of Europe thinks, it is increasingly unclear whether a hybrid settlement is even possible. With the UK outside the EEA, just how will we be able to achieve ‘frictionless’ borders for trade in goods to safeguard just-in-time supply chains? In the case of services and finance, how would the EU and Britain determine what degree of regulatory alignment is ‘different, but similar enough’ not just on Brexit day but indefinitely? And how can an open border between the UK and Ireland be maintained, if compliance with different regulatory regimes must be assured?

These sound like technical debates and they are. But they all boil down to the question of whether the UK’s economic relationship with Europe can be ‘half-in, half-out’. In the phase one negotiations these issues came to a head with respect to Ireland. But the Northern Ireland question is simply forcing Britain to confront these problems sooner than would otherwise have been the case. They apply to the rest of the UK too.

Conservative ministers have been adamant that solutions can be found, with ‘flexibility and imagination’. But even if they are right, how long will they take to agree and how long to implement? Certainly, much longer than the two year transition period currently envisaged between 2019 and 2021.

Perhaps the twin barriers to a ‘Goldilocks’ Brexit will melt away. The EU is centripetal by instinct so maybe it will opt for the closest degree of integration the UK is prepared to offer. And the technical solutions could present themselves with time. But as things stand, there are good reasons to doubt that Britain can get what it wants – even before considering how unstable, divided and rudderless its government is.

Meanwhile Britain’s business and political elites now understand the economic and institutional dangers of a hard Brexit, even one with a Canadian style goods-focused trade deal. Each week new examples are revealed of the upheaval that looms for business sectors, supply chains and local economies. In minute detail, we are discovering the implications for energy, healthcare, finance and manufacturing, not to mention aviation, ports and Northern Ireland.

The UK is therefore discovering how hard it is to leave Europe’s economic area. While the Brexit referendum has proved that Europe is fragile and reversible as a political union, everything we have learnt since has demonstrated that Europe as an economic union and a community of law is very hard, if not impossible, to escape. The irony is that this is a vindication of the sort of economic Europe the UK always wanted.

If it is true that hard Brexit will lead to economic disaster and that Lancaster House Brexit is unobtainable, then it will be near impossible for the UK to depart the EEA any time soon. That means however, that Britain is approaching a terrible political and cultural crisis. In 2018 the political and business classes will say, ever more loudly, that travelling further from the EU than Norway or Switzerland either cannot be done or will take a very long time.

But set against this, a sizable proportion of the population will be angry that their Brexit choice is being defied. The UK therefore faces a head-on collision between the pragmatism of economic and political insiders and the raw emotion of cultural conservatives. Defying Leave voters might give rise to a virulent new strain of populism, that could make Ukip look tame by comparison.

Labour’s position on Brexit makes sense once this brewing confrontation between pragmatism and emotion is understood. Most Labour party politicians know they cannot afford to further alienate older working-class traditionalists if they are to win an election soon. For now Jeremy Corbyn himself is resisting definition, along with most of his parliamentary party who personally don’t want to leave, but understand the perils of crossing their constituents.

For the time being Labour can avoid picking sides by pitching itself just a little softer than the government, each time the Conservatives moderate their position. The Labour frontbench can avoid a clear position of its own, while torturing ministers from opposition. It simply sets tests for a successful Brexit that it knows cannot be met and shines a beam on the chaos and conflict within Tory ranks.

But if the party comes closer to power it will need to decide where it stands. Ultimately, Labour is a pragmatic, empirical movement so it will probably choose Brexit on EEA terms, or even re-entry, given the near impossibility of Brexit on the basis of Lancaster House. The party will conclude that the material interests of Labour’s economically insecure core voters will be best served by the UK maintaining EEA terms for a very long time.

However, Labour will only be able to make the case for EEA terms while avoiding a toxic, populist backlash if public opinion has started to move. In particular, a significant slice of working-class leave voters will need to come to see that soft Brexit (or even staying in) is the price of prosperity. For the time being, Labour must follow as well as lead public opinion.

It can lead in a negative way by undermining the Conservatives and exposing the contradictions and pitfalls of the government’s position. But it must bide its time before setting out its own positive alternative, while arguing for Britain to take more time – to work through the technical issues but also to create breathing space for the public mood to change. It is a very Fabian strategy.

And while Labour waits, the party must develop a strong domestic agenda that responds to both people’s economic and cultural insecurities. For the British left will not be able to bring pragmatism and emotion together until it appears to be addressing the underlying causes of the Leave vote. This response must not just come in terms just of public policy but in the stories we tell and the emotions we feel.

The left needs poetry not just prose to win hearts and minds. We need to convince people, especially Leave voters, that ‘we get it’ when it comes to both their material and cultural fears and that we have answers they can believe in. If we can do that then, eventually, we can convince people about Europe too.

A version of this essay was originally published by Friedrich Ebert Shiftung