Open space

As British politics tries to divine the true meaning of Brexit, there is a political opportunity for a party to be pro-openness but also pro-redistribution, argues Duncan Weldon

In 2014, Labour was on the winning side of the referendum on Scottish independence and yet ended up paying a huge political price. In 2016 it was on the losing side of the vote and yet may again be forced to pay the bill. Although about two thirds of Labour voters backed remaining in the European Union, across vast swathes of the party’s traditional heartlands the leave campaign clocked up large wins.

Although the leave side won a victory on a big turnout, it is unclear exactly what ‘leave’ means. The prime minister says that “Brexit means Brexit”, to which a reasonable retort is ‘yes, but what does Brexit mean?’

The economic impact of joining the European Economic Area (a Norway-ish deal that would guarantee single market access but mean continuing freedom of movement, paying contributions and accepting EU-designed regulations over which the UK would have no official say) would be fairly minimal. On the other hand, losing access to the single market and being forced to trade under World Trade Organisation rules would have a far more detrimental effect.

But the changes to Britain ahead are potentially far more sweeping than raw economics. Our entire political economy is now in flux. In theory the fundamentals should be good for Labour. The government have lost a proven election winner as leader, their reputation for competence is in tatters and their economic credibility under threat from a self-inflicted downturn. In addition, their politically potent but economically damaging dividing line on debt funded infrastructure spending appears to be gone. And yet it is Labour rather than the Conservatives who face an existential threat.

If the government ends up doing a deal to stay in the EEA and accepting continuing free movement, it is not hard to see a surge in UKIP support from Leave voters crying betrayal. Any such surge would disproportionately hit Labour.

As commentators are falling over themselves to point out, ‘open vs closed’ is now a real cleavage in British politics. Should we remain an open, outward facing economy with all that entails in terms of migration or should we seek to shut ourselves off to some extent from the rest of the world? What exactly did the 52 per cent vote for?

Open vs closed politics look grim for Labour. It isn’t too hard to see the UK ending up with a version of Polish politics – a centre right ‘open’, economically liberal party (the Conservatives) facing off against a harder right, ‘closed’ party which favours tighter limits on immigration and perhaps less liberal economics (a role UKIP could fulfil if it’s next leader can appeal in Labour voting areas).

The open vs closed cleavage cuts across both main parties but is an issue in particular for Labour. It potentially divides the party’s two core areas of support – working class communities having voted to leave whilst London and university Labour-held seats voted for remain.

But all the talk of open vs closed misses an important point – yes it is a significant cleavage but it is not the only one. Left vs right matters too. Ed Balls and George Osborne may have both campaigned for remain, but their fiscal plans last year had the widest gap between the major parties in two and half decades. Their visions of the size of the state, of the role and extent of social security and of public services are miles apart. Whilst the ‘48 per cent’ may agree on the European question, they disagree on much else.

Even if these differences could be papered over – and I don’t think they could – a new centre party of the 48 per cent (the political wing of The Economist magazine) feels far less likely following Theresa May’s victory (a remainer) in the Conservative leadership election. It is now very hard to see pro-remain Conservatives joining such a party, even if that was desirable.

Strip out the Conservative remainers and you are left with not a new centre party of the 48 per cent but a coalition of Labour and Lib Dem remainers – a potential new centre-left party. Call it the ‘party of the 35 per cent’. That’s a strategy that has been tested to destruction.

The answer for Labour – and for progressives in general – is to acknowledge that whilst open vs closed matters, so too does left vs right. Faced with a new cleavage, parties have a choice: pick a side or try to build alliances across it. The political space is open for a party to be pro-openness but also pro-redistribution.

Globalisation has made the UK richer but also widened the divides in society. The classic case for free trade is that some of the gains from the winners can be redistributed to the losers, making everyone better off. That works in theory but has not often happened in practice.

An electoral coalition of globalisation’s losers with the winners who recognise that for the game to carry on they have to give up some winnings has potential. It would emphasise a close and continuing relationship with the EU – ideally through joining the EEA – with a domestic focus on house building, child and social care, well-funded public services and growth driving infrastructure spending in areas other than London. Amidst the despair and division, that is a version of Brexit it would be worth the left leading the fight for.