IT would be difficult to overstate how demoralising it was to hear Labour leader Sir Keir Starmer rule out the UK rejoining the European single market if his party were to come to power.
For anyone concerned with the health of the economy and living standards over coming years and decades, Sir Keir’s categoric stance should be a great disappointment.
And the Labour leader’s claim that consideration of rejoining the European Union or single market amounted to focusing on “arguments of the past” was somewhat baffling.
The huge damage of Brexit, while we have seen a great deal of it already, is something that will unfold over coming years and decades.
It is an ongoing thing, so most certainly not something that is just in the “past”.
There is a simple way to minimise further damage, and that is to rejoin the single market.
This can, as London mayor Sadiq Khan rightly pointed out this week, be done without rejoining the EU.
So that means the Leavers can still have their Brexit.
However, rejoining the single market would give the UK back two colossal benefits: frictionless trade with the world’s largest free trade bloc and free movement of people.
And rejoining the single market would not impose any obligation on the UK to sign up for the euro, as it would have to do if it became a member of the EU. Of course, the UK had no such obligation in a practical sense to join the single currency when it was a member of the bloc previously. Its terms of membership represented a great deal indeed.
It is worth noting that time is of the essence in rejoining the single market, crucially to limit to the maximum possible extent the economic damage of Brexit but also to ensure the process is easy, before the Tories’ bizarre attempts to eschew regulatory alignment with the EU go much further.
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Turning his back on the idea of rejoining the single market, Sir Keir decided to set out a five-point plan to “Make Brexit Work”. This plan seems, in the context of what Brexit means, to amount to a little bit of tinkering at the edges.
It is difficult to see the rationale of Sir Keir’s categoric stance, beyond perhaps a desire to keep Brexiters on-side or win them over.
And it would be almost comical, if the situation were not so serious, that a speech could be constructed around a premise that Brexit, given its massive detrimental overall effects, can be made to “work”. Reducing the friction and ameliorating the damage a little by tinkering around the edges hardly amounts to turning the disaster that is Brexit into a positive.
All in all, it was a remarkable speech by Sir Keir.
He talked about how it was not possible to “move forward or grow the country or deliver change or win back the trust of those who have lost faith in politics, if you’re constantly focused on the arguments of the past”.
Just to reiterate, Brexit is not a thing of the past. It is something that is weighing on the UK economy and living standards right now, and will do so for years and decades. The protracted nature of the effects has been highlighted by a raft of experts, including recently in a joint report by economists at the Resolution Foundation think-tank and the London School of Economics and Political Science (LSE). This report highlighted a misconception among the electorate on this point.
The Resolution Foundation and LSE report said: “The public discourse, as well as the pre-referendum economic modelling, has focused on describing the anticipated overall economic effects of Brexit, creating the impression that it will have a discrete, and relatively rapid, one-off impact. But the reality is that the impact will be different from that anticipated in a number of important ways. Crucially, it will take time to fully materialise.”
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This report warned: “A less-open UK will mean a poorer and less-productive one by the end of the decade, with real wages expected to fall by 1.8 per cent, a loss of £470 per worker a year.”
You would think that type of figure might make a Labour leader think about whether they should try to “Make Brexit Work” or instead move swiftly, if they gained power and had the opportunity, to rejoin the single market and mitigate the damage.
The Resolution Foundation and LSE also observed: “A year after the referendum, sterling settled at more than 12% below its previous level, and the higher price of imports led to higher inflation, with the resulting increase in the cost of living equivalent to £870 per year [for the average household].”
Sir Keir, however, declared this week: “We cannot afford to look back over our shoulder because all the time we are doing that we are missing what is ahead of us. So let me be very clear. Under Labour, Britain will not go back into the EU. We will not be joining the single market or the customs union. Now, I know some people don’t want to hear that, but it is my job to be frank and to be honest – and you will always get that with me.”
He is certainly right on one point – many people do not want to hear that. It is also difficult to see why the UK cannot look ahead while also taking action to rejoin the single market and hopefully avoid a large part of the effect of the grave mistake which is exacting such a huge toll on the economy. In any case, Sir Keir surely sees the Brexit damage to come on the road ahead.
Sir Keir said: “There are some who say ‘we don’t need to make Brexit work – we need to reverse it’. I couldn’t disagree more.”
Many people, surely, could not disagree more with the Labour leader on this point.
On the other hand, it would have been difficult to agree more with what Mr Khan had to say on the subject.
He declared: “It’s possible to be outside the EU but be members of the single market. Keir’s job is to be leader of the Labour Party, my job is to be the Mayor of London. That’ll mean on many occasions I agree with the Labour Party, on some occasions I may disagree. Londoners elected me to be their champion, their advocate. I believe that our city and our country’s future is best served being members of the single market.”
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Of course Scotland, like London, voted very convincingly indeed in 2016 to remain in the EU. People in Scotland and London have, however, had to foot the bill for a Brexit they did not want.
Sir Keir should perhaps reflect on the forecasts of the Theresa May government, published in November 2018, which give a clear idea of the huge scale of the damage from Brexit and the protracted timescale over which it plays out.
The May government forecasts showed Brexit would, with an average free trade deal with the EU, result in UK gross domestic product in 15 years’ time being 4.9% lower than if the country had stayed in the bloc if there were no change to migration arrangements. Or 6.7% worse on the basis of zero net inflow of workers from European Economic Area countries.
The Boris Johnson administration in the end delivered a hard Brexit, and it has sadly clamped down on immigration. It has not published an economic impact assessment of its hard Brexit but the May government forecasts of what would happen by departing with an average free trade deal make it plain the cumulative effect is very big indeed.
Scotland, given its demographic circumstances, is particularly in need of strong net immigration to maximise its economic growth potential and living standards. However, there seems little room for hope on this front from Sir Keir’s speech.
The Labour leader declared: “We will not return to freedom of movement to create short-term fixes. Instead we will invest in our people and our places, and deliver on the promise our country has.”
His “Make Brexit Work” slogan had by the time his speech was done begun to sound a whole lot like the “Get Brexit Done” message of Mr Johnson and the Prime Minister’s former adviser, Dominic Cummings.
And the whole speech was utterly lamentable, from the perspective of the economy and living standards.
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