Britain out – what now?

Hi all,

First those of us who opposed Leave need to acknowledge the democratic verdict – in Broxtowe against the recommendations from both Anna Soubry and me, and in Britain against the recommendations from nearly the whole of the political leadership. I won’t pretend I suddenly think it’s a good idea, but it’s a democratic decision and we need to make the best of it. There is no point in insulting the voters! – that’s the kind of political arrogance that has got us to the present position.

I’m not going to get into Tory or other leadership questions here, but rather look at the policy consequences.

  1. EEA or total split?

The fundamental question is going to be which of the two Brexit models we decide to follow. If we join Norway in the EEA, everyday life will continue much as before – we will have free access to the common market, but free immigration will continue. We will have a little more freedom to develop distinctive policies, at the price of a little less influence on European policies which we’ll be nonetheless required by EEA rules to follow. But I don’t think it would lead to massive trade consequences, and it’s probably the policy that business and “continuity” candidates for PM like Theresa May will recommend.

If we decide that curbing immigration is the priority, then the EEA isn’t a solution, and a separate deal will be needed. That seems actually more likely – Boris Johnson, Michael Gove and Nigel Farage have all said it’s what they want. In that case, we must be prepared for a long and difficult negotiation, with significant curb on British exports of services in particular. That’s the reason why banking shares have collapsed this morning – down 30% overnight in some cases – and it will have a significant impact on GDP, with knock-on effects on personal economics.

  1. How might we curb immigration?

While I’m not interested in responding to racist attitudes, we need to accept that the sense of lack of control of migration is a worry that plenty of people have without any racist considerations, and that it was the major driver of the result. So what can we do to listen to that?

My personal view is that the government will need to do something to head off concern about this. It was undeniably true that free movement was and is a condition of both EU and EEA membership, and I don’t think that we can simply shrug off voters’ clear concerns and say tough, you’re going to have to accept it anyway.

The obvious solution is the points system which we introduced under the last government and is already largely used for non-EU immigration: broadly speaking, immigrants will need to show there’s a job waiting and that an effort to find UK-based people to fill it has failed. This hasn’t noticeably curbed immigration in practice, because a lot of it does in fact pass this test.

The obvious example is NHS recruitment. The Government has (weirdly) been cutting back on British nursing training and worsening UK doctors’ contracts, so the supply of UK-based doctors and nurses is very limited. The NHS has been dealing with that by recruiting in Eastern Europe, India and Pakistan, and we’ll need to decide whether they can go on doing that (which means that such immigration flows will continue) or curb it (which will mean longer waiting times and declining service, at least for some years until the training cuts are reversed). Less highly-skilled examples are areas like construction and restaurants – the choice here may simply be to put up wages in order to attract more British staff, and the cost of that will simply be higher prices.

An arguable way forward is probably to insist that immigration is necessary where we simply don’t have the skills (as in the NHS) and to curb low-skilled migration: if it means higher prices, that’s a consequence of withdrawal and people accepted there would be costs.

  1. Labour’s position

I’m not a policy decision-maker so the following are suggestions for consideration.

If we do accept some migration curbs, the quid pro quo needs to be really vigorous action to prevent illegal cheap labour being smuggled in, to protect workers against exploitation and to crack down on the massive tax avoidance which blights our economy: it simply isn’t acceptable that we enter a period of serious economic difficulty while people with the right City connections cheerfully avoid sharing the burden by locating offshore. Being outside the EU will give us some scope to be proactive in this, and I think that Labour needs to seize the opportunity to take the lead in this area. Nobody seriously supposes that the right-wing Conservative leadership that is on the way will have any interest in doing any such thing.

We also need to protect minorities and people already here from any spillover from understandable concerns about free movement into racism and xenophobia. Labour is an anti-racist party and it’s a fundamental principle that we will not compromise on. In particular, people who are already here under policies up to now have a right to be here, and talk of “sending people back” is a far-right fantasy which has little support and we should oppose outright.

It’s quite likely that we will see an election within a year, when the new Tory leader attempts to get a mandate. It’s important that Labour is in a position to offer a distinctive programme of what we will do with the new situation, maximising the opportunities and minimising the economic pain.

People have voted to withdraw in order to give the UK Government greater freedom of action, and we need to accept that – talk of forcing a fresh referendum to have another think is really for the birds. But the vote to leave does not mean that voters want a recklessly reactionary government, and we need to be in a position to say “Yes, we accept the result, and here is the progressive case for a Government that makes the very best of Britain separate from the EU.” We owe it to ourselves to offer that positive alternative, and we owe it to the people who we represent and to British democracy.

The work to develop that programme starts right now. We may have less time than we think.

 

Best wishes

Nick