Brexit and the waning days of the United Kingdom

[Sheilbh]

Yeah as I say I think Britain and Germany are the bookends of this moment of disruption because we were/are in different ways and for different reasons the true believers in post-history and that we'd kind of "solved" political economy. Until the globalisation that powered that caused for us a global financial crash that blew up that growth engine and for Germany the China Shock 2.0.

But I think you're right - zooming out a lot of the issues Britain's facing are quite common across Europe. And for all the doom and gloom (contributed to by Reeves and Starmer unforgivably in my view - as I think it had real economic consequences) - our growth story over the last decade or half decade has basically been an average European country. About the same as France or Italy, better than Germany, a little worse than Canada, worse than the US.

I think this is where I find the centre left focus on the EU//Brexit a bit frustrating. Because I think it has undoubtedly had a negative impact (though not evenly distributed across sectors) but I think the difference is between us growing as fast as France or a bit faster than France. I think the doppelganger models that have us growing as fast or faser than the US are nonsense. And from where we are now - which is out of the EU, traumatised by the divisions of the referendum etc - I think if your solution to growth is basically to re-do 2016-21 in reverse then it simply isn't worth it (and it reminds me of Leavers before the referendum from that status quo). I think there are vastly more levers that are within the control of the British government and the British state that we could just choose to do now.

From a Labour perspective higher growth - and higher productivity - is essential for everything else they want to do in every other area of policy. But I think to my point about worrying the fundaentals are things that are more comfortable for the right - I think there is something to that here too. Energy costs, very high minimum wage compared to our peers and tax bills on employers are problems for our economy, particularly for small businesses and areas like the hospitality sector or retail - which are really important for the "life" of high streets being more tha vape shops, bookies, barbers etc. Decentralisation builds in a form of inequality (even if I think on average, in general, over time it makes all regions far more successful than our model) - which is why Labour has historically been opposed to it and the great advocate of "nationalising" services and policy. I think there are areas of the economy, especially planning, which have become a bit of a capricious license raj with unpredictable results but enormous costs to do things. (Again I think the opposite of the 2010s when some of those issues existed but there were huge problems on the demand side).

Broadly I think many of our issues are supply side. I absolutely think there's a case for reform in all of these from a left-perspective but it's a different part of the left to the norm in Labour and I think you need to be a very smart, creative, convincing politician to build that argumet - and it might be Burnham. I do think his experience as mayor of Manchester means he actually gets a lot of this from his own personal experience in the way that many purely Westminster politicians don't. But it involves taking Labour people out of their comfort zone - in under to empower a more active, investing, controlling, planning state within the economy more broadly. I think the argument from the right is easier/more comfortable: allow domestic production of fossil fuel energy again, reduce the tax burden on business, "slash" regulations etc. FWIW I actually think Burnham's framing of all of these issues as being about "control" is right and smart (but that's because I agree with it so who knows).

Edit: I would add one of the things I like about Burnham and that I think bodes well is his absolutely utter shamelessness. Just now claiming he wasn't involved in the ousting of Starmer: "obviously that was a matter for the Parliamentary Labour Party. I wasn't in Parliament - I wasn't in a position to be involved." And that he's "supported all the Labour leaders in my lifetime" having spent at least the last twenty years angling for the main prize

[Richard Hakluyt]

Well it is not like people get to be Prime Minister because they are a nice unambitious person who just happened to be hanging around 

I totally agree concerning the economies that we should be using for the purposes of comparison. Namely Germany, France and Italy. These are all significant economies with extensive trade and not much in the way of natural resources, their populations and GDP per capita are all in the same general ballpark. We were badly behind in the 1970s which imo made Thatcher possible. The only problem is that they are all in the EU so might all be making the same mistakes; perhaps we should also look to South Korea and Japan.

Regarding the EU, I don't see the point of applying to rejoin until we get a very solid settled majority in favour (at least 66%); I suspect that most continental Europeans feel the same way. I do whinge about it myself but that is self-indulgence as I'm a huge believer in the European project (so much better than what came before).

[Sheilbh]

Regarding the EU, I don't see the point of applying to rejoin until we get a very solid settled majority in favour (at least 66%); I suspect that most continental Europeans feel the same way. I do whinge about it myself but that is self-indulgence as I'm a huge believer in the European project (so much better than what came before).

I agree - I'm not sure 66% is enough either. But I'd go further. I think we should not have joined. Once we were in we should have stayed in. Now we're out we should proceed on that basis and I would say we shouldn't join until there is a settled majority and cross-party consensus for the European project. I think in retrospect it was a mistake that we joined on a very narrow parliamentary vote (309-301) that only happened because enough Labour rebels broke the three line whip against entry to outweigh the Tory rebels who broke the three line whip for entry. It's been a dividing line in British politics since the war and I don't think that's true in any other European country or going to end any time soon.

But also I think with the exception of Ted Heath, I don't think we've ever had leaders who acually believe in the European project. Even our most pro-EU PMs, like Blair, were basically instrumentalist - it was good because it helped our economy, good for our status etc not because they believed in the project in the way that is standard in the rest of Europe. And I think that's still a fundamental flaw. There was a really good Radek Sikorski piece or speech where he talked about this and said the problem with even thinking about re-joining is even the people who want that in Britain fundamentally do not understand the European project. It is not just a trade zone or an economic area - it is a politicial, constitutional project working towards ever closer union. You have the weird situation where pro-Europeans tend to dismiss the core purpose of the project as irrelevant while Eurosceptics take it seriously but hate it. And Europe has advanced (not as much as I'd like) in recent years through things like the NextGenEU, the Draghi report etc. I think you still see this in the cake-ism - I read a Guardian article musing if Keir Starmer's reset with Europe could involve "access to the single market" without free movement - and the answer is no. But that's from someone who would like to re-join essential but they still don't see the project at the heart of it just the bundle of perks and costs.

Honestly I think a lot of the support for "re-join" is regret and a desire to go back to 2016 - but I think very little of it is actually being in favour of the EU and what it is trying to do. Again this is the pro-European side but many/most are still profoundly uninterested in Europe, European politics or the European project. My own view is that basically at every point we should have stuck/should stick to the status quo with regards to Europe But I think we'd be insane to try and re-join and the EU would be insane to consider it until our political class actually took an interest in Europe and I'd say it wasn't a major divide within one of the main two governing parties (because the other side will win at some point).

For myself I was an enormous Euro-Federalist but fair to say I was radicalised by the response to the sovereign debt crisis which I think was a catastrophe for Europe that we're through the consequences of that lost decade of cuts to investment, wasting the opportunity of low inflation, low interest rates to re-invest etc. We went down very much the wrong path and a lot of our politics and problems in it across Europe are consequences of it (but this is like me hating Cameron and Osborne - and their Lib De enablers - vastly more than, say, Johnson).

[Josquius]

I agree - I'm not sure 66% is enough either. But I'd go further. I think we should not have joined. Once we were in we should have stayed in. Now we're out we should proceed on that basis and I would say we shouldn't join until there is a settled majority and cross-party consensus for the European project.   

I'm with you until the last part.
In joining we also destroyed the viability of being out by cutting links with the EFTA and commonwealth.
Leaving took us to a very different place to not joining and staying out holds no benefits for us.
We need to get as close to the EU as we can whether it's full membership or Switzerland.

[Sheilbh]

My last point is basically political - we are just building a timebomb into our politics of this happening again if there isn't a settled majority and cross-party consensus. There is no EU future that does not start with building an understanding  of/interest in Europe and the European project and the support for it on its own terms and not as an instrumental solution to x problem. If that isn't there the there is a structural weakness that will just keep happening. There is a reason that this issue, more than any other, has caused so much problems for our politics - a huge role in the divisions in the Labour Pary in the 70s leading to the SDP breakaway, then a similar divide for the Tories. I think we're now probably back to the 60s-70s position where the right has just united around a single position (stay out) while the left is divided again - except in the opposite way. Where once anti-common market feeling was a way to play to the grass roots, now cherry-picking fantasies or re-join are deeply held by the party activists.

But in the immediate aftermath of Brexit - when the costs are most severe - the UK's grown at about the same rate as France or the Eurozone average (better than Eurozone average if you exclude Ireland - which you should because GDP isn't a meaningful measure there). As I say I think growth would have been higher had we still been in. But I'm not sure how we can say European average levels of growth show that being outside is not viable (I think they do show the best position is what Britain used to have and Poland has now adopted: in the EU and out the Euro, but again this goes to the point that there is a political project at the heart of the EU).

The challenge for Labour people who are sympathetic to re-joining is that the path to better growth outside the EU lies in diverging from it. It is in doing more trade deals with other partners, it's in adopting different regulatory approaches, particularly in emerging industries where we're strong, it's in using the purchasing power of the state to re-instate national preference in outsourcing/supply chains. But if as has broadly been the case we're just doing six of one half dozen of the other then we're probably going to carry on without the benefits of either. Basically all the things that would help growth in the short to medium term which needs to be their goal would in the long-term create obstacles to ever re-joining.