Brexit Economics: The Shadow Chancellor Who Deserted The Ship

Now the by-elections are out of the way it is time to get back to Brexit, the political issue that will dominate not only this Parliament but that may well be a defining issue for a generation.

Diane Abbot is right when she points out that any political party with a foot in both the Remain and the Leave camp would find life difficult. Replace remain and leave with immigration and the economy and you have a more accurate reflection of the political dilemma facing Labour.

Immigration is, of course, an exceptionally difficult issue for any progressive Party to consider not least because the issues raised seem different across the regions of the country. Despite immigration being such a high profile concern Labour has not even started to debate the issue seriously, despite the All Party Group on Social Cohesion calling for a Commission to examine how a devolved immigration system might work. Clear, solid and principled policy will only come from pan-party debate, votes and brave leadership. As none of these factors are in place we can’t expect any clear Labour policy on immigration any time soon.

The economy should be an easier issue for Labour to headline on as ultimately it is should be our core issue. Talk to anyone for more than a few minutes and fears of Brexit quickly surface, even amongst those who voted to leave. Remember, the South Wales steel worker interviewed the day after the referendum? “I voted to leave but I didn’t think it would happen”.

It is very easy for broadcast journalists to find pensioners who simply don’t care about the economic arguments but dig a bit deeper and it is clear that many, if not most, of those of working age feel very insecure about their futures.

Fears for the future are understandable not least as the economic foundations of Brexit seem to change each week. During the referendum campaign Johnson captured headlines by proclaiming that, of course, we could stay in the single market. Other — harder Brexiteers — wanted out from both the single market and the customs union as soon as possible but these more extreme voices were never effectively challenged as the media focussed on the Johnson and Farage roadshows.

Since the referendum the government continues to shift its position, firstly, preparing to abandon the single market and subsequently showing itself willing to abandon the Customs union, preparing to trade if need be on World Trade Organisation rules and tariffs. As this mess unfolds Theresa May’s government becomes increasingly dependent on Donald Trump to seal a quick trade deal with the USA; they will have little choice but to snap up whatever is on offer from Trump. Some are optimistic as Trump opposed the Transatlantic Trade and Investment Partnership (TTIP) as did many progressives did in Europe, but Trump’s objections are on very different grounds. How easy do we think it will for British industry to get tariff free access for high value manufactured goods without us reciprocating by the further opening up our health and public services?

At least 50% of our major businesses feel that Brexit is already having a detrimental effect on the bottom line. Each week we see businesses — from financial services to manufactures — making it clear that they will re-consider their UK bases and future investment programmes if they are left with a ‘hard Brexit’. It is already clear that trading on WTO terms will be a disaster for the UK, making our economy uncompetitive in the global economy. Negotiating trade treaties to replace those we already have access by virtue of EU membership will take years.

So, given the seriousness of these economic concerns is seems extraordinary that John McDonnell is not addressing them. He is failing to articulate a clear commitment to the prioritising of the economy in the Brexit debate.

Many of those Labour MPs who voted to trigger Article 50 argue that there is still time to act as the shape of the final deal becomes clearer, yet in reality they are being lured into fighting on Tory territory. You can’t trust Labour with Brexit will be the continuing rallying call of this government. McDonnell needs to get wise; he can’t campaign for eighteen months on being a better party for Brexit and at the last minute throw up his hands and declare the whole thing is a disaster.

For Labour finding space in the media for an anti or doubtful Brexit message will be hard. This is why Labour’s position needs to be unequivocal and our priorities shouted out long and loud. The Vote on Article 50 was a disaster precisely because it abandoned the one opportunity for Labour to grab serious media time and to make the headlines. It would have allowed McDonnell the become our champion the protection of jobs and living standards from the outset.

Such a stance need not be automatically anti Brexit or against the popular vote. It is possible, we must suppose, that the government may pull off an acceptable deal with Europe even if this seems unlikely. However, there must be a real likelihood that the position we are left with after leaving the European Union is worse than that if we had remained in it. At the end of these negotiations, do we think McDonnell is really brave enough to take on the government, to argue against the very foundations of Brexit if that becomes necessary?

There is another reason why Labour needs to adopt a laser-like focus on the economy and on jobs and trade over time. Many of the electorate seem to have a poor knowledge of basic economic principles. Tim Shipman’s account of the anti European movement and the referendum campaign, _All Out War_, shows how — as the referendum campaign reached its zenith — both campaigns found that their focus groups were un-moved by economic arguments, they simply didn’t understand them. Labour will need to campaign long and hard to effectively inform voters. Education campaigns demand time.

So, whatever the eventual result of the negotiations with the EU Labour must campaign hard now if it is to have any chance of having a serious impact on public opinion. Labour’s ability to take on the Tories in the future will depend on it.

Labour’s position needs to be unequivocal. Labour must be a party prepared to defend jobs and prosperity and prepared to argue against the Brexit deal _if_the deal sells the country short. Labour should be clear now that there must be a second referendum on the final terms of the Brexit deal. May’s ‘take it or leave it vote’ will offer little chance for eleventh hour campaigns or reversals.

Labour’s pitch to voters needs to be blunt. To trade on WTO terms would be to impose a ‘tax’ on each job in the UK. If voters are uncertain about economic arguments they sure as hell understand the notion of tax. Whether you work in manufacturing, hospitality, financial services or technology, trading on WTO terms will make you and your employer less competitive in world markets. The low tax, low protection economy favoured by hard Brexiteers will decimate the public sector.

The policy and campaign positions discussed here are not designed to be anti Brexit, rather they are aimed positioning Labour as the protector of our economy, our jobs and our living standards.

In failing to step up to the mark John McDonnell has effectively gone absent without leave. Until he finds the courage to develop a clear line on Brexit and the economy, Theresa May will continue to dominate and Labour will continue to poll at record lows. Labour’s Leadership is already conceding the future of the post Brexit world to the Tories and the right.

Andy Howell
28th February 2017

Lessons From America

During the autumn of 2015 I spent some time in both Pennsylvania and Maryland. On reflection — especially since November — the trip seems a whole lot more interesting, and significant, than it did then. The trip gave me a grasp of some of the challenging issues facing the Democrats.

This was not a political trip, I was in the US to look at the way a number of States and Cities organised their arts and culture sectors. I was particularly interested in places that had some relevance to Birmingham and the West Midlands and so the visit concentrated on post industrial regions with large minority ethnic communities.

This area (especially the cities of Philadelphia, Pittsburg and Baltimore) were about as solid a Democratic homeland as you could expect to find. All of the administrators and politicians I met were Democrat. These were places where the big political competition was always the primary election for candidate, rather than the actual real-world election. In the 2016 elections the cities remained Democrat but in the suburbs and smaller towns voters threw away their historic political bonds.

Trump had not yet won the Republican nomination but he was everywhere. When in the US my personal survival strategy involves never ever switching on the TV in the hotel room, though on this occasion there was no need. Every TV in every hotel lobby, bar or restaurant was showing CNN and one person dominated. Trump’s tactics were rather basic but very clear. Each morning about 10.00 am he would say something extraordinarily outrageous and he would then dominate the new reports until the evening when the coverage of the political rallies would start. Throughout the day Trump’s opponents — Republican and Democrat — would be playing catch up, effectively dancing to The Donald’s tune. Trump seemed to base his strategy around either the laziness of 24 hour news editors or a lack of real editorial capacity to challenge.

On the last night of our trip my colleagues and I took out a group out who had organised our Baltimore itinerary for a thank you meal. Each one of our guests was a lifelong Democrat. I spent most of my evening talking to a fascinating woman, an academic with an impressive portfolio of community activity, who was a long serving and senior Democrat (Baltimore is next door to Washington). Since November I’ve though about this evening a lot and the more I think about the conversations the more significant I think they are for the future of progressive politics on both sides of the Atlantic.

Surely, I asked, Trump would blow up? They weren’t counting on it. What’s more at this point in the campaign it was estimated that Trump had spent virtually nothing on marketing. He was being treated very seriously. They knew that Trump was ruthlessly exploiting the concerns that many people had about the ‘authenticity’ of politicians. Who did they all want to know about? Corbyn. They were fascinated at the apparent breaking of the conventional Labour machine. Might the once formidable Clinton machine, and the Democrat operation in general, suffer a similar fate?

At the time the first Clinton email ’scandal’ had yet to subside. I was told that the Democrats were worried and that plans were being made to parachute in an alternative candidate if Clinton was forced to withdraw. Who might that be? Kerry, Biden and Gore were all being seriously considered as candidates. But were they not all of the same age and political generation as Clinton?

The first problem they discussed with me was the Party’s failure over recent congressional elections. They had simply lost a generation of political leaders, especially those that had experience of political management. Did that matter? “We’re beginning to realise it does” came the reply.

Biden, I was told, would clean up if he stood as a candidate. He would suck up the vast majority of the black and hispanic votes in the country. Biden was judged to have far stronger support in these communities than Clinton. Why? Biden was considered to be properly authentic. “What you see with Joe is what you get.” My guide was a senior Black American activist.

The problem faced by the Clinton campaign, even then, was the ‘Clinton establishment’ and all that went with it and an almost monarchist view of the right to succeed. Many Democrats in the USA see the Clintons in much the same way as we see the Blairs. Both of these ‘royal families’ have adopted the same confusing mixture of business and charitable foundation operation. Here in the UK Bill Clinton remains something of a hero amongst progressives but as Francis Beckett and David Henke showed in 2015 (Blair Inc: The man behind the mask) this might be because Blair and Clinton carved up the world between them, each operating in a different part of the globe.

The email ‘scandal’ itself was not so much the issue as a growing notion that the Clintons operated in a different space to everyone else and played to different rules. There was an overwhelming sense that this mode of operation had had its day, or at least they wished that it had!

So why Hillary? Well, the history and image of the Clinton’s was simply too strong to resist. They had the power, the image, and the clout with donors. It was simply Hillary’s turn. Baring scandal, there was simply no other rightful candidate. And yet those I was talking to had very real reservations and concerns about the inevitability of the position that they found themselves in. Even twelve months before the ballot they were not at all confident. Politics was changing they told me and the Democrats had to change quickly, it’s just that had little clarity about their future direction and where it might lead.

While my hosts and guests were fascinated with Corbyn it is worth noting that this didn’t translate to Bernie Sanders. He couldn’t win they argued and US polls seem to show that was the case. Their fascination with Corbyn seemed to me to be grasping at straws, hoping there was a new and emerging political model that might prevail.

I’ve revisited these discussions a little since Trump’s election. Progressives may trumpet the popular vote as, yes, Clinton polled far more votes than Trump, but in a set political system the political machine simply failed. And it failed badly. My friends are vey clear that simply throwing money at a problem didn’t work last year and, most likely, is not guaranteed to work in the future. This was the first Presidential Election in a long time that didn’t break the expenditure record, simply because Trump spent so little. The machine is becoming less important than the clarity of message. And, of course, in the US system it is the Electoral Collage that determines the result and not a simple nation-wide majority.

It seems to me that progressives on both sides of the Atlantic are following the same path and that there is much to share along the journey. In reflecting back to these conversations there are lessons to be learnt for Labour here in the UK.

Firstly, we need put the Blair and Campbell year behind us. Yes, they were very successful in their time but the electorate has moved on and they see things in very different ways than many of Labour’s core activists do. Too many Labour activists look backwards and remain obsessed with their own turf. For example, Alistair Campbell remains a great figure for many — but we haven’t properly acknowledged the rise of the new Tory equivalents, ruthless operators like Dominic Cummings who ran the leave campaign; the ‘force’ is with them now. The soap-opera like glitz of the Clintons and the Blairs no longer cuts little ice with real voters.

Secondly, we need able politicians who are competent political managers. We should be wary of long periods of opposition. A focus on abstract campaigning is not enough — it certainly wasn’t during the Thatcher and Major years. We need to more carefully focus on the skills and achievements of our local government leaders, especially in the big cities. We should watch very carefully the work of the new regional Mayors for these are people who will be determined to make a difference. These political leaders are as much on the front line as our Parliamentary Front Bench. These are people who understand the importance of the machine but also appreciate that being seen as an effective fighter for your own community — for your own people — is even more important.

Finally, Labour — both left and right — have to get a better handle on the media, both traditional and new. We cannot simply treat the mainstream media with suspicion or disdain. We need front bench spokespeople who are media savvy, who see their jobs as taking every opportunity to harry and harass their opponents. We all know about Trump and Twitter and yet it was his use of traditional news media that was most significant in winning over voters. Social media campaigns — as MORI and others have effectively demonstrated — simply see us talking to the converted. Yes, they can rally the troops but they have very little impact on the wider community.

As political activists we have to properly understand that this world owes us very little. The past might provide benchmarks and pride with past achievements, but it is always the future that counts.

It is a long road back. It will mean a lot of hard graft. Yet without the confidence of the wider community it will all be wasted effort.

Andy Howell
11th January 2017