Labour members wanting to get behind Jeremy Corbyn need to ditch their support for the EU’s Single Market and Customs Union

Labour members wanting to get behind Jeremy Corbyn need to ditch their support for the EU’s Single Market and Customs Union

In the 1993 film Indecent Proposal, a billionaire offers $1,000,000 to a young married couple for one night with the wife. It’s a quintessential trait of an elite with a sense of entitlement over and above others to regard everything as a commodity that can be bought and sold.

But history proves that the best in humanity, dignity, integrity, free will and self-government cannot be traded in a market place. The American War of Independence was fought on the issue of self-government and in the twentieth century, in countries that had been colonised, millions gave their lives in the struggle for independence. In that struggle, none were deterred by warnings of dire consequences and predictions of doom; and neither did the hardship that followed cause any to regret their action or to wish to go back to being ruled by foreigners. It was Gandhi who said: “I must have absolute independence or perish”.

The vote in Britain to leave the EU and take back control carried similar sentiments which explains why project fear failed to get traction; staying in the EU was indeed an indecent proposal.

For the Labour Party, Brexit has dramatically moved from the sphere of conjecture and speculation to the realm of reality and necessity.

The speech Jeremy Corbyn gave to the Alternative Models of Ownership Conference earlier in the month may prove to be the defining moment that brought this about. In his speech, Corbyn outlined plans for public ownership and democratic control of utilities such as energy and water as well as rail: “The questions of ownership and control that we’ve been discussing today go right to the heart of what is needed to create that different kind of society.”

In a speech in Nottingham on the same day, Shadow Chancellor John McDonnell promised that “the next Labour government will put democratically owned and managed public services irreversibly in the hands of workers”. This – coupled with Labour’s plans for borrowing to invest and state aid for British industry including using procurement to support British firms – makes current Labour policies the most radical since the 1945 Labour Government.

But unlike that government, which was free to pursue an independent economic programme, a Corbyn government today would be unable to put its policies into practice. That “different kind of society” is incompatible with membership of the EU’s Single Market and Customs Union.

Take nationalisation. State ownership as such is not frowned upon by the EU, but it must operate in a competitive market under strict rules of competitive tendering: there is no question of public utilities like water or energy operating for the public good outside the market system. In the case of the railways, the EU’s programme for ‘Rail Liberalisation’ rules out the creation of an integrated public monopoly responsible for passenger and freight services as well as infrastructure along the lines of British Rail. As for democratic control, it’s out of the question: the EU has been shown to have a distinct aversion to democracy.

Similarly with state aid, it is not permitted under EU Single Market and Customs Union rules, although exemptions may be sought from the Commission to do so. The Commission’s record of allowing such aid is not encouraging. According to the Observer, the European Commission has estimated that its history of exemptions shows that “more than three-quarters of submissions for state aid have been waved through”, which means that a quarter, one in four, are rejected – a high rate of rejection.

When you take into account that Member States would not ask for an exemption unless they thought it was likely to be granted, then the refusal rate is far more inhibitive than first meets the eye. The very fact that state aid is considered an ‘exemption’ and not the norm should ring alarm bells to anyone who wishes to use state aid as a lever to re-vitalise our industrial base. The same goes for government procurement: prior exemption must be sought and more likely than not, not given.

The Labour leadership is aware that membership of the Single Market and the Customs Union is incompatible with its plans for public ownership, state aid and state borrowing beyond the percentage of GDP set by the EU under the Stability and Growth Pact. The party membership, however, are as yet to be convinced – but they are quickly coming round to the position of the leadership out of necessity as well as the increasing realisation that Brexit is being used by the likes of Chuka Umunna and Alastair Campbell as a proxy for their campaign to destroy Corbyn’s Labour. They see remaining in the Single Market and the Customs Union as a means of shackling the UK to the neoliberal policies of the EU. This explains their current desperate attempts to force the issue out into open rebellion for they fear that time is not on their side.

So Labour members now face a critical choice: support Corbyn and ditch the Single Market and Customs Union or remain in the Single Market and the Customs Union and ditch Corbyn. There is only one path they can follow if Labour is to re-claim its working class credentials.

Photocredit: Garry Knight