Labour MPs in Leave-backing seats should not be tempted into backing May’s deal

Labour MPs in Leave-backing seats should not be tempted into backing May’s deal

Now is a moment of truth for Labour MPs. Theresa May’s decision to go back on her manifesto promises and agree a deal which would tie the UK to EU rules indefinitely but without us having a say in setting those rules has presented them with an open goal. All the signs are that the Labour front bench will oppose the deal. But the stance of the many Labour MPs in Leave-backing constituencies is open to question.

Some, such as Gareth Snell and Caroline Flint, have indicated that they might support the deal. Their argument is simple: they want to honour the referendum but believe that voting down the deal would mean leaving without any deal at all – something they worry will threaten economic growth and jobs.

Such worries are understandable given the constant barrage of warnings about “no deal” being put out by the Treasury. It would be ironic, however, if Labour MPs were to vote in favour of tying ourselves in perpetuity to the EU, an organisation with a sorry track record of creating mass unemployment across large swathes of southern Europe.

In fact, MPs on all sides may be worrying unduly about the economic effects of a no-deal Brexit on their constituents. ‘No deal’ may involve some short-run disruption, but it also brings the potential for very significant economic benefits. 

In the first place, we would no longer be forced to erect huge barriers to trade with non-EU countries, something which forces up the prices of food and clothing for hard-pressed consumers. We would be free to strike trade deals with fast-growing economies around the world and, crucially, we would be able to control economic policy for the benefit of our own workers, consumers and businesses, rather than having to do what works for the EU Commission – why should we wait until 2022 before the UK is given gracious permission by the EU to abolish VAT on female sanitary products?

Astoundingly, the UK seems to have agreed to hand over about £40 billion to the EU (far in excess of our liability under international law) in return for nothing – the EU have made no commitment at all to a future trade deal. This should be fatal for the deal on its own and it is surprising that Labour MPs have not been keener to hold Mrs May’s feet to the fire over this issue. Perhaps voters in Stoke and Doncaster could be asked their opinion on whether they are happy to send that money to the EU or if they would prefer it to be spent on the NHS, schools, infrastructure and sorting out Universal Credit.

There is another problem with Theresa May’s deal and one which is easy to overlook: far from ending uncertainty for business, the lack of agreement over a future trading relationship would actually create uncertainty for years to come. UK industry is adaptable and will find a way of coping, whatever trading arrangements we end up with. But uncertainty rarely provides a good environment for investment. Since the referendum, investment into the UK has outpaced the rest of Europe, not ‘despite Brexit’ but because of the long-term opportunities which Brexit opens up (also, of course, because of the inherent advantages of doing business in the UK). A clean break on 29th March 2019 would end uncertainty about how Brexit will work much more quickly than would be the case under a long transition period. As a result, inward investment should get another boost.

So leaving with no formal deal is nothing to be afraid of. Indeed, poorer voters in Labour heartlands have the most to gain. But voting down Theresa May’s proposals does not automatically mean no deal. It’s always been the case that, paradoxically, preparing seriously for no deal makes no deal much less likely. No-one disputes that a UK-EU Canada+ type trade deal would be good for both sides. Once the EU realise the UK is serious about implementing the referendum result and will not put up with the faux-Brexit Theresa May is proposing, a sensible deal becomes more likely, right up to 29th March and beyond. Indeed, it is likely that a UK-EU trade deal will be much easier to achieve after we leave and once some of the overblown political rhetoric has been left behind.

Labour MPs have been presented with a wonderful opportunity to push the Government towards a Brexit which both respects the will of voters in the referendum and ensures that the long term economic benefits of Brexit are achieved for the poorest in society. There are certainly electoral rewards for the taking. More importantly though, the UK economy is just waiting for lift-off, freed from the shackles of the job-destroying EU. Let’s see how many Labour MPs are willing to help start the countdown.