Jeremy Corbyn has outlined the Labour party’s position on Brexit – in particular, regarding the customs union – Martin Hall breaks it down

Jeremy Corbyn has today committed the Labour Party to a policy of forming a customs union with the EU. Note that this is not staying in the customs union, other than in the transitional period, but instead, the setting up of a new relationship that he hopes will ensure no tariffs on goods between the EU and the UK. It is also assumed that this will be a step towards ensuring access to the Single Market without being in it, and in the process a way of addressing the question of the Irish border. After an introductory discussion where he criticised the government’s handling of Brexit, outlined the principles behind the Labour Party’s approach to the subject, discussed the importance of supply chains and access to the Single Market, the economic problems of Leave-voting areas, the Irish border and the party’s desire to stay in some EU agencies, he said this regarding the Customs Union:

We have long argued that a customs union is a viable option for the final deal. So Labour would seek to negotiate a new comprehensive UK-EU customs union to ensure that there are no tariffs with Europe and to help avoid any need for a hard border in Northern Ireland.

After giving more detail, he went on to say this:

Labour would not countenance a deal that left Britain as a passive recipient of rules decided elsewhere by others. That would mean ending up as mere rule takers.

He then discussed the importance of a deal that allows access to the Single Market, while allowing opt-outs: 

The new relationship would need to ensure we can deliver our ambitious economic programme, take the essential steps to intervene, upgrade and transform our economy and build an economy for the 21^st century that works for the many, not the few.

So we would also seek to negotiate protections, clarifications or exemptions where necessary in relation to privatisation and public service competition directives state aid and procurement rules and the posted workers directive.

We cannot be held back inside or outside the EU from taking the steps we need to support cutting-edge industries and local business, stop the tide of privatisation and outsourcing or from preventing employers being able to import cheap agency labour to undercut existing pay and conditions.

Overall, the speech reiterated Labour’s overall aims and objectives in terms of the kind of government it wants to be, and very good points were made regarding the rights of EU nationals, the refugee crisis, internationalism, workers’ rights and the paramount importance of keeping the NHS safe and out of any future deals the EU might cut with other countries.

So far, so good, to some extent, tactically-speaking. What is Corbyn hoping to achieve?

• He will hope it will be seen as the continuation of the manifesto position of a jobs-first or People’s Brexit, and that it provides a big enough tent for most Labour voters to get under.
• That it will head moderate Remainers off at the pass, bar the Blairite right, who will only accept a policy that pushes for Single Market membership.
• That it provides a clear differentiation between Labour and government policy.
• That if Labour tables an amendment or votes with the one currently on the table from Tory rebels, it is possible that the government will be defeated in the Commons, which could topple Theresa May and would certainly lead to calls for a general election.

However, the overall strategy has its problems:

• It is hard to see how the UK would be an equal partner with a trading bloc of 27 countries in future trade negotiations. 
• It will be seen by some Leave voters as a softening of Labour’s position and a step towards further concessions to continuity Remain positions.
• The customs union is of a piece with the Single Market, as it is predicated upon the idea that the EU, as a Single Market, sets tariffs with the rest of the world.
• It may in that context embolden the right of the Labour Party, who are using Single Market membership as their current stick with which to beat the left, and in the process, reconstitute a business as usual politics – especially if the EU does not go for it, and makes it clear in the coming days that it will not.
• It may not entirely solve the question of the Irish border, as the proposed customs union would not allow people to travel unhindered, just goods.
• While it may topple the government, it will not make the winning of the next general election easier, as 70% of Labour-voting constituencies voted Leave in 2016. 

Why does this all matter?

All the evidence from June 2016 points to the prime drivers of the Leave vote as a desire to take back control, including a variety of differing positions on the question of immigration and borders, allied to an attendant anger at what neo-liberal, free trade economics had done to the UK’s industrial heartlands. 

Keir Starmer, speaking on The Andrew Marr Show on Sunday in advance of today’s speech, said that ‘we all want to do bold new trade agreements but we would be better off doing that with the EU.’ While Starmer’s comments yesterday were, as expected, more of a piece with remain positions than Corbyn’s speech, Corbyn did say today, a few minutes after saying that the UK would not be ‘passive rule takers’, that ‘a new customs union would give Britain a say in future trade deals’. Of course, it has that now as a member of the EU, and this is a significantly weaker comment than the one cited further up this piece, as well as being a more realistic appraisal of what is likely to happen should Labour find itself in a position to negotiate any of this following a general election victory.

This will understandably be seen by many leave voters as not providing what was promised in 2016, as being one country working in tandem with a block of 27 in any future trade deals will very much tie the UK in to current practice; in short, the global free trade model favoured by the EU, and which has ravaged the areas that voted leave in their droves. As John Rees argued in a recent Counterfire article, ‘no People’s Brexit is possible by simply re-adopting the rules of the EU single market or customs union.’ These rules are not set up to favour workers.

Corbyn’s speech makes clear that tariff-free trade is a line in the sand and one which the Labour Party will not cross. This rules out any attempt by a future Labour government to use tariffs, should they need to, and again ties it into current practice. 

 It is difficult to see why the EU would either change its current negotiating habits with the rest of the world, nor indeed why it would commit at all to a deal on a bespoke customs union agreement that would allow a future Labour government also to cherry pick the aspects of the Single Market that it wants. The Turkey deal, for example, in which that country is a member of the customs union but not the Single Market, means that goods enter the country tariff free, but not that its own goods enter non-EU countries tariff-free, so it is a one-sided agreement, from the point of view of free trade.

The EU does not want a low tax, deregulated economy on its doorstep and will seek to ensure that does not happen by tying in access to the Single Market to a maintenance of its standards on regulation, and in the process not allowing the kind of deal favoured by the Liam Fox end of the Tory party. This is because it will not want to be undercut by such an economy. Similarly, it will not want to give tariff-free access to the Single Market nor have a customs union that is a partnership of equals with a country that wants to renationalise, use state aid freely, prevent capital from crossing borders for procurement purposes and, essentially, set up the threat of a good example on its doorstep. 

What Jeremy Corbyn has set out today is, in some ways, a brave attempt to stymie the most rabidly pro-remain aspects of his party, while keeping Leave voters in the tent. This was most strongly seen in this statement towards the end of his speech:

The European Union is not the root of all our problems and leaving it will not solve all our problems. Likewise, the EU is not the source of all enlightenment and leaving it does not inevitably spell doom for our country.

That is to be commended, in the context of the difficult job of leading a Parliamentary Labour Party which predominantly believes in the opposite of the second of these statements, while attempting to win a general election in which some of its voters in seats it will need to win believe the opposite of the first of these statements. Also, in the context of leading the second party of capital in the British state, it is perhaps wishful thinking to hope for a more radical position in terms of the capacity of Brexit really to empower a truly radical government that makes a clean break with the faltering neoliberal model of capital.

His position set out today was in line with the remain and reform position he took during the referendum and has the benefit of consistency, despite attempts by the Remain establishment to paint it as a concession to business -  see today’s Evening Standard editorial which says that Labour is now more pro-business than the Tories. 

It remains to be seen how achievable any of this is, though. It is also possibly a speech designed in the hope of winning an election rather than securing a future relationship with the EU. If and when this is rejected by the EU, what will be next? Staying in the Single Market from the point of view that the EU is reformable? Reform from a position of sitting on the edge of the tent? It is quite likely that the EU will state that it will not countenance any deal that gives full access to the Single Market that allows Britain not to be bound by all of the four freedoms. So what happens then? That will be the real test and it may be one that the Labour Party is required to address sooner rather than later.