The Labour Campaign for the Single Market is a battering ram for the Labour right, argues Reuben Bard-Rosenberg

To engage with the Labour Campaign for the Single Market is to take a journey through Alice’s looking glass. The likes of Neil Kinnock, Chuka Umunna and Peter Mandelson now consider it deeply important that the Labour Party “ends austerity” and “promotes equality, social justice and environmental sustainability”. According to these remnants of the Blairite establishment, these important goals can only be achieved if Labour commits to keeping Britain in the single market.

The extent to which the Labour right are now focused upon the question of Europe is symptomatic of their declining fortunes. After two leadership elections and the huge vote for Corbyn at the general election, even the most conservative sections of the Parliamentary Labour Party have grasped that the popular appetite for centrist status-quo politics is not what they once imagined. The European question appeals to such elements because it appears to stand outside the left-right axis and to offer a progressive veneer to attacks against the Corbyn leadership.

Of course, nothing could be further from reality. Labour can go to the country with a plan for radical economic reconstruction, or it can go to the country with a promise to keep Britain in the Single Market, but it cannot seriously do both. This is because of strict limits on government intervention that come with membership of the European economic club.

If a future Labour government is to address the long-term crises of underemployment and falling pay, it will need to go further than regulating wages and reversing austerity – important as these things are. Such a government will need to actively intervene in changing the way that the economy functions – whether that’s by directing investment towards job-rich green tech, subsidising sectors that face a race to the bottom with the world’s sweatshop-export economies, or nationalising factories that threaten to create mass unemployment by going under.

Yet it is precisely these forms of intervention that are forbidden by European State Aid laws – the set of free market strictures to which members of the Single Market must defer. As recent judgements against Italy and Belgium showed, an elected government cannot even go so far as to advance a low-interest loan to a stricken industry without being found guilty of “distorting competition” and forced to reverse course.

Under European State Aid laws, a government may not invest in any enterprise – including a publicly owned industry – unless such investment passes the “market test”: that is to say, it is done on the same terms, and at the same rates, that would satisfy a profit-seeking private investor. What this ultimately means is that it is up to bond-traders, and not elected governments, to decide what may or may not be done to determine the future of Britain’s productive base. Meanwhile, under the Single Market system, private companies may bring cases against elected governments if they feel that their opportunities to increase their market share have been harmed by, for example, a government stepping in to save a collapsing steel plant.

Ultimately the single market serves to keep a huge range of issues off the table. The ability, of the market, and the market alone, to shape the economy ceases to look like a political choice, and instead becomes a matter of following the rules. It is for this reason that the likes of Chuka Umunna are so determined that the Labour leadership should commit to membership of the Single Market. And it is precisely for this reason, that the Labour leadership must avoid being pulled into this swamp if it wishes to act as an agent for radical change.