23 January 2019

Alex Stojanovic argues that there appears to be very little substance to Labour’s alternative Brexit plan.

Jeremy Corbyn has outlined an alternative plan for Brexit which comprises a permanent customs union, a ‘strong’ relationship with the single market and ‘stronger’ level playing field obligations. The plan now forms the core of one of the amendments that MPs may have the opportunity to vote on next week.

Opposition party proposals don’t always get scrutinised in the same way as Government policy. But the official opposition always represents a government-in-waiting, so it is appropriate to assess the content and workability of their plans.

Corbyn’s major pitch is that a Labour government could secure a better Brexit deal from the EU than the incumbent Conservative administration has so far managed. But for all the rhetoric of presenting a viable alternative, Labour’s plan remains vague in key respects. From what has been articulated, Labour’s Brexit plan appears little different in substance from the Government proposals which were resoundingly defeated last week.

A permanent customs union would offer few practical benefits over the PM’s customs territory

Labour has said it wants a permanent customs union with the EU to prevent the return of a hard border in the island of Ireland and to protect British manufacturing.

The Government has already agreed a fall-back single customs territory through the Irish backstop that would kick in if a future deal between the UK and EU were not agreed. In the words of the Attorney General “unless and until” a deal on the future relationship is concluded, the backstop will remain in place “indefinitely”.

Although the backstop has been presented as an insurance policy to maintain an open Irish border, in practice it is a way of guaranteeing the UK permanent tariff-free and rules of origin free trade if it decides it wants it, or if negotiators fail to find another way to avoid a hard border.

So the Prime Minister’s customs territory already delivers the practical effects of the customs union for both business and the Irish border.

Labour's position on the Single Market is unclear

Labour has said it wants a “strong relationship with the Single Market” but it is yet to spell out what that means, or what would be required to make it work.

For example, we don’t know whether Labour’s proposal involves services or merely goods. Nor do we know whether Labour has moved on from its manifesto statement that “free movement will end when the UK leaves the EU”. If it does then Labour have the same problem as the Government: trying to retain access to the single market without adhering to the four freedoms.

An amendment to Theresa May’s ‘Plan B’ motion tabled by the Labour frontbench suggests that Labour envisages this ‘strong relationship’ being “underpinned by shared institutions.” However, the EU has given no indication it would agree to such an arrangement. In the past it has refused to countenance similar arrangements for the EEA and Switzerland.

Based on precedents, there is no reason to believe that a Labour government would find the EU more ready to compromise on UK access to the Single Market than it has so far been with Theresa May.

Labour’s level playing field provisions have little to do with the deal on the table

On the one hand, Labour dislikes the EU's level playing field provisions on state aid and competition rules - which the Government has signed up to as part of its deal on customs. The EU have been very clear they won’t countenance a deal without state aid provisions. If Labour want to avoid no deal they will have to drop this policy.

On the other, Labour has said it wants to stay within the EU’s social and environmental rules, and is keen to tie the hands of any future Conservative government that might attempt to water these down. The EU would be very happy to see such commitments included in a future deal. If the Government wants to negotiate more access than the backstop provides then it will have to concede this anyway in the future relationship. The question is when not if.

The Withdrawal Agreement gives Labour most of what they say they want

In terms of its declared objectives, Labour has little reason of substance to oppose the Withdrawal Agreement. It has always said that it supports certainty for citizens and meeting legal obligations on money, and Labour called for a transition period ahead of the Government accepting the need for one. Its proposals on a permanent customs union would achieve few practical benefits over Theresa May's plan and its single market proposal is unclear. 

The backstop arrangement and the Political Declaration negotiated by the Government set up a perfectly workable baseline for any future Labour government wanting to negotiate the type of future relationship it has said it wants. At this stage, there are few signs that a deal negotiated by Labour would be substantively different to that proposed by the Government.