speri.comment: the political economy blog

Lexit? Careful what you wish for…

A number of voices on the British left have in recent months pushed the idea of ‘Lexit’ – a progressive position in favour of Britain leaving the EU. While their critique of the EU has merit, their solution is counterproductive

Owen Parker, Associate Fellow, SPERI, & Senior Lecturer in Politics, University of Sheffield

Owen ParkerIn July 2015 Owen Jones suggested that the British left should seriously consider ‘Lexit’ – a progressive position in favour of leaving the EU. While Jones and other left-wing columnists such as George Monbiot have more recently come to the conclusion that progressives should (albeit perhaps reluctantly) vote to remain (see here and here), a sizeable minority of Labour supporters are still in favour of ‘Brexit’. Recent polls suggest that around a quarter of Labour voters are pro-Brexit while a further 14% remain undecided.

It is not difficult to see why the idea of ‘Lexit’ has become seductive. The EU’s treatment of Greece in 2015, described by Yanis Varoufakis as ‘fiscal waterboarding’, offered a particularly stark example of broader moves to exert greater EU control of national socio-economic governance.  The ongoing and secretive negotiation of the Transatlantic Trade and Investment Partnership (TTIP) will, according to many, weaken important pro-social regulatory policies and reinforce the power of corporate interests.  And the appellation ‘fortress Europe’ has never seemed so apt in the context of the ongoing refugee crisis and given the collective failure to effectively respond.

The British left’s antipathy towards Europe has a longer history though. In the early 1970s the Labour party had to deal with divisions on Europe almost as acrimonious as those that currently beset the Conservatives (and, indeed, in government it had its own referendum). At that time a majority of Labour party members and many in the Trade Unions opposed EEC membership, fearful that the Common Market would erode a national social settlement and the capacity to protect it.  Many on the contemporary left would argue that such concerns have been proven right.  Indeed, numerous political economists have documented the ways in which an ostensibly neoliberal single market project, then EMU, and now crisis responses, have chipped away at national autonomy in economic policymaking and eroded national models of welfare capitalism.

While sympathetic to much of this critique, the case for Lexit is, in my view, nevertheless misguided and potentially dangerous. Those sympathising with such a position need to reflect on three questions.  First, which aspects of Britain’s dysfunctional economic model are attributable to the EU and which are ‘home grown’?  Second, would a post-Brexit UK be more or less ‘social’ and ‘democratic’?  And, third, in the event that a post-Brexit UK were able to untangle itself completely from the EU and elect a left-wing government, would a progressive economic model be viable?

As to the first question, it is clear that the UK’s economic model owes a great deal to home grown factors: variously, labour disempowerment, privatisation, financialisation and an associated reliance on debt. Thatcher promoted Britain as a model for the single market and Blair sought to upload his ‘third way’ to the EU level, with some degree of success, reflected in the Lisbon strategy. Not being in the eurozone means that the UK’s recent austerity drive has not – unlike in Greece and elsewhere – been a direct consequence of ECB monetary policy or EU diktat. Rather, as many on the left have argued (along with Iain Duncan Smith!), it has been premised on a domestic neoliberal ideology in favour of cutting public spending and privatising public services.  In short, the UK has, in many respects been neoliberal leader rather than reluctant follower.

As regards the second question, uncertainties abound. But it is highly likely that a new Conservative leader (Boris Johnson!?) would seek to preserve substantial links with the single market and would consequently be tied in to many more EU rules than pro-Brexit campaigners on either side of the political spectrum have claimed or would like.  To the extent that TTIP adversely impacts upon the rules of the single market, it would impact also upon a Britain that remains within that market.

That is not to say, however, that the status quo would be entirely preserved. A Conservative government would push hard for opt-outs on free movement, employment rights and probably financial regulation. Britain post-Brexit would, according to this scenario, have a similar degree of economic policy autonomy, be more closed than ever to outsiders, quite likely enjoy fewer employment rights and have an increased reliance on the competitive advantages (read tax haven status) of the City of London at the further expense of the productive economy.  It would, as a consequence, be a more unequal society than ever.  And it would be a rule taker without being a rule maker – a reality that would exacerbate rather than ameliorate the democratic deficit.

Pro-Lexit voices may respond that a government of the left – perhaps led by Jeremy Corbyn – could, if elected, be bolder and remove the UK from the single market (and, indeed, all associations with the EU). This brings me to the third question: could a left-led Britain transform its economic model if entirely freed from the shackles of a neoliberal ideology manifest in both Conservative and EU rule?

First, for all its contemporary ills, European market integration cannot be divorced from the development or sustenance of national social settlements. Such integration in some respects rescued the nation-state.  As Alan Milward argued, it rescued it in the sense that it was the key to the sustainable peace and economic prosperity that underpinned the development of the modern welfare state. The idea that a government of the left could, without significant economic and political costs, entirely remove Britain from the single market or some equivalent economic relationship is therefore highly implausible.

Second, to the extent that contemporary global and European markets require substantial (re-)regulation this will require multilateralism in some form or another. One does not have to subscribe to an extreme version of the globalisation thesis to suspect that the realisation of a transformative progressive agenda in the ‘anglo-liberal’ or highly globalised UK context would require reforms to global and transnational governance (of, inter alia, finance, tax and environmental issues). Admittedly the EU is not the only instance of multilateralism, but it is the most institutionally developed instance of post-national governance and an alternative in the regional European context does not readily present itself.

The British left should, for all of these reasons, forget Brexit. They should overcome their scepticism and ambivalence to first turn out and then vote to remain on 23 June. Thereafter they should put their energy behind such initiatives as the DiEM25 movement, which combines a critique of neoliberal EU with a commitment to democracy and a multilateral European vision. The Labour party should, instead of remaining silent, clearly articulate this vision and its benefits for the British left.

Abandoning ship – even a seriously leaky one – is not the answer, particularly when shark infested waters await.

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Categories: Economics, EU Referendum, Europe and the EU, SPERI Comment | Tags: , , , , , , , , | Leave a comment

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