Brexit and the UK Labour Party

Brexit is not yet as viciously divisive an issue within the UK Labour Party as it is within the UK Conservative Party. But opinion is at least as diverse. The lack of clarity in the thinking of the party’s leader, Jeremy Corbyn, is not helping. In an interview the other day, he said that, if elected, a Labour Government would seek “a better deal” and would look to negotiate “a customs union” with the EU. Now, remember that there is an EU customs union, of which Turkey is also a member. For now, the UK is a member. Use of the term “a customs union”, and many Labour speakers employ it, suggests that something other than the existing customs union is envisaged. But this is logically impossible unless the existing one is to be abandoned by the EU. A customs union implies a common external tariff. Is Corbyn suggesting that this be different from the existing one? If not, why can’t he say that the UK would want to stay in the EU customs union. Or does he envisage a new arrangement whereby the UK and the EU would agree a new common external tariff, incidentally requiring renegotiation of all EU trade agreements with the rest of the world?

Mr Corbyn is also concerned about the State Aids rules of the EU. He says that he would be concerned if they interfered with a Labour government taking measures to encourage industry. With some exceptions, state aid rules come into play if a government gives a benefit to a firm in its own country that it denies to others. After Brexit, if a UK firm wants to trade with the EU and has had unfair benefits from the UK government, it will come up against the State Aid rules either immediately as part of whatever agreement is ultimately reached between the EU, or else later on at WTO level.

Corbyn’s position on the EU needs to be more carefully developed. At the moment, it looks a bit as though he shares the Tory Brexiteers’ delusions that the UK can negotiate with the EU as an equal partner, if not a superior one, and that exiting the EU will mean that the UK is free to do whatever it likes.

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