Show Hide image

I warned Jeremy Corbyn about Brexit - now Labour must regain its radicalism

Yanis Varoufakis on a radical vision for Brexit. 

From the beginning of my conversations on Brexit with the Labour leadership, I advocated a “radical Remain” stance: the UK should be for the EU, but not this EU. The labour movement in Britain and elsewhere has been critical of the operations of the state at the national level without calling for its disbandment. Similarly, we can be critical of the EU without seeking to leave it. We can expose the failings of its institutions and be fierce opponents of its neoliberal economic doctrine without wishing for the break-up of the bloc.

I warned Jeremy Corbyn and John McDonnell that, after almost four-and-a-half decades of entanglement with Europe, it would be very hard for the UK to leave even if it wanted to. “Never would you be more dependent on the EU than after Brexit,” I said. The UK would expend huge amounts of economic and political capital  in pursuing withdrawal.

In the end, Corbyn’s Labour Party accepted the radical case for Remain, though I wish that this was put forward more purposefully during the 2016 referendum campaign.

After the Brexit vote, the Democracy in Europe Movement 2025 (DiEM25), which I co-founded, debated the options. One idea was to campaign for a second referendum to reverse the result. Another was to accept Brexit without qualification and concentrate on the economic policies to be enacted in a post-EU Britain. The final option, which won the DiEM25 internal vote, was to support a “transitional period” of five to seven years, and it is this that Labour is edging towards adopting. A radical transition could be a period in which both the UK and the EU become something altogether new, and something more progressive.

As democrats, we must accept the result of the referendum. To seek to overturn it through a second vote would be to do to the British people what the EU did to the Irish over the Lisbon Treaty: keep repeating the question until they delivered “the right answer”. The UK electorate would rightly conclude that referendums only count when they deliver the result that the establishment wants.

The promise of a second referendum, as my Brexiteer friends (such as the former Conservative chancellor Norman Lamont) have noted, would also give the EU a strong incentive not to yield on any front. After this, Britain would be left to go cap in hand to the EU, begging to be readmitted, without any of the concessions that Margaret Thatcher and others secured.

The referendum was a binary choice. It said nothing about what kind of Brexit should be pursued. I agree that full sovereignty should be restored to the House of Commons, but that means MPs must have a mandate to debate the model of Brexit adopted.

There should be an interim agreement between the EU and the UK, so that parliament has a full term in which to deliberate. I warned Corbyn and McDonnell that the two-year withdrawal period after the triggering of Article 50 would prove insufficient. Now Labour has proposed that the UK should remain in the customs union and single market for between two and four years (though longer would be preferable).

Were the UK government to propose such a transition, Michel Barnier, the EU’s chief negotiator, would not be able to refuse. During this period, Britain would accept the supremacy of the European Court of Justice and continue to make budget contributions. Angela Merkel – who is, in effect, the only national leader who matters in Europe – would breathe a sigh of relief, with her eventual successor as German chancellor given the task of agreeing the final Brexit deal.

Labour has left open the option of permanent membership of the single market if the EU grants the UK new controls over free movement. But this won’t happen. Nor should it. Borders should be an enemy of all progressives: either we are internationalists, or we are not. Those of us who have been critical of neoliberal globalisation have always pointed out that we have the free movement of goods, commodities and capital – but not of people.

It’s a sad day when the Labour Party is defending the end of free movement and, indeed, promising its end. But where Labour can be flexible and innovative is over the question of social security. At present, European companies are able to import cheap labour and undercut domestic workers, who enjoy greater rights. Progressive parties should challenge the EU to promote solidarity and equality of working conditions for all European workers.

Labour’s performance at the 2017 general election showed what can be achieved if you ignore the free marketeers, the focus groups and what passes as “sensible” politics – and speak from the heart. Jeremy Corbyn and John McDonnell must now turn the debate about the EU into one about the British constitution, which remains an embarrassment.

Tony Blair’s half-hearted reforms left the UK in a constitutional vacuum. The absence of an English parliament contributed to the disenchantment of the pro-Brexit areas, especially in the north of England.

By proposing a genuine transitional period, Labour has shown greater political initiative and seriousness than Theresa May. To maximise this advantage, Corbyn and McDonnell must continue to develop an alternative vision of Brexit.

Yanis Varoufakis is a writer and economist and the former Greek finance minister

As told to George Eaton

This article first appeared in the 31 August 2017 issue of the New Statesman, The decline of the American empire

Show Hide image

Labour’s renationalisation plans look nothing like the 1970s

The Corbynistas are examining models such as Robin Hood Energy in Nottingham, Oldham credit union and John Lewis. 

A community energy company in Nottingham, a credit union in Oldham and, yes, Britain's most popular purveyor of wine coolers. No, this is not another diatribe about about consumer rip-offs. Quite the opposite – this esoteric range of innovative companies represent just a few of those which have come to the attention of the Labour leadership as they plot how to turn the abstract of one of their most popular ideas into a living, neo-liberal-shattering reality.

I am talking about nationalisation – or, more broadly, public ownership, which was the subject of a special conference this month staged by a Labour Party which has pledged to take back control of energy, water, rail and mail.

The form of nationalisation being talked about today at the top of the Labour Party looks very different to the model of state-owned and state-run services that existed in the 1970s, and the accompanying memories of delayed trains, leaves on the line and British rail fruitcake that was as hard as stone.

In John McDonnell and Jeremy Corbyn’s conference on "alternative models of ownership", the three firms mentioned were Robin Hood Energy in Nottingham, Oldham credit union and, of course, John Lewis. Each represents a different model of public ownership – as, of course, does the straightforward takeover of the East Coast rail line by the Labour government when National Express handed back the franchise in 2009.

Robin Hood is the first not-for-profit energy company set up a by a local authority in 70 years. It was created by Nottingham city council and counts Corbyn himself among its customers. It embodies the "municipal socialism" which innovative local politicians are delivering in an age of austerity and its tariffs delivers annual bills of £1,000 or slightly less for a typical household.

Credit unions share many of the values of community companies, even though they operate in a different manner, and are owned entirely by their customers, who are all members. The credit union model has been championed by Labour MPs for decades. 

Since the financial crisis, credit unions have worked with local authorities, and their supporters see them as ethical alternatives to the scourge of payday loans. The Oldham credit union, highlighted by McDonnell in a speech to councillors in 2016, offers loans from £50 upwards, no set-up costs and typically charges interest of around £75 on a £250 loan repaid over 18 months.

Credit unions have been transformed from what was once seen as a "poor man's bank" to serious and tech-savvy lenders where profits are still returned to customers as dividends.

Then there is John Lewis. The "never-knowingly undersold" department store is owned by its 84,000 staff, or "partners". The Tories have long cooed over its pledge to be a "successful business powered by its people and principles" while Labour approves of its policy of doling out bonuses to ordinary staff, rather than just those at the top. Last year John Lewis awarded a partnership bonus of £89.4m to its staff, which trade website Employee Benefits judged as worth more than three weeks' pay per person (although still less than previous top-ups).

To those of us on the left, it is a painful irony that when John Lewis finally made an entry into politics himself – in the shape of former managing director Andy Street – it was to seize the Birmingham mayoralty ahead of Labour's Sion Simon last year. (John Lewis the company remains apolitical.)

Another model attracting interest is Transport for London, currently controlled by Labour mayor Sadiq Khan. TfL may be a unique structure, but nevertheless trains feature heavily in the thinking of shadow ministers, whether Corbynista or soft left. They know that rail represents their best chance of quick nationalisation with public support, and have begun to spell out how it could be delivered.

Yes, the rhetoric is blunt, promising to take back control of our lines, but the plan is far more gradual. Rather than risk the cost and litigation of passing a law to cancel existing franchises, Labour would ask the Department for Transport to simply bring routes back in-house as each of the private sector deals expires over the next decade.

If Corbyn were to be a single-term prime minister, then a public-owned rail system would be one of the legacies he craves.

His scathing verdict on the health of privatised industries is well known but this month he put the case for the opposite when he addressed the Conference on Alternative Models of Ownership. Profits extracted from public services have been used to "line the pockets of shareholders" he declared. Services are better run when they are controlled by customers and workers, he added. "It is those people not share price speculators who are the real experts."

It is telling, however, that Labour's radical election manifesto did not mention nationalisation once. The phrase "public ownership" is used 10 times though. Perhaps it is a sign that while the leadership may have dumped New Labour "spin", it is not averse to softening its rhetoric when necessary.

So don't look to the past when considering what nationalisation and taking back control of public services might mean if Corbyn made it to Downing Street. The economic models of the 1970s are no more likely to make a comeback then the culinary trends for Blue Nun and creme brûlée.

Instead, if you want to know what public ownership might look like, then cast your gaze to Nottingham, Oldham and dozens more community companies around our country.

Peter Edwards was press secretary to a shadow chancellor, editor of LabourList and a parliamentary candidate in 2015 and 2017.