Leave or Remain, the EU isn’t Exactly a Friend of the Left

By Adam Peggs

The Labour movement has been falling into increasingly divided camps over the Brexit chaos. On the one hand, the People’s Vote campaign has gained increased prominence and increased confidence inside the Labour movement. On the other the Labour leadership remains committed to a softer Brexit option as its first preference. While there are serious issues with the party’s current Brexit plans – not least a sufficiently strong defense of migrants – it remains a better way out of the impasse than any major alternative.

Beyond the likelihood that a second referendum would not lead to the outcome desired by its advocates, overturning the result would hardly be desirable. Much of the People’s Vote campaign has evolved into a full throated defense of the EU and has erroneously painted the union as exemplifying progressive values. For that reason it’s worth reiterating the reservations felt on the left about the European project and the impacts of membership.

The European Union is oriented towards a market liberal vision of the economy and has minimal capacity for major reform. The EU’s Stability and Growth Pact deliberately limits the extent to which member states can spend their way out of a recession and mandates EU member states to not have overly high deficits. While Labour’s 2017 spending plans, quite rightly, would not have breached the pact it is worth noting that this pact effects on Europe’s southern states have been more serious.

There has been a good deal of misinformation on state aid. During the referendum Brexiteers made the inaccurate claim that EU rules would ban public ownership. Since the referendum, some on the left have however misleadingly argued the opposite that state aid rules represent no challenges to the left. Both positions are ultimately wrong.

The rules allow for governments to set up publicly owned firms and to buy up stakes in many industries, including water, energy and transport but private companies would still have a right to operate in these sectors. Hence a nationalised energy sector or nationalised broadband sector would likely fall foul of the rules. This would mean that if sectors like water, energy and phone lines were publicly owned they would still have to be opened up to private competition and for-profit companies would be guaranteed a role in the sectors, even if the majority of the industries were in the public sector. In the case of the Netherlands, laws which forbade privatisation of the energy sector were found to violate EU rules on state aid. In France for example the EU went after the part-publicly owned oil company because the publicly owned stake was curbing private investment in the company.

Though most of us are no friends of the fossil fuel industry that is currently choking the planet, these rules would effect a great variety of sectors. In a similar vein, transformational ideas like Universal Basic Services are also quite likely to fall foul of EU rules. There is a reason why the EU funded study on privatisation in the union concluded that the EU had been the ‘avant-garde and driving force of further liberalisation and privatisation’, the EU has been those things and effectively sought to close off alternatives.

Many of us back Freedom Of Movement and fear a Tory bonfire of migrant’s rights, opposing the rightward trajectory of migration policy and attempts to predicate people’s right to live in Britain on categories such as ‘skills’ and income. Yet much of the Remain coalition is committed to the same ideas of curbing migration and shoring up borders as the Brexit right. For the most part they lack any critique (or often any acknowledgement) of Fortress Europe, with its egregious effects on refugees trying to make it to Europe’s borders. And even within the parameters of Europe many of the PVers lack any serious commitment to migrants rights.

The European Union does not ban nationalisation but does restrict it and presents a series of obstacles, especially in the case of wholesale public ownership of industries. The EU’s rules are geared toward market liberalism. While this can leave the left with a reasonable amount of wiggle room, European Union rules represent a hard barrier that would likely inhibit any democratic socialist programme. Future Labour manifestos could face significant barriers and some existing pledges could potentially also end up falling foul of the rules – as is the case with Labour’s pledges to create a National Investment Bank, set up regional energy companies and double the size of Britain’s co-operative sector.

There is indeed much to be said for Thomas Hanna and Joe Guinan’s assessment that ‘the thrust of European economic policy has been to extend the market through liberalisation, privatisation, and flexibilisation’. Rather than guarding against economic policies which create social injustice and hammer working class people, the EU has often been at the forefront. Hence Labour’s emphasis on strong access to the single market – rather than full membership – has aimed to deliver the party some more space for a bolder, more transformational manifesto at the next election. Distance from Brussel’s emphasis on competition, markets and fiscal conservatism would not be unwelcome.

The left is currently beset by risks from several directions. A radical right Brexit in the mould of the Rees-Mogg grouping of MPs would no doubt trash workers rights and environmental protections and transfer more power to the financial sector. But returning to the politics of the UK pre-referendum would be a dead end, while a campaign to reform the EU from the inside would likely have little chance of success.

We should all be for Freedom of Movement, workers’ rights, consumer protections and co-operation. But as much as there could be a socialist Europe, we can’t in much seriousness expect to see a socialist European Union – or in all likelihood a social democratic one. Overturning a referendum that was effectively decades in the making remains a dubious direction for those on the left. We need firm opposition to everything the hard right tries to throw at us – especially when it comes to efforts to reduce the rights of migrant workers. We need a clear-headed, unapologetic drive for the rights of all working people – not least migrants, not a rehashing of the Remain campaign with a few extra left-wing voices thrown in.