A soft Brexit would make Labour’s public ownership plans impossible 

In February, Jeremy Corbyn and John McDonnell gave two separate speeches on Labour’s future plans for public ownership and democratic control of the railways, energy, water, and other utilities. They threw down the gauntlet to the Tories and, more importantly, to the Labour Party itself by giving members a stark choice: support the plans and ditch the single market and customs union, or reject party policy.

In his speech, Corbyn talked of the need to create a “different kind of society”, and McDonnell promised “the next Labour government will put democratically owned and managed public services irreversibly in the hands of workers”. This pledge, coupled with Labour’s plans for borrowing to invest and state aid for British industry including using procurement to support British firms, make current Labour policies the most radical since 1945. But unlike that Attlee government, a Corbyn government today would be unable to put its policies into practice. That “different kind of society” is incompatible with membership of the single market and the customs union.

Take the supposedly intractable issue of the Irish border. We are told that without a customs union, a hard border is inevitable. Yet a simple search of the EU website reveals a November 2017 EU report into ‘smart’ border options.

According to the study, commissioned by the European Parliament’s policy department for citizens’ rights and constitutional affairs, “standards and best practices such as domestic and cross-border coordinated border management, as well as trusted trader and trusted traveller programs, can significantly reduce compliance requirements and make borders almost friction-free. Customs and other border control practices that keep the border open, such as release before clearance, deferred duty payments and clearance away from the border, also help keep the border free of traffic and speed up or even remove the need for processing.

“Technologies such as automatic number plate recognition, enhanced driver’s licenses, barcode scanning and the use of smartphone apps can also have a significant impact by reducing paperwork and allowing pre- or on-arrival release, which can reduce or even eliminate the need to stop or undergo checks.”

Let’s move on to state ownership. Under EU rules, it must operate in a competitive market with strict competitive tendering rules. In the case of the railways, a simple search would come up with the EU’s  programme for ‘rail liberalisation’, which “introduces the principle of mandatory tendering for public service contracts in rail” and rules out the creation of an integrated public monopoly responsible for passenger and freight services along the lines of British Rail. As for democratic control, it’s out of the question – the EU has been shown to have a distinct aversion to democracy. Just look how often the EU forced member states to vote a second time when the first vote came up with a result the EU found unacceptable.

The same goes for borrowing to invest. The EU’s Stability and Growth Pact (SGP) sets a limit on member states’ deficits as a percentage of GDP. It was to avoid breaching this limit that the disastrous PFI contracts were brought in. Again, a simple search reveals the aims of the SGP: “to correct excessive budget deficits or excessive public debt burdens”.

And the list goes on. On state aid, Article 107 contains a general prohibition but exemptions may be sought from the Commission to do so. The Labour leadership is aware that membership of the single market and the customs union is incompatible with its plans for public ownership, state aid and state deficit above a limit set by the EU. Labour’s membership needs to catch up.

Fawzi Ibrahim is a national officer of Trade Unionists Against the EU.