The Progressive Challenge: Healing the divisions after Brexit

Thank you very much for that introduction and to the Centre for Progressive Capitalism for inviting me to give this speech.

The country voted to leave the European Union on 23rd June, exposing deep divisions in our country.  48% voted to remain; 52% voted to leave; London, Scotland and Northern Ireland voted to remain; the rest of England and Wales voted to leave.  An overwhelming majority of the young voted to stay; older voters opted to go.  Socio-economic classes and ethnic groups voted in different ways too.

But in spite of the multifaceted nature of the result, the Prime Minister has extrapolated one message.  In her Conservative Party conference speech she said a quiet revolution had taken place. She juxtaposed the 17 million who voted to leave - saying they stood up and were not prepared to be ignored - against a liberal elite who wanted to remain.  In so doing - in one speech - she dismissed 16 million of our citizens who voted to remain, people who are profoundly worried about the consequences of the vote, who have watched aghast at the rise in hate crime the campaign and the result unleashed, and who are not be ignored either.  

She went on to claim the vote was about a deep sense of profound and often justified sense that the world works well for a privileged few, but not for them.  That may be true but, let me tell you, my borough recorded the highest remain vote in the country.  Yet, we are amongst the most deprived local authority areas in England; child poverty in inner London boroughs is at 40%; we have higher rates of unemployment.  So my constituents share the same sense of grievance but didn’t believe leaving the EU was the way to deal with it. No one side of the EU referendum debate has a monopoly on grievance at the uneven distribution of the fruits of globalisation.

She even talked of this being a once-in-a-generation chance to change the direction of our nation for good.  If you really believed that Prime Minister, why on earth did you vote to remain?  This isn’t leadership we are seeing from Theresa May, it is opportunism, pure and simple and it is deeply disappointing.  

Instead of seeking to unite a divided country - to bring together the 48% and 52% in common cause - she has sought to ride the wave and, in so doing, further divides our country.  The challenge for those of us on the Centre Left of British politics is how to campaign for and put pressure on the Government to achieve the most progressive Brexit deal possible, and heal these divisions. That is what I want to talk about today.

Respecting the result

I was immensely proud to lead the Labour In For Britain campaign in Greater London and to play a leading role in the Britain Stronger in Europe campaign nationally.  I still believe that Britain would be stronger, better off and safer in the EU. I still believe that by the strength of our common endeavour not only do we achieve more as individuals working with together than we do alone, but we amplify British influence and achieve more as nation states working together than we do alone.

However, I accept the result.  Before the vote we accepted the rules under which the referendum was fought which dictated that if more than 50% voted one way or another, that was sufficient to carry.  I do not think that, having had a referendum conducted under those rules, we can now reject them because we do not like the outcome.  That would simply lend weight to the idea of some liberal, metropolitan elite or establishment refusing to listen which, as I have said, is a characterisation I reject.

Some argue that our fellow citizens who voted to leave were simply brainwashed by the likes of the Daily Mail and others; that they were told a barrage of lies and mistruths which they naively bought.  Many overblown claims and myths were peddled.  Vote Leave Watch which I founded and now chair aims to hold those who made those overblown claims to account.  But to say those who voted to leave were somehow unable to distinguish fact from fiction and were somehow naive I think is patronising and divisive.  It was not unreasonable for people to take the Vote Leave campaigners at their word when, for example, they promised that £350 million extra per week for the NHS.

But whilst the result gives the Government a mandate to withdraw the UK from the European Union, it has no mandate to speak of regarding the terms of our leaving.  It is simply not acceptable for the Government to seek to take the far reaching policy decisions that will arise during that process without proper parliamentary consultation and scrutiny.  As the House of Lords EU committee has argued - the Government should recognise there is a middle ground between the extremes of micromanagement they cite as obstacles to parliamentary scrutiny and mere accountability after the fact.  Those who campaigned to leave claimed their primary concern was to ensure Parliament is sovereign - it is somewhat hypocritical for them to deny Parliament its proper role in the forthcoming negotiation.

They appear to be relenting with indications being given that there will be a vote on the final package but that is tantamount to holding a gun to the head of Parliament.  Daring Parliament to vote down a deal which, if not accepted, will lead to the UK trading on WTO terms which would be a disaster.  So any vote must happen long before the date of departure so adjustments to any prospective deal can be made.

The most contentious part of any deal will be our future relationship with the EU Single Market and the future of EU free movement of people in the UK after Brexit.  I am clear: we should demand the goal be Single Market Membership and a different kind of arrangement on EU immigration.

Labour’s position

We know from the many surveys which have been carried out that many, particularly in Labour constituencies, voted to leave because of concern around the desire for greater control, particularly around the operation of free movement in the EU.  Many of these communities are former industrial communities that have undergone a huge amount of change with a strong - and, I may say, justified - view that globalisation has left too many of our communities behind, changing both their local economies and the character of their areas.

Conversely, many sprawling urban areas, with a history of immigration and diversity, like my own, voted to stay, not because globalisation works for all in our patch - it certainly does not - but because they did not believe leaving the EU would solve the challenges that it poses, not least because more people come to our shores from outside the EU than from within.

These differences in view pose a particular challenge for the Labour Party because both sets of voters are important parts of the coalition of support that has historically delivered Labour governments.  This has precipitated a debate in our party around immigration and, in particular, free movement to which a number of colleagues - including Stephen Kinnock, Rachel Reeves, Emma Reynolds and Jonathan Reynolds - have all made important contributions.

These issues are difficult and sometimes emotive but we cannot afford to shut down this debate.  I say this not out of some crude electoral imperative but because it is our historic mission to build a consensus to meet the challenges we face as a country; not to leave everyone to divide amongst themselves, veering to the extremes of left or right.  Far from validating the arguments of many Leave campaigners that all the country’s ills can be laid at the door of immigration, we must address these concerns in order to sustain continued support for managed migration and to defeat the forces of hate. 

Free movement

My starting point is that free movement of people between the UK and other EU nation states has brought many benefits. British citizens can freely holiday, work and live in other EU countries, as almost two million Brits already do today. Tens of thousands of EU citizens help power our public services, in particular our NHS. 1.5 million British people are employed in EU citizen owned business in the UK.  And, just look at the rich cultural diversity which has flourished as a result.  

When Jeremy Hunt talked about foreign doctors working in the NHS, he didn’t mention that you are more likely to have an EU citizen treating you, than to meet them in the queue.  When Amber Rudd talked of forcing companies to publish the ratio of their workers from abroad, she didn’t mention the many EU companies based here whose workforces are overwhelmingly made up of British workers.  

But whilst free movement has brought many benefits it has posed challenges to local labour markets and community cohesion in many, though certainly not all, communities.  To acknowledge this is not to fuel anti-immigration sentiment but it is a simple statement of fact. Take perhaps one of the more extreme examples, Boston in Lincolnshire, which I visited over the summer.  It scored the highest Leave vote and I spent some time there for this reason.  In the last 12 years the immigrant population there has increased by 460%, coming principally from Eastern Europe.  The rapid increase in labour has impacted on wages locally.  It has led to higher demand for properties, rising rents and exploitation in the private rental sector.  And social integration of newcomers to the community is poor.  

Now, it is no use sitting in a university or a thinktank waving graphs at the people of Boston - or other communities undergoing this kind of rapid change - telling them to pipe down and read the national data showing the impact of EU immigrants is negligible overall.  If we cannot see the benefits and acknowledge the challenges which free movement has posed - a prerequisite to healing divisions - then I do not think we have any hope of forging that national consensus for managed migration in the future.  The point is this: immigration can impact on local labour markets and can have an impact on community cohesion, but it does not have to be that way if the right policies are adopted.  

There are obvious things we can do domestically to mitigate these challenges such as reinstituting the Migration Impact Fund which we introduced in 2010 and was abolished by the Coalition government.  Ensuring the resources given to local authorities keep pace, in real time, with local population change.  Doing more to stop undercutting in the labour market by raising the minimum wage and properly enforcing it, not just through HMRC but by giving local authorities a role in enforcement too.  All of this was Labour policy before the last election.  The All Party Parliamentary Group on Social Integration that I chair is currently doing an inquiry into immigration looking at how we better integrate newcomers to our country.

Fair movement

But, clearly, there is a desire to end free movement as we know it and replace it with an alternative which gives us more control over who and how many come to the UK from the EU, whilst retaining preferential access for UK and EU citizens to each others countries.  I do not believe it is an issue of being anti-immigrant for majority of people, though for a minority it will be; it is more an issue of control.  Why else, as research by British Future has shown, is it the overwhelming view of both those voting to Remain and to Leave is that EU citizens resident here at the time of the referendum should be guaranteed the right to stay.  

Now I provoked some alarm when I remarked to The Huffington Post that free movement as we know it would have to change in response to the Brexit vote.  Perhaps this is unsurprising, given its symbolism for many pro Europeans.  Free movement is often cited as one of the indivisible, inviolable principles of the EU.   Yet, the truth is free movement of people in its purest form has not operated vis-a-vis the UK and the EU for some time - our EU partners have already accepted restrictions to how it operates.  We are not part of the passport free Schengen zone area and EU citizens who arrive without a job looking for work are subject to the habitual residence test and cannot receive means-tested benefit within the first 3 months, after which they can be required to return to their country of origin.  The other 27 members agreed in the renegotiation to an Emergency Brake applying in the event the UK voted to Remain, where EU migrants could not claim tax credits and child benefit until they had to lived and contributed to our country for a minimum of four years.

So the arguments that Labour colleagues have made for an end to free movement must therefore be viewed in this context - free movement is already subject to restrictions.  I think the primary reason our comments in aggregate provoked alarm and people worry that we are giving way to the arguments of UKIP and others, is that we have yet to spell out what an alternative to free movement as we know it would look like.  Preferably, it would be something our EU partners would at the very least be prepared to start a discussion around entertaining at the same time as our continued membership of the Single Market in these Brexit negotiations.  So let me attempt to start to spell out an alternative to free movement as we know it here.

The alternative would involve moving away from the notion of “free movement” to “fair movement.”  I claim no authorship of this label given that it has been floated by Labour figures - immigration and Shadow Immigration ministers - since the mid noughties.  It is a concept whose time has come given how discredited free movement has become in the eyes of the public.  The public has been led to believe free movement allows some free for all with no control of our borders.  So we need something new which can clearly illustrate we have control, meets the needs of our economy and which can command widespread support.  Personally, I am less concerned with the labels and more concerned that whatever we move to maintains the principle of allowing preferential access for UK and EU citizens to each others countries, whilst giving the UK more control over its borders.

We should make this argument not only in the domestic context but as part of an EU wide debate on how the union reforms itself and operates fairly.  I am Vice Chair of the Open Britain APPG and a strong supporter of it.  At Open Britain we believe there is an appetite for this debate within many European capitals who are all struggling against populist undercurrents of the extreme left and right - new thinking and a willingness to change is now essential to reconcile the European public with the Single Market.

In the end, it is not just in our interests to see such reform to free movement. It is in the interests of our European partners too.

One way of adopting ‘fair movement’ would be to allow travel as we have at present for short stays and holidays only but, in so far as settling and working are concerned, restrict free movement to the movement of labour and offers of employment.  This is in line with the Treaty on the Functioning of the European Union which explicitly states its intention to balance supply and demand within the labour market: ‘to avoid serious threats to the standard of living and level of employment in the various regions and industries.’  Another option would be to restrict low wage immigration in some way, with a more relaxed approach to high skilled immigration from the EU according to the needs of the economy.

 In addition to this, within the terms of EEA agreements, countries have been allowed to take unilateral ‘safeguard measures’ to address ‘economic, societal or environmental difficulties’ caused by being in the EEA.  So, Liechtenstein has an agreed number of residence permits for EU citizens.  Switzerland’s free movement deal allowed for an emergency brake for up to a year and, while overall quotas have been rejected, discussions continue over proposed sector-specific quotas.  It has been reported that the EU are considering an emergency brake of up to seven years for the UK.  Proposals like this will no doubt throw up other options that could be put on the table.  We should push for something similar.

Whatever “fair movement” model is adopted, the goal must be to ensure it does not promote a race to the bottom in any local labour market, it must be accompanied by measures to promote integration and should in no way detract from our country meeting our international obligations to refugees.

I believe this Labour concept of “fair movement” could unite both Leavers and Remainers - it is something we can all live with - which instead of further dividing our nation could help unite us.

Single Market membership and fair movement – possible?

Some argue that we simply will not be able to obtain such an arrangement – fair movement -  and membership of the Single Market. 

Membership not just access to the Single Market is important.  Membership of the Single Market not only removes tariffs, customs duties and quotas on all goods traded within the EU; it provides employment protections, sets minimum consumer and environmental standards and more.  The Single Market also provides a guaranteed right to deliver services within the EU without national impediments offering the best deal for Britain for services and manufacturing alike.  The importance of the Single Market membership is underlined by the commitments all the main parties gave to remaining within it at the last General Election.

If a hard Brexit model were adopted, out of the Single Market, it could mean trading with the EU under WTO rules which would lead to tariffs in the order of 12% on exports of British meat, 10% on exports of British cars and so on leading to much higher costs for consumers here and challenges for our companies seeking to export into the EU Single Market.

But would we be able to secure this trading arrangement - preferably Single Market membership - and fair movement?   

It is generally acknowledged that the UK is in a different position to other countries given it has the fifth largest economy in the world.  One cannot say what can be achieved with certainty given the negotiations have not started yet and our EU partners do not have fixed positions. It is not for us to make the arguments as to why they should refuse to give us what we want.  The challenge for us is to put enough of a big offer on the table - that goes beyond immigration and the economy - from which they would benefit, to secure the bespoke deal we seek.  To deny it is possible to achieve any compromise is in essence to basically to make the case for hard Brexit which makes no sense at all if you are Pro-European and progressive.  We must be realistic but also ambitious for what can be achieved.

Of course, a progressive Brexit deal is about more than fair movement and the Single Market. It is about security and intelligence, co-operation on education and research, the environment, and our general influence around the world. I will touch more on these topics in future interventions in this debate.

Conclusion

Let me conclude by making an observation.  Our politics is caught between two stalls at present.  A populism which refuses to acknowledge the challenges free movement can pose to local economies and community cohesion, and too willingly puts anyone who does so into the same bracket as bigots and racists; and a populism that wants to pull up the drawbridge altogether, places the blame for all the country’s problems at the feet of immigrants and wishes to turn post Brexit Britain into some off shore tax haven with poor citizen protections.  Rejecting both positions may not be fashionable but is the right thing to do.  The alternative that I have set out today is I believe a sensible position, true to our values, around which the country can unite.  Fulfilling our progressive mission.

Thank you.   

 

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