John McDonnell might talk tough, but he is supporting the Tories on Brexit

"On his own stated terms, McDonnell's policy is self-harming"
"On his own stated terms, McDonnell's policy is self-harming"
Ian Dunt By

It is quite rare to hear a senior politician talk as much gibberish as John McDonnell did on the Today programme this morning. In advance of his speech on preventing a 'bankers' Brexit', he tried to outline his thinking on the UK's decision to leave the European Union. Even someone with a PhD in European politics would have been unable to decipher it. It was self-interested, disingenuous hogwash of the highest order.

The shadow chancellor said he was going to try to prevent the Tories delivering a Brexit plan that only cared about bankers and didn't care about manufacturing. How was he going to do this? He wanted all businesses to have "access" to the single market. This is a completely bizarre thing to argue. There is an existing system which gives all businesses "access" to the single market. It is called single market membership.

And yet McDonnell is not prepared to support that. He and Jeremy Corbyn have issues (rightly, as it happens) with single market state aid rules, which obstruct governments from propping up failing industries. But instead of saying they support membership of the single market but want reform of state aid rules, he has decided to validate Theresa May's entire policy platform.

The Labour leadership is not challenging the Tory decision to leave the single market. Instead, it is implicitly supporting that decision but saying that all businesses must be included in the single market. Which is mad. You might as well say you're a vegetarian but you make an exception for fish, poultry, beef and pork. A freshers student, exhausted, half drunk and barely standing after a week of excess, would be able to scrawl a better policy down in five minutes if you gave them the requirements.


McDonnell's position is not even based on free movement. The Labour leadership has said - commendably - that it supports open borders, although it wants actions to tackle falling wages. This last part is nonsense. Studies find very little - if any - effect on low wages. What they do find is that a reduction in immigration would starve the Treasury of vital revenue and lead to tax rises and cuts to public services. Contributing to the myths and misinformation on immigration is a good way of making that eventuality more likely.

What an extraordinary position to be in. Firstly, McDonnell has managed to invent what might be the least popular policy in all of British politics: to back free movement and reject the single market. Then even where he is principled, like on immigration, he substantiates the arguments which undermine his own position. And elsewhere, where he is not principled, he is actively supporting the government’s extreme Brexit agenda.

May constantly pretends that staying in the single market is not an option. She equates leaving the EU with leaving the single market, even though they are very different things. You can leave the EU and stay in the single market, as for instance Norway does, with considerably more success than people recognise. This would be worth up to 4% on GDP compared to falling out onto WTO rules, according to the Institute of Fiscal Studies. Or you can leave and stay in the customs union, which would be worth about 4.5% on GDP, according to an average taken from studies by the Treasury, NIESR and the Centre for Economic Performance, and the London School of Economics.

These are major decisions which are about to make all of us poorer. May pretends the vote to leave the EU made both of them necessary. That is false, on a technical, political, logical and moral level. But McDonnell has accepted the argument entirely. In his interview today he said leaving the EU meant ending free movement. It does not. Leaving the single market entails ending free movement. He is doing nothing to counter the lies and misinformation being put out by the government and is in fact exacerbating them, either to suit whatever scheming, bizarre proto-Marxist political agenda he has dreamed up with Seumas Milne, or simply because he's an idiot and doesn't know what he's talking about. The only intellectually challenging aspect of his interview was trying to work out which would be more damning.

McDonnell is not even protecting the manufacturing industries he claims to care about. If Britain leaves the single market, goods will have to be checked to ensure they meet strict regulatory standards on the continent, damaging the companies that produce them and forcing them eventually to lay off workers, unless ministers can strike a deal on mutual recognition - something they do not seem to have the time nor the mental capacity to achieve. If it leaves the customs union those products will have to go through insanely complex country of origin checks and pay sometimes exorbitant tariffs, both on the final product and its component parts ahead of production.

By giving up on single market membership McDonnell undermines the work of his shadow Brexit secretary Keir Starmer, who was doing a fine job holding the line on these matters. He breaks the shaky alliance of opposition parties against leaving the single market. And he strengthens May's position so she can deliver on these completely insane economic policies, which will hurt manufacturing more than they ever hurt banking. And for what? Because he doesn't like state aid rules. It is like a parable about what ideological conviction can do to someone's practical judgement.

On his own stated terms, McDonnell's policy is self-harming. On anyone else's terms, it is dimwitted. And on the government's terms, it is extremely welcome. He would have struggled to come up with something more inadequate if he'd tried.

Ian Dunt is the editor of Politics.co.uk

The opinions in politics.co.uk's Comment and Analysis section are those of the author and are no reflection of the views of the website or its owners.

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