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TUC 2018 Brexit – a chance to rebuild the real economy

FAWZI IBRAHIM urges TUC delegates to embrace Brexit and help a future Labour government rebuild the economy

AS we approach Brexit day, March 29 next year, the question of how best to use the return of full control of our economy becomes central. This is something to which the TUC must turn its attention. 

We need some confidence again, EU-based manufacturers need our market more than we need theirs. We have a trade surplus with the rest of the world, but a deficit with the EU. We are in a strong negotiating position in Brexit discussions.

Motions calling for the TUC to campaign for a second referendum in whatever other form are self-indulgent and will do lasting harm to the TUC and its reputation among workers.  

It’s time to move from “respecting” the result of the referendum to welcoming it, as Jeremy Corbyn did. 

Speaking in Coventry early this year Corbyn promised that “the next Labour government will broaden the scope of the ‘public interest test’ to include explicit consideration of the needs of our economy taking advantage of new freedoms outside of the EU to allow government to intervene to protect our industrial base.”

In fact it is precisely in fear of this that reactionary forces in the EU are trying to scupper Brexit and keep Britain closely aligned to single market rules.

Talking about a “Tory Brexit” as opposed to a “people's Brexit” or a “left Brexit” is vacuous and politically perilous. Vacuous because Brexit, securing independence from the EU is neither red nor blue; when India got its independence, it wasn't Gandhi’s Congress party’s independence. Neither was  Kenya’s Kenyatta’s. 

Far from setting the path for the future of the country, national independence provides the conditions for its people to do so.  
It is perilous because it provides a pretext to oppose government proposals on Brexit irrespective of context as was the case in the Chequers deal debates. 

On that occasion, Labour was rescued by the stand of four of its MPs preventing a parliamentary defeat of the government and the almost certain prospects of a snap general election. 

If this had happened Labour would have to explain to workers, the majority of whom want the government to get on with leaving the EU, not just its reasons for delaying Brexit, but its Brexit policy. 

This element of Labour’s policy is in some difficulty.

As laid out by Keir Starmer, Labour’s aim is a Brexit deal that protects “jobs and living standards through building a close relationship with the EU.” 

Starmer seeks to snooker a meaningful assessment of a Brexit deal by setting up six tests that must be satisfied before gaining Labour’s support. Almost any deal according to these will fall foul of his sixth impossibly vague test of a “close relationship with the EU.” 

In turn this doesn’t sit in place with his second test which is “to deliver exact same benefits as we currently have as members of the single market and the customs union.” Hardly a test, more an argument against Brexit as neither the customs union nor single market bring us benefits. 

In addition, we have Starmer’s “no deal is not an option.” This leaves workers perplexed because we know if you go into negotiations begging for a deal, you’ll end up with scraps.

Equally misguided is the aim of replicating the very same trade relationship when we leave the EU as we have with it now. It is a relationship that has done so much harm to our industry and imbalanced our economy to favour the finance sector and speculation rather than production. It would be a relationship that would render all of the Labour Party manifesto impossible to deliver.

The imbalance is not just between the south and the north, but, and more fundamentally, between the manufacturing and the services sectors. Both the south and the north have suffered a dramatic decline in manufacturing.  

The only difference is that in the south, the service sector, and financial services in particular, took up much of the economic slack while in the north, the once thriving industrial and manufacturing centres were replaced with retail parks. 

If we are to redress this imbalance, we need a trade arrangement that will stop the flow of capital out of Britain and reverse the shift from manufacturing to servicing and from casual unskilled jobs to high skilled jobs based in collective bargaining and labour market planning. 

After all, it is manufacturing that creates the surplus value that drives the economy; banking and financial services may make profit, but they rely on the wealth-creating sector for their survival. 

Neither is a fully blown tariff-free trade, the dream of the free traders of the Tory right, of benefit to Britain.  

A free-for-all trade would exacerbate that imbalance as it opens up British industry to competition from low-wage economies resulting in a race to the bottom. 

As for the call by some trade unions for a “level playing field” to avoid this, it is depressingly meaningless; a playing field at rock bottom could be as level as one that’s sky high. 

The mantra that free trade is good and “protectionism” is bad is dominating the debate about our trade relationship with the EU and the rest of the world. 

The economic argument for liberalising trade is that it allows countries to specialise in those sectors in which they have a “relative advantage,” reducing costs and increasing GDP. 

Neoliberals say that if country A is more efficient at basket-weaving than pharmaceuticals, it should shift its economy towards the former and import the latter from countries that have a relative advantage over them in pharmaceuticals. 

This is a scenario that will condemn country A to the destructive effects of narrow specialisation and lack of diverse, skilled opportunities. It condemns nations to underemployment, poverty, inequality and ultimately migration as workers look for a more fulfilling life. 

We need a trade deal that positively discriminates in favour of our own products and development of a high-skilled workforce. 

We should import only those commodities that we don’t have, or are short of and demand that, if corporations wish to sell their products here, they should make them here. There are in fact very few products that cannot be manufactured here. 

Labour’s Build it in Britain policy will help bring to an end the grotesque, environmentally unfriendly situation in which manufacturing parts and components, that could easily be resourced locally, criss-cross the Channel before they are finally assembled into complete product.

Such an industrial strategy, coupled with regional banks and a regulated finance sector compelled to resource the real economy again, may be challenging in the short term, but it will serve the country and its people well in the long term. 

A measure of self-reliance is essential for any self-respecting nation.

We cannot depend on continued goodwill of other countries, or the globalisation of capital to keep our economy going.

Fawzi Ibrahim is national officer of trade Unionists Against the EU.

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