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The Political Quarterly

UK Labour and the EU Single Market: ‘Social Europe’ or ‘Capitalist Club’?

JOSH COLE

Abstract This article looks at the UK Labour Party’s view of the EU single market over the last four decades, focussing on three case study periods when this issue was particularly salient: first, the time of the single market’s introduction under ’s leadership; second, the A8 accession with as Labour Prime Minister; and third, between the 2016 European referendum and 2019 general election during ’s time as party leader. This his- torical narrative uses the theoretical approach of Harvard economist Dani Rodrik—of a ‘tri- lemma’ faced by national policy makers in response to globalisation—as a lens to describe a clear arc in Labour’s policy towards the single market across the three case studies. A posi- tion of initial scepticism moved to support under Kinnock’s leadership, and then active encouragement under Blair, before coming back again under Corbyn to uncomfortable non- commitment. This arc directly correlates with the ebb and flow of the party’s overall eco- nomic approach—first the Keynesian, national Alternative Economic Strategy at the time of the party’s 1983 general election defeat; then, the deviation under Blair to a policy that actively encouraged cross-border market liberalisation; and finally the return to an Alterna- tive Economic Strategy- approach under Corbyn. Keywords: Labour Party, , single market, Neil Kinnock, Tony Blair, Jeremy Corbyn

Labour. The ‘four freedoms’ the market Introduction guarantees—of capital, labour, goods and SINCE THE 2016 EU referendum, the Labour services across EU member states—make Party’s view of the single market has been a prominent, different points of view within significant part of its overall intentions for the party on related policy issues. These the UK’s future economic relationship with include immigration, the role of the state in Europe. The policy outlined in Labour’s 2019 the national economy, and the degree to election manifesto—a first preference for which government should work with or ‘close alignment with the Single Market’ against international flows of capital. which can ‘support UK businesses’, but not Labour’s disastrous 2019 election cam- the direct advocacy of remaining in the EU paign is in the rear-view mirror, and the UK or European Economic Area—was not is heading for on ’s formed without internal disagreement.1 In terms. Before the coronavirus pandemic and June 2017, Jeremy Corbyn lost three Shadow Sir ’s election as Corbyn’s suc- ministers after they and forty-six back- cessor, the party leadership had called for a benchers within the ‘Labour Campaign for ‘period of reflection’. One would expect that the Single Market’ group rebelled against a an important area for Labour’s re-evaluation three-line whip, and instead called for mar- of its EU policy will be its view of the UK’s ket membership. Polling the same year sug- relationship to the customs union and single gested eight out of ten Labour members felt market. An historical narrative of Labour’s the same way.2 changing policy towards the single market We should not be surprised that the single can provide four decades’ worth of useful market has caused such disagreement within context in this upcoming intra-party debate.

© 2020 The Author. The Political Quarterly published by John Wiley & Sons Ltd on behalf of Political Quarterly Publishing Co (PQPC) 1 This is an open access article under the terms of the Creative Commons Attribution License, which permits use, distribution and reproduction in any medium, provided the original work is properly cited. Accordingly, this article looks at three case (‘economic globalisation’), or in more public studies of single market policy under three accountability in the economy (‘democratic different Labour leaders—Neil Kinnock, legitimacy’), or in ensuring national control Tony Blair and Jeremy Corbyn. over economic policy (‘national sover- eignty’). In short, the trilemma is a parsimo- ’ ‘ ’ nious mechanism which makes the Using Dani Rodrik s trilemma of complicated ideological composition of the globalisation Labour Party more accessible. Across the three case studies, this article uses a theoretical framework from Har- In summary vard economist Dani Rodrik, who writes fi of a ‘trilemma’ faced by national policy This article nds that across each of the three makers when they seek to respond to case studies, Labour has sought to ensure ’ globalisation. He says that in the modern that, with respect to the EU s single market, — world, these decision makers are faced national sovereignty that is, national pow- with a choice between the three points of ers over economic policy exercised by elites — this trilemma: increasing economic interde- has remained a consistent priority. What pendence with other states (‘economic has changed across the time period is the ‘ ’ globalisation’); maintaining national control other point of the trilemma with which it of economic policy (‘national sovereignty’); has been paired. In the period from Kinnock and maintaining the ability to reflect the to Blair, Labour shifted its single market pol- domestic public’s policy preferences icy from a position that prioritised national (‘democratic legitimacy’). He argues they sovereignty and democracy (over globalisa- haveachoiceofanytwo,butnotallat tion) to one that prioritised economic globali- once.3 It is therefore a question of select- sation and national sovereignty (over ing a combination. As Andrew Gamble democracy). With Corbyn, we saw move- neatly summarises: ment back in the other direction. As set out below, this arc of Labour’s single market fl In the first combination—economic interde- policy correlates with the ebb and ow of its pendence and national sovereignty—authori- overall economic strategy during the same tarian governments use their power to period. pursue economic interdependence and sacri- fice democracy. Rodrik’s second combination—economic Case study 1: embracing the interdependence and democratic legitimacy ‘social dimension’ under Neil —is when national sovereignty and nation- states wither away to be replaced by cos- Kinnock mopolitan government. In the third combination—national sover- Post-1983: EuroKeynesanism and eignty and democratic legitimacy—govern- single market neutrality ments stay close to the wishes and interests of their citizens, and take steps to limit or On assuming the Labour leadership in even reverse economic interdependence.4 September 1983 after a heavy general elec- tion defeat the same year, Neil Kinnock Although this trilemma is not undisputed inherited a party whose policy was that ‘the among authors and academics, it is used European Economic Community ... was 5 consistently here because it provides a useful never designed to suit us’. It was one of the frame to think about the ebbs and flows of first things the new regime changed: Charles Labour’s policy towards the single market Clarke, Kinnock’s chief of staff, recounts that over time. It does so primarily because the after the 1983 election, ‘the earliest [policy three points of the trilemma align with intra- issue] that was dealt with was EU member- 6 Labour splits that are seen across all three ship’. Party conference votes in 1988 and case studies: between those who assign more 1989 eventually formalised Labour’s shift to importance to economic interdependence a pro-European position.

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The Political Quarterly © 2020 The Author. The Political Quarterly published by John Wiley & Sons Ltd on behalf of Political Quarterly Publishing Co (PQPC) Labour took longer to move on economic produce a single proposal for the economic strategy than it did on Europe. Kinnock may expansion which our country of Britain and have accepted that ‘Britain obviously our continent of Europe so desperately remains a capitalist country with a society need’.10 that is competitive without being merito- To reconcile EC membership with Keyne- cratic’, but in the years immediately follow- sianism and the pursuit of full employment as ing 1983, the spirit of Labour’sreflationary the ‘guiding aim of [a Labour] government[‘s] ‘Alternative Economic Strategy’ (AES) lived policy’—and in effect, to maintain democratic on.7 The AES—described by as legitimacy while EC membership threatened ‘the most radical programme the party has greater economic globalisation—Kinnock prepared since 1945’—espoused Rodrik’s called for coordinated, cross-border reflation combination of national sovereignty and across European states. An idea given the democratic legitimacy. Comprised of refla- name ‘EuroKeynesianism’, this can be traced tion, public ownership, , back to Stuart Holland MP, a former advisor economic planning, alongside price and to and left-wing Shadow eco- import controls, it mixed both national fiscal nomic minister in the late 1980s.11 In line with stimulus and democratisation of the the EuroKeynesian agenda, Kinnock’s1986 economy. book Making Our Way sets out how such ‘an Even after the 1983 election, this sort of employment strategy for Europe is desperately economic agenda remained in fashion needed’: what was required was coordinated among the party leadership: Kinnock’s eco- fiscal expansion, recognition of different prob- nomic advisor, John Eatwell, still believed lems that individual countries faced, as well as that his job remained to ‘create a framework ‘clear rules of operation, so that gains and sac- in which we can pursue Keynesian policies rifices are fairly distributed’ across the EC.12 in a credible way as part of the overall pro- Labour’s coming to terms with Britain’s ject of an industrial policy’. Nor was French inclusion in the EC meant the party did not President Francois Mitterrand’s failed disapprove outright of the European Com- attempt at ‘ in one country’ in the mission’s proposal for a single market when early 1980s a reason to change course. Eat- it was announced as part of the 1986 Single well says the lesson of Mitterrand’s dirigisme European Act (SEA).13 Eatwell has since sta- was that it instead showed ‘the danger of ted that the various common standards doing macroeconomics alone’.8 agencies produced to support the market The issue was that an interventionist, ‘so- were ‘rather liked’ by the party; and on sup- cialism in one country’ type of economic pol- ply chains, ‘the idea that this was a way of icy as contained within the AES could not [Britain] again getting back into making easily be reconciled with Labour’s increasing commercial aircraft, my God this was won- support for Britain’s EEC membership, and derful!’14 But on the other hand, nor was it the greater economic interdependence mem- clear that the market could work for bership would bring. Common Market rules EuroKeynesian ends. As a result, while the prevented state use of exchange controls to SEA was being negotiated, Labour’s Europe support the competitiveness of domestic spokesperson, George Robertson, said the manufacturing; and although Kinnock may plans for a single market were ‘wholly irrele- have been leading the party to a pro- vant’, and nothing more than ‘institutional European position, he nonetheless criticised tinkering’ that would not ‘inspire confidence other EEC states’‘hostility to the use of [ex- among the 4 million unemployed in this change] controls ... which is now professed country, never mind the 10 million others by those very countries which used such out of work across the Community’.15 controls to launch their own industrial suc- cess stories’.9 He felt European colleagues should be doing more to drive up employ- 1987—a turning point for economic ment: it was ‘nothing short of outrageous, at a time when there are 15 million unem- strategy ployed in the Common Market, that the Although Labour had been moving in a leaders of Western Europe ... still not pro-European direction since 1983, it was

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© 2020 The Author. The Political Quarterly published by John Wiley & Sons Ltd on behalf of The Political Quarterly Political Quarterly Publishing Co (PQPC) not until after the 1987 election loss that the way in which Labour sought to mitigate its party deviated from a purely Keynesian negative effects—in partnership with economic approach, to allow greater room European colleagues—was through cam- for economic globalisation. The need for paigning for cross-border social and envi- greater public control of industry and the ronmental policies. At the same time, they economy was stressed by Labour’s spokes- lobbied for measures that would ensure the people, rather than public ownership out- delivery of such policies, in particular quali- right. Private enterprise was talked about fied majority voting and the removal of more favourably—the party accepted that member states’ veto power. There was a ‘modern government has a strategic role political motive for Labour to do so: Gallup not to replace the market but to ensure that polling at the time showed 55 per cent of the market works properly’.16 A wide inter- British people saw membership of the EC nal coalition supported this shift: even as a ‘good thing’; and while Margaret , who had stood against Thatcher was openly hostile to this sort of as the Labour left’s European legislation, as Kinnock later candidate to be deputy leader in 1983, came recalled, Labour could use this ‘social to the view by 1987 that ‘there was no dimension’ to position itself as the ‘better socialist objection to the technical concep- Europeans’.21 tion of a market’, and that the ‘taboo’ over The speech of Pres- the market should be ‘exorcised once and ident, , at the TUC’s 1988 con- for all’.17 ference in Bournemouth, is often pointed to The single market was the nexus at as the turning point when Labour began its which Labour’s turn to Europe and accep- positive engagement with the ‘Social Europe’ tance of greater economic globalisation after agenda. In an address covered by the UK’s 1987 intersected. It became an important major television networks in prime time, priority. Speaking in early 1988, Kinnock Delors described the single market pro- said ‘unemployment, north-south relations, gramme as a ‘peaceful revolution in which the conservation and development of the we all must participate’ and said the accom- environment, technological and scientific panying ‘social dimension’ would be its ‘vi- cooperation ... The development of the so- tal element’.22 This was certainly an called single European market by 1992 important call to action— says places these issues at the top of the British it ‘was a completely decisive moment in political agenda’.18 As before the 1987 poll, terms of the British and Labour still felt ‘the internal market would the European question in general’—yet the be a disaster’ without a positive agenda to ideas expressed by Delors were already on accompany the market liberalisation—but Labour’s radar.23 Kinnock had already said by the end of the 1980s the party was will- publicly in April that year that alongside the ing to find positive, European, solutions to single market, action was needed to prevent potential problems the single market could ‘neglect or abuse of the environment’, along- create.19 The Labour leader set out in April side enhanced workers’ rights and protec- 1988 that ‘our non-engagement would mean tions for retired people.24 The chronology the unimpeded movement to the complete tells us instead that, as Eatwell recounts, it economic and political domination of Wes- was more the case that Delors gave Labour a tern Europe by market power ... Leaving push at the right time: the European field to that is no more acceptable than leaving Britain to perma- nent ’.20 Kinnock wanted to change the policy towards a more pro-European stance, and Delors came along and ... made it easier. So, The ‘social dimension’ as a remedy for it wasn’t that Delors fired it off, then the trade unions came along, then the party single market membership changed the position. I think there was a Although Kinnock accepted more economic combination of things happening, that were globalisation through the single market, the deemed at the time to be fortuitous, happen- ing at the same time.25

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The Political Quarterly © 2020 The Author. The Political Quarterly published by John Wiley & Sons Ltd on behalf of Political Quarterly Publishing Co (PQPC) Regardless of who initially instigated Globalisation as ‘irreversible and ’ Labour s change of tack, the commitment irresistible’ to implementing a ‘Social Programme ... to ensure the benefits of the unified market ’s desire to communicate and are shared by all people in the EC’—not demonstrate economic responsibility has—it only for the ‘benefit [of] the business com- will not surprise the reader to note—been munity’—was established by members’ vote fiercely debated for at least two decades. It at the October 1988 party conference.26 By was nonetheless a key focus of the party’s the 1992 election, Labour had committed to pitch to voters. The 1997 manifesto commit- opt in to the new Social Chapter—claiming ted Labour to be ‘wise spenders, not big that by doing so, it would ‘promote Britain spenders. We will work in partnership with out of the European second division into the private sector to achieve our goals ... which our country has been relegated by because efficiency and value for money are the Tories’ and ensure ... so that the Bri- central, ministers will be required to save 31 tish people can benefit from European safe- before they spend’. guards’ and ‘poorer countries are not During Kinnock’s leadership, particularly disadvantaged as a result of the Single after the 1987 election, Labour increasingly Market’.27 came to support cross-border economic glob- In committing to this policy in its 1992 alisation. The effect of Blair’s ‘modernisation’ manifesto, Labour sealed the transformation was to take this support to a new level. As of both its European and economic strategies the Prime Minister told the 1998 World that took place over the duration of Kin- Trade Organisation conference, globalisation nock’s leadership: euroscepticism had turned was not only welcomed; it was ‘irreversible 32 to acceptance, at the very least, of EC mem- and irresistible’. He added at the 2005 bership; the selection of Rodrik’s combina- Labour conference: ‘I hear people say we tion of national sovereignty and democratic have to stop and debate globalisation. You legitimacy had increasingly become a prefer- might as well debate whether autumn 33 ence for that of national sovereignty and eco- should follow summer’. nomic globalisation. Financial liberalisation—previously criti- cised within the party as the ‘relentless pur- suit of profits for the minority’—now Case study 2: Tony Blair, became an important priority.34 Blair’sEU advisor, Roger Liddle, would later recall globalisation and the A8 accession that ‘we gave a big push to’ financial liber- ‘ ’ Britain’s most pro-European Prime alisation in Europe, and we tried to avoid cross-border regulation of financial ser- Minister? vices.35 Support for this sort of economic It is often said about New Labour’s foreign globalisation marks a clear divergence from policy that Tony Blair was ‘the most instinc- previous pillars of Labour economic strat- tively pro-European Prime Minister since egy, notably public ownership—and there- Ted Heath’.28 Blair himself has not shied fore democratic legitimacy. One Labour MP away from this image, whether through his was reported at the time to have said that public advocacy of a second Brexit referen- after 1992 ‘the party was pretty well willing dum, or in his memoirs and speeches, where to give Blair a blank cheque and saying he has said that throughout the 1980s he “win us power, we’re fed up with being ‘helped change our policy ... [and] was battered, get us back to power”. And he 36 proud of that change’, because ‘I believe in delivered’. Europe as a political project’.29 In govern- As an active advocate of both the EU and ment, this rhetoric was accompanied by cross-border economic liberalisation, Blair action: Labour MPs from the time com- sought to capture the benefits of the free mented that ‘we were totally isolated [in flow of capital, goods, services and people Europe] under the Conservatives ... now we within the single market to achieve British are seen as a team player, much more and social democratic interests. For the involved’.30 Prime Minister, it was to be celebrated that

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© 2020 The Author. The Political Quarterly published by John Wiley & Sons Ltd on behalf of The Political Quarterly Political Quarterly Publishing Co (PQPC) Britain had ‘enjoyed rising prosperity based between 2004 and 2007, says this was politi- on open markets and fair competition’ cally permissible at home because ‘in 2004 between European partners.37 Liddle recalls immigration was not a major issue ... this that the ‘City of becoming the finan- issue of so-called Polish plumbers then got cial capital of the single market ... was very built up following that’.41 The PM was even good’ because of the ‘investment in public prepared to endure a £1 billion cut in the services that was facilitated’. With economic British rebate each year to secure the A8’s growth, ‘the Labour government then dis- entry.42 tributed [its benefits] in a fair way. And that Support for this enlargement may have was the political economy under which New primarily been political, but the decision not Labour operated’.38 to impose seven-year transitional controls on Even support for the Social Chapter, entrants from the A8 was nonetheless in line hailed by Kinnock as a game-changing with New Labour’s prioritisation of eco- accompaniment to the single market, was nomic globalisation, and British macroeco- constrained where it rubbed up against com- nomic strategy of the preceding decade. As peting demands of European economic inter- Gamble describes, these encouraged the dependence. Although Blair signed the export of services, especially financial ser- Chapter within the first week of his adminis- vices, alongside flexible labour markets that tration in 1997, once it became law he told supported the development of a low wage fellow EU leaders that he would guard economy and the recruitment of large num- against several future European Directives bers of migrant workers.43 The Blair govern- because ‘I don’t believe there is any appetite ment knew the value of migration into the in the rest of Europe to have great rafts of UK in this overall economic picture, includ- additional legislation’ of this sort.39 Liddle ing through the EU single market. As immi- says this was about keeping business on gration minister, , told an side: Blair felt that if his government went audience in the in 2000, any further than accepting policies such as while ‘we crack down where necessary on the national minimum wage, new laws on misuse, we must not lose sight of the bigger recognition and the Working picture ... the evidence shows that economi- Time Directive, ‘we would be endangering cally-driven migration can bring substantial our relationship with business. And that was overall benefits both for growth and the pretty fundamental to his and Gordon’s poli- economy’.44 In a 2005 White Paper, the gov- tics’. ernment stated ‘we would be poorer in every way without [immigrants] ... visitors from outside the EU spend over £6 billion a year’ The A8 enlargement with zero-year in the UK, while ‘those from within the EU transitional controls—a political move billions more’.45 with economic benefits The Blair government’s strong support for Politically ‘managing’ immigration the EU single market was expressed clearly while maintaining support for the free in its decision not to impose seven-year transitional controls on migration from eight movement of labour former communist states (the ‘A8’) at the The reader will note that the resulting time of the EU’s 2004 enlargement. While increase in migration from Eastern Europe enlargement had been a consistent British after 2004 became much politicised. A gov- foreign policy goal since ’s ernment survey of public attitudes under- time in office, key actors in Blair’s adminis- taken in 2013 found that 77 per cent of tration talk primarily about a political British people wanted immigration to be motive. Sir , Permanent Repre- reduced, with 56 per cent saying this reduc- sentative to the EU in Blair’s first term, said tion should be by ‘a lot’.46 Using Rodrik’s at the time that ‘the primary argument was terms, one could suggest that Labour the political one—this was the right thing to responded by pivoting towards democratic do’.40 Charles Clarke, Home Secretary legitimacy: the government introduced

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The Political Quarterly © 2020 The Author. The Political Quarterly published by John Wiley & Sons Ltd on behalf of Political Quarterly Publishing Co (PQPC) measures intended to mitigate immigration’s political salience, and to reassure the public Case study 3: Returning to that it was being controlled. Clarke recalls ‘socialism in one country’ under that soon after the A8 accession, ‘Tony and I Jeremy Corbyn decided it was the single most important thing for us to address going into ... the A Remain membership, a eurosceptic 2005 election’. Accordingly, Clarke says that leadership the government’s 2005 White Paper on this topic set out ‘a strategy for dealing with While Labour had consistently been pro-- ’ pean since Kinnock’s era, historically Jeremy migration : it comprised a points-based sys- ’ ’ tem and a process which defined ‘who is Corbyn s personal opinions about the UK s entitled to come’ alongside criteria for EU membership have not aligned with that of migrants entering the UK, and how they the majority in his party. As a trade union and were to be ‘properly enforced’.47 Labour activist, he voted for Britain to leave ’ the EEC in 1975.53 During his successful 2015 However, the Labour government s com- ‘ ’ mitment to free movement of labour leadership campaign, he said he wouldn t — fl rule out’ campaigning for Leave.54 A record of through the single market re ecting its pri- ’ oritisation of economic globalisation—meant eurosceptic instinct is shared within Corbyn s inner circle: a senior former member of the that, in practice, it would only go so far to ‘ limit arrivals from A8 states. The gains from adds there are those around interdependence were valued above the the leadership who have very, very strong increasing salience of immigration—as Blair views, who are themselves committed Lexi- teers. One can’t ignore that fact’.55 stressed during the 2005 election campaign, ’ ‘we have nothing to fear from legal immi- The Labour Party s europhilia, and Cor- byn’s personal euroscepticism, were rolled gration, and the issue is whether we are ‘ ’ attracting as many of the highest value together into a Remain and Reform compro- immigrants as we can’.48 Liddle recounts mise pitch to voters during the 2016 referen- that ‘as long as we were basically commit- dum. This allowed room for the leader to express his long-held concerns over Britain’s ted to a liberalised labour market [vis-a-vis fi the EU]—what the left would call neoliberal EU membership. In his rst speech of the —we weren’t going to be able to introduce campaign, Corbyn said that the UK should ‘ ’ 56 special measures that applied to immi- remain in the EU warts and all . With only grants’.49 , a minister in several a few weeks to go until polling day he said on ’ , at prime time, that his passion for departments and Clarke s successor as ‘ Home Secretary, recalls the reasoning: ‘I can EU membership was seven, or seven-and-a- half’ out of ten.57 Accounts of several party remember seeing Treasury papers that said fi ‘ if we limit migration we will reduce our of cials recount how by and large the Lea- ’ 50 der’sOffice never turned up’ to campaign [economic] growth . 58 This is not to say domestic politics was meetings. Harry Burns, a Labour regional never a factor. Indeed, the government took director during the referendum and head of elections for the 2017 general election, adds the opportunity to impose seven-year transi- ’ fi tional controls when Bulgaria and Romania that the leader sof ce cut key pro-European joined the EU in 2007. But rather than signif- lines out of speeches, and the man himself icant policy change, government communica- instead preferred to talk to crowds of support- ers about domestic issues such as homeless- tions were an important remedy after the 59 initial A8 accession. This strategy was essen- ness and austerity. tially to change the subject: the Prime Minis- ter reportedly instructed colleagues: ‘Don’t mention the advantages of immigration in Leaving the single market—less about public’.51 and his media free movement of labour for Corbyn, empire are often identified as a key domestic audience. As close advisor Liddle concedes, more about capital ‘I do think [Blair and Brown] were scared of Since the vote to leave the EU in June 2016, ’.52 Labour has not officially supported a

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© 2020 The Author. The Political Quarterly published by John Wiley & Sons Ltd on behalf of The Political Quarterly Political Quarterly Publishing Co (PQPC) Remain stance as first priority, nor the UK’s membership because—referring to the mar- continued single market membership. At the ket’s ‘four freedoms’—‘there are aspects of 2017 general election, the party’s manifesto that which Jeremy campaigned against in included a vague pledge to ‘accept the refer- the referendum campaign’.66 endum result’ and ‘put the national interest However, it is not the case that Corbyn first’, while prioritising ‘jobs and living stan- personally opposed the free movement of dards, build[ing] a close new relationship labour, nor sought to take the UK out of the with the EU’ and ‘protect[ing] workers’ single market on this basis alone. Instead, rights and environment standards’.60 As there is much evidence to show he has been agreed by a members’ vote at the 2019 a consistent supporter. For instance, once party conference, the policy for the most Cameron’s renegotiated deal with the EU recent election remained ‘close alignment was announced in April 2016, the Labour with the Single Market’, but not Britain’s leader came out against the ‘emergency inclusion.61 brake’ on benefits to EU citizens that the While some, such as Gareth Evans and Prime Minister had secured—what Hilary Anand Menon, saw this nuanced policy as Benn would call ‘electoral suicide’, since ‘Brexit blurrism’, others see it as the product Labour voters were perceived to be most of domestic politics.62 Former Shadow For- affected by wage pressures from immigra- eign Secretary, , in seeking to tion.67 During the referendum campaign maintain a coalition of both Leave and Corbyn talked about how free movement of Remain voters sufficient to win a general labour had ‘created opportunities for British election, noted that ‘the party leadership had people’ living on the continent.68 Referring been thinking, “How do we straddle those to EU migration during the 2019 campaign, two positions?”, which is not an unworthy he said he had ‘made my case very clear objective in itself’.63 about the value of migration to our society, As it walked that tightrope to try and about the stability of people living in our retain both Leave and Remain support, for society’.69 Former Labour official, Harry over a year after the 2016 referendum the Burns, says ‘Jeremy genuinely really believed Labour leadership pointed to one of the sin- that the only good thing about Europe was gle market’s ‘four freedoms’—the free move- freedom of movement [for labour]’.70 This is ment of labour—to justify why it could not not to say Corbyn was a minority in his support the UK’s staying within the single party for supporting this particular aspect of market. In his first public statement after the economic globalisation: at Labour’s 2019 vote, Corbyn said ‘it’s clear ... immigration party conference members voted to ‘main- is a crucial issue for a lot of people, and tain and extend free movement rights’ played a central role in the EU referendum within the EU after Brexit.71 campaign’.64 Shadow International Trade Rather than the free movement of labour, Secretary, , wrote in July Corbyn’s personal opposition to other areas 2017 that Labour should not support staying of European economic globalisation—the free in the European Economic Area, because movement of capital, and the EU’s institu- ‘Brexit arose from key political, rather than tional controls on national state aid—better trade, objectives: to have control over our justify the party leader’s preference for leav- borders, to have sovereignty over our ing the single market after Brexit. He was laws’.65 consistent on this point, both before and Having identified public concerns about after the 2016 referendum. In his first speech immigration, one might therefore assume of the campaign, Corbyn called for changes that Labour’s policy to leave the single mar- in EU legislation that pressures governments ket was proposed as a direct response, con- ‘to deregulate or privatise public services’; sistent with the ‘democratic legitimacy’ shortly before polling day he said the type element of Rodrik’s trilemma. Indeed, a of free movement which most concerned member of Corbyn’s staff told Politico in him was ‘free movement of money abroad September 2016 that Labour supported ‘ac- to dodge the taxes that fund our public ser- cess’ to the single market for goods and ser- vices, [and] the free movement of our coun- vices after Brexit, rather than full try’s wealth and corporate profits into tax

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The Political Quarterly © 2020 The Author. The Political Quarterly published by John Wiley & Sons Ltd on behalf of Political Quarterly Publishing Co (PQPC) havens’.72 In September 2016, he said ‘there and the bringing of ‘rail, mail, water and are directives and obligations linked to the energy into public ownership to end the single market, such as state aid rules and great privatisation rip-off’.76 Using Rodrik’s requirements to liberalise and privatise - terms directly, Jonathan Rutherford—a mem- lic services, which we would not want to see ber of inquiry into why as part of a post-Brexit relationship’.73 In Labour lost in 2017—says the combination of 2018, he added ‘I don’t want to be told by prioritising national sovereignty and demo- somebody else that we can’t use state aid in cratic legitimacy was ‘implicit in Labour’s order to be able to develop industry in this 2017 manifesto. The trade-off is the market country’.74 economy and it is the option favoured by Kinnock and Blair had increasingly come Labour’s eurosceptic hard-left faction, whose to accept and favour economic interdepen- policies of increasing nationalised ownership dence in Europe through the single market’s offer a form of state socialism in one ‘four freedoms’. But Corbyn’s unusual pref- country’.77 erence for some (not all) of these freedoms— a liberal immigration policy, but a position outside of EU state aid requirements and the Conclusion free movement of capital—shows how he This narrative, covering key moments in sought to adopt features consistent with both Labour’s policy towards the EU single mar- Rodrik’s combinations of national sover- ket over the past four decades, has described eignty with economic globalisation, and a clear arc. The party’s initial scepticism national sovereignty with democratic legiti- towards the market became support during macy. In mixing parts of these two combina- Kinnock’s leadership, and then active tions, Corbyn selected an economic strategy encouragement under Blair, before returning which appeared neither to enjoy public sup- again with Corbyn to uncomfortable non- port—a YouGov poll before the 2019 election commitment. showed 63 per cent thought Labour’s eco- This path complements the shift of nomic policies undeliverable—nor was in the Labour’s economic policy over the same per- best position to reap the full benefits of glob- iod. Starting with the AES’s focus on invest- alisation. ment in national production and manufacturing, over the tenures of Kinnock ’ ‘ ’ and Blair, Labour accepted—and then Corbyn s Bennite economic strategy embraced—the role of the market in the Bri- Corbyn’s incorporation of greater democratic tish economy, while at the same time it legitimacy into economic policy stems from sought to harness the tax dividends of his decades-old advocacy of ‘Bennite’ eco- greater economic liberalisation to fund more nomics. Named after his friend and political public services. Under Corbyn we saw this mentor, Tony Benn, this was the basis of the trend reversed. AES that preceded Kinnock’s tenure—the This arc of Labour’s single market policy agenda for reflation, public ownership and is formed by different calculations each economic planning described above. Labour leader made in response to Dani Over three decades after the AES, now as Rodrik’s ‘trilemma’—the forced choice Labour’s leader, Corbyn looked to shift the between national sovereignty, back in its direction. Speaking six legitimacy and economic globalisation. While months after the Brexit vote, the Labour lea- across the three case studies each leader has der said his main priority was to ‘borrow to prioritised national sovereignty—taken to invest ... at historically low interest rates ... mean national power over economic policy to generate far greater returns’ and increase exercised by elites—what has changed has employment.75 The 2017 and 2019 general been the other point in the trilemma with election manifestos included nationally-led, which it has been paired. First, during Kin- reflationary policies in the style of the 1983 nock’s leadership, the benefits of economic blueprint: examples include a £500 billion globalisation became increasingly valued National Investment Bank alongside an over democratic legitimacy, as the party accompanying network of regional banks, eventually moved to accept less public

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© 2020 The Author. The Political Quarterly published by John Wiley & Sons Ltd on behalf of The Political Quarterly Political Quarterly Publishing Co (PQPC) ownership in the domestic economy. At the 7 T. Jones, Remaking the Labour Party: from apex of the arc, Blair made a clearer and Gaitskell to Blair, London, Routledge, 1996, p. more consistent selection in favour of eco- 116. nomic globalisation, as financial liberalisation 8 Interview with John Eatwell, 8 April 2019. was embraced and cross-border ‘Social Eur- 9 N. Kinnock, Making Our Way, Oxford, Black- ’ well, 1986, p. 116. ope legislation limited where it could 10 M. Westlake, Kinnock: the Biography, London, impact economic growth. Finally, in pursu- Little, Brown, 2001, p. 270. ‘ ’ ing a Bennite economic strategy, Corbyn 11 Labour Party, Planning for Full Employment: paid more attention than his predecessors to Options for a Modern Employment Strategy, democratic legitimacy, at a cost to economic London, 1985, p. 11. globalisation. But he supported some of the 12 Kinnock, Making Our Way, p. 176. ‘four freedoms’ more than others, champi- 13 S. Tindale, ‘Learning to love the market: ’ oning the free movement of labour, while Labour and the European Community , The denouncing the free movement of capital. Political Quarterly, vol. 63, no. 3, 1992, p. 284. By thinking about the history of Labour’s 14 Interview with John Eatwell, 8 April 2019. 15 J. H. Haahr, Looking to Europe, Aarhus, Aar- approach to the EU single market in terms ’ — hus University Press, 1993, p. 115; p. 113. of Rodrik s trilemma of trade-offs between 16 Labour Party, It’s Time to Get Britain Working combinations of economic globalisation, Again, London, 1992, p. 7. national sovereignty and democratic legiti- 17 E. Shaw, The Labour Party Since 1979: Crisis macy—it is easier to understand the calcula- and Transformation, London, Routledge, 1994, tion that the party will need to make when p. 7. taking future policy decisions on this issue; 18 N. Kinnock, Opening remarks by Neil Kinnock ‘ and which point of the ‘trilemma’ would be at launch of Bringing Common Sense to the ’ sacrificed for a move in a certain direction. Common Market information campaign, The This can only be helpful during the debates Papers of Neil Kinnock, Cambridge, Churchill College Archives, 1988, p. 1. to come within Labour about what it wants ’ 19 D. Martin, ed., Bringing Common Sense to the the UK s post-Brexit relationship with the Common Market: a Left Agenda for Europe, EU to look like. Fabian Tract 525, London, The , 1988, p. 10. 20 N. Kinnock, Preface, in Martin, ed., Bringing Notes Common Sense to the Common Market, p. 2. 1 Labour Party, It’s Time for Real Change: the 21 Westlake, Kinnock: the Biography, p. 270. ‘ Labour Party Manifesto 2017, London, 2017, p. 22 TUC, 1992: The Social Dimension: address by 90. Jacques Delors: President of the Commission ’ 2 A. Asthana, ‘Big majority of Labour members of the European Communities , The Papers of “want UK to stay in single market”’, The Neil Kinnock, Cambridge, Churchill College Guardian, 17 July 2017; https://www.thegua Archives, 1988, p. 2. rdian.com/politics/2017/jul/17/most-labour- 23 Interview with Charles Clarke, 9 April 2019. ‘ members-want-uk-to-remain-in-single-market 24 Kinnock, Opening remarks at launch of ‘ ’ (accessed 11 May 2020); N. Watt and P. Win- Bringing Common Sense ,p.2. tour, ‘How immigration came to haunt 25 Interview with John Eatwell, 8 April 2019. ‘ ’ Labour: the inside story’, , 24 26 Labour Party, Britain in the World , in Labour March 2015; https://www.theguardian.com/ Party, 1988: Confer- news/2015/mar/24/how-immigration-came- ence Arrangements Committee Report, Manch- to-haunt-labour-inside-story (accessed 4 May ester, 1988, p. 43. ’ 2020). 27 Labour Party, It s Time to get Britain Working 3 D. Rodrik, The Globalisation Paradox, Oxford, Again, p. 11. , 2012. 28 A. Rawnsley, The End of the Party: the Rise 4 A. Gamble, ‘Globalisation and the new pop- and Fall of New Labour, London, Penguin, ulism’, in P. Diamond, ed., The Crisis of Glob- 2010, p. 188. alisation: Democracy, Capitalism and 29 T. Blair, , London, Arrow, 2011, p. ‘ ’ Inequality in the Twenty-First Century, New 556; T. Blair, Full text: Tony Blair s speech to ’ York, I. B. Tauris, 2018, p. 6. the European parliament , The Guardian, 23 5 Labour Party, The New Hope for Britain: June 2005; https://www.theguardian.com/poli Labour’s Manifesto 1983, London, 1983, p. 33. tics/2005/jun/23/speeches.eu. (accessed 28 6 Interview with Charles Clarke, 9 April 2019. December 2019).

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