Food for thought for Brexiteers

One could tell a surprisingly comprehensive history of the Brexit project by simply talking about food.

From curved bananas to non-recyclable teabags, Eurosceptics have long relied on myths and scurrilous half-truths about groceries to stoke public resentment over the supposed red-tape lunacy of the European Union.

More recently, Brexiteers have taken up the (mostly false) idea that the EU discriminates intensely against African smallholders in order to protect its own inefficient farmers. The pro-Brexit Tory MP Daniel Kawczynski posed sombrely in front of a tray of supermarket lemons this month in order to lambast "the EU protectionist racket".

But it's not just Africans who will benefit from Brexit. The Sun informs us that after we leave the EU the Great British shopper will all be able to save 40p on a pack of butter and 31p on a punnet of strawberries and much else besides thanks to the tariff-torching free trade deals we will inevitably sign with other countries.

Brexiteers seem to believe that a way to a Briton's support is through his or her stomach. Taking control is framed as taking control, above all else, of our grocery basket.

But it's not all one way. The Brexit food fight is a symmetrical one. US "chlorinated" chicken has become the spectre at the feast, a symbol of what the powerful US agricultural lobby will ram down our throats as the price of an inevitably unequal American trade deal. And few of the no-deal consequence warnings cut through to the public quite as effectively as the threat of a sandwich shortage.

They sometimes try to conceal it, but the agenda of some Brexiteers is plainly deregulatory. One of the reasons the forecasts produced by a small band of pro-Brexit economists show long-term gains for the UK, when every other credible study shows precisely the opposite, is that their models assume we will in future shed all our domestic product standards, including on food imports, and trade on what are known as "world prices".

But the lines between ideological fantasy and reality are becoming blurred. UK ministers insist there will be no compromising of high food standards after Brexit. They also say that in the event of a no-deal Brexit they would waive customs and standards checks on trucks delivering produce from the EU in order to mitigate transport bottlenecks and supermarket shortages. They have not said what, in those circumstances, is to stop some criminal group importing unsafe produce to the UK. Perhaps they believe it's a risk worth taking.

Regulation 1168 of the European Council, from 2011, is just the sort of Brussels red tape that Brexiteers love to hate. It lays out a host of requirements for food manufacturers, from providing detail on the geographical origin of produce to its nutritional content.

But it also says that packaging should warn buyers about ingredients that can cause a dangerous allergic reaction. Fifteen-year-old Natasha Ednan-Laerouse from Fulham died in 2016 after eating a baguette from Pret A Manger which did not list traces of sesame, to which she was allergic, on its packaging.

This was not, in fact, a requirement under the EU regulation because it was a fresh handmade product, although many people, in light of this tragedy, believe this is a regulatory loophole that urgently needs to be closed. The coroner in the case said last week that he would be writing to the government to raise concerns about "inadequate" food labelling regulation.

Brexiteers will argue that this extremely sad incident has no bearing on the issue of EU membership. And in one sense they're correct. There's no reason why the UK post-Brexit shouldn't have new domestic regulations on food labelling that are even tighter in some specific areas.

Yet this, of course, is at odds with their deregulatory impulses and the dream of importing food at world prices. Moreover, it highlights a huge and still unrecognised blind spot on trade. For it is pan-European regulatory harmonisation, regardless of whether those regulations are well-designed or not, that helps UK food exporters to tap into a significant market in the EU. It is this harmonisation that dismantles what Margaret Thatcher once called the "insidious" trade barriers of "different national standards".

Assuming that the rest of the world does not join us post-Brexit in a bonfire of food standards – and there is no reason to expect that they will – our producers will have to conform to the standards of other countries if we wish to sell into their markets. Taking back control from the EU will simply mean submitting to the authority of others jurisdictions, whether that’s the US, Canada, India or wherever. And to sell into the EU we would still have to conform to the single market’s food regulations, even if we are out of it.

Yes, there are costs from regulation. It's onerous to perform tests, to fill in paperwork, print labels and all the rest. But there are vast economic benefits too.

It was 30 years ago this month that Margaret Thatcher made her speech in Bruges, seen by eurosceptics as the lighting of the torch of national resistance to Brussels. Yet earlier in 1988 the prime minister had made another speech on the urgency of completing the single market.

"There was a tendency in Europe to talk in lofty tones of European Union," she said on the subject of regulatory harmonisation. "That may be good for the soul. But the body - Europe's firms and organisations and the people who work in them - needs something more nourishing."

 Food for thought for Brexiteers today.

'Neoliberalism' and nonsense

Here's a fun fact: the founder of neoliberalism was a Corbynista.

Well, not exactly a Corbynista. The German sociologist Alexander Rüstow died in 1963, long before Jeremy Corbyn entered Parliament, let alone became Labour leader. But some of the economic policies Rüstow advocated bear a striking resemblance to those pushed by Corbyn today.

Rüstow, according to the valuable research of Oliver Marc Hartwich, was in favour of the nationalisation of rail companies and utilities. He supported an active industrial policy to ease the social impact of economic upheaval. He wanted to reduce inequality through high inheritance taxes. He proposed higher taxes on large companies. "The economy is there for people," Rüstow insisted. Any of that might have come out of Labour's 2017 election manifesto.

From this historical perspective, the cry from Corbyn's intellectual outrider Paul Mason last week that "Labour needs to wage war on EU neoliberalism" sounds pretty strange. Yet, of course, the definition of neoliberalism that Mason is using is different from that put forward by Rüstow in the 1930s.

For Rüstow, neoliberalism was a third way between socialism and British-style laissez-faire economics. It was conceived as a specific cure for late 19th-century German-style corporatism, with its proliferation of cartels. Mason's conception, on the other hand, stems from the theorising of Michel Foucault in the late 1970s, who saw neoliberalism as an ideological project to transform all of society into a giant marketplace.

This freemarket fundamentalist conception of neoliberalism owes more to the thought of Friedrich Hayek and Milton Friedman than Rüstow.

Words can change their meaning, of course. And there's no reason Mason, or anyone else, shouldn't use the modern definition of neoliberalism as a kind of unhealthy fetishisation of markets. After all, this is what most people today understand by the term. Yet it's important to ask whether Mason, and others on the radical left, are justified in describing the EU as part of a neoliberal project - especially when they use this framing to argue that Labour should be wary of joining the EU's single market after Brexit.

With its high levels of social protection, state-owned rail companies, nationalised utilities and banks, various price controls and industrial interventions, the European continent does not, on the face of it, look like the neoliberal hellhole of the leftist imagination. Europe actually seems to be a collection of social democracies and what Peter Hall and David Soskice described as "co-ordinated market economies". Yet, according to Mason, the European "social market economy" is merely "the specific European form of neoliberalism" because "it prefers private over public, vaunts market mechanism over state direction or subsidy, relies on effective competition to make capitalism fairer, rather than strong regulation."

This is rather like arguing a hot bath is merely a warmer form of a freezing cold bath. It's a definition that ignores the experience. Most normal people, when they run a bath for themselves, are concerned with how comfortable it feels when they get in it, rather than which tap most of the water came out of.

The insights of Hayek and Friedman about the utility of markets - in particular the access to the socially dispersed knowledge embedded in them - are valuable. Yet it's also true that a mentality that presents the extension of markets as the answer to every social question is a destructive pathology. The merit of the post-war social democratic settlements of countries like Germany, France, Sweden and the Netherlands is that they have located a reasonable balance between those two extremes. Any theoretical framework that crams Germany's Social Democrats into the same category as the US Republicans or the hardline Thatcherite wing of the Conservative Party has either gone badly awry or is conceptually useless.

Perhaps we can learn a lesson from the genesis of the term neoliberalism. Rüstow's 1930s conception of neoliberalism had a specific social and historical context - the crony capitalism of Wilhelmine (and then Weimar) Germany and the global crisis of free markets and democracy in the wake of the Great Depression. To understand the programme, one has to appreciate the context.

The economically liberalising ethos of the EU's 2007 Lisbon Treaty, which the left revile as one of the supreme works of the neoliberal devil, has a context too: a series of member states with a greater role for the state and social protection than the UK and the US but also structurally higher levels of unemployment. It's not freemarket fundamentalism, for instance, to suggest that French employment laws ought to be reformed for the sake of those younger people who find themselves outsiders in a system designed to protect insiders at all costs. Nor is it wild-eyed neoliberalism, in a single market of 28 member states, each with their own domestic corporate lobbies, to police the granting of state aid.

The problem with the modern Foucauldian definition of neoliberalism is that it ignores context and invites paranoia. The result is that those who advocate a modest extension of markets in some areas cannot be understood as simply attempting to adjust the temperature of society's bath but must be seen as part of a sinister ideological project to atomise humanity.

European leaders have certainly handled the eurozone crisis abysmally, inflicting unnecessary suffering on the likes of Greece and Portugal through excessive public spending cuts and badly designed structural reforms. Domestic fiscal policy in Germany has been, and remains, a disaster zone. There are many reasons for this, but it's simply not credible to argue that these gross failures stem from the same species of ideological extremism that animates libertarian right-wingers in the Anglosphere. The context and the history are separate; the attitudes to markets, the state, inequality and social solidarity are fundamentally different.

It would be tragic if Labour rejected the option of single market membership for the UK after Brexit. And if the party did so on the basis of fallacies about European Union "neoliberalism", it would be farcical.

A 'left-wing Brexit' is a dangerous delusion

If Labour supporters want a glimpse of what Jeremy Corbyn's 2017 general election manifesto would look like in practice, they don't have to dream. They simply need to cross the Channel.

In France, they will discover university tuition funded by the taxpayer. In Portugal and Slovakia, they will see domestic energy consumers who benefit from regulatory price caps. In Germany, they can witness an extensive network of publicly-owned local savings banks. In Spain, the Netherlands, Belgium and Austria, they can marvel at train companies in public hands. In Luxembourg and Belgium, they will see no zero hour contracts. In Sweden and Denmark, they will discover that the state raises around half of national income in tax.

But this can't be happening, can it? This social democratic nirvana can't exist. It must be our imagination playing tricks. Because as two advocates of "Lexit" inform us: "Any attempt to create a different kind of economy from inside the EU has been forestalled through powerful legal impediments embodied in the treaties."

According to Corbyn supporters Joe Guinan and Thomas Hanna, "the thrust of European economic policy has been to extend the market through liberalisation, privatisation, and flexibilisation, sub-ordinating employment and social protection to low inflation, debt reduction and competitiveness". What we have here is a delusion - and an extremely dangerous one in the context of the finely-balanced UK politics of Brexit.

The reality is that the EU is no impediment to either the survival of the institutions of social democracy - nor their extension in Britain. We've had a clear demonstration of this only recently. In 2014, the population of the city of Hamburg voted to return their power grid from private companies to municipal hands. Yet, strangely, the neo-liberal jackboots of Brussels failed to crush the move.

It is fair to say that Brussels has a bias against monopoly - and a good thing, too. But it is certainly not opposed to public ownership. Indeed, a clause in the European treaty explicitly states that EU law must remain neutral on the question. The impediment that EU law imposes is that public providers have to be treated on equal footing as privatised ones. On state aid, the requirement is that subsidies to a sector must be available to all operators, public and private alike.

The Lexit case is embarrassingly flimsy. Guinan and Hanna extol the possibilities for a flowering of "community-owned firms" in the UK post-Brexit. But one can find co-operatives all over Europe, where they boast 123 million members. The pair rail against what they call the "commodified migrant labour" under the EU's freedom of movement laws, ignoring the fact that hundreds of thousands of Britons have freely chosen to work in Europe.

There are legitimate concerns about the operation of the EU's "posted workers" directive, and Corbyn himself has aired them. But it's a travesty to suggest that there is no possibility for reform in this specific area. No less a figure than the new French President, Emmanuel Macron, has put curbing "social dumping" high on his agenda.

Guinan and Hanna scoff at the "icy smooth-frictionless" of the single market. They seem not to realise that it is this regulatory harmonisation that has helped to lift the UK growth rate considerably since the 1970s, boosting the livelihoods of millions of working class Britons. It is this single market that supports millions of good jobs in manufacturing.

The authors talk about a post-Brexit Britain finally being free to stand up to "extractive" multinationals. But who fined Google and Microsoft billions of dollars of revenue for anti-competitive behaviour? Who has ordered Apple to repay € 13bn (£ 12bn) in avoided corporation tax? It was the European Commission.

Why do Rupert Murdoch's right-wing UK newspapers ceaselessly attack the EU? As Peter Mandelson once put it to my fellow Independent columnist Matthew Norman: "What you have to understand is that no single government is strong enough to stand up to him. Europe, on the other hand…" 

The Shadow Chancellor, John McDonnell, burbled last November of the "enormous opportunities" of Brexit and claimed that those who wanted a second referendum were "on the side of certain corporate elites". This suggests he has been seduced by the kind of nonsense espoused by Guinan and Hanna.

The EU is, of course, imperfect. And the mishandling of the Eurozone crisis has been a disgrace. But the idea that Europe is some kind of right-wing "neoliberal project" can only represent a combination of wilful ignorance and ideologically induced blindness. We hear endless noise about the things Jeremy Corbyn has and hasn't said about Venezuela - a country thousands of miles away. We should be more concerned about what he (and too many of those around him) seem not to know about the economy and institutions of our nearest European neighbours."

Thatcherites hailing our exit from the single market need a history lesson

Imagine going to a funeral where it turns out that most of those present never actually knew the deceased, although they were convinced they did. The thought comes to mind listening to the obsequies for Britain's membership of the single market delivered by Theresa May yesterday.

Thatcher-worshiping Brexiteers from the Tory right are flushed with excitement at the prospect of finally "taking back control" of the British economy from meddling Brussels bureaucrats - something they are convinced leaving the single market will now permit.

Many journalists, on the other hand, highlight the single market's tariff-abolishing benefits. Meanwhile, Theresa May says Britain will retain a high level of "access" to the single market after we've left. Labour's shadow Brexit Secretary Sir Keir Starmer sternly demands it.

Yet all these reactions reflect fundamental misconceptions about what the single market actually is - and a lack of understanding of why leaving it is likely to be so harmful to the British economy.

The place to start is with some history. The single market was a significant achievement of Margaret Thatcher's government in the 1980s - something that the sponge of amnesia has apparently wiped from the minds of her former acolytes such as Iain Duncan Smith and John Redwood.

The single market was designed, with considerable influence and impetus from London, to prise open European markets to British exporters, to level the playing field for UK firms across the Continent.

"A single market without barriers - visible or invisible - giving you direct and unhindered access to the purchasing power of over 300 million of the world's wealthiest and most prosperous people," was how Thatcher herself described the single market at Lancaster House in 1988 to an audience of business leaders.

What a bitter irony that, 28 years on, Theresa May has used the same mansion in St James's as the venue to announce that Britain is walking out.

And for what? The harmonising product regulations that Brexiteers (ever since Boris Johnson first pitched up in Brussels as a bowdlerising reporter for The Daily Telegraph) ridicule and condemn as anti-democratic EU micromanagement are, in fact, designed to prevent free market-distorting discrimination by European governments.

Why is there a European directive on "jam", defining what fruits may, and may not, be used in the condiment's manufacture? To ensure that anything classified as jam can thereby be sold anywhere within the single market without the risk of some jumped-up local official - anywhere from Bucharest to Belfast - banning it from the supermarket shelves on the grounds that it doesn't conform to local labelling or health and safety rules.

The new trade department recently tweeted about Britain's "innovative jams". That EU jam directive is a designed to help those innovative jam-makers sell their wares into a market of 500 million people (it's grown since 1988) on our doorstep. Multiply that jam example by the size of our entire goods export sector to get a sense of the size of the benefits.

What about control? We submitted to the supremacy of the European Court of Justice because we needed a referee on trade and regulatory disputes within the single market. Was that a "loss of control"? In one respect, yes. But this was symmetric submission. Other nations agreed to abide by the ECJ rulings as well, preventing them from discriminating against British companies. In that sense we gained economic control on behalf of our exporters: control that we will now lose.

And tariffs? The single market was not really about tariffs - financial levies on imports. Any common or garden free trade agreement can abolish those. The single market was primarily about non-tariff barriers, such as local regulations and licensing rules that prevent, for instance, a British architect establishing an office in Milan because she or he does not have a local qualification. Or, conversely, that hinder a dentist who qualified in Slovakia operating in the UK.

"Insidious ... differing national standards, various restrictions on the provision of services, exclusion of foreign firms from public contracts," as Thatcher put it at Lancaster House.

And that is where the "access" argument made by Theresa May and Labour betrays a catastrophic muddle.

You're either a member of this single market or you're not. You have influence on the rules as a member - or you take the rules. You push for the extension and completion of the market to favour sectors you are strong in - such as services in Britain's case - or the rest of the members concentrate on their own interests in its ongoing development.

The best you can hope for short of full membership is being in the European Economic Area, like Norway.

This means you benefit from the dismantling of non-tariff barriers, but don't get to set the rules. If that sounds like a pointless deal, consider the fact that Norway values it sufficiently to pay annually into the EU budget in return. But in any case, Theresa May has now ruled even this out. The limit of her ambition, revealed yesterday, is a tariff-free trade deal with Europe.

Yet economists' consensus forecasts of long-term damage to UK trade are not based on the scenario that we fail to get a free trade deal with Europe. They are based on the scenario that we are out of the single market; that our dominant services sector will not benefit from future progress in completing it. All our experience suggests this means we will export less to Europe and import less too, which means less productivity growth for the UK economy, which means lower living standards than otherwise for us all.

"Don't it always seem to go - that you don't know what you've got till it's gone," sang Joni Mitchell in her song "Big Yellow Taxi". Perhaps we will realise what the single market is only when we've left it.

Brexiteers insist they will create a paradise of new free trade deals for Britain with the likes of America and China in the wake of Brexit which will more than compensate us for the economic damage from the loss of our membership of Thatcher's single market. But what else was it that Joni sang? That's right: "They paved paradise and put up a parking lot."

This article appeared in The Independent on 17/01/17