Defending living standards not the EU is the biggest issue in British politics

By Jude Woodward

Labour’s successful campaign, in comparison with the Tories’ set back, at June’s General Election was due to the growing rejection of austerity, which trumped May’s assumption that a mandate for Brexit would be the decisive issue. The fact that defence of living standards, not the EU, is the biggest issue in British politics was also at the root of the setback for both the SNP and the Lib Dems in the election.

In Scotland the SNP miscalculated that support for EU membership would be a big vote winner and spur support for independence. In fact concerns about the economic impact of Brexit on living standards in Scotland – which would be worse if there was any kind of tariff barrier between a Scotland in the EU and rest of the UK out of the EU – made independence less immediately attractive to Scottish voters. This miscalculation meant a setback for the SNP and a somewhat humiliating climb down by Nicola Sturgeon who was forced to shelf her proposed second independence referendum.

The Lib-Dems made the same error. They believed campaigning on support for EU membership, while making no commitments to end austerity or improve living standards – in other words to continue the Euro-austerity of governments across the EU – would be a big vote winner. Instead the Lib-Dems lost votes. Cable has pledged to continue this policy. He has placed continued support for the economic policies he pursued when in government, and for so-called ‘fiscal responsibility’, i.e. the Tories’ failed economic policy, at the heart of his pitch for the Lib-Dem leadership.

The big surge in support at the elections for Jeremy Corbyn’s policies was because the Labour Party’s manifesto stood for placing defence of living standards as the cornerstone of policy – the only party to do so. Corbyn’s Labour stood in opposition to both ‘Brexit-austerity’ and ‘Euro-austerity’.

As the Brexit discussions unfold, and the negative impact of Brexit on living standards becomes more exposed, then it will become clearer that effective defence of living standards requires taking the right position on the EU negotiations. In this respect membership of the political club of the EU is not crucial, but membership of the European Single Market is. Staying in the Single Market will preserve jobs in companies that will otherwise be forced to relocate out of the UK to countries that are still within the Single Market. For example, just this week the Irish government announced that it has clinched deals with more than a dozen London-based financial firms and banks to move their operations to Dublin due to Brexit. Membership of the Single Market would also ensure the stability of the 47 per cent of UK goods exports that go to the EU, trade which is crucial to defend jobs and real wages.

But the importance of the Single Market flows from its importance in the defence of living standards, not because of the issue of EU membership itself.

This is also the reason why Chuka Umunna’s amendment to the Queen’s Speech on the Single Market was a cynical manoeuvre to attempt to break support away from Jeremy Corbyn, not a serious attempt to defend the interests of the population over Brexit. It is self-evidently cynical as just last year Umunna was arguing that Britain had to leave the Single Market, as his proposed bottom line was ending freedom of movement. In reality his bottom line appears to be whatever will cause division in Labour’s ranks and problems for the Labour leadership!

The fundamental issue is that Umunna and others on the Labour right argue against Brexit, but they remain for austerity. Under their leadership there is no way that Labour would fight another election on a progressive reforming manifesto like Corbyn’s.

The correct position is to place the defence of living standards as the top priority, which means to oppose austerity and to seek to stay in the Single Market.

The fact that living standards are the core concern of the electorate is what underpinned the results for each party in the election.

In other words, the results of the election confirmed that defending living standards, not the EU, is the biggest issue in British politics. In the immortal Marxist words of the very non-Marxist Bill Clinton: ‘It’s the economy stupid!’