Is serious rapprochement on the cards if Labour takes power?

By David Martin

I wondered while listening to what was probably the final budget of this Conservative Government just how many other people would notice the dog that didn’t bark. The Chancellor made much of the unfavourable economic situation the Government faced and the consequent tight fiscal framework within which he had to operate. Yet he made not one mention of Brexit.

This despite the Treasury’s own Office for Budget Responsibility confirming that its long-running prediction is “broadly on track” and shows a 15% fall in trade and a 4% reduction in the UK economy’s potential productivity compared to if the UK had stayed in the EU. The OBR’s analysis is in line with the Bank of England showing there are deep long-term consequences for the UK’s economy from BREXIT.

The only way to reduce taxes and improve services is by growing the economy and the quickest way to grow our economy is to improve our relations with Europe. Unsurprisingly the Chancellor did not mention this as part of the difficulties he face in balancing the books.

Can we expect better if Labour, as now widely expected. wins the General Election? Well yes and no. The three developments that would do most to help grow the economy – rejoining the single market and or the customs union and free movement of labour have it appears all been ruled out. An article in the Sunday Times quoted a ‘senior Labour source’ as saying “the three red lines, freedom of movement, customs union, single market, they are not shifting. Labour has been burned too many times on this issue.”

There is real hope in other directions though. Labour looks favourably on a veterinary agreement with the EU. Such an agreement would eliminate border checks on food and drink and according to the CBI would reduce costs and lead to smoother supply chains. In turn this would cut food prices, so easing the cost of living and helping the poorest in society.

Although Labour is reluctant to talk about free movement, they have hinted at a couple of schemes which might help the economy. Both the EU and the UK face skills gaps in certain sectors and Labour might be open to a deal to facilitate mobility for skilled workers in these sectors. Similarly, there have been hints of Labour backing a Youth Mobility Scheme which would grant young people up to a defined age, possibly twenty-five, the ability to live and work in another country. This would help address labour shortages but also in additional benefit cultural exchanges and language learning. Finally, Labour might just be prepared to join ERASMUS+. Apart from the life benefits such a programme would bring to those participating, it would give our education sector an enormous economic boost.

This of course is all a sticking plaster on the open wound of BREXIT but if combined with other potential labour moves like a deal to share data on criminals and a security and defence pact with the EU, such measures would certainly reflect a serious rapprochement between the UK and the EU. Once such processes begin they tend to take on a dynamic of their own.