On Brexit and Democracy: Response to Emma Bell

By Steve McGiffen

Emma Bell makes a number of salient points in her paper: it is true that the Brexit referendum was far from being a model of democratic practice; that referenda in general are more problematic than their supporters seem to understand; and that the level of debate in this referendum was infantile. However, there are also a number of matters of importance with which she does not deal and others to which she refers but does not properly address.

Most importantly, the UK government, unlike the power structures of the EU, is relatively easy to remove and replace. For the first time since 1983, a real social democratic party is challenging for power and this far right government, which is daily revealing its mendacity and incompetence, could be out before the end of the year, or soon after. Nothing is certain when it comes to predicting the future, but there is no doubt that as things stand this government and its neoliberal programme are in trouble.

Repeatedly, Bell makes the point that the EU’s neoliberal politics are fully in tune with the actual policies of successive British governments. Neoliberalism has been the guiding principle of British governance since James Callaghan replaced Harold Wilson as Labour Prime Minister in 1976, introducing an IMF-imposed series of spending cuts which paved the way for a Tory victory three years later.

In retrospect, Labour’s 1970s ‘monetarism’ was a relatively mild foretaste of what was to come.1 Under Tony Blair, however, the Labour Party fully embraced neoliberalism, acquiescing to the propagandistic claim that socialism was ‘outmoded’.2 However, the manifesto which this same party put to the British people in the 2017 general election was arguably its most left-wing ever. Although Labour failed to win on this platform, it deprived the Tories of their overall majority, forcing them into coalition with the far right (Northern Irish) Democratic Unionist Party (DUP), whose main aim is to preserve the protestant-unionist ascendancy in the North of Ireland.

The key factor in bringing about a result much closer than had been anticipated was the entry of thousands of young activists into the Labour party.3 It is likely that many, if not most, of these new members had voted Remain in the referendum, as polls showed overwhelming support for staying in the EU amongst people under 34,4 an age group which also recorded a landslide for Corbyn’s Labour Party.5 I would argue that this is at least in part because they are unaware, as Bell herself appears to be, that much of what the manifesto they campaigned on contains would be impossible to carry out within EU law.

An example can be found on p.8 of the Labour Party manifesto for the 2017 general election, For the Many, Not the Few:

Our National Transformation Fund will deliver the investment that every part of Britain needs to meet its potential, overcoming years of neglect. Our industrial strategy will support businesses to create new, high-skilled, high-paid and secure work across the country, in the sectors of the future such as renewables.6

However, according to Article 107 of the Lisbon Treaty,

… any  aid  granted  by  a  Member  State  or  through  State  resources  in  any  form  whatsoever   which  distorts  or  threatens  to  distort  competition by favouring certain undertakings or the production of certain goods shall, in so far as it affects trade between Member States, be incompatible with the internal market.7

There are ways round this, but the rules governing state aid are strict and difficult to comply with, particularly for a member state as relatively prosperous (overall) as the UK. And, one might ask, why should an elected government have to go to an unelected bureaucracy for permission to carry out a policy included in a legislative programme clearly laid out before the election which brought it to power? Bell’s argument that the Commission is indirectly elected is technically correct, but the link between the electorate and the Brussels executive is far too weak to enable the British people to remove and replace the latter in the way that they can remove and replace their national government, or their local and regional authorities.

Everything referring to a national industrial regeneration policy could, unless very carefully designed – probably to the point where it becomes ineffective – fall foul of EU Competition Policy.8 The EU, moreover, has its own regional policy, the funds from which are distributed to poorer regions in all member states, including the richest countries. Member states may conduct national regional and industrial policies provided these do not give the nation’s enterprises, whether privately or publicly owned, an advantage over competitors in other member states. In practice however, this is a very restrictive proviso which almost entirely limits state aids to “research and development, environmental protection and aid for small to medium-sized businesses.”9 Clearly, this makes running the kind of large-scale regional and industrial policies implied by Labour’s proposed National Transformation Fund impossible.

On p.19 of its manifesto, Labour pledges to renationalise private rail operators as their franchises expire. Opinions differ as to the extent to which the EU’s Fourth Rail Package would outlaw this,10 but at best it would restrict the socialist nature of any renationalised rail system. While the ECJ often acts as if this is not the case, the right to nationalise an industry is actually written into the Lisbon Treaty. However, a nationalised industry must comply with the same neoliberal legal framework as must any other enterprise. It’s good that the EU does allow public ownership to be extended, but the rules in this area are far from clear, and the result is a lack of transparency which gives the ECJ a power of interpretation which is inherently undemocratic.

On the same page Labour pledges to renationalise the Royal Mail. Again, opinions differ, but my own analysis indicates that the state aid rules, interpreted by a European Court of Justice itself under the increasing sway of neoliberal ideology, would not allow either the railways or the Royal Mail to be taken back into public ownership. The reason is that this would mean “intervention by the State or through State resources” which gives the recipient an advantage on a selective basis, for example to specific companies or industry sectors. This is specifically outlawed in the aforementioned rules on state aid.11 Whether trade unions are correct in their view that references to ‘liberalisation’ in the Fourth Railway Package effectively make public ownership impossible, or at best eliminate many of its advantages, is a question for a specialist in the labyrinthine pathways of EU law. Bell should have included such matters in her analysis, however, as clearly if a nation’s people want to see their vital public services in public ownership, and there are effective barriers to this being achieved, it is hard to see how this can be described as ‘democratic’.

In relation to external (i.e., non-EU) trade, Labour’s pledges in this policy area are certainly something which it could discuss with the twenty-seven other member states and with the European Commission, but as an EU member the UK’s control over its own trade policies is limited to its input into a common policy embodied in a ‘mandate’ given to the Commission. Within the terms of this mandate, the Commission has full control of trade policy, subject to Council approval of any agreements.  As the European Commission describes its powers,

Trade policy is an exclusive power of the EU – so only the EU, and not individual member states, can legislate on trade matters and conclude international trade agreements.

This includes trade in goods and services, commercial aspects of intellectual property, and foreign direct investment.12 A Corbyn government could try to increase the normative content of trade deals, but it seems impossible that the EU will ever abandon or even dilute its commitment to ‘free trade’, as to promote neoliberal globalisation is its central function. In its own words, the European Union “aims to play a key role in keeping markets open worldwide.”13

In the age of neoliberalism, trade rules are capable of reaching into every corner of people’s lives and influencing laws and regulations which at first sight appear to be purely domestic concerns. A notorious aspect of this is mentioned by Bell when she discusses the proposed trade deals with the United States and Canada – respectively the Transatlantic Trade and Investment Partnership (TTIP) and the Comprehensive Economic and Trade Agreement (CETA).  The Investor State Dispute Settlement (ISDS) which formed part of these and other trade agreements has been shelved in the face of a vigorous and broad campaign against it, but its proposed alternative, the  Multilateral Investment Court (MIC), has been described by the pressure group Corporate Europe Observatory as  “a thinly disguised attempt to re-legitimise the controversial investor rights in TTIP and other trade deals with some limited procedural reforms, which…. do not address the fundamental flaws of the investor privileges.”14 Until we have more details of the MIC, it will not be possible to pass final judgment. It would be naïve to imagine, however, that it will represent any kind of new departure. According to the TUC, Britain’s federation of labour unions, the MIC will “undermine domestic legal systems, threaten workers’ rights and public services” enabling “corporate lawyers … to claim legitimate policies passed to protect workers and society are a form of ‘indirect expropriation’.”15

It appears clear that the only way to fulfil Labour’s manifesto pledges within the European Union would be to defy the law. This has never been Labour’s way. For over a century it has insisted on obeying even laws which are clear examples of class justice. Unless Corbyn’s party were to take the unprecedented step of openly refusing to comply with EU rules, his likely fate would be the kind of humiliation which the Prime Ministers of Greece, Italy and Ireland have suffered in recent years  at the hands of the Commission and its allies in the dominant member states led by Germany.

Bell is correct to say that referenda are not necessarily exercises in a purer form of democracy, and that they should be employed only under specific – one might say extreme – circumstances. However, if referenda are to form part of the country’s political practice at all, then the transfer of powers to entities which the British people have not elected and cannot remove or replace in an election would seem to be an appropriately serious subject. Honest, fact-checked accounts from both sides of the debate would certainly make referenda more democratic, but the almost complete absence of such from the Brexit referendum campaign does not distinguish it from general elections. In Britain and beyond, these are increasingly characterised by posturing, exaggeration, deliberately misleading assertions and downright lies.

At least the actual voting method was on this occasion democratic. The fact is that on a very high turnout, Leave won a narrow but clear majority. Compare and contrast this with the first-past-the-post system used for general elections in England, Scotland and Wales.  In a by-election in Stoke-on-Trent in February, 2017, the result was as follows:  Labour 7,853 UKIP 5,233 Conservative 5,154 Liberal Democrat 2,083 Others approx 800. Far more people voted against the Labour candidate than for him. And although turnouts in by-elections are notoriously low, a candidate winning with a minority vote is a normal event. In the 2010 general election, which returned the Tories to power (officially in coalition with the Liberal Democrats), two-thirds of MPs were elected on a minority vote. In 2015, 1,157,613 people voted Green, yet the party won only one seat; the average number of votes per seat for the Conservatives was 34,245. The figure for Labour was 40,290. Other small parties fare even worse than do the Greens:  3,881,129 voted UKIP, which like the Green Party won a single seat.16

The British electoral system is, then, far from democratic. This does not mean, however, that the European Union is any more so. It may be undemocratic in different ways, but undemocratic it certainly is. As I have said, the British people can remove their government and replace it with a different one. They can do this neither to the European Commission, nor to the twenty-seven members of the European Council who do not represent them and who, in an increasing number of policy areas, can impose policies on the UK which they, their parliament and their representative in the European Council and/or the EU’s Council of Ministers have all voted to reject. Qualified Majority Voting (QMV), as it is known, gives the British (and others) only a minority say in many of their own laws.17 This is defended in the name of “efficiency”, but democracy inevitably carries some inefficiencies and capacities for delay. Democracy and efficiency are different and sometimes conflicting values. No real attempt has ever been made to explain this to the British electorate, and certainly no such attempt was made by either side during the Brexit referendum campaign.

Aside from the fact that governments can be removed and replaced, the British system does also establish a clear line of communication from citizen to state.  Individual voters and social organisations can and do take grievances and suggestions to their MP who is then obliged, where appropriate, to present these to the relevant minister. This procedure is simple, clear and widely-known. It’s true that you can go to one of your MEPs (there are several representing each region) and ask him or her to take something up, which the MEP can then do in various ways, including with a parliamentary question to the relevant Commissioner. That Commissioner, however, lacks the decision-making capacities of a government minister and may have little or no knowledge of the member state in question. Unless your rights under EU law have been violated, when you may go – after exhausting domestic grievance procedures – to the European Court of Justice (ECJ), there is no procedure which links the citizen to the European Union’s decision-making structures equivalent to that  which exists within the UK. The vast distances and the enormous cultural and linguistic differences which exist within the EU make it unlikely that this will ever change.18

The problems with Bell’s paper begin with her failure to define some of her most important terms. Democracy is conceived rather narrowly in purely parliamentary terms. As I argue above, the British parliamentary system, at least as far as Westminster is concerned, is rendered undemocratic by the continued operation of a first-past-the-post system entirely inappropriate to determining the results of constituency elections in which three or more candidates capable of attracting serious levels of support may be standing.

Democracy is not simply a matter of elections, however, and Britain’s undemocratic nature is not limited to its electoral system. It has an unelected head of state and an unelected upper house; successive governments have deprived local authorities of substantial powers and resources; and no attempt is made to ensure that the people are well-informed about the decisions they are electing people to make on their behalf.

Finally, Bell does not really ask, let alone attempt in any sustained way to answer the question of why the people of the United Kingdom voted to leave the European Union, whose predecessor it joined over forty years ago. UKIP and the Conservative right, in inadvertent collaboration with the Guardian-reading liberal ‘left’, succeeded in transforming what should have been a debate about economics and politics into a culture war. A large slice of the electorate appeared to be voting on the basis of their beliefs about culture and identity, in relation to which EU membership is in reality scarcely relevant. By the day of the vote, the referendum question might as well have been “Are you okay with foreigners?” However, as Joe Guinan and Thomas M. Hanna point out in a recent article, a third of Labour voters backed Leave, and “Left-of-centre votes proved decisive in determining the outcome of a referendum that was otherwise framed, shaped, and presented almost exclusively by the right.” The EU is a neoliberal project, Guinan and Hanna remind their readers, and now that Britain is to abandon this project, “the place to look for inspiration is precisely the range of instruments and policy options discouraged or outright forbidden by the EU.”19

The real tragedy of this referendum was the failure to develop a coherent “Leave” position by a left – including Jeremy Corbyn – long critical of the European Union.  Far from leading to a greater understanding of the politics of neoliberal Europeanism and of the existence of alternative forms of international cooperation, the campaigns on both sides thoroughly obfuscated the real issues involved.  Only by destroying this European Union can we establish a proper system of international, inter-state cooperation which we desperately need to address the accumulating problems brought about by uncontrolled globalisation and the deadly synergies attendant upon climate change in the era of neoliberal capitalism.

Notes

1. www.theguardian.com/commentisfree/2007/sep/20/howjimcallaghanchangedthe

2. Cole, Mike, “The state apparatuses and the working class”,  in Hill, Dave Contesting Neoliberal Education: Public Resistance and Collective Advance (Routledge, 2011) 225

3. https://www.theguardian.com/politics/2017/jun/10/jeremy-corbyn-youth-surge-votes-digital-activists

4. http://www.bbc.com/news/uk-politics-36616028

5. http://lordashcroftpolls.com/2017/06/result-happen-post-vote-survey/

6. This and all subsequent quotations from Labour’s 2017 manifesto are taken from For the Many, Not the Few: A manifesto for a better, fairer Britain.

7. http://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=OJ:C:2007:306:FULL&from=EN

8. http://cor.europa.eu/en/welcome/Documents/Update%204%20June%2015/MOOC_EU_competition_policy_and_state_aid.pdf

9. http://ec.europa.eu/regional_policy/en/funding/erdf/; https://www.nao.org.uk/decision-support-toolkit/annexes/annex-c-eu-restrictions-on-state-aid/

10 http://www.polisnetwork.eu/uploads/Modules/PublicDocuments/4th-railway-package_summary-note.pdf; http://www.newstatesman.com/politics/2015/08/renationalise-railways-what-no-one-will-tell-you-we-cant-while-were-eu; http://theconversation.com/fact-check-do-new-eu-rules-make-it-impossible-to-renationalise-railways-61180

11. http://touchstoneblog.org.uk/2017/03/drop-the-mic/

12. http://ec.europa.eu/trade/policy/policy-making/

13. http://ec.europa.eu/trade/policy/

14. https://corporateeurope.org/sites/default/files/attachments/s2b-isds-at-a-dangerous-crossroads.pdf

15. http://touchstoneblog.org.uk/2017/03/drop-the-mic/

16. https://www.opendemocracy.net/ourkingdom/liam-anderson/voters-per-mp-why-first-past-post-failed

17. http://en.euabc.com/word/783

18. http://www.parliament.uk/get-involved/contact-your-mp/

19. Guinan, Joe and Hanna, Thomas M. “Forbidden fruit: The neglected political economy of Lexit”, IPPR Progressive Review, June 2017, http://onlinelibrary.wiley.com/doi/10.1111/newe.12032/full
 

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