As the vote of no confidence by 75 per cent of Labour MPs after the EU referendum result showed, Jeremy Corbyn is at his most vulnerable over Brexit. The 2017 election result may have wiped away memories of this painful period, but to say that it shows the vote of no confidence didn’t matter goes too far. Unfortunately, Labour still lost in 2017 as its powerlessness over Brexit shows. How do we know that the perception Labour MPs were deeply unhappy with their leader did not cost the party the crucial votes that prevented it forming a government?
Voters currently seem as divided over Brexit as they are by party, and most Labour voters and members want the UK to stay part of the EU. There will therefore be no better time for centrist Labour MPs who are pro-Remain to break away and form a new party. When Brexit happens there will be a lot of bitterly disappointed people around questioning where to go from here. That several Labour MPs have been talking about the possibility of forming a new party is an open secret.
Unfortunately Corbyn has done virtually nothing for members and voters who closely identify with Remain. Hopes have been kept alive by Keir Starmer and, occasionally John McDonnell, but neither attended Corbyn’s recent talks with Theresa May. The overriding impression given by the leadership and its supporters is that they do not want to antagonise Labour Leavers and that they assume Remainers have nowhere else to go. It is never a good idea to give the impression to those closest to you that you take them for granted.
If the objective of a new party is to remake UK politics, it is almost certain to fail. But that is not what is important. The key issue is how much damage it can do to the two main parties. One of the lessons of the last two years is that the Conservative vote is pretty solid. Brexit is, in a way, the Tories’ Falklands: an issue that allows them to ramp up nationalism to the maximum and distract voters from the government’s incompetence and the damage it is doing to this country. The minority of Conservatives who can see through this will be scared by stories (often false) of what a radical Corbyn government will do.
The new party therefore seems to be mostly a threat to Labour. This is true in part because our future trade relationship with Europe will play a major part in politics from now until the next election. (Those who think that leaving the EU in March, or soon after, will stop politicians talking about Brexit will be very disappointed.) If the new party pledges to fight for staying in both the customs union and single market after we leave the EU, that will tempt Remain voters, because Labour speaks only of a close relationship with the single market. There is a world of difference between being close and being in: ask any trading firm why. Staying in the single market requires freedom of movement, and this would allow the new party to attack Labour over immigration, where its recent actions have also made it vulnerable from the perspective of liberal voters.
The problem a new party faces is that the MPs likely to be part of it will find it hard to major on radicalism. Will they really champion immigration, or instead fall back on anti-immigration rhetoric? If they match Labour’s economic radicalism with a kind of nostalgia for how things were before 2016, they will find to their cost that this nostalgia is not widely shared. All of these things mean that the party will fail to capture most Labour supporters. However, when it comes to winning the next election, Labour do not have supporters to spare. To lose some to a new party could mean another five years of this disastrous Conservative government.
What we can be sure of is that the media, pretty well all of the media, will hype the new party up as much as they can. The reason they will do this is that a new party is a threat to Labour, rather than the Conservatives. A consequence of the media blitz will inevitably be that some votes, mainly Labour votes, will follow. So whatever line the new party takes in general, if it is pro-Remain it is quite likely to be a threat to Labour at the next general election.
In economics, we talk about “barriers to entry” that prevent new firms entering a market. Some of these are intrinsic, such as set-up costs for a new firm. But existing firms in the market can also influence whether new firms enter or not. Corbyn’s Brexit strategy so far seems designed to create a ready market of customers who are dissatisfied with Labour’s policy on Brexit. In other words, Corbyn is currently creating the conditions in which a new party could enter, and survive for long enough to cost Labour the next election.
This piece originally appeared on Simon Wren-Lewis’s blog Mainly Macro
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