Lord Adonis: The UK is heading for a moment of crisis

Posted On: 
13th July 2017

Andrew Adonis believes the UK could be heading for a 'catastrophe' as the country prepares to leave the European Union. The former Labour Cabinet minister talks to Josh May about what is at stake

Lord Adonis says it's vital that "political leaders sound the alarm bell" over a potential Brexit crisis
Credit: 
Paul Heartfield

Andrew Adonis is not a politician who slips easily into hyperbole, so when he uses terms like “catastrophe”, “moment of crisis” and “serious danger” to describe the UK’s current predicament it is safe to assume that he is serious. The peer has also recently retaken the Labour whip, after sitting as a non-affiliated peer for almost two years. So what has driven the former minister and adviser to Tony Blair back to the partisan battlefield? The answer is concise: “Europe.”

“People like me have got to be able to argue this from the inside and we can’t afford the luxury of sitting on the crossbenches where you can stand – or perhaps I should say sit – above it all,” he explains.

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Since Parliament has returned after the election, Adonis has been spearheading a campaign for the UK to remain a member of the single market and customs union. His argument is that the clear message from the referendum was that the British people want control of immigration, and that the government would be better served seeking that one big change from the EU – on free movement of people – than the “horrendous task” of trying to unpick and renegotiate all the threads of the relationship. He adds: “We’ll only be able to negotiate hard on the free movement of workers and right to settle if we aren’t also trying to negotiate on 101 other fronts by withdrawing from the single market and the customs union.”

Despite the EU’s blunt rejection of disentangling free movement from market membership – both since the Brexit referendum and during David Cameron’s attempted renegotiation – Adonis believes that there is a “fighting chance” that such a concession could be extracted in the Article 50 window that closes in March 2019.

“It’s realistic to renegotiate one big thing in two years, and if that one big thing is free movement of workers I think that could be renegotiated in two years. What clearly cannot be renegotiated in two years is Britain’s entire trading relationship with Europe, including the successors to the customs union and the single market. That simply isn’t realistic in two years.”

But isn’t that the inverse of the “have cake and eat it” caricature of Brexiteers? Whereas they want all the good bits of being part of the single market and customs union without being part of either, isn’t he seeking the good bits of leaving without leaving? Unsurprisingly, Adonis disagrees. He points out that, in his scenario, budget contributions, EU directives, and the jurisdiction of the European Court of Justice would all remain in place.

“This would be both the benefits and the obligations of membership of the single market and the customs union, apart from the issue of free movement of workers, and that would be subject to a separate negotiation. So I don’t see this as ‘have cake and eat it’; I see this as a fair deal between Britain and our European partners to mutual advantage.”

Last month, Adonis’ amendment in the House of Lords to the Queen’s Speech to keep the UK in the single market and customs union fell comfortably (172 to 104), as did a similar motion in the House of Commons tabled by MP Chuka Umunna. Nevertheless, Adonis is insistent that the vote would have gone his way – “easily” – had it not been for the whipping from Labour and Conservative leaderships. “The cross-party majority can’t express itself, which is a temporary state of affairs because ultimately people will express their views on an issue which is so important to the country,” he says.

Labour’s official position has been that the Brexit vote requires leaving the single market, while it has been non-committal on customs union membership. That has led some of those most worried about the consequences of leaving the EU to accuse the Opposition of signing up to the government’s agenda. Adonis says the stance is a product of the long-held views of Jeremy Corbyn and John McDonnell.

“I have enough respect for them to know that the reason why they are taking the position they do is because they are in fact eurosceptics. John McDonnell is deeply worried about being in the single market in terms of Britain’s autonomy in industrial policy in future. And Jeremy’s always been sceptical on Europe: he’s been worried about the degree of economic integration and whether that disempowers Britain in terms of its social policy and welfare state. I respect their position, those are respectable decisions, I just disagree with them.”

If he has concluded that Corbyn and McDonnell’s personal positions are set, he has not yet given up hope on changing Labour’s official stance. And he believes Shadow Brexit Secretary Keir Starmer could be the person to prompt a change.

“There is nobody who understands the intricacies of European trade law better than Keir and I’m confident that he can be the person who leads us to a good place on this,” he says. “He wants to reach a viable position and I think he’s persuadable that this is a viable position. I think to be fair to him, he’s not currently persuaded that we can stay in the single market and have a new deal on free movement of workers.”

Adonis is sensitive to the optics of a centrist figure from the New Labour days pushing a policy on the ascendant left. He downplays the divisions within Labour as “differences of nuance” rather than fundamental splits. And slightly mischievously, he points out that Corbyn and McDonnell have never been “shrinking violets” afraid of open debate and hopes to recruit the new members and supporters – especially the “army of young people” attracted by Corbyn – to bolster his case.

“They love Jeremy Corbyn, they also love Europe, and what we’ve got to do as a party is to reconcile those positions,” he says. “I believe they can be reconciled. They’re reconciled by us acknowledging that the electorate voted to leave the European Union but they did not vote to make themselves poorer... I believe that we can have our cake and eat it. We can have Jeremy as leader and we can remain committed to the single market.”

Labour, says Adonis, remains in a “state of shock” after its election gains – as are the other main parties in the UK. He calls on MPs worried about the current Brexit path to use this “great disruption” to forge alliances across the House. “The Conservatives haven’t recovered from the shock of Brexit; Labour hasn’t recovered from the shock of doing so well in the election; the Lib Dems haven’t recovered from the shock of being decimated and intellectually destroyed by coalition with the Conservatives; and the SNP hasn’t recovered from the shock of being overwhelmingly popular in Scotland and now discovering that that’s a temporary phenomenon.”

Cross-party consensus-building is something he is familiar with, not least since he became chair of the National Infrastructure Commission in 2015. His concerns about leaving the EU carry over into that job as well. The initial post-referendum period when the economic impact was limited may be coming to an end, Adonis suggests. “What business did was to generate a false degree of optimism that we might never seriously leave, and I think that optimism is being dissipated at the moment.”

He says he sees “completely eye-to-eye” with the Prime Minister on infrastructure planning, works “particularly closely” with Philip Hammond and, through the course of the interview, also praises Vince Cable and Andy Street. And he is confident that that bipartisanship will continue now he has retaken the Labour whip which he gave up (though he remained a party member) when first appointed to the NIC job in 2015.

“I am every bit as committed to forging a strong consensus for infrastructure investment as ever before. And though we’re talking about Europe now, my passion for infrastructure is undimmed and that’s my day job for the three days a week I’m contracted to work for the National Infrastructure Commission. I do Europe and other things in the other two. They’re quite long days!”

One of those “other things” involves critiquing the Coalition government’s university tuition fees policy. Adonis was an education adviser to Tony Blair when variable fees were introduced but he says the upfront payment model may be impossible to save after the “colossal mistake” of raising the ceiling to £9,000 and hiking interest rates. “What they did was to delegitimise the fees regime overnight,” he says.

What, then, could replace the existing system? Corbyn won support with a promise of outright abolition, but Adonis is more cautious: “All I’m sure about is that the status quo isn’t sustainable. I don’t know whether some form of student or graduate repayment may now be viable. I think there’s going to be a big job to win the trust of students for it. But because I always try to be honest in my thinking and explanations, where I’ve got to is recognising that the status quo is unsustainable. What should replace it is a massive job of work and I haven’t worked that one out yet – though I’m giving a lot of thought to it.”

His big push on membership of the customs union and single market also came about after diving into the details of the EU debate after deciding that “we all need now to understand what is going on”. His research led him to view the government’s strategy as “even madder” than before, as he realised trade deals with 74 “third countries” were entangled with the EU treaties. He likens the idea of leaving, only to re-make those deals, to “trying to fill a swimming pool with a teaspoon: it may be an interesting idea but don’t jump in for three centuries”.

So, after such a pessimistic verdict on the current trajectory of the Brexit negotiations, how high are the stakes?

“My language is usually pretty subdued in politics. But anyone with a historical sense – and I’m a historian – recognises that leaving the economic institutions of the European Union, which have guided our destiny as a trading nation for half a century, is a very big step and the importance can’t be overemphasised. To my mind, it’s as big a step that we’re taking as a country as decolonisation in the 1950s and 60s and appeasement in the 1930s. We got it right on decolonisation; we got it wrong on appeasement and I think we’re in serious danger of getting it wrong in the way that we leave the EU.

“If we can’t have our cake and eat it then we face a serious relative decline in our living standards compared with France and Germany and I don’t believe the British people will put up with that. So we would, in that event, I believe face a crisis. It may be a crisis played out over quite a number of years – which, after all, is what happened with appeasement – but there will be a crisis. It’s important for political leaders like me to sound the alarm bell because it’s important to understand what might be at stake: in 18 months’ time, people may require visas to go to France.

“Can you imagine what the Great British public is going to think?”

 

ADONIS ON LABOUR’S ‘BROAD CHURCH’

“The interesting thing about the debate is that no one is leaving the party. In the 1980s a large part of the social democratic wing of the Labour party left; no one has done that so far and I don’t think they’re going to either because this is a friendly debate amongst colleagues. It’s had nothing like the bitter intensity of the debate in the 1980s – I was there, I know what it was like, it was bitter and horrible and that isn’t the case with the debate at the moment.”

ADONIS ON YOUNG VOTERS

“People like me thought that the young just weren’t voting because they had no interest in politics. It’s now clear that they weren’t voting because nobody was making a good enough offer to them and mobilising them.”

ADONIS ON A NEW CENTRIST PARTY

“An absolutely indispensable requirement for a new party to be set up was that the Liberal party had to vanish. People thought it might vanish at this election; people were talking about it going down to two or three seats. That didn’t happen. Vince Cable is a very substantial political figure, he will play a big part in the national debate going forward, he has a great capacity to command the airwaves because he says such sensible things.”

ADONIS ON CALLING THE EU REFERENDUM

“This is, to my mind, an entirely self-inflicted wound caused by David Cameron’s calling of the referendum. The reason it became the centre of national debate is because David Cameron called the referendum. I was in government when we had the Iraq crisis, there were a million people on the streets of London clamouring against the Iraq War; there were never a million people on the streets of London clamouring for a Europe referendum.”