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While Britain’s Conservative government has taken definitive steps on Brexit, the Labour Party is no longer fighting the effort as a practical matter, but is looking to develop social democratic principles for the economy, says Professor John Weeks

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SHARMINI PERIES: It’s the Real News Network. I’m Sharmini Peries, coming to you from Baltimore.

After making significant gains in the local council elections on May 3, the British Labour Party has published a new economic platform. The Labour Party is almost unrecognizable these days when it comes to the way in which it is talking about the economy compared to what it was like just a few years ago. Now, the new economic platform is very detailed, and it contains plans to reform the tax system and financial systems, increase investment in infrastructure, and in sustainable energy and housing.

Now, on to talk about all of this with me is John Weeks. He’s professor emeritus of the University of London School of Oriental and African Studies, and the author of “Economics of the 1 Percent: How Mainstream Economics Serves the Rich, Obscures Reality, and Distorts Policy.” John, thank you so much for joining us.

JOHN WEEKS: Thank you very much for having me. Let me say it’s very important that the Real News is interviewing me, because it’s extremely difficult to have a discussion about economic policy, of Labor’s economic policy, in Britain because the forces that are opposed to progressive policies want to discuss diversionary issues such as Brexit, Jeremy Corbyn’s alleged anti-Jewish views, and that he’s really a Russian agent, all of those things. And so it’s a great relief actually be able to talk about Labour’s economic policy. You have a lot of watchers in London. So this is quite important.

SHARMINI PERIES: John, let’s start off with the Labour Party’s approach to developing a new economic plan for the party, and the kind of exercises it is engaged in in doing that.

JOHN WEEKS: Well, I think that, as I suspect, most of your viewers know the Labour Party has changed dramatically since Jeremy Corbyn became the leader. It is now a social democratic party again, or at least the leadership is. There is quite a split among the members of parliament, but we don’t necessarily have to go into that, unless it’s relevant. And there’s been widespread consultation by, in Labour Party, local constituency parties, and through the organization Momentum, through which you have got Jon Lansman on, I think, recently. He is, of course, one of the leaders of Momentum.

So there’s been widespread consultation. I don’t want to be romantic and say, you know, it’s all bottom-up. But the leadership has made a sincere and I would say extensive attempt to present their policies to a very large number of people, and to get reactions to those policies. And that is, I would say, unprecedented, or at least over the last 20 or 30 years.

SHARMINI PERIES: Now, give us an example of that, John. You were just citing to me offline that just this weekend there was a fairly large conference that took place in terms of this sort of consultation that’s underway.

Yes. On Saturday at one of the colleges there was Labour’s state of the economy conference. There have been several of these. And Jeremy Corbyn spoke at the beginning, and John McDonnell spoke at the end. About 800 people there. Most impressive was the wide range of panels and plenary speakers that ranged from very committed feminists, and gay and lesbian representatives, sort of a people talking about fiscal policy and a, a quite narrow stance about things like budget, whether or not a large deficit should be, how big the national debt should be, monetary policy. So there was quite an interaction with the audience. I was at a session in which a new organisation was launched, which [inaudible] progressive economy forum. We had about eight people, and there was an exchange and arguments over what policies should be implemented.

So it’s quite an exciting time. It would be more exciting if we actually were in government, but that day will come.

John, it was no secret that Jeremy Corbyn didn’t support the move for a Brexit to leave the European Union. Yet once the people in Britain voted for the Brexit, and the Labour Party has been grappling with this issue of how to respond to it. But in this economic platform it really clearly takes a position on Brexit, stating that Labour accepts the referendum, and, and that Labour government will put the national interests of the country first. What does this mean, and does it mean that Labour will give up on the issue of remaining in the EU?

JOHN WEEKS: Well, I think there are two big issues here. One is if a British government, whatever it was, Labor or Conservative, if the regime wanted to remain in the European Union, could it do so? That’s the first question. And then what is the position of the Labour Party? The answer to the first question, I think, is no. That the British government, the current Conservative government, has taken a number of absolutely definitive steps which have never been taken before by any member of the European Union to leave the European Union. They held a referendum, which was then won by people who wanted to leave the European Union. I supported remaining in the European Union, and I still do, though I think it is no longer possible to do so. In fact, I was on the Real News several years ago speaking in favour of staying in the European Union.

So, first it was a referendum. Then the government passed legislation announcing its intention to leave within two years that related to a particular provision of the European Union’s treaties. The Labor Party supported that legislation. And now the deadline will come just over, well, actually just under a year from now. Would it be possible to reverse that? Could a Labour government come in, and let’s say we have a Labor government within, before the two years run out, I very much hope we do, it came in and said, well, actually, we’ve changed our mind. We’re going to repeal the legislation, and we’re going to go back to the original position we had for the referendum, or the referendum was only advisory.

I suspect the response of the European Union leaders would be to say no, that Britain has to re-apply. They might facilitate Britain re-applying, but the implication of Britain re-applying is that it would lose certain key advantages, or opt-outs, as they are called, which you had, which Conservative and Labour got and negotiated. And those opt-outs, the most important of them is the opt-out to join the euro, the European currency. So if Britain came back in, if it were re-admitted, if it re-applied, then it would have to commit to joining the euro.

Now, the importance of that, forgive me for going on for a while, is it would be almost impossible to sell that to the British people. If a Conservative government or a Labour government were to say we are going, we’re staying in the European Union, and we are going to join the euro, that government would certainly fall. And so it would be very difficult to remain in the European Union as a practical matter.

The practical implication of the arguments over the European Union, and this is shown in the really only centre-left newspaper, the Guardian, which is very pro-European Union, the implication of that is to try to weaken Corbyn’s leadership. That is the practical consequence of it. I say that as someone who would like to stay in the European Union, but whether or not Britain can stay in the European Union I would say now is, as Jeremy Corbyn said, the train has left. Maybe something could have been done a year ago. Nothing can be done now. Britain will leave the European Union. The question is, under what conditions? But it is a very powerful club to beat the Labour leadership with.

SHARMINI PERIES: All right. Now, there are many other features in this economic program. It tries to tackle issues, big issues, like education. Of course, the, the NHS program, the National Health Program. And in fact, in this platform they’re talking about having a national education system which is similar to the NHS, in terms of how it might be administered. Can you talk a little bit more about what else is on that platform, which includes the education sector, and why you feel that the British education system needs fixing, according to Labour?

JOHN WEEKS: The British system, as, of course, as in the United States, it has publicly-funded schools, state-funded schools, and it has private schools. And then, in addition, the Conservatives, the Tory party, Tory leadership, want to return to a system which was largely abolished about 12 years ago, in which within the state system there was a hierarchy. And there was sort of a elite stream, which were called grammar schools. And then there were for the schools for everybody else, which were called secondary modern. In effect, grammar schools were the equivalent of privately-funded schools with the public sector, though they were funded by the State. The Labour Party will eliminate the hierarchy within the public sector, and will put the funding on a sustainable basis.

The current system is, I think people in the US can’t imagine this because they’re going through the same thing in many communities, underfunding of schooling, and shortages of teachers, buildings deteriorating, inadequate teaching equipment and a lack of modernization, an inadequate number of computers and things such as that. The Labour Party, by having a national education system, like a national health system, will remedy that. It won’t be done immediately, but I think it could be done in the life of a five-year Labour government.

SHARMINI PERIES: John, Grenfell tower is still vivid in many people’s memory, where the tower was burning. And the issue of housing was highlighted not only in the UK but the world over, the issues that poor people have in terms of housing. Now, the housing crisis in Britain is something that the Labour government is promising to address by building over a million new homes. Tell us about those programs. Are plans underway?

JOHN WEEKS: Well, I think the Grenfell Tower event was, it was a national scandal. Continues to be a national scandal. It involved a tower block, a high-rise apartment block, which had cladding on the outside, a covering on the outside, which was flammable. And a very large number of people were killed in that building. Americans who have seen the images of people leaping from the twin towers on 9/11, well, you have a good idea of what happened.

That highlighted a national problem that’s been around for a long time: a shortage of housing. This shortage of housing is the result of conservative governments not building affordable housing. So as a result you have had a housing market, particularly in cities, in London, but in other cities also, which is becoming increasingly unaffordable, and people living in extremely crowded circumstances.

Labour will solve that problem in [certain ways]. One, of course, is committed to building housing. But the, the issue is what will be the institutional form that housing will take? And increasingly, the policy is that it will be what’s called council housing. And what that means is that it will be rental accommodation owned by the state, with affordable rents, and in which people can live and not go into poverty as a result of the exorbitant housing costs. How will the housing be financed, how will construction, because we’re talking about a very large financial commitment. This will be done through a public sector investment bank, which is part of the Labour program, as you probably know. And that public sector investment bank will be properly funded, and will build, and will finance housing all over the United Kingdom, and will finance it through the local government.

So this is not just a question of contracting private companies to build housing, which has pretty much been what little the Tories have built, is what they’ve done. But this will mean having local governments organize, locate, arrange the design of this housing, and then contract people to build it.

SHARMINI PERIES: All right. There is quite a bit for us to discuss, John. Let’s go into this whole issue of finance. Now, finance and how the state regulates finance in the country has become a major issue in all of the world, in the U.S. and UK alike. What are the plans to reform the financial system and regulate it?

JOHN WEEKS: Well, this is an area where I was meeting today with the shadow Chancellor of the Exchequer. That would be the equivalent in the U.S. of the, the Chancellor of the Exchequer is like a Secretary of the Treasury. And in Britain you have the system that the opposition party has a parallel person that corresponds to every ministerial or governmental post. And the shadow chancellor of the exchequer in Britain is John McDonnell. Banking is something which he has given extreme priority to throughout his career and in parliament. So he’s very concerned about it. Having said that, this is a potentially very dangerous territory for the Labour Party. Of course, the mainstream press is just waiting for John to say something about, you know, how they’re going to regulate financial markets. And then he will be attacked as a dangerous socialist, a Marxist, someone who is too irresponsible to serve as chancellor.

What have they said they’re going to do, and what will they do? First, they will regulate the financial sector. Initially this will be done through several concrete mechanisms. One will be very much tightening the accounting practices of the financial sector, and monitoring financial capital’s accounts, you might say, in a much tighter way. Second, it will be through using the Bank of England as a much more, as a regulator of financial markets. And I think being considered are, I would recommend that would be considered, actual types of financial regulations such as limiting speculation. A simple policy which has been suggested, which has not formally been accepted by the Labour Party, but one that is being discussed is that there would be, if you buy stock or bonds, unless you hold it for a certain period, you’ll be taxed when you sell it. For example, if you if you buy a stock or a bond, you sell within six months, there will be a tax on that. That is a type of policy which is employed a number of countries, famously in Chile. But it would reduce the extent of speculation.

Having said that, financial markets are very, very powerful, and some bold steps must be taken. The Labour Party is considering them, and I think could there be, for example, a run on the pound if a Labour government were elected? I think it’s quite possible. What can you do to prevent that? I think the answer to that is there are certain types of capital regulations need to be seriously considered as short-term measures. And the, while they’re not specified in the manifesto, there is a clear commitment there to taming financial markets.

SHARMINI PERIES: All right, John. There’s so much more to discuss with you, including the plans of the Labour Party as far as the military sector is concerned. Spending around buying new equipment, and so on. But let’s leave that for another day, and we’ll look forward to having you back. I thank you so much for joining us today.

JOHN WEEKS: Thank you very much for having me, and thank all the listeners for, for tuning in. And it’s always a pleasure to be on the Real News Network.

SHARMINI PERIES: Thank you, John. It’s a pleasure to have you. And I thank all of you out there listening to the Real News as well, and please join us again.

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John Weeks is Professor Emeritus and Senior Researcher at the Centre for Development Policy and Research, and Research on Money and Finance Group at the School of Oriental & African Studies at the University of London.