The ‘Singapore scenario’: the uncertain prospects for labour standards in post‐Brexit Britain

• Date: 01 November 2017
• Published date: 01 November 2017
• DOI: http://doi.org/10.1111/irj.12198
• Author: Charles Woolfson

The ‘Singapore scenario’: the uncertain

prospects for labour standards in post-

Brexit Britain

Charles Woolfson

ABSTRACT

The Conservative government of Theresa May asserted that labour standards would

be preserved post-Brexit. The Labour Party also privileged labour standards in its

anti-austerity programme. The threat remains however that Brexit will provide an

incentive to erode labour standards in a global ‘race to the bottom’in a ‘Singapore

scenario’.

1 INTRODUCTION

The UK referendum of June 2016 to decide on whether or not to retain membership

of the EU yielded a voter turnout of 72.2 per cent with a majority of 51.9 per cent for

Leave as against 48.1 per cent for Remain (BBC News, 2016a; Electoral Commission,

2016). As negotiations commenced with the European Commission over the terms of

UK exit, it was quickly apparent that the combined asymmetric weight of the

Commission together with the remaining twenty-seven EU member states placed

the UK negotiators at a disadvantage. The possibility of negotiations eventually

collapsing without an agreement has remained real and would probably not be

removed until the final round of negotiations, with March 2019 as the official date

of UK exit, regardless of any subsequent ‘transitional arrangements’over however

many years (Bloomberg, 2017a). The prospect of failure to achieve a negotiated

Brexit and a chaotic exit from the EU single market and customs union without an

agreement on a future trading relationship with Europe was not simply an initial

negotiating stance but remained a real possibility (The UK in a Changing Europe,

2017). Such an outcome would entail a stand-alone UK immediately reverting to

World Trade Organization (WTO) rules come Brexit day, and the imposition of tariff

barriers on UK exports to continental Europe.

Not everyonewould see such an outcome as a disasterfor Britain. Take James Dyson,

one of Britain’s most celebrated entrepreneurs and an avid supporter of Brexit in the

UK business community.He has argued that WTO tariffs are not a barrier to financial

success or profitable trading with Europe, norhave they prevented his technology com-

pany from achieving record financial results. As Sir James has put it, the tariffs were

❒Charles Woolfson is Professor emeritus of Labour Studies at REMESO, Institute for Research on

Migration, Ethnicity and Society, Linköping University, Sweden. Correspondence to: REMESO, Social

and Welfare Department, Linköping University, Norrköping, Sweden, SE-601 74. E-mail: charles.

woolfson@liu.se

Industrial Relations Journal 48:5-6, 384–402

ISSN 0019-8692

© 2018 The Authors. Industrial Relations Journal published by Brian Towers (BRITOW) and John Wiley & Sons Ltd

This is an open access article under the terms of the Creative Commons Attribution-NonCommercial License, which per-

mits use, distribution and reproduction in any medium, provided the original work is properly cited and is not used for

commercial purposes.

‘tiny penalty to pay’compared with other taxes such as corporation tax (The Guardian,

2017a). Dyson’sannouncement of new investment of £2.5bnin order to build a research

and development campus in Britain was welcomed by Theresa May as an example of

investor confidencein post-Brexit business prospects. Less publicisedwas the announce-

ment that Dysonwas also to invest in Singapore, notjust in new production facilitiesbut

in associated R&D employing high-skill technology graduates from East Asia.

Extending the global reach of Dyson’s innovative products initially came at the

price of the closure of manufacturing facilities in England in the early 2000s, with

the controversial loss of 800 production jobs, about half the then total UK workforce

(The Telegraph, 6 February 2002). The success of Dyson’s business model has relied

as much on low-cost assembly labour (entailing a fraction of the wage costs of

UK), first in Malaysia, then in the Philippines and, more recently, in Singapore,

where the company is currently expanding. ‘Offshoring’initially permitted Dyson ini-

tial overall savings reportedly of about 30 per cent on production and distribution

costs (Hollinshead et al., 2002, 263). Today the company reports that sales rose 45

per cent year-on-year for 2016, while underlying profits rose a staggering 41 per cent

(The Guardian, 2017a). Dyson Corporation has reported to the UK authorities under

the requirements of the UK Modern Slavery Act that there is no forced labour in its

establishments and that it utilises an ethical database, supplier training, and audits

from independent third-party bodies. There also exists a ‘hot line’for worker

complaints (but no independent trade unions) (Dyson, 2017).

For the Conservative government a vision of a post-Brexit Britain, akin to a

European ‘Singapore of the West’, has a particular allure. It would be typified by a

business-friendly environment, low or zero corporation tax, low wages, weak trade

unions and a temporary migrant ‘non-citizen’workforce, largely without the

protection of national labour laws (McTague and Guerrera, 2017). This free-market

paradise colours Conservative Party thinking well beyond the ranks of the ‘hard

Brexiteers’in parliament. It is enthusiastically supported and argued for by Econo-

mists for Free Trade who are proponents of an ultra-liberal Brexit regime of unilat-

eral free trade solely governed by WTO rules (Dowd, 2017). A ‘Singapore scenario’

as a model for post-Brexit Britain would appear to offer the congenial prospect of la-

bour subordination, and its adoption would have significant potential implications

for labour standards in a post-Brexit Britain.

The article proceeds as follows: first, a brief overview of the watershed 2016 EU

referendum and the issue of labour migration provides the context. Second, the May

Conservative government’s rhetorical commitment to ‘social justice’and the preserva-

tion of labour rights is critiqued. Third, the UK’s‘Brexit’general election of June 2017

and its aftermath are considered. Finally, the possibility for advancing labour stan-

dards in the context of a developing anti-austerity movement is posed against the

rather more pessimistic ‘Singapore scenario’entailing a ‘race to the bottom’.

2 THE EU REFERENDUM VOTE AND MIGRATION

Migration flows to the UK, especially from other EU member states provided the

touchstone for the debates on EU membership during the 2016 referendum campaign.

According to the Office for National Statistics, EU immigration for work began to in-

crease following the EU Accession (enlargement) in 2004, from 65,000 in 2004 to

125,000 in 2007. There was a decline in EU immigration to the UK during the

financial crisis of 2008 and 2009 among EU8 citizens. Up until 2012, it remained

385Labour standards in post-Brexit Britain

© 2018 The Authors. Industrial Relations Journal published by Brian Towers (BRITOW) and John Wiley & Sons Ltd