Brexit on a knife edge: Deal or no deal?

After four years of extremely painful and sometimes tedious negotiations, the ‘deal’ to leave the EU now looms.  The pendulum has swung backwards and forwards between a likely deal and then the prospect of a ‘no deal’.  Within days, we will know the outcome but it is once again necessary to go over the likely prospects for the working class, whatever the outcome.

By Mike Forster, Socialist Alternative Political Committee

After four years of extremely painful and sometimes tedious negotiations, the ‘deal’ to leave the EU now looms.  The pendulum has swung backwards and forwards between a likely deal and then the prospect of a ‘no deal’.  Within days, we will know the outcome but it is once again necessary to go over the likely prospects for the working class, whatever the outcome.

Why Do Both Sides Need A Deal?

Probably British capitalism will have the most to lose from a no deal scenario, business leaders have been lining up to warn Johnson of the consequences. It isn’t just the possibility of up to 30% tariffs being slapped on British exports to the EU which worries them, but also the massive hold-ups at British ports should additional trade controls become necessary. A combination of a sudden rush in trade (there has been a 30% increase in goods being handled since September), as firms try to stockpile goods in the event of a no deal, plus delays due to covid-19 and an anticipation of customs delays at European and British ports, has produced huge problems on both sides of the continent. The British Freight Association has described the delays of the last 10 weeks as creating a “breakdown of the conveyor belt of ships and containers and the return flow of empty containers”.  

All these problems are an anticipation of either a soft or hard border which will inhibit the existing free flow of goods between the EU and the UK. Such delays will have big repercussions for working people in the form of higher prices and potential job losses.

Some economists have predicted a further fall in British GDP of 2-3% in this event. This in turn would create huge problems for Johnson within his government and wider society. Despite his rhetoric about ‘sovereignty’, Johnson would prefer some kind of deal to avoid any further shocks to an already fragile situation – economically and politically.

Likewise for the EU, they fear the economic disruption of border controls and economic tariffs. It will benefit no one to have an intensification of trade tensions against the background of the largest drop in economic growth for over 300 years. The EU is desperately trying to put together their own recovery plan which remains mired in dispute between different EU nation states. They also fear the political consequences of Brexit for the ongoing unity of the whole EU project, since all the tensions of this last year can easily spill over into very strong nationalist and anti EU sentiments between nation states and amongst the wider working class.

What Have Been the Sticking Points?

Both sides approached these latest discussions with their own ‘red lines’. Irrespective of the arguments around fish, the other issues remain what they call ‘level playing fields’ and ‘British Sovereignty’. Socialists have to apply their own analysis to these issues. 

British capitalists need unfettered access to European markets which continue to make up the majority of British exports so Johnson continues to demand tariff-free trade. The EU has indicated it is willing to agree in exchange for an equal arrangement for EU goods coming into the UK, including all European trading standards. Johnson wants the ‘freedom’ to apply British only standards i.e. the ‘freedom’ to apply even more diluted workers rights and safeguards. 

Sunak’s promise to deliver ‘free ports’ all over the country is a grave warning to the working class as this will involve a huge attack on workers pay, conditions and rights. Socialists have to remain very wary of references to British sovereignty as this will only apply to capitalist and not workers’ interests. We cannot and will not trust the Tory government or the EU to look after our interests in these negotiations. 

As we said last month: “Connected with this, the section of the Tories around Johnson want the freedom to use state aid in order to give British companies support not possible under EU rules, which will still apply to Britain under the current arrangements if it affects the “integrity of the EU market”, including, for example, if the British government wished to provide state aid to a company which also had operations in Northern Ireland. This form of state aid will not be used to save jobs or public services, but instead as a way of subsidising big business, such as tech companies which Johnson hopes will allow Britain to compete with the US and China.”

Negotiators were willing to find a way through this minefield but they came stuck at the 11th hour, largely for secondary reasons and both sides found themselves edging towards an outcome neither side wanted, a no deal. They are now trying to row back from this outcome but in reality these and future negotiations will not resolve the many problems which will arise from Brexit.

Why is any Outcome going to Create more Problems?

The irony of Johnson’s claim to be protecting the UK’s interests in his short lived government lies in the fact that the UK is falling apart.  A majority of Scots now favour independence mostly as a means of escaping Tory rule which millions see as having contrasted sharply with the Scottish government’s handling of the covid-19 crisis. The Brexit chaos has added to these sentiments. The same can be said, but as yet not as pronounced, for Wales and now even the emerging North-South divide.

Although Johnson has offered to drop the infamous Withdrawal Bill in exchange for other concessions from the EU, the completely intractable issues in Northern Ireland will continue to haunt him.

Johnson’s claim to have an ‘oven ready’ deal which would allow him to ‘get Brexit done’ in last year’s election is now ringing hollow across the whole country. Johnson has squandered his lead following the election through his bungled handling of the covid-19 crisis and now comes across to large sections of the working class as incompetent, unable to deal with complex issues. This huge and rapid fall in popularity has found expression within the ranks of his own party with some backbenchers already questioning his competence and leadership. This in turn has fed through into the negotiations where there appears to be a collective mistrust in Johnson in particular and his government in general. These tensions came to a head recently with the forced departure of Cummings and others as parliamentary aides which revealed the massive ongoing splits in the Tory Party.

Johnson’s weaknesses are a factor in the current situation but in reality the huge structural weaknesses of British capitalism in the present period cannot be overcome by any deal or no deal for that matter. The fall in British GDP this year was by far the worst of any of its European rivals. Manufacturing capacity is lower than 10% of output, with the economy highly dependent on hospitality, tourism, services and speculation – the very sectors which have been hardest hit by the covid-19 crisis. The British capitalists have developed an economic model which is seeing them fall further and further behind their rivals. Their answer to these self made problems has been to administer the ‘medicine’ for working people of low pay, privatisation, and huge job insecurity.  We can now add to that list growing mass unemployment. These measures have  weakened them further whilst creating the largest gap between rich and poor in recent history.

When Johnson and Gove sold the idea of ‘taking back control’ in the 2016 referendum, it resonated with many workers. This promise will come back to haunt them as workers begin to rely on themselves and their own actions to take back control for the working class as a whole and not rely on capitalist politicians to do it for them.

What is the Answer?

Socialists do not believe that working class interests can be met by capitalism. Whether in or out of the EU, whether there is a deal or no deal, capitalism exists to serve the minority rich elite.  Whatever measures they might take, they cannot succeed. The covid-19 crisis has revealed all of society’s ills. From an economic point of view, capitalism has been bailed out with unprecedented state bailouts. They could not have survived this economic shock otherwise.  

But the resulting social crisis which is now unfolding is storing up anger and resistance on a huge scale. The capitalist response has been to retreat behind state boundaries and entertain more trade wars. This is being played out in the so-called ‘roll out’ of the covid-19 vaccine which has turned into a free-for-all between the richest countries taking the lion’s share for themselves and leaving the poorest and most vulnerable without. This is the real meaning of capitalist cooperation.

Working people have, on the other hand, moved for the most part towards solidarity and mutual support, choosing not to wait or rely on governments or business to look after each other.  It is this instinctive class solidarity which stands in sharp contrast to the capitalist ‘beggar thy neighbour’ attitude.

The capitalist EU is not the answer and neither is the nationalist go-it-alone approach of the Tories. Deal or no deal, Sociaist Alternative stands for the international solidarity of the working class. We restate our aims and position:

  • Trade unions must organise emergency conferences to organise the fightback against any anti-worker trade deal – whether with the EU or the US – or in the event of a no-deal Brexit, including against any attacks on workers’ rights, on jobs, pay and conditions or closures.
  • This struggle must be organised across borders and internationally – Resist the race to the bottom!
  • Oppose the hardening of borders – either in Ireland or the Irish sea. For workers’ unity against sectarianism!
  • For the right to self-determination of the Scottish population, including the right to a referendum on independence. 
  • No to a Tory Brexit! No to the neo-liberal, capitalist EU! Oppose anti-worker trade deals – struggle for nationalisation of key industries, under democratic workers’ control and management, as a step towards planning the economy in the interests of the working class.position :
  • For a free, voluntary and equal socialist federation of England, Wales, Scotland and Ireland, with the rights of all minorities protected, as part of a socialist Europe and a socialist world
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