The Tory party is in crisis over what sort of Brexit to pursue. It is torn between the needs of big business, the xenophobia of its members, and the Hard Brexiteers like Boris Johnson and Jacob Rees-Mogg. The lack of certainty about what Britain’s relationship will be like with the rest of the EU after Brexit has alarmed the representatives of capital. The CBI, the Institute of Directors, the National Farmers Union and the Society of Motor Manufacturers & Traders have all called for a long transition within the single market. They are even worried about the government’s proposal to introduce tough migration controls which would choke the supply of low paid, flexible and pliant labour especially in the agricultural sector.
A further crisis has erupted for the Tories with Boris Johnson’s latest article in the Telegraph calling for a hard Brexit. This is being interpreted as a leadership bid and a number of ministers are calling for his dismissal. Whichever way May responds to this, she will come under further attack and be more weakened.
When David Davis, Michael Gove, and Johnson pushed for a Leave vote in June 2016, they had not thought through the consequences. They believed it was just about stopping immigration, reclaiming UK sovereignty over trade and investment, continue undermining workers’s protections and rights while campaigning about saving £350 million a week that could be used instead for the NHS. However, disentangling 45 years of treaties and negotiating new trade agreements with the rest of the world in two years from the triggering of Article 50 is not simple. This is especially so when the Tory front bench is deeply divided over what it is seeking from the Brexit negotiations. Some like Foreign Secretary Boris Johnson want a clean break – or a hard Brexit – on the 30 March 2018, with no transition period or financial settlement. This, Johnson believes, will lead to a “glorious” future for Britain as it is opportunity to lower taxes. The hard Brexiteers have a clear vision for a post-Brexit Britain: an off-shore tax haven with low taxes, a small state with few public services, and an even more flexible and low-paid workforce.
Seeking to reassure both industrial and finance capital, the Chancellor Philip Hammond has been recently arguing for a soft Brexit with Britain’s relationship with the EU to be “similar in many ways” to what it is now and with a transition period of up to 3 years. But in August he then made in a U-turn in a joint declaration with Hard Brexiteer and International Trade Secretary Liam Fox that Britain will be “outside the customs union” during the transition and that it “will not be party to the EU treaties”. He then made another U-turn in September when he declared that the Brexit transitional deal that the government is seeking will “look a lot like the status quo” to minimise the impact on British business!
With the government spinning around like a top, it is no wonder that other EU leaders are exasperated and are warning that the negotiations are leading nowhere fast. The real danger is that the chaotic approach to the Brexit negotiations could lead to Britain crashing out of the EU, the consequences of which would be even worse than that of a negotiated hard Brexit. Even a hard Brexit would cause severe hardship for people in Britain. The democratic right to freedom of movement of people (albeit within the single market area) will be lost for British nationals and other EU citizens. Tough residency arrangements will be required for the 3 million citizens from other EU countries. New cruel migration proposals would require “low skilled” workers to have a work permit for just two years with no possibility of families being reunited in Britain.
The Hard Brexiteers want to tear up as many progressive social, labour and environmental gains as possible by introducing “Henry VIII” powers which allows government to change laws without parliamentary discussion and approval. If no new trade deals are in place (and they cannot be negotiated while Britain is in the EC), then trade will be under WTO rules with its punitive tariffs. These will be passed on to consumers and could lead to a deep recession rather than the current economic stagnation. Any trade deal with the USA, the largest importer of goods from Britain after the EU, would likely be on Trump’s “America First” principles: Britain would have to import GM foods, hormone-fed beef and chlorinated chicken.
The consequences for a hard Brexit would provoke a crisis for the EU which probably would be manageable, but it would provoke a very severe crisis for Britain. At the moment, about 45% of exports from Britain are to the rest of the EU, while less than 10% of exports from the rest of the EU goes to Britain. The idea that there is the possibility of “global Britain” making free trade agreements all over the world is pure fantasy.
In this context, Labour’s proposal to remain within the single market for a transitional period is welcome. It would reduce the risk of the Tory government using Brexit to tear up existing progressive social, labour and environmental gains to turn Britain into a low tax country with a minimal state and a flexible workforce. It would maintain the status quo, at least for a while, without being in the EU: there would be no tariffs, quotas or taxes on trade, and it also includes the free movement of goods, services, capital and people. It also minimises conflict with Labour voters and members who voted Leave by not challenging the result of the referendum head on, while leaving open the possibility that the right time to do so could arise.
In arguing to remain in the single market for a transitional period, it is critical that there are strong, loud and united voices defending the rights of EU citizens, what free movement there is, and opposing all xenophobia. That’s why the founding of the Labour Campaign for Free Movement has been important.
There should be no illusion that the EU’s single market is a progressive alternative to Britain in its current state. They are both capitalist, and both pushing a neoliberal programme of austerity and privatisation. But just like the vote to Leave in the referendum opened the door to xenophobia and racism, a hard Brexit would give confidence to the sections of the ruling class who want an even deeper neoliberalism.
Jeremy Corbyn told the TUC congress that “this weak and chaotic government can be prised out of Downing Street”. The Tories are certainly weak, divided and in crisis because of the chaos over Brexit but also because people are feeling the impact of continued austerity. As Brexit approaches, there will be a realisation that the financial cost to individuals of a hard Brexit would be severe: people voted for Brexit but not for poverty. The Tories will try to avoid at all costs another election which they would lose to Labour. They need to be pushed out of office as soon as possible. A resurgent Labour with its anti-austerity programme, campaigns to defend the NHS and education, and industrial action by the unions for a decent pay rise offers a real opportunity for that to happen. We need to keep up the pressure at every level – on the streets, in the workplaces and in political debate.