Brexit will make working people poorer

Photo: Duncan C
Building a massive coalition in favour of Brexit was a triumph for the hard right Tories and Ukip writes Andy Stowe. A lot of working class people were persuaded to vote for something that will make their lives worse. The Treasury’s figures indicate that a hard Brexit will reduce GDP by 9.3% and every other form of departure from the EU has a negative economic impact.

The Brexiteers used a squalid old trick. They argued that immigrants caused low wages, job insecurity and the housing shortage and millions believed them.

Nearly one third of people who voted for Brexit believe that Muslim immigration is part of a conspiracy to Islamicise Britain. Almost half believe that the government is hiding the real numbers of immigrants. This willingness to believe racist conspiracy theories floating around the internet is one piece of evidence that Brexit voters are drawn from the most backward sections of the working class. If we extrapolate those survey results it suggests that more than 8.5 million people were motivated to vote in favour of leaving the EU because of their reactionary views on immigration. And that 8.5 million doesn’t include those who don’t believe in conspiracy theories, but just don’t like immigration.

Another piece of research describes Brexit supporters as the “squeezed middle” and argues:

“the Leave vote was not more popular among the low skilled, but rather among individuals with intermediate levels of education (A-Levels and GSCE high grades), especially when their socio-economic position was perceived to be declining and/or to be stagnant.”

Every reputable study published so far indicates that Brexit will make these people worse off, and the poorer you are the harder you’ll be hit.

One estimate is that people will be £700 to £1000 a year worse off. This is after a decade of real terms wage cuts for millions of working people and a huge reduction in benefits for millions more. No serious economist believes that the British economy will grow after Brexit. The Brexiteer economic arguments are about as valid as Trump’s views on climate change. The deregulation that they advocate is nothing but a fancy was of saying that workers should have fewer rights and a greater share of profits should be transferred to employers and investors.

Everything gets dearer

About 45% of goods exported from Britain go to the EU and about 38% of exported services. Brexit necessarily means that there will be trade barriers and higher transaction costs. The capitalist market is unforgiving and EU companies will not pay more for British made goods if they can be acquired more cheaply and without customs delays from an EU member state. The impact on jobs is obvious.

The reverse is also true. One third of Britain’s food comes from the EU. Tariffs will make it more expensive affecting the poorest most severely. The queues at food banks will get longer.

Ecosocialists argue that cars are environmentally destructive and need to be replaced with free, accessible and comprehensive public transport. Car plants can be re-engineered to create such a network. However, whether they are making cars or buses, the factories that produce them now rely on just in time logistics systems. For example, BMW’s plant in Oxford produces 1000 cars a day, each containing more than 4000 parts. These are delivered daily by 200 lorries, most of which arrive from Europe through the port of Dover. BMW’s management will have no qualms about shutting that factory and transferring production to a site within the EU where the flow of components will not be impeded by customs checks or enormous traffic jams. The car industry in Britain employs around one million people. They are right to be worried about their economic future.

Every Brexit model indicates that the value of the pound will fall against the euro and the dollar. Roughly speaking, when the pound falls by 10% inflation rises by 2%. If, as predicted, one pound is the same as one dollar, inflation will hit 5% at a time of stagnant wages.

Shrinkage in the economy also gives the Tories a dishonest pretext to cut benefits still more and reduce public services at the same time.

And of course, the working class in the British state is not just white English people. The Scottish government’s forecast is that the ending of free movement to and from the EU will reduce immigration by up to 50% and they are willing to say something Tories (and some on the Labour right) never dare: “Inward migration has made an overwhelmingly positive contribution to Scotland’s economy and society.” Not only are millions of EU citizens being denied the right to live and work in Britain and British workers being prevented seeking jobs in Europe, European workers already in Britain are living both with tremendous levels of anxiety about their future and much more frequent episodes of racist abuse.

Brexit is an anti-working class project. There are large Remain majorities in the Labour Party and trade unions which need to start organising to make sure both are won over to an active opposition to it. The economics are inarguable. Brexit makes working class people poorer and that’s another reason to reject it.



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