Alex Callinicos correctly asserts that “British capitalism is…heavily dependent on access to European markets”.1 Indeed, some 60 percent of British exports find their way into European markets. There is no doubt that Brexit has unleashed the most serious crisis for the British ruling class since the Second World War, dependent as it is on maintaining cross-Channel supply chains. It is a crisis that threatens to tear the Tory Party apart.
But the reality is that, under capitalism, unless the level of workers’ struggle has risen to the point where they are prepared to take over the means of production, they are dependent on capitalists’ investments. If capitalists do not invest or if they scale down their level of investments, workers’ living standards will suffer: some three million jobs are linked to trade with the EU; the average household benefits by some £3,000 a year from trade with the EU. The UK receives £66 million of investment from EU countries daily. At the moment, given the low level of class resistance, these benefits are vital for safeguarding workers’ living standards.
A hard Brexit will undoubtedly result in a significant deterioration of levels of employment and income. This is apart from the likelihood of an economic downturn in the event that there is no deal with the EU on the terms of Brexit. The resulting chaos could double food prices and plunge Britain into a recession that could last 30 years, worse than the 1930s. The government’s own statistics estimate that under the worst scenario, in 15 years GDP would be 10.7 percent lower than if the UK stays in the EU. According to barrister Anneli Howard of Monckton Chambers: “the anticipated recession will be worse than the 1930s, let alone 2008”.2
The result of leaving the EU will be to make the UK dependent on WTO trade rules, involving tariffs of 10 percent for cars, 35 percent for dairy products (the average EU tariff is low—2.5 percent for non-agricultural products, though it can be quite high in some sectors).3 Moreover, trading outside EU regulations, for example importing food from the United States, with its much lower environmental protection standards—for example, selling chlorinated chickens—could pose a long-term health risk.4 Nevertheless, hard Brexiteers have been rebranding Brexit as a “clean break” from the EU on WTO terms. However, according to Dr Kojo Koram, the illusion that one could recreate an imperial past when Britain’s free trade policies of the late 19th century enabled it to embrace unilateral zero tariffs on the basis of its global military power is “pure fantasy”.5
Moreover, companies that have productive facilities in different parts of Britain are in the process of revising their investment plans to take into account the possibility of no-deal. Nissan has abandoned plans to build its new model of the X-Trail SUV at its Sunderland plant, citing both “business reasons” and Brexit. This threatens the employment and livelihood of 6,700 Nissan workers and some 30,000 working in the supply industries. Figures from the Society of Motor Manufacturers and Traders indicated that British car production had dropped to a five-year low in 2018, with companies warning that the threat of a no-deal Brexit had resulted in a fall in new investment.6
Clearly, many workers voted Leave as a protest against the austerity imposed by the Coalition government elected in 2010. Prior to that, there were years of neglect and failure to regenerate those abandoned former manufacturing and mining areas. In 2018, Philip Alston, the UN special rapporteur on extreme poverty and human rights, quoted figures showing that 14 million people were living in poverty and 1.5 million were destitute, that the UK government had inflicted “great misery” on its people with “punitive, mean-spirited and often callous austerity policies”.7 More than 40 years of neoliberalism had destroyed the post-war settlement that saw the UK reach “peak equality” in 1976 when the country was better off than it had ever been.
Sadly, the low level of resistance meant that the left could not benefit from anger over austerity. The unions have not become stronger as a result of Brexit. There has been no rise in class struggle. Wayne Asher’s illuminating article in the previous International Socialism makes clear just how prominently petty-nationalist and racist attitudes featured in the Leave vote.8 There was a hike of 41 percent of hate-crimes against immigrants following the referendum result. It was the Tory right and UKIP that reaped the rewards. The ending of free movement represents a major defeat for the left. Moreover, Britain’s Leave vote greatly encouraged the far right across Europe.
There is much for socialists to criticise in the EU—it is an unelected bureacracy largely committed to neoliberal policies that promote competition and privatisation. In 2015, it imposed austerity on Greece as a condition of solving its chronic debt crisis. It is threatening to do the same to Italy. Its Fortress Europe policies encouraged southern European governments to allow several thousand migrants to drown in the Mediterranean.
However, we weaken a case if we overstate it. The EU does contain social-democratic elements. It safeguards important workers’ rights and environmental protections. Its Social Chapter contains working time regulations that impose a limit of 48 hours a week; young people under 18 are protected from super-exploitation by not being allowed to work more than 40 hours a week. Equal pay has been enshrined in EU law since 1957. Of course, most of these rights were won by working class action—for example, the women’s rights won by the Ford women in their strikes of 1968 and 1984. The struggle for the eight-hour day has been fought across many countries since the 19th century. However, capitalists will always seek to overturn hard-won rights, to build “a bonfire of regulations”, so it is surely better for working people that the EU supports them than not. That said, workers must of course always seek to rely on the strength of their organisation.
Nor does the EU necessarily oppose nationalisation and state aid. The EU protects the right of member states to nationalise industries. Article 345 of the Treaty on the Functioning of the European Union states: “The Treaties shall in no way prejudice the rules in Member States governing the system of property ownership”.9 Under EU competition policy, Britain could not create a single railway monopoly, but it could bring much of the rail sector into public ownership by maintaining the separation between infrastructure (Network Rail is already publicly owned) and rail services which could be nationalised. As for energy supply, Jeremy Corbyn’s plan involves nationalising the Big Six energy suppliers, which wouldn’t prevent “third party” access to 20 percent of the grid. European railways remain overwhelmingly in public ownership. In France, some 80 percent of energy is supplied by a state-owned company.
Can the EU be reformed? One cannot predict the effects of a resurgent Europe-wide workers’ movement. But is leaving currently the best method of resistance? Brexit means a greatly reduced influence for British trade unions within the EU-based European Trade Union Confederation. A socialist Europe can surely be more easily achieved if Britain remains in the EU or as close to Europe as is compatible with the results of the referendum.
Historically, Karl Marx and Friedrich Engels argued in favour of European capitalist unity. In 1866, they favoured German unification even though a united Germany would be dominated by an autocratic Prussia. On 25 July, Engels wrote to Marx:
Bismarck by using the Prussian army carried out the Little Germany scheme of the bourgeoisie with such colossal success… The good side of the affair is that it simplifies the situation; it makes a revolution easier by doing away with the brawls between the petty capital cities…a German Parliament is something quite different from a Prussian Chamber…parties will at last become really national parties instead of merely local ones. The chief disadvantage—a very great one—is the unavoidable flooding of Germany with Prussianism.
And on 27 July, Marx replied: “Everything that centralises the bourgeoisie is of course advantageous to the workers”.10
Leon Trotsky echoed this approach when he wrote in 1917:
If the capitalist states of Europe succeeded in merging into an imperialist trust, this would be a step forward compared with the existing situation, for it would first of all create a unified, all-European material base for the working-class movement. The proletariat would in this case have to fight not for the return to ‘autonomous’ national states, but for the conversion of the imperial state trust into a European Republican Federation.11
Sabby Sagall is chair of Camden Palestine Solidarity Campaign and author of Final Solutions: Human Nature, Capitalism and Genocide.
1 Callinicos, 2019, p21.
2 Quoted in Hill, 2019.
3 Morris, 2019.
4 Chapman, 2017.
5 Koram, 2018.
6 Monaghan, 2018; Jones and Sabbagh, 2019.
7 Booth and Butler, 2018.
8 Asher, 2019.
10 Marx and Engels, 1975.
11 Trotsky, 1975.