Boris Johnson has announced his Brexit deal to great fanfare, promising a bright future of prosperity and freedom. But dark clouds are gathering for British capitalism, which faces a perfect storm. This rotten Tory government must go.
“We will take our plan
From the new world of man
And our work shall be called the Promethean.” (Shelley)
Just when it seemed like things couldn’t get any worse in Britain, the last week has seen a dramatic rise in COVID infections. This comes on top of a new twist in the dreaded Brexit saga, as UK ports become gridlocked, with tens of thousands of lorries heading for the continent.
It is against this background of chaos and crisis that Boris Johnson boldly announced his Brexit deal to the nation before the New Year. Like an ostrich with its head buried in the sand, the Prime Minister proudly revealed that there would be no non-tariff barriers to trade, and therefore nothing to worry about.
This latest episode brings to mind the words of Stanley Baldwin, the Tory prime minister in the 1920s. Baldwin once remarked that “Europe was a madhouse”, to which Leon Trotsky replied: “Yes, but Britain is simply the last ward in the European madhouse, a place normally reserved for the most disturbed and violent patients.”
This is a fitting description of Britain today. Welcome to 2021 and the rest of the turbulent decade!
In the dying days of 2020, the House of Commons signed off the Tory trade deal with the EU. Boris Johnson, like a little boy with his Christmas trumpet, triumphantly announced a golden future for “liberated” Britain. In a spectacular own goal, for the first time in history, a political leader has heralded a trade agreement that will deliberately make their country poorer.
The ever-so-pragmatic Sir Keir Starmer rushed to whip his MPs in support of Boris’ Brexit deal, in the “national interest”. The Labour leader stated that it would not be “credible” for his party to sit on the “sidelines”. As a result, the deal sailed through the Commons.
Johnson boasted about the deal creating “a giant free-trade zone” – when, ironically, the UK has just left one: namely the EU single market and the customs union. The new trade deal creates red tape and puts barriers up, rather than bringing them down.
The reason why big business has generally opposed Brexit is that they stand to lose billions in profits. The trade agreement reached will increase British industry’s costs, with new customs processes, health checks, border procedures, and duplication of systems.
Despite all the previous denials, the deal will include a new trade border in the Irish Sea, raising new challenges and controls.
“We have taken back control of our laws and our destiny,” bellowed Johnson, sounding even more hollow than when he previously proclaimed to have an “oven-ready” deal.
Boris Johnson promised there would be no border between Northern Ireland & the rest of the UK. Even the BBC is reporting “The ‘Irish Sea border’ is a consequence of Brexit & means most commercial goods entering NI from GB require a customs declaration”
He simply lied, again!
— Peter Stefanovic (@PeterStefanovi2) January 2, 2021
Chaos and costs
The agreement does not cover most services, which constitute 80% of the economy, nor the financial sector as such, which is still to be worked out.
The Office for Budget Responsibility has stated that, overall, the UK economy will shrink by 4% as a consequence of this hard Brexit. Nevertheless, big business regards the deal as a mixed blessing, given the possibility of a no-deal calamity. In other words, the final agreement was the least bad option.
Sunak suggests EU access for financial services will exceed Brexit deal. Services are 80% of the UK economy and the Government has failed to get an agreement that includes them https://t.co/WCVn8btD7U
— Andrew Knight (@ank2210) December 27, 2020
“This week’s chaos at Dover and the last gasp nature of this deal means that there will be significant disruption to supply,” stated Ian Wright, chief executive of the Food and Drink Federation.
Shane Brennan, chief executive of the Cold Chain Federation, said the arrangements would mean that the UK’s “food chain will be slower, more complex and more expensive for months if not years”.
After bitter acrimony and fractious talks, Michael Gove hopes the UK and EU will develop a “special relationship”. Johnsone talked of a “happy and successful stable partnership”. Clearly, hope springs eternal in the human breast. Of course, these Brexiteers don’t believe a word of it.
“Big changes are coming,” states Johnson. In this assertion, the Tory PM is correct – but not for the reasons he imagines.
Britain has gone to the dogs. With the intensified crisis of British capitalism, we face a steep decline in living standards and increasing turmoil for years to come. The country will likely soon find itself in a third national lockdown, which could easily be followed by a fourth and fifth. In turn, businesses will go under, unemployment will spiral upwards, and debts will mount.
Completely ignoring reality, Lord Frost, the UK’s chief negotiator, believes that the Brexit deal represents a “moment of national renewal”. As the ancient proverb goes: Those whom the gods wish to destroy, they first make mad. Far from any “renewal”, economic and social decline is set to accelerate, and the divisions in Britain will become even sharper.
Demise and decline
Rather than a glorious “renaissance”, Brexit will reveal all the weaknesses of British capitalism. The UK will be an ever smaller player on the world stage, crushed between the rival imperialist power blocs of the USA, China and the European Union.
In a bout of wishful thinking, the advertising executive Martin Sorrell said: “We have to do what the Germans do so effectively. Export until we drop…We have to be a ‘Singapore on steroids’ or ‘on Thames’ to avoid further marginalisation.”
Despite the delusion, this is nevertheless a serious warning. To export effectively you need a strong industrial base and significant investment. But after years of deindustrialisation and chronic underinvestment, British capitalism lacks these essential foundations.
The only other way for UK businesses to compete, therefore, is to slash costs – particularly wages, which already lag behind rising living costs. Attempts to squeeze the working class will inevitably lead to bitter class conflict.
The Brexiteer fanatics eventually backed the new deal, despite yearning for a no deal – a so-called ‘clean break’, as they see it. Johnson had himself been a member of this camp, but falling over a steep cliff was a step too far for the Tory leader.
The sight of truck chaos in Kent was a harbinger of things to come. And a no-deal outcome with the EU would have scuppered a quick trade deal with the US. Britain would have been up shit creek without a paddle. Therefore, there was no real alternative but to sign a weak last minute deal.
While European leaders have sighed in relief about the “end of Brexit”, in truth the deal will mean years of troubled relations between Britain and the EU.
If UK manufacturers fail to comply with rules on origins of components, the EU has the right to impose tariffs – which it will. As a result, some cars could incur tariffs on entering the EU. In addition, the deal means that either side can impose tariffs to counter “unfair” subsidies.
Smaller businesses, already weakened from the pandemic, will clearly suffer. Faced with little cash and few resources from the government to ease the transition, many will go to the wall.
On top of this, the Brexit deal will certainly add grist to the mill of Scottish independence. The impact and disruption of leaving the EU will further intensify the divide between Scotland and the English nationalist Tory government in Westminster.
As socialists, we stand for the right of nations to self-determination – up to and including independence. We must also add, however, that genuine independence cannot come about on the basis of capitalism.
As time goes by and the smoke clears, it will become obvious that this Brexit deal is simply the prelude to a new chaotic chapter in Britain. The world slump, the growing pandemic, and the Brexit disruption will be a series of hammer blows on society and consciousness.
The UK economy already fell by 11.3% in 2020. With the continuing crisis and further lockdowns, the idea of any genuine economic recovery is a pipedream. According to the Resolution Foundation, the British economy is likely to be 6% smaller than was predicted just a month ago.
From our Macro Outlook – if monthly output remains at its November level (reflecting ongoing Tier 4 restrictions) until Easter, this would see the economy being 6 per cent smaller by Easter than forecast by the OBR just last month https://t.co/wAes3FPg3q pic.twitter.com/8Aski72l1K
— Resolution Foundation (@resfoundation) December 28, 2020
The implications for working-class living standards are dire. Talk of a ‘bright future’ is a sick joke for millions. All the Tory hot air about ‘independence’ and ‘freedom’ will be exposed as the sham they are. Not hope, but austerity and crisis are the fate for millions under capitalism.
Socialism or barbarism
On the basis of this experience, the working class will come to realise that there is no way out on the basis of the so-called ‘market economy’. Capitalism is driven by the greed and increasing profits of the rich and powerful – the owners of the giant banks and monopolies.
Britain is a rich country, but its wealth lies in the hands of a billionaire capitalist class. The capitalist system cannot be ‘reformed’, as some believe. Capitalism cannot be changed into something it is not, any more than a flesh-eating tiger can become a vegetarian.
The ruling class has become thoroughly degenerate, amassing greater fortunes at the expense of society, even during this pandemic. They are like the Roman emperor Nero, who fiddled while Rome burned to the ground.
Only by overthrowing this clique of parasitic money-grabbers – by taking the economy out of their hands, and planning production rationally in the interests of the majority – can our problems be solved.
The future we face could not be clearer. In the words of Rosa Luxemburg, it is a choice between socialism or barbarism.