Negotiations over Brexit and the associated fall in the pound have exposed the fault lines within the Tory Party and the British economy. Theresa May and Philip Hammond have warned of “difficult moments” and “turbulence” ahead. The Tories cannot be allowed to make us pay for their crisis. As Rob Sewell explains in the latest editorial, a socialist fightback is needed.
Britain has experienced its “Marmite” moment, the spat between Unilever and the supermarket giants over who should shoulder the cost of rising prices. This follows the biggest fall in sterling for 168 years, a near 20% devaluation against the dollar and euro. This is a sure sign that these effects will soon hit workers’ pockets as inflation rises. But it has simply exposed the tip of a very large iceberg, which will eventually sink the Tory government as sure as the Titanic.
Editorial from the latest issue (no.259, November 2016) of Socialist Appeal. Buy your copy here and subscribe today.
Even before negotiations have begun, Mrs May’s words about “hard” Brexit have been met with icy opposition from European leaders. “If Mrs May wants a hard Brexit she will get a hard negotiation,” warned French President Francois Holland. They have made it clear that there will be no negotiations until Article 50 has been triggered next spring. They are digging in for a hard fight.
Even if they can patch up some kind of deal, it will only take one of the 27 countries in the EU to object and throw the whole thing into chaos. The Walloon regional government in Belgium – yes, the regional government – has just vetoed the EU trade deal with Canada, which been negotiating for seven years, an ominous sign of things to come. The fact that they are arguing over what language to use in the future negotiations does not bode well! Outside of the EU single market, Britain will face the cold winds of tariffs on its exports as well as 22% tariffs on its food imports. This will have a big impact on already squeezed living standard.
In the understatement of the century, Mrs May admitted that there would be “difficult moments” ahead, while the chancellor Philip Hammond warned of “turbulence”. But the “turbulence” has been with us for some time.
The divisions over hard and soft Brexit have surfaced in the Cabinet and spilled into the open. The new PM’s honeymoon period is vanishing. Divisions and cracks between the unelected Mrs May and her chancellor and Mark Carney, the governor of the Bank of England, have emerged within the first 100 days since Cameron was forced to resign. With a majority of 16, she is in a rather weak position to weather the storms ahead. What ever they do will be wrong. It will not be long before this Tory government becomes the most unpopular government in recent history.
There is widespread anger and bitterness everywhere. It has been building up for years. The vote in favour of Brexit was a reflection of this deep discontent.
New figures reveal that 5 million self-employed workers (deemed “entrepreneurs” by the Tories) are earning LESS now than 20 years ago, when records were first compiled. Half of these workers are on or below the minimum wage. Taking self-employed transport workers alone and the numbers on minimum wage rises to 60%. The Financial Times commented that the rise of the GIG economy, where workers take piecemeal jobs here and there, has not been seen in Britain since the 18th century, before the Industrial Revolution! Every week, millions are being screwed over by landlords charging sky-high rents for substandard accommodation. Brutal cuts in essential services – affecting the most needy and vulnerable – are being carried out without impunity to pay for the crisis of capitalism.
No wonder there is a bitter mood in the country. Even among the strategists of Capital, there is dread and fear about the future. One top Tory adviser even warned of the dangers of anti-capitalist riots in Britain, such is the combustible material. Not simply riots, but riots against capitalism.
Tobogganing towards disaster
The British economy is facing catastrophe as the world economy is facing a new downturn. Rather than reducing debt, world debt has risen to $152 trillion – more than twice the size of the world economy – and rising. The IMF has recently warned: “The Fiscal Monitor shows that rapid increases in private debt often ends up in financial crisis. Financial recessions are longer and deeper than normal recessions.” They are tobogganing towards disaster.
We are not simply facing a financial crisis, bad as that would be, but an economic slump of overproduction worse than 2008. The Brookings Institute again warned that the global economy is “sliding back into the morass [they have] been stuck in for some time.” The Financial Times says: “The world economy is at risk of slipping into a Deflation Trap and faces a historic slump in global trade.”
The capitalist system as Karl Marx explained has exhausted itself. It has reached its limits. It is in a process of decay and decline. It can no longer grant reforms like in the past. On the contrary, now is the era of counter-reforms and austerity. There is a continuing onslaught against the working class.
The road to hell…
As we predicted, the Blairites in the Labour Party are still busy undermining Jeremy Corbyn at every opportunity. They will never give up. They have the support of big business. They should be rooted out. Jeremy Corbyn should bring back automatic reselection to get rid of these right wing careerists. Only then will he be able to unite the Labour Party against the Tories. There is no other road.
However, the fight against Labour’s right wing and the supporters of capitalism in the Labour movement must go hand in hand with the fight for a bold socialist programme. Those who think they can reform capitalism or work within the system are making a big mistake. The whole history of Labour governments shows that this cannot be done.
You cannot serve two masters, as the Bible says. The government does not dictate to the capitalist economy, the economy dictates to the government. Either you move to put an end to capitalism or you will be forced to do the bidding of big business. The laws of capitalism will dictate. Good intentions are not enough, and can simply lead us to a very warm place. We need a programme that can put an end to the crisis once and for all.
Another world is possible
British and world capitalism are in a deep and insoluble crisis. The present system offers no way forward for working people except increasing toil and misery. Only by taking over the “commanding heights of the economy”, the 200 major monopolies, banks and insurance companies can we plan the economy in the interests of the majority and not the profits of a tiny handful of parasites.
With the science and technology at our disposal we could employ everyone and cut the working week to 20 hours and even less, while increasing living standards. 25% of capacity is not used under capitalism. We can put that to use and more. On this basis of a socialist planned economy we can completely transform the lives of ordinary people and become a beacon to the workers of Europe and the rest of the world. On this basis, another world is possible.
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