By Jerry Stone
The labour movement and the population of Britain now faces the biggest attack on it since 1979 and the election of Thatcher. This is organised around the Tory project of ‘hard Brexit’ – more precisely withdrawal from the European Single Market. This provides the context of the Stoke and Copeland by-elections and explains their outcome.
The main targets of this attack are first, the majority of the population, second the trade unions and the wider labour movement. Given the seriousness of this attack any hollow rhetoric is of no use. Only a sober examination of the facts can provide the basis for a strategy to defend the labour movement. The overall context of the by-elections will be analysed first and then their precise outcomes.
Brexit is Thatcherism Mk II
It is necessary to be clear what the present Tory project of hard Brexit is. It is Thatcherism Mk II. This is determined by its economic fundamentals.
Withdrawal from the European Single Market is on the face of it economically wholly irrational from the point of view of British capital. Modern production requires a scale of market far larger than an individual national economy – particularly one such as Britain which, by international standards, is only medium scale. As long as Britain retains a capitalist economy – which regrettably it will do in the coming period – withdrawal from the Single Market will inevitably lead to job losses and lower standard of living of the population, particularly the poorest.
The impact of this can already be seen even before Brexit takes place. The largest scale producers will inevitable be most severely hit by Brexit/withdrawal from the Single Market. This is why the negative effects are being felt first among such sectors as car makers (Nissan etc), large scale manufacturers and banks/finance – not that socialists should care about a small handful of bankers at the top with bloated bonuses but they do care about the tens of thousands of ordinary employees who will lose their jobs. In sectors that are dominated by large scale capital, such as car production and banking, investment plans are being scaled back even before negotiations with the EU-27 commence, with cut backs proposals for jobs.
This is also why leaving the Single Market is such a deadly threat to the trade unions. In the private sector it is among large scale employers, both manufacturers and in the service sector, that the trade unions have their strongest membership. The still deeper cuts which will follow from the economic consequences of leaving the Single Market are also a direct attack on public sector unions.
The consequences of the Brexit vote, and threat to leave the Single Market, are already leading to downward pressure on living standards, which will intensify. The UK economy already faces considerable problems. It is running a balance of payments deficit of 5.9 per cent of GDP, requiring a vast inflow of capital to fund. This is not sustainable outside the Single Market, where Sterling would experience huge falls, leading to inflation and the slashing of the population’s real incomes. The most generalised form of this is inflation which is feeding through from the devaluation of the pound after the Brexit votes. This inflation will inevitably intensify during 2017, putting downward pressure on real wages.
But it is an error to believe that this cut in living standards is irrational. On the contrary this cut in living standards is the aim of the Tory Brexit project. The calculation of the Tory Brexiters is that by this reduction in living standards a large transfer of resources into profits will take place and the British capitalist economy will be ‘revitalised’ on that basis. Britain will become a low tax low social security country – a further twist downward of the Thatcherite spiral. As the trade unions and labour movement are an obstacle to such reduction in living standards therefore they must be further weakened. That is why the project of leaving the Single Market is, in particular, such a threat to the trade unions. The unions would be weakened even further by jobs losses and public sector cuts.
It is therefore necessary to assess accurately how to fight against this threat.
What Paul Mason is right on
There are differences with Paul Mason on theoretical issues, but his immediate analysis of the situation regarding Brexit after Stoke and Copeland is very accurate:
‘Brexit, not nuclear power, is the thing blinding a large section of the English and Welsh electorate at present and that will not change until the negotiations go catastrophically wrong, and the economic disaster unfolds. Everybody on the progressive side of British politics needs to understand this will take some time.’
At present, for historical reasons, a majority (just) of the British population is attempting to solve the deep problems confronting it since the international financial crisis by retreat into nationalism, hostility to immigrants and other dead ends. Not merely are these false explanations of the problems confronting it but illusory attempts are made to attempt to square the circle of various ways out of this situation.
For example, it is hoped Britain can have access to the Single Market without having freedom of movement of labour. This position is a pure illusion. The Single Market is exactly what it says it is – a single market, and labour is the single biggest market within it. That is why the EU will stand firm on freedom of movement of labour. Therefore, in the end Britain will be forced to chose between membership of the Single Market, with freedom of movement of labour, or rejecting freedom of movement of labour and leaving the Single Market.
There is no doubt which should be chosen. Membership of the Single Market in present economic conditions translates into tens, probably hundreds, of thousands of jobs and higher living standards. Placing first rejecting freedom of movement of labour, which means leaving the Single Market, means losing tens of thousands of jobs and lower living standards. But it will take the whole process of negotiation to reveal this to increasing numbers of people. Paul Mason then also drew the correct conclusion about what should be done by any agreement which did not include membership of the European Single Market:
‘at the end of the Article 50 negotiations I would be in favour of a clear vote against the Brexit plan the Tories bring to the UK parliament in 2018–19.’
Mason also drew the correct conclusion on Scotland:
‘In that situation (which is likely) I would also not only accept but propose Scotland secedes from the UK to save what it can of a socially just society from the wreckage that hard Brexit would bring.’
The stakes for the labour movement
But far better than these options is, of course, to block Britain’s withdrawal from the European Single Market. This is by no means impossible. The trade unions, with their decisive weight in the Labour Party, have the strongest possible direct interest in this. Leaving the Single Market for them would mean large scale job losses, reduction in living standards, and therefore loss of members, It is highly probable that in the end the trade unions will indeed come out for membership of the European Single Market.
But also sections of capital, and therefore the Tories and Liberal Democrats, have a direct interest in being in the Single Market. Medium and small employers may eye with glee the prospect of the deregulated, anti-trade union, low tax and low social security Britain the Tory ‘hard Brexiters’ dream of. But large manufacturers, and many large employers, consider that being outside the Single Market would be disastrously damaging for them.
Labour also cannot have a coherent economic policy without a clear position in favour of membership of the Single Market. All ideas that in the present circumstances a National Investment Bank, an industrial policy etc would be sufficient to counteract the negative consequences of leaving the Single Market are illusory. The negative economic forces that would be unleashed by leaving the Single Market are far more powerful than these proposals by themselves. Of course in the context of membership of the Single Market such proposals are valuable.
In addition to the trade unions sections of relatively highly paid workers, but who depend on public and social services, the mistakenly named ‘middle class’, also have a direct interest in opposing Brexit/leaving the Single Market. This provides the base of the ‘progressive/liberal’ opposition to leaving the Single Market.
It is this combination of trade union/working class votes and the so called ‘middle class’ (in fact higher paid workers) which explains why 63 per cent of Labour voters in 2015 voted for Remain. As John Curtice, Britain’s top expert on electoral statistics has shown in detail a majority of Labour voters voted for Remain in every region of the country.
The present relation of forces confirmed by Stoke and Copeland
The results of the Copeland and Stoke by-elections fully confirm these forces. Taking the most ‘sensational’ of these results, Copeland, the first time in 35 years that the party in government has taken a seat from a rival in a by-election, the explanation is simple. Compared to the General Election the Tory vote rose by 8.5 per cent and the UKIP vote fell by 9.0 per cent. In short, the Tory victory was due to a straight transfer from UKIP to Tories. The Labour vote fell by 4.9 per cent and the Liberal Democratic vote rose by 3.8 per cent.
In the ‘Leave camp’ there was shift from UKIP to Tories but no significant shift in the overall size of the Leave camp. Between Labour and the Lib Dems, both of whose party supporters had voted for Remain, the more anti-Brexit Lib Dem vote rose and the apparently less anti-Brexit Labour vote fell by almost the same amount. This gain of the Tories from UKIP, and loss of Labour to the Lib Dems, fully explained the ‘sensational’ character of the result.
In Stoke the dynamic was different as in the Leave camp UKIP was better placed tactically than the Tories. Therefore, instead of UKIP voters going to the Tories, as in Copeland, UKIP gained slightly more than the Tories. But the pattern of Labour loss to the more anti-Brexit Liberals was the same – Labour’s vote went down by 2.2 per cent and the Lib Dems went up by 5.7 per cent.
These were the fundamental features of the election – and are in line with national trends. They were more powerful than undoubtedly negative factors for Labour such as the by-elections being triggered by the resignations of sitting Labour MPs moving on to high paid jobs elsewhere, the extraordinarily large number of nuclear power workers in Copeland etc.
Conclusions for Labour
The conclusions for Labour are clear. Maintaining Corbyn as Labour leader remains absolutely central to advancing progressive politics in Britain and defence of living standards. Any other leadership of the Labour Party would capitulate on austerity. It would also capitulate on the attack on the trade unions. It is therefore the responsibility of the left to advance an agenda that builds Labour’s support. This is the key way to sustain Corbyn’s leadership.
The key challenge that must be met is that Labour must defend the population and its living standards in the forthcoming Brexit negotiations. This problem will dominate British politics for at least the next two years. For the reasons already analysed how the left handles this will determine whether the working class and labour movement advances or suffers a reverse.
The government intends to invoke Article 50 in March. This will set in train the exit discussions with the EU-27. The Prime Minister is committed to a hard Brexit and is tying Britain into the US’s new agenda on Europe introduced by President Trump. These reactionary projects of ‘hard Brexit, more precisely leaving the European Single Market and Trump, which are now increasingly directly linked, need to be contested.
Specifically, the Labour Party should lead the political campaign to ensure Britain remains in the Single Market. That is the key fight now to have with the Tory government. The trade unions, who have the most direct interest in the outcome of this, need to lead the fight for Labour to commit to membership of the Single Market. Around this the widest possible alliance should be constructed.
As John Curtice has very accurately analysed, the fact that a majority of voters, which includes supporters of all political parties, backed Leave in most Labour held seats in the north does not reveal anything about the views of Labour supporters. To find that out it is necessary to distinguish between the supporters of different parties. The evidence clearly indicates that a majority of Labour supporters in the northern Labour held seats voted to Remain.
Two polls on the referendum day (YouGov and Ashcroft) reported a substantial majority of Labour supporters voted Remain. More recently John Curtice has reported on the British Election Study (BES) data, confirming approximately two-thirds of Labour supporters voted Remain. Curtice’s table, reproduced below, shows how support for Remain varied amongst supporters of the two main parties across different regions.
A clear majority of Labour voters across the north of England and Midlands (58 per cent) voted Remain. Across Labour held seats 63 per cent of its 2015 support voted Remain, with the figure for the north of England and Midlands being 57 per cent.
Only a minority of 2015 Labour voters in Labour-held seats, including in the north of England and Midlands, voted Leave at the referendum. As Curtice points out, there are simply not enough Labour Leave supporters for a pro-Brexit strategy to be viable. Without its Remain supporters, including in the north, Labour would be wiped out. Instead what is happening at present is that Labour is losing support to the Lib Dems.
Of course Labour needs to appeal to its supporters who voted to Leave, but not at the expense of losing the far larger part of its support. So Labour’s campaign to retain Single Market membership must be based on protecting jobs and living standards. It is not a campaign to overturn the referendum decision. That vote was solely on the question of EU membership, not about the Single Market.
In the coming period the fight to remain in the Single Market will be the most important battle to try to win. The left needs to position itself in the leadership of this fight. It is key to defending the population from a hard Brexit, so can strengthen Labour and its leadership.