Britain: The Brexit deal

The UK finally leaves the European Union on 31 December, after 48 years of membership.  The initial decision to leave, made in the special referendum back in June 2016, has taken over four tortuous years to implement.  So what does the deal mean for British capital and labour?

For British manufacturers, the tariff-free regime of the EU’s internal market has been maintained.  But the British government will have to renegotiate new bilateral treaties with governments across the world, whereas previously they were included within EU deals.  People will no longer be able to work freely in both economies by right, all goods will require significant additional paperwork to cross borders and some will be checked extensively to verify they comply with local regulatory standards.  Frictionless trade is over; indeed, that’s even between Northern Ireland and mainland Britain with a new customs border across the Irish Sea.

And that’s just goods trade, where the EU is the destination of 57% of British industrial goods.  The British government fought tooth and nail to protect the fishing industry (and failed), but it contributes only 0.04% of UK GDP, while the services sector contributes over 70%.  Of course, most of this is not exported, but still services exports contribute 30% to UK GDP.  And 40% of that services trade is with the EU directly.

Indeed, while the UK runs a huge goods trade deficit with the EU, that is in part compensated by running a surplus in services trade with the EU.  This surplus is in mainly financial and professional services where the City of London leads.  Exports of UK financial services are worth £60 billion annually compared to imports of £15 billion. And 43% of financial services exports go to the EU.

The Brexit deal with the EU has done nothing for this sector. Professional services providers will lose their ability automatically to work in the EU after the Brexit deal failed to obtain pan-EU mutual recognition of professional qualifications. This means that professions from doctors and vets to engineers and architects must have their qualifications recognised in each EU member state where they want to work.

And the deal does not cover financial services access to EU markets, which is still to be determined by a separate process under which the EU will either unilaterally grant “equivalence” to the UK and its regulated companies or leave firms to seek permissions from individual member states.  Over the next year, there may well be bit by bit agreements on trade in these areas.  But the UK service sector is bound to end up worse off for its exports than was the case within the EU.

And that’s serious because the UK is a ‘rentier’ economy that depends heavily on its financial and business services sector.  Financial services contribute 7% of UK GDP, some 40% higher a contribution than in Germany, France or Japan.

The UK is a country of bankers, lawyers, accountants and media people, rather than engineers, builders and manufacturers.  The UK has a huge top-heavy banking sector, but a small manufacturing sector compared to other G7 economies.

What about the impact on working people?  On leaving the EU, what little British labour has gained from EU regulations will be in jeopardy within a country which is already the most deregulated in the OECD.  The EU rules included a 48-hour week maximum (riddled with exemptions); health and safety regulations; regional and social subsidies; science funding; environmental checks; and of course, above all, free movement of labour.  All that is going or being minimised.

Around 3.7% of the total EU workforce – 3 million people – now work in a member state other than their own. Since 1987, over 3.3 million students and 470,000 teaching staff have taken part in the EU’s Erasmus programme.  That programme will exclude Britons from now on.  Immigration into the UK from EU countries has been significant; but it also works the other way; with many Brits working and living in continental Europe. With the UK out of the EU, Britons will be subject to work visas and other costs that will be greater than the total money per person saved from contributions to the EU.

On balance, EU immigrants (indeed all immigrants) have contributed more to the UK economy in taxes (income and VAT), in filling low-paid jobs (hospitals, hotels, restaurants, farming, transport) than they have taken up (in extra cost of schools, public services etc).  That’s because most are young (often single) and help pay pension contributions for those Brits who are retired.  The Brexit referendum has already brought about a sharp drop in net immigration into the UK from the EU, down 50-100,000 and still falling.  That can only add to the loss of national income and tax revenues down the road.

Most sober estimates of the impact of leaving the EU suggest that the UK economy will grow more slowly in real terms than it would have done if it had remained a member.  Mainstream economic institutes, including the Bank of England, reckon that there would be a cumulative loss in real GDP for the UK over the next ten to 15 years of between 4-10% of GDP from leaving the EU; or about 0.4% points off annual GDP growth. That’s a cumulative 3% of GDP loss per person, equivalent to about £1000 per person per year.

The UK’s Office for Budget Responsibility reckons that one third of this relative loss has already taken place because of the reduction in the pace of business investment since the referendum as domestic businesses stopped investing much, due to uncertainty about the Brexit deal along with a sharp drop in foreign inward investment.

And then of course, the COVID pandemic has decimated business activity.  In 2020., the UK will suffer the largest fall in GDP among major economies apart from Spain and recover more slowly than others in 2021.

British capitalism was already slipping badly before the pandemic hit.  Its trade deficit with the rest of the world had widened to around 6% of GDP; and real GDP growth had slid back from over 2% a year to below 1.5%, with industrial production crawling along at 1%.  The UK economy already had weak investment and productivity growth compared with the 1990s and with other OECD countries.

Investment in technology and R&D has been poor, more than one-third less than the OECD average.

And the reason for this is clear. The average profitability of British capital has been falling.  Even before the pandemic hit in 2020, average profitability (according to official statistics) was 30% below the level of the late 1990s and, excluding the Great Recession, was at an all-time low.

Since the referendum of 2016, UK profitability has fallen by nearly 9%, compared to small rises in the Eurozone and the US.  And the Eurozone AMECO forecast for profitability will leave the UK 18% below 2015 levels by 2022!

As a result, investment by British capital is set to plunge and is forecast to be down a staggering 60% by 2022 compared to the referendum year of 2016.

But maybe the UK can confound these dismal forecasts, as the government claims, because UK industry and the City of London can now expand across the world ‘free from the shackles’ of EU regulation.  And it is increasingly clear how it thinks it can do this – by turning Britain into a tax and regulation-free base for foreign multinationals.  The government is planning ‘free ports’ or zones; areas with little to no tax in order to encourage economic activity. While located geographically within a country, they essentially exist outside its borders for tax purposes.  Companies operating within free ports can benefit from deferring the payment of taxes until their products are moved elsewhere or can avoid them altogether if they bring in goods to store or manufacture on site before exporting them again.

Unfortunately, for the government, studies show that free ports might simply defer the point when taxes are paid, as imports would still need to reach final customers across the country. And the incentives may also promote the relocation of activity that would have taken place anyway, from one part of the UK to another. Moreover, tax breaks could mean a loss of revenue for the Treasury. And free ports risk facilitating money laundering and tax evasion, as goods are usually not subject to checks that are standard elsewhere.  A deregulated Britain will not restore economic growth, let alone good, well-paid jobs for an educated and skilled workforce.  It will only boost the profits of multi-nationals, using cheap, unskilled labour.

In sum, the Brexit deal is another obstacle to sustained economic growth for Britain. But the COVID pandemic slump and the underlying weakness of British capital are much more damaging to the UK’s economic future than Brexit. Brexit is just an extra burden for British capital to face; as it also will be for British households.

Post Brexit Britain: When lies and bluster collide with reality

British Flag Comes Down in Brussels.

Reprintedfrom LeftHorizons UK

Editorial: When lies and bluster collide with reality

February 5, 2020

Formally and legally, the United Kingdom is no longer a member of the European Union, but Brexit is still set to be a major political issue for the remainder of the transition period this year. ‘Get Brexit Done’ was a simplistic slogan that more or less won the election for Boris Johnson, but it may well turn around to bite him in 2020.

Johnson would not have won had he not had the brass neck to make so many unrealistic promises about the outcome of leaving the EU. Getting Brexit done, he reassured everyone, would not involve any threats to the National Health Service, to jobs, wages, working conditions or environmental or food standards. There was no section of the working population to whom he didn’t offer beguiling platitudes: from farmers to fishermen, from nurses to teachers, from car drivers to car makers.

Johnson claims, against all the expectations of the more sober economists and representatives of capitalism, that comprehensive trade agreements can be in place by the end of this year with the UK’s main trading partners, the EU and the USA. It will all go swimmingly, he tells us. Brimming with bombast and bluster, Johnson launched his long-awaited ‘free trade’ speech this week in the historic Royal Naval College at Greenwich, all part of his pantomime theatrics, as if it were possible, by waving a magic wand, to rekindle the past glory of British maritime supremacy.

Barnier spells out some home truths

“There is no need”, he claimed, “for a free trade agreement to involve accepting EU rules on competition policy, subsidies, social protection, the environment or anything similar any more than the EU  should be obliged to accept UK rules.” But even as Johnson was speaking, the EU negotiator, Michel Barnier, was spelling out some home truths and making it clear that free access to the giant European market – still Britain’s biggest trading partner by a long margin – would only come at a price. The reality, in other words, looks somewhat different to Johnson’s fairyland.

There is one small element that Johnson leaves out of account. An agreement between the EU and the UK is not one, as he alleges, between “equals.” The EU is a trading block with six times the economic clout of Britain and seven times the population. The loss of trade with Britain would be a blow to the EU, but the loss of EU trade would be a catastrophe to Britain, which has become increasingly entangled in the nearby continental economy over 47 years. Whereas the EU accounts for over 45 per cent of British exports, exports to the UK are only 15 per cent of the EU total.

There is no possibility, therefore, of the EU accepting trade terms that would put their own economies at a disadvantage – either by government subsidies or tax incentives to British companies, by reducing wage costs and working conditions or (in the case of agricultural produce) by curtailing animal welfare or safety standards. The ‘level playing field’ that the EU is demanding is not a game, despite the sporting metaphor. The EU will be insisting that trading regulations are equitable for both sides – otherwise, there will be no agreement.

‘Australian deal’ is a euphemism for ‘no-deal’

Johnson’s pursuit of a Canada-style deal sidesteps the fact that the EU and UK economies are more integrated and geographically closer than is the case with Europe/Canada trade. His claims that the UK will ‘diverge’ from European regulations, while still trading seamlessly with the EU, is just a rehash of the ‘having the cake and eating it’ fantasy of Theresa May.

The government’s apparent fall-back plan is a so-called ‘Australian’ deal, which is a thinly-veiled euphemism for a no-deal scenario, given that Australia has a miniscule trading relationship with Europe. It would mean virtually trading with the EU on World Trade Organisation terms, which the National Farmers’ Union has warned, (to cite only one example) would mean 48 per cent tariffs on British lamb exports and 84 per cent on beef going to the EU.

There is also the politically-charged issue of fisheries. At present, other than a narrow strip around the coasts, EU waters are open to all EU fishing, with annually-negotiated quotas for different species of fish and for national fishing fleets. The Tories are claiming that all British waters, which are among the richest fishing grounds, will no longer be open to EU fleets. But if that is the case, then it puts a question mark over the export of British-caught fish to the EU, which is half of the total British catch. Besides which, the EU has made it clear that access for EU fleets, with more or less a retention of the status quo, has to be a quid pro quo for British financial services’ access to the EU market.

Fishing is a highly-charged issue

Fishing represents a tiny part of the British economy and workforce – around 0.04 per cent – alongside the much bigger contribution made to the economy by financial services. But fishing is an issue that is highly-charged politically and it is not clear how Johnson can steer his way through this particular minefield.

In other words, the real process of Brexit has only just begun and the Tories’ easy slogan of last December will come up hard against a cold reality.

“…the issues are many and complex,” Martin Wolf writes in the Financial Times (February 5), “These include data protection, participation in the EU and Euratom nuclear programmes, trade in goods and services, intellectual property, public procurement, mobility of people, aviation, road transport, energy, fisheries, judicial cooperation, foreign policy cooperation and cyber security. It beggars belief that all this can be agreed and ratified within a year. The idea that the UK should walk away if all this cannot be agreed in that brief time seems insane.” It is no wonder this newspaper, a sober and serious representative of British capitalist interests, is urging the government to “come clean on EU trade”.

The difficulties of the Tories negotiating their way out of the Brexit maze are compounded by the only land border the UK has with the EU, between Northern Ireland and the Republic. Few people, north or south of the border, would be happy to go back to a ‘hard border’ so it will mean that one way or another, yet more of Johnson’s pledges and assurances will go up in smoke.

The next ten months will bring extremely fractious and difficult trade negotiations between the UK and the EU, but those with the US will be no easier. Trump’s Secretary for Agriculture, speaking on a mooted trade deal between the US and the EU, made it clear where he stood. “The US will push hard to include politically-sensitive subjects such as chemically-washed chicken”. If that is the stance the US takes with a trading partner of 450 million, we can be sure it will be much harder with a weaker ‘partner’ like the UK.

Outlook for British economy is far from rosy

Even without the difficulties or even a possible collapse of trade talks with the EU; even without the world economy being shunted off course by the outbreak of the coronavirus in China, the outlook for the British economy is far from rosy. The most recent Bank of England forecasts for economic growth are considerably below the chest-beating forecasts of Tories during the election. Chancellor Sajid Javid, recently spoke of his aim to get annual growth up to 2.7 or 2.8 per cent in the coming years.

This was supposed to sound impressive, but these target figures are well below the historic growth levels of the post-war decades up to the financial crash of 2008. Nonetheless, even Javid’s target growth looks wildly optimistic against the BoE forecasts of just over 1 per cent for the next few years. The net result is that Javid will have a “black hole” of £12bn in the government’s balance sheet, compared to an expected £5bn surplus, and this will have severe implications for austerity and government cuts.

…limit to any rise in real living standards

“The BoE predicted a sustainable growth rate that is so slow” The Financial Times commented, “…it would severely limit any rise in real living standards, leave the public finances struggling to meet the demands for better public services, and constrain government efforts to boost the performance of weaker regions.” (February 1).

The key indicator dragging the British economy down, in comparison to its economic rivals in the main capitalist countries, is its poor investment record and the consequently poor record of productivity. The research director of the Resolution Foundation noted that the downgrade in the BoE’s economic forecast “was reflected productivity performance that had not been so weak since the Victorian era”, adding that “it creates a tough outlook for living standards and the public finances.” (Financial Times, February 4). Add this to Brexit and you get a toxic mix. As a Financial Times editorial pointed out, “Whatever version of Brexit the country pursues…will leave the economy smaller than had it remained in the EU…Johnson has chosen the hardest, most economically harmful form of departure.” (February 1).

Tories preparing more department spending cuts

It is no accident, therefore, that we find the Tories preparing more cuts. Boris Johnson has ordered all cabinet ministers to identify cuts of at least 5 per cent to their Whitehall department budgets. ”…a letter jointly signed by the prime minister and the chancellor, Sajid Javid, tells ministers that budgets remain extremely tight, even after a decade of austerity in the public services.” (Financial Times, February 1)

The Tories’ pledges that ‘austerity was over’ and their claims to be a ‘one-nation’ government able to deliver for the ‘people’ will turn to ashes in the coming months.  Johnson will not be having a long political ‘honeymoon’; he will be lucky if it lasts out the Brexit transition period. “For Britain, the past three years have been the most politically turbulent and rancorous for decades. Brexit has shaken the foundations of British democracy” (Financial Times editorial, February 1). The foundations have certainly been shaken! But so far all we have felt have been the first shocks of a much bigger, tectonic shift in politics. The Tories may have a large majority of seats in parliament, but the idea that they will enjoy five years of uninterrupted and calm government are the stuff of cloud-cuckoo land. We will see in the coming months the outlines of the huge crises and convulsions that lie ahead and the labour movement needs to be prepared for them.

Britain: After the election, which way now?

Tory policies will not improve this situation

This editorial from the UK Website Left Horizons reflects on the recent electoral defeat for the British Labor Party and where socialists and the left activists in the party go from hereon. The editorial makes a point, as Left Horizons has done repeatedly, that Brexit should not have been the main issue rather austerity and the horrors of the Tory government’s assault on the British working class. But with the help of the capitalist press and the LP and Corbyn’s ambivalence on Brexit and the 1^st referendum, Brexit was the decisive factor. The editorial also points out that it was not the radical policies of the Labor Party that were rejected by the public and that in general the nationalization program that was put forward to deal with some of the worst aspects of Tory rule, were popular.  FFWP Admin.

Editorial: after the election, which way now?
December 17 2019

The election result is a serious setback for workers everywhere. It opens the prospect of the most right-wing government for thirty years, an economic catastrophe around Brexit and the further erosion of standards in all local government services and in the NHS. The fear among Labour members and supporters is that we now have a Johnson government with a big enough majority to last for ten years. His victory has been described as seismic, in the same terms as Thatcher’s victory in 1979.

In the Labour Party there will be huge feelings of disappointment, not to say dismay and that will be especially true for the left of the Party. It is not a time for despair, however. It is a time to be angry and to channel that anger into organising and preparing for the future. There will be a radical Labour government elected at some stage – the crisis of British capitalism and the associated collapse in living standards leaves no room for any alternative – and if it takes longer than we hoped, its impetus will be all the greater for the wait.

Johnson has achieved the biggest Tory majority for over thirty years, but that is barely down to any campaign by the Conservative Party or its leader. He  carefully avoided all serious contact with real people on the streets or in workplaces, because so many of his outings turned out to be PR disasters. He dodged TV interviews that might have given him a hard time and stuck rigidly to carefully-arranged photo opportunities. Even some of those he mucked up.

Mainstream media conducted Tories’ campaign

In the streets, Tory Party workers were thin on the ground and far fewer in number than Labour activists, as would be expected from a much smaller and largely geriatric Tory membership. It was the  national press: The Daily Mail, the Daily Express, the Sun, The Times, The Daily Telegraph – all owned by tax-dodging billionaires – who did all the heavy lifting for the Tory Party election campaign, day in and day out.

The newspapers were ably backed up by the BBC, with its most partisan coverage for years, even going to the extent of twice doctoring TV footage (later apologising for the ‘mistakes’) to put Boris Johnson in a better light. It should be noted that the total Tory vote rose by only one single percentage point and that by no means indicates a ‘landslide’, although the big parliamentary majority might suggest otherwise.

Nevertheless, the clear majority for Boris Johnson has brought a wave of euphoric relief among the tax-dodgers and coupon-clippers who make their money by having money. The pound immediately rose against the Euro and the Dollar and the FTSE100 index of leading shares jumped two per cent. According to the Financial Times, a mere eight companies – those ear-marked for nationalisation under Labour – saw £6bn added to their share value. BT shares rose 7 per cent, the utility Centrica rose 8.7 per cent, housebuilders – those profiting from the rigged market and the housing shortage – also rose in value. Among the rich and powerful, there were sighs of relief all round.

But Labour Party members cannot put this defeat down to a bad press, because it was expected that the big majority of the press and TV would back the Tories. A Corbyn-led left Labour Party offered a genuine threat to the interests of the ruling elite for the first time in two generations and it was anticipated that the Establishment would use the press to fight back.  Labour, quite properly, relied on its half million membership and its armies of enthusiastic volunteers, far outnumbering the election workers of all the other parties put together.

A re-run of 2016 EU referendum

We have argued that the main issue facing working class people has not been Brexit, but austerity and the fall in living standards. Labour tried hard to keep a focus on the issues that really affect workers on a day-to-day basis: education, housing, local government services, minimum wages and especially the NHS.

However, that strategy failed and by keeping Brexit centre-stage in the election campaign, Boris (“Get Brexit Done”) Johnson effectively turned this election into second EU referendum and that was the fundamental basis of his victory. Brexit was much more of an issue this year compared to 2017, precisely because of the fact that it has dragged on for three and a half years and Euro-sceptics now completely dominate the Tory Party.

In this election, the Tory Party, in effect, became the Brexit Party and for the first time in living memory, in some cases for the first time in the best part of a century, it was able on that basis alone to win seats in what used to be solid Labour areas like Don Valley, Rother Valley, Bolsover, Redcar, Durham North West and Bishop Auckland. In many of these areas Labour is still paying the price for decades of neglect by right-wing Labour councils and Labour MPs and here the election on Thursday was an echo of 2016.

The actual Brexit Party was no more than an auxiliary to the Tory Party, a splinter of the Conservative right wing. Farage had pulled all his candidates from standing in 317 Conservative-held seats to concentrate on those held by Labour. Where this was done, his party successfully drew enough votes away from Labour for it to allow some Tories to win.

According to data compiled by the Financial Times, “the Brexit Party took more votes from Labour than the Conservatives in the election, supporting Nigel Farage’s claim to have helped Boris Johnson defeat the opposition.” (December 14) “…Labour also suffered greater losses on average where the Brexit Party stood than where it did not. This was most evident in Yorkshire and the Humber, where the Brexit Party had their best performances…In the constituency of Don Valley, the Brexit Party picked up 15 per cent of the vote as Labour’s share fell by 19 per cent…”

In Scotland, Labour is still suffering from the legacy of decades of the rotten Labour councils that had governed for decades, while doing nothing for working people. The rise of the SNP, from having only two MPs elected in the 1983 general election, to a position where it completely eclipsed all the other parties, has been largely the result of the failure of Scottish Labour’s right-wing which dominated Scottish politics for so long. The SNP covered itself in fake ‘radicalism’ precisely to win over workers disillusioned with Labour MPs and Labour councils. Labour still has a long way to go to recover in Scotland, now with only 18.6 per cent of the vote and a single MP.

What was different to 2017?

We have to ask the simple question, therefore, ‘what was different to 2017?’ and we have to offer an honest answer. In 2017, there was a huge jump in Corbyn’s Labour vote compared to Ed Miliband’s miserable performance two years earlier. The jump in Labour’s vote, from 30% in 2015, to 40% two years later, was the biggest between two general elections since 1945. In total votes, the increase was from  8.1m to 12.8m, an increase of the best part of 5 million votes.  

The question is, how was Labour different this year and why was there no repeat of 2017. The key answer must lie in Labour’s position on Brexit. In 2017, Labour stood on a manifesto that accepted the 2016 EU referendum result, but insisted it would fight for guarantees on trade (and therefore jobs), on workers’ rights, and on environmental and food safety regulations. Labour put forward specific conditions to support whatever was negotiated and was opposed to a Tory Brexit, correctly in our view.

By 2019, Labour’s position had changed to one of renegotiation, followed by a second referendum. Even if Corbyn said he would personally remain ‘neutral’ in any second referendum, his position was perceived by many – and emphasised over and over again by Johnson – as either a dither or a closet Remain position. 

Two key players in the shift of Labour’s position were the Shadow Foreign Secretary, Emily Thornberry and Shadow Brexit Minister, Keir Starmer. Both of these, from the traditional right of the party, undermined Corbyn’s personal position at Labour Party conference by making it plain in their set speeches that unequivocally they were going to campaign in any second referendum to remain in the EU. Before he resigned, deputy-leader Tom Watson penned a newspaper article that insisted that Labour faced defeat unless it embraced a new referendum. Len McCluskey of Unite has complained over the weekend about a ‘metropolitan elite’ (Starmer and Thornberry are both London MPs) pushing Labour towards the position of a ‘Peoples’ Vote’ and he has a point.

Labour continued to get most support among younger voters, who are more in favour of remaining in the EU. But despite this, Labour’s changed position on the EU has been the key factor in losing it two and a half million of the nearly five million votes it had won back in 2017. That shift had the added effect (combined with the most vicious press campaign against any Labour leader) of undermining Corbyn’s personal standing.

The right wing of the Labour Party are rubbing their hands at this result because, they claim, it demonstrates the failures of radicalism and Corbyn personally. Right-wing commentators have been queuing up to go on TV – where, of course, they are welcomed with open arms – to argue for ‘change’ in the Party. All the usual suspects are jostling to rubbish the Labour manifesto and its radical slant: so we have assorted has-beens like Alan Johnson, Jack Straw and David Blunkett along with current MPs like Wes Streeting, Jess Phillips, Margaret Hodge, and all the usual riff-raff of the right. We even had the spectacle of former Labour general secretary, Iain McNichol, adding his pennyworth. Party members will be wondering why our current general secretary wasn’t on TV instead of a right-wing has-been. Oh, yes, it was the BBC.

Even if Jeremy Corbyn’s personal standing was a factor in the defection of some Labour votes, Left Horizons will not join in the chorus of personal abuse against the man. He has had a dirtier press campaign against him than any Labour leader and that includes Michael Foot and unfortunately, it seems that some of that rubbed off, despite the decline in influence of the mainstream press. In various headlines he has been “anti-British, anti-Semitic, pro-IRA, pro-Hamas, a friend of Putin, a Czech spy” and many other things. No story was too outlandish to make a good headline.

Lowest expense claims of any MP

Party members know that Jeremy Corbyn has consistently fought racism and prejudice all his life; he has opposed overseas military adventures like Iraq and Afghanistan and long before Margaret Hodge saw the need (as leader of Islington council), he fought for the interests of his constituents, including Jewish people, in Islington. Not incidentally, he has the lowest expenses claim of any MP. He has the support of thousands of Jewish members of the Labour Party. The charge that he is “anti-Semitic” is outrageous. But none of this featured, as broadcasters and the press conducted a character assassination, which at least to a degree, was successful on the doorstep.

If Jeremy Corbyn demonstrated any ‘weakness’ in his leadership, it was in his generosity towards the right-wing of the party, and particularly those in the Parliamentary Party, who have never accepted his double mandate from the membership and have never accepted the radicalism of the party’s half million members.

While Boris Johnson dealt ruthlessly with rebels in his own parliamentary party – kicking out twenty one MPs, including the grandson of Winston Churchill – Jeremy did not deal with the relentless sabotage, sniping and undermining from his ‘own’ side in the same way. Many right-wing MPs now calling for his early resignation are the same people who have undermined him non-stop for four and a  half years. Rather than fight back hard against the slanderous accusation of systematic anti-Semitism, as he ought to have done, he simply repeated his opposition to it, appearing to give credence to wildly false allegations.

We need to deal with the quasi-Tories in the PLP

In our period reflection, analysis and discussion in the Labour Party, we have to say loud and clear that the struggle for socialism will not progress as long as quasi-Tories infest the Parliamentary Labour Party. It was the split-off from the Labour Party forming the SDP that contributed to Labour’s defeat in the 1983 general election. Then, under Michael Foot, Labour won 28% of the vote, the SDP and Liberals (then separate parties) got nearly 25 per cent between them. The SDP subsequently disappeared into oblivion, and Labour’s right-wing today has learned a lesson from it. Let us not forget that 172 Labour MPs voted against him in the confidence vote in 2016, defying the mandate of the membership. The majority of these did not split from the party and have been re-elected as MPs. Unlike the SDP or latter-day defectors they are only staying to do damage from the inside.

Labour’s right wing are now demanding Corbyn’s head, but that is only the opening gambit for them. Their main aim is for Labour to row back from its radical reform agenda. It is true that we need to discuss to what degree there was some scepticism among Labour voters about the manifesto. The reforms outlined were aimed to tackle the very urgent problems faced by working class people up and down, but, prompted by the TV and newspapers, many workers asked, ‘how will they pay for it?’.

There is some basis to the doubts, because these very necessary reforms outlined by Labour will not be easily affordable under a capitalist economy, whatever John McDonnell says. Unlike Labour’s right wing, Left Horizons supports all of those reforms, but, as we have argued, they should be the starting point for a wholesale transformation of the economy along socialist lines. A socialist economy, democratically owned and run by the majority can easily afford Labour’s reforms – and much more.

But differences in explaining how these reforms can be brought about are not a reason for ditching them. The manifesto answered very real needs, we could even argue very reasonable needs, of working class people. Labour’s right wing were opposed and still are opposed to the Labour manifesto and the wave of radicalism that has gripped the party in the last four years. They want to roll the back to the Blair years, to Tory-lite, and to the miserable offer of the Ed Miliband ‘tombstone’ that lost us the 2015 election.

What the right wing will never accept is the fact that Labour’s policies – particularly re-nationalisation of rail and public utilities – have been shown by one opinion poll after another to be popular. According to a poll by Opinium, after the election, the main reasons given for the desertion of Labour voters were Corbyn’s leadership (37%) and Brexit (21%). Only 6% cited “economic policies” as their reason for switching. (Financial Times, December 14)

The right will now argue – and the BBC is offering the maximum platform for the idea – that Labour’s defeat was the worst for generations. In fact it was not. Labour’s share of the vote under Michael Foot was 27.6 % to be exact. Under Gordon Brown, Tony Blair’s successor in 2010, it was 29%. Under Ed Miliband in 2015, it was 30.4%. As bad as it was last Thursday, and faced with unprecedented hostility by the media and systematic sabotage by the right wing, it was still better than these results, at 32 %.

Even in terms of seats won, if we take into account Labour’s demise in Scotland, the result is by no means the worst. In 1983, Michael Foot won 209 seats, but this included 41 (out of 72) seats in Scotland where last Thursday, Labour only managed to hang on to one.

Brexit will be a disaster

So what is likely to happen now, in society at large and in the Labour Party in particular. One thing is for sure, we need to steel ourselves for a fight. The main enemy, as always, is the Tory government and it goes without saying that we will fight against all the policies and measures that Johnson will try to implement in the next few years. Brexit will be a disaster, bringing economic chaos and dislocation. Moreover, this will be taking place in the context of a looming world recession which will hit the UK economy particularly hard.

We now have a prime minister who has made a political career out of lying and the idea of a “smooth transition” out of the EU is only the latest lie. Even a columnist in the Financial Times (July 26), asked what the Tories’ answer was to the most “profound crisis” in modern peacetime thought they had put a “second rate huckster” in 10 Downing Street. Johnson is a man, the same newspaper’s sketch-writer says, “whose campaign involved inventing statistics, dodging interviews and hiding in a fridge.” He is a man, acknowledged by even Tories, as someone with only a passing acquaintance with the truth.

Whatever Johnson is now saying about healing and reconciliation after Brexit, there is not a snowball in Hell’s chance, that austerity will be “over” for the overwhelming majority of working class people and young people especially will continue to suffer the insecurities and uncertainties of life in Tory Britain. Johnson has admitted that Labour supporters have only “lent” their votes to him, but the promises of an end to austerity will turn to ash in their mouths. Homelessness will continue to rise. Low pay will plague millions of workers. Food banks will multiply, along with poverty and squalor in the private rented sector. The dismay of the millions of young voters who voted Labour will turn to anger in a measurable period of time and then we will see some serious opposition to the Tories.

Although the Fixed-term Parliament Act and Johnson’s comfortable majority, would appear to suggest that there may not be another election until 2024, it does not mean an earlier election is ruled out or that there will not be a crescendo of opposition to the government. Those who voted for him in former Labour areas will be expecting genuine improvement in their lives and prospects, investment in infrastructure, relief for local authorities, schools and the NHS – and none of these things are going to happen beyond cosmetic measures.

Young voters particularly angry

The first preliminary analysis of voting by age has been produced by the polling organisation of Lord Ashcroft, former Tory Party chairman. Even his poll shows that there was approximately the same gradient that we had in 2017, where the younger the voter the greater the likelihood to vote Labour. According to Ashcroft, 57% of 18-24 year olds voted Labour and only 19% Tory. Among 25-34 year-olds, the figures were 55% and 23% and for 35-44 year-olds 45% and 30%. This chimes with anecdotal evidence from election day itself. For the first time that anyone can remember in British politics there were long queues of voters at polling stations and a large majority of these were younger voters.

This information has profound implications for the future, because, when faced with years of Tory rule, these young voters will not shrug their shoulders and switch to the Conservatives. On the contrary, they will become increasingly angry at the economic and social outcomes they face. The long-term prospects for the British economy, as the article by Marxist economist, Michael Roberts explains here, are dismal.

Having failed on the electoral front, we may well see a move of workers and youth into struggles on the industrial front and on the streets. The pent-up frustrations and anger among workers in many industries and services – education, local government, NHS, rail, Royal Mail – will not vanish overnight and they are likely to exacerbated in the coming months and spill over into industrial disputes.

‘parliamentary democracy’ is discredited

Depending on what the leadership of the Scottish National Party does and the outcome of next year’s Scottish Assembly elections, the government in Westminster may also face an unprecedented constitutional crisis not dissimilar to the crisis in Spain over Catalonia. After the sweeping gains of the SNP there will be some considerable momentum towards another Scottish independence referendum and Johnson and the Tories, however big their majority in London, will be unable to deal with it.

As for the sanctity of ‘parliamentary democracy’ Johnson himself has diminished the status and reputation of the ‘mother of parliaments’ by his cavalier approach to its suspension, by the Tories’ hooligan behaviour in the chamber of the House of Commons and by the abandonment of ‘constitutional norms’ and custom and practice.  What could better demonstrate the Tories’ contempt for parliament than the image of Jacob Rees-Mogg arrogantly lounging full-length, eyes-closed, in the chamber of the House of Commons. Among young people especially, the Tories have set a certain tone – that parliament doesn’t really matter – and so the focus of opposition to the government will move outside and onto the streets.

But if we have a struggle on our hands against a rampant right-wing government, for the left of the Labour Party there is another fight. We will need to defend the radical shift of the party in the last four years and to vigorously oppose any attempt to shift the party back to the non-existent political ‘centre’, into Tory-lite territory.

Jeremy Corbyn is right to stay on as leader in a period of ‘reflection’ as he put it. But the right wing will be clamouring for his resignation as early as possible and they are already touting alternatives like Kier Starmer, Lisa Nandy or Jess Phillips, all of whom supported the leadership ‘no-confidence’ vote in 2016. Emily Thornberry’s acceptance speech in the early hours of Friday morning apparently sounded like an opener in her own leadership bid, but the Labour Party needs a right-wing leader from another London seat like it needs a hole in the head.

Open selection needs to be brought back on the agenda

We need to resurrect the idea of Open Selection – something favoured at Labour conference in 2018 by the majority of Constituency Labour Party delegates, but voted down by the trade unions and Momentum-supporting CLP delegates. Serious steps need to be taken to bring the parliamentary Labour Party to heel – to bring it into line with the aspirations and wishes of the majority of members. Labour MPs are in office to fight for Labour policy, for the hopes and aspirations of party members and for policies in the interests of workers in general. They are not there to feather their own nests or further their own personal careers. There should be no more allowing the NEC to parachute chosen candidates into safe seats where they have no connections, often against left candidates with a track-record of campaigning in the local area. Selections need to be entirely transparent, locally-managed and fully democratic.

Supporters of Left Horizons will participate in the debate and discussion that will inevitably grip the party in the coming months. We will be arguing in favour of Open Selection for a left candidate in any forthcoming leadership election and, above all, for the consolidation of socialist policies in Labour’s commitments for the future.

It will be interesting to see where some of the forces of the ‘left’ make their stand. The leadership of Momentum has shown itself to be unable to run its own organisation democratically and has used its authority to bend and give ground at every push from the right wing. Momentum and a lot of the so-called ‘lefts’ will no doubt draw entirely wrong conclusions from the general election and will support the dilution of radical policies. That must be opposed.

We must also fight and campaign for socialist ideas in the trades unions  affiliated to the party. Too many union representatives – at Labour conference and on Labour’s NEC – take decisions that fly in the face of the best interests of their members and often against their own expressed union policy. We must demand that union delegates to Labour meetings, at all levels, are fully accountable for their actions to the members they purport to represent.

There will be a lot to do and a lot to fight for. We might be bloody but we are  unbowed. We fight on.

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Britain: Some Answers From Brexit's Leave Voters.

Why we voted leave: voices from northern England from Guerrera Films on Vimeo.



This is an interesting film. I was on those picket lines in Yorkshire back in 1985 and it was a profound experience for me, changed my life in a way. This video gives some insight in to the thinking of working class people in the north of England. There are strong similarities with the US..As I was telling someone today, South East England is like a different country economically.

More on British Elections. Editorial: we can win this election!

March 2019: Thousands call for a second referendum (Image not with original article)

The following is the editorial on the British Election from the British Website Left Horizons

Editorial: we can win this election!

October 30, 2019 

After months of speculation, a general election has finally been called for December 12. This election will be a decisive turning point in British politics and it is a contest that Labour can win. The half-million strong Labour membership, bigger by far than the geriatric membership of the Tory Party, will be straining every sinew to make sure the Tories are defeated and Jeremy Corbyn is catapulted into power at the head of a radical Labour government.

It is the first general election in December for nearly a century and the latest in the calendar in more than a century. Elections are not normally held in December, and for good reason, given the possibility of wintry weather affecting the turnout. But that is precisely Boris Johnson’s calculation in holding a short, sharp election. He even opposed an election on December 9 rather than December 12, not because he has a sentimental attachment to Thursdays, but in the hope that the later the date the more likely that tens of thousands of student votes will go missing. In 2017, the student vote was overwhelmingly Labour and proved decisive in many constituencies, notably in Canterbury, where the seat went to Labour for the first time ever. Johnson’s own seat, Ruislip South in West London, includes Brunel University, with 10,000 students and staff. Johnson is hoping that students broken up from university or on their way home will not vote.

Potential of Brexit monopolising the election

The Tory Party relies upon the active support of the press and mass media rather than any campaigning by their membership, so no doubt Johnson is hoping that poor weather and the darker nights will deter Labour’s legions of workers from effectively working on the ground.

One thing that is different to the 2017 election, however, is the potential for Brexit to monopolise the entire campaign. As we have argued, the trading relationship between the UK and the EU is not and has never been the decisive question facing the working class. That issue is austerity and the drive to the bottom in wages, services, working conditions and in all the normal securities of life.

Nevertheless, the press and BBC will be doing their best to keep the Brexit as much as possible at the centre of the campaign in the next six weeks. That will chime precisely with the Tories’ main slogan, which will be to “get Brexit done”. Johnson is hoping to cut across the support in the polls for the Brexit Party and the only way he can do that is for the Tories to become the Brexit Party and make it the only issue in the campaign.

A means to drive living standards down further

Johnson is indeed aiming for a majority to ram through his Brexit deal. But it is what is behind it that matters. A Tory Brexit is nothing more than a means of driving down living standards even further. Johnson’s deal is worse than the miserable arrangement that Theresa May cobbled together. What environmental protections and food standards there are now will be ditched. Previously vague commitments to maintain working standards and workers’ rights – the so-called “level playing field” – have been explicitly jettisoned by Johnson. The NHS will be chewed to bits by big American medical corporations and pharmaceutical companies. The Tories, if they are allowed to leave the EU on their terms, will try to turn the UK into a low-pay, low-tax and low-skill economy off the shores of Europe. This is a plan that has been described as “Singapore on Thames”, where inward investment will be attracted by the opportunity to exploit the lowest-paid workers in Europe.

The Labour Party is absolutely right to oppose this Tory Brexit, but it is vital that the election campaign goes outside and beyond that issue and raises the class issues that affect the majority of the population.  A recent tweet from TUC pointed out that from 1997 to 2008, the average UK worker’s wage rose by £4772 a year, but in the ten years that followed, from 2008 to 2019, the average fell by £705 a year. This is the reality of Tory Britain…low pay, insecurity, uncertainty, a shortage of affordable housing, the disintegration of the NHS, education and local services and a relentless drive to the bottom. These are the real issues that affect millions of working people and their families. And it is on these issues that Labour has a clear advantage because the Tories have nothing to offer.

As Jeremy Corbyn said recently, “The real divide in our society is not between people who voted Leave or Remain in 2016. It’s between the many who do the work, create the wealth, and pay their taxes, and the few, who set the rules, reap the rewards and dodge their taxes.” The potential is there for a Labour campaign on the real issues. According to the Daily Mirror this week, almost half of people polled think Boris Johnson is lying about the NHS and a US trade deal. As well they might.

This will be a vicious election campaign and the press attacks on Corbyn and the Labour left which we have seen in the past will be multiplied ten-fold. No lie will be too big, no exaggeration too great, no slander too outrageous for the national press to repeat and for the BBC to echo. We expect nothing else from the Tories, but we should not be surprised if they are assisted from time to time by the barbs of some right-wing Labour MPs. These people have learnt nothing from the experience of 2017, when they demanded that Corbyn stand aside as leader who was “unelectable”, but then found their majorities increased as a result of Corbyn’s campaign.

Labour’s fifth column is still in place

Many of the old Blairite MPs are still in place as candidates and will be elected as MPs. We have to say, as an aside, that many of them would have been de-selected in the last year if the soft-left of the Labour Party, notably the Momentum leadership, hadn’t caved in to the right of the party and ditched Open Selection at the 2018 Labour conference. Labour’s right wing are a fifth column who are capable of sabotaging the election campaign. As long as their own seats are safe, many of them would be happy to see a Tory administration rather than a radical Labour government led by Corbyn.

Politics is more unpredictable and volatile than it has been for generations and it would be rash to predict the outcome of the election at such an early stage. But Boris Johnson’s calculations may well backfire as Theresa May’s did in 2017. The Brexit Party, starting off in the polls at around 10-11 per cent, is likely to be squeezed by the Tories. The Liberal-Democrats, supporters of the Tory coalition from 2010 to 2015 and therefore among the architects of drastic cuts in welfare and services, have made remaining in the EU their only policy, and in truth they have nothing else to offer. It remains to be seen whether or not they can get over the stigma of supporting the Tories on all of their flagship policies in the first half of the decade.

Two million registered to vote in eight weeks

What will be the decisive factors at play in the election? It is notable that according to official government figures, nearly two million people have applied to register to vote in the past eight weeks. This is almost double the number of the previous eight weeks. Out of the two million recent registrations, more than half (58 per cent) were from people under 34 and only 7% were from those 65 and over. This follows a spike in September, when there was speculation about an Autumn election and 200,000 people applied to register in just 72 hours, again more than half of them under 35.

In the 2017 general election, according to the Guardian, 55% of 25-34 year-olds voted Labour and among 33 to 44 year-olds, it was still 50%. A YouGov survey was even better for Labour: 18-19 year-olds were 66% for Labour, 20-24 year-olds 62%, 25-29 year-olds 63% and 30-39 year-olds 55%. It is true that there is no guarantee that history will repeat itself, but Labour can at least be confident that it can win the majority of young voters again. It is still the case that Labour is stronger, the younger the age of voters polled. This election will therefore be as much about voter registration as it will be about voting.

Labour’s mass membership can be decisive

Another important factor in Labour’s favour is its half million members, overwhelmingly supporting Jeremy Corbyn. Most of these have not been active in terms of participation in meetings and that is the only reason why right-wing Labour candidates have withstood trigger ballots. But the three big influxes of membership in two leadership campaigns and the 2017 general election campaign, have left a permanent mark. Labour won the recent Peterborough bye-election, against the odds, precisely because it was able to mobilise hundreds of party workers one weekend after another in the run-up to the vote.

Even if only a fraction of Labour’s membership turn out to work in the election, it will completely eclipse anything the other parties can do. If the Labour Party supplements the work of its large membership with mass rallies up and down the country, as it did in 2017, it will not only by-pass the hostility of the media and TV, it will help to galvanise and energise the membership.

But the key question, as ever, is what is in the Labour manifesto and how this is put across to the electorate. The more radical it is and the more it addresses the day-to-day needs of ordinary workers and their families, the better Labour’s results will be. Labour’s manifesto commitments from 2017 – and we hope and expect they will be even better this year – were extremely popular, as one opinion poll after another shows.

Labour regained 3 million votes in 2017

An energised Labour Party can do again what it did in 2017. In that election, Labour won back three million votes that had been lost by Tony Blair and New Labour. The jump in Labour’s support in 2017, by nearly 10 per cent from the 2015 election, was the biggest jump in Labour votes since 1945. Labour began 20 points behind in the polls and came within a whisker of winning. If the campaign had gone another two weeks Labour might have won.

Unfortunately, there are some even on the left of the Labour Party who are already wringing their hands in despair. We say to them, remember 2017. Left Horizons supporters will be out in the streets and on the door-knockers with other Labour Party members and we will fight like never before. Capitalism offers nothing to working class people, except more blood, toil, tears and sweat. We need a Labour government that looks to socialist solutions for all the ills of society. Let us work, fight and campaign for the next six weeks to put Boris Johnson and his rich elite where they belong: in the dustbin of history.