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WHAT does Brexit mean for jobs and the economy in Britain?
During the EU referendum campaign, a barrage of reports, open letters, forecasts and announcements warned that a Leave vote would bring about an immediate recession. GDP would fall, the pound would collapse, unemployment would rise and by 2030 the average household in Britain would be £4,300 worse off.
Tim Shipman shows in his blockbusting book, All Out War: The Full Story of How Brexit Sank Britain’s Political Class, how this offensive was carefully orchestrated.
Between them, prime minister David Cameron’s private office, chancellor George Osborne's Treasury, the Stronger In strategy and media teams and a PR cabal including Lord Mandelson choreographed a diarrhoeal stream of doom and gloom.
There was nothing accidental about the commissioning and publication of Treasury forecasts, joint letters by FTSE 100 chief executives and 200 “entrepreneurs,” warnings from the G7 and the IMF, Barack Obama’s “back of the queue” threat and the rest. They were calibrated to generate a fresh, scary headline every day.
Goldman Sachs, JP Morgan, Citibank, Morgan Stanley and the other big business backers of Stronger In — who far outnumbered the maverick millionaires funding the main Leave campaigns — must have thought their money was being well spent.
Since the referendum result, the predictions of post-Brexit catastrophe have poured forth unabated, along with excuses for the failure of the first batch to materialise. Like a mirage, they advance into the distance as time passes.
Of course, this is not to pretend that the British economy is in good shape and improving.
Economic growth is fairly steady but slow and due to decline a little.
The pound has fallen but stabilised for the time being against the dollar and the euro — bad for import prices, good for exports.
Interest rates remain low but are beginning to rise — still a favourable climate for investment in productive industry, although the capitalist class in Britain is more interested in financial markets, shareholder dividends, property and profiteering abroad.
Unemployment continues to fall as employment rises, although many new jobs are low-paid and insecure. Business investment and productivity per hour remain stagnant. Britain’s balance of trade in goods continues to worsen, while a surplus in services and higher profits from overseas investments have reduced the current account deficit since Brexit.
So it’s a mixed bag.
The major structural weaknesses persist: low investment, domination by the financial sector, a small industrial and R&D base (too dependent on armaments), external ownership and control of strategic sectors such as energy and transport, a growing current balance of payments deficit with the EU since 2001, an over-reliance on overseas investment earnings, no regional development strategy and the almost total absence of integrated economic planning, whether sectoral or national.
There is no evidence that staying in the EU single market and customs union will assist in remedying these structural deficiencies. They have not done so up to now.
Indeed, in some areas, EU “free movement” and competition rules prohibit the kind of action that is sorely needed.
That is why we need a People’s Brexit, not a Tory bogus Brexit that would keep our economy tied to the rules and institutions of the EU single market and customs union.
A People’s Brexit would mean:
- Allowing the British, Scottish and Welsh governments to organise financial assistance and investment for industry and infrastructure, free from EU treaty bans. There would be no EU restrictions on the Scottish Futures Trust programme or Labour’s “people’s quantitative easing” policies.
- Ending EU corporate establishment rights and the free movement of capital, so that governments can once again direct capital and promote regional policies that reduce economic and social inequalities.
- Using public ownership to integrate energy and transport systems, with emphasis on green and sustainable development.
- Seeking a low or no-tariff EU trade deal in specific sectors, while British governments are free to negotiate agreements with the world’s emerging and most dynamic economies (whose share of Britain’s trade and investment increases as the EU share shrinks).
- Allowing public authorities to promote local employment and investment, workers’ rights and social equality, free from EU competitive tendering rules.
- Reintroducing policies to support farming and fishing communities, rather than undercompensating them for the negative impact of market forces.
- Repatriating extensive powers to democratic legislatures in London, Edinburgh and Cardiff as we move towards a federal Britain. The Scottish and Welsh nationalist parties would prefer to leave those powers in Brussels.
Even the staunchly pro-EU Financial Times has reported on the likelihood that Brexit could benefit industrial training, the countryside and Britain’s ports beyond Dover.
Many People’s Brexit policies were showcased in Labour’s 2017 manifesto For the Many, Not the Few. However, as the Communist Party has pointed out in detail, these cut across EU treaty rules and directives in at least 16 specific areas.
That is why there is much common ground between EU Commission negotiators and the Tory government: they both fear that a Corbyn-led Labour government would break the neoliberal consensus so beloved of big business, mainstream Tories, many right-wing Labour MPs and the EU itself.
As reported in the Times (May 7), the Guardian (August 2) and the Financial Times (August 4), there is growing agreement that the answer is a “bogus Brexit” that keeps Britain locked into EU single market and customs union rules.
Hence the Chequers plan in July which drove out the Cabinet’s Brexiteers, replacing Boris Johnson with pro-EU Foreign Secretary Jeremy Hunt.
Hence the renewed campaign by Labour MPs to undermine Corbyn and shadow chancellor John McDonnell and get Labour to sign up to the EU single market and a repeat referendum.
Of course, nothing would guarantee a Labour defeat (and the resurrection of Ukip) more surely than telling 17.4 million voters that they are thick, racist bigots who — EU-style — will have to vote again until they get the answer right.
Now Britain and the EU are inching towards a bogus Brexit settlement which will keep Britain and Northern Ireland aligned with EU rules and institutions.
Real and contrived problems of City financial “passporting,” migration and residency and the Irish border are likely to be overcome, helped by whipping up “no-deal” fears in Britain that would allow further concessions to the EU.
The alternative is a People’s Brexit. And the only “people’s vote” we need is a general election so a left-led Labour government can carry it through.
Robert Griffiths is general secretary of the Communist Party.
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