BREXIT: Ruling class deadlock

House of Commons

Fight Racism! Fight Imperialism! 268 February/March 2019

‘Everything under heaven is utter chaos; the situation is excellent’ – Mao

On 15 January 2019 Prime Minister Theresa May’s Brexit withdrawal deal, the product of more than two years of convoluted, drawn-out negotiations with the EU, was overwhelmingly defeated in the House of Commons by an unprecedented  230 votes.  202 voted for the deal and 432 against. 118 out of 317 Tory MPs voted against it. This is the largest defeat suffered by a British Prime Minister in modern history.1 The last time there was a defeat of such proportions was on 8 October 1924 when Ramsay MacDonald’s minority Labour government was defeated by 166 votes in the ‘Campbell Case’.2 DAVID YAFFE reports.

The withdrawal agreement and the Irish border

Labour Party leader Jeremy Corbyn announced after the vote that he had tabled a formal motion of no confidence in the government backed by other party leaders.  MPs voted on the no confidence motion the following day. It was clear that it would be defeated after the Democratic Unionist Party (DUP) and Jacob Rees-Mogg’s pro-Brexit Tory European Research Group, having earlier voted against the Brexit withdrawal deal, now said they would support the government. The no confidence vote was narrowly defeated by 325 to 306 votes, with the DUP and the vast majority of hard-line Brexiters voting with the government.

May had announced that if she survived the no confidence vote she would meet ‘senior parliamentarians’ from all parties to identify what would be required to secure the backing of the Commons for the withdrawal deal negotiated with the EU. She made it clear, however, that she would approach the talks trying to find a solution that would abide by the results of the EU referendum. This effectively ruled out talks with those wanting a second referendum or a full customs union. Labour leader Jeremy Corbyn refused to take part in the talks if she did not rule out the possibility of a no deal Brexit. That she would not do. Other party leaders as well as some Labour MPs took up the offer to meet her and her representatives but made no progress as May would not move away from her so-called ‘red lines’ – ending free movement and being able to strike trade deals with third countries. So the chaos and deadlock in the Commons will necessarily continue.

A divided ruling class

Since we made clear our position as communists to boycott the EU referendum of 23 June 2016,3 there have been a further 12 articles on Brexit in FRFI and an additional article which appeared solely on our website. It is certain that there will be quite a few more to come. Many have been encouraged to treat the Brexit debate as ‘boring’, with only the political and media elites concerned to promote and debate positions on the central issues. This view is ideologically dangerous. Latest developments have shown that not only do we have a disintegrating minority government with a Prime Minister drained of authority and dependent on the deeply reactionary pro-Brexit DUP to stay in power, but a divided ruling class facing the most significant strategic decision about the future path for British imperialism. In the referendum of June 2016 we were essentially being asked to choose between an imperialist Britain within an imperialist EU and an imperialist Britain outside of it as a junior partner of US imperialism.

Divisions in the ruling class on relations with what was then the EEC began to emerge most strongly within the Conservative Party in the 1980s with the growing crisis of British capitalism. Michael Heseltine, previously a Cabinet minister in Thatcher’s government and later to challenge her in the Conservative leadership contest, made the case for Britain’s future as part of the European Union in 1989 when he said: ‘The conditions which made it possible for Britain to be semi-detached from Europe for so long have vanished for ever. There is no empire to sustain us; we are no longer an industrial superpower; we can no longer pretend that Britain is in any sense an equal partner of the US. There is nowhere for us to go except as part of a European consortium.’ A growing number of Tory MPs, however, believe, against all the evidence, that Britain could go it alone as an independent global power out of the EU.

Since the first referendum on the EEC in 1975, there has been a very significant change in the attitude of the British Labour movement to Europe. By the beginning of the 1990s it had become increasingly clear that British imperialism could no longer sustain a social democratic state. For sections of the British Labour movement a Keynesian welfare state was no longer sustainable on a national basis. A European-wide Keynesianism was seen as a more viable alternative, with British imperialism becoming a significant player within a European imperialist bloc. Sections of ‘left’ MPs within the Labour Party had already started the push for a new strategy towards Europe, putting their own opportunist gloss on the issues at stake. Typical were the Labour MPs Ken Livingstone and Harry Barnes:

‘Democratic socialists must build for a European future, placing social welfare and democracy on the agenda …On its own the sovereign nation state is no longer up to the job of dealing with the many pressing issues, such as the power of multinational corporations, ecological crises, new technology investment, the conversion of defence industries…The socialist project goes through Europe or it probably goes nowhere.’4

Other sections of the Labour Party, together with some ‘left’ political organisations and unions, see the EU with its regulations on state aid, privatisation and competition as a barrier to progressive/socialist advances in capitalist Britain. The Labour Party is split on this issue with its leader Jeremy Corbyn resisting the dominant pro-EU majority in the Labour Party in his attempt to pull the party towards an independent progressive/socialist Britain – a national British road to socialism.

The withdrawal deal and the Irish border

Agreement on the 585-page Brexit withdrawal deal, together with the 26-page outline of a political declaration on the future UK-EU relationship, is essential if the UK is to retain the benefits of the single market and customs union for a further 21 months after leaving the EU on 29 March 2019. This transitional period itself, however, depends on the withdrawal deal being agreed and ratified by both the UK and EU parliaments. The agreement also allows for a one-off extension to the Brexit transition period for up to one or two years to December 2022 at the latest, six months after the next general election is due to take place.

The withdrawal deal contains a default ‘backstop’ solution5  to avoid a hard border on the island of Ireland, put in at the request of the Irish Republic, under which the north of Ireland would maintain full alignment with the EU single market and customs union. The government accepted the ‘backstop’ on the understanding that both sides work towards technological and legal alternatives. The ‘backstop’ will start at the end of Britain’s transition period (at present December 2020) until and unless alternatives are agreed. It is totally unacceptable to the hard-line Eurosceptics in the Tory party and to the DUP, which the government relies upon to maintain a working majority in Parliament, as it is seen as threatening the constitutional integrity of the UK, and according to them creating a customs and regulatory border down the Irish Sea. The DUP’s ten MPs refused to support the government and abstained or backed Labour in a series of votes on the Budget Finance Bill on 19 November 2018 – breaking the so-called Confidence and Supply deal between the DUP and the Tory party.  This was a warning shot to the government on future developments if it doesn’t change its Brexit strategy.

The withdrawal agreement, crushingly defeated in the Commons on 15 January, contains a key concession to the EU that infuriated many Brexiters and particularly the DUP. Britain will not be able to unilaterally exit the ‘backstop’ plan to avoid a hard border on the island of Ireland. That decision will lie with a joint committee with an equal number of UK and EU representatives, as well as outside independent members. The EU and the UK will decide jointly within this committee that the ‘backstop’ is no longer necessary. There would be no unilateral way to withdraw from the ‘backstop’.

May’s premiership under threat

The Prime Minister clinched the support of her deeply divided Cabinet for her Brexit deal after more than five hours of fraught and ferocious debate on 14 November 2018. Up to 11 Cabinet ministers were said to have spoken against the deal. Over the next 24 hours two Cabinet ministers resigned – the Brexit Secretary Dominic Raab and Esther McVey – along with five junior ministers. The vote in the House of Commons on the withdrawal deal was initially announced to take place on 11 December.

In the run-up to the vote on the withdrawal agreement May suffered further humiliation and defeat. On 4 December she sustained two major Brexit defeats in one day. The start of the five-day debate on the deal was delayed as MPs passed an historic motion, by 321 votes to 293, finding the government in contempt of Parliament for failing to publish in full legal advice on Brexit. It had to be published the next day. The second major defeat, by 321 votes to 299, was the passing of a cross-party amendment aimed at strengthening the hand of Parliament if the Brexit deal is voted down. Any motion brought back to Parliament if the deal is defeated can be amended.

On 4 December Remain campaigners welcomed a European legal opinion by a senior legal adviser to the European Court of Justice (ECJ) that the UK could revoke Article 50 independently without needing the permission of every EU member state. (Article 50 of the Treaty of Lisbon gives any EU member state the right to quit unilaterally and outlines the procedure for doing so.) The ECJ confirmed this legal opinion when it ruled on 10 December that a withdrawing member state may revoke its intention to withdraw from the EU unilaterally.

On 11 December an increasingly desperate Prime Minister set off on a tour of European capitals to plead for a better Brexit deal, after being forced at the eleventh hour to abort a planned vote on her withdrawal deal due on that day, when it became clear that she would be massively defeated. The tour was to no avail. Donald Tusk, European Council President, said that while the EU was ‘ready to discuss how to facilitate the UK ratification’, he warned that there could be no renegotiation of the Brexit deal or the Irish ‘backstop’. The vote was considerably delayed by the government until 15 January 2019, much to the annoyance of most MPs.

The acrimonious split in her party was further demonstrated when the necessary 48 letters needed from Tory MPs were dispatched to allow a confidence vote in her leadership of the party on 12 December. She won a pyrrhic victory by 200 to 117 votes, confirming the irreconcilable split in the party.  Rees-Mogg, the instigator of the attempted coup, said it was a terrible result for May and she should resign. For this vote the whip was restored to a pair of MPs who had been suspended for sexually inappropriate behaviour. Shortly before the vote May promised to stand down as Prime Minister before the 2022 general election.

On 19 December the Prime Minister infuriated many Tory MPs and business leaders by introducing a post-Brexit immigration White Paper to slash EU immigration (see p2). It centred on tough visa restrictions on unskilled migrants from the EU and a £30,000 minimum salary for migrants to enter the UK as ‘highly skilled’ workers.  This deliberate opportunist move to placate Brexiters was seen to have potentially dire consequences for the already fragile British economy.

May wanted a 12-month limit on her Irish ‘backstop’. The EU would not agree to a legal guarantee on this. Assurances before the vote on her Brexit deal in a letter from the European Commission President Jean-Claude Juncker and Donald Tusk, European Council President, were to no avail, as it simply stated that they expected the  ‘backstop’ to be to be replaced ‘as quickly as possible’. It did not have the ‘legal force’ the DUP and arch-Brexiters sought.

May suffered two other defeats leading up to the vote on the deal. An anti-no deal amendment to the Budget Finance Bill, by a cross-party alliance of MPs, restricting changes to tax law in a no deal Brexit was passed by 303 votes to 296 on 8 January. May was the first Prime Minister for 41 years to lose a vote on a government Finance Bill. A second defeat in 24 hours by 308 to 297 votes came from a vote tabled by Tory MP Dominic Grieve, requiring May to produce a Brexit ‘Plan B’ within three parliamentary sitting days if she loses the vote on the withdrawal deal. Eurosceptic MPs were furious that the Commons speaker, John Bercow, had allowed the vote to take place.

In the meantime the Prime Minister phoned union leaders to seek their support for her deal, including Unite’s Len McCluskey and the GMB’s Tim Roach. This was the first time since the start of her premiership that she had spoken to them. She told them the deal was good for protecting jobs and that it guarantees environment protection and workers’ rights. They were not convinced. A few days later they were invited to Downing Street for further discussions.

The inevitable consequences of her refusal to make compromises on the ‘red lines’ governing the withdrawal deal led to its overwhelming defeat when put before the House of Commons on 15 January.

Ruling class deadlock

Parliament exists to put forward and pass legislation which sustains ruling class interests in this country. With the ruling class split on Brexit this is not a straightforward process, so the divisions between and within parties in Parliament begin to take on a significant role. MPs are a privileged, highly-paid political elite with access to many other lucrative positions. They are well protected from the devastating effects that the crisis of capitalism is imposing on millions of working class people. They will manoeuvre and battle to ensure that they sustain these privileges. This is manifest in the wheeling and dealing over Brexit in the House of Commons after the crushing defeat of May’s Brexit deal.

On 21 January May produced an outline in Parliament for a new plan, ‘Plan B’, which essentially involved a promise to renegotiate the ‘backstop’ arrangement in her original withdrawal deal – something the EU chief negotiator Michel Barnier had already ruled out. She believes, if she can address the ‘potential permanency’ of the ‘backstop’ with some end date mechanism, the DUP and significant numbers of her Brexiter critics could be won round. May has ruled out a second referendum under the guise of it being a ‘threat to social cohesion’. She also dismissed the suggestion of extending the Article 50 process to give more time for new Brexit proposals to be discussed and debated.  She has refused to rule out a no deal Brexit despite the devastating impact it would have on the British economy. May’s ‘red lines’ are unmoveable and she insisted that the only way to rule out no deal is to vote for her deal or revoke Article 50 and have no Brexit. Her main concern is to keep an irrevocably split Tory Party in power, which depends on the support of the deeply reactionary pro-Brexit DUP – something which could well prove to be impossible. Jeremy Corbyn, after listening to her outline plan, called it ‘groundhog day’ as it offers nothing new. Remain Tory MP Sarah Wollaston declared that ‘Plan B is Plan A’.

The so-called Plan B will be brought to the Commons on 29 January when it can be amended and voted on. Numerous amendments have been proposed. They include stopping no deal, extending Article 50, giving Parliament more control on the final outcome, a Labour Brexit deal and a second referendum. All the amendments will be taken subject to the discretion of the Speaker.

An amendment by Labour MP Yvette Cooper and Conservative MP Nick Boles states that if there is no deal in place by the end of February, the government must put a binding motion on extending the Article 50 process. MPs could push back the date of departure to 31 December, or another date. It has a good chance of being passed. Amber Rudd, the Work and Pensions Secretary, warned that dozens of ministers could quit if they were forced, on the grounds of collective responsibility, to vote against this amendment.

Labour’s amendment would give Parliament a say on a Brexit deal supported by the party, including a customs union, a close relationship with single market alignment and protection for the environment and workers’ rights. It also offers the option of a vote on whether to hold a second referendum. Corbyn said: ‘Our amendment will allow MPs to vote on options to end this deadlock and prevent the chaos of a no deal. It is time for Labour’s alternative plan to take centre stage while keeping all options on the table including a public vote.’ Many MPs from Leave-voting constituencies oppose a second referendum as they see it as a threat to their re-election and access to the status and privileges which come with being an MP. Brexiter ministers have warned the Prime Minister that she risks splitting the Conservative Party if she pursues a permanent customs union with the EU or rejects leaving the EU without a deal.

Dominic Grieve, a former Tory minister, has tabled an amendment proposing that Parliament would allow backbenchers six days to table different Brexit motions from mid-February to late March. MPs on those days could propose and vote measures such as a customs union, Labour’s Brexit plan, the Norway model and a second referendum.6

The outcome of this process, and the impact on both major political parties, Tory and Labour, is uncertain. It is clear that this Brexit saga has a long way to run.

The root of the crisis

The Tory party is hopelessly divided, yet determined to hold on to political power. It should be remembered that the referendum held in June 2016 was called by then Prime Minister David Cameron in an attempt to contain the deep splits in the Tory party over Europe, exacerbated by the challenge of the United Kingdom Independence Party’s (UKIP) anti-EU stance and racist immigration policy, and to strike a populist pose to improve his party’s prospects at the next general election. Today Theresa May’s minority government is irrevocably divided on Brexit, desperately holding on to power with the support of the deeply reactionary pro-Brexit DUP. While this is the impetus behind the deadlocked negotiations it is not its root cause. That is grounded in the relative decline of a British capitalism facing a global economic crisis and growing imperialist rivalry.

Imperialist rivalry, the European Union and Brexit

The decision of US President Donald Trump to pull out of the 2015 Iran nuclear deal on 8 May 2018 and impose further sanctions on Iran and countries and companies trading with Iran, an expression of his ‘America first’ nationalism, itself a response to the relative economic decline of US imperialism, represents a serious threat from the US to a European imperialism potentially weakened by the growing conflict over Brexit.

The EU has to decide whether to hit back against the threat of sanctions and revive the EU ‘blocking regulation’, a response that enabled the EU to prevail over extraterritorial US sanctions to deter trade with Cuba, Iran and Libya in the 1990s. That regulation prohibited EU entities and courts from complying with and enforcing a list of foreign sanctions laws, raising the prospect of financial penalties for companies that do comply. It will be more difficult this time because of the deeper links between European companies and the US financial system and the threat of large fines, criminal charges and asset seizures against such companies in the US (Financial Times 15 May 2018). There is a lot at stake and the EU has to determine how it will respond to this growing challenge from a rival imperialist power.

At a dinner before a meeting of the 28 European leaders, including British Prime Minister Theresa May, in Sofia, Bulgaria on 16 May, the President of the European Council, Donald Tusk, began to address this issue when he said: ‘We are witnessing today a new phenomenon, the capricious assertiveness of the American administration.’ He condemned the US withdrawal from the Iran nuclear deal and its threat of a transatlantic trade war. Tusk drew lessons from this: ‘I have no doubt that in the new global game, Europe will either be one of the major players, or a pawn. This is the only real alternative. In order to be the subject and not the object of global politics, Europe must be united economically, politically and also militarily like never before. To put it simply: either we are together, or we will not be at all.’

A significant response to this development came later in the year from Jean-Claude Juncker, President of the European Commission, in his last State of the Union speech to MEPs in Strasbourg on 12 September. In it he proposed to turn the euro into a global reserve currency that would rival the dollar as part of a drive to reduce its dependence on the US. He said it was ‘absurd’ that Europe pays for 80% of its energy import bill – worth €300bn a year – in US dollars when only roughly 2% of EU energy imports come from the US. ‘It is absurd that European companies buy European planes in dollars instead of euros’. An initiative was needed, he said, from the European Central Bank to promote the international use of the euro. 

This demand signals Europe’s alarm at Trump’s moves to use the dollar as a weapon of foreign policy to punish US imperialism’s rivals. The EU has said earlier this year that it will switch from dollars to euros to pay for Iranian oil imports in response to the conflict with the US over the Iranian nuclear deal. On 21 August, Germany’s Foreign Minister Heike Maas said: ‘It is indispensable that we strengthen European autonomy by creating payment channels that are independent of the United States.’

In his speech Juncker outlined the steps to be taken to create from the EU a European imperialism able to stand up to the US. He said: ‘The geopolitical situation makes this Europe’s hour: the time for European sovereignty has come. It is time Europe took its destiny into its own hands. It is time Europe developed what I coined “Weltpolitikfähigkeit” – the capacity to play a role, as a Union, in shaping global affairs. Europe has to become a more sovereign actor in international relations.’

As we have consistently pointed out, the parasitic character of British capitalism has made it increasingly incapable of withstanding the economic and political challenges of US or European imperialism as an independent global imperialist power. The Brexit conflict is essentially a dispute between sections of the ruling class over two necessarily, totally reactionary outcomes for British capitalism – staying as part of a European imperialist bloc or leaving and becoming an offshore centre for usury capital under the umbrella of US imperialism. In addition, Brexit is creating serious obstacles to sustaining the City of London as a leading global financial centre and with it the material basis for the standard of living of the more privileged sections of the British working class.7 In this context it is not surprising that Trump’s ‘America first’ nationalism and the growing US conflict with Europe are driving the opportunist tendencies in the British Labour movement towards staying within or as close as possible to a European imperialist bloc. Corbyn supporter, journalist and commentator Paul Mason expresses this development clearly when he says:

‘If Brexit was a crack in the superstructure of globalisation Trump has aimed a wrecking ball at its foundations. As the world fragments into conflicting trade and finance blocs it is imperative for both geographic and cultural reasons for Britain to attach itself as closely to Europe as possible.

‘With Trump in power, being inside the single market has become the only logical option for a Labour government, even if that might make some of its plans for state ownership, state aid and workplace regulation more difficult to achieve.’8

This was, in essence, the position that was adopted at the September 2018 Labour Party Conference. The composite motion that was passed not only called for a relationship with the EU that guarantees full participation in the Single Market, but also rejected a no deal Brexit and supported all options remaining on the table, including campaigning for a public vote (second referendum) if Labour could not force a general election. Keir Starmer, introducing the motion, made it clear that the question of a public vote should be an open one with remaining in the EU an option. In addition any deal signed by the May government with the EU had to satisfy six tests which Starmer set out in 2017. These include a strong and collaborative future relationship with the EU, delivering exactly the same benefits as currently exist for members of the Single Market and Customs Union.

Labour’s compromise position is both reactionary and unrealisable. As has been argued already we reject totally taking sides in what is essentially a dispute between sections of the ruling class over what would be for Britain necessarily totally reactionary outcomes. The only principled communist position is to expose the reactionary intentions of those on either side of this debate. There is no short cut. We must use the chaotic situation to continue to build an anti-imperialist movement in this country, and open the path for communists to link-up with those other forces in Europe fighting against European imperialism.


1 This is an edited and updated version of David Yaffe’s talk on Brexit given at a London RCG meeting on 16 January 2019.

2 The ‘Campbell Case’ of 1924 involved charges against a British communist newspaper acting editor J R Campbell for alleged ‘incitement to mutiny’ caused by his publication of a provocative open letter to members of the military, including calling on them to ‘Refuse to shoot down your fellow workers!’ The Labour government suspended prosecution of the case and it was defeated by Liberals and Conservatives in the House of Commons twice on the same day – the second time by 161 votes.

3 David Yaffe ‘EU referendum: the position of communists’ in FRFI 251 June/July 2016, on our website at http://tinyurl.com/z7cpcz7

4 The Guardian 21 November 1991

5 See David Yaffe ‘Brexit Chaos: No end in sight’ FRFI 267 December 2018/January 2019 on our website at https://tinyurl.com/y8jm7pgw

6 Much of this recent information is taken from the Financial Times and The Guardian (21-24 January 2019).

7 In July 2018 Deutsche Bank shifted half its euro clearing activities to Frankfurt. The bank could eventually move about three-quarters of its estimated €600bn assets to Frankfurt. During the past 12 months, 10 foreign banks have moved operations from London to Frankfurt lifting the total number of ‘Brexit banks’ to 25, including Goldman Sachs, Citi, JPMorgan and Barclays. There are now 8 ‘Brexit banks’ in Paris and 15 in Luxemburg, Dublin and Amsterdam (Financial Times 25 September 2018). Financial services companies have moved almost £800bn in staff, operations and customer funds to continental Europe since the Brexit referendum according to a report from consultancy EY (Financial Times 8 January 2019).

8 Paul Mason ‘I’m backing a second Brexit vote – so should Jeremy Corbyn’ The Guardian 24 September 2018.

 

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