The three versions of Brexit

Submitted by Matthew on 11 November, 2015 - 12:46 Author: Harry Glass

In the forthcoming European Union (EU) referendum, the question on the ballot paper will be “Should the United Kingdom remain a member of the European Union or leave the European Union?”

The duty of the revolutionary left is to weigh up these concrete alternatives from the perspective of the working class internationally — its global interests, its European interests and lastly the specific impacts for workers in the UK.

Three possibilities are being floated, the first of which is not an actual alternative at all, while the others, whatever their nuances, are universally worse for working class interests.

The first “alternative” propagated by some on the left such as Owen Jones, the SWP and Socialist Party, and some within the RMT leadership, is left-exit, or “Lexit”. The second might be called “EU-lite”, meaning the UK would have a trading relationship with the EU like Norway, Switzerland or perhaps Turkey. The third, and most likely scenario, is the “neoliberal nirvana”, whereby the British state charts its own course within the hurricane forces of globalised capitalism.

The idea of a left exit from the EU is not just fanciful, it is utterly delusional. It is clear from the pro-business “Remain” campaign and the equally pro-business “Leave” campaigns that the terrain for leaving the EU is far from working class political economy. Those driving the exit campaign are among the most reactionary, anti-working class forces in British politics, whether they are from UKIP or the “even-further-far right”, or from within the Tory party. Brexit under these circumstances would be the result of a racist, anti-migrant, chauvinist deluge, one which would completely swamp the sideshow arguments of Lexit advocates.

If such chauvinist forces are able to coalesce and sweep to victory, it would come off the back of an orgy of nationalism that would threaten the existence of the left. It will ramp up the series of measures designed to punish and isolate migrant workers already in the UK and those who hope to live here, and would spill over into racist attacks on minority ethnic communities already established, including people of colour born in the UK. With 7.7 million foreign-born people (including 2.6 million EU-born citizens) living in the UK, such an assault will be highly divisive and utterly reactionary.

The “Socialist United States of Europe” will not be an option on the ballot paper in this referendum. The path to a Socialist United States of Europe can only come from forging closer ties of solidarity with other European workers, fighting across an increasingly integrated terrain created by capital and its states. It is ridiculous to counterpose workers across the rest of the globe to unity with workers across Europe; in fact global working class solidarity and European worker links are part of the same internationalist approach. The concessions to nationalism already visible with the Morning Star, the Socialist, some RMT leaders and from Lexit Labour MPs shows the dangers of accommodation on this front. The way to convince workers who express hostile opinions about Europe and/or migrant workers is not to agree with them and then add a few caveats about the “real” enemy. It is to take the argument about the necessity of international solidarity head on. We need to outline demands for levelling up conditions across Europe as part of the fight for socialism.

Some on the left and others on the right are promoting the view that not much would change in the event of Brexit. They say that given the levels of trade between the UK and the rest of the EU, the British state could quickly negotiate a looser, mostly trading relationship with the EU — something like the current arrangement with Norway or Switzerland, or further afield, the customs union with Turkey.

This sounds plausible, but it ignores key problems. The EU is by far Britain’s biggest trading partner, accounting for 45% of UK goods and services exports and 50% of imports. Britain’s next biggest trading partner is the US. The UK is the EU’s top destination for Foreign Direct Investment (FDI), winning one in five projects in recent years. Although the UK government pays £17 billion for membership, once rebates and regional grants are factored in the net contribution is nearer £8 billion (figures from David Charter, Europe: In or Out? 2014). Those are the immediate economic realities that Brexit throws into the air. The Norway option is the most limited. Norway, which has huge oil revenues and largely opposed EU entry in order to protect its farmers, still contributes billions to belong to the associated European Economic Area (EEA, along with Iceland and Liechtenstein). Under this arrangement, these states pay for the privilege of trade access and still have to abide by EU laws relating to the four “freedoms” of capital, people, goods and services. They therefore implement the bulk of EU law without having a significant say in its content or scope, because they are not represented politically within the EU structures. Thus the UK leaving would have none of the alleged benefits but retain and worsen the costs, particularly the democratic deficit. Much the same is true of Switzerland. Swiss people rejected the EEA in a referendum in 1992 and Switzerland remains part of the European Free Trade Area (EFTA). Its parliament retains the power to scrutinise and reject EU law, but in practice transposes more than half of them anyway. It has a trade agreement with the EU on goods but not for services, no doubt to protect its indigenous finance capital. It is also absent from EU political structures. Finally, Turkey currently has a customs union, an even looser trading relationship.

These arrangements might suit some sections of business, but they close off the existing, truncated but nevertheless extant democratic channels that European workers can use to advance political demands. More significantly, these arrangements have been negotiated by the EU and other European powers because they see these states as potential members at some point, when international and domestic circumstances might allow it. That will not be the direction of travel after Brexit: other European states may judge that they don’t need the UK and adapt accordingly. This would cut off workers in the UK from our sisters and brothers, putting up further barriers to solidarity and making joint struggles harder to fight.

The final Brexit scenario and the one most likely to unfold given the current balance of forces is the “neoliberal nirvana”, or what UKIP MP Douglas Carswell has reportedly referred to as “Singapore on steroids”. In this scenario, the UK state will make its own trade agreements, beyond the current WTO arrangements. In this set up, the UK can deregulate and adapt flexibly around the imperatives of global capitalism. The UK would become offshore what Singapore or Hong Kong are to Asian economies — a conduit for trade and investment from across the globe. Open Europe, a Eurosceptic thinktank, published a report earlier this year, “What if...? The consequences, challenges and opportunities facing Britain outside the EU”.

It stated that the consequences of UK withdrawal would range between a 0.8% permanent loss to GDP and a 0.6% permanent gain in GDP by 2030, depending on the mix of policy approaches. It rejected the Norway and Switzerland options as unsuitable for the UK, but argued that with more liberal trade arrangements and large-scale deregulation at home, economic “gains” (for capital) could be made. Beneath the diplomatic language, the report revealed that even in neo-liberal calculations, UK capital outside the EU could thrive within global capitalism only through more thoroughgoing TTIP-style treaties, more privatisation, and slashing working time, safety and other EU-derived laws. The warning for the working class is stark: quitting the EU in current circumstances will unleash a wholesale neoliberal assault on the gains won by workers in the UK over decades of struggle. The result could well trigger a similar attack across the EU as it reels from Brexit. Such downward pressure would also hit workers across the globe, defenestrating labour movements and atomising workers in a neoliberal wave. In short, this neoliberal nightmare is the most likely scenario as envisaged by bourgeois thinkers in the aftermath of Brexit.

The labour movement across Europe and in Britain must not pretend that the EU is a workers’ paradise. It remains a bosses club that mostly promotes capitalist interests, the concentration of capital and the interpenetration of European bourgeois states. But at present for workers, being inside the EU is the lesser evil compared with the quantifiable, well-defined alternatives offered by the bourgeoisie after Brexit. Socialists across Europe have to fight to reform the EU, expanding the democratic space for workers to organise in and levelling up economic, social and political rights across the continent. That is the strategic line for uniting European workers to fight for reform and ultimately for socialism. Brexit cuts across that orientation. Using the fight for the UK to remain in the EU for refurbishing the British labour movement, making solidarity with migrant workers and making direct links with militants across the continent is the best approach for Marxists in these conditions.

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