The British ruling class is deeply divided on its future relations with the European Union (EU). The vote, by a small majority, in the EU referendum of 23 June 2016 to take Britain out of the EU was unexpected and no contingency planning by the then Cameron government or the Brexit camp was in hand to deal with it. Cameron resigned and Theresa May became Prime Minister on 13 July 2016. Soon after this, her monotonously intoned catchphrase ‘Brexit means Brexit’ was launched. Yet, more than a year later, after much toing and froing, we have little idea of what this means concretely. David Yaffe reports.

The divisions in the Conservative Party were most strikingly demonstrated on 22 September 2017 in Florence, the European city where Theresa May chose to deliver another, this time more conciliatory and less combative speech on what ‘Brexit means Brexit’ actually entails. Her aim was to break the deadlock in the ongoing talks with EU negotiators. Despite her speech being agreed at a two-and-a-half hour cabinet meeting the previous day, she felt it necessary to take along with her three cabinet ministers, the Chancellor Philip Hammond, the Foreign Secretary Boris Johnson, and the Brexit Secretary David Davis, who disagree profoundly with each other on Brexit. In a charade of cabinet unity they were made to endure her speech, sitting in the front row under the gaze of most of the British media. On her return, further rows and disagreements among the three ministers were reported in the British media.

The Labour Party has its own divisions over this issue. At the end of August the party made a significant shift on Brexit by backing continued membership of the EU single market in a ‘transitional period’ of two years or more beyond the end of March 2019, the date when Britain is down to leave the EU. This marked a clear dividing line with the Conservative Party. Sections of the Labour Party, however, now want to go even further and permanently keep the UK in the single market and customs union after Brexit. Over 40 senior party figures, including more than 30 MPs, Labour peers, trade union leaders and mayors, signed an open letter to The Observer (24 September 2017) demanding that Labour shows ‘the courage of its convictions’ and toughens its pro-EU message. This move came as Jeremy Corbyn told the BBC’s Andrew Marr that he was cautious about committing to remain in the single market because it could restrict Labour from putting in place certain domestic policies as a result of EU restrictions on state aid and spending.

To avoid open conflict with the Labour leadership on this issue at the Labour Party annual conference in the last week of September, motions on Brexit were ruled out for debate by delegates, with Momentum organising its members to ensure that none of the eight ‘contemporary motions’ chosen by delegates to be fully debated at conference related to Labour policy on future relations with the EU. Labour’s ruling NEC eventually put forward a motion on Labour’s official policy on Brexit, which was passed by delegates.

Brexit and the crisis of British imperialism

The imperialist character of Britain is decisive in determining all the major economic and political developments in this country. The parasitic character of British capitalism, its dependence on the earnings from its vast overseas assets and particularly those of its parasitic banking sector to sustain the British economy, not only makes it vulnerable to any external financial or political shocks, but leaves it increasingly incapable of withstanding the economic and political challenge of US or European imperialism as an independent global imperialist power. That is why more than 10 years ago we argued that the British ruling class knows that, sooner or later, it will have to make a choice between Europe and the United States, if it is to maintain its global reach as an imperialist power. Whatever choice is forced on the ruling class, it is certain that any independent role for the City of London will be severely curtailed.¹

The unending global crisis of the capitalist system precipitated by the financial crash of 2008/09 has driven this point home. The Brexit vote is one of its concrete expressions. Britain’s relationship with Europe and the impasse the British ruling class finds itself in over this question is now upon us. Its resolution will have dramatic consequences for the rivalry between European and US imperialism and for the future role of the City of London.

The RCG rejected taking sides in the EU referendum and called for a boycott of the vote in what was essentially a dispute between sections of the ruling class over what would be for the British people, necessarily, totally reactionary outcomes – part of a European imperialist bloc or becoming an offshore centre for usury capital under the umbrella of US imperialism.² The future trajectory of British imperialism and the City of London, its financial arm, is at stake. There will be much political trouble ahead. Meanwhile the British economy will continue to stagnate and millions more British people will be driven into low-paid jobs and confront failing public services and increasing poverty.³

This is the context in which the divisions in both the Conservative and Labour Parties on future relations with the EU should be examined.

From Lancaster House to Florence

The EU referendum was designed to address the deep splits in the Conservative Party over Europe, splits exacerbated by the challenge of the United Kingdom Independence Party (UKIP), its anti-EU stance and racist immigration policy. It was a gamble that spectacularly failed and created serious problems for the British ruling class.⁴

At the Conservative annual conference in early October 2016, Theresa May announced that the UK would become a ‘fully independent, sovereign’ country. That is, it would take full control of immigration and refuse to accept the jurisdiction of the European Court of Justice (ECJ). She said she would trigger article 50 of the European Treaty of Lisbon no later than the end of March 2017. Article 50 gives any EU member the right to quit unilaterally, and outlines the procedure for doing so. It gives the leaving country two years to negotiate an exit deal and once it is set in motion it cannot be stopped except by unanimous consent of all member states. The government, May said, will pass ‘A Great Repeal Act’ in 2017. This will repeal the 1972 European Communities Act, which took Britain into the EU and meant that European law took precedence over laws passed in the UK Parliament. It will also end the jurisdiction of the ECJ. All existing EU legislation will be copied across into domestic UK law to ensure a smooth transition on the day after Brexit.

On 17 January 2017 the Prime Minister finally attempted to give some content to her oft repeated catchphrase ‘Brexit means Brexit’ in a televised speech at Lancaster House, a prestigious building commissioned in 1825 by the ‘grand old’ Duke of York, who famously is said, like May, to have led his troops futilely up the hill only to march them down again.

In her speech May made it clear that Brexit meant ‘hard’ Brexit. Britain, she fantasised, would become an independent ‘truly global’ imperialist power. She said that Britain will:

• leave the EU and will not seek to remain in the European single market;
• take control of its borders, controlling immigration to Britain from Europe;
• no longer be under the jurisdiction of the ECJ;
• cease to make ‘vast contributions to the EU every year’, although we would pay towards ‘some specific European programmes in which we might want to participate’;
• not stay in the ‘customs union’ as Britain should be able to negotiate its own global trade agreements, but will try to reach a new, unspecific ‘customs agreement’ with the EU to make trade as ‘frictionless’ as possible;
• make no unilateral guarantee to EU nationals resident in the UK;
• maintain a common travel area between the North of Ireland and Irish Republic – to be negotiated;
• implement a process of phased new arrangements outside the EU from 2019, but not some ‘unlimited transitional status’; and
• continue security cooperation with the EU.

The Prime Minister threatened the EU. Any attempt, she said, in these negotiations to inflict a punitive deal in order to discourage other EU countries from taking the same path would be an ‘act of calamitous self-harm for the countries of Europe’. Britain would retaliate, setting ‘competitive tax rates and embrace the policies that would attract the world’s best companies and biggest investors to Britain’. Finally Theresa May said that, though she did not think this outcome would arise she was equally clear that ‘no deal for Britain is better than a bad deal for Britain’. The Eurosceptics in the Tory Party applauded her. Corporate business executives, however, were horrified at the prospect of an abrupt ‘cliff-edge’ exit from the EU without the cushion of a new trade deal.

The response from the European Parliament’s lead negotiator on Brexit, Guy Verhofstadt, was sharp and to the point. Britain, he said, ‘has chosen a hard Brexit. May’s clarity is welcome – but the days of UK cherry-picking and Europe a la carte are over.’ He continued: ‘Threatening to turn the UK into a deregulated tax heaven will not only hurt British people – it is a counterproductive negotiating tactic’ (The Guardian 18 January 2017).

May’s hubris in the EU negotiations was gradually deflated. After the triggering of Article 50 at the end of March 2017, negotiations eventually got under way once a row over their ‘sequencing’ – that is, the order in which things will be discussed between the UK and the EU in the negotiations – was resolved after Britain quietly backed down. The EU’s chief negotiator, Michel Barnier, insisted that sufficient progress had to be made with the exit agreement – settling accounts, citizenship, and the Irish border – before discussion on the future relationship between Britain and the EU, particularly the terms of trade. Britain wanted these discussions to take place alongside each other. The outcome of the snap election on 8 June 2017 – a hung parliament with a grubby £1.5bn bribe to the Democratic Unionist Party to keep May in power – further undermined May’s authority.

The EU had put forward estimates of costs of €60bn-€65bn for the divorce bill for the UK. When asked in Parliament about such a financial payment on 11 July, Boris Johnson agreed with the questioner that the EU could ‘go whistle’ for any further money. On being asked about this comment Barnier responded: ‘I am not hearing whistling, just the clock ticking’. Two days later in a written answer to a parliamentary question the government said ‘that we will work with the EU to determine a fair settlement of the UK’s rights and obligations as a departing member state’. This showed that ‘the story of Brexit negotiations will be one of the UK giving way on each contested point’.⁵ May’s speech in Florence was another step along this road.

Before her Florence speech negotiations were at an impasse, despite various position papers being published by both the government and the EU to clarify their standpoints. In the early hours of 12 September the EU Repeal Bill, more formally called the European Union (Withdrawal) Bill, secured a second reading in the House of Commons by 326 votes to 290. Seven Labour MPs defied their own party whip to support the government. The Bill will return to the Commons for eight days of line-by-line scrutiny in October. There are said to be up to 157 amendments to the Bill tabled, including one that would require the final Brexit deal to be approved by parliamentary statute, giving MPs the right to propose and vote on changes.

May’s speech in Florence on 22 September struck a much more conciliatory tone. This renaissance city was presumably chosen to point out Britain’s long-standing attachment to parts of Europe. Of significance were the following proposals:

• Although Britain will formally leave the EU at the end of March 2019, there will be a strictly time-limited two-year ‘transition period’ during which the UK will seek full access to the single market, accepting EU rules, including the free movement of EU workers, and accepting European Court judgments. During the transition period the UK will no longer have a vote in EU policy making.
• Britain will not only pay into the EU budget during the transitional period, and be prepared to pay more than the €20bn to cover annual contributions over that period so no country loses out, but will also honour commitments made during the period of membership of the EU. May also promised to ‘cover our fair share of costs’ to participate in specific policies and programmes, such as science, education and research programmes.
• The UK will not accept ‘physical infrastructure at the border’ between the North of Ireland and the Irish Republic.
• The rights of EU citizens will be protected by ensuring that any deal with the EU will bind British courts.
• The UK will be unconditionally committed to maintaining Europe’s security and offered a new treaty of law enforcement and criminal justice co-operation.

During the speech there was no suggestion of Britain walking away without any deal to compete with the EU as a ‘deregulated tax haven’.

British negotiators hoped May’s ‘constructive’ speech in Florence would unblock the talks and allow them to move on to negotiations on a UK/EU trade deal. On all three main issues for an orderly withdrawal the EU negotiators insist that more clarification and more concessions have to be made. Britain had not specified exactly what past financial commitments will be met beyond the transitional period. The two sides disagree on the role of the ECJ in securing citizens’ rights. There is much more progress to be made on the status of the Irish border. Michel Barnier said that while May had created ‘a new dynamic’ with her speech, it is clear that the negotiations are far from the stage of saying there has been sufficient progress on the principles of orderly withdrawal to move on. He said the talks could stall for months over Britain’s bill of settlement alone. The UK’s concessions have still some way to go. As the economic crisis deepens and inter-imperialist rivalries and trade wars develop, May’s time is running out. The decision of the US Department of Commerce to back Boeing in an action that could lead to 219% tariffs on planes made by Bombardier, whose wings are made in the North of Ireland, is a warning sign of the shape of things to come.

Labour and the split in the working class

After May’s Florence speech, Corbyn said that it sounded as though she was listening to the Labour Party with its policy of remaining in the single market and the customs union. But he added ‘Fifteen months after the EU referendum, the government is still unclear about what our long-term relationship with the EU will look like’ (The Guardian 23 September 2017). However the same could be said of the Labour Party and particularly its leader.

We have pointed out how the dominant position of the Labour Party on the EU has changed as the crisis of capitalism deepened from the end of the 1970s. The Labour Party represents the interests of the better off layers of the working class and sections of the middle classes – the labour aristocracy. A social democratic state is a significant factor in their standard of living and way of life. Yet by the start of the 1990s it had become increasingly clear that British imperialism could no longer sustain a social democratic state. As we argued before the EU referendum,⁶ 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 (The Guardian 21 November 1991).’

This opportunism lies behind Labour’s change of position on Brexit and, even more so, the attempt by over 40 senior Labour Party figures to push Labour into staying in the single market and customs union permanently after Brexit.

Labour’s official position has been put by the Shadow Brexit Secretary Keir Starmer. He says that ‘Labour would seek a transitional deal that maintains the same basic terms we currently enjoy in the EU. That means we would seek to remain in a customs union with the EU and within the single market during this period. It would mean that we would abide by the common rules of both’. The transitional period will be as short as possible, but as long as necessary and ‘must be a bridge to a strong and lasting new relationship with the EU – not as members but as partners. That new progressive partnership should be based on our common values and shared history.’ He goes on to say that it must be based on a deal that retains the benefits of the customs union and the single market. ‘How that is ultimately achieved’, he says, ‘is secondary to the outcome.’ Labour, however, in any final agreement wants a special deal on immigration with changes to freedom of movement rules.

The pro-EU MPs take this opportunism to its logical conclusion. Labour MPs Heidi Alexander and Alison McGovern published a proposed motion for members to submit to the Labour Party conference which said: ‘The Labour Party is serious about protecting jobs, tackling austerity and defending the rights of workers and consumers, so staying part of the customs union and in the European Economic Area is a no-brainer ... Labour must be able to deliver the ambitious programme of investment in public services which we put to the electorate in 2017.’ (The Observer 27 August 2017)

FRFI has consistently pointed to the process by which the European powers are taking steps to create a European imperialist bloc. We have spelt out the devastating impact it is having on the working class of the peripheral EU countries in the eurozone. There will be no let-up in the desperate conditions facing millions of ordinary Europeans as the dominant European countries push forward their programme step by step to create a federal European imperialist state. It will suppress progressive developments in the member states while confronting the economic challenge of the US and other imperialist powers and compete with them to divide up the spoils from the plunder, looting and super-exploitation of the oppressed nations. This is the process in which the Labour Party wants to be a partner. Such a new partnership will indeed be based on common values and shared history – the history of British and European imperialism, the material base of the privileged sections of the working class. In becoming leader of the Labour Party Corbyn has taken sides. For real socialists the only way forward is to break with the Labour Party and join alongside all those forces around the world committed to the fight against imperialism.

Fight Racism! Fight Imperialism! 260 October/November 2017

1. See David Yaffe ‘Britain: parasitic and decaying capitalism’ FRFI 194 December 2006/January 2007. For a discussion on the parasitic character of British capitalism and the importance of the City of London for the British economy.

2. ‘EU referendum: the position of communists’ in FRFI 251 June/July 2016. 

3. See David Yaffe ‘Brexit intensifies Britain’s crisis’ in FRFI 252 August/September 2016.

4. See EU referendum…op cit

5. See David Allen Green’s blog in the Financial Times 15 July 2017, at www.ft.com for these details.

6. EU Referendum…op cit.