Strange battle lines
David Sherrief says that the Tories are acting against the interests of big capital. Expect compromises and gruelling late-night sittings
Theresa May: can’t get backing of monopoly capital
Theresa May is, predictably, winning the initial battles over Brexit. On September 12 she got the European Union (Withdrawal) Bill through its second reading in the Commons. The final vote was 326-290. There was a lone Tory rebel - Ken Clarke deliberately abstained. But there were more rebels on the Labour side. Dennis Skinner, Kate Hoey, Graham Stringer, Ronnie Campbell, Kelvin Hopkins, Frank Field and John Mann voted with the Tories, while Caroline Flint, Ian Austin, John Spellar, Yvonne Fovargue, Kevin Barron, Helen Jones and Kevan Jones abstained. A rotten Europhobic bloc uniting Labour leftwingers Dennis Skinner and Kelvin Hopkins with Labour’s far right.
However, the war is far from over. Tory MPs - not least Nicky Morgan, Dominic Grieve and Anna Soubry - have tabled amendments aimed at shooting holes into May’s Brexit plans: eg, they want to include the EU’s charter of fundamental rights. There will also be challenges to the use of so-called Henry VIII powers and demands for a vote on the final terms. This brings the distinct possibility of a government defeat. Of course, that would not trigger a general election. For the moment at least May is secure. She would win a vote of confidence. Nonetheless, the government is vulnerable and we should expect compromises, gruelling late-night sittings, MPs being brought in from sick beds and desperately fought by-elections.
But, surely, the government’s main problem is that a hard Brexit runs counter to the interests of the dominant sectors of big capital in Britain. For example, the recent Downing Street approach to large private companies and selected FT-100 firms, in the attempt to obtain endorsement for the government’s post-Brexit plans for a “global Britain”, was greeted with derision. Technology, aerospace, pharmaceutical, energy, manufacturing, banking and financial services firms have all warned that the drifting Brexit negotiations in Brussels could lead them to transferring some operations from Britain. Toyota is already openly questioning the future of its Burnaston plant in Derbyshire.
Many capitalists fear that they will face tariffs and other damaging barriers after March 2019 … if there is no deal. Nor do they have any liking for the government’s leaked proposals to limit immigration post-Brexit. The markets confirm what the personifications of capital state. Since the June 2016 referendum the pound sterling has fallen by around 20% compared with other major currencies. Reports that outward investment has doubled in the last quarter shows the thinking of collective capital. Despite having to pay what is in effect a 20% premium, the bet is that Britain is heading for difficult times. In other words, Brexit is bad for making a profit.
Of course, at Phillip Hammond’s prompting, there has been less talk of a “clean break” from the EU. The shift towards negotiating a transition period has been cautiously welcomed by many of the CEOs and boardrooms of blue-chip companies. But the lack of detail causes uncertainty, frustration, even anguish.
A recent survey of 1,000 UK businesses reported that more than two-thirds of them needed to “know the details of any transition arrangement after Brexit by June 2018 - just nine months from now - in order to plan properly”. If investment and recruitment decisions that have been put “on hold” are to be “unblocked”, 40% of the businesses say the government must set out what the transition will involve, when it comes to vital areas, such as the movement of goods, capital and people, as well as legal arrangements.1
Far from May and her cabinet providing Britain with ‘strong and stable’ leadership, big capital worries that party interests are being put first. Hence addressing widespread concerns amongst voters about ‘unrestricted’ immigration is being prioritised over guaranteeing access to the single market. Private meetings and frantic lobbying have had little effect on David Davies and his department for exiting the EU. The government says it has its mandate and appears intent on brushing aside the interests of big capital. All in all, therefore “big business is in a difficult position”, says John Colly of the Warwick Business School.2
Maybe the loss of direct and indirect influence over the Conservative Party, the inability to exercise control, reflects the increasingly cosmopolitan nature of modern capitalism. For instance, foreign investment in Britain stood at around £950 billion in 2015.3 A few big businesses, such as JCB, Westfields and Bloomberg Europe, have donated considerable sums to the Tories.4 But most of the money going to Tory HQ nowadays comes from very wealthy - often very quirky - individuals (many of them after access to government, dinners with ministers, knighthoods, membership of the House of Lords, etc).5 Over the years the number of companies making donations has declined.6 Yet with the bulk of Tory finances coming from the rich and the super-rich, with hundreds of Tory parliamentarians holding directorships, with Tory MPs coming from business and going back to business, with the visceral hostility to trade unions, it is clear that the standard Marxist description of the Conservative Party as the party of big business remains correct, albeit it with qualifications.
Nevertheless, the tension that exists between the interests of big capital and the direction being taken by May’s party and government is unmistakable.
The origins of this divergence lies squarely in electoral calculation. Having outmanoeuvred her rivals and taken over from the hapless David Cameron - following his June 2016 referendum humiliation - Theresa May clearly thought that she could inflict a massive general election defeat on the Jeremy Corbyn-led Labour Party … if she seized hold of the political programme of the UK Independence Party. Of course, her gamble did not pay off. May’s presidential campaign proved to be a disaster, while Jeremy Corbyn’s For the many, not the few campaign was, by contrast, a brilliant success.
Now, irreversibly committed to a hard Brexit, the Tories resemble the Loony Tune’s cartoon character, Wile E Coyote. Fixated on chasing the Road Runner, his nemesis, Wile E Coyote, suddenly finds himself in mid-air over a precipitous canyon. His legs still move. So does he. For a brief moment it appears nothing is wrong, that the momentum can be maintained. But, inevitably, Wile E Coyote realises that he is suspended in mid-air … then comes the long plunge to the ground.
Since the 48.11%-51.89% referendum result, Britain has not suffered the economic disaster George Osborn, Mark Carney, Peter Mandelson and co, predicted. No yanking recession. No flight of capital. This has allowed little UK Europhobes right and left - from the Daily Mail to the Morning Star - to claim vindication. But a Brexit referendum result hardly amounts to Brexit. True, statisticians report that the British economy has been growing slower than the euro zone. It is, though, a case of anaemic growth compared with anaemic growth. Projected long-term, that heralds Britain’s continued relative decline.
Nonetheless, a negotiated hard Brexit deal - let alone a hard Brexit non-deal - could quite possibly result in absolute decline. Such a prospect deeply worries big capital. Unless control over the Conservative Party can be reasserted, the choices it faces are all unpalatable: tariffs on goods going to the EU, reduced supplies of cheap labour, running down investment in Britain, decamping abroad, sponsorship of a national government, etc.
Meanwhile, Keir Starmer has succeeded in getting the shadow cabinet to come out in favour of staying in the single market. Hence the striking paradox. On Europe Labour is articulating the interests of big capital. Not that big capital will reciprocate and back the Labour Party. It is, after all, led by Jeremy Corbyn: pro-trade union, pacifistic and a friend of all manner of unacceptable leftists.
For the sake of appearances, Starmer pays lip service to the 2016 referendum result. There is no wish to alienate the minority of Labour voters who backed ‘leave’. More through luck than judgement, ambiguity served the party well during the general election campaign. The contradiction between Corbyn’s historical hostility towards the EU - now represented in the Commons by the Skinner-Hopkins rump - and the mass of Labour’s pro-‘remain’ members and voters resulted in a fudge.
Political realities changed with June 8. Today Jeremy Corbyn is no longer considered an electoral liability, to be subjected to a sustained campaign of sabotage, leaking, mockery and coordinated resignations. Now he can - if he is willing - be repackaged as a responsible prime minister in waiting.
1. Financial Times September 12 20017.
3. House of Commons Library Debate pack Number CDP 2017/0159, September 8 2017.
4. The Guardian April 1 2015.
6. B Jones (ed) Political issues in Britain today Manchester 1999, p313.