Brexit in the time of coronavirus

Winter 2020

As this journal goes to press, there are just 4 weeks left before the 11-month Brexit “transition period” comes to an end. Britain leaves the EU on the 1 January 2021, with, or without, a trade deal. And with talks going to the wire, nobody is putting any money on the outcome.

Despite all the hyped-up headlines, if a deal is not struck, it will not be the end of it. And even if there is a deal, more time is needed for the ratification process - and for both sides to get ready. So it is highly likely that there will be “extra time” allocated for more talks, or indeed to use a football analogy, “injury time”. Because there has been injury - and there is more pain to come. Not just for the capitalist class because of the cost to their businesses, or to the City of London. The months of toing and froing, with negotiations going nowhere, have provided endless opportunities for nationalist posturing over so-called “British sovereignty” and the need to regain “independence”. And this has consequences.

On the eve of the Covid pandemic, and with the NHS already in a bad way, thousands of EU doctors, nurses and paramedics who were helping to prop it up, went back home because they no longer felt welcome. And who can blame them? Brexit is a very real problem for Britain’s multinational working class, not only because of the potential for divisions in its ranks, but because of the loss of its, albeit few, but significant, gains from the EU: freedom of movement and equal employment conditions and welfare rights - which have at least theoretically, existed across the whole of Europe’s working class. What is more, the ageing British working class is in danger of losing essential and rejuvenating young blood from the EU.

Three little sticking points

The talks between Johnson’s nominee, David Frost and the EU’s Michel Barnier have been more or less stuck over the same issues for 11 months. The Covid pandemic threw a minor spanner in the works, but is not to blame for this. Commentators and the media go into great detail about three main negotiating hurdles, which none of the officials seems willing to jump over, let alone dismantle. So by now, probably most people are familiar with the ins and outs of the EU Common Fisheries policy, fish quotas and every other aspect of fishing, even though this industry comprises just 0.1% of British GDP. Not to mention the principles and practice of EU state aid and the level playing field of common regulations and standards, which the EU needs Britain to agree on, for “fair competition” to prevail. Never mind that this latter is a contradiction in terms!

There are (apparently) good reasons for negotiators to disagree. But given the impasse which has existed for so long, it seems likely that this constant “breaking down” of talks is all about nationalist muscle-flexing in front of an electoral audience. And what better distraction at a time when the government’s mishandling of the coronavirus pandemic has already caused its popularity to wane, particularly in the so-called Red Wall seats in depressed areas, which Johnson won from Labour less than a year ago.

However, a deal has to be done. The capitalists on both sides of the Channel, along with some of their politicians (maybe not all!) definitely do need an agreement. And obviously it cannot be equitable, because despite what the grandiose and backward-looking politicians say, Britain needs the EU more than the EU needs Britain. One has to remember that the EU is Britain’s biggest trading partner, taking 43% of British exports and that 51% of Britain’s imports come from the EU. Even the fishermen and women need the EU market, where they sell 70% of their fish. There may be talk of Britain “taking back control” of its waters, etc., and regaining its “independence”. But in this interconnected world there is only interdependence.

Anyway, for British capitalists, there is no alternative market or source of imports on offer, at least not in the near nor medium term future. What is more, after 47 years of marriage, the partners have become moulded to each other and this mutual adaptation to each other’s needs cannot be easily replicated by a quick embrace with any other country, or countries... The trade deal Britain just negotiated with Japan, for instance, just replicates the deal it previously had through the EU.

Brexiteer braggadocio

Nevertheless, the Trump-like braggadocio of Tory Brexiteers carries on. One can always trust Johnson and his fellow jingo-artists to seize any opportunity to boast about Britain beating the world, even if its only recent “world-beating” achievement has been the number of Covid deaths.

So when the medicines’ regulator, the MHRA, approved a vaccine against Covid-19 “ahead of the rest of the world”, the jingoists rushed straight in! First off was Panglossian Matt Hancock, Johnson’s Health Secretary. He immediately said Britain got there first, “because of Brexit”, since it was no longer constrained by the European Medicines Agency. Except that it is. Britain remains under the EMA’s remit until 1 January. But never mind that. Ultra-Brexiteer leader of the House of Commons, Jacob Rees-Mogg, claimed ”We could only approve this vaccine so quickly because we have left the EU...”. Education secretary Gavin Williamson simply explained that the UK was the first to approve the vaccine because ”we’re a much better country”! Which got a few laughs. But the real joke is that this was an “approval” of a vaccine developed not in Britain, but in Germany, which will be produced in Belgium and transported here under EU free trade rules. An example, precisely, of why no country can be “entire of itself”, in fact, and of the benefits of being connected with Europe - and everywhere else! Brexit could certainly disrupt future vaccine supplies, thanks to checks and hold-ups, even if vaccines will remain tariff-free, which is one thing which has been agreed!

The chest-beating buffoons among Johnson’s ministers did not explain why the USA’s vaccines agency was being so slow, if it was an escape from the EU’s “dead hand” (as Rees-Mogg put it) which allowed Britain such speedy approval. It transpires that “eyebrows have been raised” by other equally reputable regulators over such haste.

There is another angle to this story: early on during the pandemic, the government rashly turned down an invitation to be part of the collective EU response to Covid, which organised procurement of PPE among other vital supplies, as well as the basis for procuring a future vaccine. In fact it would have meant being part of a much larger - and cheaper - collective vaccine deal. Today the NHS may have got its order in first for the Pfizer-BioNTech vaccine, but it is also going to be paying a much higher price for it.

A Tory party purged of conventional conservatism

The Tory ministerial display over Britain being “best” just reflects what the Tory parliamentary party has become since Johnson took over. He may have achieved unity in this congenitally divided party, for now, but only by expelling or side-lining most of those who did not follow the “hard Brexit” line. The result is that today, the most right wing, mindless, nationalist, bunch of Tory MPs in decades, are occupying the benches on the right side of the Commons. Truly, under Johnson, the lunatics have taken over the asylum.

It is a long time - 4½ years - since the Brexit referendum was won by the “leave” camp, with 51.89% of the vote (representing 38% of the electorate). It should not be forgotten that this referendum was the then PM Cameron’s attempt to end for good the squabbles in Tory ranks over EU membership. These had re-emerged when some of the farthest right MPs threatened to join former Tory, Nigel Farage’s UK Independence Party (and a few actually did) after his growing electoral successes. The unexpected “yes” for “leave” ousted Cameron, leaving his successor, Theresa May with the problem. Her attempt to strengthen her majority in the House by calling a snap election in 2017 backfired, leaving her with an even smaller majority and worse, reliant on the vote of a band of 8 very right-wing, anti-EU, Northern Ireland Unionists.

Unsurprisingly, May was finally tripped up by the so-called “Northern Irish backstop” - written into the divorce deal she was negotiating with the EU. It was regarded as the only way to comply with the 1998 Good Friday Peace Accord, which had ended the 30-year long armed struggle by Irish Republicans in the North for a united Ireland, ensuring an open border and physical, if not political, Irish unification. Brexit threatened to upset this. So the backstop proposed a single market and customs union to remain in place between the two parts of Ireland, but also, temporarily, with Britain’s mainland. However, opponents on the right of May’s party, as well as the Northern Irish Unionists suspected this backstop would lead to a Brexit “in name only”.

In the end, despite all her efforts, May repeatedly failed to get enough votes in the Commons to move Brexit forward, and finally resigned as PM in June 2019. This was Johnson’s opportunity. He began by re-editing May’s Withdrawal Deal and removing the Irish backstop. And this is where it gets interesting. Because Johnson’s Internal Market Bill, which he produced in September this year, will reverse the changes he himself made, last year. At the time, he clearly upset the Northern Ireland Unionists who had always been big fans of Boris’s blustering right-wing verbiage.

Under this new protocol, Northern Ireland was to leave the EU’s Customs Union along with the rest of the UK on Brexit day. The north-south border would remain open to the EU. But since Northern Ireland also had “unfettered access” to the British internal market, he agreed to checks on goods passing between Britain and Northern Ireland. In effect, the EU border moved from between the 36 counties and the 6 counties, to the middle of the Irish sea, between the British mainland and Northern Ireland. However, as a concession, the Northern Irish assembly would have the possibility of voting to change this after 4 years had passed...

As to the Ulster Unionists for whom this was a step towards their united Ireland nightmare, perhaps Johnson had already reassured them that this was not the last word on the matter. And of course it has turned out not to be.

When Johnson took over from May, the parliamentary arithmetic confronting him left him unable, just as May, to move the Brexit process forward. It meant he could not keep his pledge that he would “get Brexit done” by that October, or “die in a ditch”. In the end, he had no option but to call another general election and try to win enough seats to deliver the Brexit he promised.

That was precisely what he did, running a populist, demagogic election campaign in December last year. He even promised, Trump-like, to “level up” the living standards of the poorest working class people in the northern regions of the country. This time, the fed-up electorate (which the media and the Labour party right-wing had effectively vaccinated against leftish Labour leader Jeremy Corbyn including by labelling him an anti-Semite), voted Johnson into power, giving him seats in Labour constituencies which hadn’t ever been anything but Labour - and an 80-seat parliamentary majority. Britain duly left the EU customs union and single market on 31 January 2020, entering the 11-month transition period.

Northern Ireland, still a deal breaker

Whether US president-elect Biden’s “word” with Johnson over not jeopardising the Northern Ireland Peace Accord, by passing his “Internal Market Bill” unamended, will make a difference to this bill, remains to be seen. It removes that “border in the Irish sea” which he substituted for May’s “backstop” in the Withdrawal Deal. This was undoubtedly to be seen to do right by the Northern Ireland Unionists. But the bill is also meant to strengthen the “union” of the United Kingdom, against the Welsh, Scottish and Irish nationalists. At the time of writing, it is meant to go through the Commons again. Johnson intends to take out the amendments added by the House of Lords, which removed his changes to the Irish protocol. If that happens, this Bill will break the Brexit Withdrawal Agreement, as ratified by both British and EU parliaments and thus break international law.

Whether Johnson intends to mantain this clause in his bill is another question. Joe Biden sticking his nose into this very publicly, gives Johnson a good excuse to back down, using the pending trade deal with the US as pretext. In the meantime, perhaps some other way of appeasing the Ulster Unionists will be found...

Brexit is worse than Covid

Brexit is not good news for the capitalist class, that is established fact. However, any mention of it was conspicuous by its absence in Chancellor Rishi Sunak’s 25 November Autumn Budget Review, despite the proximity to the deadline. And this, despite the fact that the Office for Budget Responsibility (OBR) - had submitted a full report on the outlook for the economy, including the risks of Brexit, to Sunak’s Treasury department beforehand.

In fact Sunak said very little of significance about anything in this statement, as if the 22% plunge in GDP by the 2nd quarter and current 11.3% contraction “due to Covid” has been too much for him to comprehend. In fact Britain’s economy has taken the hardest hit out of all the European economies bar Spain, with the worst dip in GDP in 300 years. Although that may be hard to believe, given all the hyperbole coming out of ministers’ mouths of how everything is “best” in Britain.

The Brexit effect was already being felt before Covid arrived, in the context of an economy “led” by the City of London (and with a long-since-shrunken productive base) and which has as yet, been unable to recover from the 2007/8 crash. So no wonder the situation is anything but rosy.

The OBR and the National Audit Office have both warned that the 4% cost to the British economy of Brexit “with a deal” could increase by an initial 1.5% a year (8% over a decade) if there is “no deal”. This is on top of the hit to the economy due to the pandemic. However the government has very pointedly avoided the subject. And when it has mentioned it, it is to say that the effect of Covid far outweighs any effect of Brexit on the economy. But this is not true. The effect of Covid, although there is likely to be some “scarring” as they call it, is not a permanent effect. The effect of Brexit is.

What is more, different sectors are affected by Brexit - precisely the productive sectors like manufacturing, mining and quarrying, but also financial services, which were relatively “spared” by the Covid lock downs. And these are the sectors on which the economy rests.

As for regaining lost ground through a trade deal with the US, according to the OBR, this is unlikely to add more than 0.02% to 0.15% to GDP! Yet at the same time, prices, as measured by any index are expected to rise, not to mention the deleterious effects of a predicted fall in the value of stirling.

Half a century of frictionless trade is hard to unwind, even with a trade deal. Reports by the Bank of England and the UK Treasury in 2018, estimated that even a Canada-style free trade deal with the EU would impact GDP in Britain by 4-6.7% over the next 10 years.

Part of the problem is that even with a trade agreement, knock-on effects from logistical delays will make imports and exports more expensive. Some 270m extra customs documents could be required yearly, according to the Financial Times. What’s more, 95% of UK trade moves through ports, a third of it in lorries through Dover and the Eurotunnel. Any delays, even if Britain and the EU agree a comprehensive free trade deal, will have a knock-on effect. In fact huge lorry parks are already being built in Kent and on the routes to crossings - dubbed “Farage’s Garages” after Brexiteer Nigel Farage - to hold thousands of trucks in order to try to control the anticipated queues. A lorry-drivers’ “passport” may be introduced to enter Kent to avoid complete blockages of roads and motorways.

And anti-immigrant policy

The government’s new Immigration Act, which became law on 11 November has been specifically designed to infringe the rights of immigrant workers and restrict entry to Britain. Of course, it ends freedom of movement from the 31 December 2020. The 3.7m people living in and working in Britain who come from one or other of the EU-27 countries are meant already to have applied for “EU settlement status”. If they have not done so, they could risk deportation.

This new Immigration Act implements an Australian-style points based system, which will place yet more hurdles in front of those who wish to live, study or work in Britain legally. It might, however, be easier to qualify for one of the 220,000 NHS and social care vacancies which currently exist! That is, provided the government waives the £624/year “fee” that it demands from all migrants and each of their family members, too use the NHS, even if they work in it!

Brexit not only affects NHS staffing, as already alluded to, but also the supply chains for NHS medicines and other essential items. Around three-quarters of the medicines, and more than half of the devices that the NHS uses, come into Britain via the European Union. As some need special storage conditions, any delays at the border could mean whole consignments of medicines are rendered unusable. Last August, the government tendered a £25m contract for an express freight service, which is expected to deliver small “time sensitive shipments” (including, no doubt, frozen vaccines) within 24 hours, or larger pallets of medicines within 4 days. Whether the necessary measures will be in place by the time they are needed is highly unlikely, given all the evidence of the government’s incompetence during the Covid emergency.

The estimated extra cost to the NHS due to price rises and the bureaucratic red tape added by Brexit will be as much as £2.3 billion.

Affecting the daily bread and the daily grind

There are a host of other problems which will arise after 1 January. Britain is obviously not self-sufficient in food. Currently, it imports up to 40% of these needs from the EU. Even with a trade agreement, Brexit is going to mean logistical delays, made worse by extra paperwork and therefore increased prices - and that is not even taking into account a fall in the value of the pound. What is more, British farmers, who have for years relied on subsidies provided via the Common Agricultural Policy face a crisis, not only to sell their produce which could face tariffs, but to arrange passage to Britain for the 80,000 seasonal workers, mostly from the EU, who pick their fruit and vegetables.

Then there is the car industry, which has been one of the most vocal opponents of Brexit. Currently around £30bn worth of car parts and vehicles pass back and forth between Britain and the EU every year. Without a free trade deal, 10-22% tariffs are likely to be applied with obvious consequences. Unless, of course, all operations were moved to the Free Ports - special economic zones - which the government has been boasting about creating. Although the details are not yet known, the idea is that they will be tax-free, tariff-free and as regulation-free as possible. Which means the workforce will also be even more exploitable than it already is.

In the meantime, any Brexit deal is almost certain to include special arrangements for the car companies to at least exempt their supply chains from duties and tariffs, so that they do not up sticks and leave.

Of course, every aspect of “normal life” is going to be altered by Brexit, including scientific research and engineering innovation, which British politicians claim are “world leading”. These fields can only flourish if ideas are shared across the whole inventive and scientific “community” - right across the globe. Britain is already losing out through its exit from the European Space Agency. Fortunately however, there is still some basic collective etiquette among the scientists and engineers themselves, which could at least mitigate some of the worst aspects of British isolationism due to Brexit!

Will Brexiteers finally get their exit... or not quite?

When Johnson was asked what he thought about the current precarious deal or no-deal scenario, he replied that ”there is a deal to be done if the EU wants it”. In other words, they can take it or leave it, as far as he is concerned. Said he, ”this country will prosper mightily in either event, deal or no deal... if we have to come out on a so-called Australian style, model, relationship, with the EU, we will make a great success of it”...

This talk of an “Australian deal” is just Johnson being coy. Of course, there is no such thing: Australia does not have a trade deal with the EU. Its trading relationship is based on World Trade Organisation terms, in other words, tariffs which would be a killer for many small and medium business, and a costly addition for fisheries, for farmers and for the car industry in Britain. So of course, Johnson is blustering and lying as he always does. He knows this country’s capitalist class will not “prosper mightily” even with a deal, thanks to his Brexit. And not just because the myriad links between Britain and the EU, built over 47 years, which cannot easily be broken, but because there is no “equitable” deal to be struck: not in the interests of British capitalists, not in the interests of the huge edifice that is the London City, but not either in the interests of the majority of the population lucky enough to hold a British or EU passport who will need new paperwork to move, drive and even to take a dog back and forth across the Channel! Johnson himself used to be on the other side of the argument, so he knows exactly what the consequences are for the “British people” he misrepresents!

The latest word is that talks have again broken down (4 December), but of course it is not the end of the road. Whatever happens between Frost and Barnier Britain will finally exit the EU at midnight on 31 December. As to the rest of us, we can only hope that after Brexit, the absurdity of national borders and the rules preventing free movement of people and things, will become obvious to all, along with the need to get rid of them for good!

Last word should go to English poet John Donne who wrote this “Meditation 17”, 400 years ago, arguing for the interconnectedness of humanity at a time when Communism was still a Utopian idea. Today it is a scientific necessity.

”No man is an island entire of itself; every man

is a piece of the continent, a part of the main;

if a clod be washed away by the sea, Europe

is the less, as well as if a promontory were, as

well as any manner of thy friends or of thine

own were; any man’s death diminishes me,

because I am involved in mankind.

And therefore never send to know for whom

the bell tolls; it tolls for thee.”

4 December 2020