Britain - The EU referendum, Brexit and the dance of the demagogues

Summer 2016

Voters woke up on 24th June to the news that the "Leave" camp had won. Headlines were screaming: "We're Out!". Once again, opinion polls had got it all wrong.

Many "Remain" voters had probably never even considered this possibility. But some "Leave" voters had not expected it either.

So there was much disappointment on the Remain side, a certain amount of discomfort on the Leave side, and surprise on both sides.

Not that this was a landslide victory for "Leave". Although the 72.2% turnout was comparatively high, the Brexit majority was tiny just 3.8% fewer than 1.3m votes. Not a lot, considering that the number of registered voters is 46.3m.

Indeed, only 37.5% of the electorate voted for Brexit which, for a vote described by all and sundry as a "historical political decision", was hardly a "historical" majority!

Ironically, a vote for strike action in the public sector which achieved such a small majority would be deemed "invalid" under Cameron's new anti-strike legislation!

No wonder over 4 million people signed an online petition demanding a re-run of the vote within days of the result, while tens of thousands took to the streets in support of this demand during the following two weekends.

But too bad for them. The 62.5% of the total electorate who did not vote for Brexit will have to live with the consequences of this vote, despite the fact that it was merely a consultative exercise with no legal status.

Why? Simply because Cameron cannot afford to ignore it at least not openly without exacerbating the crisis in the ranks of his party which is exactly what he was trying to address in the first place, by calling this referendum.

There was no choice for the working class

That being said, there was no possible way for the working class to defend its interests by way of this referendum.

Voting Leave meant endorsing Nigel Farage's and Boris Johnson's crass xenophobic demagogy against migrant workers in general and EU migrants in particular. It meant condoning a divisive split within the ranks of the working class, which can only weaken its ability to resist the bosses' exploitation. It meant going along with the fairy tale of a "democratic, sovereign Britain" as if (and contrary to the lies of the Leave camp), 99% of British laws were not made by a British Parliament which, far from being accountable to the population, has always done the City's bidding. It meant falling for the fantasy of a so-called "Great" Britain, going it alone against the rest of the world precisely the kind of fantasy which could soon become a justification for increasing the exploitation of workers in order to boost competitiveness.

Voting Remain, on the other hand, meant endorsing European institutions designed specifically to meet the needs of Europe's richest capitalist classes and their system - and certainly not the needs of Europe's populations. It also meant supporting the new discriminatory measures against EU-workers that Cameron had been championing for months before the vote in other words, it meant supporting yet more divisions in the ranks of the working class, i.e. measures which are not all that different from those proposed by the Leave camp.

But voting for either side meant lending one's support to the same politicians who have imposed austerity on the working class in the form of policies designed to help boost capitalist profits in the context of today's on-going recession. And they were obviously going to use the outcome of the referendum to justify more of these pro-business, anti-working class policies. Osborne has already begun, with his plan to cut corporation tax below the 15% threshold for the sake of "attracting investment"!

So, no, whichever way workers chose to vote in this referendum, they had no way of voicing their class interests. Their ballot papers were bound to be hijacked and used against them by their class enemies.

Cameron's self-inflicted Tory crisis

But this was all very predictable from the word go. After all, this referendum had nothing to do with giving voters a say, nor even with the EU, for that matter - and everything to do with the internal problems of the Tory party, whose roots were to be found in Cameron's own policies.

Since coming to office in 2010, Cameron's government had systematically blamed the deteriorating economic situation on the difficulties being experienced by the Eurozone - and on the alleged straitjacket of EU regulations. By the same token, the on-going collapse of public services and the worsening housing crisis was blamed on migrants in general, and on EU migrants in particular.

Of course, this blame game was just a cover, designed to divert attention from the government's increasing use of public funds in order to bail out the capitalist class. And this meant cutting social expenditure and infrastructure investment on the backs of the working class majority of the population.

The main result of all this was, however, to give a new lease of life to the xenophobic anti-EU demagogy of Ukip, which had been lurking in the shadows for two decades. By 2013, the rising by-election scores won by Ukip in several traditional Tory strongholds, on the basis of a mixture of anti-EU and anti-migrant rhetoric, caused increasing anxiety among Eurosceptic Tory backbenchers over their future careers. Then when Ukip came first in the EU elections, in 2014, relegating the Tories to third position, these worries turned into panic, threatening Cameron's leadership with a major rebellion.

With the 2015 general election coming closer, Cameron tried to contain this unrest by stealing Ukip's clothes. Its main political demands were added to the Tory election manifesto: strict limits on immigration; a renegotiation of Britain's membership of the EU, in particular with regards to the status of EU workers in Britain and a pledge to organise an in/out referendum on the basis of the results of this renegotiation.

From an electoral point of view, Cameron's strategy proved effective. In the 2015 general election, Ukip only won one parliamentary seat thanks to the first-past-the-post system while the Tories managed to win an absolute majority in the Commons. In fact Ukip's vote contracted by a quarter compared to the European election the previous year.

From that point onwards, however, it was hard to see any difference between Cameron's Euroscepticism and the anti-EU populism of Ukip's leader, Nigel Farage especially during Cameron's protracted "renegotiations" with the EU.

In the end, Cameron won no political concessions of any kind. But he did get the right to reduce the access of EU migrants to the British welfare system. And then, having presented this result as a victory won single-handedly against his 27 EU partners, Cameron announced the date of the referendum, stating that he would campaign for Remain, on the basis of these concessions.

A referendum to sort out the Tories' in-fighting

Although Cameron still occasionally made a point of reminding his audience that he remained a "Eurosceptic at heart", this statement predictably caused hell to break loose within Tory ranks. Six of Cameron's cabinet ministers opted to campaign for Leave belatedly followed by the former Mayor of London, Boris Johnson while nearly half of the party's MPs supported them more or less openly.

By then, the rift within the Tory party was wide open and what followed, during the referendum campaign had, therefore, nothing to do with giving voters a choice between two policies. Instead they were invited to arbitrate between two warring factions of the Tory party, whose quarrels were plastered all over newspapers and TV screens.

But, of course, beyond their rivalry, these factions had no real political differences they simply represented two versions of the same pro-business, anti-working class Tory policies. As to the other main protagonists in this referendum campaign Labour, but also Ukip and all those who supported either the Leave or Remain vote they were reduced to playing backstage roles in a grotesque theatrical performance whose script had been entirely written by the Tories.

This Tory family business became even more blatant after the result was announced. Except that the ugly charade of the referendum, with its flood of lies, scapegoating and scaremongering, now turned into farce.

The defeat of the Remain vote meant that Cameron had lost his bet and would not be able to restore his authority over his party. His immediate resignation opened the leadership race - and his rivals went in for the kill.

Johnson, Leave's front man, lost his bottle and backed out. His right-hand man, Gove, who had previously denied ambition, suddenly found the appetite for a career move to Downing Street. Others followed, including Energy minister, Andrea Leadsom, the initiator of a proposal to scrap all employment rights for all workers in small companies.

Ironically, though, the favourite, Theresa May, was formally on the Remain side, although she was careful to keep a low profile in this respect, during the referendum campaign.

But then, as Home secretary, May had always been in the Tory right-wing's good books. She is particularly popular because of her campaigns against migrant workers. For instance, the anonymous hotlines for "concerned citizens" to grass up suspected "illegal" migrants, whose only crime is to try to by-pass her stringent immigration rules so as to escape destitution in their home countries. And, of course, it is no coincidence that May refused to offer EU-migrants living in Britain any guarantee as to their future status.

In other words the poisoned atmosphere created during the referendum campaign by the politicians' scapegoating of migrant workers remains. And it will be there as long as these politicians are allowed to use their blame-game against migrant workers as a cover for their anti-working class policies.

The multiple delusions of the Leave vote

A lot has been said in the media about the decisive role that working class voters are supposed to have played in boosting the Leave vote. Many commentators, including among Tory Remain supporters, have even gone so far as to blame the result of the referendum on the "anti-migrant vote" of the working class, especially in the socially deprived areas of the North of England.

The truth, however, is that most of the highest pro-Leave scores were recorded in wealthy, traditional Tory heartlands which are anything but working class. But they certainly are extremely prejudiced against foreigners.

There were indeed a number of working class towns in which the Leave vote was 60% or over. What is significant, though, is that most of these scores were recorded in the industrial graveyards left by the steel and mine closures of the 1980s and 1990s.

So yes, it is a fact that a section of working class voters, in these towns and elsewhere, did vote for Leave. They did so for a mixture of reasons: being left out by the system, the on-going deterioration in their living conditions, etc., but also because they fell for the xenophobic lies about the alleged "parasitism" of EU migrants, which permeated the whole referendum campaign.

But who was responsible for peddling these lies in the first place, if not Tory politicians and their Ukip rivals, with their xenophobic overbidding against each other? Who is responsible for the policies which gave credibility to these lies, if not Cameron and his party, by starving social and housing budgets of the vital funding needed in order to rebuild these many working class communities? And who is responsible for allowing these lies to take root among workers, if not a working class movement which has, with very rare exceptions, responded to Cameron's attacks on EU migrants with a deafening silence instead of opposing these attacks in the name of the interests and unity of the whole working class?

At the same time, all evidence points to the fact that a significant number of working class voters chose to vote Leave both to voice their opposition to Cameron's austerity policies and to throw a spanner in the works of the political establishment. But by voting Leave, they did not, and could not achieve what they hoped for. Instead they scored an own goal, against their class interests.

Maybe these voters have drawn some satisfaction out of seeing Cameron lose his usual arrogance for a few minutes when he tearfully announced his intention to resign, outside Downing Street? Maybe, but what then? Will they find the arrogance of Theresa May or Andrea Leadsom, the last two in the race for the Tory leadership, at the time of writing more bearable? Of course not, because their anti-working class policies will be exact copies of Cameron's.

The truth is that there was no way, in this referendum, to voice clearly one's opposition to the policies of the government. Contrary to what many groups on the revolutionary left have claimed, there was no "Lexit" there was no "left" version of the Brexit vote.

On the contrary, every Leave vote has and will be counted as support for the same reactionary, xenophobic, nationalist policies represented by the Tory Eurosceptic right, just as they will be used to justify continuing Cameron's anti-working class policies.

The cost of the politicians' games

Those expecting rapid change after the referendum results were announced, will have been disappointed. The British isles didn't start drifting westwards, further into the Atlantic. Nor did Britain suddenly look as if it would be "going it alone" any time soon, as the Leave camp had promised. In fact, nothing has changed and little is likely to change in the near future, at least not as far as Britain's relationship with the EU is concerned: the truth is, that Britain remains just as intimately dependent on the Continent as it was and only the most bigoted Eurosceptic diehard can deny this fact.

Behind the scenes, the top spheres of British capital are watching the events with discomfort and breathing down the necks of politicians to stop them from doing anything rash that might put their interests at risk.

The bosses' magazine, The Economist, summarised their worries in an editorial published in its first issue following June 23rd. The tone of this editorial was anything but happy, concluding as it did that: "This vote will reverberate for years. The economy will suffer, as will the political establishment. June 23rd will be a landmark in British and European history" in other words, what this magazine was expressing was its worries of an economic meltdown combined with a political crisis.

As far as the economy is concerned, the meltdown is already happening. Of course, newspaper headlines were quick to hail the fact that the FTSE100 index which measures the share prices of the 100 biggest companies listed in London, recovered from its initial sharp fall and regained its pre-referendum level. They forget to mention a whole number of significant facts, however.

First, they forget to say what it took for this index to return to this level a massive injection of cash by the Bank of England, which allows speculators to borrow virtually unlimited funds on the cheap, in order to gamble on the stock market. This is a repetition of the cash injections made by the Bank of England following the 2008 banking crisis. And, although the amounts injected are not quite as large for the time being, it is not hard to guess what this means: someone will be expected to foot the bill at some point and, just as for the banking crash, it will be the working class.

Second, these newspapers do not mention that the companies which are driving the FTSE100 index upwards are almost exclusively companies whose income is in dollars whereas the share prices of those operating mostly in Britain or in the EU, have fallen significantly. For instance, the shares of Britain's two largest construction companies, Barratt and Taylor-Wimpey, have lost 41% and 32% of their value respectively; those of the country's two largest real estate owners, British Land and Land Securities, fell by 33% and 25%.

But the biggest losers are the main British banks, whose share prices have fallen by anything between 19% for HSBC and 54% for RBS. And there is, of course, a logic to this: because most of the profits of these banks are dependent on their free access to the EU market in order to sell financial services, on the one hand, and on a high exchange rate of the pound, on the other.

This brings us to the third thing which is carefully ignored by the optimism of newspaper headlines the fall in the value of the pound or rather, its consequences. This drop in value began even before the Brexit vote - as soon as Cameron announced the date of the referendum, in fact. But since then, the pound has fallen by more than 15% against the euro. Politicians in the Leave camp now claim that this is going to boost exports to Europe. This is rather ironical coming from people who insisted that the British economy did not actually need a free access to the EU market in the first place. But never mind. The truth, however, is that Britain does not export all that much in material goods, to Europe. In fact, most of its exports to the EU are services, especially financial services for which the low exchange rate of the pound is a handicap, not an advantage!

No-one can say exactly what consequences this financial turmoil will have on the real economy neither in Britain nor beyond. The fall in the value of the pound is certain to result in an increase in the cost of living in Britain. Economic analysts are already forecasting a slump in real estate. They mention the fact that several real estate investment funds have been facing panic sales by investors, to the point of being forced to suspend all trading in order to cut their losses. This is likely to result in the mothballing of major projects and the cancellation of planned ones, causing tens of thousands of job cuts.

As to the big foreign manufacturers operating in Britain, they are considering their options, depending on further developments in the Brexit process. But one thing is certain: whatever option they choose, it will be aimed at preserving their profits, not jobs.

Brexit or Brexin?

So, the British capitalist class has every reason to be worried by the outcome of this referendum. But there is one thing on which it can be trusted: now that the Tory politicians' stupid games are nearly over, the capitalist class will make sure that it does not lose out. At least it will do its best to achieve this if the economic turmoil created by this referendum does not develop into another fit of massive economic instability which, in turn, could put many things into question including the very existence of the EU.

But the situation is not as bad as that yet. For the time being, the British capitalists have to allow time for the leadership contest in the Tory party to be completed. But whoever replaces Cameron will be told in no uncertain terms that what matters is for British companies to retain their full access to the EU market whatever the cost of this may be. Whether it will require all sorts of contortions on the part of the new prime minister, in order to appear to be implementing Brexit, while doing the exact opposite, is not the City's business. Just as Cameron, after years of posturing as a Eurosceptic, had to swallow his pride and call for a Remain vote, in the same way, his successor will have to toe the line drawn by the City, whatever the political cost.

Of course, there could be other, more or less painful ways for the next government to meet the wishes of British capital. After all, the legal status of this referendum was merely that of a consultative ballot, and thus its result is not legally binding. Paradoxically, although it may seem politically difficult to ignore it without causing major problems in the Tory party, this would be much easier if Cameron's successor was an outspoken Eurosceptic.

There is also a parliamentary way of getting out of Brexit's sticky situation: by seeking Parliament's approval of the referendum's decision. In that case, it would probably be possible to find a majority in the Commons in favour of reversing the vote thanks to the support of the other parties against the large number of Tory Eurosceptic MPs and it would be a doddle in the House of Lords, which has a pro-EU majority.

This option is already being pursued by one of the City's most prestigious law firms no doubt commissioned by powerful City interests which has filed a law suit to challenge the government's right to trigger article 50 of the Lisbon Treaty (which would initiate the process of Britain's withdrawal from the EU) without Parliament's approval.

But even if article 50 is finally triggered, this will only happen after a lot of horse-trading has already taken place behind the scenes, to ensure that the outcome of the procedure does not go against the interests of British capital. The aim of the official negotiations in that case will be to ensure that British companies retain their free access to the EU market and vice-versa for European companies. Obviously, reaching such an agreement would be in the interests of both sides. However, the relationship of forces will be overwhelmingly in favour of the EU, meaning that the British government will have to make concessions which are likely to amount to a return to the existing status quo, including the free movement of labour. And all the more so, as some of Britain's large industries, such as construction, but also public services, need this pool of skilled and non-skilled labour.

In that case, it would be back to square one. Whether formally inside or outside the EU, Britain's relationship with the EU would involve the same benefits for British companies, and the same duty for them to follow EU regulations with the exception of some opt-out areas, as was already the case and the same free movement of labour. The only difference would be what Cameron got his EU partners to agree to before the referendum the right to treat EU workers as second-class citizens who would be deprived of some of the rights enjoyed by British workers, in particular in terms of access to the welfare system.

The need for a working class voice

What this referendum leaves in its wake and in fact, not just this referendum but the whole period since the 2010 general election is a bitter division within the ranks of the working class.

The level of xenophobic tension reached during the election campaign was illustrated by the murder of the Labour MP Jo Cox. It was the anti-migrant, nationalist climate created by years of demagogy and overbidding which eventually led her killer to turn his far-right infatuation into action.

This incident may be isolated. But the same climate feeds a level of xenophobic prejudices and, in a growing number of cases, harassment which should not be tolerated by the working class.

Foreign workers in general and EU workers in particular make up a large section of the working class of this country. Since they live and work here and are subjected to the same exploitation as all other workers by the same exploiters, they should have the same rights. They are an integral component of the collective strength of the working class and they should be able to count on all the support that they need to defend themselves against the attacks of the bosses and their politicians in government.

Anyway, a working class movement worth its name would aim at organising all workers, regardless of nationality, in order to reinforce the working class as a whole and defend collectively its material interests.

In this respect the British trade unions have failed to carry out their most elementary duty. But then they also failed to organise any kind of fightback against the deterioration in working conditions and huge rise of casualisation over the past years. They did not even begin to oppose in any real way, the collapse of the NHS or the progressive erosion of social housing.

It is this failure of the British working class movement and the resulting absence of the working class from the political scene which is feeding the despair and demoralisation of large numbers of workers and, by the same token, giving credit to the politicians' anti-migrant scapegoating.

This referendum campaign highlighted once again that when it comes to defending its political interests, the working class has no voice of its own. Of course, the referendum itself wouldn't have allowed workers to voice their interests. But the fact is that all the major organisations which claim to represent their material or political interests from the trade unions to the Labour party have allowed themselves to fall into the trap laid by Cameron, instead of exposing his political game and fake non-choice for what it really was.

And if this shows anything, it is the need for a working class party, which, rather than adapting to the divisive games of the political establishment of the capitalist class, in order to gain positions within its political institutions, aims at representing the social and political interests of the working class. First and foremost that would mean reinforcing and uniting its ranks and leading its struggles against this exploitative system, in order, ultimately, to overthrow it!

9 July 2016