No-deal Brexit, establishment splits, threat of renewed downturn…
On 22 September, the Socialist Party’s (CWI in England & Wales) national committee met to discuss the political situation in Britain, including the tasks facing the workers’ movement in this tumultuous period of capitalist crisis. Here, we carry edited extracts of the speech given by Peter Taaffe, Socialist Party general secretary, in opening the meeting.
The end of the summer is often an important time for the Socialist Party to take stock, and to prepare for the period ahead. But a sober analysis, both of the past period and of the coming period, is now virtually impossible given the dramatic events of recent days. These events have altered the script, both for this speech, and for the capitalist class itself.
There was no summer break for the capitalists. They are preoccupied with a world crisis, and in particular the economic situation, with a morbid fear of another financial crash ten years on from the collapse of Lehman Brothers.
One of the themes carried in the capitalist media of what took place a decade ago is that “nobody anticipated” the crash. That’s not true; in articles written in the run-up to 2007, we pointed towards the explosive crisis that was brewing.
Today, the dominating issue in British politics is Brexit. However, there is tremendous confusion – no clear pathway to a solution for the capitalist class. This was summed up by Tim Halford in the Financial Times: “I recently had a couple of conversations with bright teenagers. One wanted to discuss philosophy – Godel, Turing, Wittgenstein – not a problem. The other asked me to explain Brexit. Not a chance”. He concluded that the Brexit saga is “madder than a box of hallucinating frogs”.
There is a deep-going political crisis in both major parties. The Tories are riven with division. It’s possible this might come out into the open in a split in the next period, probably around the figures of Johnson and May.
This split is not just on the EU. It’s on the whole direction of the party. It’s on where to politically situate themselves in a rapidly changing situation, particularly given the ferment among the middle classes – the Tories’ traditional base of support.
Labour’s own civil war remains unabated. If anything it has deepened.
Understanding the economic conjuncture in Britain and the world is the key to perspectives.
There’s been a ‘recovery’ in jobs – the “best 40 years” according to the raw statistics. In the US unemployment is officially at its lowest for decades.
However, this is just one aspect. The other, and more important, ‘reality’ is the colossal worsening of the working class’s existence – in every respect – including in jobs and particularly in wages and conditions. You only need to see the strike of the Uber Eats workers, where many of the most oppressed workers are fighting against the brutal conditions of the gig economy.
The Financial Times has compared conditions in the working class to the situation of the 18th century in which the majority of workers were on ‘piece rates’.
Just 13.5% of private-sector workers are in a trade union. Capitalist commentators are almost imploring big business owners to increase wages. Some even advocate the formation of unions, though tame ones of course! This indicates the dilemma faced by the ruling class. They need an increase in wages to generate demand.
This crisis has not been overcome. In fact new figures show the colossal increase in debt. Worldwide public debt is now $60 trillion. In the UK, national debt is more than £2 trillion.
The increase in the national debt is because there is no or inadequate growth. While there has been a certain recapitalisation of the banks, at the same time the problem has been transferred from the banks to other sectors like ‘hedge funds’.
There has also been a relocation of investments to the so-called ’emerging’ markets which are no longer emerging but ‘submerging’. Look at Latin America, Asia and Africa. In Argentina there is now a 60% interest rate. Brazil has experienced the biggest recession in its history. This has enormously increased social tensions there.
This is quite apart from the effects of incipient trade war prompted by Trump, where $200 billion in tariffs against China have led to retaliation. This represents a ratcheting up of the inter-imperialist rivalries.
This is the background to the events in Britain. While workers are not yet acting in mass opposition to the system, there are rumblings. The recent walk out by prison officers, in defiance of Tory anti-trade union laws, was an example of this.
There is not yet a powerful workers’ movement or uprising. But this is germinating. As always, this future is signified in the gaping splits developing in the ruling class and its parties.
The most obvious is the crisis over Brexit. One false ‘misstep’ and a messy Brexit could enormously aggravate the crisis, leading to mass confrontations and clashes in Britain and elsewhere. The sharpness of the clash in Salzburg was an indication of the bitter rivalries. The EU’s negotiator, Michel Barnier, first tried to love-bomb May at one stage. But in Salzburg we saw bitter intransigence towards British capitalism’s demands. This reflects the fear of the centrifugal disintegration of the EU with major repercussions in other European countries, particularly those in the south of the continent: Italy, Spain, and so on.
However, the overwhelming majority of British capitalist strategists in industry and commerce favour ‘Remain’. At a minimum, they desire a continued close relationship to Europe and the single market.
There is an element of ‘project fear’ in the recent statement of Bank of England governor Mark Carney on house prices.
But in general it’s not the case that these fears have been exaggerated. The sober statement of Jaguar Land Rover, predicting massive job losses in a no-deal scenario, indicates this. There are real fears of a complete logjam at the ports. Even a two-minute delay in bringing goods into or out of the UK is bad enough. A five minute delay creates a catastrophe – with the resulting lines of traffic stretching for miles. There is the potential for losses of billions of pounds to the bosses.
The capitalist class is not clear on how to approach the Brexit negotiations. They are feeling their way. Labour is similarly struggling to propose some kind of ‘solution’.
The famous ’empiricism’ of the British ruling class is on full display. They will attempt to muddle through. There is growing support for a so-called ‘blindfold Brexit’, to maintain the status quo for a period after leaving the EU while negotiations continue into the future. There is also the fear of the Good Friday Agreement unravelling and a further sectarian polarisation in Northern Ireland.
There is consequently a noisy clamour for a new referendum – particularly from the Blairites, the Liberal Democrats and London mayor Sadiq Khan.
While a second referendum can’t be completely ruled out, it is unlikely. In reality, it’s likely that such a referendum would serve to stoke anti-EU feeling. It would be rightly seen as attack on democratic rights, with the potential threats of street demos, violence and confrontation.
That’s why it’s vital that we stress our different workers’ and socialist approach. If given a lead from the top, the working class is instinctively internationalist. A real ‘peoples’ vote’ would be a general election.
We call for a ‘workers’ Brexit’, but at the same time, we recognise the vital importance of an internationalist approach, which has been enormously reinforced by the colossal integration of the productive forces across borders, which cannot be unscrambled without huge economic damage. Therefore we give emphasis to workers’ unity and the need for a democratic socialist confederation of Europe.
The class divide has enormously deepened since the first referendum in 2016. Every aspect of the economic and social situation indicates a massive widening of the class gulf in Britain. Even the Tories are affected. They are forced to accept that the ‘conversation’ has changed. There is now open discussion in their ranks on the ‘crisis of capitalism’.
Of course, they only wish to attempt to ‘solve’ this problem by trimming at the edges – implementing cosmetic reforms. We understand that what is necessary is system change. The intervention of Justin Welby, the Archbishop of Canterbury, is significant particularly when considering the historic position of the Church of England – described in the past as the ‘Tory party at prayer’.
Welby denounced Amazon’s chief Bezos – and by implication capitalism – for ‘greed’, for not paying taxes. The shepherd is at least partially reflecting the views of his flock, and up to a point being led by them! In the highly-charged situation in Britain, the ruling class, including its churches, are forced to sway and adapt to the prevailing social and economic winds.
However, there is, at present, a certain frustration in the labour movement that “nothing seems to be happening”, particularly on the industrial front. Everybody is waiting for an explosion and it is coming!
Rage is continuing to pile up at the dramatic decline in living standards following ten years and more of austerity. Life expectancy, particularly for women, is declining.
This reveals not only the inadequacies of capitalism as a whole but also the consequences of the shameful record of the Blairites. Arch-Blairite Peter Mandelson claims the ‘centre left’ is being squeezed out of Labour. In reality, their capitalist policies are coming home to roost in the deterioration of living standards.
The middle class, as well as the working class has been profoundly affected by the crisis. The majority now fear for themselves, and particularly for their children in terms of jobs, homes and education. Many are looking around for an alternative.
Shockingly, we have been assailed in the last few days by a series of reports of hungry workers and children. 14 million are currently classed as living in poverty in Britain. The Blairites prepared the ground for the Tory attacks with the cuts made to welfare payments – including the withdrawal of benefits.
The struggle against cuts being carried out in local government has if anything increased. Recent events in Somerset and Northampton show this.
Tory councils have in effect given up the ghost. In the face of government funding cuts they say: “We surrender!” They share this approach with a majority of right-wing Labour councils. These areas – allegedly sleepy rural counties – are in fact amongst the leaders in the league of deprivation!
Right-wing Labour councils are desperate to attract high ratepayers. That explains why they have got into bed with the speculators to enforce schemes of gentrification and social cleansing. This has provoked massive protests and internal upheaval in London, such as in Haringey, Waltham Forest and elsewhere.
This is why we demand that councillors stop doing the dirty work of the Tory government by passing on cuts. We will continue to support socialists and trade unionists standing as candidates in local elections to challenge those implementing brutal austerity.
We will also continue to call for the re-grouping of genuine socialist forces under a Corbyn-led Labour Party, on the basis of refounding the party with a democratic, federal structure. It is for this reason that we have corresponded with Jennie Formby, general secretary of the Labour Party, on this question (see ‘The struggle to transform Labour’ at socialistparty.org.uk).
Labour’s civil war
The outcome of the Labour party’s civil war remains in the balance. There remain ‘two parties in one’. Of course, there are really two civil wars ongoing in the Labour Party and the Tories, with the potential for splits within both.
Capitalist strategists, through the columns of their newspapers, have hardened their approach to Corbyn and particularly to a government headed by him. The Daily Telegraph wrote that the ‘biggest crisis’ capitalism faces arises not from the economic situation but rather the prospect of a Corbyn-led government!
This remains true despite Corbyn, and particularly McDonnell, doing everything to allay the fears of big business and the capitalist class.
Unfortunately, their programme amounts to little more than the implementation of the recent report of Welby and co, calling for mild reforms, the development of co-ops and so on. There are also other proposals to cut down on the more parasitic elements of capitalism.
But the pressure exerted by the capitalist class on a Corbyn government will go much further. This is illustrated in the relentless campaign of slander which Corbyn has been subjected to over the summer, particularly over the issue of ‘antisemitism’.
We have also seen the cranking up of the ‘security’ issue by the right. This is particularly happening over the Salisbury Novichok attacks. The truth is that this is probably preparation for a dirty election campaign, which will depict Corbyn as weak on ‘defence’.
But the hypocrisy of these slanders is shown by the different approach towards Tory EU MPs backing Orbán in Hungary! It is also highlighted by the support afforded to the ‘head choppers’ of Saudi Arabia by Blair. Johnson’s disgusting comments on Muslim women provide another striking example.
However, the campaign of the capitalists and the Labour right on the question of antisemitism has not worked.
Support for the socialist alternative has grown. This is evident not just here in Europe, but also in the US, where one in three youth now support socialism.
In the end, this slander will have little effect. The overriding class issues will come to the fore. It is still likely that the outcome of a general election in the near future would be a Corbyn victory, paving the way for a Corbyn-led government.
One potential stumbling block in the immediate term is the possibility of splits by the right of the Labour Party. While it appears more likely that the Blairites will ‘hang on’ for the time being, continuing their campaign of sabotage, it’s a threat which has not gone away. Blairite Alan Johnson recently described a split as “inevitable”.
But Blair took time out from meeting oligarchs and Italian far-right politician Salvini to warn of the possible consequences of repeating the failure of the Social Democratic Party in splitting from Labour.
Therefore, a new ‘centre party’ is not the most likely in the immediate term, though it remains on the agenda as an option. The Blairite outrider Chuka Umunna – who made the disgraceful statement that he considers the Labour party ‘institutionally racist’, a term originally used by anti-racist campaigners to describe the brutal methods of the capitalist state – keeps hopes alive. The main obstacle the Labour right face remains the lack of firm social ground for a centre party.
The Observer’s commentator Andrew Rawnsley recently argued that ‘right’ populists, not the left, inherited the post-2007-08 crisis period. This paints only one side of the picture.
His definition of the ‘left’ includes right-wing social democracy, which has become so organically connected to capitalism as to be incapable of benefiting in the present period.
Where the legacy of social-democratic failures looms less large, such as in the US, the growth of support for socialism has been particularly striking.
There is now no room for a sustained revival of right-wing social democracy. This has been shown by developments in Greece, leading to the virtual collapse of Syriza following its capitulation to the demands of the Troika – the EU, the International Monetary Fund and the European Central Bank.
We will continue to play a key role in events. Our main job is to dig roots among workers, particularly young workers.
In this way we prepare our and the working class’s future, building a force capable of leading the struggle for the end of capitalism and the establishment of socialism
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