Wednesday, 14 September 2016

What is the Tory's Economic Plan for Brexit?

Last week, David Davis (pictured), the minister for Brexit, was supposed to lay out a detailed and cohesive plan for withdrawing from the EU without harming Britain’s infrastructure. I have never been pro EU, because I essentially see it as a vehicle for forcing neoliberal policies on member states. However, before the referendum, I repeatedly warned that Brexit would be an absolute shambles, and would be a classic ‘out of the frying pan, into the fire’ scenario. The main reason for this is that, neither Brexiters nor the Tory government had an actual plan for what to do if the British public did vote to leave the EU. David Cameron not only gambled the future of the country purely in order to win over Brexiters both in his own party and on the electoral register, but he also failed to make a contingency plan just in case the gamble backfired. The fact that David Davis, in his Brexit speech to parliament, decided to present a load of incoherent waffle and meaningless platitudes, instead of a detailed plan is a clear demonstration that they never actually had a plan to begin with.
Indeed, had the Tory’s actually come up with a plan beforehand, they would not have been able to go around making a huge number of false promises. Within a day of the Brexit vote, high profile leave campaigners were already queuing up to deny the £350 million for the NHS lie. A couple of months down the line it turns out that what the Tory’s had in store was not extra money for the NHS, it was actually a secret programme of spending cuts, staff layoffs and hospital closures. Theresa May has dashed the hopes of many on the ukipper side of the debate by ruling out a points based immigration system. Also, any highly optimistic people that believed that Brexit was going to inspire a clamp down on tax dodging and a saving of British steel by the Tory’s is clearly living in cloud cuckoo land. Because there was no plan of action these cynical Brexiters felt free to promise people the world and more. The problem is, a lot of people who voted Leave, are now expecting it.

Backtracking on Austerity

When it comes to actual policy there really was not much at all to go on from Davis’ speech. However, in the part where he spoke about maintaining economic stability there were a few interesting points. One of them is that the Tory Brexit squad have secured an agreement from the new chancellor Phillip Hammond, that structural and investment fund projects signed before the autumn statement, would continue to be funded by the UK treasury after Brexit eventually goes ahead.
This is interesting because it is a 180 degree U turn on the previous Tory economic position that austerity creates economic stability. For the past six years they unwaveringly supported George Osborne’s austerity agenda that they have to ruthlessly slash spending on stuff like infrastructure projects, local government, emergency services and public sector wages in order to achieve economic stability. Now Davis is saying the precise opposite, that in order to achieve stability it is vital not to slash funding. Whichever way you look at it this is a complete and utter admission that they are wrong. Either Davis was wrong to seek assurances that agreed structural fund projects would not be axed, or he is right that austerity at a time of economic instability is harmful, which acts as proof that the last six years of Tory ideological austerity has been nothing but pseudo economic nonsense. If the economic policy of cut everything, which the conservatives have been pursuing since 2010, made any sense whatsoever (spoiler alert: It does not) then Davis and his friends in office would have happily withdrawn funding from the structural investments. The only reason they didn’t is because they know, as they have always known, that Osborne’s austerity agenda was a complete and utter con from day one 

Landowner Subsidies

One of the only bits of actual policy is Davis’ speech was unsurprisingly absolute nonsense. This was that the government will ‘match the current level of annual payments’ that the agricultural sector receives ‘through the direct payment scheme, providing certainty’.
Agriculture accounts for just 0.62% of the UK economy. It is obviously an important sector that employs several hundred thousand people. However, it is a blatant double standard that the conservatives are giving landowners a special announcement when other sectors like manufacturing, science, education, health etc. got nothing to provide them with certainty in the entire speech. Furthermore, the idea that the EU direct payment scheme provides a subsidy for agriculture is an absolute fiction. These payments are little more than taxpayer funded handouts to landowners and come with no obligation to actually produce agricultural outputs. The more land you own, the bigger the handout you get. This is despite the fact that many landowners do not even use their land for agriculture and instead leave it barren. These subsidies are just a method of making the lower classes subsidise the owning class, so no wonder the Tory’s are prioritising it over much more important stuff like the manufacturing sector.
If you look at this issue from the self-interested Tory perspective, the landowner class are probably the most loyal Tory demographic of them all, so why wouldn’t Davis prioritise them? He must have been inundated with calls from his wealthy landowner mates worrying about their tax payer funded handouts coming to an end. Look to Paul Dacre, the editor of the rabidly anti EU Daily Mail, for instance. Since 2011, he has claimed an extraordinary £460,000 in landowner subsidies for his country estates in Sussex and the Scottish highlands. If he hadn’t had guarantees from his Tory Brexiter mates, that these vast handouts were going to continue, do you really think he would have pushed so hard for Brexit? The fact that David Davis made this a priority of his Brexit speech shows clearly that he is going to negotiate the whole thing on the back of the Tory’s financial backers, and show complete and utter lack of concern about the consequences for the rest of us.  

The Norway option or ‘Hard’ Brexit?

Up to this point Theresa may has refused to say whether leaving the EU entails staying in the single market. Indeed, she repeatedly evaded the question at Prime Ministers questions. When asked by Angus Robertson about the government’s plan for a post Brexit economic settlement, all May could come up with is a lot of incoherent floundering about how ‘Brexit means Brexit’, while the Tory benches tried to drown out Robertson’s questions with hooting, jeering and other such noise making. It is absolutely impossible that Theresa May will be able to continue stalling on the issue, but that is what she has been doing for ten weeks so far.
One option favoured by a lot of people, assuming the procrastination will finally come to an end, is the so called ‘Norway option’ where we leave Europe, whilst remaining a member of the single market. The problem is for Brexiters that access to the single market comes with a load of stipulations including the free movement of Labour within the single market zone. The idea that, during the Brexit negotiations, the EU are going to let us remain a single market and retain control of our borders is a complete fantasy. Indeed, not scrapping the free movement of Labour would cause a massive storm of protest from the Xenophobic Brexiters, who were so fixated on having their cake and eating it, that they voted leave in order to keep all those ‘pesky’ foreigners out. That said, I am not exclusively criticising the right. Those on the left of the Brexit crowd are equally as guilty of playing utopian politics for thinking that we can retain access to the single market, while having control over how we choose to run our industry. It seems from this like many people who voted Leave have got nothing that they actually voted for.
That only leaves ‘Hard Brexit’, the option overwhelmingly favoured by the ukipper brand of Brexit voters. The problem with this option is that it would have severe economic consequences for huge numbers of businesses and jobs. Anyone rooting for ‘Hard Brexit’ whilst working for a Japanese car company in Sunderland – where the majority of people voted leave – really does not know what is best for them. They would be arguing for the endangerment of their own jobs and livelihoods, purely because they have fallen for some tribalistic crap about ‘taking back control’. This option would also mean we would have to revert back to basics and try and renegotiate a trade deal with Europe. Given the fact that Boris Johnson and Theresa May would be in the driving seat on this one, I don’t think we can expect a deal that works in the interests of British workers. Finally, under these circumstances every EU nation would have a veto on the deal, making it an extremely hard negation to make. 


From reading this, some people might think I support the campaign for a second referendum. However, doing so could only lend greater legitimacy to Brexiters, especially those on the far right. The main reason I voted remain in the referendum, was not some misguided love of the EU but an understanding of the near inevitability of such a vote resulting in a mess, with a savagely right wing bunch of Tory’s running the show for their financial backers. As such, it is my personal opinion that rather than looking to things such as referendums as a means to initiate further change we should be looking at grassroots direct action.

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