Brexit still represents an opportunity

Jim Sillars say capital rules the roost in the EU so the only way is out

In requesting views on preferred options ‘after Britain has left the EU’, the editor has almost asked for the impossible as no one knows what Brexit will mean until a deal is struck and we can study the details. If the Prime Minister and the EU continue on the present path of so-called negotiations, Britain will effectively remain in on the worst possible terms – subject to EU rules without a say in how they are made. Nothing, therefore, will change. Those of us who voted Leave were clear. Out of the customs union and single market, no further contributions to the EU budget, out of the Common Fisheries Policy and Common Agriculture Policy, no longer subject to the jurisdiction of the European Court of Justice; and able to strike free trade deals with countries outside the EU bloc.

I never met anyone on the ‘leave’ side who, on the hard facts, thought other than that a sensible trade deal would emerge from negotiations. One of those facts is the trade surplus of £68bn in favour of the EU, showing how important the British market is to exporters in key EU states such as Germany, France, Italy, Netherlands and Denmark. Another was underlined by the Deloitte study of the effects a British departure on WTO terms would have on the German vehicle industry. A 10% tariff, resulting in a revenue fall of 12.4bn euros (-18%), with 550,000 fewer units sold in Britain, causing 18,000 jobs to go. But economic logic and the EU do not go together. There is for the Commission a bigger agenda.

As the Commission has shown in the handling of the euro zone, it gives more weight to its political ambition of ever greater integration than to the economics. It has applied the same principle to British-EU trade relations. The Commission has a need to punish Britain for leaving as a warning to other member states, because if others take the British road then the objective of finally creating a United States of Europe, a single state, will vanish.

The euro zone was a giant step towards that ambition, because to make it work it requires political and fiscal union; and no matter its inherent flaws without that union, and the severe punishment dealt out to the peoples of Greece, Portugal and Spain due to those flaws, it has been kept in place – a triumph of politics over economics, still the forcing agent of that final piece of the integration jigsaw that remains the Brussels ambition.

As we have moved from the Prime Minister’s ‘Brexit means Brexit,’ to her Lancaster House speech with it red lines, to the Chequers stitch up, the Government has a different definition of ‘leave’ than those of us who voted ‘leave’. It looks like we are heading to be no longer legally in membership of the EU on 29 March next year, but still in the customs union, single market, and under the jurisdiction of the EU, with EU access to our fishing waters not clear, providing not only a whopping £39bn pounds, but continuing to pay over a proportion of our VAT proceeds to the EU budget during a prolonged transitional period.

How a British Government can lay £39bn on the table and be unable to make ‘leave’ mean ‘leave’ on the definition the majority voted for, is something of a wonder; something that should destroy the Tory party’s self -declared claim to competence. So, given the uncertainty about the eventual outcome of what are called negotiations but have in reality been an EU blocking, tackling and dictating the agenda, it is only possible to speculate between the two scenarios seemingly considered by the Cabinet – Chequers and WTO, and within the former the future of Scottish fishing waters. The lead EU negotiator has talked of continued EU access in any deal. Would a Tory Government accept that, given the number of Scottish Tory MPs whose constituencies are in fishing areas? Never mind them, would the Scots?  

Before looking at these options, let me re-state the reasons why I voted Leave. Away back in 1972, before Britain entered the EEC, at a special Labour conference, I denounced the Treaty of Rome as the ethic of capitalism, and I have been proved right as the EEC evolved into the EU. The Laval and Viking judgements by the European Court of Justice (ECJ) are one point of proof. Both cases posed a conflict of interest between capital and labour. In both the ECJ, properly in my view, applied the EU treaties which enshrine the rights of capital, and said that capital’s rights to move at will within the EU trumped any workers’ rights to stop it. Properly? Yes, in law, as there is nothing in the EU treaties, which are the basis of EU law, that make labour even equal to capital. Both can move freely, but that gives capital the whip hand as Laval and Viking showed.

The second point concerns the fears often expressed on the left that out of the EU, Britain will see a massive attack on workers’ rights by an illiberal Tory government; and that, therefore, sticking with the EU one way or the other, is the best defence workers will have. The fact is on rights like paid holidays, maternal and paternal leave, British standards – introduced by different governments – are above the EU minimum. But more important is the question of who, in defence of capital in the form of French and German banks, tore up workers’ rights, and imposed the sale of national assets on the peoples of Greece, Portugal and Spain? The EU – that’s who. The workers in those countries were then forced to use their ‘right’ of free movement to find work elsewhere, at low wages.

Out of the EU, we in Britain can campaign and evict a Tory government, whereas in Greece and Portugal, for example, a change of government has not meant lifting the yoke of the Troika, until the governments have fully submitted to the Commission in Brussels. A Commission we cannot evict. Britain has no written constitution and this gives capital supreme rights over labour, as do the treaties and ECJ judgements in the EU. Throughout our history, there has been a struggle between capital and labour, and labour through political and industrial action has been able to recoup its losses and win significant victories: all because, unlike the EU treaties, the rights of capital are not entrenched in law.

This is where the Corbyn-McDonnell Labour leadership has me puzzled. It is sensibly preparing for an onslaught by international capital the day it takes office. Yet, if Britain remains subject to the rules of the EU, it will be powerless in the face of that organisation’s assertion of the absolute right of capital over any legislation that curbs its powers, or gives labour advantages. That the Labour left wishes to stick with an organisation that gives capital pre-eminence is a wonder to behold.

Given that fundamental advantage to capital in the EU treaties, it is logical for the CBI to back the Chequers position, which will continue the rule of the ECJ and its pro-capital and anti-labour precedents. For the rest of us, it is a different matter. Britain will be of, but not in the rule making of the EU. The worst possible outcome to joke negotiations; with money continuing to flow to Brussels instead of into our public services. A vassal state.

Chequers and the Irish border is a false problem, and the idea that Britain must stay in the customs union and single market to solve it, equally false. A ‘hard border’ already exists in respect of fuel duty, excise duties, VAT, taxation and currency, without effect on the Good Friday Agreement, which is not about trade but managing relations between the nationalist and unionist communities. If trade between Switzerland and the EU states can flow freely, then the same can be done in Ireland where the volume of trade is much lower. Over 2.4m people cross the Swiss-EU every year; 23,000 lorries cross it every day. Switzerland exports 56% of its goods and services to the EU. It is not in the customs union, yet the traffic flows easily.

A World Trade Organisation (WTO) rules Brexit is not cliff-edge. It is a known system, being the one used for Britain’s trade of £342bn with the rest of the world. The same one EU states use to trade with the rest of the world. In the WTO system, EU tariff barriers, except on cars and agriculture, are low at around 3%-4%. As the British pound has been devalued by at least 15%, they will prove no punishing barrier.

On Scottish independence, not unusually, Nicola Sturgeon has got the wrong end of the EU stick. My vote for ‘leave’ was strategic: it takes the EU out of the triangle of power between Edinburgh, London and Brussels that existed in 2014, with the latter two hostile to independence. Moreover, Brussels has come down firmly against Scotland having a seamless entry to the EU, with the Spanish veto always available to prevent a precedent that would give Catalonia a case for its independence.
Take the EU out of that triangle of power, and it will be much easier to deploy a case for independence when only our relations with the rest of Britain at stake.

Jim Sillars is a former Labour and SNP MP