16th July 2017
In the City – who really benefits from EU membership?
As the Tory government lists hopelessly towards the next round of Brexit negotiations the impact of the last ten years of austerity has been highlighted in recent research by the Resolution Foundation. According to the thinktank, those with incomes over £275,000 per annum have recovered from the impact of the banking initiated recession in 2008 more quickly than the other 99% of UK households.
Adam Corlett, senior economic analyst at the Resolution Foundation, stated,
“The incomes of the top 1% took a short, sharp hit following the financial crisis. But they’ve recovered rapidly since the very richest households have now seen their share of the nation’s income return to very high pre-crisis levels. In contrast, for millions of young and lower income families the current slowdown comes on top of a tough decade for living standards, providing a bleak economic backdrop to the shock election result.”
The under 35’s have been particularly hard hit, struggling with high rents, a lack of social housing and limited access to the housing market, due to low pay and inflated property prices.
The ‘shock election result’ was based very much upon the life experience of many of those in the under 35 age group and the experience of those on low wages, zero hours contracts, unemployed or struggling with job insecurity, whatever their ages and wherever they live.
The most important common factor, uniting all of those experiencing the sharp pain of austerity under the Tories, is not age or geography but social class. As the recent disaster at Grenfell Tower in North Kensington illustrated all too dramatically, the poor can co-exist with incredible wealth in a single London Borough. The extremes in other parts of the country may not be as sharp as in Kensington and Chelsea but the same principle holds true.
The beginnings of a solution to the issues facing those in poverty across the country were outlined in the Labour Party manifesto at the General Election, placing an emphasis upon addressing the needs of ordinary people for healthcare, housing and education. The ‘shock election result’ was a reflection of the recognition by many that a government of the rich, by the rich, for the rich was not going to deliver to meet those needs.
The Tories blunder towards Brexit in the belief that by exiting the European Union they can improve the lot of their class. The past decade of austerity is evidence, if any were needed, of the exact opposite. As part of the European Union the banks and corporations, which were the architects of the financial crisis, have found themselves protected, even to the extent of having their immediate future secured by the state, Lloyd’s and Royal Bank of Scotland being just two examples.
By contrast, those working in the public sector have seen jobs disappear wholesale, pay frozen or capped at a meagre 1% and investment in new technology and infrastructure at a minimum. Youth unemployment in parts of the EU is in excess of 25% while job insecurity is rife. As a capitalist club, which acts in the interests of capitalist banks and corporations, the Tories are going to be hard pressed to do any better than the protections offered by the EU, hence the current disarray in their ranks.
It is salutary to note that the core business the Tories are seeking to protect in Brexit negotiations is that of the City of London. Making sure that the square mile remains the banking heart of European capitalism is far higher up the Tory agenda than any consideration of the rights of workers, or human rights in general.
For Labour the task ahead is also difficult but in different ways. Many of those attracted to the Labour Manifesto are young people attracted to that alternative based upon their own life experience of capitalism in the UK. Many of the same demographic have been brought up on the pseudo-internationalism of the EU, pedalled by the Remain camp, suggesting that to be anti-EU is to be anti-European . Labour Leader, Jeremy Corbyn, has committed Labour to following through on Brexit following the outcome of last year’s referendum. The idea that to be anti-EU is to be anti-European is an association which must be broken if class interests are to prevail over those of geography.
This will not be easy. The pro-European sentiments of sections of the younger generation are based upon the positive social benefits which being part of the EU has brought for a number of them. Conversely, the anti-EU sentiments of others is easily fuelled by demagogues quick to hide the failings of capitalism as a system by placing blame upon immigrants, foreign labour or simply those of a different skin colour.
As the Brexit negotiations progress the complexities of the arguments need to be brought out. The Labour Manifesto will need to be held up as a touchstone that is merely a starting point. Even that starting point is not one that could be delivered within the EU, with its current limitations on public investment and public ownership.
As Jonathan White, co-author of Building an Economy for the People, argued recently in the Morning Star,
“Remaining within the single market and customs union would mean remaining subject to the EU-Canada Comprehensive Economic and Trade Agreement (Ceta) free trade treaty, which allows companies to sue governments over any new law or policy that might reduce their profits in the future.”
Presumably public ownership would be such a ‘threat’? It is becoming increasingly clear that a completely new form of organisation and new approach to the type of society we want to see is required. It is increasingly clear that the current crisis at the heart of capitalism in the UK goes beyond Brexit. Arguments in favour of socialism cannot be avoided.