At the start of the year, I predicted that May would call a snap General Election in February. Reports are that the Tories are, indeed, preparing for such an election. The path to that election now looks clear.
May has continued to run down the clock towards March 29th. She has been assisted by Corbyn and the Labour leadership, who, after the 2016 referendum, surrendered any vestige of international socialist principle, using the spurious argument that they had to “respect” the referendum vote. On that basis, they gave May an easy run through parliament, by supporting the vote to invoke Article 50, thereby also providing May with an obvious club to beat Labour over the head with, in further debates. Rather than Labour providing opposition to the Tories, on the issue of principle, it was extra-parliamentary forces that did so, such as the court action of Gina Miller, and of the Scottish government etc. Labour compounded that situation by going into the 2017 General Election on a Manifesto that again repeated the nonsense that it would “respect”, the referendum result, and thereby carry through the reactionary Brexit policy were it elected. Again that gave the Tories an obvious club to beat Labour over the head with, ever since, and has provided the Brexiters with another easy tool to use, by claiming that, in 2017, both parties supported Brexit, and 85% of voters voted for those parties. In reality, a major reason for Labour gaining a large number of additional votes and seats in 2017, was precisely because it was seen as the only credible alternative to the hard Brexit that the Tories would push through.
The reality of that is not just seen in the seats such as Canterbury, or Kensington and Chelsea that Labour picked up, but is also being seen in the fact that, as it becomes clear that Corbyn is determined to push through his long held opposition to the EU, in defiance of the wishes of 90% of party members, and around 75% of Labour voters, the party has started to lose members, who are allowing their subs to lapse, and in rising support for other anti-Brexit forces, such as the Liberals, Greens, SNP, and Plaid, both in terms of party membership, and in votes in local elections. The more Corbyn continues on this route, such as with his decision now to basically drop Labour's Six Tests, in order to try to stitch up a deal with May, to push some form of Brexit through parliament, rather than abide by conference policy, and put his weight behind another referendum, the more it will be Labour that becomes split by Brexit, not the Tories. The more Corbyn's support for Brexit becomes indistinguishable from that of May, the more he will be led into unsustainable arguments and contradictions, and the more that will make his position look untenable.
In order to pursue this obsession of pushing through Brexit, Corbyn has now approached May with a potential deal that would mean that he would provide Labour votes for May, to outweigh those of the ERG, who will oppose May's deal unless it meets their requirements for a hard Brexit. That itself now puts Corbyn into the same camp as those reactionary, nationalist Labour MP's who voted for the Brady Amendment, and against the Cooper Amendment. It brings Corbyn closer to the position I warned of some months ago, of following in the footsteps of Ramsay MacDonald, of essentially forming a National Government with the Tories. It is fully in keeping with the Popular Front strategy of Corbyn's mentors in the Communist Party. But, of course, as I wrote a week or so ago, May cannot accept Corbyn's proposal.
Corbyn has said to May that he would support her deal if she introduced into the mix the idea of joining a permanent Customs Union with the EU. In Labour's Six Tests, this proposal for being in a Customs Union, is conditional upon the EU allowing Britain to also have a seat at the table in negotiating future trade deals, as well as allowing Britain to negotiate its own separate trade deals. For that very reason, the EU would never agree to it. That requirement, now seems to have been dropped. In its place comes the rather vacuous notion that the arrangements for this Customs Union would have to be “negotiated”. The reason for including this proposal on the Customs Union is that, were Britain to “negotiate” such an arrangement, it would, its claimed, remove the need for the “backstop”. The backstop is only required if Britain and the EU do not come to such an arrangement, in relation to their future trading, which removes the need for an Irish border. But, the problems here are obvious.
Firstly, the reason that the ERG and DUP oppose May's Deal, as it stands, is that the backstop commits Britain, and/or Northern Ireland, to remaining within the EU Customs Union and Single Market arrangements for an indefinite period. In other words, it commits Britain to remaining in the Customs Union, and either in, or closely aligned to the single market on a permanent basis. That is why Corbyn's position is, in reality, indistinguishable from that of May. If May were to agree to Corbyn's proposal, and go for permanent membership of a Customs Union, she would immediately invoke the ire and opposition of the ERG and DUP. If the DUP withdrew its support, May's minority government would be in danger of losing a no confidence vote, and being thrown out of office. But, as I wrote, recently, May cannot go for a policy which backs membership of a Customs Union, because that would be to undermine the reason that the Tories support Brexit itself, which is to promote the interests of that plethora of small private capitalists, who back not just Brexit, but a “No Deal” Brexit, by a margin of 4:1. If May were to line up with Corbyn, she would be out on her ear in short order, as the Tory rank and file rose up in opposition to her.
Moreover, being in a Customs Union does not deal with the question of the Irish border. It is not a Customs Union, and absence of tariffs, which enables frictionless trade, but membership of the single market, which ensures that goods and services traded within it, comply with a common set of regulations. Corbyn's proposal could only make sense if Britain were also to be inside the EU single market. Yet, Corbyn cannot propose that, because, like the Tories, he is tied to the idea that Britain must set its own rules and regulations, especially when it comes to free movement. That was illustrated by Labour's disgraceful initial failure to oppose the Tories' new racist immigration laws. Hence Corbyn mutters about having a close relationship to the single market, by which he means he wants to have cake and eat it, so as to have all the benefits of single market membership without having any of the responsibilities such as accepting free movement. The Tories, at least, have the benefit of honestly saying that the reason they do not want to be in the Customs Union is because it prevents Britain doing separate trade deals, and do not want to be in the Single Market, because they do not want to accept free movement.
But, even were such a deal to be cobbled together, with Britain being in the Customs Union and in or closely attached to the Single Market, the only way the EU would accept such an arrangement would be if Britain simply accepted the rules and regulations dictated to it, by the 27. Why would any rational government accept such an arrangement whereby it had to accept rules and regulations dictated to it, without any say in determining those rules? How would that in anyway represent an improvement on the position Britain already enjoys as a member of the EU?
So, May will reject Corbyn's offer. But, the EU will also reject May's bid to reopen the Withdrawal Agreement. The consequence is that when May does bring her deal back to parliament, it will again be voted down. A number of reactionary, nationalist Labour MP's, thought to be as high as 60, might back May, as she runs the clock down to a catastrophic No Deal, on March 29th. But, that will not be enough to get the Bill passed, bearing in mind the 230 majority by which it was defeated. With 80% of Tory voters saying they support a “No Deal “ Brexit, the door is wide open for May to throw the Tory Remainers under the bus, and to back the ERG/DUP No Deal wing. That will mean that the Tories could go into a General Election on a unified No Deal Brexit platform, leaving Labour going into the election on a totally confused, and divided basis. Corbyn will have given more than enough hostages to fortune for the Tories to use in the election campaign, due to his eagerness to push through some form of Brexit.
Exactly what Labour's stance in that election would be is still not even clear, and Labour frontbenchers, when asked, cannot say. At the moment, it appears to be that Labour would still pursue the catastrophic line of “respecting” the referendum vote, and saying it would push through Brexit, though the Brexit it proposes will by then be one that the EU and history will have shown was an illusion. It will mean that a unified Tory party will rally its core vote around it, whilst Labour will be shredded, with Remain supporting voters being lost to other parties, whilst the commitment to pushing through Brexit, will be unable to attract sufficient votes from Leavers who will, in any case, vote Tory, UKIP, or do as many of them always have, and simply sit at home.
May will propose a General Election to break the impasse, following the further defeat in parliament of her deal. She will argue, as she did in 2017, that she needs a parliamentary majority to get it enacted. The latest polls show that she is, this time, on course, to achieve such a parliamentary majority. Of course, May does not want, and would not be allowed, to push through a catastrophic crash out of the EU on March 29th., so without a majority for her deal in parliament, the only alternative will be to get agreement from the EU to extend Article 50. The EU have said they will only do that if it is to enable time for either a referendum or a General Election. May has no reason to risk another referendum. So, before the end of February, she will go to the EU, having lost again in parliament, and ask for an extension of Article 50, so as to hold a General Election.
She will make clear to the EU that she will fight the election on the basis of negotiating a “managed no deal”. That is, rather than crashing out, Britain will request time to establish a range of bilateral, and individual agreements with the EU, and its member states to replace vital existing arrangements, for example, in relation to aerospace, medicines, and so on, which will alleviate some of the main immediate crises that would otherwise arise. The EU also wants to avoid such crises, and so is likely to agree. Britain, would then enter into negotiations for its future trading relations with the EU, based around some kind of Canada plus deal.
On that basis, May can fight the election on a coherent and unified Brexit programme, whereas Labour would go into the election on an incoherent programme, and divided over the main issue of the day, and the only issue around which the election will be decided, as its radical economic and social programme gets drowned out. The markets will prefer the certainty of such a deal than the uncertainty that currently exists, or the chaos that would result from crashing out on March 29th. The Pound would then be likely to strengthen, giving May a certain honeymoon period, as a stronger Pound causes inflation, and pressure on interest rates to ease. Although, a No Deal Brexit implies continued uncertainty for business, over the future trading relations, a managed No Deal, means that Britain could probably continue on the basis of WTO rules until such time as a free trade deal was negotiated. That would probably mean that some of the pent up investment spending by firms would be released, creating a short-term boost to aggregate demand, and growth, at a point where the UK looks set to slip into recession.
EU growth is also currently being hit by investment being held back due to the uncertainty caused by Brexit, as well as by the hit to world trade caused by Trump's global trade war, and its effect on the Chinese economy, as well as by specific short-term factors, such as the drop in demand for diesel vehicles, following the emissions scandal, and also due to structural changes, as vehicle manufacturers begin to retool and re-equip for the shift away from petrol to electrically driven vehicles, and also towards self-driving vehicles, and the shift away from an ownership model to a service based model. So, even a managed No Deal, on WTO terms, as an interim to a free trade agreement would be likely to be seen as a step forward by the EU, and indeed one in which it will have a whip hand, compared to a diminished UK economy.
The path is thereby clear for May to call a General Election before the end of February, on the basis of pushing through such a managed No Deal solution. It is likely to see the Tories elected, and would avoid the catastrophe that crashing out on March 29th implies. But, none of that changes the underlying reality that Brexit will mean a weakening of the UK economy, and thereby the position of British workers within it. It implies that the Tory Right, whose agenda will have been the one that won out, will then push ahead with their programme of undermining workers, consumers and environmental rights and protections, so as to boost the competitiveness of British firms, as they compete with their larger EU rivals.
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