The Financial Times has reported that the government is intending to use its new found freedoms, as a result of Brexit, to attack workers' rights in Britain. The government, of course, denies the report, and ridiculously claims that Britain has better workers' rights than anywhere else in the EU. It doesn't. The reality of Brexit is that it does not mean taking back control in terms of Britain's relations with other more powerful economies, such as the EU, and so it can only ever make up for its worsened position, by using its new found flexibility to put the cost of that on to British workers. But, it was not just Tories that supported Brexit. Some on the Left also supported it, as did some union leaders like Len McCluskey. Is this what they wanted, because that is what they are going to get, and it was always going to end that way.
In the 1980's, Britain, under Thatcher, was embroiled in what was an all out attack on workers' rights. That attack was one supported by big and small capital alike, even though it was the small capitalists that had most to gain from it. It came at a time when the rising wage share of the 1960's, and 70's had created a squeeze on profits, as described by Glyn and Sutcliffe. In other words, it was a classic crisis of overproduction of capital, as described by Marx, where capital expands relative to the social working-day to an extent that absolute surplus value cannot be expanded, and rising wages causes a fall in the rate of surplus value, and falling profits. Both big and small capital needed to reverse that situation, which they did by revolutionising production. New technology was introduced that replaced labour, causing unemployment to rise, and wages to fall. As workers tried to resist that by a series of large scale strikes, such as the Miners Strike of 1984-5, the Tory government mobilised the state against them, such as at Orgreave, at Wapping and so on, and it began introducing a series of anti-union laws to limit the effectiveness of organised labour in being able to resist.
During this period, Thatcher was a pro-European, who believed that all of these ideas of spreading free markets, and restrictions on workers would spread across the EU, and that one means of effecting that was the creation of a Single Market that would force all EU countries to sink to the same low levels of workers rights. Thatcher was a representative of the petty bourgeoisie, of the small capitalists, whose existence depends upon such constraints on workers ability to defend themselves, because the bulk of the costs of these small capitalists consists of wages, as against big capital for which wages comprises only a small part of its overall costs, the bigger part consisting of fixed capital, and circulating constant capital.
The economic policies of Thatcher's government favoured the small capitalists, who comprised the core of the Tory membership and voter base. At the same time, the de-industrialisation that resulted from Thatcher's adoption of Misean/Hayeckian ideology, weakened the position of big capital, which further strengthened the relative position of the petty-bourgeoisie, and its influence on the Tory Party, pushing it ever more in a reactionary direction. A similar thing happened in the US, to the Republicans, under Reagan. But, in the later 1980's, the EU, as it started to develop the Single Market that Thatcher had been so keen upon, saw it in a quite different light that more reflected what happened in Britain in the 1860's, when large-scale industrial capital came to dominate, and when a national level playing field on things like working hours, and conditions were imposed.
The EU, rather than seeking a race to the bottom on workers' rights, instead began to legislate for minimum levels of conditions and rights. The reason it did so, was the same as that which led the British state to impose and enforce a maximum working-day, and other factory legislation in the second half of the 19th century. The big capitalists can afford to do it, and it assists in raising productivity. At the same time, the small capitalists can less afford to comply, and they are put at a disadvantage to big capital, which then assists the process of the concentration and centralisation of capital, inseparable from its development. By the late 80's, workers had been largely defeated, and the new technology was being increasingly rolled out. What big capital needed was continuous production, not further industrial strife. Its new, even larger scale, fixed capital, now serving an enlarged single market for its increased output, needed to be used continuously. As Engels had put it, about the same process in the latter part of the 19th century,
“The competition of manufacturer against manufacturer by means of petty thefts upon the workpeople did no longer pay. Trade had outgrown such low means of making money; they were not worth while practising for the manufacturing millionaire, and served merely to keep alive the competition of smaller traders, thankful to pick up a penny wherever they could. Thus the truck system was suppressed, the Ten Hours’ Bill was enacted, and a number of other secondary reforms introduced — much against the spirit of Free Trade and unbridled competition, but quite as much in favour of the giant-capitalist in his competition with his less favoured brother. Moreover, the larger the concern, and with it the number of hands, the greater the loss and inconvenience caused by every conflict between master and men; and thus a new spirit came over the masters, especially the large ones, which taught them to avoid unnecessary squabbles, to acquiesce in the existence and power of Trades’ Unions, and finally even to discover in strikes — at opportune times — a powerful means to serve their own ends. The largest manufacturers, formerly the leaders of the war against the working-class, were now the foremost to preach peace and harmony. And for a very good reason. The fact is that all these concessions to justice and philanthropy were nothing else but means to accelerate the concentration of capital in the hands of the few, for whom the niggardly extra extortions of former years had lost all importance and had become actual nuisances; and to crush all the quicker and all the safer their smaller competitors, who could not make both ends meet without such perquisites.”
But, this was inimical to Thatcher as the representative of the petty-bourgeoisie. Its what led her to say to Jacques Delors “No, no, no”. It was the inflexion point at which the Tory Party moves from being a majority pro-EU party to being a majority anti-EU party, and which creates the conditions for the civil war inside it, during the 1990's, and early 2000's over Europe. Thatcher won concessions and opt-outs for a number of the new bits of social legislation that the EU introduced, and when Blair took office, New Labour also continued this policy, asking for opt-outs from the Working-Time Directive and so on.
The claim that Britain has better workers' rights than elsewhere in Europe is a nonsense. Its anti union laws are some of the worst anywhere in the world, not just in Europe. In terms of public holidays, Britain is poorly provided for compared to others globally, not just in Europe. Britain's 8 public holidays are beaten by 14 in Spain, 11 in France and Sweden. In terms of state pension, Britain is again at the bottom of the world table, as the FT has described. It pays out just 29% of average earnings as state pension, compared to the Netherlands, which pays out 100.6%, Portugal which pays out 94%, and Italy which pays out 93.2%. The list of where Britain is at the bottom of league tables goes on, with the facts relating to workers rights at tribunals and so on. Yet, the Tories are proposing to reduce these already appalling levels of workers' rights even further.
But, that was always going to be the inevitable consequence of Brexit, whether there was a Tory or a Labour government. Brexit means that capital in Britain is put at a competitive disadvantage to capital in the EU. It has additional costs, and even though the Brexit trade deal has removed tariffs, other non-tariff barriers exist to limit the extent of access of capital in Britain to that huge market. Capital in the EU can afford to pay higher wages, and provide better conditions, and indeed it is in the interests of big capital, in the EU, to do that, because, in terms of demand for its output, and the mass of profit it obtains from it, it gains disproportionately compared to small capital, which pays a higher proportion of its costs in wages. Marx describes this in Capital III, Chapter 11. The consequence is to reduce the proportion of capital employed in spheres with a low organic composition, and increase it in spheres with a high organic composition, in effect increase the weight of big capital, and reduce the weight of small capital.
The only way that small capital can compensate for this disadvantage, as against big capital, is to try even harder to screw down the wages and conditions of its workers, so as to raise the rate of surplus value, and rate of profit. That is the position that all capital in Britain is in now, compared to capital in the EU. Its not a question of whether the EU is more morally committed to better pay and conditions for workers than the UK, and so on, but that this is what flows logically from the different economic conditions in each economy.
Of course, if Britain reduced wages and conditions sufficiently as to undercut EU capital, thereby, increasing its profits, then EU capital would have to respond to this fall in its profits in like manner, by reducing wages and conditions in Europe too, creating the kind of race to the bottom that Thatcher had hoped for. Its again why Brexit is such a reactionary development.
Its also what makes a nonsense of the pro-Brexit line now being taken by Starmer, because, if, and on his present course its a big if, Starmer were ever to become Prime Minister, his New Labour government would face these same economic realities that the Tories now face, of a British economy that has higher costs, lower productivity and lower profitability than capital in the EU. It would necessarily have to screw British workers harder to counteract that disadvantage, and push up profits. Because, in order to do that, it would need to reduce taxes, it would be able to spend less on public services, so that workers conditions would deteriorate both in terms of their actual wages, and in terms of the social wage.
Welcome to Brexit, and taking back control.
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