Amid the fanfare accompanying the announcement of the ‘Windsor Framework’ agreement between prime minister Rishi Sunak and the president of the European Commission Ursula von der Leyen, a remarkable interview on the BBC’s Newsnight programme with the Northern Ireland minister Steve Baker (27 February) revealed the high stakes at play for the UK ruling class – and their European counter-parts too – in trying to contain the ongoing combustible contradictions created by British capitalism’s exit three years ago from the European Union bosses’ club.
Baker was a central figure in the campaign to unseat Theresa May as Tory leader from 2018-19 for her not too dissimilar attempt then at a ‘soft Brexit’. Now, his voice shaking and on the verge of tears, the self-styled ‘hard man of Brexit’ appealed “for people to just be sensible and grown up”. Tory MPs, and the Northern Ireland Democratic Unionist Party (DUP), should accept the deal to modify the workings of the Northern Ireland Protocol aspect of the 2020 UK-EU Withdrawal Agreement or face, as he saw it, the only alternative of “chaos”.
“We have got to move beyond this awful populism we’ve suffered” – said the former chair of the European Research Group (ERG) of Tory MPs; founder of the climate change-sceptical Net Zero Scrutiny and conspiracy-feeding Covid Recovery Groups; member of the ‘small-state’ Conservative Way Forward faction; and opponent of the Same Sex Couples Marriage Act of 2013. And without even a hint of irony!
Instead, he quavered, “holding these tigers by the tail (sic) has taken its toll”. His demeanour was indeed of someone who had been told in brutal terms by more serious representatives of capitalism than himself to precisely ‘grow up’, and recognise the dangers to the overall stability of the system his previous demagogy has exacerbated.
The pressures for a deal
While the full consequences for British capitalism of the post-Brexit trading relations with the EU have been clouded by the impact of Covid-19 and the Ukraine war, the trends are clear. British exports to the EU, for example, have fallen from 70,000 product types to 42,000, with small and medium-sized companies in particular bogged down with new forms, checks or other processes, just giving up. One study, by the Bank of England monetary policy committee member Jonathan Haskel, identified a £29 billion ‘Brexit penalty shortfall’ in private sector investment since 2016. And UK scientists continue to be excluded from the €100 billion Horizon Europe programme, in a world where research networks are increasingly dominated by the three main blocs of North America, Asia (with China to the fore) and Europe.
Such issues were undoubtedly the theme of the confidential cross-party ‘Ditchley Park talks’ held in February, to discuss how Brexit could be made to “work better with our neighbours in Europe”. Present at the Oxfordshire retreat were Tory ‘leavers’ such as the former party leader Michael Howard, the ex-chancellor Norman Lamont, and the current cabinet member Michael Gove. Joining them were Labour shadow frontbenchers, former senior civil servants – including the ex-Treasury mandarin Tom Scholar, defenestrated during the brief Liz Truss regime – and, inevitably, the ubiquitous Blairite New Labour guru Peter Mandelson. The importance of resolving the Northern Ireland Protocol problem as the key to addressing the broader issues was almost certainly high on the agenda.
Although Britain is the smaller market, and EU businesses have fewer problems with the UK-EU Trade and Co-operation Agreement than UK firms, the secession of a country that had accounted for 16% of EU GDP when it was a member has obviously weakened the bloc. The Ukraine war has also brought home the still persisting (if diminishing) military-diplomatic standing of British imperialism, with the fourth-largest military budget in the world last year and a permanent seat on the UN security council.
The relatively basic UK-EU trade deal signed in 2020 is up for review in 2026, creating an opportunity to re-draw Britain closer into the EU orbit. Better integration, for example to meet the threat to European manufacturing from growing US protectionism, would be in the interests of the capitalist classes of the 27 EU member states too. The significance of this issue is exemplified by the huge $370 billion subsidies and tax credits agreed by the Joe Biden administration in last year’s Inflation Reduction Act for electric vehicles and renewable energy technologies, but only for those made in the US.
But nothing would be possible while the dispute over the Northern Ireland Protocol remained. And particularly the threat contained in the eponymous bill introduced by Boris Johnson in June 2022 to unilaterally overrule parts of it, in an acknowledged breach of the withdrawal agreement international treaty.
And so the Northern Ireland Protocol Bill will now be dropped by Sunak following Windsor. And Steve Baker is not the only former right-wing Brexiteer ideologue to have been tamed. Could an end to the Brexit saga really be in sight?
Windsor fudge
While there were some exceptions for ideological reasons – or material ones, particularly amongst speculative, offshore-linked firms within the UK financial sector – the overwhelming majority of the British capitalist class had wanted a remain victory in the 2016 referendum. When faced with its unexpected result, at its root a working-class revolt against the capitalist establishment which shook the ruling class to its core, they then looked to retain a closer alignment to the EU single market and customs union than the ‘hard Brexit’ policies that Johnson attached himself to.
One reason was the border between Northern Ireland and the Irish Republic. UK and Irish membership of the common EU economic area had removed customs controls in 1993. After the end of security checks under the 1998 Good Friday Agreement, all other physical manifestations of the line of partition had gone. A capitalist hard Brexit of the character pursued by Johnson’s negotiator David Frost, however, with a different customs and regulatory regime aimed to undercut the EU single market, would inevitably pose its reinstatement as a hard border.
Or alternatively, if Northern Ireland was to remain effectively within the EU’s economic jurisdiction – as was eventually agreed by Johnson in the UK-EU Withdrawal Agreement treaty that he signed – there would have to be a border between Britain and Northern Ireland in the Irish Sea, which was what was codified in the Northern Ireland Protocol. The potentially ominous consequences for the working class, of the exacerbated sectarian tensions which inevitably transpired, were viewed at the time as so much secondary detail by the capitalist politicians on both sides. But with the DUP walking out from the Northern Ireland Stormont Assembly in opposition to the protocol, the Good Friday Agreement peace process was now under threat.
The new Windsor Framework tweaks the operation of the Irish Sea border but it does not resolve the fundamental contradiction. The so-called ‘Stormont brake’ mechanism, under which 30 members of the Assembly can ask the UK government to veto changes in EU single-market rules – if it can prove that the objection was “not trivial” and the new rule would “have a significant impact on the day-to-day lives of businesses and citizens” – is so crafted as to be “virtually unusable”, according to the Cambridge professor of EU law, Catherine Barnard, without risking a UK-EU trade war. As long as Northern Ireland remains within the EU single market, the EU’s European Court of Justice remains the ultimate arbiter of the single market rules there.
What is involved at bottom, however, are not legal-technical questions but how to overcome the deep legacy of sectarian divide and rule bequeathed by capitalism to Ireland. As Niall Mulholland explains in his article reviewing 25 years of the Good Friday Agreement on page 21, “no amount of fudging the issues will remove the fact that Northern Ireland remains ‘exceptional’ to the rest of the UK – part of the EU single market, as well as part of the UK – and this will be a running sore with Unionists”.
Tory divisions not over
Nor is it a technical question for a section of the Tories either. All capitalist politicians to some degree rest on nationalism – with racism as its most virulent expression – reflecting the historical origins of capitalism and its continued organisation into competing nation states. Defending a system based on the exploitation of the majority by a small minority, it provides an ideological furnishing for their rule. But that also creates the conditions for competition between them on that terrain, which can sometimes cut across the broader, more essential interests of the system. Capitalism is a system of political economy, not economics alone.
And so, while Steve Baker may have been yoked in, David Frost accused Sunak of “overclaiming” as the first details of the Windsor Framework emerged; having earlier denounced the Ditchley Park talks as “evidence that many in our political and business establishment want to unravel the deals we did to exit the EU and stay shadowing the EU instead”. (The Daily Mail, 13 February) Meanwhile Johnson, still proceeding cautiously at this point as he positions himself for a future return bid for the Tory leadership, has declared that he would “find it very difficult to vote for something like this”. (2 March) Windsor would “act as a drag anchor on divergence” with the EU he said, “and there’s no point in Brexit unless you do things differently”.
So there will be new flashpoints ahead. The Windsor agreement requires legislation to enact – in Britain and in the EU – with the devil in the operational detail. Then there is the Retained EU Law Bill to scrap over 3,000 pieces of European law that were preserved on the UK statute book after Brexit. This is currently making its way through parliament and, by potentially increasing regulatory divergence between Britain and the EU, could mean more, not fewer, controls in the Irish Sea.
On the EU side, meanwhile, there is a determination to prevent British capitalism from ‘cherry-picking’ those elements most favourable to its interests of the single market arrangements. The negotiations to extend the temporary ‘equivalence’ access UK financial services have to the EU beyond 2025 provide a particularly acute point of leverage. There will be many more acts to come in the Tory Brexit drama.
Could it have ended differently?
One thing that the latest developments have shown is that Brexit could have ended differently – if the workers’ movement had put its own stamp on the process of re-negotiating relations with the EU club, which is what, ultimately, Brexit entailed.
The Windsor Framework formally “overlays” the Northern Ireland Protocol rather than replacing it, but it does involve re-writing parts of the protocol, something EU negotiators have said they would never do since the Withdrawal Agreement treaty was signed in 2020. It shows again the essential character of the EU club as an institutionalised codification of treaty agreements between the different member nation states, far-reaching it is true, but which can be changed – including under the pressure of the working class.
In the binary choice presented in the 2016 referendum, the Socialist Party refused to give a vote of confidence to the EU, as we would to capitalism in general as a way to organise human economic and social relations. But we argued for a socialist exit, to use the talks that would follow a leave vote, to organise a European-wide campaign of socialists and workers’ organisations to tear up the current neo-liberal rules and institutions and create a new collaboration of the peoples of Europe on a socialist basis – in the context then, of course, of Jeremy Corbyn’s leadership of the Labour Party.
Corbyn had made a serious mistake in the weeks following his leadership election victory in 2015 when, to keep the Blairites in his shadow cabinet, he pledged to campaign for remain in the forthcoming EU referendum ‘regardless’, instead of sticking to his previous position of, correctly, denouncing the neo-liberal character of the EU bosses’ club and its policies. But with the blow dealt to the capitalist establishment by the 2016 vote, the situation could still have been retrieved.
The Windsor Framework, for example, now gives the UK some limited flexibility in Northern Ireland over the EU state aid rules that have generally restricted member states from giving companies or industries support that would ‘distort competition’. Why couldn’t Corbyn have called for a continent-wide end of state-aid rules and public ownership restrictions that conflict with the interests of the working class? If the EU could concede a ‘Stormont brake’ on EU rules, as it has now transpired, then why not a ‘workers’ brake’?
A bold stand to completely scrap the austerity-driving European Fiscal Compact, write-off Eurozone debts, and to create a ‘level playing field’ based on public ownership of the banks and major monopolies in each EU country, could have electrified the debate across Europe, completely changing its character. The capitalist politicians conducting the Brexit talks – who ultimately represent the ruling classes of their respective nation states – could not reach an agreement that met the economic, social, national and cultural needs of the working class across Ireland, as they could not the needs of the working class across Europe. But the workers’ movement, with no stake in capitalism, has a vital interest in workers’ unity, including collaboration across borders.
The Corbyn Labour leadership experience proved to be a missed opportunity, in general as in the various twists in the Brexit tale, as he and his leading supporters continually sought to conciliate with the representatives of capitalism within the workers’ movement. But, as we explore in our articles reviewing the debates at the recent Socialist Party congress (page 5) and the issues at stake in the Unite executive council elections (page 12), if the fundamental lessons are drawn for the current movements and those to come – for independent working-class political organisation, with a fighting, internationalist, socialist programme – it will not have been a wasted one.