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From The Socialist newspaper, 5 February 2020

'Post-Brexit' era of crisis ahead

Infrastructure and investment needs; austerity and free-market profiteering; Tory divisions are once more opening up, photo New Zealand Defence Force/CC

Infrastructure and investment needs; austerity and free-market profiteering; Tory divisions are once more opening up, photo New Zealand Defence Force/CC   (Click to enlarge)

Brexit Day has been and gone. Now Johnson is promising the "dawn of a new era". According to the Tories' optimistic script a 'Brexit bounce' will mean more investment, more jobs and more money to 'level up' spending and 'pay back' those working-class people who loaned the Tories their vote in the general election.

With an 80-seat majority and Brexit 'out of the way' the old Tory divisions are supposedly now healed and a period of growth and stability will open up before us. The chancellor Sajid Javid has pledged to restore the economy to its "post-war glory days" with growth of 2.7%-2.8%. But just last week the Bank of England downgraded its growth forecast by the largest amount since 2016.

This year it expects the economy to 'grow' by just 0.8%, the worst level for over ten years. An economist at the think tank IPPR called Javid's growth goal "a fantasy". In an already uncertain international economic environment made more fragile by the possible repercussions from the coronavirus (see page 4), and with the worst slowdown in productivity in Britain for 250 years, why would the capitalists rush to invest?

Johnson's boast that austerity is over has been exposed by Javid ordering government departments to make at least 5% cuts in areas that do not correspond with the government's priorities - not to mention the councils all over the country which are about to vote through budgets slashing local services already pared to the bone.

Tory infighting has broken out over Johnson's decision to allow Huawei licences for building part of the 5G internet network, and the likely OK for going ahead with the HS2 high-speed rail link.

Fault lines

New Tory party fault lines are emerging over what a post-Brexit Britain will look like. The ultra-free-marketeers saw Brexit as a route to a low-tax, deregulated, small-state 'Singapore-on-Thames'. This is the aim of cabinet members Liz Truss, Priti Patel and Dominic Raab, authors in 2012 of Britannia Unchained, a free-market manifesto in which they bemoaned a "bloated state, high taxes and excessive regulation" and described British workers as being "among the worst idlers in the world".

On the other hand, the new intake of Tory MPs in the North and West Midlands are under pressure to call for more protectionist measures and state intervention to save jobs and boost growth in the areas they represent. But it's precisely these areas that will be hardest hit by the fallout from Brexit because of its effects on manufacturing industry.

Rather than the rosy scenario painted by Johnson and Javid, the reality of Brexit on a capitalist basis is likely to be less investment, job losses and factory closures - causing enormous anger and bitterness among those working-class people who might have hoped that getting Brexit done would have the opposite effect.

So far Johnson has leaned towards policies aimed at shoring up working-class support. So, as well as promising increased public spending and not going ahead with a rise in corporation tax, he has intervened to give tax breaks to Flybe, a regional airline, and to bring Northern Rail into public ownership.

But if the budget for current spending on public services is going to be balanced by 2022-23, as Javid has pledged, and with anaemic economic growth, the economic resources for intervening and 'levelling up' will be extremely limited. In fact, according to calculations by the Financial Times, if the Bank of England forecasts play out, Javid will be facing a budget defecit of 12 billion rather than the surplus of 5 billion he is expecting.

Any attempt to raise taxes or borrowing further to pay for increased spending and investment would be fiercely resisted by the free-marketeers and, if it threatened their profits, the capitalists all the Tory politicians ultimately represent.

Far from strong and stable, the 'new era' in Britain will be one of crisis in which working-class people will have no choice but to get organised and fight back against the further attacks that are coming their way.

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In The Socialist 5 February 2020:


News

6.5 million working poor: Fight to end low pay

Labour leadership contest and public ownership

Coronavirus exposes capitalism's weaknesses in healthcare and economy

Record dissatisfaction with democracy: capitalism's dead end

Refuges turn away 64% of women - set no-cuts budgets now!

Grenfell watch: Unions challenge 'mockery of justice'

Them & Us


Rail

Nationalise the railways: For an integrated public transport system

Expensive, overcrowded and unreliable: Renationalise the railways!

Cancel the franchise, not our trains

Will the North get investment and transport infrastructure?


What we think

'Post-Brexit' era of crisis ahead


Workplace news

Huge victory for Bromley library workers after 241 days on indefinite strike!

14 more days of university strikes over pensions, pay and conditions

500 BBC journalists' jobs under threat

Newham council tax workers' pay victory

No to academisation of east London schools!

Ealing tax office workers strike against closure


NHS

Outrageous waiting times will put lives at risk

NHS: Save stroke beds in Coventry and Warwickshire


International

Syria: Assad regime consolidates power after brutal counterrevolution

Israel/Palestine: Trump 'peace plan' promises further conflict


Campaigns

Socialist Party calls anti-austerity protest on Budget Day

Sadiq Khan "out-Tories" himself to defend tech firms' tax bonanza

Socialist Sellers

Reading Labour council: Stop privatising our leisure services

The rich fund the Tories and Blairites, so help fund the working-class fightback

Support the working-class press in 2020

Defend and fight for warm, safe housing for Samira and everyone

Alternative Burns Night success


Readers' opinion

Liverpool council: "No more cuts" - Is Joe Anderson serious?

Socialist Inbox


 

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