The Johnson government said leaving the EU would allow the UK to regain its sovereignty so it can apply higher labor and environmental standards, but that was an empty promise, says University of London economist John Weeks.
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Greg Wilpert: It’s The Real News Network and I’m Greg Wilpert in Arlington, Virginia. About three and a half years after Britain voted in a referendum, by a margin of 52 to 48%, to leave the European Union, it will finally happen at midnight Central European Time on January 31st. This would conclude Britain’s 47-year membership in the European Union. At first, not much will change, because the EU and the UK negotiated a transition arrangement that will last for the next 11 months until the end of 2020. By that time, the two sides are supposed to negotiate policies that would have to do with trade, security, foreign affairs, data, fisheries, cultural educational ties, and much more. Also, for now, free movement of EU and British citizens into and out of the EU remain the same with no changes at the border crossings.
For a while, it was uncertain whether there would be a so-called hard or soft Brexit. That is, for a long time, Britain’s Parliament could not come to an agreement over the modalities of the Brexit. If no agreement with the EU had been reached, Britain’s exit from the EU would have been harsh and uncoordinated. However, when Prime Minister Boris Johnson managed to call a new parliamentary election for December 12th, which his Conservative Party won with an 80-seat majority, Johnson was finally able to move forward on Brexit. Parliament then passed the EU Withdrawal Agreement on January 23rd, which Johnson eagerly signed. Joining me now to discuss what Brexit means is John Weeks. He’s Professor Emeritus at the University of London, and his most recent book is “The Debt Delusion: Living Within Our Means and Other Fallacies.” Thanks for joining us again, John.
John Weeks: Thank you.
Greg Wilpert: One of the big issues in Brexit has always been whether the UK would recover its national sovereignty, that is, independence from the EU, and thus be able to pass more legislation that would be in alignment with what the people of Britain presumably want. Now, here, for example, is the Brexit Secretary, Stephen Barclay, speaking about this issue last Sunday.
Stephen Barclay: The key issue is that we will, have control of our rules. We will not be a rule taker, we will not diverge for the sake of diverging. We start from a position of alignment. But the key opportunity is that we will be able to set our standards, high standards on workers’ rights, on the environment and state aid as part of that trade policy.
Greg Wilpert: So John, what do you think? Is that really what the Conservatives will do, set their own high standards for workers’ rights and environmental policy?
John Weeks: Well, of course he’s right to say they could, but he won’t. Boris Johnson may or may not. It’s hard to know what Boris Johnson thinks. He’s not ideologic. He’s a complete opportunist. But given the members of his party and he must satisfy them, and he has a very right wing group in his party. The likelihood of substantial workers’ rights passing Parliament with a Conservative majority is very slight. On the environmental side, we know pretty much what their position is, and it is, at best, been neutral. They have not been enthusiastic about things like Extinction Rebellion and other work by activists, so I think it is extremely unlikely that they would do that. They could, but they won’t, is the big picture.
Greg Wilpert: Let’s turn to what the current trajectory of Brexit might mean for Britain’s economy. The British pound has already lost in value, which reflects some of the anxieties around Brexit. The lower currency means more expensive imported goods, but it also means British goods and services are cheaper for export. The government itself has estimated that a hard Brexit, which is still theoretically possible by the end of 2020, would mean that Britain’s economy would grow 9% less over the next 15 years than it otherwise would have, because of higher tariffs and hampered production processes. What do you expect to happen now, economically speaking, in the coming year?
John Weeks: First, I would say that your audience should realize, and you have a sophisticated audience, that these estimates of the growth impact are pure guesswork and should not be taken seriously. That is particularly the case because they are estimates dug from a neoliberal free trade globalization point of view. So, for example, the argument that raising tariffs will produce economic output [inaudible 00:04:44] is very much a part of neoliberal mainstream economics ideology. Having said that, if you think about it practically, there’s bound to be some impact. The Brexit, particularly while negotiations are going on, creates a world of uncertainty. Just moving out into new rules creates uncertainty.
Now, capital speculators, of course, love uncertainty. That’s where they make their money. But investors, which build factories and software and things like that, they are very unsettled by uncertainty. And so I think we can often at least say that the investment levels, private investment levels in particular, are likely to stagnate. I’ve just been looking at some statistics, and since the referendum, that referendum, as you mentioned, back in June 2016, there has been a leveling off. Or if you wanted to use a value judgment, it’s a stagnation of both manufacturing and non-manufacturing investment. So I think that we can say that investment is likely to decline. Whether it will be a catastrophic decline, I think no one can say, but I think the conclusion is that the British economy grows slower and overall economic conditions will deteriorate.
Greg Wilpert: Now, one of the big unresolved issues is that of the British border between Ireland and Northern Ireland. That is, Ireland is part of the EU and there were no border controls into and out of Northern Ireland as a result. Now that the UK is leaving the EU, there’s a tentative agreement to have controls for crossing the Irish Sea between Northern Ireland and the rest of the UK. But Boris Johnson actually just recently backtracked on this tentative agreement without really saying what the alternative is. Now, what do you think this Brexit agreement would mean for Northern Ireland going forward?
John Weeks: Well, I would say that this must be put into context with the European Union wants an arrangement. I think the German government is very keen to have a agreement. We mustn’t romanticize the European Union, though I was a strong supporter of the European Union. The German government very much represents German capital, and the German capital has a large trade surplus with Britain. And German economy is stagnating at the moment. So German [inaudible 00:07:40] is very keen to have an agreement. So it’s a mistake to think that the EU is going to drive a hard bargain and Britain will just have to take it.
However, having said that, it’s hard to see any solution to the circle Northern Ireland problem that does not involve Britain joining the Common Market European Union. That was the only way not to have a hard border with Ireland is between Ireland and Northern Ireland. The only way to do that is to eliminate tariffs and a custom check. The only way to do that is to, going into customs you can part with the European Union. Now, [inaudible 00:08:36] says he will not do that. I think that’s more or less what labor [inaudible 00:08:42] when it was the ill-fated [inaudible 00:08:49] reelection. So I would say that there will, the UK will have to enter into a customs agreement or the relationship with Northern Ireland will become unguarded and intractable.
Greg Wilpert: Now finally, the Labor Party actually lost quite badly in the last election, and many attributed this to its unwillingness to take a strong position either in favor of or against Brexit. Now, how do you see the Labor Party strategy unfolding, or what do you think it ought to be in the coming period with regard to the 11 months negotiations that are going to be going on with regard to the final Brexit agreement?
John Weeks: So, first let me say, yes, it was a terrible result. There’s no question about that. I was providing some advice to the [inaudible 00:09:43] chancellor in the months, about a year and a half before the election. And as John McDonnel, [inaudible 00:09:53] chancellor said, it was a very disappointing result. Which I would say it’s the understatement of the century. So what is the Labor Party going to do? It is extremely unfortunate that Labor Party is in the process of choosing a new leader. Not because they don’t need a new leader. They do need a new leader. What is unfortunate is, the process is going to last until April. So, in effect, we’ll have a lame duck leadership Labor Party for three months. And, as a result, Labor will have very little input into its fate. Now, Boris Johnson [inaudible 00:10:37] tend to say, “Well, we could ignore labor, anyway,” but it will be very hard for Labor opposition to put together any type of effective blockage what the Boris Johnson, Prime Minister, is going to do.
It would be very difficult, hard to block anything when into the throes of a leadership [inaudible 00:11:00] Now, after April, there will be a new leader. I would predict, if I can stick my neck out, the new leader will be actually my MP, Keir Starmer. [inaudible 00:11:13] out that sometime. He was known for being pro-EU, but he has said now that is behind them. But what position you think we can sort of predict? What position he will take once he becomes a speaker. His position will be to try to make Great Britain in the what’s called a single market. It’s now an official term in Singapore, European Union. And, while allowing for some flexibility and independent of [inaudible 00:11:53] being something called state aid, which is basically allowing each government gives subsidies to industry. So the short answer to your question is, I think that Labor will be able to do nothing until April and after that, they’ll push for so-called [inaudible 00:12:11].
Greg Wilpert: Okay. Well, we’re going to leave it there for now, but of course we’ll definitely come back to you also with regard to how the labor leadership vote turns out. But we’ll leave it there for now. I was speaking to John Weeks, Professor Emeritus of the University of London. Thanks again, John, for having joined us today.
John Weeks: Thank you for having me.
Greg Wilpert: And thank you for joining the Real News Network.
