Will Teresa May win Brexit?

The British Daily Mail and Express newspapers have printed ecstatic front pages about the Prime Minister's latest manoeuvre in Parliament. Apparently she has settled a majority in the House of Commons in supporting a specific Brexit plan and at the same time she has united the Tory Party and 'defeated' Jeremy Corbyn, the leader of the British Labour Party.

The less jingoistic commentators pointed out that May's new plan (which is her old plan minus what is called 'the backstop) would not be accepted by the EU. Indeed, the initial comments by EU leaders following her 'victory' on the evening of the 29 January, directly opposed May's proposal. They point-blank refused that the the legal definition of the backstop should be re-opened from May's previously accepted proposal. The EU's stance, it was argued, would therefore return May to exactly the same point she was in before the 29 January. That is, she would face a deeply split Tory Party and no majority Brexit plan among the MPs. Then May would be seen as an absolute failure and new proposals for Brexit (including a possible new referendum) would be 'back on the table.'

History may repeat itself when it moves from tragedy to farce -  but it never repeats its content. The tragedy may shape the farce but both of these states of history are also unique. The Mail and Express writers and their more thoughtful colleagues have entirely missed the point of May's latest initiative.

May has made a great deal of the 'meaning' of the 2016 Referendum vote for Brexit. She has argued for example that coming out of the EU's Custom Union and the EU's 'single market' are actually decisions made by the referendum vote itself. In her speech on the 29th she 'promised' full equivalence between British workers rights and their European counterparts. Indeed she hinted that she might go further. All this is rubbish of course. In fact May is not interested in the content of the 'deal'. No doubt she has to give a nod to her own Brexit Manifesto commitments from her disastrous election of 2017. But her real purpose? Here May has a clear set of immovable priorities.

First; she should remain PM at all costs. Even her 'self sacrifice' not to stand in the next General Election was presented as conditional on whether her Party wanted her and in any case not before the 'end' of Brexit (which will spin-out way beyond 2020.) Second (and a requirement of the first priority) she would keep the Tory Party unified. And the third priority - her only deep political commitment outside of herself and her political ballast - to prevent at all costs a Corbyn led Labour Party winning a General Election.  This is what Prime Minster May offers to the future - and to Britain's ruling class. She hopes her last priority in particular will go some of the way to reconciling her leadership to the class that the Tories were built to defend.

How does May's insular but deep-rooted priorities work out in the here and now?

May perfectly well understands two things about her latest approach to the EU; first the EU needs to defend their union, particularly before the May European Parliamentary elections where Europe's new right-wing will flower. But that means that they need to show that the UK remains, albeit to a negative degree, dependent on the EU. (This is not about loss of car sales to the UK. German car manufacturers are much more interested in selling cars to China than most British Brexiteers imagine.) The issue for Germany in particular is that it is well aware of the possible impact of a European Singapore. The EU are opposed to a 'no-deal,' not because there will be empty shops and no insulin in the UK. They are opposed, particularly in Germany's case, to being damaged by a fierce, tax-free, virtual slave-labour competition. As a result, a convoluted piece of legalism, a great skill in EU corridors, is the most likely thing to emerge from May's second EU campaign.

Secondly, according to her own priorities, May, while hoping for an early and easy result from the EU, believes that she personally and politically can win either way. Should the EU slip up, or their legal language prove unsuccessful in Britain, who is then to blame? Certainly not Britain's valiant PM. And she appears not just innocent of failure but the only key to further Tory unity. May, whose orientation has always been towards the 'no deal' Brexiteers - because they are the strongest element of her Party - would sadly respect the consequence of the EU' hard headed intransigence' (should it prove necessary.)

Nothing is certain in a convulsive political crisis and accidents happen, but in the general trend of things May's nemesis will not come about as a result of Tory annoyance at her battles with the EU (and neither from a deeply unlikely 'no deal Brexit.') It will come from a General Election. May would probably fall at the moment it is announced. It is unlikely she will be left to deliver another Tory disaster. But an election will not come from Brexit tricks in a corrupt and decrepit Parliament. It will come when the majority of people in Britain recognise May's real priorities, when they disentangle themselves from divided Brexit tribes and focus on those across Britain who are already challenging Britain's (and the EU's) desperately failing politics and economics.

UK Brexit blues

UK Prime Minister, Teresa May, claims that the last 5 years of the Tory lead Coalition government followed by 2 years of full Tory government have been a success in reducing British government debt, increasing employment and recovering from the 2008 crash (for which the Tories have always blamed the previous Labour Government). The illusion of UK economic success (as against the EU for example) has been based on 2 rapidly expanding features of the British economy since 2008, the 'success' of austerity while achieving growth - as shown by the expansion of employment. But the reality is that the key elements of economic life in the UK are in drastic decline.

Employed household incomes have reduced since 2008. The economic downturn had a larger effect on non-retired households, with median income in 2015/16 still 1.2% lower than pre-downturn levels in 2007/08. House prices have continued to inflate - especially in the South East - blocking the younger generation's access to their own homes - and rents have also inflated dramatically. Meanwhile investment is weak and getting weaker, as the Office for National Statistics (ONS) noted in 2014 :
'...the proportion of total expenditure accounted for by spending on investment has fallen (in the UK) from an average of 13.5% in 2007, to an average of 10.9% during 2012 and to 10.4% in quarter 2 of 2013: the lowest level recorded since the 1950s. This compares with 14.1% in France, 16.7% in the United States and 17.9% in Canada. Across the G7, investment accounts for an average of 14.6% of Gross Final Expenditure.'

Poor investment levels are related to under-invested work. The UK's expansion of zero-hour jobs, of 'self-employment' contracts, service work without a technological or industrial base, is one of the two reasons for Britain's already catastrophic and worsening productivity. In April 2016 the Independent newspaper stated;
'The latest decline in the UK’s levels of output produced per hour worked means that Britain’s national productivity is now a remarkable 15 per cent below where it would have been if the pre-crisis trend growth of productivity had carried on. That shockingly poor performance compounds the UK’s status as an international productivity laggard. Britain already has the weakest levels of output per hour of any nation in the G7, with the single exception of Japan.

And there will be more productivity disappointment to come according to the Office for Budget Responsibility. The Treasury’s official independent forecaster made a major downward revision to its productivity growth forecasts in last month’s Budget. The OBR now assumes that the UK’s trend productivity rate over the next five years will rise to just 2 per cent, down from its previous forecast of 2.2 per cent forecast.'

The other reason for Britain's falling investment and falling productivity is a massive rise in share dividends. The (right-wing) Daily Telegraph 25 May 2017 reports;
'The payout ratio for the UK stock market, a measure that reflects the proportion of earnings that are paid out as dividends to shareholders, as a percentage, has been steadily rising over the past three years.
The ratio is now above 60pc, higher than pre-crisis levels ... a figure that income investors have described as “scary” and “far too high”. '

Two of Britain's top firms (AstraZeneca and GlaxoSmithKline) are paying more this year than their profit in dividend payouts. All of the top 14 are paying more than half of their profits to shareholders. UK firms in general pay more of their profits to shareholders than any of the top firms represented in rest of the world's different stock markets.

Household incomes have reduced back to 2008 levels and beyond; housing is is desperately short, much shorter than before 2008; investment is declining to lower levels than 2008; most of the fresh labour is in 'uberised' jobs; productivity is nose-diving to lower levels than 2008. Only the relentless payout to the rich grows and grows.

So what is it that is fuelling May and the establishment's bizarre claims about the strength of the UK economy?

Household debt.

In January 2017 the Guardian newspaper reported,
'Households have £66.7bn of credit card debt outstanding, up £600m on the previous month, while the total level of outstanding consumer credit reached £192.2bn, up £1.9bn on October. The article also pointed out that;
'The latest figures from the Bank of England show unsecured consumer credit, which includes credit cards, car loans and second mortgages, grew by 10.8% in the year to November to £192.2bn, picking up pace on the previous month to grow at its fastest rate in more than 11 years.' 
In September 2008, the month that Lehman Brothers collapsed and the banking crash triggered a worldwide recession, the level of UK consumer credit debt hit a peak of £208bn.

Consumer debt is buying the UK economy out of recession. Interest rates on loans still look anchored at the lowest levels but, look out, here comes Brexit's first blow - inflation - as the currency dives. And the wealth accumulated in property looks next in line for a hit, as housing looks less of a payola for landlords and in danger as an asset as May decides to use it pay for old people's care.

The West in general, the EU in particular, and rackety Britain have all been been modelling their financial and more broadly their economic structures on 'managing' globalisation. We have already seen once, in 2008, how that doesn't work. But the West have simply looked the other way since 2008 and built it all up again. Britain (either inside or out of the EU) has been busy re-setting up its own version after 2008, with its over-blown financial structures and its 'free labour' laws. Now, outside the EU, it finds itself among the most vulnerable to the globalised winds. Now, only after Greece, the UK is the weakest link, economically speaking, in the whole Western chain.

With its economic cold weather comes a continuation, a deepening, of the UK's political crisis. The old stability has already deserted and its desertion has already shaken the political system into a Coalition government and two referendums.  May will likely win the election on June 8, but this will not buy the 'stability' that Tory grandees crave. If the left hangs on to and deepens its alternative manifesto and its left leadership in the Labour Party, if it helps expand the mass movements against austerity, for the NHS and against war and racism, then it will surely face new opportunities to challenge May - long before 2022.