Boorish Johnson seems to be proposing basically that Northern Ireland stay in the Single Market but not the Customs Union, which is quite a big concession since it will involve regulatory controls on goods entering NI from the mainland. It meets the EU demand that the integrity of its single market be retained.
If NI’s land border with the Republic had not historically been a bone of contention there wouldn’t be a problem with NI leaving the Customs Union and so customs controls to check that any tariffs due had been paid. But this is a political not an economic problem.
There is no economic reason why the EU needs to support the aim of a united Ireland. In theory there could be some compromise solution. We will see. In any event no change is proposed before the end of next year.
Who would benefit from a no deal Brexit?
Philip Hammond who until a month or so ago was the Chancellor of the Exchequer, i.e. the treasurer of the British capitalist state, who we must assume knows what he’s talking about on these matters:
“Johnson “is backed by speculators who have bet billions on a hard Brexit — and there is only one outcome that works for them: a crash-out no-deal Brexit that sends the currency tumbling and inflation soaring," Hammond wrote in the Times on Saturday."
This is similar to Corbyn’s claim that no deal would be a ”bankers’ Brexit”, though more accurate in that it those involved, and who financed the Leave campaign in 2016, are not so much bankers as speculators, hedge fund operators and vulture capitalists who don’t want to be subjected to EU regulation of their particular financial activities.
Hammond represents the mainstream UK capitalist view which wanted to Remain but, in view of the result of the result of the referendum, now wants to settle on a deal which would keep Britain in the frictionless single EU market. It is clear from Hammond’s statement that they recognise that the Leave campaign was financed by a maverick section of their class in its own sectional interest.
More grist for our view that the whole business is a dispute within the British capitalist class in which the working class has no interest and should not take sides. But what a sorry sight to see so many workers getting so passionately involved on one side or the other.
It’s not just or even essentially financiers betting that the pound will fall, which a no-deal Brexit would result in. Someone like Odey will be equally prepared to bet on the pound rising through Britain not leaving. In fact he probably has.
It’s that they don’t want such activities strictly regulated by the EU. The Tory MEP Daniel Hannan (re-elected in May) listed the sort of things that the financiers who funded the Leave campaign objected to:
“a financial transactions tax, a ban on short selling, restrictions on clearing, a bonus cap, windfall levies, micro-regulation of funds.”
Very revealing article in today’s Times by Simon Nixon, their chief leader writer, explaining the split in the capitalist class over Brexit. After pointing out that there is more to it than short-term betting against the pound, here are extracts of what Nixon points out:
“One of the surprises of Brexit has been the strong support for leaving the European Union in some parts of the City and among a handful of Britain’s wealthiest entrepreneurs. This support is in contrast with the continued anxiety over Brexit among the bulk of Britain’s business leaders. Yet this division among Britain’s business elite is perhaps not so surprising when one considers the extent to which the two groups sit on different sides of an important faultline in global capitalism. What makes hedge fund support for Mr Johnson significant is not that they are representatives of disaster capitalism but that they are manifestations of what might be dubbed “oligarchic capitalism”.
The hedge fund industry sits at the apex of the shadowy world of offshore finance that emerged in London in recent decades. This world is quite distinct from the traditional business of the City, which is serving as a domestic capital market for British and, since the creation of the single market, EU companies. Titans of the hedge fund industry insist that they owe their fortunes to their unrivalled acumen for trading. In reality, they owe much of their success to the unique conditions that made London such fertile ground for the development of their astonishingly lucrative activities. They are the beneficiaries of the explosive growth in global offshore finance that followed the dismantling of exchange controls around the world, the collapse of communism and the emergence of a new global class of super-rich seeking to shield their wealth from national authorities...
Crucially, London possessed the expertise to make the most of the opportunities presented by offshore finance. Over time, it has developed an entire economy designed to service the needs of oligarchic capitalism, from lawyers to accountants to art dealers.
Nor is it surprising that prominent hedge fund tycoons have turned out to be enthusiastic Brexiteers. The hedge fund industry likes to operate in the shadows. It manages private pools of capital and believes that this entitles it to be exempt from the more onerous rules that govern the rest of financial services. What turned much of the industry so virulently against the EU was the introduction of the Alternative Investment Managers Directive in the aftermath of the global financial crisis, which imposed modest reporting requirements on the sector. Although the impact of these rules was close to nil, this shot across the bows was deeply resented. Whereas the EU’s status as a regulatory superpower has bought benefits to most sectors, creating opportunities to reap economies of scale across a single market, for the hedge fund industry it poses a threat.” (emphasis added)
They used a part of their wealth to fund the Leave campaign in 2016 and Johnson’s Tory leadership campaign and are now expecting to reap the benefits. Whether the representatives of what might be called mainstream UK capitalism in Parliament will be able to stop this remains to be seen. Given that elections are the key to political power it seems that in the end it will be up to the working class to decide, either in a general election or a referendum. But why should we take sides? It won’t be the People v Parliament, but “oligarchic capitalism” v “mainstream capitalism”, cholera or the plague.
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