Earthquake shakes Europe as Britain votes Leave

A political earthquake has just shaken British and European politics. On a turnout of just shy of three-quarters of the electorate, 52 percent, or more than 17 million voters, have backed Leave in the British referendum on membership of the European Union. In doing so, they outpolled a Remain campaign that was backed by the entire financial and political establishment.

The vast majority of establishment opinion makers in the world of business and politics have declared the result a complete disaster. It wasn’t supposed to be like this, they wailed. The drift in the polls back towards Remain in the days leading up to the vote had given them confidence that the threat of Brexit had been seen off. But within just a few hours on the night of 23 June, their hopes had turned to ashes.

Even before the result was confirmed, the financial markets reacted. Sterling, which had been bid up in the run up to the referendum, collapsed, falling to its lowest level against the US dollar since 1985. Shares on the London stock exchange dropped sharply, with the banks leading the way. Investors are threatening to pull their money out of the UK and doubts are now widespread concerning the future of the City of London in world financial and currency markets. The credit ratings agencies have threatened to downgrade Britain’s AAA rating.

Contagion to other countries has spread rapidly. The Euro suffered its worst day ever against the US dollar. The price of gold hit a two year high while oil fell by 6 percent. Any companies with extensive investments in the UK were burned, with Tata Steel and Tata Motors of India both seeing their shares hit hard.

“A vote that changed everything”

The political consequences of the vote for Brexit are enormous. Financial Times writer Philip Stephens described the implications for the British ruling class as follows: “This was a vote that changed everything. Economic and foreign policies crafted over nearly half a century overturned in the course of a single night. A political establishment shattered by an insurgency against the elites. The nations of the United Kingdom divided; and England split between its metropolitan cities and post-industrial provinces. A vote against globalisation. A decision that weakens Europe and the West. Political earthquake is an understatement”.

The referendum result will have its most shattering impact on the ruling Conservative party, the party that has been the first choice of the ruling class for overseeing British capitalism since the 19th century. Prime minister David Cameron has gone, and it is likely his chancellor George Osborne will not be far behind. The pair will go down in history as bearing responsibility for one of the biggest self-administered defeats to the party in a century or more.

But their departure does not resolve tensions in the party, far from it. The party is split down the middle over the EU. If Cameron is replaced by another Remain supporter, Tory Leave supporters will try to push them out; if leading Leave supporter Boris Johnson takes over, he will be white-anted from the start as he is loathed by many in the party. The process of withdrawal from the EU will take up to two years and the crisis in the Tory party will accordingly be protracted and very bloody.

Before the referendum took place, journalists expressed concern that the outcome might be the disintegration of not one but two unions, not just the union with Europe but that of the United Kingdom itself, which dates back to the 1707 Act of Union bringing England and Scotland together. Nicola Sturgeon, leader of the Scottish National Party, which runs the devolved Scottish assembly, is demanding that a second referendum on Scottish independence now be run rather than see the country forced out of the European Union – Scottish people voted 62 percent in favour of Remain. In the current circumstances, it is difficult to see a vote for independence failing a second time around. Scottish independence will be a serious blow to the project of British ruling class as it will remove a major economic and political powerbase for British imperialism in its dealings with the wider world. Richard Haas, diplomat and president of the US foreign policy think tank, the Council on Foreign Relations, described the referendum result as “the beginning of the end of the UK”.

Not just Scotland, but Northern Ireland too. This statelet, the product of the sectarian partition of Ireland by Britain in 1921, also voted Remain. Moves since the 1990s to more fully integrate the economies of North and South of Ireland under the aegis of Tony Blair’s “peace process” and lubricated by EU funds will now be thrown into jeopardy as borders are once again thrown up between the two. Sinn Fein has already stated that as a result of the referendum “the British government has forfeited any mandate to represent the economic and political interests of people in Northern Ireland” and is calling for a “border poll” to maintain an open border with the South. Such an outcome would lead in fairly short order either to reintegration of the rest of Britain into the EU in deed if not in law as people, money and goods pass unhindered from the South to the North and thence to England and Wales, or the collapse of British authority in the North.

The Tory party, which has been identified since its foundation with maintaining the power of the British state machine, could end up overseeing its fragmentation and enfeeblement.

Blow to world capitalism

This was a defeat not just for the British establishment but also for the ruling classes in Paris, Berlin and Rome, and in Washington, Canberra and Tokyo too. The European Union has been the means by which these elites have structured economic relations within Europe and between Europe and the rest of the world. It is a lynchpin of the neoliberal world economic order and also of Western imperialism. For this reason it has been encouraged from the outset by the United States. The European Union, with its unelected Central Bank and European Commission, has been one of the most important institutions enforcing austerity on the working class of Europe since the onset of the global financial crisis in 2008.

Britain’s vote to Leave threatens to up-end all this, and could be the start of a broader unravelling of the EU. Fears of such an outcome explain why a senior German politician in Angela Merkel’s CDU, Norbert Rottgen, described the referendum result as “the biggest catastrophe in the history of European integration”, while the head of the German banking association said that it was “a black day for the UK and Europe”. Germany’s Bild newspaper led with “Europe’s Black Day”, while France’s Le Figaro said that “This is the beginning of a real cataclysm”. The European ruling classes are right to be worried. The dislocation caused by Britain’s withdrawal from the EU will only add to existing fears of a return to recession across the Continent.

A vote against austerity

The vote for Leave has to be understood first and foremost as what Diane Abbott, a senior Labour Party MP, called “a roar of defiance against the Westminster elite”. It was just the latest indicator of mass resentment by workers in the most depressed areas of England and Wales against the political establishment which has for four decades screwed them ruthlessly.

Whether it’s workers, pensioners and the unemployed in the valleys of South Wales or in Yorkshire mining towns like Barnsley and Doncaster, where the coal industry has been shut down taking tens of thousands of jobs, or those in the depressed regions of the North East of England – Sunderland, Redcar, Middlesbrough - where heavy industry has been shattered and whole communities thrown onto the scrap heap, the referendum was an opportunity to take revenge on the politicians who have treated them so ill. The same too in the Midlands, with cities like Birmingham and Coventry, historically the centres of British engineering, now hard hit by massive factory closures and rationalisation.

Even in towns that voted Remain, the class dimension was obvious. In Oxford, Glasgow and Lancaster, just to take three examples, the more prosperous areas dominated by the universities voted Remain, the more blue-collar areas, Leave. In London, the pattern was more mixed, with poor boroughs Tower Hamlets, Lambeth and Haringey voting Remain, along with relatively prosperous areas like Hammersmith and Fulham and the City of London, but other poorer areas like Barking and Dagenham in the city’s East voting Leave.

The importance of working class immiseration in explaining support for Leave is borne out even in the opinion polls, which are a highly inadequate way of understanding class sentiment. YouGov recorded 60 percent support for Remain among what social scientists call ABC1 voters (capitalists, middle class and some sections of the working class) and 60 percent support for Leave among C2DE, broadly speaking the blue- and white-collar working class.

The fact that the referendum was used by workers as a means to express anger at decades of neglect was also recognised by supporters of Remain. Julie Elliott, one of Sunderland’s Labour MPs said that “Some people are feeling really vulnerable at the moment and the north east is being really hard hit by the cuts – massive, massive cuts to the local authorities, health services and people are feeling very, very vulnerable”. Over in Wales, Leanne Wood, the leader of the Welsh nationalists Plaid Cymru, which also supported Remain, said: “I’m of the view it’s austerity that is at the root of the problem here. People want change and they’ve seen this as an opportunity to get the change they want”.

This was not just a crisis for the Tories, however, but the entire political establishment which, with the exception of the Tory Brexit supporters, all supported Remain. All are discredited by the result.

Dealing with racism

Supporters of Remain on the left have argued that the poll was a referendum on immigration and that the only decent thing for any anti-racist to do was vote Remain. Singer Billy Bragg for example tweeted that “Not every Leave voter is a racist, but every racist will vote Leave”.

Some of this is pure bullshit. Fortress Europe is responsible for the drowning of thousands of asylum seekers in the Mediterranean in the last 12 months alone. And the area with the strongest Remain vote was Gibraltar, hardly renowned as a bastion of liberal anti-racism!

Sheeting the Leave vote to racism can also be challenged when looking at strong votes for Leave in areas like Newham in London’s east, one of the most multicultural boroughs, where racists have been repeatedly rebuffed in their attempts to get a foothold over many years. Likewise in Leicester, a city with a very diverse population and a former centre of textiles and clothing manufacturing which recorded a strong Leave vote.

But, putting aside the hypocrisy of some of those in the Remain campaign, it is true that many Leave voters were motivated at least in part by opposition to immigration. Polling shortly before the referendum showed that “immigration” was the number one concern of those intending to vote Leave. These voters falsely sheet home at least some of the responsibility for problems such as lack of jobs, long queues for public housing and overcrowded public transport to immigrants.

And certainly the result has been grist to the mill of the racists like UKIP’s Nigel Farage and the Tory Leave campaigners who are only too happy to create a spurious linkage between hardship and immigrants in the minds of workers. Racist agitators like Farage are emboldened by the referendum result, as are Marine Le Pen and Geert Wilders, racist Eurosceptic politicians, who cheered the Leave result and called for referendums in France and Holland.

The fact that racists have been able to fish in the pools of working class misery and turn the entirely legitimate anger of many workers regarding their situation towards scapegoating immigrants is something that must be fought tooth and nail.

The crucial question now is what will happen to the millions of traditional Labour voters in South Wales, the East Midlands, the North East and elsewhere who defied the leadership of the party and trade unions to vote Leave.

Will they go to the racists of UKIP - the only political party that they agreed with on this issue? Or will they stay on the left, with the institutions of the workers’ movement?

A lot of that will depend on what Labour, the left outside the Labour party and the unions do in the aftermath of this vote. If they bemoan the result and dismiss the anger that led to it, writing it off purely as a racist outburst, they will allow the far right to present itself as the political leadership of the British working class.

If they chase UKIP and further mimic its racist anti-migrant posturing, they will do nothing except promote their rival and make themselves irrelevant.

But if they challenge the racism, while embracing the anger that made this vote possible, then they could transform the political struggles in Britain. What has started as a crisis for the ruling class could become a real opportunity to roll back the four decade long offensive against the working class. Workers in Britain could then take their place alongside those in France now engaged in a vital struggle with their own government and bosses to resist the imposition of the kind of Thatcherite agenda that has been imposed on British workers for far too long.