The Road From Bruges

Since the UK joined the European Economic Community (EEC), the forerunner of the European Union, in 1973, there has always been a section of British business skeptical of European integration if not outright hostile to it. This sentiment has tended to be centered on the City of London, Britain’s financial center, which the Tories and (to some extent) Labour have long regarded as sacrosanct.

The City is significant not only for its tax revenues. As a world-leading center of finance and commercial capital, it helped ensure the UK retained a pivotal role in the global economy after the demise of the British Empire. A significant but minority fraction of British capital and the ruling class it supports had a key interest in its continued health. This set Britain apart from the other states of Western Europe, particularly France and (West) Germany, whose economic models were more rooted in state-directed industrial development.

Where there are sunk interests, there are decisions to be made about what best serves them. We have often seen such debates reflected in the ranks of the Tories, the traditional party of British capital (especially so after the eclipse of the Liberals by Labour in the early twentieth century). The outsized importance of the City means that its concerns filter through into the official politics of the British bourgeoisie.

The debate about “Europe” gained potency in Tory ranks during the late 1980s and early 1990s. On the one hand, there was the political conjuncture. Margaret Thatcher’s reengineering of the British state smashed the labor movement and rode roughshod over centers of knowledge and expertise within its own institutions. The objective was straightforward: the restoration of the primacy of capital over labor.

In pursuit of this agenda, the executive — the government, in other words — acquired virtually untrammeled power to subordinate any aspect of society to capital accumulation if necessary. Thatcherism was and is based on neoliberal economics, which claims to be engaged in “rolling back the frontiers of the state.” But it is only possible to put such economics into practice by means of authoritarianism and violence, as demonstrated in much bloodier fashion by Thatcher’s Chilean friend General Augusto Pinochet.

In a famous 1988 speech delivered in the Belgian city of Bruges, Thatcher attacked the perceived drift of the EEC toward federalism under the leadership of European Commission president Jacques Delors:

We have not successfully rolled back the frontiers of the state in Britain, only to see them reimposed at European level.

For Thatcher, Europe was a potential fetter on her project — a means of interfering in and infringing on her government’s sovereign right to rebalance the relationship between capital and labor as it saw fit. And so the Tory rediscovery of sovereignty as a fetish was born. The fact that this concept came to be central for Tory narratives of nationality and Britishness (Englishness, in effect) during and after the Brexit campaign is no accident.

Cameron’s Gamble

The second key point about the EEC/EU was the City of London and its relation to it. With Britain as a member state, the City was subject to regulation, and increasingly faced competition from Frankfurt, which Germany was building into a rival financial center. The debate about Europe cannot be separated from the City’s commercial interests.

There were some fundamental questions to grapple with. Should the City remain in the EU and submit itself to regulations from Brussels and the European Central Bank, while enjoying its status as the bloc’s single largest financial center and a key source of capital? Would it benefit from less regulation and more autonomy without leaving the EU altogether? Or would it thrive better outside the framework of European integration, attracting greater trade volumes as an offshore clearing house for emerging economies, inward investors, and money laundering on behalf of authoritarian regimes and dictators?

Politics is concentrated economics, and economics is always more about class struggle than market share. Euro-skepticism was and is a much more potent force in Tory politics than in the Labour Party, particularly following the election of Tony Blair and the advent of New Labour. The division among the Conservatives over Europe persisted during their thirteen years of opposition that followed their heavy defeat in 1997. After they returned from the wilderness, it was never far from the surface in David Cameron’s “modernized” Tory party.

Cameron’s superficial gestures toward a more liberal Toryism resulted in significant chunks of the party base and its parliamentary group becoming more sympathetic toward the UK Independence Party (UKIP) of Nigel Farage with its call for outright withdrawal from the EU. Sometimes they colluded directly with Farage. Tory strategists, not least Cameron himself, identified the growth of anti-EU populist politics as a particularly corrosive threat to the Conservative base. They feared that UKIP might take seats at a general election and allow Labour to profit from a divided right-wing vote.

In an attempt to put this challenge down, Cameron announced a gamble on the UK’s EU membership with an in/out referendum if the Tories won the 2015 general election. Contrary to expectations, the electorate returned the Tories to office with a slim overall majority. Without the pro-EU Liberal Democrats to veto Cameron’s referendum as junior coalition partners, he had to make good on the promise.

After the Referendum

The subsequent referendum campaign fully exposed the extent of the Tory split. Although most leading Tories backed the Remain campaign, just 56 percent of its MPs did so. Former London mayor Boris Johnson was the best-known figure in the Leave camp, with self-advancement on his mind: Johnson famously wrote pro-Remain and pro-Leave articles for publication in the Daily Telegraph depending on which side he ultimately took.

Remain had backing from most of the political establishment, as well as British business, the trade union movement, and the regional nationalist parties in Scotland, Wales, and Northern Ireland. The Leave campaign did not command the same support. However, a mixture of anti-immigration sentiment and (English) nationalist populism, support from right-wing newspapers like the Sun and the Daily Mail, and a certain image of being opposed to the liberal establishment helped carry Leave over the line.

Cameron resigned, and his successor, Theresa May, set her government on course for a “hard Brexit” — shorthand for being as far removed from anything to do with the EU as possible. May pledged to stop free movement of labor from EU member states and take Britain out of the jurisdiction of the European Court of Justice. She saw this as the path of least resistance in terms of party management: the number of Conservative MPs who were not reconciled to leaving the EU was smaller than the combined forces of those who accepted the result plus the 44 percent of her parliamentary party who had backed Leave in the referendum.

While May favored a hard Brexit as a way of keeping the Tories together, she did not relish the prospect of being held to ransom either by the pro-Remain rump of Conservative MPs or by the pro-Brexit right, whose organizing center was the innocently named European Research Group (ERG). Labour was in the grip of a vicious civil war, with opponents of Jeremy Corbyn having mounted a leadership heave immediately after the referendum. During the early months of 2017, May’s party routinely enjoyed double-digit leads in the polls. In April, she called a general election, expecting to cash in on this advantage.

May’s election pitch depicted her campaign as a struggle against those who wanted to thwart Brexit. Unfortunately for May, Labour refused to paint itself into the Remain corner, stating in its manifesto that it accepted the referendum result and would focus on the terms of Britain’s exit from the EU. This, among other things, helped Labour under Corbyn to deny May her hoped-for majority with a large increase in support.

The Tories did manage to win 13.6 million votes or 42.4 percent, which was the highest tally achieved by any party since 1992. But the votes piled up in the wrong places for May and the thin majority Cameron had bequeathed to her vanished. May had to rely on a parliamentary deal with the ten MPs of the Democratic Unionist Party (DUP) just to stay in office.

The Conservative leader was now even more the prisoner of her backbenchers, and her government entered into two years of permanent crisis. As May set about negotiating with the EU in earnest, her main priority was finding a form of words that would keep her party together, rather than settling on a constructive future trading relationship. The need to keep the DUP on board made her task even more difficult.

Toward the Summit

The main stumbling block for May proved to be the status of Northern Ireland. With EU support, the Irish government insisted that there could be no return to a hard border between the two parts of the island. There were only two ways to avoid that: either May could accept a closer relationship with the EU’s single market and customs union for the whole of the UK than her 2017 manifesto had promised, or else she could agree to special arrangements that would set Northern Ireland apart from the rest of the UK. May tried to avoid making a choice with the so-called backstop, a way of postponing the decision on Northern Ireland’s status that ended up pleasing nobody.

While May faced and won a no-confidence vote in late 2018, her Brexit deal, deemed too soft by Tory Brexiteers and too hard by the Westminster opposition parties and her own anti-Brexit refuseniks, was defeated three times in the House of Commons. But there was no parliamentary majority for any other position, as a series of indicative votes in the House of Commons revealed, whether that meant a softer Brexit that would keep the UK in the EU’s customs union, or a second referendum to revisit the whole question.

With no chance of breaking the deadlock at Westminster, May resigned after suffering a thumping defeat at the hands of Nigel Farage’s Brexit Party in the 2019 European election. This resulted in the second Tory leadership contest in three years. From the beginning, Boris Johnson was the favorite to succeed May.

Johnson was generally known as a celebrity politician with a talent for public pratfalls, saying the wrong thing at the wrong time, and thumbing his nose at propriety. For the heavily pro-Brexit Tory membership, the profile he enjoyed from his eight years as London mayor and acknowledged role as the leader of the Leave campaign made him the ideal candidate to break the logjam and see off the challenge from Farage. Running with the sole objective of leaving the EU as soon as possible, he won the contest with ease.

This most untrustworthy of characters, who already enjoyed a well-deserved reputation for lying, was subsequently able to establish his credibility with angry Leave voters by unlawfully suspending parliament and expelling dissenters in his own party. Johnson promised to take Britain out of the EU by the end of October, even if that meant leaving in the absence of an agreement. He initially wanted to call a snap election before this deadline, but the opposition parties got in his way. Instead, Johnson negotiated a fresh Brexit deal that, unlike May’s, would give Northern Ireland its own special status, allowing the rest of Britain to make a clear break with the single market and the customs union.

Johnson was now able to call an election with a thin manifesto and the slogan “Get Brexit Done” as his main pitch to voters. Labour, on the other hand, was hopelessly split between those who were determined to stay in the EU and those willing to accept some form of Brexit. Its leadership eventually adopted a position of promising a second referendum on Brexit with Remain as an option on the ballot paper to prevent the party from falling to bits.

The price of this new line was the desertion of three hundred thousand voters to the Tories in exactly the right places. A swathe of constituencies that Labour had traditionally held fell to the Tory Brexit advance. Johnson built on May’s vote, slightly increasing the 2017 Conservative vote share to secure a majority of eighty seats in the House of Commons.

Johnson had proved his credibility on the issue of Brexit, and throughout the early part of his premiership he stuck to his pledge. The withdrawal agreement passed through Westminster by the end of 2019. Not even the most acute phase of the COVID-19 pandemic over the year that followed could be allowed to drive Johnson’s hard-Brexit strategy off course.

He concluded a deal with the EU along those lines in the final weeks of 2020. The establishment was routed, the promise of sovereignty had been fulfilled, and London was open for business. Johnson was now at the summit of his powers, and the only way was down.

Dubious Dividend

Johnson’s manifesto promised there would be a Brexit dividend for each part of the country, offering the opportunity to undo decades of regional decline and reactivate the plucky, can-do spirit Britain showed during the dark days of World War II. There has been no such dividend.

Johnson has only returned a fraction of the funding that David Cameron’s government systematically stripped away from the regions. Resistance from the Treasury thwarted the idea of serious support for Johnson’s “leveling up” vision. During his two years as chancellor, former City man and self-confessed Thatcherite Rishi Sunak was pointedly reluctant to provide the money, while Johnson himself lacked any real interest in the subject beyond boosterist speechifying and other theatrics.

The Johnson government also ratcheted up authoritarianism, with greater police powers to ban and penalize disruptive forms of protest, and a particularly despicable scheme to transport traumatized refugees to Rwanda, supposedly to deter people smugglers and traffickers. Johnson’s high-handedness and more or less open contempt for Britain’s constitutional niceties was starting to worry senior figures from the civil service and across all political parties, as well as among business leaders, who were increasingly being left to sink or swim in the post-Brexit mess.

Johnson’s downfall began in November 2021. A Westminster inquiry found backbench MP and close Johnson ally Owen Paterson to have received money for lobbying ministers on behalf of a corporate client — a clear breach of parliamentary standards. He faced a thirty-day suspension from the House of Commons and a recall petition in his safe North Shropshire seat. Andrea Leadsom, another former minister, put down a motion calling for the suspension of the punishment until a new disciplinary committee heard Paterson’s case under less stringent standards.

Johnson threw his weight behind the move, and people who had formerly indulged the prime minister now turned against him. Under a stream of criticism to which Johnson was unaccustomed, with the normally loyal right-wing press joining in, Paterson had to resign. In the subsequent by-election, the Liberal Democrats — the traditional third party in England and Wales — took the seat in spectacular fashion, with a swing of almost 70 percent.

Partygate

This was the squall before the storm. Between December and January, allegations surfaced that there had been parties taking place in Downing Street when the rest of the country was under the cosh of pandemic restrictions. At first, Johnson denied there had been any such parties, but then, as more evidence emerged, it turned out that he had personally attended at least half a dozen gatherings, including one in his residence above Number 10.

There was a flood of calls for him to go, including some from his own political side. One Conservative MP, Christian Wakeford, who had a wafer-thin majority in his northern English constituency, crossed the floor and joined Labour.

Johnson resisted pressure to resign and announced an inquiry led by a senior civil servant, Sue Gray, into what the media quickly dubbed “Partygate.” He later connived with the commissioner of the Metropolitan Police, Cressida Dick, for her force to announce its own investigation. It was a high-risk strategy for Johnson, as no sitting prime minister had been issued with a criminal penalty notice before, and he would be expected to resign if he received one. However, Johnson believed that this would enable him to play for time and drag out the story, hoping to draw its sting.

He seemed to be right in this assessment. When the police issued him with a fine, he did not resign as prime minister, apologizing instead while pleading that his attendance had been an accident. Neither the Met nor Sue Gray probed the party in the Downing Street flat nor other occasions when, according to witnesses, Johnson had played more of an organizing role in rule-breaking social events.

Discontent with this situation boiled over when MPs returned from a short break in early June. Enough Conservative MPs had submitted no-confidence letters to force a vote on Johnson’s leadership. About 60 percent of the Tory parliamentary group supported Johnson — a smaller percentage than had backed Theresa May in 2018 — but he assured restless Tory backbenchers that he was listening and things would be better from now on, with no more scandals.

This promise barely lasted a month. On June 30, Christopher Pincher, the party’s deputy chief whip, had to resign his position after allegedly committing a drunken sexual assault on two men. It quickly transpired that Pincher was well-known for his “handsy” proclivities and there had been complaints made about his behavior for many years. As Pincher was a key Johnson ally, journalists asked the prime minister if he knew that he was a sexual predator.

At first, the Tory leader outright denied any knowledge. Then he changed his story several times, first saying that he had heard rumors, then acknowledging that he was aware of allegations but had since “forgot” about them — in spite of claims that Johnson had sometimes been heard referring to his ally as “Pincher by name, Pincher by nature.” With Johnson’s ministers expected to defend this constantly changing line in the media, it was not long before the dam burst.

On July 5, the health secretary Sajid Javid gave Johnson notice that he was resigning in protest. Later that day, completely out of the blue and without warning Johnson in advance, Rishi Sunak resigned as well. Over the next two days, sixty junior and senior ministers quit Johnson’s cabinet. Practically everyone who was not a Johnson loyalist on the backbenches went on strike. Johnson had no choice but to step down as Tory leader, setting a new contest in motion.

After Johnson

The Tories turned to Johnson as the medicine for their Brexit crisis, but the cure proved to have some very nasty side effects. Establishment politics has taken a coarser, more vindictive, and antidemocratic turn under his leadership. For Johnson, accountability is merely a word in a dictionary, not something to which Tory politicians should be expected to submit.

The balance sheet of his premiership was entirely negative. The UK may have left the EU, but Brexit is far from done, with continued friction at the borders over trade and travel. Northern Ireland, which remains inside the customs union, has economically outperformed the rest of the UK. One of Johnson’s final acts as prime minister was to attack the Northern Ireland Protocol of the Brexit agreement he had previously negotiated.

A parliamentary committee found that tens of thousands of people had died unnecessarily due to Johnson’s mismanagement of COVID-19, which alternated between a tardy, lackadaisical approach and an authoritarian one and back again. The UK now faces an economic crisis, with double-digit inflation and soaring energy prices while real wages have flatlined.

This is the mess that Johnson’s successor will inherit. The choice before Tory party members is one between two kinds of continuity candidates. Rishi Sunak has effectively promised that nothing will change if he becomes leader. The deeply unpopular increase in National Insurance (NI) — a tax typically perceived as funding the National Health Service and social security — will remain. At some point down the line, we can expect further assistance for households with the scheduled hike in energy prices.

Sunak is a self-professed Thatcherite: at his campaign launch on July 23, he described his approach as “common-sense Thatcherism.” Sunak is on the hard right in terms of economic policy and campaigned for Brexit, but his own receipt of a fine during Partygate has compromised his position, as have revelations about the tax status of his wife, Akshata Murthy. Murthy is an heir to the $100 billion Indian IT giant Infosys, and may have avoided paying up to £20 million in taxes by registering as “non-domiciled.” This helps explain why Sunak entered the contest as the underdog.

Observers consider his rival Liz Truss to be the right-wing choice. So far in her career, Truss has been a political chameleon, swapping her principles when self-interest demanded. Over the space of twelve years, she has moved from being a keen champion of Cameron’s liberal Toryism and earnest Remain campaigner to become a champion of Brexit and an enthusiastic prosecutor of the so-called “war on woke.” In Britain, that typically focuses on attacking and scaling back the rights of trans people.

Much of the Tory establishment, who are backing Sunak, deride Truss, but she can rely on support from the pro-Brexit ERG and the tacit backing of Johnson himself who appears to still be smarting from the former chancellor’s “betrayal.” In a series of clumsy photo ops over the last few years, Truss has taken to aping Thatcher’s style, and is also keen to lay claim to her legacy. However, her central pitch promises the reversal of Sunak’s NI rise and more tax cuts — always Tory code for more wealth transfers to the rich.

This pledge raises a major problem for the received economic orthodoxy. Truss has said that she is willing to borrow to fund tax cuts, but Sunak counters that such borrowing would not only be potentially inflationary but would also add to the government debt — something Conservatives are supposed to avoid.

Uncertain Future

At present, polls suggest that Truss enjoys a strong lead among the Conservative membership and edges out Sunak for popularity with the public at large. But less than a third of Tory MPs backed her to get into the final round of the contest, while Sunak had the support of approximately 40 percent. The leadership candidate who placed third with MPs, Penny Mordaunt, has yet to declare for either Sunak or Truss, but is temperamentally and politically closer to the former — especially since she has been on the receiving end of a dirty-tricks campaign from the Truss camp.

If Truss wins, she will face a parliamentary party where two-thirds of Tory MPs did not endorse her. The last time something similar happened was in 2001 when Iain Duncan Smith became Conservative leader. His stewardship of the party was beset by crisis and limped on for only two years. It’s reasonable to assume that a figure as insubstantial as Truss would find herself similarly buffeted by her party. In that scenario, the next election — likely due to be held in 2024 — would be Labour’s to lose.

Neither Truss nor Sunak has the answers to Britain’s problems. They do not even have the answers to their own party’s difficulties. It’s clear British capital is uncompetitive outside of the EU. The introduction of post-Brexit rules has seen companies lose market share in Europe. With “leveling up” proving nonexistent outside of Johnsonian rhetoric, there is no thriving domestic market that can cushion the shock.

What’s more, the summer of 2022 is set to be defined by the threat or reality of industrial action. The National Union of Rail, Maritime and Transport Workers (RMT) trade union, which represents rail workers, has organized several disruptive strike days on Britain’s transport network. Despite the usual press bile against strikers, public support has swung behind the workers.

This is not only because their pay demand is merely asking to keep pace with high inflation. The RMT general secretary, Mick Lynch, has proved to be a hit with his plain-speaking defense of the strike and ability to make fools out of condescending broadcast journalists. He has also used his platform to encourage other people to join their union and demand their fair due.

Industrial discontent is spreading, with successful ballots by postal and telecommunications workers. Threats of industrial action secured inflation-busting pay rises for British Airways employees. Education workers are also balloting for action, and even unions representing nurses are talking up the possibility of strikes.

In response to these developments, the Tories have predictably defaulted to a line of outright hostility. Both leadership candidates have pledged to ban strikes on public transport, and the government recently passed a new law enabling businesses to hire scab labor during strikes. However, with Tory legitimacy eroded and strikes enjoying popular support, this will be another headache for Johnson’s successor. Going back to the Thatcherite cupboard and disinterring the old slogans about “militants” and “union barons” won’t wash.

No matter how many tax cuts the Tories offer, or anti-strike measures they sign into law, it’s becoming obvious that the government has alienated swathes of British business. As for the City of London, it has retained its status as a world leader in financial services, despite losing out on EU capital-raising channels and on share volumes. However, as the cost-of-living crisis and the increasing decrepitude of Britain’s public services show, what’s good for the City isn’t necessarily good for the rest of the population or even the rest of business.

Johnson thus leaves the scene with the settlement Thatcher struck consolidated. But it is difficult to see where the Conservative Party can go from here to win the next election, with a divided parliamentary group and two rival leadership candidates whose prospectuses will not tackle the UK’s problems. Populist posturing and scapegoating can only go so far, and if the cost-of-living issues go unanswered, the Tories will have nothing but political pain to look forward to.

Whatever happens, we can be sure that both Sunak and Truss will seek to maintain the current balance of forces between capital and labor, despite the evidence of public sympathy for striking workers. If that means using the whip of inflation and the discipline of a shrinking economy to keep workers in line, they will be only too happy to do it.