Have the Tories been trumped by Brexit?

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The Tory government's divisions over Brexit can only be sharpened by Donald Trump's election to president of the US. Theresa May's woes go deep and won't easily be solved, writes Alan Gibson.

What does Donald Trump’s victory in the US presidential election mean for the Tories? Does it help or hinder the government’s crisis-strewn plans for Brexit? Like every other government, the Tories face not only the bumpy transition from Obama’s administration to Trump’s, but a president elect notorious for unpredictability.

Before his victory, Trump claimed he would treat the UK “fantastically”, but May was ninth in line, behind the leaders of South Korea, Japan, Egypt, Australia, India, Turkey, Israel and Mexico, for a telephone call from the president elect. Trump said their ties should be the “close relationship” that Margaret Thatcher and Ronald Reagan formed in the 1980s, but that was begun in the years before Reagan’s presidency, and was never marred by negative comments such as those made by May in the weeks before the US election. Then she called Trump “divisive”, and criticised his claim that London has Muslim “no-go” areas.

Enter UKIP’s Nigel Farage as self-declared broker between the UK government and Trump — a role that May quickly rebutted, but not before causing yet another split in the cabinet, with some ministers reportedly arguing Farage’s “offer” be taken seriously; just as some did when Trump said UKIP’s interim leader would be a good ambassador to the US.

Poisonous
In a hint at just how poisonous is the atmosphere around the cabinet, one senior former minister, referring to international trade secretary Liam Fox’s claim of strong ties with the Republican Party, said, “Fox should fuck off and butt out of it. He thinks he is the only link to the Republican Party. He isn’t. In government, you don’t take on roles that are not properly yours.” Meanwhile foreign secretary Boris Johnson has claimed Trump’s victory is “a great opportunity”, talked of a post-Brexit trade deal with the US, and called for Europe’s leaders to snap out of their “general doom and gloom…and collective whingearama” following the US election.

But Trump’s victory doesn’t only pose challenges to the UK’s relations with the US. The president elect has made it clear he wants to make a break with foreign policies pursued by the West until now, particularly over its approach to: Vladimir Putin’s Russia and its role in Syria and Ukraine; the Iran nuclear deal; and critically Nato. But can Johnson and his fellow Brexiters be certain that Trump will be amenable to agreeing a trade deal? They can point to his saying he would put the UK “first in line”, but he has also made clear that globalisation is over, and that an economic strategy that “puts America first” will be top of his agenda.

Alongside the massive changes in activity this has created on the world’s stock and bond markets, that means tariffs and import controls. Though Trump is targeting mainly China’s imports, the trade wars that could ensue pose potential dangers for the UK, which trades extensively with the US. As Tom Raines of the think tank Chatham House says, “The twin poles of UK foreign policy for 40 years have been the special relationship with an Atlanticist US and active membership of the EU. Both are in tatters.”
And, by all accounts, there is little to replace them.

Clarity
Writing in the Financial Times about the first four months of May’s government, Richard Lambert, former head of the Confederation of British Industry and ex-editor of the FT, says: “There has been no clarity about the overall direction of economic policy, especially on the crucial question of future trade relationships with the EU. There has been a sense that political considerations override economic realities in key areas of decision-making, and that business is not represented at all in the inner circle running Downing Street.”

Lambert referred to questions around the deal the government struck with Nissan in October, asking, “Was this a panic response to crisis, or the start of a new strategy?” — a question being asked by business leaders in every section of industry, including the City; so far, with no answers. Many will have been unhappy to hear Johnson’s statement to a Czech newspaper in mid-November that Britain would “probably have to leave the EU customs union”, and that “free movement” was never a valid principle, and was “bollocks”.

In the same week, Italian economics minister Carlo Calenda’s revelation of Johnson’s threat — you agree to the UK’s access to the single market and its ending of free movement, or the prosecco gets it — will have reinforced these same leaders’ growing misgivings about the state of the government’s Brexit strategy.

Speaking to the CBI conference days before the Autumn Statement, May attempted to calm nerves, with little success. “She wants business to trust her that she has their interest at heart, the mood music is encouraging … but it’s too early to know whether to trust her or not,” said Simon Lowe, a partner at accountant Grant Thornton. Another chief executive said “my business operates around Europe, we don’t know if we’ll have tariffs in two years, we would like clarity, we would like certainty”.

Yet hardly a week goes by without another sign of major splits and general chaos within government. A leaked memo written by accountant Deloitte in mid-November claimed continuing cabinet splits, with the leading Brexiters in particular — Fox, Johnson and David Davis — pitted against chancellor Philip Hammond and business minister Greg Clark.

This was followed by the Institute of Government’s attack on May’s “secretive approach”, and the government’s “chaotic and dysfunctional” process towards Brexit. It warned the civil service is in danger of massive overload with Whitehall working on more than 500 Brexit-related projects, and said another 30,000 staff may be needed. John Manzoni, chief executive of the civil service, reinforced the warning, saying Whitehall was trying to do 30 percent too much.

Animosity
A civil servant at the Department for Environment and Rural Affairs reports colleagues “are working up scenarios for post-EU with no idea what ministers preferences are in negotiations. Indeed, they have no idea either because there are splits in central government. During the referendum Defra secretary of state Liz Truss was for remain, whereas Defra minster George Eustace was for Brexit. No surprise that one or the other would be moved post referendum. They could not be in the same room for the duration of the campaign such was the animosity”.

There are also reports of civil servants claiming Fox and Davis are out of their depth and incapable of carrying out their remits. If such chaos was not enough, the High Court’s ruling that May must consult both houses of parliament before declaring Article 50 to begin formal talks towards Brexit has created even more disarray. The government is appealing to the Supreme Court, preparing a short Brexit Bill in the event of it losing, and backtracking from its plan to restrict the powers of the House of Lords in order to clear the way for an easy passage.

But even this strategy has been questioned, with Lady Hale, one of the 11 judges who will hear the appeal, suggesting the court could force May and Co to formulate a “comprehensive replacement” of the 1972 act that saw the UK join the forerunner of the EU. Such a process would destroy May’s plan to begin Brexit talks next March, and make it vulnerable to being completely overturned.

As Jeremy Corbyn said in parliament, “We have a Brexit team with no plan for Brexit and a prime minister who is not prepared to answer questions on Brexit strategy.” Or, as one commentator said, with the Brexit process in chaos, and the US administration is disarray, it could be that the best strategy is to have no strategy at all.

Brexit is also posing major problems for chancellor Philip Hammond. The Office for Budget Responsibility, which former chancellor George Osborne set up in 2010, estimates the cost of Brexit will be £100 billion within five years. That would not be such a big problem if Osborne’s austerity measures were set to produce his promised surplus by 2019-20.

Outlook
Alas, Hammond in his Autumn Statement was obliged to admit to the largest deterioration in UK public finances since 2011, restricting plans for tax cuts for the “just about managing” families that May pledged to help at the Tory party conference. According to the Institute of Fiscal Studies, the UK’s weak economic outlook could see government borrowing increase by a further £30 billion before 2019-20 before any gains from leaving the EU are taken into account. But even these figures are dodgy, however, precisely because no one knows what the outcome of the Brexit process will be.

The government’s problems are piling up beyond Brexit. Now that the worst of Osborne’s austerity measures are arriving, things could get tricky — witness the prison officers’ recent actions. Pointing to the 30 percent cut in prison wardens and a significant increase in prisoners since 2010, they threatened to “shut down” prisons in order to force justice minister Liz Truss to agree to hiring 2,500 wardens. Having conceded, the wardens want more, and Truss now faces more walkouts.

Its attempt to appear resolute to the business community with its green light for the Hinckley B nuclear power station and backing for fracking has mobilised resistance, particularly from communities threatened by the mining contractors. And the rise in inflation brought about by the pound’s fall in value on the money markets lays the ground for an increase in pressure for wage rises.

The Tories’ inevitable response to their problems, however, is to be even more vicious in pushing through their attacks. Their Trade Union Act is now coming into force, significantly restricting workers’ rights to take industrial action — something that will be hopefully severely tested if wage pressure does take off.

They have backed off its pay-to-stay attack on council tenants, but are still pushing through the bulk of the Housing Bill that will effectively see the end of council housing. They have also backed off forcing every school to become an academy, but still aim to bring back grammars and cut spending, particularly for nursery schools. Truss is set on scrapping the 1998 Human Rights Act, threatening fundamental rights, particularly those affecting disabled people, privacy and free speech. And the government’s Investigatory Powers Bill will give ministers the power to identify and expose journalistic sources and whistleblowers.

Overhaul
Rather than concede to the growing furore over its Prevent legislation, home secretary Amber Rudd plans to overhaul and insert it into the government’s wider reworking of its counter-terrorism strategy, known as Contest, that is to be published before the end of the year. Meanwhile the effect of former home secretary May’s 2014 Immigration Act, that made countless landlords, civil servants, local authority workers, nurses and doctors into the government’s second level border control, is seeing increasing numbers of migrants and refugees — and even people who “look like” migrants — turfed out of homes, refused benefits and denied medical care.

The capacity of a government fraught with profound splits over key policies to carry through these attacks is clearly very low. That’s why socialists need to be part of building support for resistance to the Tories wherever and whenever it arises.