The European Research Group, Jacob Rees-Mogg’s hard Brexit think tank, is trying to hide its real views about the UK’s future. The ERG’s 140-page report on post-Brexit Britain has not been published. It was shelved at the last minute because it contains a clear blueprint for the country Rees-Mogg and his fellow travellers want when the UK leaves the EU. It’s a vision familiar to anyone who lived through the 1980s.
We know now that Brexit is based on an economic fantasy. We know this because the Brexiteers have told us so. The ERG’s report calls for massive tax cuts, which have been endorsed by prime ministerial wannabe Boris Johnson. Income tax, capital gains tax and stamp duty could all be cut – measures that would disproportionately benefit the rich and the biggest corporations. Rees-Mogg and Johnson, and their friends in the city, will get richer.
The justification for these cuts is a long-discredited right-wing economic theory, embraced by Margaret Thatcher and never fully abandoned by the Tories. This is the Laffer Curve, a nonsense embraced by Ronald Reagan. This is trickle down economics writ large: the ludicrous idea that a government can increase revenues by slashing taxes. ‘Trickle down’ proponents also claim that cutting taxes for rich people and companies benefits the poorest in society, by creating jobs and economic growth. Time and again this theory has been proven wrong, and time and again right-wing politicians return to it. George H. W. Bush once called it voodoo economics, today it’s more like zombie economics.
In Thatcher’s Britain, there was substantial economic growth that made some people very rich indeed. But the Yuppies were a lucky minority who were in the right position to exploit the system. For the nearly 4 million unemployed during he Thatcher years, trickle down felt more like being pissed on by the rich. Bank and market deregulation created fortunes, and left ordinary workers exploited and alienated.
As Thatcher privatised essential services and attacked the social safety net, so has this Tory government. Overstretched police forces, a funding crisis in the NHS and high levels of working poverty are results of a deliberate policy. In the ERG’s vision of Britain, these services would have to suffer further cuts as the tax take fell and the economic realities of Brexit started to bite.
Bizarrely, the ERG also wants a new missile defence system – built in the UK, of course. This boondoggle is no doubt intended to offset the economic impact of Brexit. The ERG is essentially admitting that the government will need to stimulate the economy through spending, but the only acceptable form of stimulus for the hard right is military expenditure. So Britain will get some unnecessary new missiles to replace those food and medicine imports.
More bizarre still is the suggestion that an expeditionary force should be sent to the Falklands. What possible reason could there be for this? Are Brexiteers worried that Argentina will invade the islands again? If this is starting to sound a lot like 1982, that’s not a coincidence.
Rees-Mogg, Boris Johnson, the ERG and like-minded Brexiteers are embracing this vision of a low tax, low regulation economy where spending on social services will be pared back to a bare minimum. They are embracing a discredited economic ideology that even economically conservative organisations like the IMF don’t support. And leaving the EU will make it much easier to implement these ideas.
Once the UK is outside the EU, there will be no EU regulations on workers’ rights and no European court to appeal to if the government roles back those rights. The Brexiteer ideology is and always has been one of visceral opposition to government intervention in the market, unless that intervention benefits corporations and the people who own them. If you are not a millionaire, if you do not have a stock portfolio, if you’re just about managing on minimum wage, the Brexiteers don’t care about. You’re just a human resource; just another asset to be exploited for maximum profit.
The unions won’t save you, they’ve been gutted. Solidarity across borders won’t work with the UK beyond the reach of EU rules. The country will be poorer, more militarised, less regulated, less fair and extremely profitable. This is Thatcherism on steroids.