In this second extract from How the Establishment Lost Control Chris Nineham explains why the Brexit vote was such a serious defeat for the Tories and the whole ruling class

Tensions created by Brexit on the left shouldn’t obscure the fact that the Brexit vote was a body blow for the British ruling class. British capitalism’s big players, the major corporations, the banks and the other financial institutions have long seen membership of the European market as crucial to Britain’s future. The post-referendum report from the CBI, Britain’s main employers’ organisation, lobbied hard for a Brexit that looks pretty much like continued membership. Friction-free trading with Europe is important to a ruling class that has been at the forefront of globalisation. Britain has more foreign direct investment around the world than any other European country. A good deal of this is with Europe. The banks in particular rely on the free flow of European capital in and out of London. But support for EU membership was not just about actual trade with European partners. The closest possible relationship with Europe is regarded as essential for Britain’s core economic project of sustaining its role as a financial centre and as a low wage destination for foreign investment from all around the world. Margaret Thatcher was one of the architects and main champions of the European Single Market because it both positioned Britain as a low cost manufacturing base in the European trading area and, through its provisions on the free trade in services, guaranteed against government regulation of the economy. EU membership also helped in the strategic goal of reinforcing the special relationship with the USA. Apart from the immediate economic role as an English-speaking bridgehead for US capital in Europe, successive British governments have pitched themselves to Washington as a reliably neoliberal and hawkish ally in the politically and militarily uncertain European scene, for example, campaigning strongly for the failed free trade agreement between Europe and the Americas.

Despite its paymasters’ clear preference, the Tory party itself has long been divided over its attitude to the European Union. Over the years, the Tories have nurtured an ageing, middle class membership suspicious of the Brussels bureaucracy, bigoted about immigration and, in general, jealous about national sovereignty. David Cameron’s plan was to promise an EU referendum as a way of undercutting support for UKIP and marginalising the Europhobic right in his own party. Not only did he fail to carry the country, exit polls suggest 58% of Tory voters voted Leave. That the main party of the ruling class is unable to agree on such a key strategic question reveals dysfunction at the heart of the ruling elite and has created massive problems in the short term, let alone further down the line. The Tories are now pursuing a project that is not supported by most of their own leadership or the bulk of the class they represent. The big capitalist interests will be doing everything they can to roll back the decision in practice, while many Tory voters will be pushing for maximum independence and minimum immigration. Every step the Tories take will be fraught with difficulties and the democratic deficit can only grow.

May’s gamble of trying of forge a new right wing consensus around a hard Brexit was a disaster. It was always based more on desperation than forward planning and it involved a profound misreading of the public mood. Confounding all the Tories and most pundits’ calculations, the general election wasn’t mainly about Brexit, immigration or – May’s accidental plan B – national security. Economic and social questions dominated partly because the Brexit vote was done and dusted, but also because these were the issues that mainly drove that vote in the first place. Once Team Corby had raised the prospect of state intervention, the rotting shell of Tory politics started to crumble. Planning, redistribution, renationalisation, more democratic participation, all these things are now real possibilities in the minds of millions. In the process the left has regained its rightful ownership of the key question of the day – popular control of society.

The main party of British capitalism is out of sync with its paymasters, its leaders are losing influence over their members and their traditional middle class strongholds let alone the mass of working people, people who regard them with more and more contempt. This at a time when it has no alternative to the programme of austerity that has caused so much of the growing misery and opposition. In the 1930s the Italian Marxist Antonio Gramsci wrote, ‘a class is dominant in two ways, that is, it is “leading” and “dominant.” It leads the allied classes, and dominates over the adversarial classes’. On both fronts the British ruling class is now failing.