In silencing Euroscepticism, Italy’s president has gifted its far right

Yanis Varoufakis in The Guardian

Italy should be doing well. Unlike Britain, it exports considerably more to the rest of the world than it imports, while its government spends less (excluding interest payments) than the taxes it receives. And yet Italy is stagnating, its population in a state of revolt following two lost decades.

Italian president names interim prime minister until fresh elections


While it is true that Italy is in serious need of reforms, those who blame the stagnation on domestic inefficiencies and corruption must explain why Italy grew so fast throughout the postwar period until it entered the eurozone. Was its government and polity more efficient and virtuous in the 1970s and 1980s? Hardly.

The singular reason for Italy’s woes is its membership of a terribly designed monetary union, the eurozone, in which the Italian economy cannot breathe and which consecutive German governments refuse to reform.

In 2015 the Greek people elected a progressive, Europeanist government with a mandate to demand a new deal within the eurozone. In the space of six months, under the guidance of the German government, the European Union and its central bank crushed us. A few months later, I was asked by the Italian daily newspaper Corriere della Sera if I thought European democracy was at risk. I answered: “Greece surrendered but it was Europe’s democracy that was mortally wounded. Unless Europeans realise that their economy is run by unelected and unaccountable pseudo-technocrats, committing one gross error after another, our democracy will remain a figment of our collective imagination.”

Since then, the pro-establishment government of Italy’s Democratic party implemented, one after the other, the policies that the unelected bureaucrats of the EU demanded. The result was more stagnation. And so, in March, a national election delivered an absolute parliamentary majority to two anti-establishment parties which, despite their differences, shared doubts about Italy’s eurozone membership and a hostility to migrants. It was the bitter harvest of absent prospects and withering hope.

After a few weeks of the kind of post-election horse-trading common in countries like Italy and Germany, the Five Star Movement and League leaders Luigi Di Maio and Matteo Salvini struck a deal to form a government. Alas, President Sergio Mattarella used the powers bestowed upon him by the Italian constitution to prevent the formation of that government and, instead, handed the mandate to a technocrat, a former IMF employee who stands no chance of a vote of confidence in parliament.

Had Mattarella refused Salvini the post of interior minister, outraged by his promise to expel 500,000 migrants from Italy, I would be compelled to support him. But, no, the president had no such qualms. Not even for a moment did he consider vetoing the idea of a European country deploying its security forces to round up hundreds of thousands of people, cage them, and force them into trains, buses and ferries before sending them goodness knows where.

No, Mattarella chose to clash with an absolute majority of lawmakers for another reason: his disapproval of the finance minister designate. Why? Because the said gentleman, while fully qualified for the job, and despite his declaration that he would abide by the EU’s rules, had in the past expressed doubts about the eurozone’s architecture and has favoured a plan of EU exit just in case it was needed. It was as if Mattarella declared that reasonableness from a prospective finance minister constitutes grounds for his or her exclusion from the post.

What is so striking is that there is no thinking economist anywhere in the world who does not share concern about the eurozone’s faulty architecture. No prudent finance minister would neglect to develop a plan for euro exit. Indeed, I have it on good authority that the German finance ministry, the European Central Bank and every major bank and corporation have plans in place for the possible exit from the eurozone of Italy, even of Germany. Is Mattarella telling us that the Italian finance minister is banned from thinking of such a plan?


Beyond his moral failure, the president has made a major tactical blunder

Beyond his moral failure to oppose the League’s industrial-scale misanthropy, the president has made a major tactical blunder: he fell right into Salvini’s trap. The formation of another “technical” government, under a former IMF apparatchik, is a fantastic gift to Salvini’s party.

Salvini is secretly salivating at the thought of another election – one that he will fight not as the misanthropic, divisive populist that he is, but as the defender of democracy against the Deep Establishment. He has already scaled the moral high ground with the stirring words: “Italy is not a colony, we are not slaves of the Germans, the French, the spread or finance.”

If Mattarella takes solace from the fact that previous Italian presidents managed to put in place technical governments that did the establishment’s job (so “successfully” that the country’s political centre imploded), he is very badly mistaken. This time around he, unlike his predecessors, has no parliamentary majority to pass a budget or indeed to lend his chosen government a vote of confidence. Thus, the president is forced to call fresh elections that, courtesy of his moral drift and tactical blunder, will return an even stronger majority for Italy’s xenophobic political forces, possibly in alliance with the enfeebled Forza Italia of Silvio Berlusconi.

I’m starting to hate the EU. But I will vote to stay in

George Monbiot in The Guardian

On jobs, health and wildlife, the European Union is often all that stands between us and unfettered corporate power

 

Slurry runoff polluting a river: ‘What Cameron described in parliament as “pettifogging bureaucracy” are the rules that prevent children from being poisoned by exhaust fumes, rivers from being turned into farm sewers.’ Photograph: Alamy



By instinct, like many on the left, I am a European. I recognise that many issues – perhaps most – can no longer be resolved only within our borders. Among them are grave threats to our welfare and our lives: climate change and the collapse of the living world; the spread of epidemics whose vectors are corporations (obesity, diabetes and diseases associated with smoking, alcohol and air pollution); the global wealth-grab by the very rich; antibiotic resistance; terrorism and conflict.

I recognise that the only legitimate corrective to transnational power is transnational democracy. So I want to believe; I want to belong. But it seems to me that all that is good about the European Union is being torn down, and all that is bad enhanced and amplified.

Nowhere is this clearer than in the draft agreement secured by David Cameron. For me, the most disturbing elements are those that have been widely described in the media as “uncontroversial”: the declarations on regulations andcompetitiveness. The draft decisions on these topics are a long series of euphemisms, but they amount to a further dismantling of the safeguards defending people, places and the living world.

What Cameron described in parliament as “pettifogging bureaucracy” is the rules that prevent children from being poisoned by exhaust fumes, rivers from being turned into farm sewers and workers from being exploited by their bosses. What the European commission calls reducing the “regulatory burden for EU business operators” often means increasing the costs the rest of us must carry: costs imposed on our pockets, our health and our quality of life. “Cutting red tape” is everywhere portrayed as a good thing. In reality, it often means releasing business from democracy.

There is nothing rational or proportionate about the deregulation the commission contemplates. When Edmund Stoiber, the conservative former president of Bavaria, reviewed European legislation, he discovered that the combined impact of all seven environmental directives incurred less than 1% of the cost to business caused by European law. But, prodded by governments including ours, the commission threatens them anyway. It is still considering a merger and downgrading of the habitats and birds directives, which are all that impede the destruction of many of our precious places and rare species.

Alongside such specific threats, the EU is engineering treaties that challenge the very principle of parliamentary control of corporations. As well as theTransatlantic Trade and Investment Partnership (TTIP), it has been quietly negotiating something even worse: a Trade in Services Agreement (Tisa). These claim to be trade treaties, but they are nothing of the kind. Their purpose is to place issues in which we have a valid and urgent interest beyond the reach of democratic politics. And the commission defends them against all comers.

Are such tendencies accidental, emergent properties of a highly complex system, or are they hardwired into the structure of the EU? The more I see, the more it seems to me that the EU’s problems are intrinsic and systemic. The organisation that began as an industrial cartel still works at the behest of the forces best equipped to operate across borders: transnational corporations. The commission remains a lobbyists’ paradise: opaque, sometimes corruptible, almost unnavigable by those without vast resources.

People such as the former Labour home secretary Alan Johnson, who claim the EU is a neutral political forum – “simply a place we have built where we can manage our interdependence” – are myth-makers. They are the equivalent of the tabloid fabulists who maintain that European rules will reclassify Kent as part of France, force people to trade in old battery-operated sex toys for new ones, and ensure that dead pets are boiled for half an hour in a pressure cooker before they are buried.

So should those who seek a decent, protective politics vote to stay or vote to leave? If you wish to remain within the EU because you imagine it is a progressive force, I believe you are mistaken. That time, if it ever existed, has passed. The EU is like democracy, diplomacy and old age: there is only one thing to be said for it – it is not as bad as the alternative.

If you are concerned about arbitrary power, and the ability of special interests to capture and co-opt the apparatus of the state, the UK is in an even worse position outside the EU than it is within. Though the EU’s directives are compromised and under threat, they are a lot better than nothing. Without them we can kiss goodbye to the protection of our wildlife, our health, our conditions of employment and, one day perhaps, our fundamental rights. Without a formal constitution, with our antiquated voting arrangements and a corrupt and corrupting party funding system, nothing here is safe.


Though the EU’s directives are compromised and under threat, they are a lot better than nothing

The UK government champs and rears against the European rules that constrain it. It was supposed to have ensured that all our rivers were in good ecological condition by the end of last year: instead, lobbied by Big Farmer and other polluting businesses, it has achieved a grand total of 17%. On behalf of the motor industry, it has sought to undermine new European limits on air pollution, after losing a case in the supreme court over its failure to implement existing laws. Ours is the least regulated labour market in Europe, and workers here would be in an even worse fix without the EU.

On behalf of party donors, old school chums, media proprietors and financial lobbyists, the government is stripping away any protections that European law has not nailed down. The EU’s enthusiasm for treaties such as TTIP is exceeded only by Cameron’s. His defence of national sovereignty, subsidiarity and democracy mysteriously evaporates as soon as they impinge upon corporate power.

I believe that we should remain within the union. But we should do so in the spirit of true scepticism: a refusal to believe anything until we have read the small print; a refusal to suspend our disbelief. Is it possible to be a pro-European Eurosceptic? I hope so, because that is what I am.

Two-thirds of Tory MPs want Britain to quit European Union

Toby Helm and Henry McDonald in The Guardian


Party sources say Brexit support is rising – despite David Cameron’s preference for staying in EU – but U-turns are possible

 

David Cameron with the European commission president Jean-Claude Juncker. Photograph: Ints Kalnins/Reuters

Two-thirds of Conservative MPs now support Britain’s exit from the European Union, despite David Cameron’s clear preference for staying in, according to senior sources within the party.

Key figures in Tory high command say analysis of public statements and private views expressed by their 330 MPs shows that at least 210 now believe that the UK would be better off “out”.

The surge in support within the parliamentary party for leaving will greatly encourage “out” campaigners, who believe many people will take their lead from local MPs when they decide which way to vote. However, party managers say the total number of Tory MPs who will join the campaign to leave could turn out to be significantly fewer – around 110 – if in the next few months opinion polls begin to point towards a close result or a win for the pro-EU side.

“Certainly at least two-thirds want to leave as it stands,” said a senior party figure. “But if things are very tight some will be bought off by offers of patronage and will be reluctant to take a different line to the prime minister. Plenty will not want their careers blighted by being on the wrong side of such an important debate.” The Observer has also been told that soundings taken by MPs show the “vast majority” of grassroots activists now want to quit the EU – and that most will not be swayed by whatever deal Cameron achieves in his attempt to renegotiate UK membership.

EU referendum expected in September as hopes fade of deal next month



Last week Cameron, in effect, conceded that his party was split from top to bottom over Europe when he agreed that members of his government, including cabinet ministers, would be allowed to speak out against the official line during the campaign, which is expected to be later this year.

While the holders of the top offices of state – including the chancellor, George Osborne, the foreign secretary, Philip Hammond and the home secretary, Theresa May – are likely to back staying in, other senior ministers, including the work and pensions secretary, Iain Duncan Smith, the leader of the House of Commons, Chris Grayling, and the Northern Ireland secretary, Theresa Villiers, want to campaign to leave.

The spotlight will inevitably now turn to Boris Johnson, who attends cabinet in his role as mayor of London and sees himself as a future leader of the party. A longstanding critic of the EU, Johnson has yet to indicate whether he will campaign to stay in or leave.

The ability of Villiers to remain as Northern Ireland secretary if she sides with the “out” campaign was being called into question on Saturday night as opposition MPs said leaving the EU would not be in Northern Ireland’s interests, could harm the peace process and damage Northern Ireland’s economy. The Liberal Democrat MEP Catherine Bearder, who speaks for her party on the referendum campaign, said Villiers should stand down, saying a Brexit would not be compatible with her role. “It would be highly inappropriate for Theresa Villiers to remain in her post while campaigning to leave the EU,” Bearder said. “Leaving Europe would risk stoking sectarian tensions and undoing years of peace-building, much of it funded through EU peace programmes.

“It would also fundamentally transform the UK’s relationship with the Republic of Ireland and put at risk the open land border we currently share. Government ministers should not be able to campaign for an EU exit if this completely goes against their role and responsibilities.”

Osborne: PM giving ministers free rein on EU referendum is not a U-turn



The only Irish nationalist party represented in the House of Commons also questioned whether Villiers could remain in her post. Colum Eastwood, new leader of the Social Democratic and Labour party, said Britain’s departure from the EU could put at risk Northern Ireland’s £1.6bn of trade with the Irish Republic. “While Theresa Villiers is obviously entitled to engage in the internal and long-running Tory battles over Europe, her role as secretary of state for Northern Ireland places upon her a separate responsibility. That role should require her to represent the best interests of people in the north. A Brexit is not in our interest. It is not in the interest of our economy or in the interest of our society,” he said.

“All the evidence, all the major voices in our agricultural and business communities, have warned that a Brexit would devastate the fundamentals of our economy.”

Meanwhile, the EU spokesman of the strongly Eurosceptic Danish People’s party, Kenneth Kristensen Berth, said he did not believe the UK should leave. “I fully understand the British people’s scepticism, but the answer is not to leave now. The answer is to work within the EU framework to slim down the EU cooperation, and that’s a job that will be significantly harder without the British.”

James McGrory, chief campaign spokesman for Britain Stronger In Europe, said: “It shows how isolated Ukip and the Leave campaigns are when even rightwing Eurosceptics in other countries are arguing that Britain should remain in Europe.

“Europe needs reform, but leaving altogether would take us to very extreme fringes of the international community, where even far-right outfits like the Danish People’s party don’t want to be.”

Portugal's anti-euro Left banned from power

Constitutional crisis looms after anti-austerity Left is denied parliamentary prerogative to form a majority government


Ambrose Evans Pritchard in The Telegraph

Portugal has entered dangerous political waters. For the first time since the creation of Europe’s monetary union, a member state has taken the explicit step of forbidding eurosceptic parties from taking office on the grounds of national interest.


Anibal Cavaco Silva, Portugal’s constitutional president, has refused to appoint a Left-wing coalition government even though it secured an absolute majority in the Portuguese parliament and won a mandate to smash the austerity regime bequeathed by the EU-IMF Troika.


He deemed it too risky to let the Left Bloc or the Communists come close to power, insisting that conservatives should soldier on as a minority in order to satisfy Brussels and appease foreign financial markets.

  “In 40 years of democracy, no government in Portugal has ever depended on the support of anti-European forces, that is to say forces that campaigned to abrogate the Lisbon Treaty, the Fiscal Compact, the Growth and Stability Pact, as well as to dismantle monetary union and take Portugal out of the euro, in addition to wanting the dissolution of NATO,” said Mr Cavaco Silva.








“This is the worst moment for a radical change to the foundations of our democracy.

"After we carried out an onerous programme of financial assistance, entailing heavy sacrifices, it is my duty, within my constitutional powers, to do everything possible to prevent false signals being sent to financial institutions, investors and markets,” he said.

Mr Cavaco Silva argued that the great majority of the Portuguese people did not vote for parties that want a return to the escudo or that advocate a traumatic showdown with Brussels.

This is true, but he skipped over the other core message from the elections held three weeks ago: that they also voted for an end to wage cuts and Troika austerity. The combined parties of the Left won 50.7pc of the vote. Led by the Socialists, they control the Assembleia.

The conservative premier, Pedro Passos Coelho, came first and therefore gets first shot at forming a government, but his Right-wing coalition as a whole secured just 38.5pc of the vote. It lost 28 seats.

Newly re-elected Portuguese prime minister Pedro Passos Coelho

The Socialist leader, Antonio Costa, has reacted with fury, damning the president’s action as a “grave mistake” that threatens to engulf the country in a political firestorm.

“It is unacceptable to usurp the exclusive powers of parliament. The Socialists will not take lessons from professor Cavaco Silva on the defence of our democracy,” he said.

Mr Costa vowed to press ahead with his plans to form a triple-Left coalition, and warned that the Right-wing rump government will face an immediate vote of no confidence.

There can be no fresh elections until the second half of next year under Portugal’s constitution, risking almost a year of paralysis that puts the country on a collision course with Brussels and ultimately threatens to reignite the country’s debt crisis.

The bond market has reacted calmly to events in Lisbon but it is no longer a sensitive gauge now that the European Central Bank is mopping up Portuguese debt under quantitative easing.

Portugal is no longer under a Troika regime and does not face an immediate funding crunch, holding cash reserves above €8bn. Yet the IMF says the country remains “highly vulnerable” if there is any shock or the country fails to deliver on reforms, currently deemed to have “stalled”.

Public debt is 127pc of GDP and total debt is 370pc, worse than in Greece. Net external liabilities are more than 220pc of GDP.



The IMF warned that Portugal's “export miracle” remains narrowly based, the headline gains flattered by re-exports with little value added. “A durable rebalancing of the economy has not taken place,” it said.

“The president has created a constitutional crisis,” said Rui Tavares, a radical green MEP. “He is saying that he will never allow the formation of a government containing Leftists and Communists. People are amazed by what has happened.”

Mr Tavares said the president has invoked the spectre of the Communists and the Left Bloc as a “straw man” to prevent the Left taking power at all, knowing full well that the two parties agreed to drop their demands for euro-exit, a withdrawal from Nato and nationalisation of the commanding heights of the economy under a compromise deal to the forge the coalition.


President Cavaco Silva may be correct is calculating that a Socialist government in league with the Communists would precipitate a major clash with the EU austerity mandarins. Mr Costa’s grand plan for Keynesian reflation – led by spending on education and health – is entirely incompatible with the EU’s Fiscal Compact.

The secretary-general of the Portuguese Socialist Party, Antonio Costa, appears on Saturday after the election results are made public Photo: EPA

This foolish treaty law obliges Portugal to cut its debt to 60pc of GDP over the next 20 years in a permanent austerity trap, and to do it just as the rest of southern Europe is trying to do the same thing, and all against a backdrop of powerful deflationary forces worldwide.

The strategy of chipping away at the country’s massive debt burden by permanent belt-tightening is largely self-defeating, since the denominator effect of stagnant nominal GDP aggravates debt dynamics.

It is also pointless. Portugal will require a debt write-off when the next global downturn hits in earnest. There is no chance whatsoever that Germany will agree to EMU fiscal union in time to prevent this.

What Portugal needs to pay off (Source: Deutsche Bank)

The chief consequence of drawing out the agony is deep hysteresis in the labour markets and chronically low levels of investment that blight the future.

Mr Cavaco Silva is effectively using his office to impose a reactionary ideological agenda, in the interests of creditors and the EMU establishment, and dressing it up with remarkable Chutzpah as a defence of democracy.

The Portuguese Socialists and Communists have buried the hatchet on their bitter divisions for the first time since the Carnation Revolution and the overthrow of the Salazar dictatorship in the 1970s, yet they are being denied their parliamentary prerogative to form a majority government.

This is a dangerous demarche. The Portuguese conservatives and their media allies behave as if the Left has no legitimate right to take power, and must be held in check by any means.

These reflexes are familiar – and chilling – to anybody familiar with 20th century Iberian history, or indeed Latin America. That it is being done in the name of the euro is entirely to be expected.

Greece’s Syriza movement, Europe’s first radical-Left government in Europe since the Second World War, was crushed into submission for daring to confront eurozone ideology. Now the Portuguese Left is running into a variant of the same meat-grinder.

Europe’s socialists face a dilemma. They are at last waking up to the unpleasant truth that monetary union is an authoritarian Right-wing enterprise that has slipped its democratic leash, yet if they act on this insight in any way they risk being prevented from taking power.

Brussels really has created a monster.

Sir John Major gets his carefully-crafted revenge on the bastards

Tory former prime minister's speech was a nostalgic trip down memory lane, where he mugged the Eurosceptics

• Simon Hoggart
• The Guardian, Tuesday 22 October 2013 16.46 BST

Sir John Major made a lunchtime speech in parliament in which he got his revenge on the Eurosceptics and other enemies Photograph: Gareth Fuller/PA

John Major, our former prime minister, was in reflective mood at a lunch in parliament. Asked about his famous description of Eurosceptics as "bastards", he remarked ruefully: "What I said was unforgivable." Pause for contrition. "My only excuse – is that it was true." Pause for loud laughter. Behind that mild demeanour, he is a good hater.

The event was steeped in nostalgia. Sir John may have hair that is more silvery than ever, and his sky-blue tie shines like the sun on a tropical sea at daybreak, but he still brings a powerful whiff of the past. Many of us can recall those days of the early 1990s. Right Said Fred topped the charts with Deeply Dippy, still on all our lips. The top TV star was Mr Blobby. The Ford Mondeo hit the showrooms, bringing gladness and stereo tape decks to travelling salesmen. Unemployment nudged 3 million.

Sir John dropped poison pellets into everyone's wine glass. But for a while he spoke only in lapidary epigrams. "The music hall star Dan Leno said 'I earn so much more than the prime minister; on the other hand I do so much less harm'."

"Tories only ever plot against themselves. Labour are much more egalitarian – they plot against everyone."

"The threat of a federal Europe is now deader than Jacob Marley."

"David Cameron's government is not Conservative enough. Of course it isn't; it's a coalition, stupid!"

Sometimes the saws and proverbs crashed into each other: "If we Tories navel-gaze and only pander to our comfort zone, we will never get elected."

And in a riposte to the Tebbit wing of the Tory party (now only represented by another old enemy, Norman Tebbit): "There is no point in telling people to get on their bikes if there is nowhere to live when they get there."

He was worried about the "dignified poor and the semi-poor", who, he implied, were ignored by the government. Iain Duncan Smith, leader of the bastards outside the cabinet during the Major government, was dispatched. "IDS is trying to reform benefits. But unless he is lucky or a genius, which last time I looked was not true, he may get things wrong." Oof.

"If he listens only to bean-counters and cheerleaders only concerned with abuse of the system, he will fail." Ouch!

"Governments should exist to help people, not institutions."

But he had kind words for David or Ed, "or whichever Miliband it is". Ed's proposal for an energy price freeze showed his heart was in the right place, even if "his head has gone walkabout".

He predicted a cold, cold winter. "It is not acceptable for people to have to make a choice between eating and heating." His proposal, a windfall tax, was rejected by No 10 within half an hour of Sir John sitting down.

Such is 24-hour news. Or as he put it: "I was never very good at soundbites – if I had been, I might have felt the hand of history on my shoulder." And having laid waste to all about him, he left with a light smile playing about his glistening tie.

-------

Steve Richards in The Independent

Former Prime Ministers tend to have very little impact on the eras that follow them. John Major is a dramatic exception. When Major spoke in Westminster earlier this week he offered the vividly accessible insights of a genuine Conservative moderniser. In doing so he exposed the narrow limits of the self-proclaimed modernising project instigated by David Cameron and George Osborne. Major’s speech was an event of considerable significance, presenting a subtle and formidable challenge to the current leadership. Margaret Thatcher never achieved such a feat when she sought – far more actively – to undermine Major after she had suddenly become a former Prime Minister.

The former Prime Minister’s call for a one-off tax on the energy companies was eye-catching, but his broader argument was far more powerful. Without qualification, Major insisted that governments had a duty to intervene in failing markets. He made this statement as explicitly as Ed Miliband has done since the latter became Labour’s leader. The former Prime Minister disagrees with Miliband’s solution – a temporary price freeze – but he is fully behind the proposition that a government has a duty to act. He stressed that he was making the case as a committed Conservative.

Yet the proposition offends the ideological souls of those who currently lead the Conservative party. Today’s Tory leadership, the political children of Margaret Thatcher, is purer than the Lady herself in its disdain for state intervention. In developing his case, Major pointed the way towards a modern Tory party rather than one that looks to the 1980s for guidance. Yes, Tories should intervene in failing markets, but not in the way Labour suggests. He proposes a one-off tax on energy companies. At least he has a policy. In contrast, the generation of self-proclaimed Tory modernisers is paralysed, caught between its attachment to unfettered free markets and the practical reality that powerless consumers are being taken for a ride by a market that does not work.

Major went much further, outlining other areas in which the Conservatives could widen their appeal. They included the case for a subtler approach to welfare reform. He went as far as to suggest that some of those protesting at the injustice of current measures might have a point. He was powerful too on the impoverished squalor of some people’s lives, and on their sense of helplessness – suggesting that housing should be a central concern for a genuinely compassionate Conservative party. The language was vivid, most potently when Major outlined the choice faced by some in deciding whether to eat or turn the heating on. Every word was placed in the wider context of the need for the Conservatives to win back support in the north of England and Scotland.

Of course Major had an agenda beyond immediate politics. Former prime ministers are doomed to defend their record and snipe at those who made their lives hellish when they were in power. Parts of his speech inserted blades into old enemies. His record was not as good as he suggested, not least in relation to the abysmal state of public services by the time he left in 1997. But the period between 1990, when Major first became Prime Minister, and the election in 1992 is one that Tories should re-visit and learn from. Instead it has been virtually airbrushed out of their history.

In a very brief period of time Major and his party chairman Chris Patten speedily changed perceptions of their party after the fall of Margaret Thatcher. Major praised the BBC, spoke of the need to be at the heart of Europe while opting out of the single currency, scrapped the Poll Tax, placed a fresh focus on the quality of public services through the too easily derided Citizens’ Charter, and sought to help those on benefits or low incomes. As Neil Kinnock reflected later, voters thought there had been a change of government when Major replaced Thatcher, making it more difficult for Labour to claim that it was time for a new direction.

The key figures in the Conservative party were Major, Patten, Michael Heseltine, Ken Clarke and Douglas Hurd. Now it is Cameron, George Osborne, Michael Gove, William Hague, Iain Duncan Smith, Oliver Letwin and several others with similar views. They include Eurosceptics, plus those committed to a radical shrinking of the state and to transforming established institutions. All share a passion for the purity of markets in the public and private sectors. Yet in the Alice in Wonderland way in which politics is reported, the current leadership is portrayed as “modernisers” facing down “the Tory right”.

The degree to which the debate has moved rightwards at the top of the Conservative party and in the media can be seen from the bewildered, shocked reaction to Nick Clegg’s modest suggestion that teachers in free schools should be qualified to teach. The ideologues are so unused to being challenged they could not believe such comments were being made. Instead of addressing Clegg’s argument, they sought other reasons for such outrageous suggestions. Clegg was wooing Labour. Clegg was scared that his party would move against him. Clegg was seeking to woo disaffected voters. The actual proposition strayed well beyond their ideological boundaries.

This is why Major’s intervention has such an impact. He exposed the distorting way in which politics is currently reported. It is perfectly legitimate for the current Conservative leadership to seek to re-heat Thatcherism if it wishes to do so, but it cannot claim to be making a significant leap from the party’s recent past.

Nonetheless Cameron’s early attempts to embark on a genuinely modernising project are another reason why he and senior ministers should take note of what Major says. For leaders to retain authority and authenticity there has to be a degree of coherence and consistency of message. In his early years as leader, Cameron transmitted messages which had some similarities with Major’s speech, at least in terms of symbolism and tone. Cameron visited council estates, urged people to vote blue and to go green, spoke at trade union conferences rather than to the CBI, played down the significance of Europe as an issue, and was careful about how he framed his comments on immigration. If he enters the next election “banging on” about Europe, armed with populist policies on immigration while bashing “scroungers” on council estates and moaning about green levies, there will be such a disconnect with his earlier public self that voters will wonder about how substantial and credible he is.

Cameron faces a very tough situation, with Ukip breathing down his neck and a media urging him rightwards. But the evidence is overwhelming. The one-nation Major was the last Tory leader to win an overall majority. When Cameron  affected a similar set of beliefs to Major’s, he was also well ahead in the polls. More recently the 80-year old Michael Heseltine pointed the way ahead with his impressive report on an active industrial strategy. Now Major, retired from politics, charts a credible route towards electoral recovery. How odd that the current generation of Tory leaders is more trapped by the party’s Thatcherite past than those who lived through it as ministers.

We need a Eurosceptic party of the centre left

I left Ukip, the party I founded, when it became a magnet for bigots. But what happened to left wing opposition to the EU?

• 
• • Alan Sked
  • guardian.co.uk, Tuesday 28 May 2013 09.00 BST

'There was a time when Labour was adamantly anti-EU. Gaitskell, Foot, Kinnock and even Blair opposed it' Photograph: Francois Lenoir/Reuters

The idea of reshaping the world, changing it for the better, is probably a natural, if not a divine one. However, the lure of progress can be deceptive. "Great enterprises" of the kind Charles de Gaulle in his memoirs famously associated with the role of France in the world, come regularly unstuck. The latest grand projet of the French rational mind, the EU, is now coming apart at the seams. Rather like the 18th-century "enlightened despotisms" inspired by the French philosophes, our contemporary bureaucratic autocracy now faces revolution. The peasants of Greece, Spain, Italy and elsewhere are revolting. Even the French peasants are displaying a worrying restlessness.

Progressivism everywhere has a long history of dreadful mistakes. Just look at Marxism. Today, both China and North Korea testify to its illusions as monuments to failed progressivism. So, however, is the EU. Built on progressive myths ("It has brought peace to Europe"; "it extends democracy"; "it creates prosperity"), it is now in relative economic, demographic and technological decline, lacks accountable or transparent structures of government, and is damning future generations to unemployment and despair. It is run by a self-serving, bureaucratic and political elite, is notoriously corrupt, and is admired only by politicians from the Middle East or Africa who bewail their own lack of unity, or by Americans who see its member nations as the colonies of 1776. Its policies are undemocratic – it has forced unelected, technocratic governments on both Italy and Greece – and do not work. Its single currency has brought penury to half a continent. Its present existential crisis has brought political chaos to Italy, Greece and Spain and threatens the same in France.

 Dr Alan Sked launches the UK Independence party in 1993. Photograph: STR News/Reuters

Here in Britain David Cameron's "progressive conservatism" is being challenged by Ukip, the party I founded 20 years ago and left in 1997 as it became a magnet for people whose vision of the future is the 1950s – a supposed golden age before the EEC, black people, Muslims and other immigrants, gays, lesbians and other products of the sexual revolution of the 1960s, desecrated this island Eden.

On the left, however, there has been no response to events in Europe. The Labour party seems intellectually paralysed in face of both the economic and political crises in Europe. The Lib Dems remain knee-jerk "good Europeans" with absolutely nothing to say. They are like the officer on the Titanic who, when warned of the iceberg, ordered "full steam ahead". The great Liberal party of Gladstone, Asquith and Lloyd George opposed European empires. Gladstone famously asked where on the map the Habsburgs had ever done any good? But today's Lib Dem pygmies give unquestioned support to our new Habsburg empire ruled from Brussels.

There was a time when Labour was adamantly anti-EU. Gaitskell, Foot, Kinnock and even Blair opposed it. But then Jacques Delors told the TUC that whereas they were impotent to defeat Thatcherism, he could and would overthrow it from Brussels. Almost overnight, Labour's patriotism disappeared and the party stood on its head. Brussels had managed to divide and rule Britain. The Welsh windbag, Kinnock, even became an EU commissioner and made a tax-free fortune doing nothing for the public interest but sacking whistleblowers in the corrupt EU bureaucracy. His must be the most pathetic career in postwar British politics. Blair and Mandelson, of course followed suit (although Blair failed to get an EU presidency) and – amazingly – this whole discredited clique still advocates that Britain join the euro.

An alternative, moderate party of the centre left should seek a new path for Britain. To avoid the trap of deluded, world-historical progressivism, it should remain firmly fixed on these objectives:

1. Direct, transparent, accountable democracy

2. Liberal values that protect the individual from discrimination on grounds of gender, race, sexual orientation, religion or political belief and uphold freedom of speech, freedom of the press and media, freedom of assembly, the right to a fair trial, and freedom from arbitrary arrest

3. A social policy which seeks to provide decent pensions, care, social housing, welfare benefits and full employment to all in need after a sound education that caters to everyone's talents (including those with disabilities).

4. A foreign policy that protects British national interests without thereby threatening those of others. This would involve withdrawing from the EU and negotiating free trade with our European friends and neighbours. Britain would not need to withdraw from Nato or the UN and would continue to seek peace in the Middle East and elsewhere. It would also continue to support the principle of giving overseas aid.

5. Domestically, the most radical changes, apart from ending an austerity aimed mainly at the poor, might be constitutional. It might be wise to federalise the UK and make the House of Lords an elected federal chamber. Perhaps an independent Britain could negotiate a confederation of the British Isles with the Irish Republic to help solve Ireland's problems.

Certainly, an independent Britain should be outward looking. As for the EU, there is no reason to assume automatically that it would survive a British exit. Other member states might prefer to choose democracy and independence. All Europe would be in a democratic flux. But let that democratic revolution start here.

The meat scandal shows all that is rotten about our free marketeers

This is a crisis not only for environment secretary, Owen Paterson, but for the whole Conservative party

• 
• • Will Hutton
  • The Observer, Sunday 17 February 2013

A laboratory worker tests beef lasagne. Photograph: Pascal Lauener/Reuters

The collapse of a belief system paralyses and terrifies in equal measure. Certainties are exploded. A reliable compass for action suddenly becomes inoperable. Everything you once thought solid vaporises.

Owen Paterson, secretary of state for the environment, food and rural affairs, is living through such a nightmare and is utterly lost. All his once confident beliefs are being shredded. As the horsemeat saga unfolds, it becomes more obvious by the day that those Thatcherite verities – that the market is unalloyed magic, that business must always be unshackled from "wealth-destroying" regulation, that the state must be shrunk, that the EU is a needless collectivist project from which Britain must urgently declare independence – are wrong.

Indeed, to save his career and his party's sinking reputation, he has to reverse his position on every one. The only question is whether he is sufficiently adroit to make the change.

Paterson is one of the Tories who joyfully shared the scorched earth months of the summer of 2010 when war was declared on quangos and the bloated, as they saw it, "Brownian" state. The Food Standards Agency was a natural candidate for dismemberment. Of course an integrated agency inspecting, advising and enforcing food safety and hygiene should be broken up. As an effective regulator, it was disliked by "wealth-generating" supermarkets and food companies. Its 1,700 inspectors were agents of the state terrifying honest-to-God entrepreneurs with unannounced spot checks and enforced "gold-plated" food labelling. Regulation should be "light touch".

No Tory would say that now, not even Paterson, one of the less sharp knives in the political drawer. He runs the ministry that took over the FSA's inspecting function at the same time as it was reeling from massive budget cuts, which he also joyfully cheered on. He finds himself with no answer to the charge that his hollowed-out department, a gutted FSA with 800 fewer inspectors and eviscerated local government were and are incapable of ensuring public health.

Paterson, beneath the ideological bluster, is as innocent about business as Bambi. Even the most callow observer could predict that with the wholesale slaughter of horses across the continent as recession hit the racing industry – horsemeat production jumped by 52% in 2012 – some was bound to enter the pan-European network of abattoirs, just-in-time buying, industrial refrigeration units, food brokers and giant supermarkets that deliver British and European consumers their food.

Meanwhile, the budgets of some local government food sampling units have been slashed by 70%. A Tesco beef burger containing 29% horsemeat was an accident waiting to happen. Of course it was the Food Safety Authority of Ireland rather than the FSA that blew the whistle. Businesses owned by footloose "tourist" shareholders whose sole purpose is profit maximisation in transactional markets have an embedded propensity to degrade. Consumers and suppliers alike become no more than anonymised numbers to be exploited to hit the next quarter's profit target.

The large supermarkets have said little or nothing, which Number 10 deplores. There is nothing they can say. They have lobbied for the world in which we now live. An alternative world – in which consumers were genuinely served and where it is understood that suppliers need adequate profit margins in the supermarkets' interests as much as the suppliers' own – has to be created by stakeholders, including by government. There is a codependency between state, society, business and business supply chains, anathema to Paterson with his undeviating obeisance to the virtues of a "private sector" free from such "burdens".

What the Paterson worldview has never understood is that effective regulation is a source of competitive advantage. If Britain had a tough Food Standards Agency, it would become a gold standard for food quality, labelling and hygiene. British supermarkets and food companies could become known for their quality at home and abroad, rather as "over-regulated" German car companies are, rather than first suspects when something dodgy is going on. Capitalism does not organise itself to deliver best outcomes, whatever rightwing American thinktanks might claim. There has to be careful thought, law and regulation about the obligations that accompany incorporation and ownership, how supply chains are organised and how companies are managed and financed. Otherwise disaster awaits.

And there are other bitter implications for Paterson. Geography means that Britain is inevitably part of the European food supply chain. Our efforts at better regulation – and of catching wrongdoers – have to be matched by others for everyone's sake, exactly what the EU was set up to do and is now doing. The hypocrisy of passionate Eurosceptic Owen Paterson flying to the Hague urgently to meet Europol, saying afterwards: "It's increasingly clear the case reaches right across Europe. Europol is the right organisation to co-ordinate efforts to uncover all wrongdoing and bring criminals to justice" and urging all European governments to share information with it, should not be lost on anyone. Europol holds powers from which Eurosceptic Tories, led by Paterson, urgently want an opt-out, but not in the middle of a first-order food safety and hygiene crisis.

That everything Paterson believes in is so wrong is not just a crisis for him – it is a crisis for his party and for Britain's centre-right media whose prejudices makes thinking straight in the Tory party impossible. A great country cannot be governed by politicians whose instincts and policies are at such odds with reality, so betraying the people, economy and society they govern. The horsemeat crisis is not confined to our food chain. It reveals the existential crisis in contemporary Conservatism. British democracy needs a functioning, fit for purpose party of the centre-right.

Instead, it has Owen Paterson and today's Tories.

Is this the start of a new coalition against the corporate scorpions?

A broader view of what is wrong with business in this country is emerging – triggered by business itself

• 
• • Will Hutton
  • The Observer, Saturday 17 November 2012 21.04 GMT

Mothercare chairman Alan Parker has added his voice to those businesses speaking out against those who avoid paying tax in the UK. Photograph: Graham Turner for the Guardian

It's a well-known fable. The scorpion wants to cross a river and pleads with the reluctant frog to carry him on his back; it would be pointless to sting the frog because that way both would drown. Halfway across the river the scorpion stings, dooming both. Why? asks the dying frog. Because it is in my nature, replies the scorpion.

Too many owners and managers of British companies, along with the Big Four accountancy firms that provide them advice on how to structure their affairs to evade and avoid taxation, are like the scorpion. They just can't help themselves from behaving badly, even if it brings everyone down. It is in their nature.

As it becomes clear that we are living through the most protracted period of economic depression for more than 100 years, the result of not just policy mistakes but the way Britain has done capitalism, business itself is beginning to ask the first tough questions about what is wrong. There always was a distinction between good and bad capitalism, but so far the critics of bad capitalism have not strayed far beyond the leader of the Labourparty, some trade unionists, business secretary Vince Cable, the odd business maverick and one or two liberal commentators. But last week some serious companies weighed in, plainly worried about the corporate scorpions riding on their backs.

Andy Street, managing director of John Lewis, broke cover to say that multinational companies trading in the UK but deploying overseas tax havens necessarily must "out-invest and ultimately out-trade" businesses paying full taxes in the UK, who now risk being driven out of business. "Ultimately there will not be a tax base in the UK."

Mothercare chairman Alan Parker joined in. "Unfair pricing from international UK tax dodgers puts our long-term ability to survive and grow under threat," he said. Sebastian James, chief executive of Dixons, tweeted that he agreed with Andy Street: "Retailers making profits in the UK should pay tax in the UK."

Unlike in manufacturing, retailing still has a critical mass of British-owned and British-based companies that have collective heft. With Comet recently joining a lengthening list of retailers going into receivership, Street, Parker and James are breaking ranks from the default position of British business that whatever leaves the mouth of a Tory politician must be good and the words of a Labour politician must be bad.

The ritual ideological incantations of, say, the Free Enterprise Group in the Conservative party – that all British business needs is yet more labour market deregulation, further dismantling of welfarism and striking a detached bargain with the EU – have hitherto gone unchallenged by business. Now a broader view of what is wrong is emerging, triggered by business itself.

What prompted Street's intervention was the disastrous performance by Amazon's public policy director, Andrew Cecil, before the House of Commons public accounts committee, aided and abetted by two flanking cameos from Starbucks and Google. The three scorpions were being quizzed about their tax dodging, but the comptroller of the National Audit Office, Amyas Morse, felt that the lack of evidence brought to the committee by Amazon was " insulting". Meanwhile, Starbucks' claim that it made no money in the UK was palpably disingenuous and persuaded none of the MPs. And Google admitted in effect that it does what it does because it can. It is just in a scorpion's nature.

Senior Treasury officials have worried for many years about the precariousness of the UK's corporate tax base and the ease with which companies could use a combination of transfer pricing and offshore tax havens to avoid UK tax. Mortal threats come from the rise of private equity – for example, private equity-owned Boots is now domiciled in Zug in Switzerland – and the emerging dominance of foreign multinationals in the UK because of our careless indifference both to who owns our companies and how they organise their operations. They need addressing.

For a long time, the arguments about the British economy have been defined by exchanges between opposing poles of the Free Enterprise Group and advocates of a bastard Keynesianism. Director generals of the CBI may have privately conceded that the argument needs to be broader and more sophisticated; that an overvalued exchange rate, the shortcomings of the financial system, the bias against innovation or the abuse of tax havens were all chronic problems. But persuading the powerful CEOs within the CBI to back them has been impossible.

Importers want a high pound. Banks allowed no criticism. Nobody wants to be on the side of high taxation by inveighing against tax havens or to give Labour any succour if it can be helped. A candidate for CBI director general who withdrew from the final shortlist to succeed the outgoing Richard Lambert in late 2010 told me that the job allowed little scope beyond urging more and better training, on which everybody could agree. On many big issues, the CBI was mute or followed the Tory line. Indeed, Lambert, ready to attack wildly overpaid CEOs as risking being aliens in their own country, was felt to have overstepped the line.

At last there is a breaking of ranks. Desperate economic circumstances and a chancellor more anxious to score political points than develop an imaginative economic policy are forcing a transformation in established positions. John Cridland, the current director general, has used the space to develop a more sophisticated policy agenda than his predecessors were allowed. And now British-based retailers are speaking out.

But any effective move against the scorpions requires the state to act and the more it can act with others the more effective it will be. Tax havens were a barely mentioned part of Britain's most effective postwar industrial policy: the swath of concessions used to support the growth of the City. We sponsor more of them than any other advanced country. That has to be reversed. There are many possibilities, ranging from taxing companies on their turnover in the UK to outlawing the use of tax havens, action that is best delivered if the EU can move together, but this is always opposed by the British.

Our fifth-columnist Eurosceptics, allies of the scorpions, are happier that the UK corporate tax base is destroyed and the British economy is owned by foreigners indifferent to their public obligations than to act together with Europeans to further joint British and European interests. Mr Miliband and the Labour party say they are for a better capitalism, against tax havens and are pro-Europeans. Now there is an opportunity to say it and to build a new coalition. Let's hear them.

What if Britain left the EU?

Eurosceptics want a vote on the ultimate question – and the PM does not seem entirely opposed. Ben Chu in The Independent examines the consequences of saying bye bye to Brussels

Exports

The European Union is easily Britain's biggest single export market, with 53 per cent of our goods purchased by our fellow European nations in 2011. This sector of our economy, directly and indirectly, supports three million jobs, according to Sir Iain Begg, a professorial research fellow at the European Institute of the London School of Economics. Without export growth last year, we would have fallen back into recession much earlier. If we were to leave the EU, we would almost certainly still be allowed to sell goods into the single market. Norway, Iceland and Switzerland already do so through a free-trade agreement. The difference would be that the UK would not be able to set the rules that govern the European single market. It would, of course, have to implement those rules to keep selling into those markets though. The argument sometimes deployed by those who want out of the EU is that leaving would, somehow, encourage British manufacturers to concentrate on exporting to the likes of China, Brazil and India.

Imports

Britain also imports a great deal from other nations in the EU – more than it exports, in fact. In 2011, we exported £159bn of goods to the EU and imported goods worth £202bn – an annual trade deficit of £42bn. Some argue that this deficit gives us leverage to demand more opt-outs and budget rebates from our European partners. The argument is: "They need us more than we need them." The problem is that we import a lot of European goods, not because we are doing the Europeans a favour, but because our people want to buy things that cannot be produced at home – think of all those German cars and French luxury goods. If Britain were to leave the EU, the Government might decide to impose large tariffs on European imports, but this probably wouldn't prove very popular. The likelihood is we would still run a trade deficit with the EU, but, as with imports, we would have no say over the rules governing the single market.

Growth

Would foreign capital still want to invest in the UK if it were not part of the EU bloc? Some economists say overseas investors would be put off. The National Institute of Economic and Social Research, for example, estimates that foreign direct investment would fall. And, mainly for this reason, it argues that our GDP would permanently be 2.25 per cent lower if we left the EU. However, Capital Economics argued last month that, because of the eurozone crisis, levels of foreign investment in the UK could actually go up if we left the EU, because we would seem like a safe haven.

Immigration

If Britain left the EU, the Government would not be required to permit the free movement of all citizens of the 27 nations of the union into Britain, nor their right to work here. About EU 165,000 citizens migrated to the UK in the year to September 2011, after 182,000 arrived in the 12 months to September 2010. Proponents of withdrawal argue that stopping such flows would improve quality of life because there would be less strain on public services and infrastructure. Opponents argue that immigrants are an economic benefit for Britain, filling holes in our labour market and boosting overall productivity. But the free movement of people is two-way. An estimated 748,010 Britons live or work in the European Union. Many have holiday homes in France and Spain. If we decided to restrict inflows of EU citizens to Britain, the European Union would be likely to respond in kind.

Budget

The UK makes an annual gross contribution to the EU budget of £15bn and it gets a rebate of €6bn in various subsidies – mainly agricultural. This makes an annual net contribution of €9bn. Ending those payments by leaving the EU would help to reduce the UK deficit, but these are not transformative sums. Our EU contributions are equivalent to 0.6 cent of GDP. We presently have a deficit of 8.3 per cent of GDP. Plus, one has to consider the benefits of those contributions. Structural funds – as payments into the common EU budget are known – are used to develop post-Soviet bloc countries in Europe, building up their infrastructure and making them bigger potential markets for British goods and services.

Business

A study by the British Chambers of Commerce has estimated that the annual cost to the UK of EU regulation is £7.4bn, but costs must be set against benefits. The EU has forced the mobile phone networks to stop ripping of customers when they use their handsets abroad. It has tackled Microsoft and airlines about over-charging. Britain outside the EU would have to rely on British competition authorities alone to protect customers from the malfeasance of corporations.

Banking

This is a complex relationship. The UK actually wants to impose higher capital requirements on its domestic banks than the rest of Europe does. Yet Britain is also fighting a Financial Taxation Tax, something that much of the rest of Europe

supports. British bankers, for their part, are generally in favour of staying in the EU. They fear that their access to lucrative European capital markets could be impeded if Britain left the bloc. And both banks and businesses calculate that Britain's EU membership is in their interests because the EU can help to open foreign markets such as China up to them more effectively than the UK acting alone.

Agriculture

The EU's Common Agricultural Policy is almost universally considered a wasteful mechanism that encourages over-production and undermines African farmers. Between 2007 and 2013, the UK will contribute £33.7bn to the Common Agricultural Policy (CAP) and get back £26.6bn, according to the Open Europe think-tank. That works out as a net contribution of £7.1bn. If the UK left the EU, our Government could scrap these subsidies at home and save the money. But it already has discretion at home about what to do with the payments – enabling ministers to channel the money to conservation, rather than production. And, within the EU, it can push for badly-needed reform of the CAP. Outside the EU, it would have no influence.

Politics

Europe is more social democratic than the UK. Even countries with centre-right governments tend to tax more, spend more on welfare and are less laissez-faire when it comes to markets. Those on the left in Britain tend to be in favour of the UK's continued membership because they feel it will help to move the country in this direction. Those on the right tend to be opposed for similar reasons; they feel Europe is helping to undermine Britain's social and economic freedoms. Yet there are global politics to consider, too. The right wants to rely on Britain's "special relationship" with the US, but Washington prefers Britain to work in closer partnership with the EU. Rising Asian giants such as India and China also seem to regard Britain's membership of the EU as a good reason to build economic and diplomatic ties with us.