The six Brexit traps that will defeat Theresa May

Yanis Varoufakis


“It’s yours against mine.” That’s how Wolfgang Schäuble, Germany’s finance minister, put it to me during our first encounter in early 2015 – referring to our respective democratic mandates.

A little more than two years later, Theresa May is trying to arm herself with a clear democratic mandate ostensibly to bolster her negotiating position with European powerbrokers – including Schäuble – and to deliver the optimal Brexit deal.

Already, the Brussels-based commentariat are drawing parallels: “Brits fallen for Greek fallacy that domestic vote gives you stronger position in Brussels. Other countries have voters too,” tweeted Duncan Robinson, Brussels correspondent of the Financial Times. “Yep,” tweeted back Miguel Roig, the Brussels correspondent of Spanish financial daily Expansión. “Varoufakis’ big miscalculation was to think that he was the only one in the Eurogroup with a democratic mandate.”

In truth, Brussels is a democracy-free zone. From the EU’s inception in 1950, Brussels became the seat of a bureaucracy administering a heavy industry cartel, vested with unprecedented law-making capacities. Even though the EU has evolved a great deal since, and acquired many of the trappings of a confederacy, it remains in the nature of the beast to treat the will of electorates as a nuisance that must be, somehow, negated. The whole point of the EU’s inter-governmental organisation was to ensure that only by a rare historical accident would democratic mandates converge and, when they did, never restrain the exercise of power in Brussels.
In June 2016, Britain voted, for better or for worse, for Brexit. May suddenly metamorphosed from a soft remainer to a hard Brexiteer. In so doing she is about to fall prey to an EU that will frustrate and defeat her, pushing her into either a humiliating climb-down or a universally disadvantageous outcome. When the Brussels-based group-thinking commentariat accuse Britain’s prime minister, without a shred of evidence, of overestimating the importance of a strong mandate, we need to take notice, for it reveals the determination of the EU establishment to get its way, as it did when I arrived on its doorstep, equipped with my mandate.

When I first went to Brussels and Berlin, as Greece’s freshly elected finance minister, I brought with me a deep appreciation of the clash of mandates. I said as much in a joint press conference with Schäuble in 2015, pledging that my proposals for an agreement between Greece and the EU would be “aimed not at the interest of the average Greek but at the interest of the average European”. A few days later, in my maiden speech at the Eurogroup of eurozone finance ministers, I argued: “We must respect established treaties and processes without crushing the fragile flower of democracy with the sledgehammer that takes the form of statements such as ‘Elections do not change anything’.” May will, I presume, go to Brussels with a similar appreciation.

When Schäuble welcomed me with his “it is my mandate against yours” doctrine, he was honouring a long EU tradition of neglecting democratic mandates in the name of respecting them. Like all dangerous hypotheses, it is founded on an obvious truth: the voters of one country cannot give their representative a mandate to impose upon other governments conditions that the latter have no mandate, from their own electorate, to accept. But, while this is a truism, its incessant repetition by Brussels functionaries and political powerbrokers, such as Angela Merkel and Schäuble himself, is intended to convert it surreptitiously into a very different notion: no voters in any country can empower their government to oppose Brussels.


There is a long EU tradition of neglecting democratic mandates in the name of respecting them

For all their concerns with rules, treaties, processes, competitiveness, freedom of movement, terrorism etc, only one prospect truly terrifies the EU’s deep establishment: democracy. They speak in its name to exorcise it, and suppress it by six innovative tactics, as May is about to discover.

Time to listen in, Theresa. Photograph: Russell Cheyne/Reuters

The EU runaround 

Henry Kissinger famously quipped that when he wanted to consult Europe, he did not know whom to call. In my case it was worse. Any attempt to enter into a meaningful discussion with Schäuble was blocked by his insistence that I “go to Brussels” instead. Once in Brussels, I soon discovered that the commission was so divided as to make discussions futile. In private talks, Commissioner Moscovici would agree readily and with considerable enthusiasm with my proposals. But then his deputy in the so-called Eurogroup Working Group, Declan Costello, would reject all these ideas out of hand.

The uninitiated may be excused for thinking that this EU runaround is the result of incompetence. While there is an element of truth in this, it would be the wrong diagnosis. The runaround is a systemic means of control over uppity governments. A prime minister, or a finance minister, who wants to table proposals that the deep establishment of the EU dislike is simply denied the name of the person to speak to or the definitive telephone number to call. As for its apparatchiks, the EU runaround is essential to their personal status and power.

Picking opponents

From my first Eurogroup, its president, Jeroen Dijsselbloem, the Dutch finance minister, began an intensive campaign to bypass me altogether. He would phone Alexis Tsipras, my prime minister, directly – even visiting him in his hotel room in Brussels. By hinting at a softer stance if Tsipras agreed to spare him from having to deal with me, Dijsselbloem succeeded in weakening my position in the Eurogroup – to the detriment, primarily, of Tsipras.

The Swedish national anthem routine

On the assumption that good ideas encourage fruitful dialogue and can be the solvents of impasse, my team and I worked hard to put forward proposals based on serious econometric work and sound economic analysis. Once these had been tested on some of the highest authorities in their fields, from Wall Street and the City to top-notch academics, I would take them to Greece’s creditors in Brussels, Berlin and Frankfurt. Then I would sit back and observe a symphony of blank stares. It was as if I had not spoken, as if there was no document in front of them. It would be evident from their body language that they denied the very existence of the pieces of paper I had placed before them. Their responses, when they came, would be perfectly independent of anything I had said. I might as well have been singing the Swedish national anthem. It would have made no difference.

The Penelope ruse

Delaying tactics are always used by the side that considers the ticking clock its ally. In Homer, Odysseus’ faithful wife, Penelope, fends off aggressive suitors in her husband’s absence by telling them that she will announce whom among them she will marry only after she has completed weaving a burial shroud for Laertes, Odysseus’ father. During the day she would weave incessantly but at night she would undo her work by pulling on a loose string.

In my negotiations in Brussels, the EU’s Penelope ruse consisted, primarily, of endless requests for data, for fact-finding missions to Athens, for information about every bank account held by every public organisation or company. And when they got the data, like the good Penelope, they would spend all night undoing the spreadsheets that they had put together during the day.

Truth reversal

While practising the Swedish national anthem and Penelope ruse tactics, the Brussels establishment utilised tweets, leaks and a campaign of disinformation involving key nodes in the Brussels media network to spread the word that I was the one wasting time, arriving at meetings empty-handed; either with no proposals at all or with proposals that lacked quantification, consisting only of empty ideological rhetoric.

Sequencing

The prerequisite for Greece’s recovery was, and remains, meaningful debt relief. No debt relief meant no future for us. My mandate was to negotiate, therefore, a sensible debt restructure. If the EU was prepared to do this, so as to get as much of their money back as possible, I was also prepared for major compromises. But this would require a comprehensive deal. But, no, Brussels and Berlin insisted that, first, I commit to the compromises they wanted and then, much later, we could begin negotiations on debt relief. The point-blank refusal to negotiate on both at once is, I am sure, a colossal frustration awaiting May when she seeks to compromise on the terms of the divorce in exchange for longer-term free trade arrangements.

So what can Theresa May do?

The only way May could secure a good deal for the UK would be by diffusing the EU’s spoiling tactics, while still respecting the Burkean Brexiteers’ strongest argument, the imperative of restoring sovereignty to the House of Commons. And the only way of doing this would be to avoid all negotiations by requesting from Brussels a Norway-style, off-the-shelf arrangement for a period of, say, seven years.

The benefits from such a request would be twofold: first, Eurocrats and Europhiles would have no basis for denying Britain such an arrangement. (Moreover, Schäuble, Merkel and sundry would be relieved that the ball is thrown into their successors’ court seven years down the track.) Second, it would make the House of Commons sovereign again by empowering it to debate and decide upon in the fullness of time, and without the stress of a ticking clock, Britain’s long-tem relationship with Europe.

The fact that May has opted for a Brexit negotiation that will immediately activate the EU’s worst instincts and tactics, for petty party-political reasons that ultimately have everything to do with her own power and nothing to do with Britain’s optimal agreement with the EU, means only one thing: she does not deserve the mandate that Brussels is keen to neutralise.

You can’t just cut and run from Europe, Theresa May – it’s illegal

Helena Kennedy in The Guardian


Leaders of Britain’s 27 EU partner countries have now thrown down the gauntlet: no discussions on a trade deal will take place until there’s progress on the UK’s divorce bill, the Ireland-UK border and the rights of EU citizens.

We are told there is a document on the table relating to UK citizens living in Europe and those of citizens from other EU countries who live in Britain, but the UK is not prepared to sign. No reason has been given as to why.

The problem for our prime minister is that at every turn her head hits the hard wall of law and the role of the European court of justice (ECJ). Theresa May has cornered herself by insisting that the UK withdraw totally from the court and its decisions. Nobody explained to her that if you have cross-border rights and contracts you have to have cross-border law and regulations. And if you have cross-border law you have to have supranational courts to deal with disputes.
Call it what you like, but in the end you need rules as to conduct, and arbiters for disagreement. Even the World Trade Organisation has a disputes court.

But May has had a bellyful of European courts after her run-in with the totally separate European court of human rights when, as home secretary, she was trying to deport the fundamentalist preacher Abu Qatada to Jordan. Jordan’s use of torture on political opponents proved a handicap to his expulsion. However, although all this related to a quite separate legal regime, the words Europe and court in the same sentence still invite obstinate opposition from May.

This is now a problem in the Brexit negotiations, because all the preliminary matters raised by EU leaders involve legal commitments from which we cannot walk away. Calls to cut and run without paying a penny in the Brexit settlement are unlawful and unethical. It is not surprising that the other 27 want to see the colour of our money up front.

There is talk of a special deal to be negotiated for Northern Ireland, whatever the rest of the UK does, by possibly joining the European Economic Area (EEA) with some additional border arrangements between Northern Ireland and the rest of the UK. EEA membership is a semidetached position that Norway, Iceland and Liechtenstein have signed up to, whereby they have the benefits of the EU single market but not the full obligations. However, it also has legal implications. You cannot trade without the protection of law because things can go wrong. EEA members have to sign up to the European Free Trade Association court, a special supranational judicial body which deals with EEA disputes; it sits in Luxembourg, and is run largely according to EU law and ECJ judgments. Of course, such law is made without the input of EEA states, which makes it a solution that would be hard for many Brexiteers to swallow.

In preparation for the negotiations, EU representatives have been appearing before Lords and Commons committees and meeting Brexit ministers. They are invariably bemused. They say they keep being told the UK wants to continue to be part of various arrangements, including the European arrest warrant and Europol – yet nobody in London seems to understand that such collaboration requires the ECJ to have ultimate jurisdiction and for EU law to apply.

It seems obvious to them that cross-border collaboration requires supranational legal arrangements covering everything from financial services, trade, farming, fishing, security, environment, employment and maternity rights to industry standards and consumer rights. Intellectual property law, for instance, covers a huge array of research, entrepreneurship, invention and creativity; the European patent court has only recently been built here in London and was due to be opened. What happens to it now, they ask.

For years the British public have been subjected to a barrage of tabloid mendacity suggesting that we are victims of an onslaught of foreign-invented law and interference by foreign courts. In fact, a vast amount of incredibly advantageous law has been created in the EU in the past 40 years. And here’s the rub: we have been major contributors to that law. The British are good at law. We have had a strong hand in the creation of EU law.

The committee I chair in the House of Lords has heard overwhelming evidence about the benefits to business of being able, for instance, to secure a judgment in a British court against a recalcitrant debtor in Poland and know it will be enforced anywhere in the EU.

A mother can secure a maintenance order against her children’s renegade father who has sloped off to continental Europe, and have the order enforced. A holiday accident in Spain can lead to swifter resolution and compensation by virtue of EU law. A British father can get access to his kids by order of a court in Munich. Cross-border relationships require cross-border law, and agreements on mutual enforcement are fundamental.

No wonder the European commission president, Jean-Claude Juncker, is reported to have said Theresa May is on another galaxy in imagining she can retain the best bits of Europe without its institutions or legal underpinnings. Her fantasy that the “great repeal bill” will fix the problem by bringing EU law home, or that a deal can be done without the need for any European court, is unravelling. These legal arrangements require reciprocity. The courts of EU countries do things for us because we do likewise for them. A piece of unilateral legislation on our part does not secure that mutuality which is embodied in many regulations.

Harmonising law across Europe has raised standards – to our advantage. Europe-wide law is integrated into our lives. In the “new order” of trade agreements with China and others, none of these safeguards will exist. My guess is that if May does secure a deal with the EU, we will find ourselves quietly signing up to a newly created court or tribunal, a lesser ECJ.
The law, judges and courts are under attack in many democracies – from Trump’s America to Poland, Hungary and Turkey. It is the currency of our dangerous times. Be warned: good law is a protection we have to preserve. The price of its loss will be very high indeed.

Calling true conservatives: stop the fake ones from destroying Britain

George Monbiot in The Guardian

Conservatism takes three main forms. Inclusive conservatism seeks to protect objects of value for the benefit of everyone. These might include great urban vistas, or national parks, or wildlife, or works of art, or great institutions, such as the NHS and the BBC. This is the conservatism governments invoke when a nation goes to war.

Exclusive conservatism, by contrast, resists change that would assist the great majority, on behalf of a privileged elite. This is the form – fighting the universal franchise, workers’ rights, progressive taxation and the welfare state – that has prevailed in the United Kingdom for most of its history.

Then there is a third form, which calls itself conservatism but is nothing of the kind: tearing down everything to clear a path for capital. This is the form that prevails today in Britain, in the United States and across much of the world. Its mission is the destruction of the norms, the values, the institutions, the public properties and the public protections that impede the scope for profit-taking.

Capital knows only the future, never the past. It rushes towards the prospect of future gains. All that lies in its path must be swept away, regardless of the value people might attach to it. Modern conservative governments see their mission as facilitating this process. If Theresa May’s government is re-elected, its opportunities for doing so will exceed those that Donald Trump is discovering in America.

The reason is as follows. In converting European law into UK law through the so-called great repeal bill, the government will grant itself the power, as its white paper states, “to correct the statute book where necessary”. “Correcting the statute book” will come to be seen as one of the great political euphemisms of our time.

The corrections will take the form of secondary legislation, which means using something called a statutory instrument. The government estimates that 800 to 1,000 of these instruments will be required – on top of the usual total – and their impact will be profound, as they are dealing with huge issues. In practice, there is almost nothing parliament can do to challenge them. As the Brexit analyst Ian Dunt points out, the bill is “shaping up to be the single biggest executive power grab in Britain’s postwar history”.

Protesters are removed from Solsbury Hill in 1994, to allow the Batheaston bypass to be built. Photograph: Adrian Arbib

Statutory instruments cannot be amended. Due to a combination of government control over the parliamentary timetable and a number of arcane and archaic procedures, hardly any have been blocked in the 70 years of their existence. Already their power is freely abused. They are supposed to be reserved for technical matters: straightening out laws in ways that don’t alter our relationship to the state. Increasingly, they are used to sneak more significant changes through parliament. As the journalist Jane Fae reports, 1,900 a year were used, on average, by the last Labour government (a high enough number, which probably incorporated plenty of abuses); under the Conservatives this has risen to more than 3,000.

After promising “an outright ban” on fracking under national parks, David Cameron’s government reversed the promise by smuggling a statutory instrument through parliament. This is likely to set the pattern, in a new Conservative government, for “correcting the statute book”, not least because, May’s administration explains, parliamentary scrutiny will have to be “balanced” by “the speed of this process”. Dunt observes that “nearly half a century of workers’ rights, environmental standards, health and safety laws, consumer protections, animal rights, and countless other areas are now at the mercy of Conservative ministers, who can use a rainy Friday afternoon, when everyone is down the pub, to finally start rubbing out bits of law they never liked”.

The promise of Brexit was that we would regain sovereignty over our affairs. But May’s plans will achieve the opposite. Sovereignty will reside in the executive, while parliamentary scrutiny is curtailed. Nothing will be safe from what modern conservatives gleefully describe as creative destruction.

We can see where this is going. The billionaire press pours scorn on environmental and workplace legislation. The National Farmers’ Union, in its election lobbying document, demands that the neonicotinoid pesticides linked to the wiping out of bees and other wildlife – and currently banned by EU law – can be used here again. The government sees planning laws and wildlife havens as impediments to business. It uses every possible excuse not to act on air pollution: any concession must be extracted with the pickaxe of European law. Prominent Conservatives ridicule those who try to protect the character and charms of the nation as “the Green Blob”.

In pursuit of ever closer union with Trump’s America, the government is likely to offer up any national standards and peculiarities it deems necessary to secure a trade deal. This is why it chose as trade secretary Liam Fox, who represents in its purest form the Conservative urge to smash the crockery.

I remember being struck by the thought – when lying with a group of dreadlocked anarchists at the foot of an iron age hill fort in 1994, in the path of an earth movercommissioned by John Major’s government – that we were the conservatives and they were the destructives. We were seeking to defend the fabric of the nation while they, with their road schemes joining the dots between scheduled ancient monuments, chalk downlands, water meadows and woodlands, were trying to pulp it. They claimed to be patriots, but we loved this country more than they did.

There is no incompatibility between an inclusive conservatism and the defence of public investment, public services, workers’ rights, gender equality and the interests of ethnic minorities. Indeed, I find it hard to see how anyone can love people without also loving the living world that gave rise to us, or can love our civilisation without loving what remains of those that came before.

If Theresa May wins, hers will not be a normal Conservative government, even by the weird and ever-shifting standards of 21st century normality. Through the powers she grants herself, it threatens to become a maelstrom of destruction on behalf of the party’s funders and associates. Unlikely as our prospects are, we must do all we can to stop her from regaining office. Conservatives arise, and defend your country from those who abuse your name.

This is how the price of shares is really decided

Satyajit Das in The Independent



Equity investors – who have enjoyed strong gains over the past eight years – are unlikely to question the merits of stocks as an investment. US stock markets have tripled in price since 2009. In nominal terms the Dow Jones Index is up 70 per cent from its peak in January 2000. But 17 years later it is up only 19 per cent in real (inflation-adjusted) terms.

Investors rarely scrutinise the driver of equity returns. In reality stock markets have changed significantly over recent decades, driven by artificial factors that result in manipulated and unsustainable values.

The traditional functions of the stock market include facilitating capital-raisings for investment projects, allowing savers to invest and providing existing investors with the ability to liquidate their investments when circumstances require. Unfortunately, a number of factors now undermine these functions.

First, equity markets have increasingly decoupled from the real economy. Equity prices now do not correlate to fundamental economic factors, such as nominal gross domestic product or economic growth, or, sometimes, earnings.

Second, equity markets have become instruments of economic policy, as policymakers try to increase asset values to generate higher consumption driven by the “wealth effect” – increased spending resulting from a sense of financial security. Monetary measures, such as zero-interest-rate policy and quantitative easing, distort equity prices. Dividend yields that are higher than bond interest rates now drive valuations. Future corporate earnings are discounted at artificially low rates.

Third, the increased role of HFT (high frequency trading) has changed equity markets. HFT constitutes up to 70 per cent of trading volume in some markets. The average holding period of HFT trading is around 10 seconds. The investment horizon of portfolio investors has also shortened. In 1940 the average investment period was seven years. In the 1960s it was five years. In the 1980s it fell to two years. Today it is around seven months. The shift from investing for the long run has fundamentally changed the nature of equities, with momentum trading a larger factor.

Fourth, the increasing effect of HFT has increased volatility and the risk of large short-term price changes, such as that caused by the 7 October “flash crash”, discouraging some investors.
Fifth, financialisation may facilitate market manipulation, with the corrosive impact of insider-trading and market abuse eroding investor confidence.
US federal investigators found a spider’s web of insider-trading exploited by a small group of funds that benefited twice: from both trading profits and artificially enhanced returns. These, in turn, generated more investments and higher management fees. The investigations revealed expert network firms, which provided “independent investment research”. Redefining the concept of expertise, these firms seemed to specialise in matching insiders with traders hungry for privileged information, routinely allowing access to sensitive information on sales forecasts and earnings.

Regulators suggested that the practice was so widespread as to verge on a corrupt business model. Reminiscent of the late 1980s investigations into Drexel Burnham Lambert, Ivan Boesky and Michael Milken, the clutch of prosecutions has created an impression that a small golden circle of traders have an information edge, disadvantaging other, especially smaller, investors.

Finally, alternative sources of risk capital, the high cost of a stock market listing, particularly increasing compliance costs, increased public disclosure and scrutiny of activities including management remuneration as well as a shift to different forms of business ownership, such as private equity, have changed the nature of equity market. New capital raisings are increasingly viewed with scepticism as private investors or insiders seek to realise accreted gains, subtly changing the function of the market. The problems are evident in both the primary markets (lower numbers of initial public offerings of new shares) and in the secondary markets (reduced market turnover).

The recent Snapchat IPO illustrates the trend. Snap, a young, still unprofitable company, saw its shares soared 44 per cent on its first day of trading, although it fell sharply subsequently. Shareholders providing capital will not be able to control the company, as company insiders have not given common stockholders voting rights, which is inconsistent with conventional corporate governance models. In technology-intensive sectors, for example, entrepreneurs, such as those associated with Snap, now use IPOs to either facilitate exits for venture capitalists and founders, create a currency in the form of listed shares to compensate or finance acquisitions, or raise cash to fund shortfalls between revenue and expenditure.

The declines are symptomatic of the problems of excessive financialisation. Financial instruments, such as shares and their derivatives, are intended as claims on real businesses. Over time, trading in the claims themselves have become more rewarding, leading to a disproportionate increase in the level of financial rather than business activity. Longer term, the identified developments threaten the viability of the stock market as a source of capital for businesses and also as an investment, damaging the real economy.

Left, right, or the good fight?

Tabish Khair in The Hindu

Bestselling author Amish Tripathi recently set people arguing with his contention that he didn’t “believe in left-wing and right-wing ideologies”; he was “just proud of the land” in which he was born, and its culture. Immediately, some of my friends assumed that I would be hostile to such a statement, but I agree with Mr. Tripathi – partly.

The matter of ‘Indian culture’ is easily resolved. Born in Muslim circles, where many claim a similar pride in Islamic practices, I have long looked at matters specifically. As a Muslim I am not proud of the fact that we give fewer opportunities and legal options to Muslim women at times, but I am proud of Islam’s egalitarian and charitable requirements. Similarly, as an Indian I am not proud of our cultural preference for male children and our caste prejudices, but I am proud of a lot of other things: our art, music, philosophy and literature, our civilised ability to live with differences, etc.

I am sure Mr. Tripathi means what I mean: like me, he is proud of the fact that we have an increasing number of women authors, scientists and politicians and not of the fact that we also have female infanticide. So that part of the argument is hardly a matter of controversy.


Making sense of the demarcation

The left-right divide – or its lack – appears more contentious. As I am usually associated with the left by people, except, I suspect, overly assured people on the intellectual political left, who happen to hold tenure in universities like Cambridge or inhabit cities like Delhi and London, I am expected to take exception to this part of Mr. Tripathi’s claim. But once again, I agree – partly.

Yes, the demarcation between the left and the right – in terms of political ideologies – does not make sense. It stopped making sense at least as far back as the rise of Stalinism in the Soviet Union. That is so because the left – as Karl Marx understood – needs to be contextual and relational. The main difference between the left and the right is that the left, if it is really the left, looks at a matter in the present context, and tries to judge it in that living and material context. The right, if it is really the right, depends on the authority of ‘custom’, ‘religion’ and similar inherited matters for justification. Failing to shut you up with ‘god’, it hits you with the fetishised ‘gene for crime!’

With the rise of Stalinism – and similar communist ideologies – a part of the political left basically started thinking like the traditional right. It started justifying its positions not by engaging with the living and the always changing world of people and their social relations, but by telling people how to live and think based on inherited ‘sacred’ ideas and texts. The fact that these texts were attributed to Marx or Lenin and not to the Gospel writers or Luther makes no difference.
Now, one of the problems the actual left has always had – because it (rightly to my mind) wants to engage with the lived materiality of social relations – is its tendency to privilege change. Because the actual left is particularly alive to changes and sceptical of tradition-based arguments, it tends to see change in largely positive terms. You have nothing to lose but your chains, thundered Marx and Engels, momentarily forgetting that people always have more to lose than their chains, and the poor have more to fear losing the little that they have than the superflux-rich.

Similarly, as the right bases its arguments on traditions and custom, it tends to believe that everything inherited from the past – as culture or religion – is necessarily good. This again may not be the case. Inheritances from the past might be good or bad; they might even have been good once and turned bad now. Similarly, a change might be for the better or for the worse.


An unwillingness to engage

Given this basic realisation, just as there are those on the left who think like the right, there are also those on the right who think like the left. In short, there are those on the left who act on the basis of inherited ideas that may have no validity today, and there are those on the right who test traditions on the basis of a lived engagement with the changed conditions of the present.

Actually, many of the political problems of the world today stem from exactly this situation: the fact that there are many on both the left and the right who are unwilling or unable to engage with the changing socio-economic relations of power today. For instance, the political left keeps talking of the proletariat even as workers have been cleverly changed into minor managers of their own labour by neo-liberalism, and the political right keeps talking of the free market of capitalism, even as neo-liberalism survives by enforcing governmental interference in the market but only on the side of the very rich!

Fatah ka Fatwa - Islamic Banking

Whiplash: the myth that funds a £20bn gravy train

Patrick Collinson in The Guardian


Ten years ago I was in a country lane in Leicestershire, indicating to turn right to go into a hotel for a family event. Seconds later my car was a write-off after a young driver careered round the bend, smashing into the rear of my VW Golf. Fortunately I stepped out uninjured. And from that moment I was pestered, again and again, to make a false whiplash claim.

One of the hotel’s guests was first in. “You’ve got to get down the doctors, tell them your neck is really hurting. You’ll easily get £3,000,” said one (I’m summarising here). But my neck, while a little stiff, wasn’t in pain. Others told me I was mad not to apply. But a decade later there is no evidence the crash caused anything other than a mild sprain that lasted a couple of days. And certainly not deserving of the £3,000-£6,000 that is routinely paid out to “victims” of even the mildest of rear-end shunts.

Now one brave consultant neurosurgeon, who has carried out thousands of operations involving neck and back issues, has declared that whiplash is a myth, nothing more than a multibillion-pound gravy train for lawyers, doctors and the victims suffering from “mainly non-existent injuries”.

In a remarkable piece for the Irish Times, Dr Charles Marks, a lecturer at University College Cork, says the medical profession is as guilty as the lawyers. “For 20 years I wrote medical reports which were economical with the truth … the truth being, there was very little wrong with the vast majority of compensation claimants that I saw. I was moving with the herd.” In Ireland, where payouts have reached levels that even the most avaricious ambulance-chasing lawyer here can only dream of, a doctor can earn as much as £3,000 a week in fees after spending 20 minutes with someone involved in a minor car crash, then writing a largely templated report. “It’s a fee of around €350 and you can easily do 10 a week,” Marks says.

Yet whiplash is “almost impossible to prove”, says Dr Marks, with patients self-diagnosing pain that can never be detected using sophisticated imaging techniques such as MRI and bone scans. “All whiplash is minor. Moderate or permanent whiplash is simply non-existent.”

He cites one study of 40 “demolition derby” drivers in the US who had an average of 1,500 collisions each over a couple of years. Compare that to a mild shunt in slow-moving traffic that, somehow, warrants payouts of thousands. Yet just two of the demolition derby drivers reported post-participation neck pain that lasted more than three months.

Dr Marks adds that in Greece and Lithuania, where there is no expectation of financial gain from whiplash, chronic neck pain following a car crash appears simply not to exist.

But one (British) consultant in Ireland is barely sufficient evidence. So I spoke to another whiplash expert, Dr Stuart Matthews, consultant surgeon in major orthopaedic trauma at the Leeds Teaching Hospitals. He sounded even more dismissive than Dr Marks. “There is not a single test that shows abnormality directly attributable to this condition. Diagnoses are purely on the say-so of the person involved. Many orthopaedic surgeons do not believe it is a genuine condition.”

He says early research that provided medical endorsement for whiplash claims has subsequently been rejected. “It’s the emperor’s new clothes. People just go along with it, there is a bandwagon.”

Neck sprain is genuine, he says, but recovery is relatively quick with little evidence of significant physical injury.

Yet the victims of whiplash receive £2bn a year in payouts, a fair chunk of which goes to personal injury lawyers. That’s £20bn over the past decade, paid for out of galloping increases in car insurance premiums. The forthcoming election means that reforms to whiplash payouts, promised in the prison and courts bill, have been shelved.

A new government, of whatever complexion, should reinstate the reforms – and order a major medical review to determine if we have all been conned for years.