Saturday 29 December 2018
Friday 28 December 2018
Monday 24 December 2018
The crisis of modern liberalism is down to market forces
Wolfgang Munchau in The FT
When I think about the crisis of our liberal system, I am reminded of an encounter almost 20 years ago in Berlin with Wolfgang Kartte, a former president of the German cartel office. I asked why he and his successors often took such a conservative view on competition cases and in particular why they were so dismissive of economic arguments.
Like the majority of economic policymakers in Germany, Kartte, who died in 2003, was a lawyer. He said he considered his job as helping the little guy to defend himself against the big guy. This was the job of a lawyer, not of an economist. Moreover, he said he was not interested in levelling the playing field, as the metaphor goes, but in tilting it in favour of the little guy.
The crisis of modern liberalism has similar elements. We have our own version of the little guy versus the big guy problem today — except that there is no one to tilt the field in the other direction. Smaller companies pay more taxes relative to their income than large multinational corporations. The economic policies that followed the financial crisis ended up widening income and wealth differences. Large immigration flows created insecurity, as did the arrival of new technologies. When you call voters deplorable — or patronise them, as happened in the UK after the Brexit vote — you add insult to injury.
Kartte was an old-fashioned German ordoliberal, a school of thought that originated after the breakdown of German democracy in the early 1930s. The macroeconomics of German ordoliberalism is somewhat dodgy. But they excelled at one particular thing. Their intellectual leaders explained better than anyone else how the German liberal order of the 1920s collapsed and how it drove a majority of the population away from supporting it.
The short, flippant answer is that the Weimar Republic favoured the big guy. The macroeconomic shocks of the period — hyperinflation and depression — are well understood. They contributed to a large extent to the political alienation of the middle classes. But they were not the only causes. The period also saw an increase in industrial cartels that threatened the livelihoods of small merchants and entrepreneurs.
When the ordoliberals finally came to power in postwar Germany, they began by tilting the playing field in the other direction by creating a corporate and financial infrastructure to support small and medium-sized companies. Germany’s Mittelstand is both a reason for German robustness, but also for stagnation. And one of the main lessons of modern economic history is we cannot be oblivious to the distribution of income and wealth.
This is not an argument about redistribution. This is about actively managing capitalism’s playing field to ensure that the majority of the population stays on it. Recall Margaret Thatcher’s successful brand of entrepreneurial capitalism in the UK in the 1980s. Through privatisation, she turned ordinary savers into shareholders. Through the sale of council houses, she turned tenants into property owners.
We cannot replicate this example: there are no council houses to be sold, nor companies to be privatised. But to save modern capitalism we will need to find ways to keep the median voter committed to the system, just as Thatcher did in the 1980s. I would argue that voters are still broadly content in places such as Germany, the Benelux countries and in Ireland. I am less sure about the UK, France or Italy.
What often leads the supporters and defenders of modern liberal democracy astray in their analysis is their addiction to macroeconomic aggregate variables such as gross domestic product and the officially recorded rate of unemployment. The decade before the Brexit referendum was a decade of reasonable GDP growth. There was nothing in the data that would suggest the UK would vote to leave the EU. But granular information paints a different picture. Data based on the official family resources survey and from the Resolution Foundation, a think-tank, showed household income after housing costs stagnated for the 60 per cent of households towards the bottom of the income distribution between 2002 and 2015.
The current wave of discontent in France also contrasts with relatively solid GDP growth since the financial crisis. But a study by the McKinsey Global Institute showed that income growth came to an abrupt halt for almost all households in the advanced economies.
The main constituency backing the Thatcher revolution in the 1980s was the C2s — the demographic classification for skilled working class people. Thatcher looked after the median household. Her successors first lost the middle classes, and then pretended to be shocked by events such as Brexit.
Any system that leaves behind 60 per cent of households will eventually fail. It is the ultimate irony: liberalism is failing because of market forces.
When I think about the crisis of our liberal system, I am reminded of an encounter almost 20 years ago in Berlin with Wolfgang Kartte, a former president of the German cartel office. I asked why he and his successors often took such a conservative view on competition cases and in particular why they were so dismissive of economic arguments.
Like the majority of economic policymakers in Germany, Kartte, who died in 2003, was a lawyer. He said he considered his job as helping the little guy to defend himself against the big guy. This was the job of a lawyer, not of an economist. Moreover, he said he was not interested in levelling the playing field, as the metaphor goes, but in tilting it in favour of the little guy.
The crisis of modern liberalism has similar elements. We have our own version of the little guy versus the big guy problem today — except that there is no one to tilt the field in the other direction. Smaller companies pay more taxes relative to their income than large multinational corporations. The economic policies that followed the financial crisis ended up widening income and wealth differences. Large immigration flows created insecurity, as did the arrival of new technologies. When you call voters deplorable — or patronise them, as happened in the UK after the Brexit vote — you add insult to injury.
Kartte was an old-fashioned German ordoliberal, a school of thought that originated after the breakdown of German democracy in the early 1930s. The macroeconomics of German ordoliberalism is somewhat dodgy. But they excelled at one particular thing. Their intellectual leaders explained better than anyone else how the German liberal order of the 1920s collapsed and how it drove a majority of the population away from supporting it.
The short, flippant answer is that the Weimar Republic favoured the big guy. The macroeconomic shocks of the period — hyperinflation and depression — are well understood. They contributed to a large extent to the political alienation of the middle classes. But they were not the only causes. The period also saw an increase in industrial cartels that threatened the livelihoods of small merchants and entrepreneurs.
When the ordoliberals finally came to power in postwar Germany, they began by tilting the playing field in the other direction by creating a corporate and financial infrastructure to support small and medium-sized companies. Germany’s Mittelstand is both a reason for German robustness, but also for stagnation. And one of the main lessons of modern economic history is we cannot be oblivious to the distribution of income and wealth.
This is not an argument about redistribution. This is about actively managing capitalism’s playing field to ensure that the majority of the population stays on it. Recall Margaret Thatcher’s successful brand of entrepreneurial capitalism in the UK in the 1980s. Through privatisation, she turned ordinary savers into shareholders. Through the sale of council houses, she turned tenants into property owners.
We cannot replicate this example: there are no council houses to be sold, nor companies to be privatised. But to save modern capitalism we will need to find ways to keep the median voter committed to the system, just as Thatcher did in the 1980s. I would argue that voters are still broadly content in places such as Germany, the Benelux countries and in Ireland. I am less sure about the UK, France or Italy.
What often leads the supporters and defenders of modern liberal democracy astray in their analysis is their addiction to macroeconomic aggregate variables such as gross domestic product and the officially recorded rate of unemployment. The decade before the Brexit referendum was a decade of reasonable GDP growth. There was nothing in the data that would suggest the UK would vote to leave the EU. But granular information paints a different picture. Data based on the official family resources survey and from the Resolution Foundation, a think-tank, showed household income after housing costs stagnated for the 60 per cent of households towards the bottom of the income distribution between 2002 and 2015.
The current wave of discontent in France also contrasts with relatively solid GDP growth since the financial crisis. But a study by the McKinsey Global Institute showed that income growth came to an abrupt halt for almost all households in the advanced economies.
The main constituency backing the Thatcher revolution in the 1980s was the C2s — the demographic classification for skilled working class people. Thatcher looked after the median household. Her successors first lost the middle classes, and then pretended to be shocked by events such as Brexit.
Any system that leaves behind 60 per cent of households will eventually fail. It is the ultimate irony: liberalism is failing because of market forces.
Bluff, blackmail and brinkwomanship: the ‘madman theory’ of no-deal Brexit
Andrew Rawnsley in The Guardian
Don’t panic! Don’t panic! You need not spoil your Christmas by worrying that Britain is walking the Brexit tightrope without a safety net because the defence secretary, Gavin Williamson, has announced that the armed forces are on standby.
Standing by to do what exactly? That is not clear. Penny Mordaunt, the international development secretary, is redeploying civil servants with expertise in disaster management to no-deal emergency planning. And Matt Hancock, the health secretary, has declared himself the world’s biggest purchaser of fridges so that the NHS has somewhere to keep stockpiles of critical medicines. He recently told colleagues that, in the event of a bad Brexit, he could not guarantee that people would not lose their lives. Choose Brexit – and you may die. They certainly didn’t put that on the side of their campaign bus.
Those who willed this nightmare on our country did not reveal that it would require such costly and alarming measures
The obvious thing to say, but worth emphasising nevertheless, is that those who willed this Brexit nightmare on our country did not reveal that it would require such costly and alarming measures. They sold it as liberation day, not doomsday. Do you recall Boris Johnson and his gang telling us that leaving the EU could mean putting troops on the street, establishing a “war room” in the NHS, emergency airlifts of medicines, leafleting every household with advice on how to cope with food shortages and deploying those with experience of dealing with the aftermath of tornadoes, epidemics and tsunamis? No, me neither. It was supposed to be a piece of cherry-topped cake, not a humiliating national calamity.
A few of the Brexiters are still trying to claim that it might somehow turn out all right on the night, so it is important to be clear about the consequences of a no-deal outcome. It will mean a stark rupture to our relationship not just with the EU but with much of the rest of the world. The overnight termination of almost every legal and trading agreement between Europe and Britain would cause disruption without precedent in peacetime. There will be no transition arrangements. There will be no mutually recognised rights for EU citizens living in the UK and Brits living in the rest of the EU. There will be a hard border in Ireland. Instead of a glide path into a new relationship with our continent, Britain will be in free fall.
Large businesses have taken some precautions against a botched Brexit. That was only sensible after the abject combination of tragedy and farce that has played out over the past 30 months. But hardly anyone is ready for the crash version. Neither is the government. It can’t even tell companies what tariffs they might be expected to pay on imports from the EU. Britain’s five most important business organisations – the CBI, the Institute of Directors, the British Chambers of Commerce, the Federation of Small Businesses and the manufacturers’ body, EEF – all agree. An unprepared Britain would be plunged into severe turbulence.
There is no such thing as a pain-free no deal
Earlier this year, the British Chambers of Commerce outlined 24 critical risk questions that businesses needed answering in order to cope with any Brexit scenario. The BCC reports today that, with under 100 days left, the government has produced a satisfactory response to just two of the 24, while 15 “are still flashing red”.
A few of the Brexiters in the cabinet are touting the idea of a “managed no deal”. This is oxymoronic. There is no such thing as a pain-free no deal. It is notable that this latest iteration of fantasy Brexit is most often promulgated by ministers, such as Andrea Leadsom, who have no responsibility for delivering essential services. Even these Brexiters don’t deny that a no-deal outcome would present a big challenge to government on multiple fronts. In the light of their recent performance, how confident are you that our masters of disaster could cope? A couple of drones have just incapacitated Gatwick airport, an example of the degree to which the complex systems of advanced societies can be acutely vulnerable to disruption.
In a no-deal Brexit, a key role will be played by Chris Grayling, the rogue drone who goes by the title of transport secretary. This is the one-man disrupter who proved incapable of introducing new rail timetables without throwing the network into chaos. I don’t know about you, but I am not sleeping better at night for knowing that Failing Grayling will be in charge of trying to manage ports gridlocked by a crash-out Brexit.
I can’t forecast exactly would happen. No one can. One of the alarming things about this scenario is its very unpredictability. I observe that civil servants, those who lead government agencies and the majority of the cabinet, the people who would be expected to handle the consequences, are very scared of no deal. They differ only in thinking that it will be absolutely catastrophic or merely disastrous. Ministers fear that the disruption to normal life will be deeply serious and there will be an extremely nasty hit to the economy, a combination that would inflict once-in-a-generation damage on the Tory party’s reputation.
A calamity Brexit would do to the Conservatives what the Winter of Discontent did to Labour. The mass strikes that overwhelmed the Callaghan government in 1978-79 seared into the national collective consciousness images of picket lines, paralysed services, rubbish piling up in the streets, the sick going untreated and the dead left unburied. That haunted Labour, and cost it public trust, for years after the event. Empty supermarket shelves, shortages of critical medicines, stranded travellers, motorways to ports turned into giant lorry parks and all the other consequences of a bad Brexit would not be quickly forgotten nor forgiven. This spectre chills the blood of some of the most hardcore Brexiters in the cabinet. The case of Michael Gove is instructive. Ardent Brexiter that he is, his departmental responsibilities for farmers and the food supply have opened his eyes to how bad no deal could be for both the country and his party. In a piquant twist, he is now one of those ministers who believe that any deal is better than no deal.
This is a highly perilous game of chicken in which people’s livelihoods, and quite possibly people’s lives, are at stake
David Gauke, the justice secretary, is not a man given to the hyperbolic statement. His usual role in government is to be deployed as a fire blanket for the smothering of any controversy that is getting fiery. So it is noteworthy when such an unflamboyant figure publicly declares that a no-deal Brexit would be so grotesquely irresponsible that he would quit the government rather than sit in a cabinet that allowed it to happen.
If all the sentient members of the cabinet think a no-deal Brexit will be a calamity, and as good as admit this in public, why is the government nevertheless acting as if it might allow that to come to pass? Bluff, blackmail and brinkwomanship feature in the explanation. Though Theresa May will say that this is not a scenario she wants or expects to happen, some of her strategists think that amping up the prospect of a disaster Brexit suits her. The prime minister is still hoping that she can extract some last-gasp concessions from the EU that will help her get her unloved deal through parliament. European leaders are sounding unwilling to do very much to assist her. The EU has worked on the assumption that Britain is not so crazy as to crash out in a way that would hurt it, but us much more. So part of Number 10’s calculation is that the EU needs to start worrying that it really is possible that this could transpire.
To make sense of this, it is useful to have some familiarity with “madman theory”. This was an idea about how to conduct international relations that was formulated during the Cold War, when Richard Nixon was in the White House. It was thought to be useful for America to have a leader who seemed to be a bit unhinged, because this would throw the other side off balance and force the Soviet Union to make concessions for fear that the US president might be crazy enough to start a nuclear war. The Brexit variant is to induce the EU to believe that Britain might be unbalanced enough to crash out. The EU will then, so goes the theory, give Mrs May what she needs. She is also gambling that fear of a disaster Brexit will drive many Conservative MPs who don’t like her agreement into supporting it.
This is a highly perilous game of chicken in which many people’s livelihoods, and quite possibly people’s lives, are at stake. The risk is that it could accidentally lead to the very catastrophe that it is supposed to prevent. It was called “madman theory” for a reason.
A merry Christmas, everyone. I will not tempt fate by wishing you a peaceful and prosperous new year.
Don’t panic! Don’t panic! You need not spoil your Christmas by worrying that Britain is walking the Brexit tightrope without a safety net because the defence secretary, Gavin Williamson, has announced that the armed forces are on standby.
Standing by to do what exactly? That is not clear. Penny Mordaunt, the international development secretary, is redeploying civil servants with expertise in disaster management to no-deal emergency planning. And Matt Hancock, the health secretary, has declared himself the world’s biggest purchaser of fridges so that the NHS has somewhere to keep stockpiles of critical medicines. He recently told colleagues that, in the event of a bad Brexit, he could not guarantee that people would not lose their lives. Choose Brexit – and you may die. They certainly didn’t put that on the side of their campaign bus.
Those who willed this nightmare on our country did not reveal that it would require such costly and alarming measures
The obvious thing to say, but worth emphasising nevertheless, is that those who willed this Brexit nightmare on our country did not reveal that it would require such costly and alarming measures. They sold it as liberation day, not doomsday. Do you recall Boris Johnson and his gang telling us that leaving the EU could mean putting troops on the street, establishing a “war room” in the NHS, emergency airlifts of medicines, leafleting every household with advice on how to cope with food shortages and deploying those with experience of dealing with the aftermath of tornadoes, epidemics and tsunamis? No, me neither. It was supposed to be a piece of cherry-topped cake, not a humiliating national calamity.
A few of the Brexiters are still trying to claim that it might somehow turn out all right on the night, so it is important to be clear about the consequences of a no-deal outcome. It will mean a stark rupture to our relationship not just with the EU but with much of the rest of the world. The overnight termination of almost every legal and trading agreement between Europe and Britain would cause disruption without precedent in peacetime. There will be no transition arrangements. There will be no mutually recognised rights for EU citizens living in the UK and Brits living in the rest of the EU. There will be a hard border in Ireland. Instead of a glide path into a new relationship with our continent, Britain will be in free fall.
Large businesses have taken some precautions against a botched Brexit. That was only sensible after the abject combination of tragedy and farce that has played out over the past 30 months. But hardly anyone is ready for the crash version. Neither is the government. It can’t even tell companies what tariffs they might be expected to pay on imports from the EU. Britain’s five most important business organisations – the CBI, the Institute of Directors, the British Chambers of Commerce, the Federation of Small Businesses and the manufacturers’ body, EEF – all agree. An unprepared Britain would be plunged into severe turbulence.
There is no such thing as a pain-free no deal
Earlier this year, the British Chambers of Commerce outlined 24 critical risk questions that businesses needed answering in order to cope with any Brexit scenario. The BCC reports today that, with under 100 days left, the government has produced a satisfactory response to just two of the 24, while 15 “are still flashing red”.
A few of the Brexiters in the cabinet are touting the idea of a “managed no deal”. This is oxymoronic. There is no such thing as a pain-free no deal. It is notable that this latest iteration of fantasy Brexit is most often promulgated by ministers, such as Andrea Leadsom, who have no responsibility for delivering essential services. Even these Brexiters don’t deny that a no-deal outcome would present a big challenge to government on multiple fronts. In the light of their recent performance, how confident are you that our masters of disaster could cope? A couple of drones have just incapacitated Gatwick airport, an example of the degree to which the complex systems of advanced societies can be acutely vulnerable to disruption.
In a no-deal Brexit, a key role will be played by Chris Grayling, the rogue drone who goes by the title of transport secretary. This is the one-man disrupter who proved incapable of introducing new rail timetables without throwing the network into chaos. I don’t know about you, but I am not sleeping better at night for knowing that Failing Grayling will be in charge of trying to manage ports gridlocked by a crash-out Brexit.
I can’t forecast exactly would happen. No one can. One of the alarming things about this scenario is its very unpredictability. I observe that civil servants, those who lead government agencies and the majority of the cabinet, the people who would be expected to handle the consequences, are very scared of no deal. They differ only in thinking that it will be absolutely catastrophic or merely disastrous. Ministers fear that the disruption to normal life will be deeply serious and there will be an extremely nasty hit to the economy, a combination that would inflict once-in-a-generation damage on the Tory party’s reputation.
A calamity Brexit would do to the Conservatives what the Winter of Discontent did to Labour. The mass strikes that overwhelmed the Callaghan government in 1978-79 seared into the national collective consciousness images of picket lines, paralysed services, rubbish piling up in the streets, the sick going untreated and the dead left unburied. That haunted Labour, and cost it public trust, for years after the event. Empty supermarket shelves, shortages of critical medicines, stranded travellers, motorways to ports turned into giant lorry parks and all the other consequences of a bad Brexit would not be quickly forgotten nor forgiven. This spectre chills the blood of some of the most hardcore Brexiters in the cabinet. The case of Michael Gove is instructive. Ardent Brexiter that he is, his departmental responsibilities for farmers and the food supply have opened his eyes to how bad no deal could be for both the country and his party. In a piquant twist, he is now one of those ministers who believe that any deal is better than no deal.
This is a highly perilous game of chicken in which people’s livelihoods, and quite possibly people’s lives, are at stake
David Gauke, the justice secretary, is not a man given to the hyperbolic statement. His usual role in government is to be deployed as a fire blanket for the smothering of any controversy that is getting fiery. So it is noteworthy when such an unflamboyant figure publicly declares that a no-deal Brexit would be so grotesquely irresponsible that he would quit the government rather than sit in a cabinet that allowed it to happen.
If all the sentient members of the cabinet think a no-deal Brexit will be a calamity, and as good as admit this in public, why is the government nevertheless acting as if it might allow that to come to pass? Bluff, blackmail and brinkwomanship feature in the explanation. Though Theresa May will say that this is not a scenario she wants or expects to happen, some of her strategists think that amping up the prospect of a disaster Brexit suits her. The prime minister is still hoping that she can extract some last-gasp concessions from the EU that will help her get her unloved deal through parliament. European leaders are sounding unwilling to do very much to assist her. The EU has worked on the assumption that Britain is not so crazy as to crash out in a way that would hurt it, but us much more. So part of Number 10’s calculation is that the EU needs to start worrying that it really is possible that this could transpire.
To make sense of this, it is useful to have some familiarity with “madman theory”. This was an idea about how to conduct international relations that was formulated during the Cold War, when Richard Nixon was in the White House. It was thought to be useful for America to have a leader who seemed to be a bit unhinged, because this would throw the other side off balance and force the Soviet Union to make concessions for fear that the US president might be crazy enough to start a nuclear war. The Brexit variant is to induce the EU to believe that Britain might be unbalanced enough to crash out. The EU will then, so goes the theory, give Mrs May what she needs. She is also gambling that fear of a disaster Brexit will drive many Conservative MPs who don’t like her agreement into supporting it.
This is a highly perilous game of chicken in which many people’s livelihoods, and quite possibly people’s lives, are at stake. The risk is that it could accidentally lead to the very catastrophe that it is supposed to prevent. It was called “madman theory” for a reason.
A merry Christmas, everyone. I will not tempt fate by wishing you a peaceful and prosperous new year.
Sunday 23 December 2018
Labour’s leadership is at rock bottom – it won’t be forgiven for conniving in a rightwing Brexit
The majority who oppose leaving the EU need a new coalition to rescue us from disaster writes Will Hutton in The Guardian
The march through London for a People’s Vote in October. Photograph: Wiktor Szymanowicz/Barcroft Images
The Labour party is united: the vast majority of its MPs, its members and its voters – from all classes – want Britain to stay in the European Union. They recognise that Brexit is a project by the right for the right.
For the EU stands for openness, peace, tolerance and the best of the Enlightenment traditions. It is the most successful institutional architecture forging international collaboration yet known. Britain has benefited immeasurably from its membership. It is the European answer to the 21st-century question of how to manage interdependencies between countries – economic, trading, security, financial, scientific – in a world where necessarily they must grow.
Those who believe in it as a force for good do not want to go down without a struggle – to wimp out because to have another democratic encounter with the issue is said to be anti-democratic, arousing dark warnings of impending civic unrest from those asked to vote again. A one-off, never to be revisited referendum, as in totalitarian states in the 1930s, has become an irreversible building block for a rightwing world, with the connivance of parts of the old left that hold the same conception of imagined, untrammelled national autonomy as the extreme right.
This brutal right, with its increasingly strident nationalist and racist overtones, is not going to go away after Brexit – it will raise the stakes still further, attempting to turn our beloved country into a venomous, intolerant cesspit. It has to be confronted sooner or later. Better sooner.
Yet Labour’s leadership refuses to speak for this powerful and growing conviction within its party – in the country, too, with opinion polls hardeningin favour of EU membership. As the government amazingly puts the country on to a war footing to manage the fallout of an impending hard Brexit, Labour’s voice is weak and temporising. In his interview with the Guardian Jeremy Corbyn says that even if Labour won a snap general election, it would lead the country out of the EU but with a “better deal” built around a permanent customs union. Ongoing EU membership threatens a socialist programme, he argues, because of state-aid rules. If Theresa May recasts her deal in softer terms, he will back it, he says.
His stance is wrong at every level. First, he has just reduced his electoral base to the shrinking Leave vote so that Labour will not and cannot win a general election. Remain voters, now the majority, must find another home. Worse, he is threatening the cohesion of his party by opposing its majority view and the values that support it, just as Brexit is threatening the cohesion of the Conservative party.
All members of the Labour party must now examine their conscience: is this what they stand for and believe? The Corbyn deal, which can only be incrementally different from the May deal, will suffer from all the same deficiencies. We are to be associated with our continent as a satellite but not to share in its governance or play a part in shaping its destiny.
It betrays a 19th-century view of socialism. What industries are going to be built by direct government subventions? The world of the future is not state-supported steel and cement companies. Britain has the third largest AI industry and could become the global hub for blockchain – all done inside the EU. The task for 21st-century socialism is not to bankroll directly such vigorous businesses. It is to build the architecture to generate more of them, enfranchise workforces, protect the backs of ordinary men and women, put environmental sustainability at the heart of our economy and continually to upgrade the social contract. In this, the EU is our ally, not our foe.
The case must be put to the people again, framed by what we now know. It must be allied to a passionate case for reform. The desperate poverty and extraordinary inequalities that disfigure our country and that properly persuaded millions they could not vote for the status quo have to be addressed. Our economy has to be reshaped by an imaginative state; our society recast; our political institutions reformed.
On top, we need two reciprocal commitments from Europe. Freedom of movement is a core freedom, but host societies must have the capacity to regulate inflows of people, otherwise intolerable strains are created. The multiple derogations from freedom of movement used by other EU states must be codified into a new deal that permits Britain, and of course other members, sufficient control of our borders.
Second, the EU itself needs a democratic and accountability reboot. We are not recommitting to the same old EU – but one committed to change.
This case would best be made by Labour as the centre of a cross-party coalition: it has credibility as a fighter against poverty and abusive capitalism and an advocate for internationalism. But the case for tolerance and openness cannot be made from a tribal silo. I admire Tories such as Phillip Lee, Jo Johnson and Sam Gyimah who have resigned on this issue, and others such as Anna Soubry, Justine Greening, Sarah Wollaston, Ken Clarke and Dominic Grieve. I would be proud to stand and campaign alongside them – and also Nicola Sturgeon, Caroline Lucas and Vince Cable. Any differences are secondary to what unites us. What does our country stand for, what is its future and who are our allies? Not Putin, Xi and Trump.
Such a declaration will write me off with Corbyn, his gatekeepers Seumas Milne and Karie Murphy, and his cheerleader in the union movement, Len McCluskey. Anyone not 100% loyal to their world view and tribe within a tribe is beyond the pale. Even in normal times, it is a disabling way to think and act in a democracy. Today, it is dangerous. The Labour party has hit bottom – conniving in antisemitism and now in the rightwing coup that is Brexit. Its break-up is no longer inconceivable, nor is the emergence of a left-of-centre alternative. Britain deserves better than this.
The Labour party is united: the vast majority of its MPs, its members and its voters – from all classes – want Britain to stay in the European Union. They recognise that Brexit is a project by the right for the right.
For the EU stands for openness, peace, tolerance and the best of the Enlightenment traditions. It is the most successful institutional architecture forging international collaboration yet known. Britain has benefited immeasurably from its membership. It is the European answer to the 21st-century question of how to manage interdependencies between countries – economic, trading, security, financial, scientific – in a world where necessarily they must grow.
Those who believe in it as a force for good do not want to go down without a struggle – to wimp out because to have another democratic encounter with the issue is said to be anti-democratic, arousing dark warnings of impending civic unrest from those asked to vote again. A one-off, never to be revisited referendum, as in totalitarian states in the 1930s, has become an irreversible building block for a rightwing world, with the connivance of parts of the old left that hold the same conception of imagined, untrammelled national autonomy as the extreme right.
This brutal right, with its increasingly strident nationalist and racist overtones, is not going to go away after Brexit – it will raise the stakes still further, attempting to turn our beloved country into a venomous, intolerant cesspit. It has to be confronted sooner or later. Better sooner.
Yet Labour’s leadership refuses to speak for this powerful and growing conviction within its party – in the country, too, with opinion polls hardeningin favour of EU membership. As the government amazingly puts the country on to a war footing to manage the fallout of an impending hard Brexit, Labour’s voice is weak and temporising. In his interview with the Guardian Jeremy Corbyn says that even if Labour won a snap general election, it would lead the country out of the EU but with a “better deal” built around a permanent customs union. Ongoing EU membership threatens a socialist programme, he argues, because of state-aid rules. If Theresa May recasts her deal in softer terms, he will back it, he says.
His stance is wrong at every level. First, he has just reduced his electoral base to the shrinking Leave vote so that Labour will not and cannot win a general election. Remain voters, now the majority, must find another home. Worse, he is threatening the cohesion of his party by opposing its majority view and the values that support it, just as Brexit is threatening the cohesion of the Conservative party.
All members of the Labour party must now examine their conscience: is this what they stand for and believe? The Corbyn deal, which can only be incrementally different from the May deal, will suffer from all the same deficiencies. We are to be associated with our continent as a satellite but not to share in its governance or play a part in shaping its destiny.
It betrays a 19th-century view of socialism. What industries are going to be built by direct government subventions? The world of the future is not state-supported steel and cement companies. Britain has the third largest AI industry and could become the global hub for blockchain – all done inside the EU. The task for 21st-century socialism is not to bankroll directly such vigorous businesses. It is to build the architecture to generate more of them, enfranchise workforces, protect the backs of ordinary men and women, put environmental sustainability at the heart of our economy and continually to upgrade the social contract. In this, the EU is our ally, not our foe.
The case must be put to the people again, framed by what we now know. It must be allied to a passionate case for reform. The desperate poverty and extraordinary inequalities that disfigure our country and that properly persuaded millions they could not vote for the status quo have to be addressed. Our economy has to be reshaped by an imaginative state; our society recast; our political institutions reformed.
On top, we need two reciprocal commitments from Europe. Freedom of movement is a core freedom, but host societies must have the capacity to regulate inflows of people, otherwise intolerable strains are created. The multiple derogations from freedom of movement used by other EU states must be codified into a new deal that permits Britain, and of course other members, sufficient control of our borders.
Second, the EU itself needs a democratic and accountability reboot. We are not recommitting to the same old EU – but one committed to change.
This case would best be made by Labour as the centre of a cross-party coalition: it has credibility as a fighter against poverty and abusive capitalism and an advocate for internationalism. But the case for tolerance and openness cannot be made from a tribal silo. I admire Tories such as Phillip Lee, Jo Johnson and Sam Gyimah who have resigned on this issue, and others such as Anna Soubry, Justine Greening, Sarah Wollaston, Ken Clarke and Dominic Grieve. I would be proud to stand and campaign alongside them – and also Nicola Sturgeon, Caroline Lucas and Vince Cable. Any differences are secondary to what unites us. What does our country stand for, what is its future and who are our allies? Not Putin, Xi and Trump.
Such a declaration will write me off with Corbyn, his gatekeepers Seumas Milne and Karie Murphy, and his cheerleader in the union movement, Len McCluskey. Anyone not 100% loyal to their world view and tribe within a tribe is beyond the pale. Even in normal times, it is a disabling way to think and act in a democracy. Today, it is dangerous. The Labour party has hit bottom – conniving in antisemitism and now in the rightwing coup that is Brexit. Its break-up is no longer inconceivable, nor is the emergence of a left-of-centre alternative. Britain deserves better than this.
Learn from Northern Ireland: beware entrenching Brexit divisions
The unloved backstop in May’s deal offers a new strategic advantage writes MATTHEW O'TOOLE in THE FT
In my hometown, as with a handful of others in Northern Ireland, there is an Irish Street, English Street and Scotch Street. They were named to reflect the origins of people who have lived alongside one another for centuries, without ever quite becoming one people.
These streets long predate the creation of Northern Ireland following partition in 1921; they predate the Act of Union between Britain and Ireland in 1801. At the most basic level, they reveal the enduring dilemma of that part of Ireland: how to accommodate more than one thing. How to live with ambiguity without antagonism. A task at which we have failed in the past with appalling consequences.
The Northern Ireland backstop is now routinely described as the central barrier, or stumbling block, in agreeing orderly terms for the UK’s withdrawal from the EU. This view has become conventional in London — particularly among Brexiters, but also many Remainers — with little attempt to understand the prior problem that required solving. This tendency has been compounded by the extraordinary power currently wielded at Westminster by the Democratic Unionist Party, which does not welcome ambiguous interpretations of Northern Ireland’s current status, nor of its history. It opposed the Good Friday Agreement of 1998, which enshrined the principle of consent (Northern Ireland remaining in the UK until a majority voted otherwise) but added several asterisks that qualified UK sovereignty.
That the DUP is the only party representing Northern Ireland in the Commons is itself further evidence of the place’s ambiguity. Sinn Fein, which holds the rest of the seats but does not take them, has never recognised the legitimacy of the UK parliament’s authority.
It is the persistence of this dividing axis in one small corner of Europe that was always — and I do mean always — going to complicate Brexit. But something more is happening: at the very moment Northern Ireland’s divisions again require subtle accommodation, Britain’s own divisions are making that impossible. Guided by the baleful influence of the DUP, whose guiding mission is to assert Northern Ireland’s unadulterated Britishness, Britain is becoming more like Northern Ireland.
Karen Bradley, the Northern Ireland secretary, was rebuked recently for implying precisely this — that the region’s divisions contain warnings for Britain at large. Northern Ireland, she wrote, “in particular, knows the damage that division can do”. Notwithstanding her previous confessed ignorance on the place she now governs — not knowing that unionists tended not to vote for nationalist parties, and vice versa — Ms Bradley was not wrong.
Brexit has created — or perhaps revealed and clarified — an intense division in British politics, and in British life. As in Northern Ireland, reality itself is increasingly defined by the split over EU membership. Contradictory narratives — of national self-harm versus thwarted national liberation — are congealing in the veins of Remainers and Leavers. Several studies, including a recent analysis by polling expert John Curtice, have shown how entrenched Remain or Leave identities have become: far more fundamental than attachment to any political party. Voters on each side are now invested in these identities in a way that prevents compromise.
There are clear limits to this analogy, dictated by respect for Irish history and its ancient and recent traumas. Britain is not the same as Northern Ireland, which is precisely the point of the backstop. It should, however, be careful about becoming any more like it, however maddening each side of the Brexit divide finds the perceived distortions of the other.
It is also wrong to imply both sides are as bad as each other: fault lies largely with the Brexiters, whose zeal has driven the country to this precipice. But whether Britain ends up leaving the EU or not, its divided society will need to a find a way of accommodating tribes that have become remarkably entrenched in little more than two and a half years.
In a few days, I travel back to Northern Ireland to spend Christmas. The place whose ambiguities are at the centre of Brexit, but where the views of most people are eerily absent from the debate in London. The backstop, unloved by virtually all sides in British politics, is mostly welcomed in a land that has learnt to live with constructive ambiguity. It remains a useful diplomatic concept as an alternative to purity and further division.
The backstop guarantees Northern Ireland access to both UK and European markets. It offers the place something it has rarely known: strategic advantage. The chance to put its contradictions to a more productive use rather than hostility.
If only divided Britain would give it the chance.
In my hometown, as with a handful of others in Northern Ireland, there is an Irish Street, English Street and Scotch Street. They were named to reflect the origins of people who have lived alongside one another for centuries, without ever quite becoming one people.
These streets long predate the creation of Northern Ireland following partition in 1921; they predate the Act of Union between Britain and Ireland in 1801. At the most basic level, they reveal the enduring dilemma of that part of Ireland: how to accommodate more than one thing. How to live with ambiguity without antagonism. A task at which we have failed in the past with appalling consequences.
The Northern Ireland backstop is now routinely described as the central barrier, or stumbling block, in agreeing orderly terms for the UK’s withdrawal from the EU. This view has become conventional in London — particularly among Brexiters, but also many Remainers — with little attempt to understand the prior problem that required solving. This tendency has been compounded by the extraordinary power currently wielded at Westminster by the Democratic Unionist Party, which does not welcome ambiguous interpretations of Northern Ireland’s current status, nor of its history. It opposed the Good Friday Agreement of 1998, which enshrined the principle of consent (Northern Ireland remaining in the UK until a majority voted otherwise) but added several asterisks that qualified UK sovereignty.
That the DUP is the only party representing Northern Ireland in the Commons is itself further evidence of the place’s ambiguity. Sinn Fein, which holds the rest of the seats but does not take them, has never recognised the legitimacy of the UK parliament’s authority.
It is the persistence of this dividing axis in one small corner of Europe that was always — and I do mean always — going to complicate Brexit. But something more is happening: at the very moment Northern Ireland’s divisions again require subtle accommodation, Britain’s own divisions are making that impossible. Guided by the baleful influence of the DUP, whose guiding mission is to assert Northern Ireland’s unadulterated Britishness, Britain is becoming more like Northern Ireland.
Karen Bradley, the Northern Ireland secretary, was rebuked recently for implying precisely this — that the region’s divisions contain warnings for Britain at large. Northern Ireland, she wrote, “in particular, knows the damage that division can do”. Notwithstanding her previous confessed ignorance on the place she now governs — not knowing that unionists tended not to vote for nationalist parties, and vice versa — Ms Bradley was not wrong.
Brexit has created — or perhaps revealed and clarified — an intense division in British politics, and in British life. As in Northern Ireland, reality itself is increasingly defined by the split over EU membership. Contradictory narratives — of national self-harm versus thwarted national liberation — are congealing in the veins of Remainers and Leavers. Several studies, including a recent analysis by polling expert John Curtice, have shown how entrenched Remain or Leave identities have become: far more fundamental than attachment to any political party. Voters on each side are now invested in these identities in a way that prevents compromise.
There are clear limits to this analogy, dictated by respect for Irish history and its ancient and recent traumas. Britain is not the same as Northern Ireland, which is precisely the point of the backstop. It should, however, be careful about becoming any more like it, however maddening each side of the Brexit divide finds the perceived distortions of the other.
It is also wrong to imply both sides are as bad as each other: fault lies largely with the Brexiters, whose zeal has driven the country to this precipice. But whether Britain ends up leaving the EU or not, its divided society will need to a find a way of accommodating tribes that have become remarkably entrenched in little more than two and a half years.
In a few days, I travel back to Northern Ireland to spend Christmas. The place whose ambiguities are at the centre of Brexit, but where the views of most people are eerily absent from the debate in London. The backstop, unloved by virtually all sides in British politics, is mostly welcomed in a land that has learnt to live with constructive ambiguity. It remains a useful diplomatic concept as an alternative to purity and further division.
The backstop guarantees Northern Ireland access to both UK and European markets. It offers the place something it has rarely known: strategic advantage. The chance to put its contradictions to a more productive use rather than hostility.
If only divided Britain would give it the chance.
Britain’s immigration debate is not only about economics
Culture, identity and a sense of fairness matter just as much to many people writes CAMILLA CAVENDISH in The FT
Last summer I was sitting in a café in Boston, Lincolnshire , interviewing Karol, its enterprising Polish owner. He arrived in England to pick lettuces ten years ago, worked his way up to factory packing, and then started this little restaurant on a side street. Sipping tea, he told me of his high hopes for the pierogi dumplings cooked by his wife.
I had sought out Karol as an example of the kind of immigrant we want in Britain — friendly and hard-working. He was sheepish about his very limited English, though, and said that his wife and parents, who have joined him, barely speak it at all. Their customers, he said with a tone of regret, are almost all Polish, Romanian and Lithuanian. Here on the east coast of England, the old residents and the new arrivals are largely living parallel lives.
This was perhaps inevitable. The population of this little town grew at more than double the average rate for England and Wales in ten years from 2004. This followed the decision of the Blair government to open the UK to the eastern European accession countries without a transitional period. There was a 460 per cent increase in immigration. Unsurprisingly, Boston registered the highest Leave vote of the 2016 referendum: almost 76 per cent.
Boston is an extreme example, but it is only one of many places I have visited where we have utterly failed to integrate people — including, sometimes, those of Pakistani and Bangladeshi origin. The government has been attacked for attempting to limit low-skilled immigration in this week’s white paper. But it is trying to respond to a deep malaise which is driving far-right populism in both Europe and the US, and even in previously moderate Sweden.
As Britain tumbles towards a future which I still hope will see us clinging on to the EU, not crashing out of it, I am concerned that so many members of the establishment continue to paint anxieties about migration as purely economic, the misplaced rage of those “left behind” by globalisation and the financial crisis.
While these are clearly factors, this explanation overlooks the fact that the challenge is not merely an economic one, of wages and productivity — it is cultural, too. The Migration Advisory Committee, which has done so much to provide objective analysis of this fraught subject, has stated that migration from the European Economic Area “as a whole has had neither the large negative effects claimed by some, nor the clear benefits claimed by others”. Something else is going on: boiling resentment at years of being ignored by the ruling classes who have benefited most from immigration.
Academics including Eric Kaufmann and Jens Hainmueller have shown that attitudes to immigration in the US and Europe are not as highly correlated with personal economic circumstances as many commentators assume. Many Leave voters and supporters of US president Donald Trump have been influenced more by deep fears about the impact on national identity.
Economists will argue that consumers benefit from cheaper vegetables in the supermarkets. But Boston voters who might prefer to pay a bit more to preserve their sense of identity should not be lightly dismissed. If we do end up remaining in the EU, we must not simply breathe a sigh of relief and resume business as usual.
This week’s argument over the proposed £30,000 income threshold for new arrivals will no doubt continue through the consultation period. So will the debate — vital for the NHS — over how to define a “shortage occupation”. But £30,000 was not plucked out of the air. It was based on the committee’s finding that EEA/EU migrants as a whole pay more in than they take out, in services and benefits — but only when they earn roughly £30,000 or more.
This goes to the heart of what many people feel deeply: that no one should take out more than they have paid in. During David Cameron’s renegotiation of the terms of the UK’s EU membership in 2015-16, polls showed that many people were aware that British taxpayers were paying child benefit to children who lived in Warsaw and had never set foot in Britain.
Mr Cameron bumped up against not only the theology of free movement of people, but also the incompatibility between Britain’s free universal healthcare and school systems, and contributory social insurance schemes in other member states which require far higher levels of prior contribution before getting entitlement to benefits.
The white paper states that people who arrive speaking only basic English are required to become more fluent; but I have interviewed many people who have survived for over a decade with no English at all. It makes a nod towards reducing entitlements for short-term workers, but does not address the question of contributions from people who want to put down roots and bring dependants, beyond the blunt instrument of income thresholds. We must bring back the contributory principle to our welfare state.
I would never argue that immigration was the sole factor driving the Leave vote in the 2016 referendum. Nor will it be the sole consideration in any “people’s vote”. But we ignore it at our peril. This week, it felt as though the debate had shrunk back into convenient tracks.
I hope that my friend Karol will succeed. Of course, if we crash out of the EU on March 29, high tariff barriers to agricultural imports will probably bankrupt our farms — and his café business. If that happens, Boston’s problem will no longer be too many people, but too few.
Last summer I was sitting in a café in Boston, Lincolnshire , interviewing Karol, its enterprising Polish owner. He arrived in England to pick lettuces ten years ago, worked his way up to factory packing, and then started this little restaurant on a side street. Sipping tea, he told me of his high hopes for the pierogi dumplings cooked by his wife.
I had sought out Karol as an example of the kind of immigrant we want in Britain — friendly and hard-working. He was sheepish about his very limited English, though, and said that his wife and parents, who have joined him, barely speak it at all. Their customers, he said with a tone of regret, are almost all Polish, Romanian and Lithuanian. Here on the east coast of England, the old residents and the new arrivals are largely living parallel lives.
This was perhaps inevitable. The population of this little town grew at more than double the average rate for England and Wales in ten years from 2004. This followed the decision of the Blair government to open the UK to the eastern European accession countries without a transitional period. There was a 460 per cent increase in immigration. Unsurprisingly, Boston registered the highest Leave vote of the 2016 referendum: almost 76 per cent.
Boston is an extreme example, but it is only one of many places I have visited where we have utterly failed to integrate people — including, sometimes, those of Pakistani and Bangladeshi origin. The government has been attacked for attempting to limit low-skilled immigration in this week’s white paper. But it is trying to respond to a deep malaise which is driving far-right populism in both Europe and the US, and even in previously moderate Sweden.
As Britain tumbles towards a future which I still hope will see us clinging on to the EU, not crashing out of it, I am concerned that so many members of the establishment continue to paint anxieties about migration as purely economic, the misplaced rage of those “left behind” by globalisation and the financial crisis.
While these are clearly factors, this explanation overlooks the fact that the challenge is not merely an economic one, of wages and productivity — it is cultural, too. The Migration Advisory Committee, which has done so much to provide objective analysis of this fraught subject, has stated that migration from the European Economic Area “as a whole has had neither the large negative effects claimed by some, nor the clear benefits claimed by others”. Something else is going on: boiling resentment at years of being ignored by the ruling classes who have benefited most from immigration.
Academics including Eric Kaufmann and Jens Hainmueller have shown that attitudes to immigration in the US and Europe are not as highly correlated with personal economic circumstances as many commentators assume. Many Leave voters and supporters of US president Donald Trump have been influenced more by deep fears about the impact on national identity.
Economists will argue that consumers benefit from cheaper vegetables in the supermarkets. But Boston voters who might prefer to pay a bit more to preserve their sense of identity should not be lightly dismissed. If we do end up remaining in the EU, we must not simply breathe a sigh of relief and resume business as usual.
This week’s argument over the proposed £30,000 income threshold for new arrivals will no doubt continue through the consultation period. So will the debate — vital for the NHS — over how to define a “shortage occupation”. But £30,000 was not plucked out of the air. It was based on the committee’s finding that EEA/EU migrants as a whole pay more in than they take out, in services and benefits — but only when they earn roughly £30,000 or more.
This goes to the heart of what many people feel deeply: that no one should take out more than they have paid in. During David Cameron’s renegotiation of the terms of the UK’s EU membership in 2015-16, polls showed that many people were aware that British taxpayers were paying child benefit to children who lived in Warsaw and had never set foot in Britain.
Mr Cameron bumped up against not only the theology of free movement of people, but also the incompatibility between Britain’s free universal healthcare and school systems, and contributory social insurance schemes in other member states which require far higher levels of prior contribution before getting entitlement to benefits.
The white paper states that people who arrive speaking only basic English are required to become more fluent; but I have interviewed many people who have survived for over a decade with no English at all. It makes a nod towards reducing entitlements for short-term workers, but does not address the question of contributions from people who want to put down roots and bring dependants, beyond the blunt instrument of income thresholds. We must bring back the contributory principle to our welfare state.
I would never argue that immigration was the sole factor driving the Leave vote in the 2016 referendum. Nor will it be the sole consideration in any “people’s vote”. But we ignore it at our peril. This week, it felt as though the debate had shrunk back into convenient tracks.
I hope that my friend Karol will succeed. Of course, if we crash out of the EU on March 29, high tariff barriers to agricultural imports will probably bankrupt our farms — and his café business. If that happens, Boston’s problem will no longer be too many people, but too few.
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