MICHAEL WHITE: The UK's quagmire trek
PUBLISHED: 16:46 28 November 2018 | UPDATED: 16:47 28 November 2018
MICHAEL WHITE on the dark forces that circle as the hunt continues for a way out.
Even before Theresa May began her nationwide media offensive to sell the half-cabinet’s Brexit deal to a weary electorate over the heads of bickering Westminster, I should have spotted that there were two cartridges in her shotgun. One is labelled “My Deal or No Deal”. The other is “My deal is the best way to reunite the country because both sides equally dislike it”.
I was a bit slow to spot the second cartridge until I heard Philip Hammond, never the most deft marksman to fire off a political message, popping up on radio and television to repeatedly warn that “disunited and divided countries are not successful countries”.
In publishing the Treasury’s updated assessment of the economic consequences of the various paths on offer, Hammond – who has previously argued that no-one voted for Brexit to become poorer – spelled it out. He even dared say that staying in the EU is still be the best economic choice (howls of religious outrage), but was sensitive enough to add that many people backed Brexit for non-economic reasons.
May’s deal, which will leave GDP between 1% and 2% lower (£40 billion) over the next 15 years, is the least damaging alternative: a Norway option – of which more later – might cost 1.4%, a Canadian free trade deal 4.9% and the no-deal cliff a nasty 7.6% (£150 billion).
Ok, these are only posh guesses from analysts who have been wrong(ish) before. But I was struck listening to Brexit and City economist, Gerard Lyons, talking warily on Radio 4 because he was up against fellow economist Stephanie Flanders, who is as smart and articulate as he is, by just how downbeat he sounded. We have to rebalance the domestic UK economy, something we could and should have done inside the EU, he admitted (true), and trade with both Europe and the faster-growing world beyond. There will be a shock, but the outlook “is not as pessimistic as some might suggest”. Oh really? Paint that slogan on the side of your next battle bus, Gerard, and see how far it takes you.
As for Eeyore Hammond’s own message, you can say that again, Phil. OK, I will. “Disunited and divided countries are not successful countries” and “We have got to bring the country together”. It’s not the most appealing advertising slogan. And it’s not quite true. Many successful countries are disfigured by deep fractures in the national psyche – ‘culture wars’ if you prefer – which resurface in varying forms over the centuries. Church vs state in France (and many other places), the bitter legacy of slavery in America off which the alt-right feeds, religious sectarianism in India of a kind which has slowly subsided in Britain (most of it) since our 17th century civil war.
City versus country, on the other hand, is an ancient schism visible pretty much everywhere in our own globalised world which cuts off outward-facing Chicago, London or Shanghai from their historic hinterland. It’s part of the Brexit story. “Reasons for voting Brexit. No 603,” as I have taken to interjecting at dinner parties when some metropolitan smoothie makes an insensitive point about people and places north of Watford. I happened to travel through small towns in the West Midlands last week. From them even the bright lights of Birmingham city centre – its office tower blocks, German Christmas market stalls, New St station’s glamorous new shopping mall – must look as remote as Manhattan. Many British city centres have that quality now, exclusive and excluding.
Never mind. We are stuck where we are, with a more urgent public agenda than urban (or seaside) renewal, NHS waiting times and mental health problems that devour police time, affordable housing shortages (plenty of the unaffordable kind stand empty) or flagging economic productivity. We are stuck with Brexit and the coming dance of death around the May plan. Any blueprint condemned for selfish, nationalistic reasons by Donald Trump – foolishly wrong or compulsively dishonest about a dozen things a day – cannot be all bad. But this deal looks dead in the water long before it floats to Westminster for that ‘meaningful vote’, now pencilled in for December 11.
I find myself surprised to be reaching this conclusion so soon in what is going to be a complex and intense two-week process. Ken Clarke has declared for the deal on the unheroic and – I suspect – accurate grounds that no one else is likely to do much different or better. So have the anti-Brexit Times and detoxified Daily Mail. The FT’s foreign affair pundit, Gideon Rachman, has compromised, as Hammond urges us all to do.
Much more surprisingly, my old Guardian colleague and pal, Alex Brummer, veteran City editor of the Mail and a passionate Brexiteer, says it is a decent compromise which will save most of the City’s business and could unleash wider economic renewal. Trusting in WTO terms would be a “colossal mistake”, he adds. I trust Alex a good deal more than I do IDS or Jake O’Mogg, the Irish asset manager. So May on tour may be a travelling leper, but she is not a wholly friendless leper. She has her own little colony – a key word in this month of ‘vassalage’.
Against all of which it must be said that Tony Blair (remember him?) came out against it, as did his man of affairs, editor-at-large Alastair Campbell of this parish. So did the Dominics, saintly Grieve and the more sulphurous Raab. Jeremy Corbyn and Keir Starmer, who has played a bad hand well, are against it. So is Anna Soubry, but not Nicky Morgan. Vince Cable, Nicola Sturgeon, Plaid Cymru all say no. So – heaven help us – does the hapless, self-important DUP. This week its leader, Arlene Foster (a woman whose own father was shot at home by a Republican gunman) appeared to say that a Corbyn government was less of a threat than May’s Brexit. No wonder she’s an unemployed first minister.
When slippery Michael Fallon, our former defence secretary, turned out for Radio 4’s Today programme, to repeat what he’d told her in the Commons – pro-Brexit but a notorious government loyalist – that May’s “huge gamble” is the worst of both worlds, I texted a genuine government loyalist, a minister vocal in his support for May. Can the deal survive, I asked? “Doomed to fail,” he replied. Doomed, despite the whips blackmailing, those proffered knighthoods and patronage, which ex-MPs love to exaggerate on radio chat shows. All are much less powerful now that MPs (not the whips) elect committee chairmen and the street politics of social media intimidates the faint-hearted.
Regular readers know that I have a fiver on the ‘TARP scenario’, named after the Troubled Asset Relief Programme (bank bail-outs) which Congress rejected in 2008 until the stock market turned nasty. Wiser heads tell that it won’t be like that here because the Bush administration was forced to provide Congress with much more detail in return for its U-turn, something May will have done ad nauseam by December 11.
Can she squeeze a bit more out of Brussels if defeated just ahead of the December 13 summit? The EU 27 said ‘no’ as they said farewell to Britain at Sunday morning’s Belgian wake. So they must, at this stage. But in a tight corner the EU priesthood is as famously flexible as a Pope under siege. Michel Barnier won’t want to unpick much of substance. Nor will May, for the increasingly apparent reason that disgruntled member states have their Herr Moggs and Senor Borises who would want concessions too, on more than Gibraltar and French fishing rights (or do I mean “fishing riots”?).
Sceptics point to the fact that the Bank of England under Mark (pause for Brexit hisses) Carney has ensured that the UK banking system is now strong enough to resist a no-deal shock and have priced in (i.e. taken account of) the likelihood of a rejection by MPs. Mail-man Brummer’s article says that too. Lots of very clever people do.
Hmmm. After what we all learned about the herd instincts of most banking systems during the pre-crash boom, not to mention their criminal behaviour (for which too few have been jailed), I think I’m entitled to remain sceptical about the City’s emotional capacity to panic. Especially so at a time when they seem to have unlearned the lessons of 2008 and dodgier kinds of debt are piling up again.
Stock markets have taken a beating this month and monetary policy hasn’t many bullets left if we all hit trouble. That includes the eurozone by the way, its problem of renewed low growth despite continued quantitative easing (QE, or printing money) are arguably worse. The left-behinds are rioting in French cities, not ours. Not yet. A botched Brexit is not fundamental to the world economy, but it could be a trigger, as could war in Asia or – this week’s scare – the waters of the Crimea.
Newspaper pundits and websites are now airing all kinds of assessments (usually legal or political, not economic) of the prospects for May’s 585-page Withdrawal Agreement, a legal treaty subject to ratification by parliament, and last Thursday’s political statement, just 35 pages, on future EU/UK trade relations. I read it myself in bed one morning and Jeremy Corbyn was right to call it “waffle”. Nothing wrong with waffle if it sustains good intentions. But it serves as a reminder that the toughest negotiations are yet to come and that when David Davis says a Canada+ deal can be achieved during the transition after a no-deal Brexit he further illustrates his casual incompetence: no-deal means no transition, but not no cliff.
I’ve also read all sorts of Brexit and Remain verdicts and was especially cowed by a savage critique on the deal published by Briefings for Brexit, the upmarket woad-wearers site. Written by ‘Caroline Bell’, a pseudonym for “a published historian who has direct experience of the matters covered in this article” (we’ll take your word for it), it placed an articulately gloomy view of all the ambiguities in the text (and those definite unambiguities!). As such it mocked May’s claim – repeated in her open letter to voters – to have repatriated freedom of movement, budget control, farms and fisheries (rejoice, we are “an independent coastal state” again – at least until we negotiate), the supremacy of English law over ECJ law.
What struck me about its tone (apart from the author’s curious need for anonymity) was how defeatist it was, a kind of Remoaner in Reverse: everything that could go wrong will go wrong. “Far from restoring our laws, the Withdrawal Agreement is the death of parliamentary sovereignty in the United Kingdom and removes from British citizens civil rights that extend back to Magna Carta,” the piece concluded.
Hyperbolic nonsense, worthy of hysterics on the fringe of both camps. Perhaps that’s why the self-styled historian chose anonymity. None of us really know how any of the proposed scenarios would play out in real time, if they ever get the chance.
The People’s Vote option – a second referendum on two or three core alternatives – gathers strength and credibility with every passing day. So does reversion to Nick Boles’s ‘Norway for Now’ model (membership of the single market, lots of costs plus continued free movement). It was rejected from the start by May in her long-abandoned red lines phase. A bloc of cabinet ministers, including Rascal to Watch Gove (why so silent, Michael?), are said to be contemplating it as an off-the-shelf Plan B fall-back, pending movement to a looser arrangement. Arlene Foster likes it too. That must be a comfort.
Treasury modelling says Norway would be the least economically damaging form of Brexit. That is why those concerned primarily with disengaging from the EU’s political structures – like Brexit veteran and founder-editor of Private Eye, Christopher Booker – have favoured it all along.
Some ‘this is worse than Remain’ hard Brexit critics of May’s deal might contemplate it at this late stage too – long after Barnier offered such an arrangement. How bonkers is that? We have much more of it to endure before Christmas. It is reported that some Tories would back May’s version if she promises to resign when it’s over. Hollow laughter. So much for the national interest.
Tony Blair’s take-away was just the opposite. The “dodo” deal is so bad that the only way left to bind up the nation’s wounds in renewed unity is via a second referendum choice between a “real” (i.e. hard) Brexit and Remain. If Brexit wins again, despite all the problems voters now better understand, the former PM says he’ll accept it, he really will. The trouble with such comfort food is that there is little evidence that Remain would fare much better – it would have to be much better – in 2019 than it did in 2016 to settle the matter.
Yes, John McDonnell seems to be edging Labour towards that option, assuming, as he rightly does, that the general election he wants won’t happen. Some 700,000 people marched (I was there) and polls show a modest tilt towards Remain and a People’s Vote. Yes, around 1.6 million people have died since June 23’s vote, mostly elderly and possibly Brexiteers. But there has been no deep shift and pollsters reported that most people (80% plus?) would vote as they did last time. Around half – give or take – are even more entrenched in their Remain or Brexit stance than they were. ‘Bobs’ – or Bored of Brexit – are a rising segment. “Get on with it,” as pollster Deborah Mattinson expresses her findings.
Over time (there isn’t much) that sentiment might work in May’s favour and against suggestions that Brexit day, March 29, might be postponed with the EU’s consent. For what? For a Norway for Now switch? For an election in which Labour insiders claim the Corbyn-led party can’t win a Commons majority (true or false?) and might take three months, solving nothing? For a referendum that would take several months to legislate and campaign, say six months in all with no certain outcome? A change of Tory leader would be quicker, but the Brexits no more have a candidate than they have a policy.
A change of government then, one without an election after May’s shambolic cabinet finally implodes? Professor Matthew Goodwin, an expert on the far-right populist and nationalist parties now rising across the world, got a generous spread in the Sunday Times to explain how Corbynism has captured the anti-austerity zeitgeist and that a Corbyn premiership might not be so bad. More fairness and economic protectionism, less market and obscene executive pay is what left-behind voters want, even Tory ones, he says. We all want it, don’t we? Easier said than done.
Remember, Goodwin does politics, not economics. McDonnell masterminds Labour’s cup-of-tea charm offensive to big business, but then lets slip how he “couldn’t be friends with a Tory”, so it’s off-message and back to square one with those vital floating voters. He’s a good hater, it’s in his nature. But Goodwin might usefully refocus on his special subject where there are far more robust good haters than McDonnell and in better health too. What worries me most about the political vacuum which looms in the winter fog is the dark and lawless forces increasingly visible in the public arena.
The police complain of over-stretch, of ‘wasting’ time looking after mental health patients and other social distress which others should handle. Lawyers complain of budget cuts which cripple the courts. Ministers wonder if they can afford to send knife offenders to prison in the midst of the current epidemic. Sajid Javid is forced to drop a rifle ban (by Brexit MPs) while a Brexit peer admits to driving his car – admittedly slowly – at a marching protestor who had annoyed him.
What’s different from when Lord Tebbit (for it was he) was an MP in the turbulent Thatcher years is that the bonds of society are weaker, the institutions of society and the state are mostly poorer and weaker, the pressures on them greater. And even radio shock-jock Nigel Farage takes fright when Gerard Batten, his successor but 25 as UKIP leader, hires the rabble-rouser, EDL founder and online entrepreneur, Stephen Yaxley-Lennon – aka ‘Tommy Robinson’ – as an ‘advisor’.
It doesn’t take many people like Robinson to seize a moment and alter public life forever, especially if they have dark money to fund their dark ideas. Italian conservatives learned that in 1922 when they allowed a supposedly manageable clown like Mussolini to become prime minister constitutionally. German conservatives made the same mistake ten years later. Is ‘Tommy Robinson’ a future Mussolini? I’ve no idea. Is his fellow-journalist, Boris Johnson? Good question.
Austerity, Brexit and the 2016 referendum, globalisation and the global reach of social media have helped liberate strong feelings that easily morph into violent, divisive passions, as Jo Cox MP discovered to her cost. At this time of acute social fragility MPs have to grope their way to a wise path out of the Brexit quagmire in the next two weeks. A lot depends on what they manage to decide.