May plays red-hot poker

ON A PM GAM­BLING ON AN AP­PEAL TO LABOUR BUT WHO COULD STILL GET HER CARDS FROM THE TORIES

The New European - - Agenda - MICHAEL WHITE

Talk about nine lives. Theresa May has had more than an al­ley cat. Al­most from the mo­ment she first lifted the job from the wreck­age of David Cameron’s premier­ship, she’s been writ­ten off – gone by Christ­mas, out by Easter. Yet she’s still there, fast clos­ing in on Lib­eral, Henry Camp­bell-ban­ner­man, whose two years and 122 days in 1905-08 make him the 37th-long­est serv­ing PM out of 54, since all­time cham­pion, Horace Walpole (1721-42). Gor­don Brown, watch out.

I love this about pol­i­tics. Some­times they look in­vin­ci­ble, then trip un­ex­pect­edly on the rug. May was just the op­po­site, but she has tenac­ity. That Birm­ing­ham con­fer­ence speech (let’s not for­get the Danc­ing Queen rou­tine), com­bined with We-all-knowWho’s vacu­ous am­bi­tion, gave her more breath­ing space. Hu­mil­i­a­tion in Salzburg? For­get it. Ir­ish back­stop? We can fix it.

Even the DUP’S Ar­lene Fos­ter is hedg­ing her bets.

Sud­denly there was all that pos­i­tive mood mu­sic out of Brus­sels and other EU cap­i­tals about some sort of deal that would save us all – them too – from the avoid­able harm of a no-deal Brexit. Next

Wed­nes­day’s two-day, make-or-break meet­ing of the Coun­cil of Min­is­ters may prove to be nei­ther: they often kick that can down the au­toroute. The ‘both sides jump to­gether’ deal would not be fi­nalised un­til a No­vem­ber sum­mit. May is wisely hos­ing down ex­pec­ta­tions.

What deal ex­actly? Well, vari­a­tions on the usual vari­a­tions. How about Chenada+? Nor­quers- ? North­ern Ire­land to re­main aligned (good word) with the sin­gle mar­ket? The whole UK to stay in­side a tem­po­rary (an­other good word) cus­toms union? Ves­ti­gial off-bor­der checks on the pas­sage of goods? No one re­ally knows, in­clud­ing the diplo­matic sher­pas do­ing the hard work.

It may all end in tears. But for the mo­ment, it’s ‘game on’. Even the back­bench Tory plot­ters around the Eu­ro­pean Not Much Re­search Group (ERG) stopped plot­ting for 24 hours or so af­ter Theresa’s Abba mo­ment, briefly aware how ab­surd their hol­low pos­tur­ing has looked to ev­ery­one else. Crank­ing back into be­trayal mode this week, the neo­phyte Steve Baker flagged up 40 rebels will­ing to die in the Brexit ditch – or at the very least stymie this month’s bud­get.

More sub­tly, aid sec­re­tary Penny Mor­daunt (whom I hold in higher re­gard than I do most of them) loudly de­clared her loy­alty to May on Tues­day, thereby sig­nalling her avail­abil­ity should any­thing hap­pen to the PM. In do­ing so she also high­lighted the ERG’S prob­lem: not a short­age of wannabe PMS but the ab­sence of plau­si­ble ones. Nice try, Penny, but the bad boys of Brexit won’t give you a clear run. Un­mis­tak­ably, a mood of prag­ma­tism is back, as we pre­dicted here last week. “I don’t dis­agree with the ide­ol­ogy of the ERG, that’s where I come from,” one anony­mous min­is­ter bravely con­fided to the in­trepid Sun­day Times man, Tim Ship­man. “But we’re also politi­cians, we’re not ide­o­logues. We’re there to get things done.” On Mon­day, Michel Barnier pulled back on pub­li­ca­tion of a po­ten­tially un­help­ful draft of the post-brexit EU/UK trade and se­cu­rity re­la­tion­ship. Good.

Let’s not get car­ried away. Wolf­gang Mun­chau, the FT pun­dit team’s Ger­man Mr Gloomy, still in­sists we should worry about the ex­treme out­come, a no-deal, no-deal – not even the £40 bil­lion with­drawal treaty di­vorce. That is a prospect so dire for Bri­tain and its near­est EU part­ners that it would lead to a series of rapid mul­ti­lat­eral and bi­lat­eral deals to keep planes fly­ing and the M20 mov­ing.

In re­sponse to that no-deal deals no­tion the high­brow Con­ser­va­tive­home web­site, run by smart ex-mp Paul Good­man, warns that by March 29 the Juncker Com­mis­sion will be pack­ing its bags. At the same time the third pil­lar of the EU – the par­lia­ment – will be pre­par­ing for un­cer­tain, five-yearly elec­tions, mi­nus the UK and Nigel Farage MEP (at last!), but with mini-me Farages pop­ping up else­where. Thank good­ness these sort of pop­ulists hate each other al­most as much as they hate Brus­sels. Even Trumpite hate-monger, Steve Ban­non, has found some right-wing Bel­gian no-hop­ers to back.

In these dis­rup­tive cir­cum­stances, ar­gues Con­home’s Good­man, Martin (‘The Mon­ster’) Sel­mayr, the Com­mis­sion’s per­ma­nent sec­re­tary-gen­eral – the one who was il­le­gally shoe-horned into the job last year – will wield im­mense power. A worka­holic fed­er­al­ist, he does not like us, it is said, and is ap­par­ently par­tic­u­larly sen­si­tive about the British me­dia’s re­port­ing of his grand­fa­ther’s 15-year sen­tence for war crimes at the end of the Sec­ond World War. Josef Sel­mayr, who served as a Wehrma­cht Lieu­tenant-colonel in the Balkans, later re-emerged to be­come Bonn’s head of counter-in­tel­li­gence. Martin has been ac­cused of tweak­ing Wikipedia ref­er­ences to his grand­fa­ther. Hmmm again.

So May has plenty of hur­dles to over­come be­fore she over­takes Gor­don Brown at two years and 319 days in No.10, or the Duke of Welling­ton (one day longer) next sum­mer. At the Brexit poker ta­ble Barnier, JC Juncker, Don­ald Tusk and Co still hold most of the aces, but they’re pick­ing up low cards and a few jok­ers all the time. The pol­i­tics of Ro­ma­nia and Latvia have now taken a geo-po­lit­i­cal turn for the worse, join­ing Hun­gary and Poland on the EU naughty step where Italy’s left-right pop­ulist coali­tion – Rome’s Cor­byn-mogg regime – is per­ma­nently camped. Bul­garia joins Malta with a trou­ble­mak­ing jour­nal­ist’s mur­der to ex­plain. Moscow is seek­ing to re­assert its in­flu­ence in the Balkans at the EU’S ex­pense, yet an­other se­ri­ous Project Fear which in­su­lar Brex­i­teers ig­nore.

Amid all this tur­moil May hangs on. It re­minds me of a story I heard last month, one which I have been un­able to con­firm. But here goes. Af­ter the cab­i­net’s Che­quers meet­ing in July – the one which later saw Boris (“pol­ish­ing a turd”) John­son join David Davis in the taxi queue – the prime min­is­ter is said to have called in Michael Gove for a chat.

“Michael, what do you need for your de­part­ment?”

Gove is said to have rat­tled off a ver­sion of the en­vi­ron­ment de­part­ment’s lengthy wish list. It must have in­cluded all that money which will be needed to save British agri­cul­ture from the con­se­quences of Brexit and all that free trade with Don­ald Trump’s swim­ming pool chick­ens. Af­ter this week’s re­newed plea from Seoul about the ur­gency of sav­ing the planet from cli­mate ‘catas­tro­phe’ Govey will need all he can get.

Ac­cord­ing to the gos­sip, May replied: “You can have it, Michael. Leave Ham­mond to me. In re­turn I want you to go on the Marr show to­mor­row morn­ing and praise the Che­quers for­mula.”

Which, on Sun­day July 8, Gove – al­ways this col­umn’s Ras­cal to Watch – fa­mously did. “I’m a re­al­ist and one of the things about pol­i­tics is you mustn’t, you shouldn’t, make the per­fect the en­emy of the good. One of the things about this com­pro­mise is that it unites the cab­i­net,” the shame­less fel­low ex­plained.

In fact, it didn’t unite the cab­i­net for long. Davis quit that evening and John­son the fol­low­ing af­ter­noon, protest­ing that Che­quers would re­duce Bri­tain to “the sta­tus of a colony”. That rings es­pe­cially hol­low this week when the Trump White House warned Canada that the re­vised Nafta deal the boss im­posed on Ot­tawa and Mex­ico City will re­quire them not to do sim­i­lar trade deals with “non-mar­ket economies” (ie China).

Ditto the EU and Ja­pan. The post-war world of grad­u­ally-di­min­ish­ing trade bar­ri­ers is chang­ing fast as neo-na­tion­al­ism takes hold every­where. Talk­ing of which, the EU has been ask­ing what’s hap­pened to all that Eu­ro­pean cheese which Canada promised to let into its pro­tected agri-mar­ket un­der the Canada/eu trade deal (Ceta) beloved of the ERG? The 5,333 tonnes ris­ing to 16,000 over five years amounted to a pal­try 1,821 tonnes in Year 1, most of that long-life Parme­san, not the per­ish­able smelly stuff. Hmmm.

Never mind. The story serves to re­mind us that Gove is an oper­a­tor, John­son a bun­gler and Team May pos­si­bly smarter than it usu­ally looks. Some­one joked the other day that Ja­cob Rees-mogg is play­ing chess while Boris is play­ing draughts. That flat­ters Rees-mogg. I think he’s play­ing soli­taire. Tim Ship­man re­ports that when a re­porter of­fered one of his ERG acolytes a mod­est £20 bet that Ja­cob would end up vot­ing for May’s even­tual deal, the cheap­skate MP wouldn’t take one for the team and risk the twenty.

For the first time in a long time May has also treated her­self to a purely po­lit­i­cal ini­tia­tive of the non-brexit kind. In an ar­ti­cle for the Ob­server she ap­pealed to “de­cent, mod­er­ate and pa­tri­otic” vot­ers on the cen­tre left to de­fect from the Cor­byn project and vote for her own “de­cent, mod­er­ate and pa­tri­otic” Tory pro­gramme next time.

This is cheeky for sev­eral rea­sons. The Guardian re­ported last week that May’s whips have been mak­ing over­tures to mod­er­ate Labour MPS in search of a Com­mons ma­jor­ity for what­ever she may bring home from the lat­est series of crunch talks in Brus­sels. Per­fectly sen­si­ble but cer­tain to out­rage woad-wear­ing purists on the ERG right and the Manichean Labour left, al­ways on the look­out for traitors and sabo­teurs who are stab­bing their un­work­able pro­pos­als in the back.

Para­noia on the right was fur­ther fu­elled when Ni­cola Stur­geon, canny first min­is­ter of Scot­land, faced a sim­i­lar chal­lenge in terms of bal­anc­ing oc­tane-fu­elled ex­pec­ta­tions of her ac­tivists with pro­saic re­al­ity when the SNP con­fer­ence con­vened in Ed­in­burgh. She used it to sug­gest that her West­min­ster MPS could vote for a sec­ond ref­er­en­dum af­ter re­ject­ing May’s deal/non-deal, even with­out the prom­ise of a sec­ond Scot­tish Indy ref­er­en­dum at­tached to it.

By in­sist­ing that all four UK na­tions must vote Brexit be­fore Brexit can hap­pen (the score in 2016 was 2-2) that sce­nario just might – might? – al­low Scot­land and the wider UK to stay in the EU. Or it might pave the way to in­de­pen­dence, al­beit cut­ting Scot­land off from its main mar­ket and fi­nan­cial prop. Fan­ci­ful talk on both counts, I still think, but there is lots of it about.

May’s pitch to Ob­server read­ers was cheeky too be­cause the woman near or at the top of an aus­ter­ity-driven govern­ment for eight years was pro­mot­ing her claims to rep­re­sent “the many, not the few” (copy­right New Labour). She did so by parad­ing her own com­pas­sion­ate poli­cies on health, hous­ing etc along with a “pos­i­tive and op­ti­mistic” vi­sion of the postBrexit fu­ture.

As ev­ery­one has no­ticed, ei­ther with sat­is­fac­tion or alarm, her new prom­ises of a post-aus­ter­ity Bri­tain don’t square eas­ily with most eco­nomic pre­dic­tions. The

Eey­ore-ish warn­ings from Philip Ham­mond and the ad­mit­tedly-mixed mes­sages com­ing from Bank of Eng­land’s Mark Car­ney in­sist that things will be tough – per­haps very tough – in terms of growth and tax rev­enues.

Yet Down­ing Street is sig­nalling that the NHS will be bet­ter funded (by £6.5 bil­lion a year) and that the cap on coun­cil house bor­row­ing to build af­ford­able homes will be lifted (£1 bil­lion a year). Other good­ies will be com­bined with such costly ges­tures as con­tin­u­a­tion of the eight-year freeze in fuel tax du­ties. That’s a flat con­tra­dic­tion of that hot air blow­ing out of Seoul about state and in­di­vid­ual ac­tion to curb global warm­ing. It also costs £800 mil­lion a year.

It pre­sents an ur­gent chal­lenge to chan­cel­lor Ham­mond for his Oc­to­ber 29 bud­get (don’t for­get May’s prom­ises to

Gove ei­ther). The FT reck­ons he has a £35 bil­lion-a-year hole in the pub­lic ac­counts to fill by 2022-3. So his of­fi­cials are scram­bling around for sav­ings be­cause they know that higher re­cent tax re­ceipts and lower bor­row­ing are head­room that won’t last. More cuts in pen­sion al­lowances for the bet­ter off ? A de­lay in the promised higher tax thresh­holds for the poor? Alas, Brown and Os­borne trousered most of the best stealth taxes.

The pen­sion hit may be so­cially jus­ti­fied but may also have a knock-on ef­fect on be­hav­iour. There is ev­i­dence that the grow­ing doc­tor short­age may be driven in part by GPS and other pro­fes­sion­als re­tir­ing early, dis­cour­aged by the £1 mil­lion cap on their pen­sion pots (it barely buys £40,000 a year now that an­nu­ity rates are so low), as well as staff short­ages and other work­place pres­sures. Never mind they can come back to the NHS at higher free­lance rates. Self-de­feat­ing, eh!

As for the poor, they’ve suf­fered more than they should in terms of cuts in wel­fare (7% be­tween 2010-15 with more to come). Lo­cal and cen­tral govern­ment ex­pen­di­ture lim­its are down 14%, ac­cord­ing to the IFS, 28% if you ex­press it as a share of na­tional in­come. Ham­mond’s “deal div­i­dend” talk de­pends on a softer Brexit than Canada+ would pro­vide. Re­mem­ber, the Brexit right is threat­en­ing to op­pose nasty tax rises on Bud­get day.

As in her Birm­ing­ham speech – where she even threw a pro­tec­tive arm around Diane Ab­bott – the PM (who has a new and young speech­writer called Kee­lan Carr) laid off heavy abuse of the Labour leader, his record and agenda, though the for­mer head of M16, Sir Richard Dearlove, did not on Sun­day sofa TV.

May re­ferred gen­tly to the “flaws in Cor­bynism” and to a “once-great party” laid low. This is bet­ter woo­ing than sav­age as­saults (which can safely be left to the tabloids) and prob­a­bly less coun­ter­pro­duc­tive than abuse, es­pe­cially as Cor­byn shies away from the per­sonal stuff, pre­fer­ring to be­rate more im­per­sonal forces like cap­i­tal­ism, im­pe­ri­al­ism and con­ser­vatism.

Again, it high­lights how fluid and un­pre­dictable pol­i­tics now are – here and every­where. Banks and for­eign-owned car­mak­ers are mak­ing in­creas­ingly un­set­tling noises about what a bad Brexit out­come would mean for their pres­ence in Bri­tain. Em­manuel Macron and his team also strike a dis­cor­dant note, though Macron’s own prob­lems aren’t go­ing away ei­ther: an­other cab­i­net min­is­ter quits and the young pres­i­dent gets caught in a silly ‘mid­dle fin­ger’ selfie on a for­eign trip.

If that wasn’t enough to be get­ting on with, the IMF – nor­mally an in­stru­ment of US im­pe­rial power in Cor­byn-speak – did what struck me as a big favour to Labour on Mon­day when it sug­gested that the UK should loosen the purse strings on tax and pub­lic spend­ing in the event of a hard Brexit.

While fur­ther down­grad­ing its UK growth pro­jec­tions for 2018 – to 1.4% from 1.7% last year – and ac­knowl­edg­ing that the pub­lic fi­nances will be tight, the IMF seems to fear that lack of de­mand could be an even big­ger prob­lem for the econ­omy. That’s what John Mcdonnell and his lieu­tenants have ar­gued and can now claim to have the IMF’S bless­ing for as they prom­ise to aban­don the crude cru­el­ties of uni­ver­sal credit (take a bow, Iain Dun­can Smith) and shake the magic money tree in all direc­tions.

Who’d have thought it? Yet just as the IMF in­ad­ver­tently pro­vides spu­ri­ous cover for Labour’s spend­ing spree it also puts equally in­no­cent pres­sure on the Tory ERG crowd. The more Labour looks likely to win an early elec­tion, the harder it be­comes for them to pull the plug on May.

Photo: John Thys / AFP Photo

POWER: Eu­ro­pean Com­mis­sion sec­re­tary gen­eral Martin Sel­mayr

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