The grave mis­take


The New European - - Agenda - MICHAEL WHITE

What’s been the most im­por­tant po­lit­i­cal news of the week? Cer­tainly not Philip Ham­mond’s bud­get gam­ble, whose mod­est re­treat from nearly a decade of aus­ter­ity rests on the frag­ile pro­viso that Britain will achieve a Brexit deal with the EU27. Not for the first time, the chan­cel­lor’s caveat is con­tra­dicted by No 10. The week’s big head­line wasn’t the

50p Brexit com­mem­o­ra­tive coin ei­ther, let alone Lord Alan (“You’re Fired”) Sugar’s Brexit con­fes­sion in the House of Lords, poignantly ego­tis­ti­cal though it was.

We’ll come back to Lord Sugar and the peers’ im­pas­sioned de­bate on a se­cond ref­er­en­dum. More in the spirit of the times, alas, was Sun­day’s elec­tion of a pop­ulist dem­a­gogue and Trump fan to lead an im­por­tant coun­try – in this case Brazil. Like state-spon­sored po­lit­i­cal as­sas­si­na­tions, like pipe bombs and syn­a­gogue shoot­ings in Amer­ica, that’s fast be­com­ing the new nor­mal: sugar rush pol­i­tics (no pun in­tended, M’lord) by a sugar rush soft-drink ad­dict in the White House.

No, for my money the most sig­nif­i­cant po­lit­i­cal event flagged up this week was at the other end of the sugar rush spec­trum. Low sugar An­gela Merkel is step­ping down.

Steady on, Mike. Why should the Ger­man chan­cel­lor’s Blair-like an­nounce­ment – it came af­ter a bad re­sult for Ber­lin’s CDU-SPD coali­tion in state elec­tions in Hesse – that she won’t fight the next gen­eral elec­tion, sched­uled for 2021, mat­ter to us? Cau­tious Mutti – Mum – Merkel has hardly been flex­i­ble, let alone help­ful, to Britain, ei­ther in the run-up to the June 23 Brexit ref­er­en­dum or dur­ing the chaotic ne­go­ti­a­tions since.

No, but she might be more help­ful in the com­ing crunch when the EU27’S lead­ers – that mostly means Merkel – take over from Michel Barnier’s talk­ing clock to de­cide what sort of deal they are pre­pared to cut with that other du­ti­ful cler­gy­man’s du­ti­ful daugh­ter, Theresa May. That now looks less pos­si­ble.

Don’t be­lieve the ‘dig­ni­fied exit’ stuff. By un­ex­pect­edly an­nounc­ing she is pre­par­ing to step down as party leader and chan­cel­lor af­ter four terms Merkel may have wrong-footed her wannabe suc­ces­sors. But, like Tony Blair in au­tumn 2004, she has also opted for lame duck sta­tus and is un­likely to last long. “Mutti is Ka­putti” as bone-headed Tory Brex­i­teer, An­drew Brid­gen, sen­si­tively tweeted.

Ber­lin’s Grand Coali­tion may be ka­putti too if the flag­ging SPD (al­most beaten by the Greens in Hesse) have any resid­ual sense of self- preser­va­tion. In Hesse – home of Frank­furt, Ger­many’s and the euro­zone’s fi­nan­cial hub – Merkel’s CDU were in im­prob­a­ble coali­tion with the mid­dle class, left­ish Greens. They may now have to bring in the pro-mar­ket FDP to sur­vive. What hap­pens next in Ber­lin is even less clear. Europe rightly trem­bles.

Any time from here on, it means no more Mutti, dull but re­as­sur­ingly sen­si­ble, es­sen­tially de­cent. Since 2005 she has been Europe’s sheet-an­chor, more re­cently a coun­ter­point to Don­ald Trump’s de­mo­li­tion job on the in­sti­tu­tions which have up­held peace, (mostly) sta­bil­ity and de­cent gov­ern­ment in the in­dus­trial West since 1945. It was a model we thought un­til re­cently we had been suc­cess­fully ex­port­ing south and east since the fall of the Ber­lin Wall in 1989. How naïve we were!

In this con­text the love­less po­lit­i­cal mar­riage of Theresa May and Philip Ham­mond – con­tem­po­raries at Ox­ford in the 1970s – sud­denly looks more solid than we tend to think. Spain, Italy, em­bat­tled Greece, much of the old Eastern bloc, even Swe­den, are all po­lit­i­cally shaky. So is May, of course, but she is lucky in her en­e­mies on both left and right, Jeremy Cor­byn and Boris, the portly plot­ter.

Lucky too in her al­lies. Eey­ore Ham­mond (“Phil-good Fac­tor” ac­cord­ing to the newly up­beat Daily Mail 2.0) was openly abused by May aides like silly brain­box Nick Ti­mothy be­fore their doomed 2017 elec­tion. Ham­mond emerged stronger. What’s more, he doesn’t want her job, what­ever the Spec­ta­tor tells its read­ers.

So what are the Brexit take­aways from the bud­get, apart from the ob­vi­ous? Pol­i­tics has trumped eco­nom­ics as May re­sponds to pub­lic aus­ter­ity fa­tigue and the need to meet some of Labour’s eas­ier chal­lenges – de­spite the Trea­sury’s re­sis­tance. £103 bil­lion put into a £2.2 tril­lion econ­omy over five years won’t feel like win­ning the pools, espe­cially for the poor­est fam­i­lies, as the Res­o­lu­tion Foun­da­tion beat the In­sti­tute for Fis­cal Stud­ies (IFS) in sternly point­ing out. Aus­ter­ity hasn’t ended, as the PM promised, but it is tak­ing a nap while the Trea­sury gam­bles that some­thing turns up.

So the bud­get gen­er­ated pos­i­tive head­lines from sup­port­ive pa­pers be­cause the hor­ri­bly cheer­ful Ham­mond – those cringe­mak­ing jokes, had some­one spiked his wa­ter? – had care­fully pan­dered to vo­cif­er­ous Tory MPS and in­ter­est groups. The “lit­tle ex­tras” en­com­passed the mo­tor­ing and beer lob­bies, fam­i­lies, tax-cut­ters and ru­ral broad­band pro­test­ers. The Mail’s cam­paigns (al­ways a good move) on the be­lea­guered high street’s busi­ness rates, gam­bling, plas­tic, so­cial care, de­fence, even pot­holes which no­to­ri­ously “ex­ter­nalise” the cost from the roads bud­get to driv­ers whose cars get dam­aged, their boxes were all ticked. In­come tax rises? Never heard of them.

But they’ll be back.

Hous­ing short­ages, class­room short­ages, em­bat­tled town halls and first­time buy­ers weren’t quite for­got­ten. Uni­ver­sal credit was patched up (again). And the artiste for­merly known as Fis­cal Phil put a few bob the way of men­tal health in the larger con­text of the £20 bil­lion a year (3.4% in real terms) which head­line thief May had al­ready an­nounced for the NHS. He also threat­ened Ama­zon and other FAANG tax cheats with a dig­i­tal tax – “very brave, min­is­ter,” Sir Humphrey prob­a­bly told him, be­cause it will only work if the rest of the world does too.

Bud­gets which do well (‘Tax Bills Slashed’, ‘High St Bo­nanza’ etc) on day one of­ten quickly fall apart. This one was a very mod­est sugar rush. But though he ut­tered the word “Brexit” only once and promised a “dou­ble deal div­i­dend” once the un­cer­tainty is over, Feel-good Phil made clear – un­like May – what the likely fall-apart sce­nario is: a no-deal de­par­ture on March 29. She says the ex­tra spend­ing will be there any­way (shades of May’s “noth­ing has changed” talk in 2017?), he says it won’t. He’s right.

There were glanc­ing hints of a ma­jor re­view of Britain’s eco­nomic strat­egy which sounded like a re­vival of his “dereg­u­lated Sin­ga­pore” warn­ing, but prob­a­bly wasn’t. In re­al­ity it would prob­a­bly mean a full-scale bud­get re­vi­sion next year – Ge­orge Os­borne’s Brexit emer­gency bud­get at last? – with cuts and higher taxes if things go badly wrong, as as­sorted busi­ness pre­dic­tions are say­ing in EVER LOUDER TONES.

The chan­cel­lor has spent most of the higher-than-ex­pected tax re­ceipts which the usu­ally-gloomy Of­fice of Bud­get Re­spon­si­bil­ity (OBR) oblig­ingly found down back of the Trea­sury sofa – but not all of it. The cost of Brexit prepa­ra­tion has now reached £4.2 bil­lion, MPS were told. It’s money that won’t go on the NHS, Boris, it will go on UK Plc’s credit card in­stead.

All the same, Ham­mond says he has kept £15 bil­lion of re­serve “fire power” or “fis­cal head­room” in case the econ­omy needs a boost as lor­ries back up at Dover and Calais. It’s all funny money any­way and the Of­fice for Bud­get Re­spon­si­bil­ity – which of­ten gets its own sums wrong – com­plained that late bud­get changes meant it hadn’t had time to vet all the chan­cel­lor’s claims on Mon­day.

Fis­cal con­ser­va­tives, those who want him to com­plete Os­borne’s much-de­layed goal of elim­i­nat­ing the bud­get deficit, were qui­etly aghast. The na­tional debt has fi­nally peaked at 86% of GDP, but that’s dou­ble the per­cent­age it was be­fore the bankers’ crash. There are few such tra­di­tional Tories left on the Con­ser­va­tive benches though, cer­tainly not among the hard Brexit right whose votes (ab­sten­tions at the very least) Tess and Phil will need to get their still-un­cer­tain deal through the Com­mons. The Tree-grown The­ory of Money is no longer con­fined to the Cor­bynistas.

You will have spot­ted that ex­cited talk of coups against May or the sack­ing of Ham­mond have gone as quiet as the “Brexit will de­liver a glo­ri­ous fu­ture” cho­rus. A snap elec­tion? You must be jok­ing. In con­trast to which I must draw your at­ten­tion to that lit­tle-re­ported Lords de­bate on the need for a se­cond ref­er­en­dum – the Peo­ple’s Vote cam­paign – on Brexit in the wake of the 700,000-strong march through Lon­don which The New Euro­pean cel­e­brated over sev­eral pages.

I need hardly tell you that peers who spoke were over­whelm­ingly in favour of giv­ing the elec­torate a chance to think again and change their minds over this momentous de­ci­sion. Or that mem­bers of the Lords are by no means a cross-sec­tion of Bri­tish so­ci­ety, though Lord John Kerr – for­mer am­bas­sador to Wash­ing­ton and the EU, ex-head of the for­eign of­fice – did cite polls which sug­gest that 45% of vot­ers now want a se­cond vote against 35% who don’t. Only 20% think May is han­dling Brexit well.

This is the fo­rum where Lord Sugar, the Am­strad bil­lion­aire and Trump-like tele­vi­sion celebrity host of The Ap­pren­tice, made his Brexit con­fes­sion. But first, the de­bate. It was ini­ti­ated by a Lib­eral Demo­crat called Lord Camp­bell of Pit­ten­weem (it’s a pretty fish­ing vil­lage in Fife) who turns out to be Men­zies ‘Ming’ Camp­bell, Pit­ten­weem’s for­mer MP and one of the nicest peo­ple in pol­i­tics as well as the (for­mer) fastest run­ner in Europe.

It was Lord Ming who gen­tly re­minded his lis­ten­ers of the “facile mis­un­der­stand­ings” that had led David Davis to say “there will be no down­side to Brexit” and Liam Fox to pre­dict that the UK’S FTA with the EU 27 “should be one of the eas­i­est in hu­man his­tory”. A cen­tury af­ter the Ar­mistice they should have re­mem­bered that Europe is as much about se­cu­rity as eco­nom­ics and that it is An­gela Merkel’s sense of re­spon­si­bil­ity to the

EU’S ‘four free­doms’ – goods, peo­ple, cap­i­tal and ser­vices – that ac­counts for her in­flex­i­bil­ity in the Brexit talks. She fears oth­ers may be tempted to fol­low.

There is some truth in that, as there was

in much of what Pit­ten­weem’s ex-mp said about the eco­nomic, so­cial and con­sti­tu­tional dam­age Britain may be about to in­flict upon it­self. Par­lia­ment is sov­er­eign and can change its mind. The peo­ple should be al­lowed to pass judge­ment on what­ever May brings home from Brus­sels. In­ter­est­ingly, few of the few who spoke against him – Nor­man La­mont and Michael Forsyth to the fore – spoke of the glo­ri­ous post-brexit fu­ture, but con­cen­trated on the well-known ob­jec­tions, prac­ti­cal as well as those of prin­ci­ple, to an­other ref­er­en­dum.

New Euro­pean read­ers would have been proud of their colum­nist, the in­de­fati­ga­ble An­drew Ado­nis’s pithy con­tri­bu­tion. In just three min­utes and 394 words he set out his nine-point case for a Peo­ple’s Vote. You can find it in the on­line Lords Hansard, Oc­to­ber 25, col­umn 977, but let me sum­marise his sum­mary: a sus­pen­sion of Ar­ti­cle 50 so we can hold a ref­er­en­dum in May; the sus­pen­sion of cur­rent ref­er­en­dum laws to al­low a ded­i­cated act and com­mis­sion to su­per­vise it;

“prob­a­bly” a two-choice op­tion – May’s deal or Re­main – be­cause there is a no-deal third op­tion in re­al­ity (planes must fly etc); only one prop­erly reg­u­lated and ac­count­able cam­paign per side; prop­erly reg­u­lated so­cial me­dia, in­clud­ing fund­ing; votes for 16- and 17-year-olds; and a bal­lot dur­ing term time so that stu­dents – the fu­ture – can vote eas­ily.

I’m sure you can spot con­tentious points in that pack­age. Some peers did, in­clud­ing those who (like me) feel there would have to be three op­tions – May’s deal, no-deal or Re­main – with a se­cond pref­er­ence mech­a­nism to en­sure a ma­jor­ity. Some­one asked if that meant try­ing to over­turn the 2016 ref­er­en­dum re­sult – in the best EU tra­di­tion – by means of the very al­ter­na­tive vote sys­tem re­jected in the 2011 ref­er­en­dum on elec­toral re­form. Oh dear, what a can of worms!

If that was not enough Lord Trevethin, an elected (sic) hered­i­tary peer and QC, called the Ado­nis timetable “hope­lessly op­ti­mistic” and his plan for a be­spoke su­per­vi­sory body as likely to arouse sus­pi­cion. Trevethin had read both the Bet­ter for Britain Road Map study and the UCL Con­sti­tu­tion Unit’s re­port, which are both on­line. While the Road Map is par­ti­san (of course) the UCL study is po­lit­i­cally neu­tral but tech­ni­cally ex­pert.

It says a ref­er­en­dum is pos­si­ble and should be a se­ri­ous op­tion. But it would need at least 22 weeks to pre­pare and must be scrupu­lous to com­mand re­spect on both sides. Who knows what might hap­pen. ‘Nor­way for Now’ is back as a pos­si­ble tran­si­tional mech­a­nism, spon­sored by Nick Boles, a bag­man for Michael Gove, the Ras­cal to Watch. But is it back in Nor­way – or in Brus­sels? No one knows any­thing for cer­tain. But the Peo­ple’s Vote is also in con­tention, as it was not a year ago, as the ne­go­ti­a­tions stum­ble near the cliff edge and the chan­cel­lor bribes vot­ers with bor­rowed money.

What def­i­nitely didn’t hap­pen is where Lord Sugar’s comes into the story.

In his brief con­tri­bu­tion he said he op­poses a se­cond ref­er­en­dum (“a com­plete farce”) while si­mul­ta­ne­ously as­sert­ing – as an ex­pe­ri­enced chair­man of pub­lic com­pa­nies – that di­rec­tors could have gone to jail if they mis­led share­hold­ers as the Brexit camp did vot­ers. So it would be bet­ter to de­clare the 2016 vote null and void – and vote on May’s deal with more knowl­edge than we all had then.

Oh dear again. But here’s the killer de­tail. Peo­ple vaguely re­mem­ber that Lord Sugar did a tele­vi­sion ad for Stronger in Europe, along with Stephen Hawk­ing and Shami Chakrabarti. But Sugar re­minded any peer who did not al­ready know that on the eve of the BBC EU Ref­er­en­dum: The Great De­bate, David Cameron had also asked him to take on Boris (“Most Trusted”) Johnson who was ap­pear­ing for the Leave side. “To this day, I kick my­self for turn­ing it down,” he con­fessed.

At the time he feared he didn’t have suf­fi­cient grasp of the in­tri­cate de­tails (don’t worry, Alan, nor did Boris), but when he watched Lon­don mayor, Sadiq Khan do­ing his inad­e­quate best, Sugar re­alised that “my force­ful man­ner” would have forced Johnson to ad­mit he was ly­ing about that weekly £350 mil­lion for the NHS – and pos­si­bly swung the nar­row out­come the other way.

It’s a great ‘what if ’ counter-fac­tual. But I could eas­ily be per­suaded he’s right. The Re­main camp lacked a street-smart bruiser’s edge, so ev­i­dent on the other side. Sugar, the coun­cil house boy from Hack­ney who left school at 16 and made a for­tune the hard way, was just the man to punc­ture the over-ed­u­cated Eto­nian’s blus­ter­ing eva­sions live on telly.

It would have been a Trump po­lit­i­cal mo­ment, but in a bet­ter cause than Trump usu­ally man­ages – a Sugar rush we could have sat at home and cheered.

Photo: Chris Wil­liamson/ Getty Im­ages

RE­GRET: Lord Alan Sugar

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