UK’S quag­mire trek


Even be­fore Theresa May be­gan her na­tion­wide me­dia of­fen­sive to sell the half­cab­i­net’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, ed­i­torat-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 self­styled 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 Yax­leyLen­non – 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 fel­lowjour­nal­ist, 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.


ON MES­SAGE: Philip Ham­mond

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