UK discovers Brexit isn’t leaving club….it’s replacing the operating system

President Donald Trump talks with British Prime Minister Theresa May during a bilateral meeting in the Oval Office, Friday, January 27, 2017. Prime Minister May was the first Head of State to officially visit the White House. (Official White House Photo by Shealah Craighead)

For 48 hours, Theresa May looked as if she was in control of her government. Last Friday, Britain’s embattled leader called all her ministers to the bucolic prime ministerial bolt hole at Chequers.

The UK cabinet, almost two years to the day of the Brexit referendum, would finally agree a collective position on leaving the European Union. Any ministers that did not sign up faced the prospect of a long walk home – ministerial cars would be immediately withdrawn. That evening, to the surprise of many, May emerged with an agreement.

The so-called ‘Chequers deal’ was heralded as a major breakthrough. On Friday evening, the BBC reported that May had emerged with her position greatly strengthened after every cabinet minister endorsed her proposals.

Afterwards Conservative leader sounded an unusually bullish tone, telling one British newspaper that it was up to the European Union to step up to the mark. “It’s now for Europe to be prepared to sit down and move the pace of negotiations on and talk about it seriously and address what we’ve put forward,” she said.

But by Sunday evening, such confidence had evaporated. Hardline Brexiters had already begun to voice their disquiet with the Chequers plan. Maintaining a “common rule book” for goods with the EU, collecting tariffs on behalf of the EU, free movement for skilled workers and students from the EU, and giving “due regard” the European Courts of Justice was too far for many Eurosceptic Conservative MPs – and for the Brexit minister David Davis.

As Sunday night moved into Monday morning, Davis announced that he was resigning from the Department for Exiting the European Union. Davis was nominally in charge of Brexit but in practice had been usurped by Theresa May’s most trusted aide Olly Robbins. In the previous six months Davis – who is not known for his grasp of detail – had spent less than hours in talks with European Commission chief negotiator Michel Barnier.

In his resignation letter, Davis told May that he was “unpersuaded” that the government’s negotiating approach “will not just lead to further demands for concessions” from Brussels. “The general direction of policy will leave us in at best a weak negotiating position, and possibly an inescapable one,” he added.

Theresa May had hoped to wake Monday to her first week in control of her cabinet since last June’s disastrous general election when the Conservatives lost their overall majority in the Commons, forcing them to rely on the support of Democratic Unionist MPs. Instead, the prime minister had lost her Brexit secretary and rumours were swirling of who would go next.

The most obvious candidate was Boris Johnson. Having pulled out of the race to succeed David Cameron in 2016 after the EU referendum – stabbed in the back by his running mate and Vote Leave colleague Michael Gove – Johnson was brought into the cabinet by May in a literal adoption of the old adage “keep your friends close and your enemies closer.”

Nominally Johnson was foreign secretary – one of Britain’s ‘great offices of state’ – but, in reality, he ran a freelance operation geared around manoeuvring himself into Number 10 Downing Street. The concept of collective cabinet responsibility was an alien one as Johnson penned 4,000 pieces in right-wing broadsheets attacking May’s Brexit plan. But the prime minister was unable to sack the most prominent Brexiter in her cabinet; to do would risk mutiny from her Eurosceptic backbenchers.

When Johnson did finally go – early on Monday afternoon – it was simultaneously surprising and inevitable. Johnson seemed set to stay until Davis’s resignation forced his hand. With the Brexit minister gone, Johnson would struggle to explain why he was still supporting a Chequers deal that he had told the press privately was a ‘turd’.

But there was little strategic logic to Johnson’s decision to leave. Pro-Brexit Tories for whom any continued relationship with the European Union is anathema lack the numbers to force May out. This point was tacitly acknowledged by another resigning cabinet minister – junior Brexit secretary Steve Baker – who noted that “arithmetic” might “constrain the Government’s freedom of action”.

Baker will return to where he has always been: the anti-EU Tory backbenches. Indeed, within meetings of his resignation he had already been once again made an administrator of the WhatsApp group controlled by the European Research Group, the rather incongruously titled cadre of hardline Brexiters led by the priggish Jacob Rees Mogg.

The ERG supports leaving both the Customs Union and the Single Market – a pledge made by May herself in her Lancaster House speech last January – but which is opposed by most businesses and is incompatible with the commitment to no border in Ireland.

Boris Johnson’s resignation letter would have received a warm reception on the ERG’s message board. The departing foreign secretary railed against May’s plans, saying the UK was headed “for the status of a colony”. (The letter was only finished after Downing Street had pre-emptively announced the resignation, although Johnson did wait around for a photographer to capture the image of him signing it at his lacquered ministerial desk.)

With three ministers gone, febrile talk grew of a leadership challenge. But shifting May is not easy: under the rather arcane Conservative party rules, a vote of no confidence is triggered by at least 15 per cent of Tory MPs requesting one by writing to the chairman of the party’s backbench 1922 committee.

Graham Brady, the 1922’s chairman, keeps names of those writing the letters confidential – and does not provide a running tally – but we do know that the 48 MPs needed currently to trigger a vote of confidence has yet to put pen to paper. If they do, there is every chance that May could survive a vote amongst her own MPs, many of whom are wary of another general election with Jeremy Corbyn’s Labour party narrowly ahead in the polls.

Even if May were to be defenestrated, a Conservative leadership contest could take months – and might not radically change the content of the UK’s Brexit plans. “It is easy for the Brexiters to criticse the plan and the prime minister but they don’t have a clear rallying point to circle around,” says Simon Usherwood, senior lecturer in politics at the University of Surrey.

“You might end up with someone, from a Brexiter perspective, who isn’t any better than May. You might just end up with a different face on the same plan. Disliking something isn’t the same as having an alternative plan.”

This lack of an alternative Brexit plan has been a constant feature of British politics since the vote to leave. Last week’s Chequers tête-à-tête was the first time the UK cabinet had sat down to discuss want Britain should look like outside the European Union.

A referendum won on soundbites – ‘take back control!’ – and slogans daubed on the side of brightly coloured buses, bequeathed a paralysed political system. Britain had voted to leave the European Union, yes, but how should it leave? Nobody can quite agree.

For ardent Brexiters, the path is straightforward. Out of the customs union and the single market. Jacob Rees Mogg dismisses dire economic warnings from the dreaded ‘experts’ as just another example of Project Fear, pre-referendum prognostications of doom never materialised. (In fact, the UK’s growth has slowed noticeably and is expected to fall further.)

But true Brexit believers are still a minority. For most Conservative MPs party unity – and their own parliamentary seats – are more important than Brexit red lines. There is even a small Tory cabal, led by former attorney general Dominic Grieve, that is actively pushing for the UK to stay in the single market by following Norway’s model by joining the European Economic Area.

The opposition benches are no less ideologically cluttered. Throughout four decades in politics, Jeremy Corbyn has never been a Europhile. Officially his Labour party is in favour of staying in customs union and leaving the single market. But as many as a hundred pro-EU Labour MPs oppose the party’s line on Brexit, with many wanting to see a second referendum on any deal.

May’s Chequers plan – fleshed out in a White Paper released Thursday – represents the first time the UK government has set out what It wants from the Brexit process. But in attempting to define what was previously a constructive ambiguity, May has exposed huge fissures, both within her own party and across British politics.

On the hoary problem of the Irish border, the Chequers plan recognised the backstop for Northern Ireland agreed last December with the EU. Leo Varadkar welcomed the proposals, saying the EU “could be flexible too”, but the Democratic Unionists upon whom May depends for her parliamentary majority were far more muted. The DUP MP group includes some of the most fervent Brexiters in Westminster.

The public reception to the Chequers plan has been equally lukewarm. A midweek poll found only 14 per cent of respondents thought it was good for Britain. (More than half did not know.) The prime minister herself has made little attempt to sell the merits of the deal, leaving much of the media to her newly appointed Brexit secretary – and trenchant Eurosceptic – Dominic Raab.

Indeed, the Chequers proposals are not an easy sell. Brexiter wails that it represents ‘the worst of all worlds’ are not without merit. The putative new customs partnership with the EU is fiendishly complicated and would place onerous bureaucratic demands on business – flying in the face of the long-running Tory lines about EU ‘red tape’.

Brexiters’ fear that by keeping so close to the EU’s orbit, the UK will not be able to realise the vision of ‘Global Britain’ constructed during the referendum to avoid the (valid) accusations that fear of immigration was driving the leave vote. There is palpable enthusiasm among sections of the British media and political establishment for free trade deals with the US and elsewhere as an alternative to the EU. That such deals would come at a price – most likely felt by British farmers and manufacturers – and amid a global turn towards protectionism has received less attention.

At the same time, the Chequers proposals would likely leave the UK economy in a much worse position that staying in the EU. Services – four-fifths of the UK economy – would be outside the Single Market, with the threat of barriers to trade. The City of London could be badly hit. Major business interests are warning of a serious disruption to both production and sales.

Whether the UK’s White Paper will survive until October’s crunch talks with the EU27 is unclear. It provides a potential basis for a negotiation with the EU but it will not be acceptable to Brussels in its current form – the whiff of freshly picked cherries is far too strong. But any further softening of Theresa May’s malleable red lines could see more ministerial departures, and more no confidence letters to the 1922 committee.

The prospect of Britain leaving the EU without a deal still remains. Brexiters have signalled that they could stymie the progress of any deal through Parliament. That could prove a successful tactic: if Westminster does not agree on a deal before 11pm on 29 March next year, the UK will crash out of the EU.

The warnings of a ‘no deal Brexit’ are dire – including, this week, the possibility of stockpiles of tinned fruit and a flotilla of electric generators to power Northern Ireland. Whether this is all remains ‘Mad Max fantasy’ will depend on May’s ability to deliver an alternative deal that can command cross-party support – a difficult challenge in partisan British politics even in fair weather.

Leaving the European Union is often described as ‘leaving a club’. But the UK is discovering that it more like a computer operating system: having run on the customs union and, latterly, the single market, for 45 years, almost everything Britain does is connected to the EU in some way. Building a new operating system cannot be done overnight – and comes with huge risks about its efficacy and efficiency.

This week left some in British politics asking what the point of Brexit is now. Writing in the Financial Times, David Allen Green sketched out “the prospect now before the UK: a Brexit not worth the time or effort, and not accommodating the demands of Brexit supporters in the media and politics. The alternatives are no Brexit, a delayed Brexit or no deal (for which the UK has made no real preparation). Brexiters are like the dog that caught the car. Now the dog must work out what to do next.”

This piece appeared in the Irish Independent, July 14.

We Need to Talk About Towns

A week or before the US presidential election, I visited Youngstown in eastern Ohio. On a deserted street corner, across from a bail bondsman and a boarded up shop, an elderly white man explained why he was voting for Donald Trump. “This town used to be something. Now it’s nothing,” he told me. “You guys had Brexit, now it’s our turn.”

Trump’s was a victory for the town against the city. The sprawling metropolises on both coasts were, as ever, solidly blue on November 8. It was places like Youngstown – a city that has seen its population more than half amid four decades of relentless deindustrialization – that swung the race for the White House.

Much has been made about the similarities between Trump and Brexit: white working class alienation; the anger at globalization; the distrust of experts. There’s undoubtedly something in all of this. But the most glaring connection is where these two unlikely victories were forged: in towns and small cities of our former industrial heartlands.

Burnley, Bolton, Hull, Grimsby. The names are familiar from June 23. In many British towns, the pride and purpose of industry – the very thing that called these towns into being in the first place – has been replaced by call centres and low rent chain stores.

Youngstown’s municipal government has started to demolish entire city blocks. In Hartlepool, over 27 per cent of shops were vacant last year. Some 70 per cent of the town’s residents voted for Brexit.

Empty retail units and urban blight did not cause voters to flock to Farage or Trump, but they are a symptom of the problem.

Glasgow, where I live, has barely half as many inhabitants now as they had at their peaks in the middle of the 20th century. The ‘Second City of Empire’ has, to an extent, developed a service-sector economy to compensate. The expensive apartment complexes that look out onto what was once the busiest ship-building docks in the world have spawned restaurants, bars and shopping centres.

But the myriad smaller industrial towns peppered across central Scotland have continued their decline. The most dependable source of employment – the public sector – has been decimated by almost a decade of austerity.

The problem for our towns is not just economic, it is cultural too. Town living is not cool.

City burghers have all the cultural capital, the flat whites and art house cinemas. The country, the rural, has its place as the opposite of the insatiable urban. But what of the town? Who wants to live in what the Americans condescendingly call ‘flyover country’? Certainly not many of the media who, like me, grew up in towns and have little desire to ever return to them.

The turn to Brexit, and to Trump, is not just a primal scream against the metropolitan elite. Globalisation has not been the win-win game that some of its supporters had claimed it would be. It may have lifted millions out of poverty and triggered the emergence of a middle class in developing countries, but it has wrecked a huge price on the working class here.

The shift of manufacturing jobs to cheaper parts of the world decimated once self sufficient industrial communities. The jobs that came to replace them were often low paid, precarious and seen as emasculating by a generation of men raised on tales of life in the pits and the steel mills.

Ten of the twelve most struggling cities in Britain are in northern England, according to research released by the Joseph Rowntree Foundation earlier this year. Rochdale fared worst in the survey. The response from local politicians? Shoot the messenger.

The JRF data was “outdated” and “does not show what is happening in Rochdale right now” said council chief executive Steve Rumbelow.

In reality, the picture is all too familiar. Most workers in the UK and the US have seen their real wages stagnate and even fall for decades. Employment opportunities have dried up in many areas, and job and social insecurity have spiked. And it’s likely to get worse.

In November, the Institute for Fiscal Studies said that by 2021, real wages in the UK – pay adjusted for inflation – will still not have recovered to their 2008 level before the global financial crisis hit. That’s 14 years of zero wage growth in the UK.

So what’s the answer for our towns? The message from the Brexiters and Trump is simple: jobs. Strip out cheap foreign labour. Erect trade barriers. Do whatever it takes, even restarting the coal mines of West Virginia or bribing Nissan to stay in Sunderland.

But here’s the bad news: jobs won’t save our towns. If anything, they are about to witness even more unemployment in the years to come.

Having seen the industrial working class hollowed out by de-industrialisation, the skilled middle-classes are set to follow. Automation is a word on few politicians’ lips, but it should be. We are at the start of a massive information technology-fuelled disruption that will change the fundamental basis on which our world is ordered.

Mechanical improvements meant thousands of layoffs our factories over the past forty years. Soon it will be the same in our offices. Who needs accountants when, as happened in the US in 2014, 48 million people used online tax preparation software rather than professional help? What is the future of teaching when more people sign up for Harvard’s online courses in a single year than attended the actual university in its almost four centuries in existence?

The future will require skilled workers – in tech, in finance, even in the media – but few, if any, of these jobs will be located in towns that are often sited by historical accident, not on the confluence of rivers or roads but near deposits of long-exhausted raw materials.

We are not the only country faced with the problem of places that no longer have a clear function. Russia has nearly 20,000 ghost towns, mostly in the freezing north. In many instances. Moscow wrote off large chunks of the local population’s mortgage debt to encourage them to move. Would any British politician ever propose a similar scheme?

Our leaders will need to start thinking along such radical lines. With no prospect of paid work for all some form of guaranteed state supplement will need to be introduced. Such a “basic” or “citizen’s income” would need to be enough not just to survive on but to live the fulfilling lives on which social stability rests.

But even this is no panacea. As automation increases, the tax take will decrease as the numbers in work fall. Public money would need to be found. The only feasible option is an effective, global effort on tax avoidance.

This problem is not new. Tony Blair and Gordon Brown realised that, for many workers, wages were so low that they could not afford to live. But their solution – tax credits – did nothing to address the inequalities unleashed by globalization, where low wage workers could end up paying more tax than the massive corporations that employed them on insecure contracts.

No wonder places like Oldham, with its 365 mills all now empty, backed Brexit so enthusiastically. No wonder a once solid union city like Youngstown swung behind Trump. Neither have the answers to our towns’ problems, but unless we start to grapple with them soon that won’t even matter. It will already be too late.

This piece originally appeared in the New European, December 2016.

 

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Scotland bangs the drum for Europe

GLASGOW — As hundreds of people gathered outside the Scottish Parliament in Edinburgh last week, there were flags of every European Union state, in a sea of Scottish Saltires. “Scotland loves Europe,” declared one placard. “Don’t EU want me baby,” read another.

“We want to find a way to respect the democratic mandate for the people of Scotland to stay in the EU,” said Sarah Beattie-Smith, a Scottish Greens activist. “We want to explore every possible option for how to stay in the European Union. Of course, that includes independence.”

And as a piper played at the “Keep Scotland in Europe” rally, Scotland’s First Minister Nicola Sturgeon was hundreds of miles away in Brussels, trying to make the case for Scotland to remain in the European Union.

There was sympathy for the Scottish National party (SNP) leader in Europe’s political capital after Scots voted by a large margin to stay in the EU — but little concrete support for her desire to see Scotland retain EU membership even as the U.K. heads for the exit door.

Both French and Spanish prime ministers made clear their opposition to Scotland retaining EU membership.

Ahead of their meeting Wednesday, European Commission President Jean-Claude Juncker said that while Sturgeon had “won the right to be heard in Brussels,” he did not intend “to interfere in an inner British process.”

European Parliament President Martin Schulz said he had “listened carefully and learned a lot” from his conference with the Scottish first minister. But European Council President Donald Tusk turned down Sturgeon’s request for a meeting.

The reception from EU heads of state was equally mixed. Irish premier Enda Kenny made an unexpected intervention at the European Council “on behalf” of the Scottish first minister.

Both French and Spanish prime ministers made clear their opposition to Scotland retaining EU membership.

The options available to the Scottish nationalist government are uncertain. The parliament in Edinburgh, contrary to reports, cannot veto Brexit.

“If the United Kingdom leaves … Scotland leaves,” said Spanish acting Prime Minister Mariano Rajoy, who has separatist forces of his own to contend with in Catalonia.

In an interview published Saturday, German Vice Chancellor Sigmar Gabriel toldGerman newspaper Neue Osnabruecker Zeitung that the EU would certainly accept Scotland as a member in its own right if it were to leave the U.K. and move to join the Union.

Despite the flurry of diplomatic activity — and the standing ovation SNP’s Alyn Smith won in the European Parliament when he begged his fellow MEPs to not “let Scotland down” — the course Sturgeon is pursuing is far from clear, and largely without precedent.

Sturgeon has formed a council of prominent experts to advise the Scottish government “on how best to achieve our EU objectives.” The group is far from a nationalist sock puppet. Members include former judge at the European Court of Justice Sir David Edward, economist John Kay, and Labour MEP David Martin.

But what options are actually available to the Scottish nationalist government are uncertain. The parliament in Edinburgh, contrary to reports, cannot veto Brexit. Westminster remains sovereign and can sign the exit triggering Article 50 on behalf of the U.K.

The main possibility discussed in Scottish circles would be for the U.K. to stay in the EU, but stipulate that European legislation apply only in Scotland (and possibly Northern Ireland, which also voted to remain). The option was floated as a “reverse Greenland,” a nod to the large Arctic territory that chose to sit outside the European Union but still remains part of Denmark, an EU member.

But such a settlement could prove practically and politically impossible. Scotland represents barely an eighth of the U.K.’s population. It is hard to imagine Westminster politicians, fresh out of a divisive Brexit campaign, choosing to remain in the EU to placate Scottish nationalist demands.

Experts warn that a bespoke Scottish settlement is unlikely. “I don’t see how Scotland could get a significantly different deal from the rest of the U.K.,” said James Mitchell, professor of politics at Edinburgh University. “The big question for all of us will be around free movement. While Scotland wants free movement, elsewhere in the U.K. this is clearly not wanted.”

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If Scotland is not able to secure a deal to remain in the EU, the issue of independence is destined to return. The terrain has changed since Scots voted by 10 points to stay in the United Kingdom in 2014.

The SNP campaigned to remain in the EU — and few doubt Sturgeon wants Scotland in Europe — but Brexit has damaged her opposition. The alliance between Scottish Labour and the Conservatives that emerged victorious last time out has frayed, probably beyond repair.

During an at times bad-tempered emergency debate in the Edinburgh parliament last week, Scottish Tory leader Ruth Davidson accused the SNP of using the Brexit vote to push for independence. But her opposite number, Scottish Labour’s Kezia Dugdale, agreed with a nationalist motion to explore “all options” to keep Scotland in the EU and condemned the Conservatives for holding the referendum “to resolve an ego contest in the Tory party.”

Davidson was rightly lauded for reviving the seemingly moribund Scottish Toriesand leading the party to second place in the May elections. But she has appeared ill at ease since last week’s vote, unsure of whether or not to argue for a separate deal for Scotland that could help to secure its place in the United Kingdom.

Labour, long the dominant force in Scottish politics, is in turmoil. The party is cash-strapped and weary. Sources privately admit the party would take a much softer line on leaving the U.K. in any future vote. On Sunday, former Labour first minister Henry McLeish said Scottish independence was “something I could now vote for.”

Scottish nationalists, however, would not be guaranteed to win a second referendum, at least not at present.

Support for ending the three-centuries-old union with England has risen in opinion polls taken since the Brexit vote. But the energy unleashed by the referendum could trail off, especially if the U.K. negotiates a deal that looks more like Norway’s agreement than a full-blooded clamp down on free movement.

Economic issues that dogged the Yes campaign in 2014 have not been resolved (although JP Morgan has given its imprimatur to a new post-independence Scottish currency.) Much of the Scottish electorate is fatigued after four national votes in less than two years.

Despite her forceful role since the Brexit vote, Nicola Sturgeon is by nature a cautious politician. The nationalist leader will only go to the polls when she feels confident of victory.

“If the SNP go for a second independence referendum then they have to win it,” said Alistair Clark, senior lecturer in politics at Newcastle University.

While Brexit is being negotiated, Sturgeon will have to maneuver her way through a political storm that is beyond her control.

The European Union would weigh on voters in a different way in a new referendum on Scottish reference. In 2014, Scots were warned that if they left the U.K. their place in the EU could be under threat. That looks far less likely now.

“The EU historically always has been remarkably flexible,” said James Mitchell. During the last independence referendum, EU member countries were fearful of interfering in British internal politics.

“Now the thinking in places like Berlin, Brussels and Paris is the U.K. is no longer a member so what is the problem if Scotland wants to become independent,” says Mitchell.

Talk of another referendum could yet prove premature. What Brexit will look like in practice remains to be seen. Meanwhile, Sturgeon will have to maneuver her way through a political storm that is beyond her control.

“She is going to have to be very fleet of foot and nimble, and at the end of the day circumstances might work against her,” said Mitchell. “[But] what’s she is doing is building relationships that could be useful in the future.”

This piece originally appeared on Politico Europe.