The myth of No Deal

It suits the government to keep talking about the possibility of No Deal for as long as the first stage negotiations continue, for three reasons. First, there is of course the remote possibility that the other side will believe it and make some concessions to avoid it. Second, as concessions are made on the UK side, it becomes a palliative to Brexiteers: maybe the Lion will roar in the end. Third, when the deal is finally done, the collective response might be relief that No Deal has been avoided rather than indignation at the terms.

But how can I be confident that No Deal will not actually happen? First, there has as yet been nothing done to prepare for that consequence, as Chris Cook outlines. Now you could rightly respond that this government is not known for its rational planning so this means little. But the lack of planning means that No Deal will bring UK chaos: not just firms leaving or going bust but highly visual dislocations like lorries clogging up ports and motorways. It would look like total economic incompetence, like Black Wednesday on steroids. It might mean the Conservatives lose not one but two or three general elections.

That is not the legacy that May wants. The second reason No Deal will not happen is that she wants to be remembered, despite everything else, as the Prime Minister that got the deal done without destroying her party. The only way I can see of that not happening, given the pro-Brexit nature of Conservative Party members, is if she is unseated by Brexiteers. 

The chaos argument still applies. So those who try to remove May before a deal is done will be putting the terms of Brexit above party loyalty: not something you normally associate with Conservatives, but as Raphael Behr argues that is just what many Brexiteers might do. (An exception is surely Boris Johnson, who sees Brexit as his route to power and would prefer the safer route of the inevitable leadership election after the deal is done.) But they would need good cause, and the details of citizens rights, the divorce bill or even the terms of transition seem unlikely to be enough. What could trigger a revolt is if the EU presses the border issue at the first stage as I outlined here, forcing May to agree to stay in the customs union permanently or more likely abandon the DUP. Even then, there may be enough Remain MPs to block the challenge or enough members may choose to compromise rather than risk electoral oblivion.      

Yet although No Deal is very unlikely to happen, it will remain a myth long after the deal is done. It will become the excuse used by Brexiteers for why the post-EU period turns out to be no better and perhaps worse than its predecessor. If only we had ‘true Brexit’, they will say, things would have been different. Ironically a deal is useful to Brexiteers in that it gives them a story for why the sunlit uplands that they described during the referendum campaign did not come to pass.

However we should still be concerned about No Deal rhetoric for the following reason. If you were the head of a firm having to decide to make an investment which would lose money if there was No Deal, would you have the confidence based on the analysis above to go ahead with that investment right now? I think you would be far more likely to postpone until you saw what happened. In addition there are all the EU nationals in the UK who continue to face a horrible uncertainty about their status under No Deal, as well as the prospective EU immigrants who will not come for that reason. Talk of No Deal, even if it is cheap talk, has real economic and social costs.    

Against Charisma

I’ve written about the popularity of Labour’s manifesto, which should more accurately be described as expanding the state rather than ending austerity. But I thought that Labour would do badly in GE2017 despite this, because Jeremy Corbyn was so unpopular as a potential Prime Minister before the campaign.

I still remember reading many, many years ago about Weber’s three forms of authority (as we macroeconomists do), and feeling a visceral distaste for authority due to charisma. Although Weber intended it as an alternative to authority based on law, I read it as an electorate choosing their leaders according to their charisma or personality within a democratic system (the extreme form of which is populism). It offended my rationalist outlook, and my view about what politics was about. As Tony Benn used to say and I believed, politics should be about issues not personalities.

And in my youth it was possible to believe that authority through charisma was something advanced democracies had indeed grown out of. After all, Edward Heath became Prime Minister, Alec Douglas Home almost beat Wilson and Richard Nixon almost beat Kennedy. Perhaps at the time I should have noted that in each case the leader who did well even though they appeared to lack charisma happened to be from the right.

My view that advanced democracies had grown out of the need for their leaders to have charisma fell apart in the age of first Thatcher and Reagan, and then Blair and Bill Clinton. I also began to see how the right wing media ruthlessly exploited perceived character flaws. I think Ed Miliband would have made a fine Prime Minister, and Hillary Clinton a fine President (both far better than those who beat them). However their lack of the exceptional charisma of a Blair, Bill Clinton or Obama allowed their opponents to make mountains over perceived deficiencies in their character.

Before the 2017 UK General Election (GE2017) campaign, things seemed to be going the same way. Labour was unpopular, mainly because Jeremy Corbyn was extremely unpopular. He had real charisma, but only it seemed among his loyal supporters. This unpopularity was translated into votes in the local elections just a month before GE2017. It was for this reason that the Conservatives decided to run a presidential type of campaign. So what changed in a few weeks?

Part of the answer was Labour’s manifesto, which because of the leak (?) a week before, and because of general election rules for broadcasters, got extended coverage. It was popular because it was clever: money was spent on items that would have immediate appeal to the voters who were likely to respond and vote (rather than what might have been - in some eyes at least - worthier causes). The decision to borrow only to invest blunted the normal attack lines, and I suspect many voters no longer cared too much if ‘the sums didn’t add up’ because austerity had past its sell by date or they were happy to pay something towards these items of spending anyway. (Of course this didn’t stop me getting rather cross with those who seemed to make a fetish out of the need to balance the budget.)

Although all this came as a surprise to some commentators, it did not to me: one of the things I got right was that austerity’s appeal was time limited. Just a year ago it looked like internal divisions would drown out the message. This didn’t happen because of an impressive, and to me unexpected, display of unity after Corbyn’s second election. But I was still concerned that his perceived lack of charisma would trump issues, and the polls and May local elections did nothing to admonish that fear. It seemed that although Labour’s policies were popular, their leadership mattered more. As Stephen Cushion notes, this idea that personality trumped issues was often reinforced by broadcasters using Vox Pops.

So what changed? Does charisma really not matter any more? Unfortunately I suspect not. Instead what happened was that voters, particularly younger voters, discovered another side to Theresa May. May looks good in controlled situations: soundbites and speeches to the faithful. When she lost control after the launch of the Conservative manifesto, she looked evasive and robotic. The independent media, who tend to pounce on weaknesses, focused on this rather than the ‘old news’ about Corbyn’s past. [1] What is more, the qualities that May seemed to lack were exactly those that a much more confident Corbyn displayed: genuine passion rather than robotic spin. It was May’s inadequacies that allowed many voters to see Corbyn in a different light.

If this story is right, it suggests charisma and personality are still important in elections. Just look at how well Ruth Davidson did in Scotland. I continue to think this is unfortunate, because people greatly overestimate how much they can accurately judge people from limited contact with them, whether it is in an interview for a job, for a place at university or being a prime minister. Cameron exuded confidence and competence as only the product of a top public school and Oxbridge can, but his faith in his own abilities did the country great harm in allowing Brexit to happen. People had decided based on limited and filtered information that Corbyn was hopeless, and now (particularly following the Grenfell fire) they can see his qualities, but I'm not sure they are much nearer knowing whether he will be a good or bad prime minister. 

Weber seems to have had a soft spot for charisma, but he died before Mussolini and Hitler came to power. I have no doubt that the personality and abilities of a leader matters. But quite how a politician’s personality interacts with events to determine whether they make good for bad decisions is something that is only really possible after the event (for a brilliant example, see Steve Richards). I can only think of only one occasion where I correctly guessed that a politician’s personality made him totally unsuited to high office, and the fact that millions of people came to the opposite conclusion about Donald Trump I think makes my case against charisma.

[1] I think this is important. The idea that the Labour manifesto and its presentation were foolproof is incorrect: journalists could have easily run with confusion over restoring benefit cuts, or over optimistic tax receipts. But on the whole independent journalists, quite rightly, chose bigger fish to fry.

Conservative zugzwang

Would really like to get back to macro, as some interesting things have been happening, but there are just too many compelling issues following GE2017 to talk about first.

The GE2017 result left the Conservatives in a position that chess players call a zugswang, which means whatever you do makes your position worse. They needed to turn to the DUP to get an overall majority, which leaves them with a secure hold on power. But that move in itself will lose them some popularity, kills their ‘coalition of chaos’ charge, and runs the risk of damaging Northern Ireland. The Good Friday agreement says that the sovereign should exercise power with “rigorous impartiality”. It will be up to the DUP to persuade Sinn Fein that all they are getting from the government is extra money for Northern Ireland. So to hold on to power, the Conservatives put the Northern Ireland peace process in jeopardy and give a gift to Labour.

The Conservatives will not fight another election with May as their leader. Their MPs, whatever they may say in public, are angry at her incompetence in running a campaign, putting together a manifesto, responding to the press, and almost everything else. The longer she stays in post, the longer the memory of that dismal campaign lingers and the more the brand gets tainted. However an election to replace her will reopen the split over Brexit which could tear the party apart.

Here is a worst case scenario. After the referendum, the Remain half of the party were in shock, and so they allowed May to define what Brexit meant. She did it in such a way as to ensure Hard Brexit, which will inflict considerable damage on the economy. Remain MPs felt they had no way of resisting that (few tried), but as Ruth Davidson made clear in any election in the near future they will be less passive, trying to elect one of their own who will perhaps keep the UK in the EEA (a Norway type deal), and certainly stay in the customs union. Leave MPs will do everything they can to stop that, and it is difficult to see this time their candidate mysteriously withdrawing before the membership are consulted. The Leave membership, with the help of the press, will choose the Leave candidate. Ruth Davidson might then declare independence from the main party.

It could be a terrible mess, spread out over time. It is a contest which will allow, with delicious irony, Corbyn to describe the Conservatives as too hopelessly divided to govern. Furthermore if they hold the contest while the EU negotiations are going on, Labour will justly accuse them of wasting precious time. But if they leave any contest until after the A50 negotiations have ended, the less time a new leader has to improve the Conservative brand, particularly when their majority makes them look powerless and ineffectual. It is a zugzwang.

The same applies to how they turn their fortunes around. The obvious move is to abandon austerity. The agreement with the DUP and other factors mean that the existing deficit targets will not be hit, so turning the deficit into surplus appears a distant prospect. But ending austerity in the mind of the voter means spending more on the NHS and schools. It should also mean reversing the cuts to in work benefits. However to, for example, match Labour’s spending commitments with some attractive alternatives of their own without raising taxes will blow the deficit. That would destroy the ‘we are competent because we cut the deficit’ line so carefully built up over seven years. To raise taxes will damage their core vote. Once again, a zugzwang.

You can add immigration. Fail to meet their target once again, and their credibility on this issue will be destroyed, but try meeting it and the economy is in serious trouble. Of course none of this means that the Conservative are bound to lose the next election. As a Conservative Prime minister once said, events dear boy, events. But for the party it means the liklihood that things will get worse before possibly getting better.

Labour and its Left

The 1980s were a battle between what eventually became New Labour, and what is often referred to as the Hard Left. 1983 to 1997 was a long period where the Hard Left gradually lost influence within both the party (then the membership and trade unions) and among the parliamentary party (the PLP). But this didn’t mollify the distaste New Labour had for the Hard Left.

This period meant that those opposing the left adopted two propositions which became almost hard-wired into their decisions.

1. The left within Labour were more concerned with controlling the party than winning elections. That has often been said about Jeremy Corbyn over the last two years.
   
   
2. That the Left, and their ideas and policies, were toxic to most voters. The right wing press assisted in this by talking about the loony left.
   
   

In short, it was best to act as if Labour’s Left were a political pariah. As a result of these ideas the left minority within the PLP was tolerated (Labour needed to be a broad church), as long as it remained small and powerless. Triangulation became the way to win power: to adopt policies that were never from the Left, but adopted a centre ground between the Left and the Conservatives. New Labour was not old Labour.

The strategy was extremely successful. Tony Blair won three elections, and it took the deepest recession since the 1930s to (just) remove Labour from office. The Blair government achieved a lot, particularly for the poor, but it also made serious mistakes, most notably Iraq. That stopped a lot of those on the left actively supporting the party.

In 2015, when Labour under Ed Miliband was defeated, the general mood among the PLP seemed to be that it needed to triangulate once more and move further to the right. Crucially, some leading figures suggested Labour should all but embrace George Osborne’s austerity policy. The three main candidates to take over from Miliband were seen (with justification or not) as representing this thinking. Austerity was a critical issue, in part because - if accepted - it potentially constrained what Labour could do to a large extent. It was also an economically illiterate policy, which I can safely say with authority. Worse than that, it was a policy that - as the deficit fell - began to lose its popularity, so for Labour to adopt it at just the point it was losing its popular appeal seemed a doubly crazy thing to do.

Before Corbyn won that election I wrote

“Whether Corbyn wins or loses, Labour MPs and associated politicos have to recognise that his popularity is not the result of entryism, or some strange flight of fancy by Labour’s quarter of a million plus members, but a consequence of the political strategy and style that lost the 2015 election. …. A large proportion of the membership believe that Labour will not win again by accepting the current political narrative on austerity or immigration or welfare or inequality and offering only marginal changes to current government policy.”

At this point I was receiving impassioned pleas by some to come out against Corbyn. These mainly went along the lines that Corbyn was unreformed from the 70s/80s, and wanted to take over the party for the ‘old left’. Many said he could not win an election because his policies would be too radical. He would be a disaster with the electorate. It was unmodified 1980s thinking. These arguments sounded unconvincing to me, mainly because Corbyn would have to work with the PLP. Unlike the 1980s, the left were now such a small minority within the PLP that they would have no other choice.

As I had anticipated, Corbyn and McDonnell did form a shadow cabinet of all the (willing) talents, and as far as economic policy was concerned they were far from radical. McDonnell set up the Economic Advisory Council (EAC), which I and I suspect others were happy to join because it involved no endorsement of Labour’s policies. Arguments that we should have withheld our advice because Corbyn was somehow ‘beyond the pale’ were again straight from the post-83 playbook, and I am very glad that I ignored them. I helped Labour adopt a fiscal rule which in my view exemplified where mainstream macroeconomics was, and which incidentally some sections of the Left were very critical of. It formed a key part of their 2017 manifesto

What I had not anticipated, back when Corbyn was about to be elected, was how foolish some Labour MPs would be in those months following his election. Critical briefing of the press was constant, and tolerated by many in the PLP. As I wrote at the time, this strategy was stupid even if you hated Corbyn, because it gave the membership the excuse to ignore Corbyn’s failings. I was more right than I could have imagined. This was the first major mistake that the PLP made after the election.

The other thing I had not anticipated was Brexit. This triggered the second major mistake by the PLP, which was the vote of no confidence. It was in many cases an emotional reaction to Brexit, the leadership’s role in the campaign and earlier incompetence. It was understandable, but it was nevertheless terrible politics. Corbyn’s supporters were gifted the perfect narrative in the subsequent leadership election: the PLP had sabotaged Corbyn’s leadership.

The two mistakes made by the PLP ensured that for many members the 2016 vote became the PLP against the membership. One big mistake Owen Smith made was to not side with the membership in terms of changing the 15% leadership rule, so naturally they said if you do not trust us we will not trust you. Nevertheless I supported Smith over Corbyn, because I could not see a future for a party that had become so deeply divided. I thought the next election was winnable for Labour, but not if the party was seen by the electorate as at war with itself. That was one of the key reasons I resigned from the EAC: whether that was the reason three others also left I cannot say.

After Corbyn won for a second time, the polls suggested Labour’s future was bleak. This is what led May to call her snap election. However two things happened after Corbyn’s re-election which surprised me and many others, and meant that my predictions of no future under Corbyn proved wrong. First, the internal squabbling within Labour stopped almost completely. Second, the leadership started putting together a manifesto that would prove very popular, with a competence that had earlier been missing. During the general election divisions within Labour were not part of May’s main attack, in part because she chose to make the campaign presidential in style..

Many will say that Labour achieving 40% of the popular vote vindicated the membership’s faith in Corbyn. Others will go further and say ‘if only the PLP had been more cooperative we could have won’. That is going too far..The election result was also a consequence of a truly terrible Conservatives campaign, headed by a Prime Minister who exposed herself as just the wrong person to lead the country through Brexit  The economic environment couldn’t have been better for Labour: unlike 2015 we had falling real wages and the slowest quarterly GDP growth rate in the EU. Labour’s manifesto held out hope, while the Conservative manifesto was a liability. Despite all this, the Conservative vote share was above Labour.

What the election does show beyond doubt is that the attitudes most of the PLP had towards the Left, which they had carried with them from the 1980s, are no longer appropriate. The result was not the disaster they had been so sure would happen. That showed some left wing policies can be very popular, even if they are called anti-capitalist by those on the right. The curse of austerity on the UK electorate has lifted. Unlike the ‘dementia tax’, none of the policies in Labour’s manifesto proved to be a millstone around Corbyn’s neck. The days when Labour politicians needed to worry about headlines in the Mail or Sun are over.

The big lessons of the last two years are for Labour’s centre and centre-left. The rules that applied in the 1980s no longer apply. The centre have to admit that sometimes the Left can get things right (Iraq, financialisation), and they deserve some respect as a result (and vice versa of course). The centre and Left have to live with each other to the extent of allowing someone from the Left to lead the party. Corbyn has shown that the Left are capable of leading with centre-left policies, and the electorate will not shun them. With the new minority government so fragile, it is time for the centre and centre-left within Labour to bury old hatchets and work with Corbyn’s leadership.

GE2017 and the stages of Leaver grief

After the Brexit vote, various people had fun talking about the stages of Remainer grief, going from denial through bargaining (we can still reverse this) to acceptance. But I think there is an analogous process for Leavers, where they begin to regret their decision and realise that they have made a serious mistake. For many of them we are in the bargaining stage, where somehow the situation can be retrieved as long as the negotiations with the EU are handled well. For them this is what the election is about.

We have to start with one interesting fact that should be noted more often. As YouGov’s Brexit tracker shows, the UK remains as divided on the issue of Brexit as it was a year ago. As I have noted before, this is slightly surprising, because over the last year it has become clear to most Leavers that Brexit will involve a cut in their standard of living, whereas before the vote most Leavers did not expect this and furthermore reported that they did not regard a cut in their living standards as a price worth paying to reduce immigration. But voting Leave was about much more than economics, so people are likely to be reluctant to admit they made a mistake that quickly. As Mark Twain said, “It's easier to fool people than to convince them that they have been fooled.”

Hence the stages of grief for Leavers. They have been led to believe, by newspapers and politicians, that as long as the negotiations are played right all will be well: the bargaining stage of grief. Unfortunately for them they are still living in the fantasy world created by the Brexit media and unchallenged by the broadcast media. The fantasy is to view the forthcoming EU negotiations as some great battle of wills. As Stephen Fisher notes, the negotiations are constantly framed in pugilistic terms. This is why the Conservatives are polling at around 45%, despite all the mistakes of the Tory campaign.

Hence, also, the attraction of the ‘no deal is better than a bad deal’ line. Leavers need to believe that walking away is a credible threat that will unlock the benefits of Brexit. But the reality is painfully different. If you want an eloquent explanation of this read Martin Wolf if you can, otherwise here is the short version. The EU knows that No Deal would be a disaster for the UK. It would be painful for the EU too, but not so painful as to make them offer the UK any significant favours. Their overriding objective is to ensure the UK will be worse off under Brexit, not as some punishment but to ensure EU survival. Given that No Deal will be so much worse for the UK than the EU, and as the clock is already ticking, the EU are in a position where they can pretty well dictate terms. To the extent that this is a game, we lost it the moment Article 50 was triggered.

The EU negotiations are still very important, but for the UK it is more a matter of making choices rather than extracting concessions. There are many kinds of Brexit. In thinking about who would be the best negotiator for the UK, the most important question to ask is who would make the right choices. Theresa May, by focusing so much on immigration and the European court, has already made two very bad decisions. She seems to be rather good at bad decisions. Personal qualities matter to a lesser extent, but success involves empathy and trust, not obstinacy. [1]

Unfortunately much of the country is still lost to the fiction that the negotiations are a battle of wills where the UK can emerge victorious if it is stubborn enough. While the ‘strong and stable’ line did not survive inspection, I suspect the ‘coalition of chaos’ mantra will begin to work in the last week of the campaign if the polls tighten. Hugo Dixon makes a strong case that in reality a hung parliament would actually be a good thing in many ways. However it is a case that is very difficult to get across in short soundbites, and the fact that there are a multitude of permutations will sound like chaos to many. In addition, the various possibilities are the stuff political commentators love talking about (see GE2015), so this apparent chaos will get plenty of airtime. That, despite her best efforts, should see May through to a decent majority on 8th June.

But this will not put an end to Leavers grief, but just delay and heighten it. Depression is likely to follow as the reality of the negotiations become clear. In all likelihood the economy and real wages will continue to stagnate, and the improvement in public services promised by the Brexiteers will not materialise. Theresa May once warned that the Conservatives had become known as the nasty party. Her actions now are ensuring that it forever becomes known as the party that embraced a disastrous Brexit.

[1] Her lies are also getting worse. At least ‘I’m calling the election because I need a strong mandate’ sounded plausible until you thought about it, but ‘I’m not joining a debate because I’m busy preparing for the negotiations’ wouldn’t fool a 10 year old.

Conservative Contradictions: the limits on Red Tories

There has been much talk of Re-leavers: those who voted to Remain but are now voting for Theresa May to get the best Brexit deal. I had talked about something similar long before the term arose (see here and the previous linked post), so I do not think this is just an artifact of particular poll questions. But I’m also sure that this is not the only reason many Remainers will vote Conservative.

Some, as Ian Dunt suggests, just believe that Brexit is inevitable (as you would based on most of the MSM [1]), and that May would be better at negotiating our exit than Corbyn. Others always vote Conservative because they belong to particular groups in society, and they are sure that party will - whatever happens - protect their interests over others. Think the typical Times reader for example. If we are talking about what you might call the affluent middle class, their assumptions have a solid empirical base.

This becomes important once you recognise the dismal economic outlook that faces the UK over the next decade. Productivity growth has virtually stopped. That means that, on current policies, growth in output per head is likely to be pretty slow. In addition, the Brexit depreciation will reduce real incomes, a process that has already begun. Finally May seems determined to reduce immigration as far as she can, which if it happens will damage the public finances.

Think of both the Conservative's core support and these dismal economic prospects in trying to decide how seriously to take the interventionist proposals in Theresa May’s first manifesto. (For good background discussion on this written before the manifesto was published, see Rick here and Geoffrey Wheatcroft here.) The words in the manifesto are certainly different: for example

"We do not believe in untrammelled free markets. We reject the cult of selfish individualism. We abhor social division, injustice, unfairness and inequality. We see rigid dogma and ideology not just as needless but dangerous."

Furthermore some of the proposals would have been condemned as socialist nonsense in certain quarters if they had been made by another party. For example a cap on energy bills, worker ‘representation’ on company boards, more council housing, a ‘modern industrial strategy’, and of course more measures to discourage (and maybe control) immigration. Now not all of these measures require serious money, but a lot of them do if they are to be meaningful. And, unlike the Labour or LibDem proposals, the Conservative’s plans are completely uncosted.

As a result, it becomes imperative to ask how much each measure will cost, and where the money comes from, because that will reveal a basic contradiction between rhetoric and reality. It is extremely difficult if not impossible to tackle social division and inequality if you want to protect your core supporters and are not increasing the size of the cake. You could find the money by raising taxes on business, but given Brexit the Conservatives are unlikely to reverse their cuts in corporation tax. (Not so much because of their economic effects, but to preserve the support of the business community which has become strained by Brexit.) You could find the money by raising taxes that largely impact on the better off, but that risks losing your core support. You could put fiscal rectitude to one side, but that would seriously tarnish the brand.

Given these contradictions, the rhetoric above is only likely to be accompanied by token gestures in reality. The most obvious thing May could have done to help the just managing family was to scrap the proposed cuts to in work benefits, and she did nothing. To be able to address inequality and social division without taking away from the better off you need a growing economy. The tragedy for Theresa May is that her insistence that Brexit means controlling immigration ensures [2] that is very unlikely to happen, and it is not clear she realises this.

But surely the change in rhetoric must mean something? The start of a Red Tory era, or the re-emergence of pre-Thatcher Conservatism, or at least the death of neoliberalism in the UK? I will start to believe those things when the IFS starts expecting falls in child poverty, rather than the - policy induced - increases they project. I will start to believe it when the pledge to introduce inequality enhancing Grammar schools is dropped. Until then, I suspect all we may be seeing is the same grasp of economics May has always displayed in government: she wants everyone to have more, while implementing policies that impede economic growth. I fear this Red Tory may be another symptom of the disease that hit the UK with Brexit. We are in the 'have your cake and eat it' era, an era that through its own contradictions cannot last.    

[1] The MSM where I fear the idea that the current fall in real wages is down to Brexit is now a ‘contested view’, thanks to recent remarks by the Prime Minister.

[2] Both directly through the impact of lower immigration on the public finances (uncontested by the Conservatives, perhaps because it comes from the OBR), and indirectly because it means we have to leave the Single Market.

This stage managed, policy free election

The real drama of the election so far was provided after the GMB union called a strike at Nestle’s York factory to protest at the management’s announcement that they were going to shift production of Blue Riband to Poland. Although the company merely talked about cutting costs, the local Labour MP blamed Brexit.

The day began with Theresa May, frontrunner in the forthcoming election, visiting both company management and union leaders to discuss the situation. The real drama began when Tim Farron, leader of the Liberal Democrats, who is campaigning to allow another referendum on Brexit, ambushed May by visiting workers who were picketing the factory. The anti-Brexit candidate shook hands and took selfies, and later said there was no doubt that the job cuts were a direct result of Brexit. I’m on the side of the workers who will lose their jobs as a result of leaving the EU, he said.

But Mrs. May was not to be outdone. After her talks she too went to talk with workers on the picket line, despite chants from some of the workers of ‘we want a second referendum’ and ‘Farron for PM’. She talked with them for an hour, and although she might not have convinced them that she could help, she did win the respect of some.

This is fiction of course, apart from the job losses at York. But those who read this Guardian article, or who live in France, will know that this is exactly what happened in the presidential run-off, with Le Pen performing the ambush and Macron having the courage to subsequently talk to the striking workers. As the article pointed out, this French political drama is in complete contrast to the stage managed campaign of Theresa May. In addition Macron has not refused to debate Le Pen for tactical reasons, as both May and then Corbyn have done.

This and the last election have been about selling brands, but unlike advertising there is no requirement to tell the truth. 2015 was all about a strong economy in capable hands: the economy was not strong and the hands sacrificed the economy for political gain but they kept on saying ‘long term economic plan’ and won. This time they are selling Theresa May as strong and stable, strong enough to bow to pressure on self-employment tax and stable in her views on Brexit, but again the marketing will win.

There is no doubt that something is very wrong when politics becomes about selling advertising slogans that are not true. But who is to blame for this situation? Janan Ganesh says the problem is that there are just two attitudes among the public about politics: indifference and obsession. I often think that the indifference is summed up by the phrase ‘all politicians are the same’. Taken at face value this assertion is clearly wrong, but what I think it means is that the person talking does not have the time or inclination to work out how politicians differ in a way that matters to them.

But this indifference does not stop people forming political opinions, often quite strong opinions. So why are we getting an election where the Prime Minister wants to avoid debate or questioning as far as she can? Krishnan Guru-Murthy is right that the media should try and discourage this way of running elections. But that needs to involve more than telling people when meetings are completely stage managed. The media needs to look at why spin doctors might want to minimise encounters with the media. For part of the answer you only need to look at how it puts gaffes before policy, as Diane Abbott discovered on Tuesday. Guru-Murthy’s own news program led with it, and all the discussion was about gaffes rather than police numbers.

Justifications along the lines of how this can reveal something about the competence of the person who made the gaffe may sometimes be true, but as a general defence it is not very convincing. As Mark Steel tweeted, if she had only put the numbers on a bus she would have got away with it. The real reason broadcasters make so much of gaffes is that they make great television. Who doesn’t want to see a politician embarrassed? But the consequence is politicians retreat to gaffe-proof platitudes. Labour politicians used to speak in a strange manner that seemed to be designed to avoid giving ammunition to the Daily Mail. It was one of the reasons Jeremy Corbyn, who said what he thought, won the Labour leadership.

If the broadcast media saved all the time they currently spend commenting on the polls and instead used that time to talk about policy, it would allow viewers to connect their own opinions to each party more easily. We do not want to end up like the last US election, where the average voter who just watched the nightly news on the non-partisan TV channels saw more time devoted to Clinton’s emails than all policy issues combined. That way we will end up with an incompetent, dishonest leader running a party whose policies will harm the country. Oh, wait...

One vote to bring them all, and in the darkness bind them

Forgive me for once again adapting a line from Tolkien’s ring-verse, but it does so naturally follow on from the post where I first used it. Then (before Theresa May announced her election) I noted that by March 2017 many more people had accepted that they would be worse off because of Brexit than immediately after the vote. However the proportions of people who say we were wrong to leave the EU has stayed pretty stable. (In the latest poll yesterday, there was, for the first time, the smallest majority possible believing it was wrong to leave.)

I wrote

“Here is a possible reason for this paradox. Voters feel that once a democratic decision has been made, it should be respected, even if they personally now feel less comfortable with the reasons behind the decision. It is important to respect the ‘will of the people’ for its own sake, just as it is important to keep to a contract even though you may now regret signing it.”

That was why I called that post ‘one vote to bind them all’.

These thoughts were, as I said at the time, largely speculation, but the extraordinary poll bounce May has received since she announced another vote makes me think I was right. When announcing the election, she talked about the country uniting behind Brexit. She also said

“Every vote for the Conservatives will make it harder for opposition politicians who want to stop me from getting the job done.
Every vote for the Conservatives will make me stronger when I negotiate for Britain with the prime ministers, presidents and chancellors of the European Union.”

The second sentence is just nonsense, while the first is ominous for any democrat. But as both polls and focus groups suggest, the spin that she needs ‘a strong mandate to get the best Brexit for Britain’ chimes with many voters. It is a vote to 'bring them all' into the darkness of an endeavour the aims of which remain hidden by platitudes.  

In this rather odd sense, there are similarities with what the Falklands did for Thatcher. The negotiations have been portrayed in the UK media as a battle between the UK and the EU. It is only natural for this to inspire nationalism among many voters: May needs strong backing (a large vote) so she can get the best deal for Britain in her battle with the EU. (And, of course, anyone arguing for the EU is therefore a ‘saboteur’.) May’s election announcement bounce therefore has similarities to Thatcher’s Falklands poll bounce.

As ever, reality is very different. What happens in the negotiations is largely down to the EU, with the occasional choice for the UK. These choices should be made by democratic means, and not by one person who has the interests of her party to worry about. My impression is that as far as the media outside the UK is concerned they just cannot understand why we have embarked on this crazy path.

If May and her team realised this when they called an election they were clever. There are plenty of other reasons why she called an election: potential prosecutions associated with election expenses, as Bill Keegan’s notes the negative impact of brexit is about to become visible, and of course the unpopularity of JC. [1] The latter was, I’m afraid, inevitable from the moment he was re-elected, and the responsibility for that vote lies as much with the PLP as with Corbyn and Labour party members.

It is almost as if May’s line is ‘who do you want to lead us into battle, me or JC’? With the referendum still regarded as the most important issue in UK politics, it is a line that could make the UK into virtually a one party state. [2] Of course many die-hard Remainers (like me) will never vote for her, but they comprise at best only around half of the 48%. Labour’s core support will remain loyal. But even if you could form some kind of ‘progressive anti-May alliance’ (which will not happen), Chaminda Jayanetti is right that there just are not enough progressives around to defeat the Conservatives, particularly if the UKIP vote collapses.

So is a Conservative landslide which decimates Labour assured? Heroic talk of defeating May and trying to shift the debate on to something else besides Brexit will not work. This is not because the Tories are not vulnerable. Quite the opposite in fact: I have never known a government that has such a poor record on health, education (this, and grammar schools for pity’s sake) and even prisons. The ‘we now have a strong economy’ line is a lie just waiting to be busted. All that means the Conservatives will focus relentlessly on Brexit and leadership. In 2015 the broadcast media followed the press in focusing on the issues where the Conservatives were strong, and they will do so again with (unlike 2015) justification from the polls.

Perhaps predictably, the wisest words I’ve seen written on this have come from Tony Blair. He suggests the slogan ‘no blank cheque’. It concedes defeat, which is realistic and has the advantage of shifting attention away from JC’s leadership qualities. It encourages voters not to ask who would be best battling for Britain against the EU27, and instead to think about choices to be made which may not be in the country’s interests but instead are in Conservative party’s interests. I do not think the leadership will ever adopt this line, because it requires them to admit they are going to lose and I do not think they are brave enough to do that. But on the doorstep it might help.

[1] When I tweeted Bill’s column with this point about Corbyn, someone replied that I couldn’t help making a dig at Corbyn when the price was a Tory Brexit. This is the other side of those on the right who accuse me of being politically biased when I’m critical of the government. Both misunderstand what I do and don’t do. I don’t do propaganda as defined here.

[2] The culture war analogy that Chakrabortty uses is interesting, as is the comparison with Nixon. But in many ways it is the spin doctors, well versed in what happened in the US, who are calling the shots, and May just has to agree to what they advise.

GE2017: Why economic facts will be ignored once again

In 2015, the Conservatives spun the line that Labour profligacy had messed up the economy, and they had no choice but to clear up the mess. In short, austerity was Labour’s fault. As Labour chose not to challenge this narrative, almost all the media and half the voters assumed it must be true. The reality was the complete opposite. The rising deficit was a consequence of the global financial crisis, not Labour profligacy. Doing something about it should and could have been delayed until the recovery was underway. By acting prematurely, Osborne delayed the recovery and lost the average UK household resources worth thousands of pounds. The story that we had to cut now because of the markets was completely false. 

Indeed, if you define the term economic recovery properly, as growth above previous trends, there has been no economic recovery from the Great Recession. I have shown this chart many times, and the story it tells is clear. In every post-war recession the economy recovered. The exception is this one, where we have seen no recovery while Conservatives were running the economy.

We can put the same point another way. The average growth in GDP per head during the Labour government period, which included the recession caused by the global financial crisis, is greater than average growth since 2010. The last decade has seen a unique period of falling real wages. Now this might not be the fault of the government in charge at the time, but it is that government that should have some explaining to do. But they never do have to explain, because mediamacro take it as given that the Conservatives are better at running the economy.

The 2015 General Election was the first recent occasion that the economic facts were ignored. The second was of course the EU referendum. Academic economists were united in thinking that Brexit would be bad for living standards: the only question was how much would incomes fall. The non-partisan media decided to portray that not as knowledge, but as just another view, to be always matched by someone saying the opposite.

A critical issue during the referendum was a belief that immigration had reduced the access of UK natives to public services. Economists know that is simply wrong for the economy as a whole, and if it happens locally it is because the government has pocketed the taxes immigrants pay. But the media did little to inform voters of why it is wrong, and I suspect this is why most of those voting Leave believed they would be no worse off in the long run outside the EU. This majority were not willing to lose income to reduce immigration for the simple reason that they believed, erroneously, that reducing immigration would make them better off.

Brexit may not have led to the immediate economic downturn that some expected, but the Brexit depreciation has brought to a halt the short period during of rising real wages. The economic pain that economists said would follow any vote to leave is starting to happen. Will that change the broadcast media’s view about how to present the economic consequences of Brexit? When Conservative politicians and their media backers choose to focus on GDP, will broadcast media journalists have the nous to ask what about real wages?

Unfortunately we know the answer to these questions. As far as economics is concerned GE2017 is likely to be nothing more than a combination of GE2015 and the EU referendum. The economy has not got any better than in 2015, and is about to get worse, but mediamacro will let Conservatives insist that the economy is strong. It is one year on from the referendum, but we still do not know what kind of Brexit we will have, a reason May gave for not holding another referendum in Scotland. The exchange rate has fallen and real wages have stopped rising, but we will still be told this is just Project Fear and the consensus among economists will get ignored once again. So, for the third time, we will have a vote where economics is critical but economic facts will be largely ignored.

We might be appalled at the authoritarian way May justified her decision to hold an election, which the Mail only slightly beefed up in their Leninist talk of crushing the saboteurs. But the depressing truth is that a majority of voters have bought this story. According to a snap poll by ICM for the Guardian, 54% of voters thought May was right to change her mind about an election because the situation has changed. They have been sold the narrative that Brexit is the will of the people, and now they must get behind May so she can get the best Brexit deal. As inflation rises and real wages fall the facts may be changing, but the narrative survives.

Narratives are a way people can try to understand things they know little about, and most people know little about economics or politics. Mediamacro is a set of narratives. Project fear is a narrative. The right and the ideologues are very good at selling narratives, and they have a media machine to invent them, road test them and spread them. The left and the realists have none of those things, and are hopeless at it anyway because they know reality is more complex than most narratives. That is why they have lost two elections, and look like losing a third big time.

Lessons from Brexit

Even if at some late hour Brexit does not happen for some reason, we will still have seen the country vote for and parliament approve a measure which inflicts substantial harm on its citizens. Anyone who still thinks otherwise should go through this Demos report on the opportunities and risks that Brexit creates, and ask whether the ‘opportunities’ are in fact things that we could have done anyway. Yes Brexit may force us to train more doctors etc etc. The disadvantages of doing it after Brexit is that the government will be more strapped for cash. [1]

In truth there are precious few opportunities that Brexit will bring, and an awful lot of costs. Those of us of a certain age have got used to losing votes of one kind or another, but in the past you could generally point to some group or class that gained from our loss. What has happened over the last few years has been something quite different: a democracy voting for things that will make almost all of the people worse off, to satisfy the interests or ideology of a minuscule minority. [2] The lessons we should draw from Brexit involve understanding clearly how this could have happened so to ensure it never happens again.

The referendum result went the way it did because of a perfect storm of two groups who had become disenchanted with the way society was going, or the way it had treated them. The first group, often forgotten by the left, were social conservatives who could be quite well off but who had probably not been to university. The kind of people who would react to claims that the Conservatives under Cameron were moving to the right by shouting ‘Nonsense. What about gay marriage’. The second group, the ‘left behind’, were the working class in once proud industrial areas that had declined steadily for decades. They were people who said before the referendum: 'well it cannot get any worse, can it'. 

The first group, because they were social conservatives, were naturally fearful of social change like immigration, although they were likely to live in areas that had seen little of it. The second group were more dependent on the state, and saw in the last few years their access to social provision steadily decline. Yet until recently neither group would have cared much about the EU either way, and certainly would not have been prepared to pay good money to leave it.

In John Major’s day the Brexiteers were a very small group who could best be described as an irritant. (John Major had a less kind word for them.) How did this group get to win a referendum? Crucially, they had allies in the owners of two key tabloid newspapers, the Mail and the Sun. Over a prolonged period these papers pushed two key ideas: that we were in some important sense ‘ruled by Brussels bureaucrats’, and that immigration was a threat to public services and wages. The first claim resonated with social conservatives, and the second with the left behind.

After John Major’s time in office, this alliance encouraged the opposition to use immigration as a stick with which to beat the Labour government. The Conservatives talked about the UK becoming a ‘foreign land’. Concern about immigration started rising well before the arrival of Polish immigrants. This in turn led to growing UKIP support. With the election of Cameron the pressure continued, and being the chancer he was he gave into the demand for a referendum, thinking both that it wouldn't happen (because he wouldn’t win an outright majority in 2015) and that he could win it.

The final part of the strategy was to associate immigration with the EU. The EU was not a major popular concern until 2016. But the tabloids were relentless in their anti-EU, anti-EU-immigrant propaganda before the referendum. The Leave campaign emphasised immigration (Turkey) and the public services (£350 million), and with ‘Project Fear’ neutralised Remain’s strong card. The bias obsessed broadcast media did nothing to expose these lies, treated academic knowledge on trade as just one opinion, and the polls showed the lies were believed.

Some have subsequently chosen to focus on the left behind group, and to suggest that they were both hard done by and their concerns about immigration deserve respect. Authors like Goodhart have suggested that the middle class social liberals that came to dominate the Labour party had little regard for this constituency. We can of course debate the successes and failures of the Labour party, but it seems this analysis misses the important point.

Those who voted Leave didn’t win. If they wanted immigration to quickly fall, it won’t. If they ‘want their country back’, they will find that all the EU interference Brexiteers go on about amounts to little more than a load of bananas. If they think their wages will rise because of Brexit they will see - are seeing - the opposite. £350 million to the NHS will become £50 odd billion to the EU. Those that will be hurt most by loss of trade to the EU will not be in London, but the very areas that voted most strongly to leave.

In other words the big news is that Leave voters were conned. The only people who will gain from Brexit will be the tabloid owners whose power will be enhanced and the ideologues who for some reason think the EU was stopping them reaching their promised land. That, as I suggested at the beginning, is not something I have seen in UK politics in my lifetime. The parallels with Trump’s election are in this respect apt. We can no more 'reconcile' ourselves to Brexit as we can think that Trump is in any way presidential. If your takeaway from both events is that Labour should better represent the working class and Clinton was a poor candidate I would politely suggest you are missing something rather important.

If there is a lesson for the left in all this, it is to be smarter about what the hard right is doing, and not to play along by talking about British jobs for British workers. The main lessons are really for those in the centre and the soft right. Don’t appease those on the hard right by using migrants as a political weapon (a lesson that was once understood). Don’t appease them by offering them referendums. Don’t appease the right wing tabloids by trying to befriend their owners and protecting their backs. Don’t appease them by being unbiased between truth and lies. If you continue to do these things, have a look at the Republican party in the US to see what you and your country will become.

When Donald Tusk received the letter from Theresa May yesterday, he expressed regret that the UK was leaving and said ‘we already miss you’. The letter he received made clear threats to end cooperation over security if the UK did not get the deal it wants. This made me rather proud to be European, and rather ashamed at the actions of my country’s Prime Minister and her government.

[1] There are only two examples I can see where Brexit might be necessary before we can exploit the 'opportunity of Brexit'. The first is to enable us to reform a farming system large parts of which are heavily dependent on subsidies. People draw analogies with New Zealand decades ago. But any transformation will be both painful and may threaten things we take for granted in the UK, like sheep grazing grass hills in areas of outstanding natural beauty. (George Monbiot likes forests more than I do.) The second is to offer development enhancing trade deals, where of course I fully agree with my economics colleagues.

[2] I say the last few years because I believe it also applied to austerity, which people voted for in 2015 despite having endured its consequences during the previous 5 years.