Monday, 27 June 2016

I nominate the chairman of our Brexit negotiations. If we ever have Brexit.....

Mervyn King, former governor of the Bank of England, was interviewed today on Radio 4’s the World at One. It was the most soothing thing I’ve heard in this whole referendum dust up.

King said fears on Brexit have been ‘overdone.’ The Remain camp treated voters ‘like idiots.’

As for the effects of Brexit, he said: ‘The countries that may well suffer more are not the UK but the rest of the European Union. Because what this will do is to re-enforce the impetus behind political parties in Europe who would like to get out of the euro area.’

‘What this will do I think more than anything else  is to create serious doubt about whether the euro area is a likely successful long term project. That’s the thing that is going to damage economies on the Continent.’

In its present form the euro ‘clearly is unsustainable.’

The interview has left me thinking King might be the man to chair the Brexit negotiations. That is, if we are to have Brexit negotiations. The powers are forming to reverse the Leave vote, but that is for another post.

Here is a link to the programme. King starts at 12.06.

He started by saying the statement by the Chancellor this morning, like the measured statement of the Prime Minister last Friday, were in contrast ‘with the slightly hysterical tone of some of the arguments that were put forward during the campaign.’

‘I think [voters] resisted this very strongly.’

People ‘didn’t want to be treated like fools. They could have listened to a rational argument. And there’s no doubt that leaving creates uncertainties. That was a powerful argument, but it didn’t help to exaggerate that argument by turning what were inevitably very speculative arguments into facts, £4,300 is the amount by which every household will be worse off…’

Are we heading for a recession? ‘We may, we may not.’

The markets today—truth in Project Fear? ‘No I think Project Fear went over the top. Sterling today, even after the fall, is roughly at the same level as it was in the middle of 2013 at a level the Bank of England and the Treasury then thought was necessary for the UK economy to rebalance … Sterling could not be at the levels it reached on Thursday night at midnight when people were speculating on the result, and hope to rebalance the UK economy. Some fall in sterling was inevitable.’

‘I don't think people should be particularly worried, markets move up, markets move down.’

‘We don't yet know where they will find their level and the whole aspect of volatility is that there is a trial and error process going on before markets discover what the right level of stock markets and exchange rates actually are.’

‘What we need is a bit of calm now, there's no reason for any of us to panic.’

King said ‘in 25 years' time we'll look back and say a little bit, that at least in economic terms, maybe that was a bit of a fuss about nothing.'

‘The long term effects may be much smaller than either side claimed.’

King stayed right out of the arguments while the referendum campaign was underway. That, and his sensible tone now, could make him the right man to be chairman of the Brexit negotiations.

Saturday, 25 June 2016

Coup? Johnson, Cummings and Hannan, 'the Cat, the Rat and Lovel our Dog'

A comment from Anglichan on my previous blog post asks: ‘I wonder now who is actually going to lead us out. Is Boris Johnson the only viable choice?’

For the moment, Boris Johnson looks like the inevitable next prime minister. But that does not mean he will lead us out of the EU. You have to remember who is coming in his wake: Dominic Cummings, the campaign director of Vote Leave, and a man not known for either accuracy or good manners. Or for any gut-level desire for Britain to leave the EU. He is just a kind of technocrat.
 For a taste of Cummings, here is how the Spectator wrote about his appearance before the Commons treasury committee last April.

Now the reason – or rather, one of several reasons – his closeness to Johnson is a cause to worry is that his original strategy was to run the referendum with this sales pitch to the voters: it is safe to vote Leave because Brussels will then come back with a better offer on membership, and we could have a second referendum on the better offer.

I myself heard Cummings lay out this plan, so it’s no rumour. Yes, he really was planning a campaign that would ask the voters to vote Leave, on the guarantee that they wouldn’t actually leave.

I did point out that Ireland had run EU referendums twice, and let’s just say it didn’t work out so well for them. Cummings – and to be fair, the other three people at the meeting, all English – brushed this warning aside with a superior ‘This is not Ireland.’

Which, given that the banking crisis was, and is, still pretty fresh in my memory, all I could do was think of two phrases in response to that: ‘Too big to fail’ and ‘This time it’s different.’

Luckily, somebody talked Cummings down from that ledge and the two-referendums strategy was not part of the Leave campaign.

It does however illustrate how far from the reality of the EU Cummings can drift. He is therefore just the sort that could embrace the idea of ‘associate membership’ which Dan Hannan, another Tory Leave ‘winner’, was yet again suggesting on Radio 4 today. (See my previous blog on Hannan’s first go at mentioning it yesterday. Once is a comment, two is a plan.)

Also, let me include this, nothing I want to be held to, but an idea. Another plan being put about is that the new leader of the Conservative party must call an election, then during the general election campaign present his plan for Brexit. This is so he has ‘a mandate’ for the relationship he wants the UK to establish with the EU.

This of course introduces the danger of the ‘associate membership’ emerging from a Boris Johnson Number 10 as the plan.

But more, think of this.

Everyone assumes that a Conservative party led by Johnson (or, indeed, led by almost anyone) would win the election, and then carry on with a Commons majority. That is because Jeremy Corbyn is leader of the Labour party, and he is the most easily beaten Labour leader anyone could image.

What if Labour get a lot more clever than one suspects, and manage to parachute a far more attractive party leader in before the election? If a Labour leader were able to form a coalition government with the SNP and other anti-Brexit MPs, he could overturn the  referendum result  – and I am the first to admit that the Constitution would allow the Commons to do just that. 

Political dynamite, yes, but possible. Therefore, a general election would be a very dangerous undertaking.

And while you are ruminating on that doom-ish possibility, here is a small glimmer of light. Or at least, a glimmer of humour, since one has to ask how it is the Economist has come so late to the party.

Here is what they have written in response to the Leave vote, on what the new prime minister should do now: ‘We believe that he or she should opt for a Norwegian-style deal that gives full access to the world’s biggest single market, but maintains the principle of the free movement of people.’

Somewhere in the blog-o-sphere I can hear Richard North saying, ‘Oh, do keep up.’

Friday, 24 June 2016

Party today, but we are not safe yet

Even as I celebrate the Leave vote, my long experience in EU matters keeps this thought hovering in my mind: voting to leave is not the same thing as actually being out. There will be plenty of time in the next few years for the decision to be fudged.

And plenty of people willing to do it. Already today Daniel Hannan as listed Guy Verhoftstadt’s idea of ‘associate membership’ as one of the paths Britain could consider.

Verhoftstadt is the former Belgian prime minister who is the head of the Liberal group in the European Parliament. He is also one of the most active euro-fanatics in Brussels. His idea of associate membership would keep Britain tied as a member of the EU, but with lesser powers.

I expect that sort of thinking from Verhoftstadt. But for Hannan, who knows the Verhoftstadt euro-fanatic principles from his years at the European Parliament, even to suggest this different, second-class membership of the EU could be on a ‘possibles’ list shows muddled--and therefore dangerous -- thinking among Tory eurosceptics.

But those are not arguments for today. Today is the moment for a happy dance. And I'm dancing it.

Tuesday, 21 June 2016

'Leap or no leap' on Thursday

What we have coming up on Thursday is Britain’s Hartford Convention moment.

Not that one person in a million in Britain has heard of the Hartford Convention. That is no surprise, since in America the convention – held in secret in Hartford, Connecticut, 1814 – is almost as unknown.

Of course it is. The narrative of official American history since 1865 has been that the federal union is, and has been since the establishment of the United States, indissoluble.

The problem for official historians – the ones the American writer Gore Vidal used to call ‘the court historians’—is that the evidence of the Hartford Convention shows it was not always so.

In late 1814, the New England States were fed-up with what the War of 1812 against the British (known as ‘Mr Madison’s war,’ after the then-President, James Madison) was doing to their trade.

That was their immediate grievance. Their long-term grievance was over the balance of political power that gave the Southern States, particularly Virginia, the richest of all the States, effective control of the federal government.

Anyone familiar with the early power of Virginia would not be surprised at the grievance: President James Madison was from Virginia, as was his immediate predecessor as president, Thomas Jefferson. Four of the first five US presidents were from Virginia, including of course Washington.

The New England delegates met in secret sessions at the Hartford State House for three weeks to draft a formal protest against the Federal Government’s continued involvement in the war, which allied the United States with France against Great Britain.

They planned to send a delegation to Washington to present their demands, including a Constitutional amendment that would dilute the Southern States’ power to declare war.
If the federal government would not consider their demands, many of the delegates of the Hartford Convention were ready to call for secession.

It was seen as the only way for the New England states to break free of the dominance of the Southern States. The threat was included in diplomatic-speak in the final paragraph of the official resolution to be presented to the government: if the resolution should be unsuccessful ‘it will in the opinion of this Convention be expedient for the Legislatures of the several States to appoint Delegates to another Convention, to meet at Boston, in the State of Massachusetts, on the third Thursday of June next with such powers and instructions as the exigency of a crisis so momentous may require.’

The momentous ‘crisis’ would be a decision for secession. No one was in doubt that the New England states could secede from the Union. The only question was whether they would.

An 1814 political cartoon titled ‘Leap or no leap’ illustrates how the rest of the States viewed the convention. 

Here is how the US Library of Congress describes the cartoon. It shows that the Hartford Convention delegates were viewed as wishing to become British again:

‘The artist caricatures radical secessionist leader Timothy Pickering and lampoons the inclinations toward secession by convention members Rhode Island, Massachusetts, and Connecticut, alleging encouragement from English King George III.’

‘In the centre, on a shore, kneels Timothy Pickering, with hands clasped praying, "I, Strongly and most fervently pray for the success of this great leap which will change my vulgar name into that of my Lord of Essex. God save the King."’

‘On a precipice above him, a man, possibly Harrison Gray Otis, representing Massachusetts, pulls two others (Rhode Island and Connecticut, possibly James Hillhouse) toward the edge.’

‘Rhode Island: "Poor little I, what will become of me? this leap is of a frightful size -- I sink into despondency." Connecticut: "I cannot Brother Mass; let me pray and fast some time longer -- little Rhode will jump the first." Massachusetts: "What a dangerous leap!!! but we must jump Brother Conn."’

‘Across the water, on the right, sits George III with arms stretched out toward the men on the cliff. He calls, "O'tis my Yankey boys! jump in my fine fellows; plenty molasses and Codfish; plenty of goods to Smuggle; Honours, titles and Nobility into the bargain."’

‘On the left, below the cliff, is a medallion inscribed with the names of Perry, McDonough, Hull, and other heroes of the War of 1812 and decorated with a ribbon which reads, "This is the produce of the land they wish to abandon."’

As it happened, while the New England delegation were traveling to Washington, word reached them of the overwhelming victory of General Andrew Jackson against the British forces at the Battle of New Orleans, which indicated the war could soon be over. 

Then on reaching Washington, they learned that the Treaty of Ghent had been signed between U.S. and British diplomats, ending the war.

The Hartford Convention delegates returned home. Their cause was dead in the water.

But their lesson lives on, and we will see it still lives on come Thursday: Just because no one doubts the right of a sovereign State to withdraw from a political and economic union today, doesn’t mean that next year – or next decade – that right will still be respected.

In 1814, the New England states freely declined to exercise their right to leave the Union. Some decades later, the Southern States chose not to decline that right...and while what happened next is a story for another day, the Hartford Convention remains a lesson for today.