Friday 22 February 2019

A blip or a sea change?

I sometimes get messages from readers of this blog praising me for a degree of insight and foresight. That is flattering when it happens, but anyone holding such a view should be disabused by the fact that I had expected this to be a relatively quiet week, with little more than continuing nonsense about Theresa May going to Brussels to try to get the EU to agree to make the Irish border backstop not be a backstop (and this, indeed, has happened).

I certainly hadn’t expected the creation of the Independent Group (IG) of defectors from Labour and Tory Parties. It’s not that this is surprising in itself – I wrote in my previous post that both the main parties have effectively ceased to function as such – but the timing of it caught me and, I think it’s fair to say, most commentators by surprise.

The possible significance of the IG

It is difficult to know what its long-term significance will be. It’s equally plausible to think that in retrospect it will be seen as a trivial blip or as a decisive sea change. That the latter is possible is because it potentially speaks to something quite deep and widespread: a despair about the way that Brexit has eviscerated adult, pragmatic politics in the main parties.

Leaving aside the mechanics of electoral systems and party organization, which may make it amount to nothing, there’s a palpable sense that the IG have the potential to occupy a political space that has been evacuated by those parties. At the very least there’s a whiff of hopefulness about it, in contrast to the relentless toxicity of so much recent politics.

This development is, in large part, about Brexit – almost entirely so for the ex-Tories, though for Labour it is more complicated, relating also to the raging row about anti-semitism albeit that the two aren’t entirely disconnected. In both parties there are push and pull factors in that Brexit policy has pulled those MPs away from their parties whilst entryism, deselection threats, and bullying have pushed them to leaving. For the ex-Tories, specifically, it reflects the three-year history of how Theresa May has sought to pander to and placate the ERG Ultras thus alienating her moderate MPs whilst, ironically, bringing her nothing but disloyalty and disdain from the Ultras.

More fundamentally, the IG is an outgrowth of the way that Brexit is shifting the tectonic plates of British political culture away from – to put it at its most generic - the 20th Century divide of Capital and Labour to what, as I’ve argued in detail elsewhere, seems to be the emergent 21st century one of ‘Cosmopolitans and Locals’.

In that context, both the English nationalist Tory Brexiters and the ‘socialism in one country’ Labour Lexiters are on the same (‘Local’) side. On the other (‘Cosmopolitan’) side are the Tory pro-business and foreign policy realists and the Labour internationalists and ‘public services based on business taxes’ pragmatists. The current labels of, for example, ‘neo-liberal’, ‘Blairite’ or ‘centrist’ don’t really speak adequately to this more fundamental division.

The immediate impact of the IG

How all that plays out remains to be seen over the coming years and decades, but it doesn’t tell us much about the more pressing issue of what’s going to happen in the next five weeks – though that, itself, will inflect what happens to the UK in the long-term. From a very near-term perspective, the IG doesn’t really matter in terms of parliamentary numbers in key votes (in that all of the defectors will probably vote exactly as they would have done had they stayed in their parties).

There are (at least) two things that matter now. First, will the possibility, or the actuality, of further Labour defections (of which there is a real prospect, because there are so many Labour MPs who hold similar views to the nine who, at the time of writing, have done so) finally push Corbyn and those around him to advocating another referendum? Or will IG weaken the voice of those calling for it, partly by removing some of its most important advocates and partly by associating such advocacy with disloyalty?

There has been much disingenuousness in the claims that Labour are not responsible for Brexit since they are not in power. For whilst not in power, in a hung parliament with a deeply divided Tory Party, Labour could have had, and still can have, a very significant role. In particular, if they now endorse another referendum then, even allowing for that fact that some Labour MPs would vote against it, there’s a good chance that with some Tory rebels, it could get support.

Second, will there be more Tory defections to IG? There are probably only a small number of possible candidates for this – but there only need to be a small number for there to be no Tory (plus DUP) majority. If that happens, a General Election seems inevitable (and, if so, a good chance that few if any of the IG get re-elected, even assuming they stand. On that, the way the IG and Liberal Democrat relations develop will be crucial). In this scenario, as in that of a Commons majority for another Referendum, it would be necessary to seek (and probably secure) a substantial extension of the Article 50 period. The moment that happens, the first big crack in the Brexit dam appears, and all bets are off.

Against that, the effect of the IG on the Tories might well be – precisely because of the possibilities just discussed – to solidify support for May’s deal in whatever form it is in for a possibly meaningful vote next week, even if it is not substantively different to that which has already been rejected. Might the defections of Tory remainers paradoxically weaken the will of the ERG types, who might finally grasp that this is the best shot they have at Brexit?

Whilst the outcome of the IG development remains unclear, and may eventually be of little importance, it does matter now - if only for deepening the political crisis which, as per my previous post, inevitably extends the political space for all the possible Brexit outcomes.

What to make of Honda?

Meanwhile, we shouldn’t lost sight of the fact that businesses, jobs, people’s lives and Britain’s global reputation continue to be trashed. On the economic front, the biggest story was Honda’s announcement that it will pull out of the UK. Brexiters were delighted that its executives said this was not because of Brexit but, whilst it’s reasonable to say the decision wasn’t solely or even mainly down to Brexit, the reality was a bit more complicated.

First, most serious analysts simply don’t believe that it was nothing at all to do with Brexit - and, worldwide, in countries where tiptoeing around the politics of Brexit isn’t a priority, that’s not how it’s being reported. It’s not as if there hadn’t been repeated warnings from Japan about the risks of Brexit to its companies. There’s a wider aspect here, too, which is how Brexit has caused the collapse of Japanese confidence in the UK as a stable place to invest.

Second, some of the deeper issues relate to the terms of the recently completed EU-Japan Free Trade Agreement (£). In the early stages, with UK input, auto tariffs were cut to zero, but in the later stages of the negotiation, after the UK vote for Brexit, what was agreed seems to have taken little account of the impact on the UK auto sector post-Brexit, prioritising (ironically, given Brexiter claims in another context) the export of German luxury cars to Japan (see here for more detail). In that respect, there’s a link, albeit complex and indirect, with Brexit.

Third, and discomfiting for remainers who have got used to business being ‘on their side’, is the fact that businesses like Honda are not anti-Brexit campaigners per se. They make anti-Brexit statements if it is in their commercial interest to do so. Once a firm like Honda has decided to completely disinvest, there is no upside in declaring that the reason was Brexit and, potentially, a downside as it alienates some of their UK customers, and also government during the winding-down period. There’s no mileage in Honda indulging in a ‘we told you so’ gesture.

All of this is rather abstruse but we can cut through it in a fairly simple way. Let’s assume that Honda’s decision had nothing whatsoever do with Brexit. So what? We know that very many cases of disinvestment, relocation and so on have been directly linked to Brexit. Is the case for Brexit really now reduced to the claim that not all economic bad news is explicitly attributed to Brexit. Their fear, of course, is of some shatteringly disastrous event that lays bare the damage Brexit will do: something that will be an undeniable sea change rather than a dismissable blip. 

Actually, it is remarkable that nowadays Brexiters are rarely heard making any arguments for the positive benefits of Brexit, rather than denying it has negative consequences. Indeed, increasingly, the only argument made for Brexit is that it was voted for in the referendum, rather than that it has any merit in and of itself.

What now?

And so we are about to enter another week – conceivably, yet again, a crucial week if, as is speculated, the latest ‘meaningful vote’ occurs or even if there is just the scheduled vote on a general Brexit motion with the possibility of the passing of the Cooper-Letwin amendment (to seek an Article 50 extension in the event of no deal being reached) perhaps with rebellions from government ministers. So it could be a sea change week.

Or, perhaps, just as I expected this week was going to be a quiet one, it will be next week that turns out to be so, with just a few more news blips that are quickly forgotten. Politicians on all sides may just allow things to drift on for a bit longer hoping, Micawber-like, that ‘something will turn up’. If so, that will be grossly irresponsible but it’s not an entirely outlandish suggestion, after all.

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