Wednesday, 26 October 2016

Respecting decisions

One of the outcomes of the referendum on June 23rd has been politicians lining up to say that the people have spoken and their verdict must be respected.  It’s a variation on the theme that Brexit means Brexit; and one of the results of that is that debate is now largely limited to the question of what type of Brexit.  But is that really a necessary concomitant of ‘respecting the voice of the people’?
There’s a comparison with the result of the 1999 referendum on the setting up of the National Assembly.  Those who disagree are still free to argue that it should be abolished, and to set up parties and campaigns to that end if they wish.  Respecting the vote of the people seems to me to mean only two things in this context, namely (a) a decision taken by direct vote of the electorate can only be reversed by another direct vote of the electorate, and (b) that there’s little point holding another vote unless or until there are clear signs that public opinion has moved.  And at present, all the signs are that there’s growing support for the Assembly rather than a huge wish for its abolition.  But that doesn’t – and shouldn’t – stop people making the argument if they wish and trying to change opinion.
Take another example.  If there were to be a referendum on the return of capital punishment tomorrow, I have a horrible feeling that I’d find myself on the losing side and that such a proposal would be carried.  (There couldn’t be a referendum on that as things stand, of course, because no-one, as far as I’m aware, has yet suggested that the UK should opt out of membership of the Council of Europe, which bans the use of capital punishment.)  But if it were to happen, would anyone seriously suggest that all debate from that point on should be limited to discussing what type of rope to use?  Of course not; those opposed to the move would continue to make their case and seek to reverse the decision.
In both cases people see (or would see) themselves as being free to disagree with the decision taken, and to continue to argue for the course of action which they believe to be in the best interests of the country as a whole, with a view to changing the decision.  So why are we seeing so little of that approach over the question of EU membership?
I’m clear that the outcome that I want to see for Wales is direct independent membership of a changed and developing European Union, alongside other new states appearing from within the existing member states, such as Scotland, Wallonia, Flanders, Catalunya, and Euskadi.  I understand and accept that that’s currently a minority view; but minority views do not become majority ones by not being expressed.  Yet at present no politicians or parties in Wales are arguing for that outcome; they’re all too busy ‘accepting’ the result of a single referendum and debating the terms under which a UK outside the EU relates to the remaining member states of the EU.
If a majority decided by a democratic vote that the earth were flat, that wouldn’t make it so.  And surely no-one would suggest that the decision had been taken and the only question for debate was how to cope with the changes involved in moving from a round earth to a flat one?  Democracy is a lot more nuanced than that.
It’s an exaggerated parallel, of course.  But it seems not far off the position of many of those who argued that we should remain in the EU.  If they thought leaving was a bad idea until June 22nd, why is it not still a bad idea now?  Have they changed their minds or are they just afraid to say what they think?
Standing up for the best interests of Wales isn’t the same as saying that the people are always right.  Sometimes, it involves telling people that a particular decision is a bad one, explaining why, and persuading them to change their opinions.  I call it leadership.  Why do so few politicians apparently have the courage to provide that?

Tuesday, 25 October 2016

Being put in their place

Yesterday’s meeting of the Joint Ministerial Committee seems to have lived down to expectations, with the leaders of the devolved governments coming out with no more information than they took in.  They have, though, been put in their place, having been told very clearly that they must not seek to promote the interests of their respective nations undermine Brexit.
A picture tells a story, as they say, and I thought that the picture of them all meeting in the Cabinet Room which is contained in this report said a great deal.  It shows that around half of those at the meeting represented the UK/England Government whilst the other half represented all three of the devolved governments.  A 50:50 split probably seems about right from ‘their’ perspective.  But they were also sitting on opposite sides of the table, in a way which immediately conveys either confrontation or a clear power relationship.  Or maybe both.
I suspect that it’s accidental, in the sense that probably no-one really gave it much thought in advance.  This is, after all, THE Cabinet Table; it’s where, from ‘their’ perspective it all happens.  And also, from ‘their’ perspective, they are very much in charge.  But the fact that it’s obviously so natural that it didn’t need a great deal of thought is precisely the point which is so revealing.  It’s what they mean when they talk about a grown-up relationship.

Monday, 24 October 2016

Negotiations and tantrums

Putting on his most grim and determined face, the First Minister yesterday declared that Wales must have tariff-free access to the single market post-Brexit and that this is a ‘red line’ issue for him.  Indeed, he went so far as to say that if we don’t get that, then he will not support any deal which emerges from the eventual negotiations.
So, when it becomes even clearer than it already is that the UK will not be allowed to opt in to the single market whilst opting out of freedom of movement (and he also said in his latest utterance that he too wants to limit freedom of movement), what exactly will he do?  Put on an even more serious face and stomp his feet?  Tour the television studios saying how awful the Tories are?  But he already does both of those – would we notice any difference?
Despite the Prime Minister’s statement that Carwyn Jones will have a direct line to David Davis to express his views, ‘expressing his views’ is all he will be allowed to do – and, of course, take his fair share of the blame for having been party to a process which will not deliver what he wants.  Of course, if Wales were an independent country, then he really would have a veto over deals affecting us.  But he doesn’t want that – he just wants to be able to stamp his feet and have an occasional tantrum.  And then wonder why Wales’ voice is being ignored.

Friday, 21 October 2016

They can't help not listening

The gulf in perceptions between the UK Government and the other members of he EU was highlighted by the story about the PM’s attendance at the Brussels summit. Telling the other members that we are not only going to walk away, but we also expect to play a full role in determining the future of the other 27 members in the meantime – and also expect them to consult and involve the UK in foreign policy decisions after Brexit – is a message that could only be delivered by the leader of a government which believes its country is particularly special and important in the world.  It sounds like a message from someone who has little conception of how that message was likely to be received by the other members.  It’s hard to conceive of a more certain way of making things difficult than continuing to behave in such a superior fashion.
But it isn’t just the Prime Minister; and I’m not the only one who thinks that they’re delusional.  There was another story yesterday about a former Treasury civil servant who said that the Brexit Secretary and other ministers are living in “cloud cuckoo land” if they believe that the UK has the upper hand in trade talks as part of the Brexit deal.  His comments were dismissed, of course, by the rabid Brexiters, but their problem isn’t simply the failure of basic mathematics in what they’re saying; it is also, like the PM’s comments, based on a failure to understand where the other EU members are starting from.
Mathematically, it is of course correct to argue that the EU sells more to the UK than the UK sells to the EU; but that comparison of totals is only part of the story.  With 450 million people on one side of the equation and 60 million on the other, a higher number has a smaller proportional impact – it only becomes greater in impact if the trade balance is weighted something like 7:1 in favour of the 27.  No-one is claiming anything remotely resembling that level of disparity.
But the bigger problem is one of starting points.  It’s true, as the Brexiters claim, that if the EU takes a tough stance, then both sides will suffer – but the point is that Brexit is meant to hurt.  Exit was never supposed to be easy, and whilst the UK’s Brexiters blithely assured everyone that the other 27 would climb down in the end, all they’re succeeding in doing is making them even more determined not to makes things too easy.
The Brexiters will argue, naturally, that this is short-sighted of the EU and that they will damage their own economies as well as ours.  But that’s the whole point; from the outset, too many people in the UK have seen the EU as purely about economic advantages and disadvantages – they still don’t seem to understand that the European project has always been, from the very beginning, about more than economics.  Economics has been the means to an end, not the end in itself.
The EU was founded out of the ashes of the second war to ravage the continent of Europe in half a century, and the intention of the founders was to make sure that it could never happen again.  After the horror of total war across the territory of Europe, and the subsequent division of Europe into two mutually hostile blocs for decades, that desire for unity is entirely understandable.  But the UK has always seen itself as being different.  On the whole, the UK establishment rather seems to like going to war – and for the past few centuries, it has had the incredible advantage of fighting its wars on someone else’s territory, a factor which surely contributes to that different attitude.
For the 27, the European project is about much, much more than economics – and it’s so important to them that they will be willing to take an economic hit in order to preserve and advance that project.  Unless and until the UK government starts to understand that basic point, an approach based on an assumption that economic considerations will be top priority for ‘them’ because they are top priority for ‘us’  is doomed from the outset.  I have no expectation of seeing any change though.  Listening to, never mind understanding, other viewpoints has never been a particular strength in the upper reaches of the British establishment.  They’ve always known with a cast-iron certainty that they are right.

Wednesday, 19 October 2016

Much ado about ... well, what, exactly?

It is clear than many MPs – including not a few on the Tory benches – are more than a little restless about their role in agreeing the Brexit terms and process.  And given the High Court challenge over whether the Government has the right to invoke Article 50 without the consent of parliament, that restlessness isn’t limited to MPs.  It was stated by the government lawyers during that court hearing that the government’s position is that MPs are very likely to have a vote about the final terms.
What’s a lot less clear to me though is what MPs would actually be voting on, at either stage.  It’s true, as many have argued, that a majority of the UK electorate has voted to depart this particular station, but the electorate wasn’t given any opportunity to select the destination.  Whilst people are reading the referendum result as support for their own particular interpretation, the simplistic nature of the question asked means that none of us can really be certain.
But the problem with a parliamentary vote at the end of the negotiation process is that that, too, is likely to end up being a binary choice, and not necessarily of the sort that people are expecting. 
I suspect that it will not be a choice between Brexit on ‘these’ terms or no Brexit (with the latter requiring, morally if not legally, a further referendum, and therefore being dependent on a clear indication of a change in public opinion).  That would be messy and politically difficult, but would at least give an opportunity for a rethink in the cold light of day with all the implications clear.  If people then chose to support it, no-one would be able to argue that they hadn’t had the consequences spelled out to them. 
But MPs are more likjely to be given a choice between Brexit on whatever terms the government has negotiated by that point and Brexit by simply walking away with no deal of any sort.  MPs may find that the choice for which they are lobbying so hard will turn out to be one of the Hobson’s variety.

Tuesday, 18 October 2016

Riding two horses

I can understand the anger and disappointment with which members of any party react to a defection by one of their elected members.  In the case of Dafydd Elis Thomas, those feelings will no doubt be heightened by the fact that (and not for the first time) his actions seem timed to occur with maximum impact just before a conference or election.  There is a danger, though, that in over-personalising the question, the substance of the underlying issues gets lost or ignored.  He has, over the years, said much with which I agree and much with which I disagree.  I’m not going to dwell on the more personal aspects of his decision.  There is one thing he said this week, however, which has largely been ignored, but on which I have considerable sympathy with his diagnosis, even if not with his proposed cure.
It’s not the first time that he’s expressed his view that Plaid has not adapted well to the new political situation post-devolution; and it’s not the first time that I’ve agreed with him on that question.  It seems to me that there are two potential roles for a nationalist party post-devolution, but neither is without its problems.  Part of Plaid’s problem is that it has never clearly opted for either.
The first is to concentrate on becoming a party of government, seeking to use the limited powers of the devolved legislature for nation-building, doing what it can to improve the lives of the people of Wales in the short term, and seeking further devolution of power on a gradualist and opportunistic basis.  The major problem with that approach is that Wales already has one (and arguably up to three) parties trying to do much the same thing.  Differentiation from the Labour Party becomes difficult to say the least; and it might even be that the most effective way to pursue the goal would be through membership of the Labour Party and seeking to change it from within rather than playing the role of an opposition to it.  That underlying similarity is part of the reason why Plaid can’t seem to make its mind up from one day to the next whether the Labour Party is a progressive force with which Plaid should ally itself, or a bunch of pink Tories who must be opposed at every level.
The second is to harden the party’s stance on the national question; to accept that devolution has a logic of its own by now and that the role of a national party is always to be arguing for more, and sooner; to be putting the case for the end goal of independence for Wales.  The problem with that approach is that, unless and until the case is made and a substantial number of people come to support that aim, it’s unlikely to be an electorally successful strategy.  For those who judge success in short term electoral considerations, it’s an unattractive option.
There are a number of reasons for Plaid’s failure to adopt either of these paths, including the fact that for ten of the post-devolution years its leader actually didn’t ever appear to agree with the party’s formal aims.  But it was never down to one individual – there have long been others (Dafydd Elis Thomas amongst them) in prominent positions who would never accept a decision to go for one or the other of these options if it wasn’t the one that they wanted.  And I'm not without a certain amount of personal experience in trying to maintain a balance between the two very different perspectives.
But am I positing a false choice?  Can the two be combined?  The case of the SNP shows, surely, that they can.  It is perfectly possible to go to the electorate and argue that a party has a clear vision for where it wants the country to be and will continue to strive for that, but that it is also willing and ready to serve the best interests of the country by offering itself as an alternative government in the interim.  It’s worked extremely well in Scotland.  For years, I believed that such a strategy was not only possible, but desirable.  However, it’s never really been tried here in Wales.  That’s partly down to electoral timidity, but also partly down to a lack of self-conviction within Plaid about the possibility of realising the aim.
There is another way of combining the two, however, and this is the option which Plaid seems to have chosen – albeit by default, rather than through a rigorous process.  That approach is to say different things to different audiences.  The internal audience is encouraged to continue working with the long term goal in mind, whilst the external audience is encouraged to believe that it’s such a long term aim that they needn’t worry their heads about it.  But the audiences cannot be kept as separate as that, and there is inevitable message leakage.  The result is a party which at best sounds uncertain about what it wants, and at worst sounds positively shifty and dishonest about what it aims to achieve for Wales.
It also has the effect of making it difficult for any new or different party to fill the space and argue for Welsh independence because Plaid continues to try and occupy that space without really doing very much to promote the aim, in an attempt to build further electoral support without losing what it already has.  It’s not quite the worst of all worlds, but it’s not far short of that for those who want to see faster progress towards an independent Wales.
Dafydd’s proposed ‘cure’ of giving more support to Labour, under this analysis, is effectively equivalent to selecting the first option of those outlined above.  In fairness to Dafydd, whilst I might disagree with him, I think that’s an entirely honourable position to take.  It would almost certainly mean splitting Plaid between the two approaches – but that might not be an entirely bad thing for Wales in the long term.  The party has achieved a lot over the past few decades – more than many people give it credit for.  But perhaps it really has reached the limits of what can be achieved by trying to ride both horses.

Monday, 17 October 2016

Scrapping EU red tape?

One of the great claims made by those supporting Brexit was that it would enable the UK to get rid of all those regulations made by those dreaded unelected Eurocrats in Brussels, and free UK businesses from what is always described as ‘red tape’.  There are at least two obvious problems with this.  The first is that the regulations aren’t made by those unelected Eurocrats in isolation; they’re made with the agreement and input of the representatives of the elected governments of the 28 member states.  Not every state always gets exactly what it wants, but it’s democracy, not the lack of it, which ends up following the wishes of the majority – or perhaps more accurately, getting to a conclusion which a majority can support.
Leaving that aside, the second obvious problem is their apparent inability to point to many concrete examples of regulations which can in future be disregarded.  There were two stories last week which brought this to mind.
The first was a story about the possibility of giving priority to electric vehicles in a number of English cities.  This is, it seems, part of a response to a Supreme Court ruling, ordering the UK Government to comply with European limits on air pollution.  Would this, I wonder, be one of those horribly European bits of red tape which we should be tearing up post-Brexit in order to free up UK enterprises to make more money by paying less attention to environmental issues?  I mean, outside of Brussels, who really cares about having clean air to breathe?
The second was rather more local; it was about the decision to give protected status to Carmarthen Ham.  This ‘protected status’ is another of those horrid European regulations, and it’s clearly a barrier to other businesses who want to muscle in to this market and exercise their right to sell their product as they wish.  So is this one of the pieces of red tape doomed to be abolished, I wonder?
Perhaps these might look like silly examples, but that would also apply to almost any other example that I picked; and the second isn’t so far away from the one concrete example that the Prime Minister gave us in her speech to her party’s conference, when she talked about “how we label our food”.  This ‘plucky island nation’ (I should probably attribute the copyright of that phrase to someone or other) standing against the foreign foe for the right to put whatever labels we like on our food sounds like the sort of thing that might go down well in a Tory conference – but how sensible is it?
For any food producer wanting to sell its produce only in the UK, it might have some advantages, particularly if it means that they can get away with more (although I’m not sure why so many of those who will be consuming the products appear to think that’s such a good idea).  But any food producers wishing to sell into the single market (paying whatever tariffs are necessary for the privilege) will still have to comply with the rules of the EU.  But in this case, that would be in addition to complying with UK rules.  This is just one example of many where having separate UK rules will not necessarily mean less regulation and red tape – they could actually mean more.
And that’s the point about most of the EU regulations that people are raging against – they exist because having one set of rules to follow is better than having 28 with which exporting businesses need to comply.  It's actually a way of reducing the overall regulatory burden on companies trading within the market bloc.  This is far from being the first or the only example of what sounds like a good sound bite actually coming back to place a real bite on the posterior.  But then, as long as we have control of our borders…

Friday, 14 October 2016

Being special and unique

It’s possible, of course, that the latest words from the President of the EU Council are just posturing; part of the process of setting expectations before serious negotiations start.  But his statement that the choice is between a hard Brexit and no Brexit at all is a blunt one, and is interesting in that it’s the first time, as far as I’m aware, that a senior figure in the EU has raised quite so plainly the possibility that the UK will change its mind about the whole thing when it truly comes to understand the implications.
Many of the statements from the Brexit side indicate that they will simply assume that this is nothing more than posturing.  After all, much of what they’ve said to date seems to assume that they really do believe that the other 27 members will see the UK as such an attractive market for their goods and services that they will give the UK a better deal as a non-member than they get themselves as members.  One has only to put it in those terms to see the fatal flaw in the argument – if an ex-member can get a better deal than (or even an equivalent deal to) a member, why would anyone choose membership?  But then, I keep forgetting – the UK is a special and unique state, entitled to special and unique treatment.
I’m not sure that threatening people with legal action before they even sit down to negotiate is ever the best strategy, but that’s apparently what Liam Fox did last weekend.  His argument was that other parties negotiating with the EU thought they were negotiating with 28 countries collectively, and they will feel so badly cheated if only 27 countries end up as part of the deal that they will sue those 27 for not allowing the 28th to remain part of the deal.  I see his point, but don’t understand why they’d sue the 27.  Surely they’d sue the one which walked away from participation, despite having been an integral part of the negotiations up to that point?  But then, I keep forgetting – the UK is a special and unique state, entitled to special and unique treatment.
There are signs that some Brexiters are starting to have concerns about the direction of travel.  It’s not that they’re changing their minds about Brexit – they still want that, just not the type of Brexit which the government seems determined to achieve.  They were probably foolish enough to believe David Cameron, when he said before the referendum that if the vote went the ‘wrong’ way from his perspective, he’d carry on and try to negotiate the best deal that he could.  If he’d said that, actually, he’d stand aside and let the more rabid Brexiters do all the negotiating, maybe they’d have been a little more cautious.
Having declared so definitively that, as far as the UK government is concerned, the one non-negotiable part of any deal is that the UK is going to keep the foreigners out, I’m not sure that there’s much else left to negotiate about.  Almost everything else flows on from that position, and that’s all Donald Tusk is really saying.  It’s simply a matter of spelling out the implications, not of changing them.  But then, I keep forgetting – the UK is a special and unique state, entitled to special and unique treatment.
If only I could be as easily convinced about that as the government seem to be.

Thursday, 13 October 2016

Winners - and losers

Remember how, not so very long ago, the gamblers and speculators did their very best to wreck the Euro in their greedy attempts to turn a few pennies?  We were told often and bluntly at the time that we should count our lucky stars that we hadn’t joined the Euro project, and that it had been doomed to fail from the start.
Since the referendum on June 23rd, those same gamblers and speculators have seen a new chance to turn a few pennies by betting against the pound, and the result has been to drive the value of sterling down.  Strangely, those same people who told us when this happened to the Euro that this showed what a disaster the Euro-zone was now seem to be telling us how wonderful this is for the sterling zone. 
Of course, the situation is not identical, but there is one clear point of similarity, and that is that the movements in currency aren’t being driven (despite what the news reports regularly say) by ‘investors’ making their wisest guesses as to what the future holds, but by gamblers and speculators who allow their computers to trade autonomously in pursuit of very narrow margins by repeatedly buying and selling the same things.  It’s a complete distortion of what ‘markets’ are supposed to be about, namely fixing the price at a level acceptable to both those who want to buy a product and those who want to sell it.  It’s gambling, pure and simple – and like all gambles, there are losers as well as winners. 
And, just as with the problems of the Euro-zone, there’s no need to guess who the losers are.

Wednesday, 12 October 2016

Tax-driven migration

Both the BBC and the Western Mail gave a lot of prominence a week or two ago to a report produced by economists at Cardiff University suggesting that reducing the higher rate of tax in Wales might actually lead to an increase rather than a reduction in government revenues, as a result of people moving from one side of the border to the other to chase lower tax rates.  The headlines were clear and explicit: “… a Welsh tax cut would end up boosting revenues”, according to the Western Mail, and “Higher income tax rate cut in Wales 'would raise money'”, according to the BBC.
The BBC headline reflected the detail of the story which followed it, which presented the report in definitive terms.  However, the detail in the Western Mail report was, in fairness, rather less conclusive, being full of qualifying words such as ‘may’, ‘might’, ‘if’, and ‘possible’.  Looking at the report itself, on this occasion the Western Mail’s reporting (after the first few sentences at least) seemed to me to be a much more accurate reflection of the content.
Lack of certainty is never a deterrent to politicians of course, especially those who don’t bother to read the source material, and the Tories’ Andrew RT Davies was quick to pounce on the report as justification for a policy of reducing both the higher rate and the basic rate of tax.  It’s a statement which owes more to his own ideological commitment to low levels of direct taxation than to the conclusions of the report.
Having seen the level of uncertainty indicated by the Western Mail’s report, I was interested in seeing just how the report’s authors had calculated the migratory impact of a change in tax level.  The idea that a difference in taxation rates between two neighbouring jurisdictions could, other things being equal, lead some people to take a decision as to which side of the border they should live, is one which has been made before, and in terms of theoretical economics, assuming that all individuals ultimately take rational decisions based solely on their own economic self interest, it sounds like common sense.  And if it’s going to apply anywhere, it’s likely to apply along a border such as that between Wales and England where cross-border commuting is (comparatively) easy for a large number of people, and where there are few other obvious differences.
The mechanism by which it might work is clear as well; the report itself uses an example to show how much a higher rate taxpayer might save from a given reduction in the rate of tax over a period, and compares that with the costs of moving. 
So the theory is clear enough; but how many real people, as opposed to theoretical economic concepts, are actually likely to sit down and do that calculation before deciding where to live?  And how many will base that decision solely on considering one variable, i.e. the rate of income tax?
The study itself accepts that there is simply no data which can directly tell us how many people will migrate based on tax rates, so there’s some analysis in the study based on establishing a correlation between the levels of council tax and the rate of migration between council areas, and then adjusting that to account for the differences between a property tax and an income tax.  It’s clever academic stuff, but it is ultimately based on an assumption that we can in some way measure the migratory impact of council tax variations.
And that’s my problem - whilst there certainly is a degree of correlation between in-Wales migration between council areas and the level of council tax, I couldn’t see that the model actually established a clear causal relationship between the two, i.e. evidence that people are actually moving from one council area to another specifically in order to benefit from lower council tax rates.  It’s a very interesting academic study of the likely outcomes of particular tax changes if people do indeed choose to migrate in response, but its conclusions aren’t – and cannot be – as conclusive as the media reports have suggested.  Not for nothing do the report’s authors themselves caveat a lot of their statements with words like if, might, and may.
Personally, I’m inclined to accept that there are indeed some people who will decide where to live on the basis of such calculations, particularly if the gap is a large one.  Isn’t economic difference, after all, one of the drivers of mass migration?  But I tend to believe that in the more limited case of migration across the Wales-England border, the number is much lower than a purely economic model would suggest, not least because (a) the differences are likely to be quite small and (b) most people will be considering a range of other, softer factors as well.  On top of that, a change to an individual tax rate rarely happens in isolation. 
But one thing of which I am convinced is that we should not allow bold headlines, or politicians with an ideological commitment to tax-cutting, to bounce us into adjusting our tax regime to suit the few who are so narrowly motivated by differences in marginal rates of taxation.  The assumption that significant numbers of people (or smaller numbers with significant enough incomes) will simply move elsewhere in response to tax differentials is far from being proven in practice as opposed to theory.