Thursday, 18 April 2019

Sunk costs and future costs

The latest announcement of job losses in Llanelli is just one of a long line of decisions taken by companies against a background of uncertainty.  There is debate, naturally, about the extent to which Brexit may or may not be the cause.  In reality, it would be surprising if Brexit were the only cause, just as it would be surprising if Brexit were not to be a factor at all.  And companies wanting to avoid political controversy don’t necessarily put things in black-and-white terms when they make their decisions public.
But let us suppose, as many of those opposed to Brexit might wish, that it were possible to prove that Brexit is the direct, prime cause, time after time, in decisions leading to job losses.  There is an implicit assumption that, were this shown to be true, it might affect people’s views as to whether Brexit should be halted.  I think this is over-optimistic.  Once the jobs are lost, halting or reversing Brexit will, generally speaking, not bring them back (there may be a few exceptions to this, but once a decision has been taken and implemented – and the costs of so doing have been incurred – businesses would need an extremely good reason to reverse such a decision).  Effectively, the price of Brexit has by then already been paid, even if it never happens.
It gets worse.  The sunk cost fallacy – with which I’m pretty familiar after years of working on large and expensive IT projects – tells us that, having paid the price of Brexit, those committed to Brexit are more likely to double down on their enthusiasm than to change their views.  All the ‘investment’ made to date – whether in job losses or in costs of preparing for a no deal Brexit – will have been completely wasted if we don’t now proceed with the project.  I know from experience that it takes a very brave person to look at a huge sunk cost and say, ‘let’s write that off as a bad investment’ and cancel.  It’s much easier to argue, ‘well, having paid all that already, we may as well proceed’.  Assuming that repeatedly drawing attention to the huge costs which have already been incurred by Brexit will somehow change opinions is a mistake  it may actually be merely reinforcing them.

Wednesday, 17 April 2019

What sort of society do we want?


In his speech at the conference of the Labour Party in Wales on the weekend, the party's leader told delegates that the real divide in Britain isn’t between Leavers and Remainers but between rich and poor, and that “The first question is what kind of society do we want to be”.  In principle, I’d agree with all of that, but I’m not so sure that it is that easy to separate the two issues.  For me, Brexit is also largely about what sort of society we want to be, and pretending that it isn’t, or is in some way just an economic issue (the infamous “jobs-first Brexit” which he talks about regularly) is ignoring the reality of the motivations behind Brexit.
Do we want to be looking outward to an increasingly interconnected world, or do we want to be insular harking back to the ‘glory’ of the past?  Do we want to co-operate with our neighbours in sharing resources and building common prosperity, or do we want to compete with them by undercutting them on standards and regulations?  Do we want to be open and welcoming towards others, or do we want to pull up the drawbridge and keep others out?  Do we want to be internationalists with a firm footing in our own roots and culture, or Anglo-British not-nationalists-at-all insisting on the uniqueness and exceptionalism of those who just happen to live on a small group of offshore islands?  These are all illustrations of the ideological divide between those of us who want to be part of a wider Europe and those who want to stand alone against the world. 
To ask “what sort of society we want to be” in the current context without understanding the huge gulf between the answer given by Brexiteers and that given by Remainers is to completely miss the point.  Of course, the EU isn’t perfect and there is much which needs to change, and of course being ‘European’ in outlook doesn’t necessarily translate into being an enthusiast for all aspects of the EU.  But it’s a much better starting point for building the sort of society that I want us to be than opting out and trying to turn the clock back.  The way the question was posed simply underlines that Corbyn is himself a dyed-in-the-wool Anglo-British not-nationalist-at-all.

Tuesday, 16 April 2019

Avoiding a vote


Brexit started life as a wizard wheeze by David Cameron to silence the awkward squad in his own party.  Cunning Plan A was to promise them an ‘in-out’ referendum in the hope that the awkward squad would simply shut up and allow him to get on with the serious business of government without the perpetual whingeing about Europe.  Besides, he ‘knew’ that he wasn’t going to win the election outright and therefore would never have to deliver; his coalition partners would simply veto the referendum.  The plan went badly wrong when his party accidentally won more seats than he had anticipated, leaving him in a position where the only way of maintaining any semblance of party unity was to attempt to actually deliver on his commitment.
Plan A might not have exactly worked out, but not to worry; not-quite-so-cunning Plan B was to breeze over to Brussels, pretend to negotiate a bit, gain a few minor concessions, and then hold a referendum.  He ‘knew’ that the EU was just sitting there waiting to give yet more special terms to the UK, and he ‘knew’ that he was going to get a thumping majority for Remain.  He then hoped that the awkward squad would simply shut up and allow him to get on with the serious business of government without the perpetual whingeing about Europe.  His ability to predict, let alone control, the outcome of a public vote proved as reliable as ever, and Plan B also bit the dust.  His Plan C was not really cunning at all – scarper and leave someone else to clear up the mess.
It was left to his successor to come up with Plan D.  After a period of umming and ahing, and after having kicked off the process of triggering Article 50 without a clue as to the end point, she decided that the way to get around her internal party divisions was to hold another general election.  Displaying the same acute predictive ability for which her predecessor was, rightly, not at all famous, she ‘knew’ that she would win a large enough majority to be able to silence the awkward squad and allow her to get on with the serious business of government without the perpetual whingeing about Europe.   Plan D went the same way as Plans A and B.  At this point, she might have been best advised to revisit Plan C, which was the only one that actually worked for her predecessor, but instead she came up with the ill-fated Plan E. 
Plan E was the transparently uncunning approach of telling both sides of her own party, repeatedly and in public, that if they didn't do as she wished the other side would win in the hope that neither would be clever enough to work out that she was actually proposing a route which none of them supported.  She might even have got away with it, if she’d opted for a short, sharp and decisive negotiation immediately after the election whilst MPs were still shell-shocked enough to have simply voted it through.  However, when thinking about Theresa May, ‘decisive’ isn’t exactly the first word that jumps into mind. 
In fairness, though, there is one thing that the PM has learnt from the common factor in the failure of Plans A, B, and D, and it is this: for a Tory PM with a Plan, allowing people to vote is a very, very bad idea.  The people have developed an unfortunate habit of not producing the answer that the Tories want.  Thus we arrive at today’s news, in which the Foreign Secretary tells us that the absolute top priority for the Government is to prevent the European Parliament elections from taking place in the UK.  Not to look after the economic interests of the people they represent, not to end the shambolic process which they have kicked off, not to sort out problems with health or education.  No, just to prevent people having a vote in an election which might not – and probably would not – produce the answer that they want.  If the elections take place, the probability is that the Tories will be badly mauled (or even ‘marmalized’, according to some).  They don’t have a policy on which they can agree, and even if they did, there’s no guarantee that those elected would support it.  At best, half the members elected from one of the parties would be supportive of the May deal, and the rest from that party, and all those from other parties, would be against it.  Allowing a vote, in whatever proxy form, on her plan is almost certain to show how little support it has.
That, of course, brings us right back to the beginning.  Avoiding an election is, just like the original conception of Brexit, all about the Tory Party.  It is, though, already far too late to silence the awkward squad.  It’s a lost cause; continuing to fight yesterday’s battles may be the prime interest of some of the awkward squad, but it’s already way too late to restore any semblance of unity to a disintegrating party.

Monday, 15 April 2019

Who writes the definition?


In recent days and weeks, the Prime Minister has repeatedly demanded that MPs “put the country first” and “act in the national interest” rather than pursuing party political interests.  In principle, it’s an entirely reasonable expectation; the problem is that it doesn’t equate directly with supporting her deal in the way that she demands.  For what it’s worth, I believe that the overwhelming majority of MPs (there are a few, of course, who put their own personal interests first) are trying to do what they think is ‘right’ for their constituents and the country as a whole, it’s just that they define what is ‘right’ in different ways.  Some also, of course, define ‘country’ in a different way than May – it does not necessarily follow that what’s good for England is good for Scotland or Wales.
What May actually thinks about anything is a mystery even to those closest to her (and perhaps also to herself), but her words suggest that she thinks that the national interest is served by honouring the result of the 2016 referendum, since doing otherwise damages (further) people’s faith in the UK’s system of democracy.  In a limited sense, I’d agree; telling people that you’re giving them the decision and then ignoring the result is indeed damaging, and I can see that the ‘national interest’ is served by implementing the result.  But it is surely also ‘in the national interest’ that the government does not wreck the economy or take decisions which lead to shortages of food or medicines.  It is surely not ‘in the national interest’ to destroy jobs and opportunities, especially for our young people.  And it is surely not ‘in the national interest’ to reduce standards of environmental and employment protection.  Determining where the balance lies between those different factors is always going to be a matter of opinion, not fact; and opinions will differ.  Holding a different opinion on such a complex issue is not at all the same thing as acting against the national interest, as the PM seems to be claiming.
Demanding that people act ‘in the national interest’ is just rhetoric; the real question is who defines where that interest lies and on what criteria.  It is far from being the simple question as which she presents it.  There’s another aspect as well – she claims to be defining it in terms of ‘honouring democracy’, but what history teaches us is that individual leaders of governments who claim that they, and they alone, are the arbiters of what constitutes the national interests aren’t usually over-interested in democracy.  Claiming the unique right of definition and attacking all those who disagree as enemies of the people are the hallmarks of dictatorship, not democracy.

Friday, 12 April 2019

She's just having a laugh


Having utterly failed to do the homework which she was set last time she went begging to Brussels for a short extension to the deadline, the Prime Minister returned this week to face the music.  She made the absurd claim that the failure wasn’t her fault because she’d outsourced the work to an essay-writing factory which had let her down by failing to deliver the work on time.  Despite being firmly of the opinion, which she had expressed forcefully on many occasions, that the essay-writing factory was run by an utterly untrustworthy cove who should never be allowed anywhere near any reputable institution of government, she still swore that she had total faith that he would deliver the required essay within a few days.
The headteacher and assembled staff listened carefully to what she had to say but found the excuses far from convincing.  They didn’t really believe that the outsourced essay was ever going to be delivered, and even if it was it was probably going to be on a different topic anyway.  But they were feeling in kindly mode; it was clear that the pupil had a range of additional needs, and rather than mark her as a failure they decided that it would be better to make ‘reasonable adjustments’ – in this case to ignore the admission of attempted plagiarism and allow a lengthy second extension to the submission date.
Whether she heard the rider about getting on with the work and not wasting the time again is doubtful, because she dashed straight back to her own classroom and announced that she and parliament could celebrate by taking a holiday for the next two weeks.  With any luck, the headteacher and staff wouldn’t even notice their absence, let alone think that she might just be extracting the Michael…

Thursday, 11 April 2019

Redefining success


It was very kind of Donald Tusk to tell the EU27 that they should endeavour not to humiliate the UK or its Prime Minister again when she went before them to admit that she hadn’t done the homework they set her last time to produce a plan for her next steps.  It might be argued, mind, that feeling it necessary to tell someone not to humiliate someone else is somewhat humiliating in itself, and it’s certainly rather patronising, but I’m sure that his motives were entirely well-intentioned.  As it happened his efforts didn’t exactly work out well anyway; having failed to produce a good excuse (or indeed any sort of excuse – even claiming that the dog ate her plan might have been better) she was always going to be forced to accept something which she had repeatedly said she didn’t want and couldn’t accept.  And being made to sit in an anteroom for hours whilst others decide your fate is never exactly going to be an exercise in generating pride and self-respect.
There is a problem, though: did Tusk breach her human rights under some convention or other by trying to prevent her humiliation?  I mean, if someone really wants to be humiliated, and enjoys it as much as she obviously does, what right does anyone have to try and prevent it?  It’s almost enough to make me think that perhaps the Brexiteers have got it right after all: how dare the EU interfere with the inalienable right of the UK to repeatedly humiliate itself on the world stage? For once at least the PM has stood up to these tyrannical dictators and defended the right of the UK to be mocked and laughed at.  Another successful outcome to a summit.

Tuesday, 9 April 2019

Revocation would not be an accident


According to the Prime Minister, Brexit could “slip through our fingers” unless a compromise deal can be reached with Labour.  It is yet another of those statements showing an almost complete lack of awareness of the potential impact of what she says on different audiences.  She sets out to alarm one audience (the Brexiteers) into supporting her deal, but inadvertently encourages an entirely different audience to believe that Brexit can be reversed. 
The phraseology is curious, implying that Brexit is somehow going to be stopped by accident, unless something is done to prevent it.  But in reality, there is only one way in which Brexit can be stopped and that is by deliberate decision of a government – presumably her own government – to revoke the letter issued to the EU27 in accordance with the terms of Article 50 of the treaty.  It is true that there are two circumstances in which that could happen, but in either case it requires action by the government and is not something which happens by accident.  The first is in panic in the next three days if no extension can be agreed, leaving the government and parliament to face the two options of no deal or no Brexit.  The second – and more likely – is after a lengthy extension, incorporating a General Election and/or further referendum.
In either event, a cancellation of Brexit will occur not because a government or parliament has failed to follow through on a referendum decision, but because the parliament elected by the people in 2017 does not contain a majority for any particular outcome of the 2016 referendum.  There is a very real sense in which it is possible to argue that, whatever result parliament comes up with eventually, it is the result which people voted for when they elected their MPs in the election called by the PM in 2017.  It’s possible that those who voted didn’t fully understand what line their MPs would take when push came to shove (and who could blame them; few MPs would have been able to predict at the time of the 2017 election just how big a mess the Tory party would actually get itself into, let alone on what they would eventually be asked to vote).  But under what passes for ‘democracy’ in the UK, the 2017 election (itself called, at least in part, because Theresa May knew that she didn’t have a stable majority for any type of Brexit within her own party) trumps any previous vote and resets the government’s mandate. 
If Brexit ends up being cancelled, either this week in panic or else in some months’ time after a rethink and new referendum, such a decision will be every bit as ‘democratic’ as the 2016 vote, because it will be the direct result of the choices made by voters in the 2017 election.  But the ‘problem’ isn’t with parliament or its members, it’s with the ‘winner-takes-all’ electoral system used in the UK.  The same electoral system which gave us an ill thought out referendum which only a minority voted to hold has also failed to create a clear majority in either parliament or the two main parties for any particular interpretation of the result of that referendum.  I entirely accept that we’ve reached a point where any outcome is going to be unacceptable to an enormous number of people, and that trying to rebuild faith in the political system will be far from easy.  I’m certain, though, that trying to do so within a system which has been shown to fail so spectacularly is doomed to fail; electoral reform which more accurately reflects voting outcomes is a key precondition for any reconciliation.

Monday, 8 April 2019

Finding unity of purpose


In a rather shaky home video released yesterday (the shakiness presumably being an intentional metaphor for either Brexit or the PM’s hold on reality, or perhaps just a reflection of her difficulty in getting anyone with any expertise to assist her in doing anything these days), Theresa May talked about the Brexit impasse and the need for politicians to compromise and work together.  ‘Compromise’, though, is still something that she thinks other people should do – as Labour report from the two-party discussions to date, there’s still no sign of any willingness by the PM to change anything.
Her little homily reveals perhaps why she doesn’t think any compromise on her part is necessary – as she sees it, Labour already agree with all the key aspects of her proposal anyway.  It was interesting, though, that the first thing she mentioned when talking about the areas of agreement between the Tories and Labour was the ending of freedom of movement.  This aspect of why people voted Brexit has been at the forefront of her mind from the outset; the card which trumps everything else.  I don’t think that she’s particularly concerned about customs unions or membership of the single market; her one reason for opposing both is that they would carry a requirement to allow free movement to a greater or lesser extent.  And although she frequently talks about having the right to negotiate independent trade deals for the UK, I doubt that she’s over-exercised about that either, just as long as she can stamp out free movement. 
I wish that I could be confident that she isn’t right in her assumption that ending freedom of movement between the UK and the rest of the EU is as big a priority for Corbyn and the Labour Party as it is for her.  There’s something rather depressing about the thought that the one big idea which unites the government and the main party of opposition is the deliberate restriction of citizens’ rights.

Friday, 5 April 2019

'Honouring the outcome'


At the heart of the PM’s demand that other parties back her deal is the idea that the way people voted should be respected.  After all, according to her, not only did the leavers win the referendum, but in 2017 the voters went on to back, overwhelmingly, the Labour and Conservative parties, both of which published election manifestos which committed to delivering Brexit.
Up to a point, her argument has some validity – but as is invariably the case with Theresa May, even when she’s telling the truth (infrequent as that may be), she can only ever manage part of the truth.  So, she’s right when she says that a 52:48 vote in favour of a vague undefined Brexit means that people voted to leave, under the rules of the referendum as they were agreed.  There was a considerable amount of law-breaking and dishonesty, true enough, and the vote was only ever supposed to be ‘advisory’: but in essence, it’s hard to argue against the idea that it delivered a mandate for ‘leaving the EU’.
But when it comes to the terms of departure, or the type of Brexit, her argument promptly falls apart.  Since her party is in government, and that party’s manifesto stated clearly that Brexit means leaving both the Customs Union and the Single Market, she demands that others must fall into line.  However, the electoral mandate which she claims for that is a good deal less clear cut than the electoral mandate for the principle of Brexit.  Because even if the referendum never spelt out the meaning of ‘Leave’, the parties' manifestos in 2017 did.  So, although the electorate weren’t given a choice between types of Brexit in the 2016 referendum, they were given such a choice in the 2017 election, and the PM’s refusal to consider the content of more than one of those manifestos is part of the problem in reaching any sort of consensus.  Her party may be the largest party by votes and seats, but in terms of electoral mandate, the position is rather more complex.
Under the rules which are used in the UK for General Elections, the percentages of votes cast show that the Tories, on a manifesto of 'no Customs Union, no Single Market', gained 42.3% of the vote.  That means that her party’s vision of what Brexit should be was rejected by the electorate on a roughly 58:42 split – a significantly bigger margin than backed Brexit in the first place.  Whilst Labour’s manifesto equally clearly stated that the party would respect the result of the referendum, it also said that any agreement reached by the party would emphasise “retaining the benefits of the Single Market and the Customs Union”.  Applying the percentages of votes once more, Labour’s proposed Brexit model was rejected by a margin of 60:40. 'Our proposal was rejected by a smaller margin than yours' doesn't strike me as the most compelling argument for a particular course of action.  As far as I’m aware, no party represented in parliament proposed the ‘no deal’ option being pushed now by more than half of the Tory MPs, which means that not only are they ignoring their own manifesto commitment, they are also demanding an outcome on which precisely zero MPs were elected in 2017.
Since neither manifesto gained the party presenting it a majority in terms of seats – let alone in terms of votes – any agreement between them means that at least one of the parties must move away from what their manifesto said.  It’s been obvious for some time that the PM’s idea of ‘compromise’ is that it’s something that everyone else must do because she’s the PM, but there is no way politically that Labour can fall in with that (even if, as many of us suspect, Corbyn would quite like to do so); they have to be seen to be getting at least one major concession to their position.  Personally, I still doubt that anything much will come from the talks; I suspect that May’s real objective is simply to pile even more pressure on the dissidents in her own party (although her approach continues to look counter-productive in that regard) but leave herself in a position to then blame Labour if that fails.
But let’s assume, for the sake of argument, that a compromise of some sort does miraculously emerge, under which she drops her opposition to a Customs Union and Labour drop their insistence on remaining close to the Single Market (or some other combination of rubbed out red lines).  What that will mean is that the deal which parliament will then be asked to vote on is one which was not only not on the table in the 2016 referendum, it was also an option which nobody was even given the option of supporting in the 2017 election.  In effect, the outcome of the PM’s demand that what the people voted for must be delivered would become an argument that what no-one voted for must be delivered, and that it must be delivered without asking what the people think because they’ve already told us that.  It’s a very strange definition of ‘democracy’ and makes a complete mockery of the PM's demand that the ‘will of the people’ must be delivered, even if it were possible to believe that the ‘will of the people’ had not changed one iota in three years.  At the very least, it's a highly selective way of 'honouring the outcome'.

Wednesday, 3 April 2019

It's still Plan A


The entire cabinet was given an hour’s detention yesterday after agreeing to something (although on the basis of past experience they probably didn’t know what they’d agreed to) so that they couldn’t get their usual blow-by-blow accounts of the meeting into the public domain through ‘briefings’ and whispers before the headmistress had given hers.  When the vegetables eventually found out what they’d agreed to, it was too late to change it.
The statement which she eventually made after the marathon cabinet meeting yesterday has been widely interpreted as representing a significant change in her position (for example, this, from the BBC); some sort of Plan B.  But it looks more like a repackaged Plan A to me.
The core elements are:
·        Meet Jeremy Corbyn to ‘consult’ over possible alternative options give him another lecture on why her plan is the only one available
·        Ask the EU for a short extension which takes us past the point of no return for participating in the Euro elections, and makes any longer extension legally impossible
·        Attempt to bully her own party into line by threatening the extremists with a softer Brexit
·        Attempt to cajole a few more Labour MPs into supporting her by threatening a no-deal Brexit
·        Run down the clock until the new ‘final’ date when the alternative becomes her deal or no deal (without participating in the elections, the right to unilateral revocation would have to have been taken off the table by any grant of an extension by the EU)
·        Resign as soon as she gets her deal through, leaving one of her party’s extreme Brexiteers to take over and tear up whatever agreement she’s managed to reach with the EU and/or the Labour Party
In what way, exactly, is that any different from what she has done to date?  It doesn’t take no deal off the table; indeed, it makes it more likely unless Labour agree to support her plan.  Why else would the Brexiteers in her cabinet have supported her?  Labour MPs would have to be certifiable to trust a single word she says given her history (although sadly that’s about the most credible aspect of her plan).  Hopefully, the EU will show the same wisdom and patience that they showed last time she asked for an extension and offer only a lengthy one (with the option of reducing it in the event of agreement being reached sooner) on condition of participating in the elections.  It is surely clear by now that a rushed decision will be a bad decision, and that the UK needs more time to find a proper consensus plan going forward rather than one achieved by bullying under the pressure of the clock.