Understanding plain English

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After open hostilities broke out between the Foreign Secretary and the Prime Minister just over a week ago, peace was duly restored.  And that peace remains in place.  The two of them are in complete agreement over the length of any transition period and the rules that will apply during that transition period.  The fact that the Foreign Secretary also believes that the transition period should be shorter and that some of the rules won’t apply does not, apparently, signal any disagreement between him and the Prime Minister.  They are in complete agreement about everything, the Prime Minister has been her usual ‘very clear’ about that. 

If the EU27 perceive in any of this a certain lack of clarity in the UK’s approach, it’s obviously because they haven’t been listening properly.  These foreigners, eh – what are they like?

The long road to acceptance

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A debate that I’ve often had with some independentistas over the years is about the nature of national identity.  For me, national identity is ultimately a subjective concept rather than an objective one.  There are objective realities which may affect the sense of identity felt by an individual, such as history, language, place of birth, place of residence, but the decision to ‘feel’ Welsh, English or whatever is an inherently subjective one.  Identity is also fluid and flexible; it can change over time and it means different things to different people.  Such an approach also allows of the possibility that people can feel multiple identities, such as Welsh, British, and European, all at the same time, and even in different proportions in different contexts.

Others reject that approach and demand that people accept the identity that they wish to give them.  In that vein, some Welsh independentistas demand that people choose between being Welsh or British – or even more strongly, demand that they accept that they are Welsh whether they want to be or not.  It’s a closed approach to the subject.  And it seems to me that it’s not only counter-productive, but it also denies the reality of life in Wales.  If people want to consider themselves both Welsh and British – which is where most people in Wales would probably place themselves today – who are we to tell them that they can’t have that option; they must choose one or the other?  Besides, for those of us who believe that sovereignty belongs to all of us rather than having been invested by god in the monarch, whether people feel a common sense of identity is merely an aid to any decision to take control of their own lives rather than a prerequisite.

One of the uglier aspects of the Brexit landscape in the UK is the way in which the cheerleaders for Brexit take a very black and white (pun not entirely unintended) view of identity and seek to impose that on the rest of us.  We’ve had Theresa May claiming that anyone who wants to be a citizen of the world is actually a citizen of nowhere, and last week, Boris Johnson decried the ‘split personality’ of young people who think that they can be European as well as, or even instead of, being British.  And Boris isn’t the only one who thinks that the UK can and should be the ‘greatest country in the world’; it seems to be a core belief for many of them.  Another aspect of this has been the branding as ‘traitors’ of anyone who doesn’t ‘get behind’ the decision to leave.

It’s a form of nationalism which I fear, with its inherent notions of superiority and exclusiveness.  I don’t particularly want to live in the ‘greatest’ country; I want to live in a confident and relaxed country which sees itself as just one part of the wider world community, and as an equal with other parts.  There’s nothing wrong with taking pride in past achievements as long as we also acknowledge past mistakes, and there’s nothing wrong with wanting ‘our’ side to do well in rugby or football, but when the people of a country start to believe that they are in any sense ‘better’ or ‘greater’ than everyone else, it becomes unhealthy and dangerous.  Yet it is precisely that belief which seems to be coming to the fore at present.

Life outside the EU – if that actually happens – is likely to be something of a revelation to those who take such a view, even if perversely, in the short term, it serves only to reinforce their view that ‘we’ must be better or the rest of them wouldn’t be out to get us.  The road away from painting a quarter of the world red on the map to an acceptance of the reality of the UK’s position in the world has been a long and tortuous one.  It still has a few twists and turns to come as the readjustment continues.  Life post-Brexit will be uncomfortable for those of us who take a rather more flexible view on identity, but it would probably turn out to be the last hurrah for the faded glory of the past.

But if there’s an element of hope and optimism to be found in the whole Brexit shambles it is that the outcome could yet be a humbled UK deciding to remain, followed in due course by the independence of the last remaining outposts of empire.  An England which could be at peace with itself, and accept a role as an equal partner, rather than trying to make its own rules and dominate others, would find it had rather more friends in the world than the UK seems to have – or even want – at the moment.

When is a loan not a loan?

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The reaction from some quarters to Labour’s proposal to bring PFI deals back ‘in-house’ has been to claim that this would be very expensive, and would require a Labour Government to borrow money in order to buy out the PFI contracts.  The problem with that line of attack is that it assumes that the money involved in PFI deals wasn’t borrowed in the first place, and that is a contentious argument to say the least.

What is the difference between the government directly borrowing money to build a hospital and paying it back over, say, 40 years, and the private sector borrowing money to build that same hospital while the government pay a service charge over the same period and then take ownership of the hospital at the end of that period?  The difference is just a question of accountancy or ‘financial engineering’; effectively the government is borrowing in both cases but treating one type of loan as an ‘off-balance-sheet’ arrangement.  When private companies use off-balance-sheet arrangements, they are often accused of hiding the true state of their indebtedness.  That seems like fair comment to me, and it is equally true when it comes to the government.

The point is that the government already owes the money to pay for PFI deals; it merely pretends that it doesn’t so that it doesn’t have to count the total amount due in its debts.  Any proper due diligence exercise on HM Government’s accounts would, as a result, conclude that it owes a great deal more than its accounts show.  The question therefore, when it comes to terminating PFI contracts early, is not whether the government needs to borrow new money to buy them out, it’s whether borrowing from a different lender at a better rate might be a cheaper (and more honest) way of financing the same debt.  And given the exorbitant effective interest rates being charged on some PFI contracts, and the record low level of interest on new government debt, it’s hard to believe than buying out PFI deals at a fair rate based on normal accounting treatment of the value of future payments won’t be far cheaper than letting them run.

The real question to Corbyn and McDonnell is not ‘how will you pay for this?’, but ‘why did it take you so long to figure this out?’  The latter question gives me far more concerns about their financial acuity than the former; but it puts them way ahead of the Tories who still haven’t been able to figure it out.

Who cares what Labour think?

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There has been criticism of the Welsh Labour government by Plaid politicians over that government’s refusal to support the right of the Catalan government to hold a referendum.  But I’m not sure why anyone would ever expect the Welsh branch of the British Labour Party to support the Catalan government’s attempt to lead Catalunya out of Spain.  Labour may be – albeit reluctantly in many cases – a devolutionist party, but at heart it supports devolution as a means of retaining and strengthening the union, not as a means of undermining it.  And its equivalent party in Spain, the PSOE, takes a similar stance.  Expecting Labour to support the position of the Catalan independentistas rather than that of its sister party is wholly unrealistic.

Insofar as there is a supposed parallel with what’s happening in Catalunya and the situation in Wales, Labour is being challenged to support a devolved administration against a centralist takeover which is, to all intents and purposes, closing down that devolved administration and taking power back to the centre.  However, the parallel with Labour opposing the power grab by Westminster following Brexit is only superficial.  There is a danger of oversimplifying a complex situation in Catalunya, but a more realistic parallel would be if a Plaid government in Wales launched a referendum on independence without the permission of a Tory government in London, and against the wishes of the Labour/Tory opposition in the Assembly.  Labour’s natural instinct in such circumstances would be to support the Tory government – so why expect them to do anything different in respect of Catalunya?

It’s true that the Catalans have been left with no obvious alternative route forward.  The referendum is unquestionably illegal under the Spanish constitution, which declares that Spain is a single and indivisible entity.  They could try to change the constitution, but no matter how big a majority they obtained in Catalunya for doing that, they would still fail unless the other ‘regions’ of Spain also supported them.  The constitution included that clause largely because it was the only way of getting the military back into their barracks after the death of Franco, and it’s true that an overwhelming majority of the Catalans backed that constitution in a referendum as a result, but – and there’s a parallel with Brexit here – who decided that a decision taken in a referendum could never be revoked; that people never have a right to change their minds?  And there was also, of course, a second later referendum in Catalunya, on a Statute of Autonomy agreed with, but subsequently repudiated by, Madrid: why is the result of one inviolable, but not the other?

The background to the referendum on independence is contested and hotly debated, but there is no doubt that, in strictly legal terms, the law is the law and the referendum is illegal.  It’s the sort of legalistic position invariably supported by Labour; and we should not forget that it was a Labour politician – Jack Straw – who argued after the 2014 referendum in Scotland that UK law should be changed to, in effect, mirror the Spanish constitution by declaring the UK to be equally indivisible, effectively outlawing any argument for independence.

There was under Spanish law no way forward for the Catalans to express their wishes regarding independence other than by organising a referendum themselves, after all efforts to hold such a referendum with the consent of the central government in Madrid came to nothing.  They were left with the choice of defying the law or simply abandoning their aspirations.  For those who believe that sovereignty belongs to the people rather than stemming from some central source, the people of Catalunya – and whether one regards them, as I do, as a nation or as others do, as a region is really irrelevant here – have a right to determine by majority decision how they should be governed, but that right is being denied them by a repressive central government, run by a party which is essentially the heir to the former dictator.

The British Labour Party is instinctively unionist, and it is a party which accepts and supports the fiction that sovereignty was bestowed by god on the monarch of England, who ‘graciously’ invested it in the UK Parliament which has, as a result, the absolute power to decide, for the whole of eternity, the governing arrangements for the territories under its control.  It is as much a British nationalist party as the Tories; it is a party which sees the UK as the ‘natural’ state of affairs, in which brotherhood and co-operation extend only as far as the English Channel, a stretch of water which mere foreigners should only be allowed to cross under sufferance.  Why on earth would anyone expect such a party to support the right of the Catalans to decide for themselves?  For Labour, the right of self-determination extends only to very foreign people far away, and certainly not to those which they define as an indivisible part of a greater and immutable whole.  No party of independentistas would or should expect them to behave any differently, and why Plaid are exercising themselves about Labour’s response is a mystery to me.

To see oursels as ithers see us

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The part of Theresa May’s speech in Florence which made me cringe most was when she said: “…throughout its membership, the United Kingdom has never totally felt at home being in the European Union.  And perhaps because of our history and geography, the European Union never felt to us like an integral part of our national story in the way it does to so many elsewhere in Europe”. 

It’s not just that she dared to express that view as though it were the view of all UK citizens, based on a narrow majority in a referendum in which people voted as they did for a variety of reasons, bad enough though that leap is.  Nor is it the suggestion that the history of the UK means that we’ve never really been part of Europe, which flies in the face of the truth: these islands have been inextricably woven into the history of the wider continent for many centuries.

It’s more that it goes to the heart of the way that the English (and I mean English in this context) establishment view themselves and the rest of the world.  It’s a lazy expression of the ‘natural truth’ that we are somehow different from, and superior to, the rest of the continent.

But most of all, it’s because it shows an inbuilt tendency to have not a clue about how the words will be received by others.  She more or less told the rest of the EU that ‘the EU may be good enough for you, but not for us’ with that casual superiority which comes so naturally to people of a certain class and background, and completely fails to understand that people from a different background may not see that superior attitude in quite the same way.  Perhaps she genuinely saw it as nothing more than openness and honesty; but that is exactly the problem.  From the outset of the Brexit discussions, the UK has been represented by people who have absolutely no idea how they sound to others.

Recognising where the power lies

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Some political commentators have interpreted the Prime Minister’s Florence speech as an attempt to go over the head of Michel Barnier, the EU’s Chief Negotiator, and appeal directly to the governments of the other member states.  Since the latter are the people who collectively set the negotiating brief, that would not be an entirely misdirected strategy – the people who set the strategy are the only ones who can change it.  Whether it will be successful or not is another question; past attempts to deal directly with individual member states have been seen as an attempt to undermine the unity of the 27, and been given short shrift as a result.

But hold on a minute – I’m sure that the Brexiteers told us that one of the reasons that we needed to leave was because member states were subservient to the ‘unelected Brussels bureaucrats’ and couldn’t influence the direction of the EU.  That couldn’t possibly have been another porky, could it?

A day out in Florence

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The UK Prime Minister is off to Florence today to give her important speech on Brexit, so important that negotiations were put on hold for a week to wait for her pearls of wisdom.  The EU negotiators have said that they will pay careful attention to what she has to say, although they’ve also said that they won’t actually be present when she gives the speech.

That declaration raised another question in my mind – who exactly will be there to listen to her?  When the speech was first mentioned, I had assumed that she had been invited by some organisation or other to go to Florence and that she had decided to use the opportunity to put forward her views on Brexit.  It seems that I was being too kind to her – it is becoming increasingly obvious that holding the event in Florence is little more than a political stunt.  Not only is the speaker being flown in for the event, but so is the audience – largely cabinet ministers and journalists.  Am I the only one who finds it a little strange that a Prime Minister should drag cabinet ministers halfway across Europe so that they can smile, nod, and clap in all the right places as she tells them publicly what she’s already told them in Cabinet?

This is the expenditure of our money by the government to organise a jolly to Florence for an event which could equally well (and far more cheaply) have been organised in London, but is going to Florence to add a sense of drama and import to the event.  Perhaps they believe that journalists whose employers will be paying their expenses for a few days in Florence – conveniently just before the weekend, should they wish to extend their stay – will be minded to provide better coverage as a result.

According to the hype, the speech will make an offer to the EU side in an attempt to move the negotiations – currently going nowhere fast – along a little.  But if that’s the aim, it’s megaphone diplomacy.  If she has an offer to make, why not make it directly to the EU negotiators at the talks which were scheduled anyway rather than delay those talks to make it publicly at an event where the claimed target audience isn’t even going to be present?  The answer is, in all probability, that the real target audience for this speech isn’t the EU27 at all – it’s for a domestic audience.  Hard reality is starting to bite; the UK needs to give ground in a number of areas, and ‘leaving’ is starting to look more and more like ‘remaining’, in the short term at least.  The drama and build-up to this event is all about trying to carry the leavers in a direction which they’re not going to like, and trying to give the impression that the UK is driving events rather than having to respond to those horrid European types.

Whether it works or not depends on the degree of cooperation by the journalists - and the gullibility of the electorate.

Brexit Masterchef

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Yesterday, the former chief of the Vote Leave campaign told us that triggering Article 50 to leave the EU was an “historic, unforgivable blunder”.  Strong words, but they don’t necessarily mean that he’s completely changed his mind about leaving the EU at all (although some of his comments suggest that he’s never been entirely convinced about Brexit).  It’s more a criticism of the approach adopted, and particularly of the way that the government has plunged into the process without having a plan or knowing what it wants the end result to be.  He’s not the only one in the leave camp who has expressed such doubts.

The problem with that analysis is that the Prime Minister really does seem to believe that the government is working to an agreed plan.  In response to the latest statements by Boris Johnson, she told us yesterday that “We are all agreed as a Government about the importance of ensuring that we get the right deal for Brexit”.  It’s a statement that I can believe, but it’s wholly inadequate if they don’t have any sense of agreement about what that ‘right deal’ might look like.  It’s as though they’ve decided to bake that famous cake which everyone is always talking about, but without deciding whether it’s for eating or merely having.  Even worse, they haven’t decided what sort of cake to bake – some want a good old patriotic Victoria sponge, others want a nice sticky chocolate cake, and yet others – I blame their education – will be happy to accept a good dollop of Eton Mess.  Worse still, they’ve started to bake the cake without having agreed on the ingredients.

Still, as the Prime Minister keeps telling us in lieu of answering any question put to her, she’s perfectly clear that the people simply want her to get on with the baking, and not to get distracted by such irrelevant detail.

Merely eliminating the negative

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The Secretary of State for Wales told us at the weekend that cutting just over a pound off the cost of crossing the Severn bridges will ‘power [a] new business boom with Bristol’.  It’s probably just as well that he made no attempt to explain how the one thing leads to the other, although it would be interesting to have seen him try.  It’s simply not credible that such a small change – or even the larger change which is in the pipeline when the tolls are abolished – will have as large an effect as he claims.

It’s certainly true that the tolls have, from the outset, been a disincentive to companies basing themselves in Wales.  It may not be a huge extra cost, but small costs repeated many times can become large sums, and it’s easy to see how that becomes a factor in deciding on location.  But the absence of a negative isn’t the same as the presence of a positive, as my old maths teacher would have said, and the removal of a disincentive doesn’t magically create an incentive.  The idea that a reduction in tolls – or even their abolition – can suddenly create new economic growth is fanciful at best.  During the years that the tolls have been in place, companies have already taken their decisions on location, and they aren’t suddenly going to change those because of this change; creating a more level playing field for future decisions isn’t the same as tilting it in our direction in respect of past decisions.

But when the promised land predicted by prophet Cairns fails to arrive, it will no doubt all be the fault of the Labour administration in Cardiff.  He seems to think that he’s done his bit now.

Brexit dividends

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In his latest pitch for the Conservative leadership, Boris Johnson has returned to the ‘promise’ to spend an extra £18 billion a year (£350 million a week) on the NHS following departure from the EU.  The figure has been widely discredited many times and even most of those responsible for promoting it during the EU referendum have long since admitted that the ‘Brexit dividend’ – i.e. the amount of money available for other things because it’s no longer being sent to ‘Brussels’ would be a lot less than that.

I’d go further – I’d argue that there will be no Brexit dividend for the foreseeable future.  Perhaps there may be in the long term, if the economy really does outperform to the extent that Brexiteers believe want the rest of us to believe, although it’s beyond any reasonable or realistic forecasting window so we’ll never actually know whether we would have been better off staying in or not.  But in the short to medium term, most recognise that there will be a hit to the economy, and coupling that probable reduction in GDP, or at the least reduction in growth of GDP, with the requirement to spend a lot more on replacing all the EU agencies with UK versions, increasing the spend on managing the physical and economic borders, and the other increased costs which will come in the wake of Brexit, I believe that zero is a reasonable estimate of the Brexit dividend within any reasonable forecasting period.

Having said that, I welcome Johnson’s statement that the UK Government can spend an extra £18 billion on the NHS if it wants to.  And I agree with him; they can – it’s just that it has nothing at all to do with Brexit.  Looking at the detail of what has been said by Johnson and his supporters, that’s a truth which they come close to acknowledging themselves.  £8 billion of that total – more than 40% - has already been committed and is in no way contingent on Brexit.  What Johnson has asked for is that an extra £5 billion a year be made available in 2019 and a further £5 billion in 2022.  Given the ease with which more than £1 billion was found to buy a coalition partner, and the total government spend of more than £770 billion per annum, this isn’t much more than small change to HM Exchequer – less than 1.5% of expenditure.

However, for a moment, let’s assume that there is a relationship with Brexit.  Part of Johnson’s argument is that the UK should not honour any perceived commitments to EU budgets after the date of departure, and he wants a maximum transition period of six months.  If he’s right, then why isn’t the whole of the extra money available immediately?  Why do we need to wait until 2022?  And if he’s wrong, then where is the 2019 tranche of money coming from?  The answer to both of those questions is very simple – the initial premise is wrong, and a decision to spend more on the NHS is not contingent on Brexit; it’s a simple matter of policy.  The only reason for linking it to Brexit is to attempt to persuade us that Brexit has a short term benefit, when he knows as well as anyone else that it does not.  But then, Boris and truthfulness have been estranged for a very long time.