Feb 7th 2012, 23:11 by Bagehot
A QUICK link to an interview I recorded with Andrew Marr of the BBC for The Economist late last week, about his new biography of Queen Elizabeth II. A one-time republican, Mr Marr is an admirer of her 60 years on the throne, and in interesting ways.
He comes close to describing the queen as a symbol of egalitarianism, and though that may sound odd it is possible to see what he is getting at. In his book he talks about the humility of the hereditary principle. Precisely because the Queen cannot claim to hold her position through some meritocratic scramble, she is humble, and not swaggering, he suggests.
Mr Marr spent the best part of a year, on and off, watching the Queen travel to small towns and cities across Britain, meeting volunteers, charity workers, public servants and business people who he thinks are rather despised by the "London power elite". You may or may not agree, but take a listen if you have a few minutes to spare.
Mr Marr (a former Bagehot, many years ago, in the interests of full disclosure) knows more than most about the London power elite, having a standing invitation to any of their gatherings as the BBC's star interviewer. Yet he is strikingly tough on the current structure of British society, and the way that cronyism and networking undercuts claims that Britain is a proper meritocracy. Social mobility has gone backwards in the past 30 years, he argues, it has not advanced.
In a moment of journalistic cheek, I felt I should ask him about his trenchant conclusion in the book that the Queen has been wise never to grant an interview. Symbols should be silent, he writes at one point. So what if you were offered an interview with her, I asked? He admitted it would be an internal tussle: the journalist in him would want to take it, while the constitutionalist in him would regret that she had offered one. But not that much of a tussle, he finally concedes. In the end, the journalist would probably be jumping around while the distraught constitutionalist was left "slumped in the corner".
Feb 3rd 2012, 14:04 by Bagehot
FROM a distance it must be hard to feel excitement at the news now gripping the Westminster village: the resignation of Chris Huhne as Britain's energy and climate change secretary over the alleged cover-up of a years-old speeding offence.
But this domestic hiccup matters to anyone with an interest in the fate of ambitious climate change targets agreed by European Union countries back in the boom-times of 2007. From the perspective of 2012, amid the chill winds of recession politics, those free-spending Euro-summits at which Angela Merkel (or the Green Goddess, as she was dubbed) vied with Tony Blair to seem as climate-concerned as possible seem like a cruel joke
But for the moment, in fact, Britain still remains committed to some pretty expensive and ambitious targets when it comes to increasing the amount of electricity generated from renewable sources, imposing a carbon price on heavy users of energy, and generally lowering national emissions of greenhouse gases. Some of that is down to Mr Huhne. A Liberal Democrat from the left of his party and the loser of a fairly bitter party leadership contest with the current Lib Dem boss Nick Clegg, Mr Huhne positioned himself as the coalition government's Green conscience, pushing hard for ambitious targets and never failing to argue that creating a low-carbon economy was a vital response to tough economic times, and not an unwelcome burden. Going green was win-win, think of all those new jobs building windmills and lagging lofts, he would argue. This is Britain's exciting future, not a cost to be endured.
Leaks from the cabinet table revealed how Mr Huhne would go into battle against Conservative colleagues for what he considered authentic Lib Dem positions.
His clashes included bruising rows with the Conservative chancellor of the exchequer, George Osborne. Though Mr Osborne has not recanted from the central claim that today's Conservative Party is the greenest ever, he has also made clear that he does not intend saving the world at the cost of British competitiveness. To widespread dismay from the green movement, but cheers from the right, Mr Osborne told last year's annual Tory Party conference that environmental rules were "piling costs on the energy bills of households and companies" and argued:
We're not going to save the planet by putting our country out of business... So let's at the very least resolve that we're going to cut our carbon emissions no slower but also no faster than our fellow countries in Europe
Now, fans of logic may feel they have grounds to quibble at Mr Osborne's position, which amounts to the statement: the world is on fire and we must try to save it for our children and grandchildren...except if it makes us less competitive than our neighbours. But Mr Osborne's position is in tune with the mood of voters. Not for nothing has Mr Osborne matched his rhetorical caution with specific policies, for instance offering a small but symbolic tax break to motorists in the new year by cancelling a planned rise in fuel duties.
So what does it mean for the country's climate-change commitments, now that Mr Huhne has resigned to spend more time with his lawyers (he denies allegations of seeking to pervert the course of justice by asking his then wife to say she was driving a car caught roaring past a speed camera). Mr Huhne has been replaced as energy and climate change secretary by Ed Davey, a very different sort of Lib Dem. Mr Davey is a pro-business free-market liberal, or, as one Conservative ministerial colleague approvingly jokes: "he's basically a Tory in disguise".
It may be counter-intuitive, but I would argue that Mr Huhne's resignation is good news for the climate change cause. Mr Huhne's confrontational pro-green stance, and his pitch that going low-carbon was going to be painless, was completely out of kilter with the mood of sour austerity now gripping the country, and the fragile confidence of British business.
It was sometimes said that Gordon Brown's boom-year pitch to British voters was the promise of Swedish public services with American levels of taxation. Well, now that the public is feeling the pinch in a country still, in theory, determined to lead the world on greenery, I would argue that the coalition has almost ended up with a dangerous variant: Swedish environmental policies in a country with American-style voters. I say "almost" because polls still show British voters more likely to support some forms of government action to fight climate change than their American cousins, but in general the British green faith is wavering.
In particular, that specific, 2007-era pitch about a low-carbon economy being win-win for Britain (all those green jobs, all that green tech to export) is a harder and harder sell, and not just in Britain. Voters see windmill plants closing over here, and opening in China, or they see the government slashing the subsidies paid to homes with solar panels and they conclude uh-oh, this is not going to be painless after all.
And it's not going to be painless. But in fact that does not dent this newspaper's case for ambitious climate change mitigation. Here at The Economist, we have long urged a more pragmatic approach, based on the insurance model. It is not absolutely proven that man-made emissions are causing dangerous global warming, but the overwhelming scientific consensus points in that direction. And—crucially—it is clear that the global costs of doing nothing and being caught by drastic climate change are very high indeed. The costs of attempting to mitigate such changes early are high, but not as high. It's like buying insurance, we argue: no fun, but safer than the alternatives.
If Mr Davey, a pragmatic sort of chap, cares to shift the British environmental debate onto that sort of argument, I would urge anyone actually keen on saving the earth to cheer.
Feb 2nd 2012, 16:31 by Bagehot
MY PRINT column this week is based on reporting visits I recently made to an inner London secondary school. I found the experience hugely encouraging. It's a great school, in a tough neighbourhood. That begs the next question. If it can be done here, why can't it be done everywhere? I don't pretend to have all the answers, but offer this as a snapshot of one successful school, doing a lot of things right.
Here's the column:
DANIEL RILEY, a young trainee teacher from west London, attended a school so bad that it was shut down while he was there. It was, he recalls with commendable understatement, an “unstructured” place. Fewer than 20% of pupils achieved five good GCSE passes, including mathematics and English (the main benchmark for secondary students, involving exams commonly taken at 16). There were fights. Some, involving knives, ended with arrests. There were drugs—the school drew its pupils from tough housing estates, and gangs prowled at the gates. The teaching was “not inspired,” Mr Riley says, sticking with the understatement. He recalls lessons spent copying texts from books.
As happened to a few dozen failing institutions under the previous Labour government, Mr Riley’s school was turned into an academy—a state school removed from local council control and given new freedoms over staffing and teaching methods. Six years on, Paddington Academy draws its pupils from the same estates. But the school is unrecognisable.
Last summer 69% of pupils met the benchmark for good GCSEs, easily beating the national average. More than half come from homes poor enough to earn free school meals and more than three-quarters do not speak English as a first language, making its intake exceptionally “challenging”, in Whitehall jargon.
Now when Mr Riley meets teenage students they seek advice about university. His dream is to return to Paddington Academy to teach full-time. It is easy to see why. The school is a success, recently earning an “Outstanding” grade from Ofsted school inspectors. It is, more subjectively, an impressive place. It feels calm and academically ambitious. It hums with optimism.
The Conservative-Liberal Democrat coalition has put great faith in school autonomy: there are now 1,500 academies in England. A single column cannot pretend to prove that faith right or wrong. Bagehot spent time at Paddington last month with a more modest goal, to look at one successful school and try to discern what makes it different. Two big lessons jumped out.
First, Paddington is built around remarkable people. An unusually high proportion of staff come from Teach First, a programme that sends highly-qualified graduates into challenging schools for at least two years. Staff stay late for homework clubs that run until ten at night (many pupils come from crowded homes) and volunteer for weekend workshops. A teacher guiding 15-year-olds through a thoughtful debate on British manufacturing was a Treasury economist before switching career. His economics GCSE class is an experiment, part of a policy of promoting more academic subjects. Maths is the most popular subject for the oldest, sixth-form pupils, followed by sciences. Create an expectation that students can take hard subjects, and they will demand them, the teacher says. Thanks to pupil lobbying, the school now offers the astronomy GCSE.
The students’ families—from Africa, Bangladesh, Iraq, Kosovo and the Caribbean in the main—are remarkable, too. Many went through “trials and tribulations” to reach Britain, explains a 15-year-old girl who plans to be a doctor, so “we like a challenge”.
Second, Paddington uses distinctive methods. A motto is: “the street stops at the gates”. There is a strict uniform code, and pupils must remove hooded tops and caps as they arrive. Pupils are educated for the professional world, says a teacher: if they call a boss “Bruv”, value judgments will be made about them. Pupils agree. Using street slang would be an easy option in school, says a teenage boy. Alas, the world “out there” will not be easy.
Competition is embraced. Pupils are ranked on progress against individual targets every six weeks, with results posted publicly on a board. A difficult home life triggers support but not excuses. Some pupils arrive speaking no English: they are offered up to four years’ specialist help, but expectations are not lowered.
Staff enforce the small details of behaviour ceaselessly, with meaningful looks, a warning finger briefly held up, or a word of praise every few seconds. The goal is not Gradgrindian discipline, but the avoidance of bigger confrontations. Good deeds are consistently rewarded, lapses always have consequences. Pupils’ blazer lapels sag with enamel badges for choir, language-learning, mentoring younger pupils and so on. When the school gained its “Outstanding” grade, pupils were crestfallen to hear that this did not bring a badge. The school’s excellent and tireless principal, Oli Tomlinson, finally had “Outstanding” badges made in blue and gold enamel, bearing the Ofsted logo.
No excuses, no barriers
A common charge from academy critics—notably teachers’ unions—is that they practise selection on the sly by excluding difficult pupils. Early on, Paddington did expel some pupils from the old school, but now takes hard cases itself. At a morning meeting, staff discussed the progress of a new pupil rejected by all neighbouring schools: it went well, they agreed, considering it was his first day out of prison. Yet students feel safe. It’s better than primary school here, says a 12 year old: “People respect you.”
Paddington Academy is a brilliant school. That is great for its 1,200 pupils. But for others to benefit, Paddington’s strengths—its remarkable people and methods—must be echoed elsewhere. Methods can be copied. It helps that Paddington is part of a chain of academies sponsored by a charity, the United Learning Trust, driving the spread of good ideas. It also helps that school league tables are being beefed up with much more data, making Paddington’s success more visible. Remarkable people are harder to reproduce. Yet Paddington’s dynamic young teachers talk of their luck at working at a school which transforms lives. Mr Riley, fresh from university, longs to join them. The country needs more Mr Rileys. Schools as inspiring as Paddington are a good first step.
Jan 31st 2012, 22:50 by Bagehot
WELL that is helpful timing. It is bank bonus season. And there was the government, wriggling like a lugworm on a hook as the press and opposition politicians raged at the idea of paying millions of pounds in bonuses to bosses at the Royal Bank of Scotland, a semi-nationalised and expensively bailed-out institution.
Then, as if out of the blue, the "Forfeiture Committee"—a discreet body made up of Whitehall mandarins and chaired by the head of the civil service—decided that today was just the right sort of day to telephone Sir Fred Goowdin, the former boss who ran RBS into the ground, and inform him that his knighthood (awarded in 2004 for services to banking) was being revoked. The Queen does the formal revoking, it is reported. Sadly for all those cheering tonight, revocation does not seem to involve a Dreyfus-style degradation ceremony, at which the monarch lifts the ex-knight's insignia over his head with a disdainful flick of her sword.
Knighthoods and lesser honours have been removed before, it is noted in tonight's reports, though mostly for criminal convictions or (in the case of Robert Mugabe) for being a violent despot. Mr Goodwin, as we must now learn to call him, has not been convicted or even charged with any criminal offence. By all accounts he was arrogant and made some appalling mistakes. There is also considerable evidence that he was greedy and extravagant (whizzing about by private jet, walking away with a vast pension even after the government had to inject tens of billions of pounds into RBS to save it, and so on).
Officially, the forfeiture committee was moved by the fact that a report into the collapse of RBS by financial regulators sharply criticised Mr Goodwin. Censure by a professional body is grounds for losing an honour, government officials explain. But RBS collapsed in 2008. The report by the Financial Services Authority was published in 2011 and while it described serious management failures at the bank and by regulators, it did not censure Mr Goodwin formally.
Let there be no doubt. Mr Goodwin lost his knighthood today because (a) he is very unpopular; (b) bankers in general are unpopular and (c) the government has had a bad few days after the Labour opposition leader Ed Miliband seized control of the news agenda and forced the new boss of RBS, Stephen Hester, to give up a million-pound bonus on Sunday night by threatening a vote on his pay package in the House of Commons.
George Osborne, the Conservative chancellor of the exchequer, explained that the forfeiture was appropriate because: "RBS came to symbolise everything that went wrong in the British economy in the last decade".
But the real running has been made by an unholy alliance between the left, in the form of such tribunes of the people as the Guardian's Polly Toynbee, and the populist right, in the form of the Daily Mail, which has worked hard to make first Mr Goodwin and lately Mr Hester into icons of greed and arrogance. Given that Ms Toynbee and the Mail do not agree on much, onlookers are entitled to feel a little queasy at seeing them in league. What links them? Well, Ms Toynbee is honest enough to say, straight out, that she thinks bankers are simply paid too much money, before you even get to questions of their conduct. Here she was this morning, before the news broke of Mr Goodwin's de-gonging, cheering Mr Hester's political mugging as a first step in a new war against wealth:
The Hester moment is Labour's chance to leap ahead and make unfairness the central charge against this government. Look at the Sunday Times YouGov poll: 62% say taxes on the wealthiest should be increased, while 66% support a mansion tax on property worth more than £2m.
The High Pay Centre's ICM poll this week finds two-thirds of voters support the plan, endorsed by Labour, for an employee on every remuneration committee. Only 7% say pay above £1m is acceptable, yet average FTSE executive pay is £4.2m. Deborah Hargreaves, head of the commission, finds the public far angrier than politicians have yet understood. "They are outraged when they see how much wealth goes under-taxed. On a radio phone-in I did at the weekend, callers were furious at Dave Hartnett, the head of HMRC's attack on people evading VAT by paying cash for services, when he had let Vodafone and Goldman Sachs off billions."
She sees a real danger in people refusing to pay tax when they see such blatant evasion and avoidance. The public, she says, wants a super-tax on the wealthiest. A one-off austerity tax on windfall-accumulated extreme wealth at a time of national crisis would be popular. "People are vehement and vituperative," she says. "I'd be hit by a mansion tax, but I'd think it right and fair."
So much for the confiscatory left, with its one-off austerity taxes and other interesting fiscal innovations. Here is the Labour leader, Mr Miliband, explaining that the real goal is the pay system for bosses:
It is right that Fred Goodwin lost his knighthood but I think it is only the start of the change we need in our boardrooms. We need to change the bonus culture and we need real responsibility right across the board
Over on the right, the Mail spent tonight crowing at its victory over Mr Goodwin, whose knighthood, it argues, had to go to preserve the dignity of the honours system:
More than any other individual, Sir Fred Goodwin personifies the greed and recklessness that caused the banking crisis of 2008, from which every family will be suffering for at least a generation.
As the dominant figure in RBS, he oversaw the bank’s breakneck expansion, buying up businesses with barely a thought to their viability and splashing out other people’s money to borrowers who could never repay.
In so doing, he marched the bank off a cliff edge, landing taxpayers with a £45billion bailout and helping precipitate the worst recession since the 1930s, before leaving with a £342,000-a-year pension.
Indeed, this improvident gambler, who stuffed his own pockets as he staked billions on bad risks, bears a heavy personal responsibility for blighting the jobs and living standards of millions
Here is a Tory MP, David Ruffley, explaining to Sky news that the knighthood had to go because Mr Goodwin was not going to face criminal prosecution:
He proved a huge disservice to the banking industry and I think what people wanted to hear was that this man was held to account... Bizarrely there's been no criminal charges against the man, so he's not going to be in front of a jury, and there was a sense that this guy had got away scot-free and the only thing left really to show the public opprobrium was for the knighthood to be stripped
Call me a hand-wringing killjoy, but there is something a bit alarming about this talk of what the public wants and the people want to hear, and how it trumps such footling niceties as the law and due process.
While I am being awkward, I would also note the oddity of the Mail's insistence on illustrating every story about Mr Hester with an image of him in a velvet riding helmet and smart black riding coat, and every story about Mr Goodwin with a picture of him in tweeds with a shotgun over one arm. Now, being the Mail, this is not your classic appeal to class war: the tabloid rather likes real toffs (or even fictional ones, such as the lords and ladies from the television series Downton Abbey, which has generated page after page of fawning coverage in the Mail). But neither Mr Goodwin (a grammar school graduate) nor Mr Hester (a comprehensive schoolboy) are posh, in the blue blood and pedigree sense. Is their crime not to know their place, to be no better than they ought to be, to the rage of tut-tutting Mail readers?
A final thought. The mood of public rage at bankers is real enough, and is not going away any time soon. It would be dangerously glib for Bagehot to tap away in an ivory tower and say all such anger is nonsense. It matters that most voters should feel that the system is broadly fair, and not rigged against them. And, as noted in a couple of recent columns, austerity and the current debt crisis brings a real problem: western governments can no longer compensate their citizens for their loss of competitiveness with torrents of easy money and welfare on credit.
If British politicians feel they must act, perhaps they should stop bullying the Forfeiture Commitee and learn from the Americans. They should fire up the country's finest fraud investigators and prosecutors and look for masters of finance who have broken the law, then throw the book at them. The perp walk—powerful suspect is led in handcuffs past photographers to a waiting patrol car, in here sir, guiding hand on the head, mind the roof, in you go—is not a subtle tactic, but it sends a powerful signal that there is no impunity for even the wealthiest.
It is also a powerful driver of good behaviour. As a City banker I know once put it, bank bosses are Alpha males. They are not afraid of much, and in any contest with supervisory officials they have the upper hand when it comes to resources and incentives. But they are properly scared of prison. Use that fear. It might focus minds more sharply than any populist jiggery-pokery involving knighthoods. And as long as the prosecutions were clearly well-founded, then the world's financiers—who at the moment could be forgiven for looking at Mr Hester and wondering what happened to British respect for contract law—should conclude that the City of London is strict but fair, and remains serious about being a good place to do business. That is not a reputation that can be taken for granted just now.
Jan 26th 2012, 21:59 by Bagehot
TO his slight surprise Bagehot was recently asked to review all the new biographies of Queen Elizabeth II being published to mark 2012, her 60th year on the throne. It was a bit like asking an agnostic to be Vatican correspondent, but five books, 1500 pages and a lot of corgi anecdotes later, I finally surfaced. At moments it felt a bit like eating a banquet entirely consisting of cakes and pudding, with Turkish delight to finish. But in amongst the cloying fluff there were some good stories. It was striking to be reminded how shabby and poor war-broken Britain was (there were nice details about peers of the realm at the queen's coronation in 1953, assured that they could substitute rabbit fur for ermine and told they could hide sandwiches in their coronets).
I think my favourite anecdote involved John Prescott, a curmudgeonly lefty who served as deputy prime minister to Tony Blair. Early on in the era of New Labour, it is claimed, Mr Prescott was due at a palace reception to meet his sovereign. Among his Labour colleagues there was much speculation as to whether he would bow to the queen or defy what he surely considered the snobbish, southern tomfoolery of court etiquette. The moment arrived, the pair were introduced, and the queen politely greeted her deputy prime minister... in a suddenly tiny voice. Straining to hear, Mr Prescott bent down. Oh, so John's bowed then, murmured his colleagues. He's Lord Prescott now, so he clearly got over it.
Here's the review, published in this week's print edition:
BEING on show is a serious business for Queen Elizabeth II who acceded to the throne 60 years ago next month. On royal tours and walkabouts, she is careful to choose bright colours and small-brimmed hats, glides through crowds “like a liner” and seemingly never tires. “Oh look! She’s keeled over again,” the queen once noted at a stifling-hot palace reception, spotting her then prime minister, Margaret Thatcher, pale and slumped in a chair.
On several occasions she has been urged to retreat behind more obtrusive layers of security. Each time she has refused with something between a joke and a motto for her six decades on the throne, telling aides: “I have to be seen to be believed.”
Yet for the 85-year-old monarch, pictured above with Prince Charles shortly before her coronation, belief requires distance, too. Younger generations of royals have kissed and told. But the queen has never given an interview. Though some of her 12 British prime ministers were convinced they forged a special bond during weekly audiences with their sovereign, her personal politics remain unknown.
Over the years, various aristocrats, cousins and horse-racing grandees have been more or less plausibly identified as her friends. Even among such intimates, boundaries are observed, for fear of crossing an unseen line and triggering a stare of blank, silent rebuke. “She is never—you know—not the Queen,” advises an unnamed friend, quoted in the opening lines of a new biography by the BBC’s senior political interviewer, Andrew Marr.
Yet as a constitutional monarch, ruling with the tacit consent of the majority, she is not the only judge of the trade-off between necessary display and indispensable discretion. The public have a say as well. Some of the queen’s closest brushes with disaster have involved a lack of visibility, most painfully in 1997 when she remained in Scotland with the royal family after the death of Diana, Princess of Wales. She only returned to London after pleas from her new, young prime minister, Tony Blair (and lynch-mob demands to “Show Us You Care” from the tabloids).
The double nature of the queen—an unusually private woman with extraordinary public duties—poses a test for all who try to write about her. Including Mr Marr’s book, five new biographies have been prepared for 2012, the queen’s diamond jubilee year. The authors boast of watching the queen at work, interviewing officials from the royal household and of trawling through archives. They quote family members, friends and people with a claim to know the queen.
In the process, all five biographers wrestle with the question neatly framed by their subject herself: if to see the queen is to believe in her, what vantage point allows the most authentic experience of faith? Which queen is the most “real”, the private woman or the public figure? Each offers a different answer.
Two of the authors, Sarah Bradford and Robert Lacey, are veteran royal historians, whose 2012 biographies draw on previously published work. With the frankness of an old pro, at one point Ms Bradford names different schools of royal-watching. There is the “work of the Queen” genre, as pioneered by the 1969 television film “Royal Family”, which showed the monarch working through boxes of state papers, preparing state visits or relaxing with her family. Alas, she explains, once the public had seen inside royal drawing rooms, they soon wanted to peer into the bedroom. Thus arose the “royal soap opera” genre. Ms Bradford takes readers on a brisk, assured canter through the familiar landmarks of both genres, adding a dose of history as she goes. Mr Lacey, who has been writing about the queen for nearly 40 years, advertises his slim volume as a “pleasant afternoon’s reading”, which it is not. At once knowledgeable and jaundiced, Mr Lacey seems slightly sick of his royal subjects, as do the unnamed courtiers and insiders whom he quotes.
Robert Hardman, a royal correspondent for the Daily Mail, offers a convincing tour of the British monarchy as an institution, apeing the vantage point of the fly-on-the-wall documentary. His access produces an interview with Prince William and several lesser scoops—a rarity in the world of royal biography, in which the same anecdotes turn up in each book. But access has its limitations. The young prince is more loyal than revelatory about his grandmother, explaining that her “gravitas” awes even her family, that she offers good advice and was “so excited” by her 2011 state visit to Ireland. Some lesser sources appear to be quoted largely to thank them for their time.
Sally Bedell Smith, an American author of books about Pamela Harriman, Princess Diana, Bill Paley and others, offers her readers the illusion of knowing the queen as a friend. Ms Bedell Smith brightly describes her own brief chats with the monarch at a Washington garden party and a London reception, before sprinkling her account with minute indiscretions from other people who have met her. The elder President Bush reveals that Elizabeth II is “rather formal” but not “standoffish”. A witness describes how a puppy defecated in front of the queen during a visit to a Kentucky horse-breeder, breaking the ice. Nancy Reagan recalls a breakfast with the queen, Prince Philip and Prince Charles at Windsor Castle; she was surprised that everyone poured their own cereal from the box. It is reported that the queen likes a travel rug round her knees and used to wear a hard hat when watching stallions cover her mares (now she stands on a viewing platform, after health and safety advice). This footling stuff is only of any interest because it is about the queen. But—fatally—those same domestic details have nothing to do with why Elizabeth II, as queen, is interesting.
Mr Marr, a former political editor of the BBC and author of some shrewd books on modern Britain, sets himself a more ambitious task: to explain what the queen’s role and position tell us about her subjects. It is an admiring portrait, of an unfashionably dutiful monarch who in her weekly audiences offers prime ministers what he calls “a kind of higher therapy”—a chance to share anxieties or explanations which will never leak, with someone who has read almost every state secret of the past 60 years (and so has heard worse before). He describes the queen and her strong sense of vocation, as a monarch “God-called” to give her life to her people as a sacrifice. Only by understanding that calling, he writes, can the queen be understood.
In perhaps a claim too far, Mr Marr emphasises the comfort offered by the queen as a symbol of the continuing British state. By representing those who did not vote for the current government or did not vote at all, she strengthens democracy, he suggests. It is a clever thought, but may overstate the degree to which most Britons suffer from constitutional angst.
But a symbol she certainly is. And in modern Britain—a restless, exhibitionist place—Mr Marr’s Queen Elizabeth stands out for her discretion, and for understanding that symbols are “better off keeping mostly quiet”. There is a lesson there for her heir, the Prince of Wales, Mr Marr suggests sharply.
Mr Marr palpably likes the queen, whether for touring the country to greet and thank people mostly ignored by “London power brokers”, or for relaxing when her work is done with “a glass of something cheerful”. Yet liking is not really the point. In Mr Marr’s words, there is only a little space, though “an interesting space”, between the queen and the woman who lives her life. Her calling gives her meaning. She “is what she does”.
Mr Marr’s sober conclusion feels right. To adapt the queen’s one-liner: for all that the spectacle and unattainable glamour of royalty still fascinates (and helps sell books), for Britain’s jubilee monarch the show is a means to an end. Being seen is about being believed.
Jan 26th 2012, 21:27 by Bagehot
MY new column looks at today's seemingly distinct debates about British capitalism, executive pay, welfare caps, the squeezed middle and immigration, and concludes that behind them lies something bigger, simpler and more dangerous. Without properly acknowledging it, Britain is having a row about globalisation.
WITH your back to the open sea, an island can feel encircled, even claustrophobic. Turn to face the waves and an island feels like a starting point, a place surrounded by a variety of bracing possibilities, both good and bad.
Britain has the politics of an island. At worst, its political debate can be parochial, even tin-eared about the world outside. Yet Britain is an outrider for openness, standing out among large European nations for its faith in free trade, liberalised markets and undistorted competition. In many neighbouring countries, calls to reject free trade and embrace protectionism attract a quarter or more of the vote. Not in Britain. Yet in island politics, the temptation to gaze inward is never far away.
Debates about capitalism dominate British politics. The Conservative prime minister, David Cameron, his Liberal Democrat deputy Nick Clegg, and the leader of the opposition Labour Party, Ed Miliband, have repeatedly spoken about building a fairer economy. Responding to voter anger, they talk of reining in bankers’ bonuses and pay packages for company bosses. All three agree that there is a need to curb welfare for the work-shy. Most of all, they agree there is a desperate need to help the “squeezed middle” whose incomes stagnated even when times were good.
Listen to the leaders, and it would be easy to conclude that the root of the problem is the moral failings of Britain’s political parties. The parties accuse each other of letting unfairness thrive, because they are variously nasty, incompetent or unable to stand up to vested interests. Immigration has become part of this argument. The Conservatives accuse Labour of lazily allowing foreigners to take millions of jobs during the boom years rather than improving the employability of native workers.
On January 19th Mr Cameron accused the previous Labour government of making a “Faustian pact” with debt-fuelled, finance-driven “turbo-capitalism”. That pact, he charged, let bankers and corporate bosses collect “huge rewards” while channelling welfare to those at the bottom. Hard-working Britons in between lost out. Labour does not believe in markets, Mr Cameron went on. Conservatives do, and know how to fix them when they fail. Delving into history, he cited Tory reformers from Margaret Thatcher to Benjamin Disraeli.
A few days later, in the House of Lords, a coalition of Labour peers and Church of England bishops cited Charles Dickens and Victorian notions of the deserving and undeserving poor as they attacked government plans to restrict the welfare payments received by any one household to the median income of a working family. The rebels won, with the Lords voting to ease the benefits cap for families with many children. Their rebellion will be overturned: some three-quarters of voters support the cap.
So far, so very British. Yet these seemingly distinct, domestic disputes—about income inequality, executive pay, welfare, the squeezed middle, even immigration—are all also arguments about something bigger. Without acknowledging it, Britain is having a row about globalisation.
The Faustian pact Mr Cameron describes is, at heart, an attack on the previous government’s compact with globalisation, with soaring rewards for a few, millions parked on out-of-work benefits at the bottom, and—Tories would say—competitiveness either neglected or artificially boosted by importing migrants. Mr Miliband’s “squeezed middle” analysis leans heavily on work by the Obama administration’s “Middle Class Taskforce”, and its studies of how, in an era of automation and globalised supply chains, American workers have seen real incomes stagnate while the richest saw their share of national wealth surge.
Inside Downing Street, there is much discussion of Tyler Cowen, an American economist who argues that, for many Western workers, economic stagnation may be the “new normal”. Jesse Norman, a Conservative MP whose ideas for reforming capitalism found strong echoes in Mr Cameron’s recent speech, calls globalisation “the whale under the surface” of today’s arguments.
In lots of other countries, anxiety over globalisation is openly discussed. In Britain, political leaders have instead chosen to channel voter anger into arguments about each other’s character. Does that matter? A cynic might argue not: no serious British politician is calling for protectionism, so let sleeping dogs lie.
That is too complacent. British support for free trade runs deep, but thoughtful types in all three parties are worried.
No opt-out from global competition
The pressure from globalisation is as intense as ever, says one Tory. But now Britain must manage without the easy credit and generous welfare that once cushioned the impact of competition.
On January 26th the Lib Dem leader Mr Clegg demanded a big income-tax break for the “hard-working many”, funded by hitting top earners or closing a loophole used by buyers of pricey houses. He calls stagnating middle incomes an “emergency”.
To some alarmed Labour colleagues, Mr Miliband gives the impression of seeing capitalism as a bad system that needs fixing with regulation, and globalisation as the internationalisation of capitalism. Lord Mandelson, a founder of New Labour, this week published a report with the IPPR think-tank, offering ways to shore up support for globalisation. In America, free trade Democrats “took to the hills” after Bill Clinton left office, says Lord Mandelson. “We mustn’t see the same happen in Britain.”
Openness comes naturally to the British, a maritime bunch. The British elite has backed free trade for more than a century, partly because for a long time Britain was a world-beater. But now British voters are angry, and globalisation is part of the reason. Consent for open markets has withered before. Denying that a battle needs to be fought is the first step to losing it.
Jan 19th 2012, 16:51 by Bagehot
MY RECENT interview with Alex Salmond, the leader of Scotland's pro-independence party and head of the Scottish government, forms the basis of this week's print column. Here it is:
ALEX SALMOND, leader of Scotland’s pro-independence party and first minister of the Scottish government, has a revelation to share. Over the years, he confides, there has been a tendency among some people in Scotland to blame things that go wrong on the English. He adopts a sorrowful air, as if pondering—for the very first time—man’s capacity for grievance.
Happily, Mr Salmond has a plan. He intends to hold a referendum on Scottish independence in the autumn of 2014. Grant his homeland its independence from the United Kingdom, he says, and the honest folk of Scotland will be friends with the “plain people of England”. Flanked by a pair of large Scottish Saltire flags, he quotes the homespun wisdom of a childhood family friend, predicting that, after independence, England will lose a “surly lodger” and gain a “good neighbour”.
Mr Salmond calls himself the most Anglophile figure in Scottish politics. He has “great faith” that the English people can craft a modern new identity without the “appendage” of Britain. In a public lecture in London on January 24th, he plans to argue that the example of an independent Scotland will “reinvigorate” England, and old English traditions of radicalism.
Alas, there are a couple of reasons sharply to distrust Mr Salmond’s vision of the Scots and English shaking hands over the corpse of Great Britain. One involves breathtaking political hypocrisy. A more serious problem centres on Mr Salmond’s oddly old-fashioned understanding of identity in modern England.
Start with hypocrisy. For Mr Salmond to act dismayed by anti-English grumbling requires a degree of political chutzpah bordering on performance art. He is the man who once accused Margaret Thatcher of imposing a “government of occupation” on Scots, and referred to the British government’s taxation of oil revenues from Scottish waters as probably “the greatest act of international larceny since the Spanish stole the Inca gold”.
As first minister, he has shown a genius for stoking cross-border resentments. There was indignation in England this month when he declared that—after Scottish independence—the British government should be liable for the bailed-out Royal Bank of Scotland and its vast debts (London officials failed to regulate the banks, sniffed the first minister). North of the border, Mr Salmond is portraying a legal wrangle with the British government over how to hold his referendum as a conspiracy by “Westminster politicians” to keep Scotland’s mineral resources.
Defences can be mounted for Mr Salmond. He is an elected politician, opportunism is what politicians do. Mr Salmond is no bigot. He says, with feeling, that modern Scottish identity is open to all: Pakistani Scots are as Scottish as any other.
Where Mr Salmond needs challenging, urgently, is over his vision for Britain. There he is out of date, and capable of wreaking real harm. Since his days as a gadfly member of the House of Commons in the 1980s, Mr Salmond has portrayed the British state as a relic, calling it “fundamentally unattractive” and sunk in xenophobic decline. As late as 1999, according to his biographer David Torrance, Mr Salmond told the BBC that Britishness had been claimed as an identity by thugs and racists, while Englishness was an “aristocratic, almost medieval concept”.
Follow that line, and independence sounds like a progressive act to promote friendship between the yeomen of England and the brave hearts of Scotland, liberating two ancient cultures from the moth-eaten baggage of imperialist, embittered Britishness.
But Britishness has evolved. Two decades ago, it was a complacent default identity, with many English using Britain when they meant England. Now, it is becoming a consciously-chosen layer of identity, especially among immigrants, from British Muslims to black Britons and beyond.
Englishness is the subject of a tussle. To some, it carries nastily tribal, exclusive overtones. Racists want to appropriate the English flag of St George, as they appropriated the Union flag for a time, decades ago. Their adversaries, like the left-wing singer Billy Bragg, are as enthusiastic as Mr Salmond about England’s radical tradition. In between those two poles, there is evidence suggesting a link between the rise of Englishness and feelings of being ill-served by the status quo. YouGov, a pollster, recently compared voters who called themselves English with those who identified as British. Those feeling “English” were more likely to want to leave the European Union, by a margin of 58% to 37%. New research by IPPR, a think-tank, shows Englishness rising in popularity, alongside a growing sense that the English are not fairly represented in the British Parliament.
Not only British, but also
Painfully for Mr Salmond, who professes to love the EU and loathe the Tory party, his strongest sympathisers in the House of Commons are English Conservative MPs on the Eurosceptic right. Many are tempted to wave goodbye to a Scotland they see as a “subsidised People’s Republic”, says a Conservative MP from the 2010 intake. The move would have the happy side-effect of depriving Labour of scores of seats. The traditional Tory attachment to the union no longer stirs the grassroots, says the MP, who during his hunt for a seat earned his loudest cheer by asking why the English could not declare independence from Scotland.
Mr Salmond rejects such talk. Tory right-wingers do not mean what they say, he snaps: “They want to hold Scotland fast.”
The SNP leader has a right to argue for Scottish independence. But to make that case, he is seeking to make the English into foreigners, and deny millions of hyphenated Britons, from Anglo-Scots to black British, the country in which they feel at home, Britain. That is not a progressive act, nor a modern one. Warm words about friendship between neighbours cannot excuse it.
Jan 17th 2012, 14:26 by Bagehot
THE English have cause to feel flattered. David Hockney, the Yorkshire-born artist who fled his "boring, stifling" home country aged 24 for southern California, seeking fierce sunlight, strong shadows, heat, space and greater sexiness than that available in 1960s Bradford, will open a big new show in London on January 21st, celebrating the English landscapes of his boyhood.
This huge show fills all the exhibition rooms of the Royal Academy, just off Piccadilly, but it is not a retrospective. Though Mr Hockney is now 74, most of the work is new and fresh. Scores of the images reveal the artist's excitement at discovering a new piece of technology, the iPad, which he uses as a sketchpad before printing off the results on large pieces of paper. At the same time, the works are rooted in the ancient and pastoral. The show is explicitly an attempt to reproduce the fine grain of the rural landscape of a particular patch of northern England through the changing seasons.
A whole room is devoted to the blossoming of hawthorns near his new home in Bridlington, a seaside town, captured in a burst of creative energy the artist calls "Action Week". Another is given over to a series of seasonal images of three trees at Thixendale. The arrival of spring on one small road in Woldgate, east Yorkshire, is celebrated in 51 iPad-generated prints, and one very large, 32-canvas painting.
At every turn, ideas fizz and seethe, underscored by a satisfying hum of autobiography: there is talk of Mr Hockney's "delight" and "joy" at being back in Yorkshire, where he has lived for the past few years in a house near the sea he had earlier bought for his mother. The artist's long interest in photocollages is given new life. Once, such Hockney collages attempted to convey the experience of standing on the rim of the Grand Canyon. In this show, a wall of 18 video screens plays short films displaying fragments of English landscape—the verge of a rural lane in Yorkshire, a stretch of woodland—in mesmerising detail. (The films were generated by nine cameras attached to a grid mounted on the bonnet of an assistant's slow-moving car, and were "directed" by the artist in the back seat, using a grid of nine monitors to draw and edit the unfolding landscape.)
The colours are bright, the strokes bold. There are echoes of previous smash-hit shows at the RA, involving works by Van Gogh, or the Fauves.
Unsurprisingly, the show promises to be a blockbuster. Advanced ticket sales are already beating records set by the academy's 2010 Van Gogh exhibition, the Daily Telegraph reports this morning. The whole event, which runs until April 9th, is intended to drum up excitement for a cultural festival linked to this summer's London Olympics, designed to lure visitors from across the world.
But English visitors can feel a special thrum of patriotic pride. In a slew of newspaper profiles and interviews, Mr Hockney is presented as a national treasure, the "greatest living British painter" and an ambassador for plain-speaking Yorkshire common sense. Though he declined a knighthood in 1990, he recently accepted membership of the Order of Merit, a rarer honour, telling the Guardian that he felt it only "gracious" to say yes after the Queen's private secretary telephoned to explain that the OM is a mark of esteem in the monarch's direct gift.
Generating delighted headlines, Mr Hockney recently stressed that the scores of paintings and prints in the new show were all his own work. This, it was explained, was a swipe at the younger British artist, Damien Hirst, who uses teams of assistants to create many of his most lucrative artworks. The Royal Academy, which is not publicly funded, has cranked up its marketing machine, offering visitors a shop crammed with attractive Hockney merchandise, a catalogue with essays exploring the artist's place in the English landscape tradition, and special Yorkshire breakfasts and afternoon teas in its restaurant. At the press viewing this morning, a van from a tea merchant in Harrogate was distributing free cups of Yorkshire tea in the academy's courtyard.
Yet here is an odd thing. The new show is rooted in lots of interesting ideas about landscape, place and the evolving technologies of reproduction. It is underscored by an arresting human story: the return of the exiled Yorkshireman. It is also a strikingly patchy show containing some fine and thought-provoking paintings and quite a lot of disappointing mush.
But the good and bad works are the wrong way round. To me, the least successful images are precisely those with the most interesting back-story: that week-long rush to capture the blossoming of hawthorn, or those innovative iPad sketches. Time and again, these are the images that your blogger (a strictly amateur art-critic) found mediocre, flat, and bafflingly unconvincing. The hawthorn blossom looks maggoty, or toothpaste-like (see first image).

The iPad-generated images are mostly banal, and with some rare exceptions fail to convey any sense of place. Here is one from January 2nd, 2011. (see second image).

I know just enough about visiting art galleries to know not to take paintings too literally. But the stated intention of the iPad sketches seems to me to be missed. The show features whole walls covered with scores of carefully dated images of specific landscapes, tracking the passage of the seasons by means of shifting colours and a careful use of light. But they do not work. The light in them is not an English light. The trees are not interesting trees. (see image three, from April 12th).

There are some landscapes in the show which are rather fine, meaning enjoyable to look at. An example would be "A Closer Winter Tunnel, February-March, 2006" (see fourth image).
But it is not blazingly exciting, surely?
Others, I would argue, would not be celebrated at all if they were not by Mr Hockney, such as this, the "Road Across the Wolds" (see fifth image).

In contrast, one painting has stuck in my mind, the huge 32-canvas "The Arrival of Spring in Woldgate, East Yorkshire in 2011" (see sixth image). Yet it is hardly rooted in a real landscape at all. It bears only limited resemblance to the plodding iPad sketches which flank it. To me at least, it has not much to say about Yorkshire, England, or Mr Hockney's biography.
In short, I went to the Royal Academy expecting to be gripped by the interplay between a long-absent artist and his boyhood home, and came away impressed by a work of the imagination, that could have been painted after a visit to almost any temperate landscape. That said, it is pretty splendid (though a reproduction of this very large work hardly does it justice). Well worth a look, if you are passing.
All images courtesy of the Royal Academy of Arts, London. Copyright David Hockney.
Jan 16th 2012, 22:40 by Bagehot
BANG on cue, after a week of calls for the Scottish people to be given their say on the future of the United Kingdom, come the calls for the English to be given their say, too. These calls to heed the will of England divide into a couple of categories.
First, assertions that if the Scottish minority are to be offered a referendum, it is glaringly obvious that the English majority (with 85% of the population) must have one as well. The Daily Mail seems especially keen on this argument, giving it both barrels with a blast from Simon Heffer "Hang on, Mr Salmond. The English MUST have a say on Scotland's future too...", and one from Melanie Phillips:
England is fed up to the back teeth with the Scots pocketing a whacking subsidy from Westminster while constantly — and offensively — whingeing about England. And if Scotland has a referendum on its independence, then, in any just universe, the rest of the UK must vote on the proposal, too. For while those five million Scots may argue that they have the right to decide how they are governed, they do not have the right to break up the United Kingdom regardless of the wishes of the remaining 55 million of its citizens
Second, assertions that it is time to bite the bullet, stop pussy-footing around and end the anomaly that Scottish, Welsh and Northern Irish members of the British parliament at Westminster can vote on laws affecting English schools, hospitals or roads, though—post-devolution—English MPs have no say over these matters in Scotland, Wales or Northern Ireland. Biting the bullet, it is suggested, involves either the creation of a new English parliament, or legislating so that only English MPs have a say over English laws.
Lots of English voters are receptive to such arguments.
New research for the IPPR think tank shows that 79% of English voters want Scottish MPs excluded from votes on English-only laws. In a poll published at the weekend by the Sunday Telegraph, ICM found 49% of its English respondents wanted an English parliament, with similar powers to those enjoyed by the Scottish parliament in Edinburgh (with the proportion rising to 58% among those aged over 65). English voters were also slightly keener on Scottish independence than Scottish voters, the same poll showed (though once the margin of error is taken into account, the result was more of a dead heat).
But at the risk of being difficult, giving the English their say is not quite as simple as all that.
First, those demands for English voters to be consulted on Scottish independence, as well as Scots. What would happen if the Scots voted yes to independence, in a formal referendum but the English then voted no? Would the English prevent the Scots from leaving? If so, how? Would English police be sent north to quell street protests? Would gunboats be sent up the Forth?
Next, those calls for English laws to be decided by English MPs. This is a seductively fair-sounding solution, and indeed was included in the Conservative Party manifesto for the 2010 general election. It is, in effect, a solution to a constitutional conundrum known to Westminster wonks as the West Lothian question, after the constituency of the Scottish Labour MP who first raised it, decades ago.
The Conservative-Liberal Democrat coalition is about to unveil a committee packed with worthy sorts to ponder the West Lothian question, and impatient English patriots are already grumbling about an important issue being kicked into the long grass.
But if the West Lothian question has been unresolved for decades, there is a reason. In his recent book "The Coalition and the Constitution", Vernon Bogdanor, a constitutional sage (and former tutor at Oxford to one David Cameron), outlined a heffalump trap lurking in those calls for "English votes for English laws."
The first is that, in recent general elections, the Conservatives have won a majority of seats in England or something close to one, but failed to win a majority in the United Kingdom as a whole. In 2010, the Tories won just a single seat in Scotland (giving rise to the current Edinburgh gibe that, thanks to two recent arrivals at Edinburgh Zoo, there are now more pandas that Conservative MPs in Scotland).
Now, says Professor Bogdanor, imagine a system of "English votes for English laws" operating in such a parliament, where there is a majority of the right in England, but a majority of the left for the whole United Kingdom. In such circumstances, government would risk being bifurcated. As the professor puts it:
There would, therefore, be one government for English domestic affairs such as education and health, and another government for UK-wide matters, such as economic policy, social security, foreign affairs and defence
None of this is to say that the West Lothian question (or the broader problem of growing English resentment about devolution) can or should be dismissed as silly.
Indeed, as Professor Bogdanor notes, but for an accident of electoral arithmetic in 2010, that simmering resentment could have already exploded into very serious tensions already. After the May 2010 elections ended without any party commanding an overall majority, there were efforts by some in the Labour leadership to cobble together a rainbow coalition of Labour, the Lib Dems and a bunch of small, mostly nationalist parties. These efforts foundered because a Conservative-Lib Dem coalition, though seemingly an outlandish idea at first, enjoyed a much more stable majority.
But, says the professor, supposing talks between the Tories and Lib Dems had failed, and a rainbow coalition of the left had come into being. Between them, he notes, Labour and the Lib Dems have just 234 seats in the House of Commons, as compared with 298 seats for the Conservatives. That means that a government coalition of the left would only have been able to secure its legislation by whipping non-English MPs through their division lobbies, night after night. Coalition MPs from outside England would have been imposing their will on England.
Given the fact that coalition governments are already a novelty in Britain, it is entirely possible, the professor suggests, that such a coalition of the left would have been seen as "illegitimate" by English voters.
As for creating an English parliament, it is arguably a neater solution, but hardly a small (or cheap) step. The country would then have an English parliament, a Scottish parliament, a Welsh assembly, a Northern Irish assembly and a British parliament for everything still decided at national level, such as foreign policy and defence.
I have lived in a country like that for five years: it's called Belgium, a kingdom blessed with six parliaments and six governments. And all those debating chambers, mini-ministers, federal ministers and hangers-on do not come cheap. Given the current British mood of lynch-mob fury towards politicians, I wonder if creating more of the rascals is really what voters have in mind.
Jan 12th 2012, 20:14 by Bagehot
MY column in this week's newspaper is about the leader of the opposition Labour Party, Ed Miliband, and why things are looking bleak for him. Here it is:
ED MILIBAND, leader of the opposition Labour Party, has a problem which should not be serious, but probably is. In this buffed and burnished television age, he sounds and looks a bit odd. This makes him increasingly the butt of jokes. Things are so bad that a BBC interviewer this week asked him—more or less directly—whether he was too ugly to be prime minister.
There is not much that Mr Miliband can do about his slightly prissy delivery and doleful, irregular features. In contrast another, genuinely grave, flaw is entirely his own fault. Mr Miliband’s plans for solving Britain’s most pressing problems manage to be both too timid and implausibly ambitious.
On January 10th Mr Miliband gave a speech on the economy, explaining what his party should stand for, now there is less money around. Amid horrible approval ratings (according to YouGov, a pollster, some two-thirds of voters think the Labour leader is doing a bad job) allies of Mr Miliband talked up the importance of the address. They called it a moment to “bash on the head” the idea that Labour is in denial about the need to fix the public finances.
Mr Miliband made an important concession in his speech: that Britain will probably be stuck in austerity after the next general election, planned for 2015. That means a future Labour government would not be able to reverse every spending cut made by the Conservative-Liberal Democrat coalition, he said. His Labour Party would not be able to repeat Tony Blair’s and Gordon Brown’s strategy of letting financially turbocharged growth rip, while diverting some of the proceeds into public works and welfare. Labour would have to deliver “fairness in tough times”.
Mr Miliband and his inner circle are convinced this message resonates with the “squeezed middle”: the group that has seen its living standards stagnate while welfare recipients at the bottom of society and bankers at the top seem to have been spared pain. The Labour leader believes that he predicted the current national mood of gloom and anger. He devoted chunks of his speech to explaining just how prescient he has been.
He had been mocked when he first attacked “crony capitalism”, he declared. Now Tories and Lib Dems were scrambling to copy him. A year and a half ago, Labour warned the government about the dangers of cutting spending too far and too fast. It had been proved right, he insisted. Because too much demand has been removed from the economy, the government would have to borrow “£158 billion more” than planned over five years.
The Labour leader is fond of this last argument about missing demand, and repeats it often. But this is odd. For one thing, it is a source of public doubts about Labour’s commitment to reducing the budget deficit, a task most voters say is necessary. For another, it is a ludicrously complex line of attack. Economists disagree about the precise impact of deficit spending (and voters are just as confused, with poll numbers on whom or what to blame for Britain’s economic woes splitting every which way). Most damagingly, Mr Miliband is picking a fight about the past. He is seeking to prove, with numbers, that voters made a mistake when they trusted the coalition back in 2010. That is a strange use of an opposition leader’s time.
It is also not working. Polls show voters far more inclined to trust Mr Cameron than Mr Miliband on the economy, even if they are not sure the Tory leader is worried about fairness. Perhaps this is because, on taking office, the coalition made a much bigger and more easily understood prediction: that a terrifying economic storm was brewing, which would be made more lethal by Labour’s failure to put money aside in good times.
Mr Miliband claims to “relish” the chance to manage the economy differently. But when it comes to embracing austerity, he could hardly sound more grudging. In his speech he did not admit to a penny of wasted spending in 13 years of Labour rule. He offered a single example of spending he might trim, and vowed to offset that with compensation from the private sector. In office, he explained, Labour might not be able to increase the winter-fuel allowance (a universal benefit paid to elderly dukes as well as retired dustmen). To offset that pain, he would push energy companies to offer their cheapest fuel tariffs to the elderly.
The quiet man
What changes does Mr Miliband relish, then? The answer lies in his talk of breaking with New Labour’s economic model. Yes, he says, he is “incredibly proud” of schools and hospitals paid for with the proceeds of growth, and the jobs created under Mr Blair and Mr Brown. But too many of those jobs offered low-paid, low-skilled drudgery. Mr Miliband wants to use “the power of government” in new ways. He vows to harness regulations, tax rules and government procurement contracts to craft a kinder, more sustainable version of capitalism with a marked Rhineland tinge: think apprentices, employee representatives helping to set bosses’ pay, and a Britain in which smart graduates want to design clever machines, not City derivatives.
These are bold plans, at a time when governments worldwide are struggling to survive until next month. Mr Miliband is serenely confident. These are early days, he says. The government is failing. Voters will come round.
Voters’ trust in the government could crumble. But Mr Miliband may not have much time. Grumbling from Labour MPs is turning into on-the-record sniping. Timidity about how to cut spending is less of a problem than their leader’s vaulting ambitions to reshape British capitalism, just when voters have lost faith in the ability of experts of all sorts to improve anything. Mr Miliband is a mid-sized politician making outlandish claims. That credibility gap explains why voters are not listening.
Jan 12th 2012, 11:28 by Bagehot
BAGEHOT is in Edinburgh. Yesterday afternoon I interviewed Alex Salmond, first minister of the devolved Scottish government and generator of a hundred headlines this week, as the man who wants to break up Britain.
My report for the newspaper is here. With apologies for a very long post, I thought some readers of this blog might like a fuller account of what the first minister said.
Mr Salmond, who led his pro-independence Scottish National Party to a thumping victory in the 2011 Scottish elections, is preceded by quite a reputation nowadays.
"The most talented politician in the British Isles," I was told by an academic, as I made some last-minute calls about the implications of Mr Salmond's declaration, earlier this week, that Scotland would hold a vote on independence in 2014. "A brilliant demagogue...slippery... a total opportunist," one of his political rivals assured me. Over coffee in London last week, a senior Labour politician urged me, with surprising passion, not to suspend my critical faculties when meeting Mr Salmond. Don't be lulled into thinking you are in a foreign country, and so cannot understand what he is up to. Ask him your toughest questions, urged the Labour grandee.
I met the first minister at his official residence, Bute House, an Adam mansion in Edinburgh's New Town. It was my first time inside, and—perhaps appropriately—the setting felt at once foreign and familiar. Charlotte Square, on which Bute House sits, strongly reminded me of Dublin. Inside, however, the look is of 10 Downing Street redux, down to the smartly-uniformed officers opening the glossy black front door, the slightly austere Georgian hall and the stern portraits of previous first ministers marching up the main staircase.
And Mr Salmond? A panda-like figure, round of form and face, he bustled into the room flanked by aides and his chief economic adviser. He seemed charming, combative, self-deprecating and swelled with pride, all at the same time. And that was just the first minute. He had just come from opening a new headquarters for Barclays Wealth and been mobbed by television crews, he joked. Had something just happened?
In his day, Mr Salmond has had some pretty harsh things to say about the British state and its economic treatment of Scotland. A fierce left-winger in his youth, before a more recent conversion to talk of Nordic, business-friendly social democracy, he once called the use of North Sea oil revenues by the British government "probably the greatest act of international larceny since the Spanish stole the Inca gold". He referred to Margaret Thatcher's Conservative administration in Westminster as a "government of occupation", on the grounds that Scots voted by a large majority against the Tories, and Mrs Thatcher in particular.
The British state is "fundamentally unattractive", he declared in 1988, when he was an effective gadfly in the House of Commons in London. Britain, he said, was unpleasant in its views towards foreigners and depressing in terms of the breakdown of social cohesion. As an idea, Britain was "declining and out of date".
Now, as head of a devolved Scottish government, hosting The Economist in his Georgian drawing room (open fire, elegant sofas, fine plasterwork) he was on his most conciliatory form. Once Scotland gained its independence, its ancient friendship with the English would be "re-invigorated", he declared. Quoting a boyhood friend of his family from Linlinthgow, the town of his birth, he said that Scotland yearned to be a good neighbour, not a surly tenant. For too long, he sorrowed, a number of Scots had blamed everything that went wrong on perfidious Albion, in something of a culture of grievance. Surly, he said again, as if pondering the term. That is a good way of putting it.
Well hang on, I asked. What about him? What about the widespread charge that he specialises in policies designed to provoke grievances on both sides of the border? Take his policy of offering free university tuition to Scottish and European students, while charging English, Welsh and Northern Irish students thousands of pounds in fees. What about his recent demand for extra money for Scotland, to compensate his people for spending on the Olympics in London? His political opponents are convinced that his plan is to boost Scottish pride north of the border while provoking English rage south of it, I noted. He earnestly denied it, shaking his large head at the extraordinary nature of the charge.
With a referendum behind him, the government in London would find him a very reasonable negotiator, he said, with few red lines. Asked about sensitive issues, from Scotland's future currency to the fate of Britain's nuclear deterrent (currently based in Scotland), he combined soothing, friendly noises with a continuous, relentless flow of facts, figures and debating points. It felt a bit like interviewing a teddy bear driving a bulldozer. The tone was sweet reason itself. But there was no stopping him.
Mr Salmond had prepared a great slew of facts and figures, setting out why Scotland was in better economic shape than the wider United Kingdom. His government's chief economist sat on a sofa nearby, to provide further detail if needed. Mr Salmond was keen to share this good news. He argued that, if you include revenues from North Sea oil and gas, Scotland ran a current budget surplus in four of the last five years while the United Kingdom was in deficit each and every of those years. Include a geographical share of oil, goes another of his statistics, and Scotland's population share of UK net debt in 2009-10 is 46.3%, compared to 52.9% of GDP for the whole of the UK.
I fear I did not pursue these numbers very far. This appeared to disappoint Mr Salmond's entourage, who ended up just giving me all their figures afterwards in a briefing note. The chief economist slipped from the room, halfway through the interview.
The thing is, all the claims and counter-claims about whether Britain subsidises Scotland or vice versa are essentially questions of politics, not economics. Mr Salmond says 90% of North Sea oil and gas revenues belong to Scotland, relying on one interpretation of the maritime border that suits him. His opponents say that England has a claim to between a quarter and a third of the North Sea oil and gas fields, relying on different maps.
The Liberal Democrat cabinet minister for Scotland in the British government, Michael Moore, last year produced tables that are every bit as stern and important-looking as Mr Salmond's. But these show different deficit and surplus numbers for the same period. Mr Moore argues that Scotland has run deficits for years, even if North Sea revenues are counted. Indeed, he says: "If you had allocated every single penny of oil and gas revenues to Scotland over the past 30 years - a figure of £156 billion - then you would still fall £41 billion short of what both governments have actually invested in Scotland."
Still the numbers come. Mr Salmond told Channel 4 News last night that Scotland would take 8% of Britain's national debt, in line with its share of the wider British population, but would not take on any of the bad debts associated with the failed Royal Bank of Scotland (RBS), the Edinburgh-based bank which at one point grew to 250 times the size of the Scottish economy (with Mr Salmond enthusiastically egging RBS on in its disastrous plan to buy ABN-Amro, the Dutch bank). The British Treasury collected tax revenues from RBS and failed to regulate it properly, Mr Salmond explained, prompting Channel 4 News to headline its report "Salmond: you keep Scots bank debt, we'll keep the oil money".
Talk to English Tory MPs in London, and they grumble loudly about Scotland being subsidised to the hilt by Britain. In Stirling, on my way to visit the site of the Battle of Bannockburn yesterday morning, a local ranted at me that Scotland was sick of paying for Britain, and should seek its independence, just like Ireland and, um, Wales.
Whose numbers are right? I have no idea.
The bottom line, surely, is that an independent Scotland's future solvency cannot be separated from the negotiations that would follow a referendum vote for a split. Some broad arguments can be made about the merits of being a small country with a large banking sector, but when it comes to divvying up public debts, pensions liabilities, gold reserves and the like, everything would be up for grabs.
That being so, I decided to spend my hour with the first minister trying to pin him down on his political plans for that fight. I had only partial success, but did come away with a few, tentative observations about Mr Salmond.
1. Though he has devoted his life to Scottish politics (unlike the big beasts of the Scottish Labour Party, who still mostly flee to London to try their luck on the British national stage), Mr Salmond is strikingly keen to measure himself against other front-rank British politicians.
He talked, a lot, about George Osborne, the chancellor of the exchequer and chief electoral strategist of the Conservative Party, who is reportedly leading the tactical charge against Mr Salmond's referendum. Sometimes, this was to attack Mr Osborne as a foreign Tory interfering in Scottish politics. At other times, he boasted that "my old friend Mr Osborne" is "rather impressed" with policy innovations dreamed up by the Scottish government, such as the Scottish Futures Trust, (a clever wheeze for paying for public works). Mr Salmond is "not sure" Tory MPs would like to know that Mr Osborne was looking at SNP ideas, he added, grinning prettily.
Mr Osborne's tactical skills came up, again, in discussions of the independence referendum, and the row that now looms between Edinburgh and Westminster over when to hold such a vote, how to run it and, vitally, what question to put on the ballot paper (the British government wants a straight, yes-or-no, question about independence, Mr Salmond has dropped hints about adding on a second, fall-back option offering much deeper devolution, leaving only defence and foreign policy in British hands).
Unbidden, Mr Salmond drew a comparison with last year's Britain-wide referendum on whether to change the voting system used at Westminster general elections, during which the Conservatives soundly defeated their Liberal Democrat coalition partners. That's a complicated tale, but in essence the Tories opposed adopting the Alternative Vote (AV), while the Lib Dems campaigned in favour. The No camp backed by the Conservatives ran a pretty tough campaign, including personal attacks on the deputy prime minister, Nick Clegg.
The Conservatives "were very successful at kippering the Lib Dems," Mr Salmond ventured. "I'm not Nick Clegg."
Asked to expand on this, the first minister argued that the Liberal Democrats had been "desperate" to change the voting system to their dream of full proportional representation (PR). Somehow, Mr Osborne "stitched up" his Lib Dem colleagues in government and managed to get them to agree to a referendum on something that wasn't PR, so the Lib Dems' own enthusiasm fell away. Then the Tories further undermined the case for change with ruthless campaigning.
He tried to look all shocked at the ruthlessness of Mr Osborne. But if I had to guess, I'd say he likes the articles popping up in the press this week, portraying the independence fight as a contest between two great political strategists, Salmond v Osborne.
2. When cornered on a hard question about Scotland, Mr Salmond likes to go global, and throw around all manner of obscure and clever foreign analogies. These do not always withstand close scrutiny.
For instance, a big important question about Scottish independence concerns the new country's currency. Mr Salmond used to want to join the euro as soon as possible. He has gone a bit quiet about this (funnily enough). So at least for a while, his new Scotland would use the pound. That inspires alarm in some quarters, as people wonder if it is really wise to reproduce, via a new currency union of Scotland and England, the same wizard-wheeze that lies at the heart of the euro-crisis, namely a monetary union without a political and fiscal union over the top. I put this to Mr Salmond.
Oh not at all, he said. The fundamental problem of the euro is about uniting wildly diverging economies, with very different levels of competitiveness: countries like Greece and Germany. Scotland and England are very similar, even if (twinkle, twinkle) Scotland is more competitive by some measures.
Hmm, I said. Are we not now living in a world that has learned a bitter lesson from the euro crisis, so that bond traders are much less likely to take things like sovereign creditworthiness on trust, and are much more sceptical about breezy assurances that economies are jolly similar?
Ah, the euro is just a bad comparison, he continued. A better analogy is Belgium and Luxembourg, and their currency union before the euro.
Hmm, I thought (for I am a sad geek of an ex-foreign correspondent who once covered the Luxembourg referendum on the ill-fated EU constitution, and interviewed various Luxembourgeois about their views of currency union, who told me how humiliating it had been in the days when the Luxembourg franc was basically the Belgian franc in drag and Luxembourg had no monetary independence at all). Hmm, I said, expressing some of that out loud, are you sure Scots would accept such limited monetary independence?
Mr Salmond was off, dancing and diving, explaining how much more credit-worthy Scotland would be, how modest its stocks of debt, and how restrained its borrowing. Well, hang on, I said, in this suspicious new world, assurances of fiscal rigour are out of fashion. Over in euro-land, people want binding debt brakes written into constitutions, and deficit rules policed by supranational judges. Would an independent Scotland accept legally binding debt and deficit rules as the price of sharing sterling?
"I'm in favour of a stability pact," Mr Salmond said. What does that mean, I asked. Binding rules? The first minister was off again, explaining how an England-Scotland monetary union was not like the euro, and how the great advantage of holding a referendum meant that after a clear vote, Scotland and England would be negotiating in an atmosphere of goodwill. Pushed one last time, he delivered the gnomic pledge: "We'd negotiate a stability pact appropriate for the circumstances."
Another big, tricky question is what to do about defence policy in the event of a break-up. Would Scotland leave NATO, I asked? Ah, replied Mr Salmond happily. SNP policy is that Scotland would not be in the command structures of NATO. That means it would be like Sweden or Ireland.
Well hang on, I found myself saying again. Sweden and Ireland are not members of NATO. They're members of Partnership for Peace, said Mr Salmond. Yes, but that means they are not members of NATO, I said. (It was that kind of interview).
To be fair, once we had stopped roving round the map looking for analogies, he was forthcoming about his plans for an independent Scotland's military posture. He drew my attention to the recent strategic defence review conducted by the British government to manage deep spending cuts. This, he said, would leave Scotland home to a rapid deployment force of between 8,000 and 12,000 troops, a single air base and a single naval base. That's the sort of scale of armed forces an independent Scotland would have, he explained, with the big difference that the Scottish public did not want weapons of mass destruction in Scotland (a reference to Britain's submarine-based nuclear deterrent, Trident, which currently operates out of the deep, discreet waters of a Scottish loch).
We are not going to be unreasonable about it, we are not going to say Trident must leave the day after independence, he went on. But it would have to leave.
What about American submarines and warships carrying nuclear weapons, would they still be welcome in Scottish waters? I don't envisage a boycott on visiting forces, of the sort that New Zealand had, he replied.
Would Scottish forces go to war with the armed forces of the continuity British government? We'd have sent them to Iraq in 1991 if asked to join the international coalition, he replied. We wouldn't have sent them to Iraq in 2003, to participate in an illegal war. Scottish warplanes could have taken part in the 2011 raids over Libya, because that air campaign had legal backing from the UN.
Would Scottish citizens now serving in the British armed forces have to leave? Not at all, said Mr Salmond. There are all manner of foreigners serving in the British armed forces, from Irish or Commonwealth troops to the Gurkhas.
We've done a lot of thinking about these things, Mr Salmond told me. We are not wanting to be upsetting or awkward. On the contrary, there will be lots of positives. Look at the relationship between Ireland and Britain, and how it has been enhanced by mutual respect. He checked himself. Scotland is not Ireland, he said carefully. Scotland was never an oppressed country.
But in general, went his message, the friendship between Scotland and England will be given new life by Scottish independence.
That leads me to observation 3, which seems to me to be a real point of vulnerability for Mr Salmond.
3. I think Alex Salmond is out of date when it comes to English nationalism, and the changing nature of Britishness as a form of identity.
I think his views of Britishness are a bit stuck in the 1980s, when he first sat in the House of Commons in Westminster. Back then, it is true that far-right fringe groups such as the National Front had aggressively adopted Britishness as their identity. Their slogans included: "There ain't no black in the Union Jack". As late as 1999, according to David Torrance, Alex Salmond's biographer, the SNP leader could be heard telling the BBC that Britishness had been claimed as an identity by thugs and racists, while Englishness was an "aristocratic, almost mediaeval concept."
If you stick to that view of the world, then promoting friendship between the good, honest folk of Scotland and the plain, decent people of England must look like a progressive act, liberating two ancient cultures from the moth-eaten baggage of imperialist, nostalgic, exhausted, embittered Britishness.
I have a hunch that is how Mr Salmond sees it. He has always been very careful to distance himself from the angrier forms of nationalism, and stress the idea of Scottish independence as an outward-looking, internationalist cause.
With that in mind, I asked him about the dramatic rise in anti-Scottish sentiment on the right of the Tory Party. Doesn't it worry you, I asked, that your strongest supporters at Westminster are the very people you most dislike: nationalist, Eurosceptic English Conservative MPs? There is a striking overlap between the MPs who want to quit the EU and those who want to kick out what they consider to be scrounging, subsidised Scotland.
I told him about the young Tory MP I knew from the 2010 intake, who confided to me that during the long slog of seeking a safe seat, the loudest cheer he earned at a selection meeting came when he was asked if he thought the Scots should be allowed a vote on independence. He had replied, blimpishly, that he wanted to know when the English might be allowed to vote on whether the Scots could stay. The cheers lifted the roof, apparently.
I would never judge the plain people of England by some views heard by foolish Tory backbenchers, Mr Salmond replied airily, adding that this was not too modern a phenomenon, either. In the House of Commons in the 1980s, he said he heard plenty about Scotland that if said about another country would be "deemed quite unacceptable".
But it is precisely that same breed of Tory MPs who are the loudest advocates in London of granting Scotland its independence, I insisted.
His face darkened. Do they mean it? he snapped, utterly unwilling to concede the point. They do not, he said. "They want to hold Scotland fast."
They don't, I retorted. They really want to kick you out. (It was that kind of interview).
Mr Salmond remembered his calm and soothing manners. Just as I have great faith in Scotland's hidden powers, he breathed, I have great faith in the English people to forge an English identity.
But it's more complicated nowadays, I suggested. Britishness is now the country's multi-cultural, inclusive identity. People talk about being British Muslims, or British Asians, in a way that they would never talk about being English Asian. Englishness is becoming mixed up with tribal grievance. If you see a St George's flag flying outside a council house in England, it is often a sign of protest and complaint. The union flag is not used by the far-right now, they use the English flag, I suggested.
What about Billy Bragg, retorted Mr Salmond, naming a left-wing singer and activist whose work explores the history of English political radicalism and popular protest?
What about the English Defence League, I said, naming a nasty far-right group that has made headlines in recent years?
Mr Salmond paused briefly before saying: people should reclaim their flag, and do it as quickly as possible.
Later, he returned to the theme. You say Britishness is a less tribal identity, he said. But isn't one of the great successes of modern Scottish identity that it is non-exclusive? People can be Pakistani Scots. Mr Salmond quoted a famous line from a Thatcher-era cabinet minister, Norman Tebbit, who asserted that immigrants could not consider themselves British as long as they supported a foreign team at cricket. No Scot would be asked to pass a Norman Tebbit cricket test, Mr Salmond said firmly.
For a nimble man who has changed his political arguments at dizzying speed over the years, whenever circumstances required it, I think Mr Salmond is a bit stuck on this one. His sense of Scottishness as a generous, open-hearted, authentic identity seems partly defined as a rejection of a closed, pinched Britishness that carries a powerful 1980s whiff.
Mr Salmond knows his Scottish politics, better perhaps than any other front-rank politician in his country right now. But I think his understanding of Britishness, and Englishness, is oddly out of tune with the present.
Perhaps this does not matter. He only needs to win the votes of Scots in 2014 to win his referendum. But English opinion seems to matter to him. Later this month he is coming to London to deliver a Hugo Young lecture on how an independent Scotland may prove a stirring example for England. I wonder if he will be surprised by who cheers his message, and who is cast down by it.
Jan 9th 2012, 19:27 by Bagehot
PUT up or shut up. That is the risky (but arguably rather canny) message that David Cameron has sent to the pro-independence head of the Scottish devolved government in Edinburgh, Alex Salmond. Specifically, Mr Cameron has announced that the British government and Westminster Parliament are willing to give Mr Salmond the referendum on Scotland's future that he says he wants—as long as it is a proper, straight up-and-down vote on whether to stay in the United Kingdom or leave, and is held sooner rather than later.
It is not that Mr Cameron wants to break the three hundred year old union between London and Edinburgh. Both emotionally and intellectually, he is fiercely committed to the union as a source of strength for both Scotland and Britain, insist Conservative colleagues who have discussed the question with him. Publicly, he has pledged to oppose Scottish independence with "every fibre" of his being.
But Mr Cameron and his ministers also feel that Scotland has been drifting in a constitutional limbo, ever since Mr Salmond's Scottish National Party (SNP) won an outright majority at Scottish parliamentary elections in 2011 (a feat that was supposed to be impossible, under the complex voting system used in Scotland). The SNP campaigned on a simple manifesto pledge to hold a referendum on the future of Scotland. But after his thumping win Mr Salmond slammed on the brakes and started talking about holding a consultative vote in the second half of his term in office, ie, some time between 2014 and 2016.
The accusation from Mr Salmond's opponents is that he is "frit", or too frightened of a No vote, to hold a straightforward independence vote any time soon. Instead, goes the charge, Mr Salmond is planning a fiddly, three-way vote on whether to stay, leave or seek another big dose of devolution to transfer more powers from Westminster to the Scottish parliament at Holyrood. Should such a vote end up with Scots splitting roughly equally between the three options, Mr Salmond would then turn round and say he had an overwhelming mandate to seek drastic changes, pro-union politicians grumblingly predict.
In a final provocation, Mr Salmond is widely reported to be planning to hold such a referendum in 2014, around the 700th anniversary of the Battle of Bannockburn. That would link the vote to an emotionally-resonant victory that (according to popular belief) saw Robert the Bruce and a band of hairy Highland heroes defeat a much larger army of sneering, heavily-armoured Norman knights sent north by a simpering English tyrant, Edward II. Short of having a blue-faced Mel Gibson charge up Sauchiehall Street crying "Freedom", the theory goes, Mr Salmond and the SNP could not pick a more stirring backdrop to a referendum.
Understandably, it is the timing question that dominated this morning's headlines, after what was clearly robust briefing by sources close to the prime minister. The morning newspapers reported that Mr Cameron's brilliant wheeze involves making the SNP a time-limited offer of a binding referendum, with a shelf-life of just 18 months. Only the Westminster Parliament has the power to order a legally-binding referendum, the same papers report, so logically this would pose quite a dilemma for Mr Salmond and the Scots Nats, prodding them to hold their vote by 2013 at the latest. The Independent called it a poker move, and you can see what they mean: it sounds as if Mr Cameron is seeing Mr Salmond's consultative vote, raising him a binding referendum and calling him.
The SNP has reacted crossly, with Mr Salmond's deputy, Nicola Sturgeon, telling the BBC that Mr Cameron was trying to interfere in Scottish democracy, and predicting that this would backfire, because the "more a Tory government tries to interfere", the "greater the support for independence will be". All referendums in Britain have always been consultative, she added, so promises of a binding referendum are "absurd". The SNP majority in the Scottish parliament won office on a clear prospectus of holding a referendum in the second half of its term, she concluded. Thus "it's right that now that we have the mandate we can proceed on that basis."
Does a stand-off loom? There is no doubt that Mr Salmond takes this mandate business seriously, rejecting any talk of the Westminster Parliament seeking to organise his referendum. Last October, Lord Forsyth, a former Conservative member of parliament and cabinet minister with responsibility for Scotland in the government of John Major, stirred up the House of Lords with a rather cryptic question to the government, asking if it was true that Mr Salmond had been "threatening government Ministers that if we constitute a legally conducted referendum campaign in Scotland, he will make it his business to boycott that referendum"? Could the government confirm that the first minister was "getting a bit too big for his boots?" Lord Forsyth ventured.
On being questioned by Scottish reporters later, Lord Forsyth offered further details of his claim. Mr Salmond, he had been reliably informed, had told George Osborne, the Conservative chancellor of the exchequer, that if the government in London and the Parliament in Westminster set up a Scottish referendum he would use his powers as Scottish first minister to block it, for instance by preventing the Scottish police and other public services from administering and overseeing such a vote. Lord Forsyth had checked the story with Mr Osborne, who had confirmed it, he added, while Mr Salmond's staff had only issued what he considered a non-denial sort of denial.
For the moment, we are still in the realm of clashing politics. Mr Cameron made his position clear in an interview on Sunday with the BBC's Andrew Marr, arguing that the Scottish people needed and deserved more clarity on who was going to be asking them about independence, when, and what the question was going to be. Scotland needed to know that any vote would be fair, legal and decisive. To that end, the British government would set out its plans in a few days, the prime minister said, adding:
I think what Alex Salmond is trying to do—I think he knows the Scottish people, at heart, don't want a full separation from the United Kingdom—and so he's trying to sort of create a situation where that bubbles up and happens... Whereas I think we need some decisiveness, so we can clear up this issue
More technical details will not be long in coming. Government sources say that the current cabinet minister for Scotland, or Scottish Secretary, Michael Moore, will be unveiling plans to the House of Commons on Tuesday. Mr Moore, a Liberal Democrat, will play down the question of timing and play up the importance of a straightforward, in-or-out question, I am told. His statement will set out measures that could be included in a new Scotland Bill currently trundling through the House of Commons and House of Lords in Westminster, which is already set to deepen devolution in various ways.
Government sources say that it is a bit of a red herring to draw a contrast between binding and consultative votes. The political reality is that Mr Cameron's coalition government is not about to prevent Scotland from splitting away if a decisive majority of Scots vote in a referendum to leave. A decisive consultative vote would be binding for a'that, sources say.
The same sources say that talk of a precise 18-month deadline for holding a vote is also missing the main thrust of the British government's gamble. Yes, Mr Cameron and his ministers would prefer a vote sooner rather than later, not least because they think that Scotland is being kept in limbo by uncertainty about its constitutional fate, and fear that that is hurting the Scottish economy.
But what really exercises the government is three different things: the legality of the vote; securing a clear, binary question and ensuring that the referendum campaign is fairly- and transparently-funded and overseen by an independent electoral commission.
Prominent unionists agree. If Mr Salmond wants to "make a fool of himself linking the timing of his referendum to a mediaeval battle", then supporters of the union should not "go to the stake" over the precise date of a referendum, a leading player says. What matters is getting the right question: in or out.
Within the government, there is some surprise that the whole obeying-the-law thing is not attracting more attention. Sources point to a growing body of legal opinion arguing the Scottish parliament has no right to organise a referendum on Scotland's constitutional settlement with the United Kingdom. Under the terms of the 1998 Scotland Act that set up the Holyrood parliament, constitutional questions are "reserved" for the British parliament in Westminster.
Government ministers believe that that if the Scottish parliament passed legislation to hold a referendum, it would certainly face legal challenges, plunging the whole process into uncertainty if not chaos. The House of Lords fairly heaves with distinguished former Scottish judges and politicians who care very much about the legal niceties, and who are poised to table any number of amendments to the Scotland Bill when it enters committee stage in the upper house on January 26th.
In short, the government in London is sure that it has a legal mandate to weigh in, whether the fierier sort of nationalist cares to admit it.
Mr Salmond and the SNP seem just as sure that they have a democratic mandate to run this show and that the main Westminster parties, whether Conservative, Liberal Democrat or Labour, have no political interest in using legal niceties to trump democracy. Brian Taylor, the BBC's well-informed political editor in Scotland, makes the point that any legislation in Westminster establishing a referendum might have to be approved by Holyrood in any case, after political guarantees not to ram the Scotland Bill through against the wishes of the devolved Scottish assembly.
This may be right. But a Scottish Labour grandee offers a neat concluding point. Mr Salmond does not just face legal pressure from London to hurry up and organise a vote. He faces mounting political pressure at home, too. Everything in Scotland is "on hold", awaiting a referendum, says the Labour figure. That means Mr Salmond simply cannot duck naming a date for much longer.
It is all pretty ironic. Political and legal forces are aligning to put the Union to a once-in-a-generation test. And Mr Cameron, a politician who wants to preserve the status quo, finds himself pressing an in-out vote on Mr Salmond, whose adult life has been devoted to the cause of Scottish independence.
Jan 6th 2012, 8:23 by Bagehot
THIS week's print column looks at a story that filled British newspapers this week: the conviction and jailing of two white men for the 1993 murder of Stephen Lawrence, a black London school student stabbed to death as he waited for a bus with a friend, purely because of the colour of his skin.
Commentary in Britain seemed to divide, often, along two competing lines. One camp said that the murder case and the long campaign by the Lawrence family for justice, had changed Britain for the better. Another said that racism, and racial inequalities, still blight Britain. It seemed to me that this was not a case of either/or. Britain still has a race problem, but public attitudes to race have changed since 1993, and the horrible murder of Stephen Lawrence played a role. Here's the column.
THE assault that killed Stephen Lawrence, an 18-year-old black student stabbed as he waited for a London bus, lasted less than a minute. That was in 1993. On January 3rd, after a campaign for justice lasting longer than her son’s life, Doreen Lawrence heard a jury find two men guilty of the racist murder of her son.
Mrs Lawrence declined to celebrate as she emerged from the Old Bailey. Racism still exists in Britain, she told reporters. It has taken 18 years to convict her son’s killers because the police failed “so miserably” to do their job. Yet high-profile supporters of the Lawrence family, drawn from across the political spectrum, take a much more upbeat view of the case, and its impact on Britain.
January 3rd was a “glorious day”, declares the Daily Mail, a conservative-leaning tabloid which—at one point in an admirably dogged campaign to see the teenager’s suspected killers in court—splashed five men’s faces and names across its front page, daring them to sue if they were not murderers. It was a glorious day for Stephen Lawrence’s parents, the Mail insists, and for British justice, the police and the press.
Jack Straw and David Blunkett, who as ministers in the previous Labour government rewrote ancient laws and shook up police procedures in response to the Lawrence case, say that the family’s campaign has made Britain “a better place”. There has been praise, too, from the Metropolitan Police in London. The force was branded “institutionally racist” by a 1999 inquiry into the Lawrence case headed by Sir William Macpherson, a retired judge, who recommended scores of reforms. Those changes have “vastly improved” police work, claims the force’s acting deputy head, Cressida Dick: a terrible killing’s legacy has been a “force for good”. For Trevor Phillips, boss of the Equality and Human Rights Commission, a watchdog, the dignity of Stephen Lawrence’s parents played a “vital part” in changing attitudes to race.
It all makes for a painful puzzle. On the one hand the Lawrence family, still wary and worried that racism has moved underground. On the other, their admirers across the Establishment, thanking them for helping to transform Britain for the better.
One key to the puzzle is the asymmetry between personal and public grief. Mrs Lawrence’s son is dead, she reminded reporters. “How can I celebrate when my son lies buried?”
Another is that each side is talking about a different thing. Mrs Lawrence is offering an answer to the question: is race still a problem in Britain? She says, accurately, that it is. In contrast, those heaping praise on the Lawrences are addressing separate, if related questions: have public attitudes to race changed, and did the Lawrence case play a part? The answer is yes, twice over.
Caution is needed. Britons have not become swooning converts to internationalism. Transatlantic Trends, a big annual opinion poll, found the British unusually hostile to immigration in its latest survey, with 68% of Britons seeing it as more of a problem than an opportunity, far exceeding the gloom found in France, Spain, Germany, Italy or America.
Moreover, measures recommended by the Macpherson inquiry to combat official racism remain controversial, especially on the right. That almost 40,000 hate crimes were reported in 2010 strikes many conservatives (and police officers) as proof of political correctness run amok rather than national wickedness.
Yet something simpler and bigger has changed. Respectable, middle-class Britishness—a rather embattled identity that feels under threat from all manner of coarse and alien trends—now involves at least an aspiration to be colour-blind. Overt, unashamed racism, even when far less vicious than the sort displayed by Stephen Lawrence’s killers, has become indecent.
Supporters of the Lawrence family’s campaign duly stressed that the murdered boy, while “not perfect” (in the words of a family lawyer) was studying for school-leavers’ A-level exams and dreamed of being an architect. His parents—who emigrated from Jamaica in the 1960s—were described as hard-working, married church-goers. Their children played tennis, it was reported.
In contrast, the press talked of the thuggish backgrounds of the young white men suspected of killing Stephen Lawrence, and their family connections to local gangsters. Police surveillance tapes, later made public at the Macpherson inquiry, recorded the men expressing violently racist beliefs and fantasies.
At that point, argues Mr Phillips, public opinion jumped past race. Britons saw the Lawrence family as exemplars of traditional values of faith, work and ambition, under assault from an ugly face of modern society that was “vulgar, violent and vicious”. It hardly mattered that the ugly face was white.
Being British: everyone’s invited
Britishness (as opposed to the more tribal Englishness) has become an inclusive identity, based more on values than ancestry. This could be seen during the riots in August 2011, when three young Muslims were killed in Birmingham. Tariq Jahan, the father of one of the men, successfully urged an angry crowd, in the name of Islam, to avoid revenge attacks. Mr Jahan was hailed by politicians as “the true face of Britain”. The press warmly agreed.
None of this allows for complacency. Mrs Lawrence buried her son in Jamaica, convinced a British grave would be desecrated—as a memorial plaque in London has been, several times. Britain “didn’t deserve to have his body”, she told the BBC recently.
Such pain is hard to gainsay. But public opinion was shifted, durably, by the contrast between the Lawrences’ decency, the viciousness of their son’s killers, and the casual incompetence with which police handled the death of a young black man in 1993 London. That public dismay left the criminal justice system on trial and scrambling to reform. As a result, the Lawrence family and Britain have an unbreakable bond.
Dec 28th 2011, 17:51 by Bagehot
BRITAIN's royal family continues its remarkable run in the tabloids, in titles that once delighted in headlines about out-of-touch or gaffe-prone royals. "Good to see you again, sir," chirps the Daily Express on its front page this morning, reporting that a "smiling" and "indomitable" 90 year old Duke of Edinburgh had emerged from a four day stay in hospital after heart surgery, just in time to join at a shooting party lunch at the royal family's Sandringham estate.
The duke was "all smiles" as he left hospital, says the Daily Mail, adding sympathetically that: "A keen shot even now, Philip was desperately disappointed to have missed the traditional shoot this year but at least was able to attend the lunch."
Over at the left-leaning tabloid, the Daily Mirror, "insiders" (ie, people the paper just made up) offer still more detail, explaining how the queen's husband:
immediately set off to join his children and grandchildren as they took a break from blasting birds from the sky. It is believed the notoriously stubborn royal heeded doctors’ advice to take it easy by not wielding a gun himself following surgery for a blocked artery. But insiders say keen marksman Philip enjoyed being back in the fold after missing out on most of the Christmas celebrations. The shoot, which he normally leads, was already well under way when he finally returned to the Queen’s Norfolk estate just after 10.30am
Who'd have thought it? It seems only yesterday that the Express titles delighted in running front page after front page quoting conspiracy theories and allegations about the death of Diana, Princess of Wales, under such banner headlines as: "Prince Philip and Blair ordered murder".
As for the annual Christmas pheasant shoot at Sandringham, not so long ago it was the cue for disapproving pursed lips, angry quotes from animal rights groups, and headlines such as "Queen Clubs Bird to Death" (Daily Mail) and "The Killer Queen" (the Sunday Mirror, reporting that the queen had been photographed wringing the neck of an injured pheasant).
The Duke of Edinburgh, in particular, has been portrayed for years in the tabloids as a rude, semi-racist, emotionally-constipated bully. Now, his "gaffes" are hailed as refreshing and no-nonsense plain-speaking, and his gruffness has become dignity and old-fashioned charm.
What is going on? Partly, and most obviously, the duke is 90 years old. His long-standing admirers always made allowances for him as a former naval officer born into a world of baroque formality and self-reliance. Such arguments used to cut little ice with the wider British public.
But lots of people make allowances for very old people, who, it is commonly understood, enjoy considerable licence when it comes to rudeness and appearing a little less than cuddly, and probably deserve respect for the things they have achieved in a long life. In other words, the duke's age has caught up with who he is, and the public is finally prepared to extend him the licence they refused him in the past.
But something bigger is afoot, and has been visible since the royal wedding of Prince William and Kate Middleton last year. At a time of austerity and uncertainty about British greatness, coverage of the royal family becomes ever more fawning. To outsiders, that might seem illogical. Amid spending cuts and after scandals involving parliamentary expenses, the British are in a mood of hair-trigger egalitarian rage, ready to explode over any report of high-living by public officials or extravagance by bailed-out bankers. Yet the tabloids, cannily sniffing the mood of the crowd, sense that this is a moment to hose down the wealthy, palace-dwelling hereditary monarchy with treacle.
I think there is an overlap between the revival of affection for the monarchy and the current, slightly mawkish tide of British admiration for the armed forces, and all who are connected with them. The same words keep coming up, to do with pride and duty and sacrifice. The royal family, being no fools, have long understood this connection, with endless princes heading into the forces to serve their country. Just now, that appears to be a potent combination. Here, for instance, is the Daily Mail comparing the Duke of Edinburgh to a choir of military wives who have just topped the Christmas music charts with a charity recording:
Like the army wives whose touching record has just topped the charts, Philip embodies hard work, self-sacrifice, and traditional family values. At 90, his fortitude is an inspiration to us all.
Thankfully he seems to be well on the road to recovery and the Mail – in common with every patriotic Briton – wishes him a speedy return to his own home, his own family and his own bed.
More cynically, after last year's royal wedding, I suspect the newspapers are sighingly grateful to have a new Diana-figure to photograph and slap on the front page every other day, as they struggle to halt sliding sales. Indeed, it occurs to me that the press is doubly in luck this time.
The original Princess Diana offered two consecutive bonanzas for the press. First there was Diana the royal wife, who could be photographed wearing smart outfits on state visits and comforting hospital patients. Then, later, came celebrity-Diana, who could be hounded around town by paparazzi in her jeans and sunglasses, snapped at the gym, spied on in restaurants and hunted down on dates with eligible men.
The British press now have both Dianas available at the same time. There is the Duchess of Cambridge (Kate Middleton's new identity as a dignified-yet-caring royal wife). Then there is her sister Pippa Middleton, who occupies the unenviable role endured by the celebrity Diana of later years, as a sort of hybrid prey/enabler of a thousand photo ambushes. Miss Middleton is considered newsworthy while out ice-skating, emerging from restaurants or out shopping, with no further explanation required. Each new picture allows columnists to discuss her bottom, her weight and general physique with all the dispassion of a seven-year-old bending a Barbie doll this way and that. Two Dianas for the price of one. No wonder the tabloids are in a good mood.
And if either Middleton sister cracks under the strain, well, crazy sells papers too. Who can forget the tabloid delight when the late princess Diana, maddened by constant intrusion, began what paparazzi referred to as her "Loon attacks". In 1993, the Daily Mirror was so amused that it commissioned a cartoon after Princess Diana turned on photographers who had ambushed her outside a cinema with her two young sons, shouting "You make my life hell". The cartoon drew the princess as a Jurassic Park dinosaur, stalking two photographers. The caption had her sons chortling: "Wow, mum, you're better than the movie."
It is possible that Britain, which lapped this horrible stuff up at the time, is simply a chastened, less prurient place now, and is slightly more willing to make allowances for the human frailties of royals like the Duke of Edinburgh. Somehow I doubt it.
Different explanations are needed for the renewed deference being shown to the monarchy. I attempt a stab at a couple of tentative theories in this week's print column.
The column looks ahead to the summer of 2012, which the government hopes will be dominated by two big celebrations which will lift the public mood and showcase British greatness. One is the Diamond Jubilee to mark Elizabeth II's 60 years as queen. The other is the London 2012 Olympics. Ministers have got into the habit of conflating the two events into one long summer of rejoicing, but I suggest that, in fact, the two events are rather different, and carry different mixes of risks and reward for the powers that be.
Paradoxically, I have a hunch that the Diamond Jubilee, a ritual celebration of a hereditary elite, may prove more straightforwardly in tune with the mood of austerity Britain than the London Olympics, a popular festival of sport and celebrity.
Part of that is to do with those patriotic headlines quoted at the start, and the tabloids' apparent sense that the country is in the mood to be told why it is great and has been for a long time.
But I advance an additional argument, to do with austerity grandeur. Because the royal family have accumulated so much capital, in both material and historical terms, it is surprisingly easy for them to adjust to a period of austerity by putting on a good show with relatively little fresh spending. Look at the programme for the Diamond Jubilee celebrations next summer. It is cannily modest stuff: beacons will be lit and public concerts held at Buckingham Palace, a wood will be planted in Leicestershire, communities will be encouraged to gather round and organise shared jubilee lunches and street parties, and the queen will ride down the Thames in a borrowed pleasure cruiser disguised as a royal barge by set designers, with the help of flowers from her gardens.
The Olympics, in contrast, are an unstoppable global juggernaut run by an unaccountable sporting elite who have no need to trim their spending to fit in with a mood of austerity. I smell potential trouble. You can already see it in the endless stories in the press about the miles of closed-off traffic lanes that will criss-cross central London, for the use of Olympic VIPs, and the articles about foreign sporting bureaucrats reserving thousands of rooms in five and four star hotels.
None of these arguments are comprehensive. Nor is this the place for a debate, from first principles, about the merits of a monarchy (let that wait for another day). But the British are in a funny mood. Swelling praise for the royal family seems to be part of that mood. That, in itself, is politically intriguing.
Here is this week's print column:
BRITISH voters are braced for a horrible 2012: the country nearly tops international rankings for economic pessimism. But David Cameron has a cheerier plan—a couple of parties to hold off the gloom. Though his coalition government also expects a tough year, ministers hope that the public mood will be lifted by the Diamond Jubilee marking Queen Elizabeth II’s 60 years on the throne and, a few weeks later, by the London Olympics. Together, these events should dominate the summer.
The festivities should serve a dual purpose, the prime minister wrote in an end-of-year letter to Conservative members of Parliament: they must celebrate what is “already great” about Britain, and show a watching world that the country is open, strong, confident and “moving forward to a better future.”
Amid grumbling from Londoners about the cost and inconvenience of hosting the Olympics, the capital’s mayor, Boris Johnson, has urged people to recall the 1948 “Austerity Olympics”, hosted by a London so pinched by post-war rationing that alarmed French officials sent to Paris for food. In the run-up to the 1948 games, the London press was filled with calls for their cancellation, yet they were a triumph, says the mayor. Add on the Diamond Jubilee in June, and London will enjoy a “summer like no other”, promises Mr Johnson, a Conservative (and something of a rival for Mr Cameron) who is seeking re-election in the spring, weeks before the festivities kick off.
Yet politicians are being glib if they present the 2012 London Olympics and Diamond Jubilee as almost a single event, offering a summer of cheer to hard-pressed voters at home as well as a chance to show off to the world, “putting the great back into Great Britain”, as one minister puts it. The country is in an odd mood. There is no national consensus about what Britishness means. And the summer’s two set-piece events will present quite different accounts of the nation.
The Diamond Jubilee, an historical rarity last seen in 1897, unfashionably celebrates a hereditary elite. Yet, oddly, it is so far proving less contentious than the Olympics, a popular festival of global sport and celebrity.
Start with the question of Britishness. A discussion of the merits of a monarchy, from first principles, must wait for another day. But at a time when the political union of England with Wales, Northern Ireland and especially Scotland is fraying, royal bonds are proving more flexible than sporting ones.
Alex Salmond, the pro-independence first minister of the Scottish devolved government, has embraced the Diamond Jubilee, agreeing to a long weekend of celebrations in June coinciding with festivities south of the border. Mr Salmond—whose Scottish National Party (SNP) secured a majority at Scottish elections in 2011—has already said that an independent Scotland would keep the queen as its monarch, just as she is queen of Canada and Australia. Part of this is intended to reassure his voters, many of whom would probably prefer big new transfers of powers to outright secession, at least for now. Partly, Mr Salmond is making mischief: he recently suggested that Scots enjoy a special, less class-ridden relationship with the royal family, so that there is a “better case” for an English republic than a Scottish one.
In contrast, Mr Salmond’s SNP has used the Olympics to stoke Scottish grievances, disputing the idea that the games are a national event and demanding millions of pounds in “compensation” from the British government, under a formula that links spending levels in England to those elsewhere in the British Isles. Though Britain fields a unified team at each Olympics, the SNP has denounced talk of inviting Scottish players to play for the Team GB football squad at the London games.
It is the same story when it comes to presenting Britain to the world. To borrow Mr Cameron’s formulation, the jubilee will be about celebrating what many Britons feel is “already great” about their country, from its history to its democratic stability, the second world war (in which the queen served) and its flair for ceremony. It will be Britain’s event, to which others will be invited.
The Olympics will show the country in a different light. The games will be the world’s event, at which the British will dream of coming fourth in the medal tables. London will function rather like a global concierge, providing services to a hyper-mobile sporting elite. It is good at this sort of thing—London already provides services to a hyper-mobile financial elite. But, following the credit crunch, there are many in Britain who resent that role.
Gold medals or crown jewels?
Perhaps the greatest irony is that the royal jubilee may have a better chance of navigating the British public’s deep rage at high-level extravagance and abuses of power. The monarchy is hardly an egalitarian’s dream. But it can draw on centuries of historical and material capital to put on a decent show with little fresh outlay. The jubilee promises a distinctly homely grandeur, tailored to austerity Britain. Beacons will be lit, the queen will ride the Thames in a pleasure cruiser disguised as a royal barge with flowers from her gardens, street parties will be encouraged and a wood will be planted in Leicestershire.
The Olympic movement, a juggernaut controlled by an unaccountable sporting elite, is less flexible. The danger signs are in place, with newspapers reporting on the five-star hotel rooms reserved for foreign Olympic bigwigs and the miles of special traffic lanes that will be reserved for Olympic VIPs. Perhaps sporting success will neutralise public resentment, and the country will feel only pride at hosting a splendid games, fuelling new confidence in Britain’s future. But, for now, the Olympic debate revolves around material costs and benefits rather than glory. If you want certain cheer, bet on a celebration of Britain’s past.
Dec 15th 2011, 17:50 by Bagehot
MY PRINT column this week attempts to step back from the noise and chatter in Westminster about the coalition and that David Cameron veto, to ask a simpler question: what does any of this mean for Britain's membership of the club? I am off on leave after this, so blogging will be light. For readers who celebrate Christmas, have an excellent one, and the happiest new year you can manage in the circumstances. 2012 is going to be bumpy.
Here is the column:
THE British government has no intention of walking out of the European Union. But Britain could end up falling out. The recent, testy summit in Brussels, at which David Cameron blocked a new EU treaty after failing to obtain veto powers over future financial regulation, points to ways in which that might happen.
Bagehot’s gloom is not universally shared, it should be conceded. The sophisticated view around Westminster is that Mr Cameron’s decision to say no to a new EU treaty was not such a big deal. This reasoning is buttressed by clever arguments.
Britain, it is said, may have looked isolated after some two dozen countries signed up to the latest half-baked wheeze to save the euro. But isolation is not a worry when you are right. The deal that Mr Cameron blocked—a German scheme to starve the euro zone to health, bolted onto a French plot to marginalise Britain and create a congenial (ie, Gallic) mini-club within the wider union—was a stinker that will do nothing to restore market confidence in the tottering single currency. By preventing such a bundle of bad ideas from being hard-wired into the EU’s treaties, Mr Cameron was doing the rest of Europe a favour, not least because a formal EU treaty would have had to run the gauntlet of Eurosceptic members of Britain’s Parliament, whose blood is up.
Finally, it is murmured, Britain has been semi-detached ever since it declined to join the euro. Other Europeans have always been keen on regulating things and talking about solidarity (ie, spending someone else’s money). Successive British governments have treated Europe as a flawed, overpriced but geographically unavoidable mechanism for eliminating some barriers to competition and trade. Everyone should calm down.
Britain has not been here before
This approach is too languid. British views of Europe may not have changed very much. But the EU is in unprecedented flux. There are scenarios that could see Britain stumbling out of full membership, largely by accident.
The fate of the fiscal pact agreed in Brussels on December 9th remains as clear as mud. The final tally of countries taking part may be lower than the 23 initially announced, as governments struggle to ratify a document that is woefully lacking in detail. But the president of France, Nicolas Sarkozy, has for the moment secured a long-cherished French ambition: an agreement on holding frequent summits of national leaders from an inner core of countries, excluding Britain.
Britain could yet secure a seat at those summits, backed by others (eg, Germany) alarmed by Mr Sarkozy’s boasts about a new, two-speed Europe. If not, the dangers are grave. In Europe, summits of national leaders wield political clout that trumps other checks and balances. If an inner core of leaders “caucus” together and stitch up deals on the single market or financial services, Britain could be left seething with impotent frustration.
Then add a deepening of the crisis in the euro zone. Among some Tories, a euro collapse is seen as a scary event with upsides, among them vindication for those in Britain who said the currency could not work. Those contingency-planning for a break-up are less sanguine. One senior politician describes Treasury studies of the surprisingly big disruption caused to British banks when tiny Iceland’s economy imploded in 2008. Euro-zone paralysis would be incalculably more dangerous, he says.
The diplomatic consequences of a crumbling euro are perilous too. Being proved right wins the British little leverage. In the final stages before a collapse, they could face fresh demands for help, attached to large numbers. Britain is currently refusing to contribute to a planned new bail-out fund for the euro zone, the European Stability Mechanism (ESM). It is also resisting calls to offer billions more pounds to the IMF for euro-zone use. Indeed, Eurosceptic MPs are threatening to hijack a parliamentary vote in early 2012 allowing other governments to create the ESM, to attach a demand for a referendum on Europe.
If the crisis takes another turn for the worse, nasty scenarios are not hard to imagine, involving frightened euro-zone leaders meeting without Britain and agreeing desperate plans that no British government could accept, let alone get through the House of Commons. Some, such as Mr Sarkozy, already barely conceal their desire to marginalise Britain, vowing to use new European structures to pursue more regulation, in opposition to those only interested in a single market. Others, friendlier to Britain, nonetheless believe Mr Cameron has behaved badly.
Even Britain’s favoured solution to the euro zone’s woes—pushing for Europe to become more competitive—is widely seen as a selfish alternative to solidarity rather than as a bid to help. Mr Cameron denies he sought a special British opt-out at the Brussels summit, saying he wanted to shield Europe’s entire financial sector from harmful regulation. Other leaders suspect darker motives. Mr Sarkozy, who is facing a tough re-election fight next spring, claimed that Mr Cameron wanted to make the City of London into something like the Cayman Islands. A frequent British ally, the Dutch prime minister Mark Rutte, grumbled about Britain seeking an “unacceptable” competitive advantage.
Combine such forces and it is possible to imagine Mr Cameron’s government trapped, unwillingly, between an impossible piece of hostile Euro-legislation, domestic British anger and unstoppable pressure for a referendum that cannot be won.
Whatever Westminster sophisticates murmur, the politics of this crisis are moving into new territory. Britain’s relations with Europe are now inseparable from how, and whether, the euro survives. That is the real lesson of the fractious Brussels summit. What happens next may test not just the government’s powers of diplomacy, but of imagination itself.
Dec 12th 2011, 19:28 by Bagehot
NOBODY mentioned the Titanic, at least not when I was listening from the press gallery of the House of Commons. Your blogger headed to Parliament to hear David Cameron explain to MPs his decision to reject proposed changes to the European Union treaties, forcing the countries that share the euro to aim, instead, for a pact among themselves outside the EU's main structures.
It was all rather decorous. There was none of the bombast of the weekend's press coverage, in which Conservative MPs and conservative commentators vied to praise Mr Cameron for pulling Britain clear from the looming collapse of the euro and, perhaps, the entire European Union project. Specifically, nobody compared the euro to a doomed ocean liner, a train heading at speed for the buffers, or a burning building: all of them favoured images over the weekend.
There were no references to the second world war. Nobody was called a traitor. The whips had been out in force, instructing Tory MPs not to gloat or launch attacks on their Liberal Democrat coalition partners, whose pain was made vocal (rather late in the day) when the deputy prime minister Nick Clegg said on Sunday that he feared that Britain might end up "isolated and marginalised" in the EU.
Mr Cameron was in sober form. He seemed to many of us hacks in the press gallery to signal that Britain might yet give ground and allow the new euro-plus pact of 23 (and soon 24 or 25) countries to use at least some of the institutions of the full EU, in contrast with the early insistence of his chancellor of the exchequer, George Osborne, that the main point of Mr Cameron's stand on Thursday night had been to veto the use of the "full panoply" of institutions by the new club.
The prime minister repeated that it was in Britain's interests for the euro zone to be rescued, and conceded that it would be harder for the new club to do its work if it had to invent new, parallel institutions: a line rather similar to that taken by Mr Clegg (who was absent from the chamber, prompting cries of "Where's Clegg?" and "Où est Clegg?" from Labour MPs).
Mr Cameron told the House:
The EU Treaty is the treaty of those outside the euro as much as those inside.
Creating a new euro-zone treaty within the existing EU treaty without proper safeguards would have changed the EU profoundly for us too.
It’s not just that it would have meant a whole new bureaucracy, with rules and competences for the euro-zone countries being incorporated directly into the EU treaty…
…it would have changed the nature of the EU—strengthening the euro zone without balancing measures to strengthen the single market.
Of course an intergovernmental arrangement is not without risks but we did not want to see that imbalance hard-wired into the treaty.
And to those who believe this wasn’t a real risk, France and Germany said in their letter last week that the euro zone should work on single-market issues like financial regulation and competitiveness.
That is why we required safeguards and I make no apologies for it.
Of course I wish those safeguards had been accepted.
But frankly I have to tell the House the choice was a treaty without proper safeguards or no treaty.
And the right answer was no treaty.
It was not an easy thing to do but it was the right thing to do.
As a result, euro-zone countries and others are now making separate arrangements for co-ordinating their budgets and making sure there is more surveillance of what they do and the fiscal integration they need to solve the problems in the euro zone.
They recognise this approach will be less attractive, more complex and more difficult to enforce and they would prefer to incorporate the new treaty into the EU treaties in the future.
Our position remains the same.
He then indicated where Britain's position may, in fact, be shifting, saying:
The decision of the new euro-zone-led arrangement is a discussion that is just beginning.
We want the new treaty to work in stabilising the euro and putting it on a firm foundation.
And I understand why they would want to use the institutions.
But this is new territory and does raise important issues which we will need to explore with the euro-plus countries.
So in the months to come we will be vigorously engaged in the debate about how institutions built for 27 should continue to operate fairly for all member states, and in particular for Britain.
The UK is very supportive of the role the institutions—and the commission in particular—play in safeguarding the single market.
So we will look constructively at any proposals with an open mind.
What does an open mind mean? Well, the briefing is that for Britain to stop the new club of 23 from using the European Commission, the European Council or other institutions in their work would not be that simple, in practice. It would mean taking the others to court, which could take years, and (according to government legal advice), Britain might well lose. So I sense that Britain is preparing to give some ground. What might we ask for in return? I asked a couple of well-placed figures whether Britain might ask to attend the planned monthly summits of heads of state and government from the euro-plus pact countries. Too early to say, I was told.
But the line is definitely shifting. At the same time, senior figures are privately far from convinced that the countries of the euro zone are doing enough, fast enough, to save their currency. This thing might not survive, one normally calm and low-key government source said to me when we bumped into each other in Whitehall. The new club, I asked? No, he replied, the euro.
Does that mean the government thinks the single currency is the Titanic, just like the gleeful backbenchers and columnists who were so happy this weekend? I hope not.
I think that the Titanic is a misleading analogy. Once the Titanic sank beneath the icy waves, it effectively ceased to exist. If the euro blows up, the consequences will be horrible and long-lasting.
I have a new analogy to propose. I think the British government should think of the euro as the Chernobyl nuclear complex. They think it was badly designed, and thus was always a bad idea. They are very glad not to have it on British soil. But they also understand Britain's interest in helping to fix it. Or if that is impossible, undertaking heroic efforts to contain and limit the continent-wide fallout.
(Picture credit: AFP)
Dec 11th 2011, 0:44 by Bagehot
COULD David Cameron have done anything different at Thursday night's EU summit, when he refused to sign Britain up to new EU treaty rules overseeing taxation and spending in the euro zone, after failing to secure safeguards to shift key areas of financial regulation to vote by unanimity?
I was asked this question on the BBC today, and I did not come up with a good answer. During the interview, I had already set out the view that I still hold: that those in Britain cheering the Prime Minister for wielding a veto are missing the bigger point, namely that a true veto stops others from doing something you dislike, whereas Mr Cameron's decision to walk away from the table did not stop the majority of other EU members from agreeing to push ahead without him.
I mentioned the accusations from some other EU players that Mr Cameron negotiated and prepared his position clumsily, as set out in my last post quoting the scathing analysis of one (well-placed but avowedly partial) source.
But I also wanted to be fair to Britain's position. I think that a big part of the problem of Britain's relationship with Europe is that we genuinely are different. To simplify, as I said on the BBC this morning, I think that to some extent what happened on Thursday night was the logical end-point of a relationship based on distrust. Successive British governments have believed that on balance membership of the EU is in their interests (or is worse than non-membership). But because we are different (and because we take a common law as opposed to Napoleonic view of regulation, favouring a world in which everything is allowed unless it is expressly prohibited), we seek at every turn to pin down every detail of new rules or schemes being proposed, in case some of it turns out to be harmful. What was on the table on Thursday night was not clear in all its details when it came to the implications for the single market, so it was genuinely a tricky document for Mr Cameron. That being so, you can see why he wanted to secure some safeguards.
Since writing my last post, I have spoken to British officials who advance a number of arguments in defence of what Mr Cameron did. The request for unanimity decision-mkaing for the City was really pretty modest, one says. It was not sprung on other EU governments as a surprise. George Osborne, the chancellor of the exchequer, had briefed colleagues extensively, for instance. What is more, France and Germany negotiated with real aggression, it is said: it was not Britain that was being unreasonable.
Mr Osborne was interviewed on the Radio 4 Today programme. He firmly dismissed talk of British isolation, saying that the country had "gained" by walking away. He told the BBC:
The integration of the eurozone, which we think is necessary to make the single currency work, is not taking place within the full panoply of the European treaties, with the full deployment of the European institutions enforcing those treaties. And because we were unable to get British safeguards that might have allowed that to happen, we're not allowing it to happen...If we had signed this treaty - if David Cameron had broken his word to parliament and the public, gone there and caved in without getting the safeguards he was looking for - then we would have found the full force of the European treaties, the European Court, the European Commission, all these institutions enforcing those treaties, using that opportunity to undermine Britain's interests, undermine the single market
Mr Osborne added that Britain remained a full member of the EU of 27 countries, noting that he, along with government colleagues, would still be attending monthly meetings of ministers from across the club.
Read Mr Osborne's argument closely, and he is candidly describing a Europe that includes hostile forces willing to undermine Britain's interests. He is further suggesting that Mr Cameron's decision to walk away from a formal EU treaty has denied those hostile forces the ability to use the "full panoply" of EU institutions against us.
Now, I am not going to mount some blanket defence of the other EU countries and say there are no hostile forces at work out there. It is clear that France, for example, takes a radically different view of the City of London and whether Britain has any right to seek to secure it from intrusive euro-rules. The veteran Brussels correspondent for Libération, Jean Quatremer, describes on his blog, for instance, how:
As Nicolas Sarkozy told a group of journalists [after the summit meeting], Mr Cameron wanted "to create an off-shore zone in the heart of Europe" by securing an exemption from financial market regulation, "when at the same time he insists that the single market's integrity must be protected."
That is a deliberate distortion of Mr Cameron's actual request, which in at least one area (the regulation of capital cushions for banks) sought to secure the right for Britain to impose tougher standards than those being proposed at the EU level.
But, here is the problem. To believe that Mr Cameron has done something to protect British interests by walking away from the table, you have to believe that Britain can continue to use its membership of the full EU to keep a firm grip on the new euro-plus club (membership at 23 so far, and likely to rise). On paper, legally, that belief works. It is certainly tricky to see the legal route that would allow a non-EU club within the club to start using the European Commission, European Parliament, European Court of Justice as regulatory battering rams against Fortress Britain.
Mr Osborne is also right that he will be invited to monthly gatherings of EU finance ministers, despite what happened on Thursday. But if five years reporting from Brussels taught me anything, it is that in Europe, (a) politics trumps law, and (b) in Europe, supreme political power flows downwards from summits of heads of state and government. Other bits of the machine have influence, but for the trickiest and most painful questions, only "heads" as they are known in diplo-shorthand, will do.
There is a grave crisis under way in the euro zone, which lots of European governments feel as an existential threat. That makes me doubt that any magic piece of paper exists that a single, dissenting country can brandish to stop 23 (or 24, or 25) threatened, panicking governments from using the tools they feel they need to save themselves. If the crisis deepens, and the euro-plus countries start to feel that they are being made to defend themselves with one hand tied behind their backs, they will not tolerate a legalistic British veto for very long. At that point, expect to hear lots of European politicians calling for the euro-plus 23 or 24 or 25 simply to become the new European club. (Indeed, reports Bruno Waterfield in the Telegraph, it has already started among low and mid-ranking Euro-politicians).
Can a legal way be found to do that? I am not a lawyer, but I do note that one of Mr Sarkozy's greatest boasts after Thursday is that he has secured agreement for heads of state and government from the euro-plus pact to meet every month for as long as the euro-zone crisis lasts. Britain will not be invited. And that will be an astonishing source of political power, I would argue, for just those hostile forces identified by Mr Osborne.
A final thought. The MPs, commentators and columnists cheering most loudly this weekend are Eurosceptics who do not believe full EU membership can work for this country. Many of them want to leave and negotiate a Swiss or Norwegian-style trading association. In other words, although they are hymning their praise for the government and Mr Cameron, they do not actually agree with the government's analysis as set out by Mr Osborne.
They do not believe, as the chancellor tells the BBC, that integration in the euro zone is needed to make the single currency work, and they do not believe that Britain's interests are going to be marvellously defended by British ministers going to Brussels for monthly meetings of the various EU councils of ministers. They think the euro is doomed, integration cannot and should not work. They hope that Britain is detaching itself from the folly that is the EU, and are already arguing that Mr Cameron must soon seek a radical renegotiation of relations, tested by a referendum of the British people.
Avowed "better-off-out" Conservatives are a (substantial) minority among Tory MPs. Most Conservative MPs would not want to leave the EU outright tomorrow, but want to try for the return of powers from Brussels. Yet it is that minority that is cheering most loudly right now, and which is asserting with great confidence that it was their pressure in recent weeks that made Mr Cameron realise that he could not risk presenting a new EU treaty to the House of Commons without huge concessions.
As Charles Moore writes in the Telegraph:
Several factors gradually bore in upon Mr Cameron as the day approached. He learnt from his mishandling of the Commons vote on an EU referendum last month. Literally never have so many Eurosceptic Tories filled the lobbies against their party line. This was followed up by serious, though discreet, ministerial protest, most notably from Iain Duncan Smith and the Northern Ireland Secretary, Owen Paterson. The Prime Minister realised it would be impossible to return to Parliament promising his party a new treaty that they distrusted while refusing them the referendum that they demand.
Then he worked out that the Liberal Democrats, however fervent their europhilia, were not going to kill the Coalition for a treaty which was expressly being advanced by President Sarkozy (in re-election mode) as a means of making London pay for the euro.
Dreadfully late in the day – as is so often the case with Mr Cameron and his “government by essay crisis” – everything became clear to his cool mind. He could stave off a referendum, hold together his Coalition, win over his party and prevent further encroachments on British commercial freedom by the use of that one little, previously unsayable word, “No”.
At the top of this blog posting I said I felt I had not answered the BBC's question well, when they asked me what Mr Cameron had done differently on Thursday night. On the radio, I talked about how he could perhaps have prepared his negotiating position with more skill.
I think I should have said, on reflection, that his problems date back six years, and left him with very little room for manoeuvre long before Thursday night. Ever since his campaign to become Conservative leader, Mr Cameron has spent years saying he believes in the benefits of full EU membership while offering concessions and pledges to colleagues who not believe in full EU membership. That sort of political contortionism is not sustainable forever.
Perhaps, as one official suggested to me this weekend, France set a trap for Britain on Thursday. If so, I have a nasty feeling that by the time Mr Cameron walked into the room, he had left himself little choice but to walk into that trap, eyes open.
Dec 9th 2011, 18:09 by Bagehot
CLAIMS and counter-claims are flying as British officials and European diplomats squabble over who, exactly, was being unreasonable last night when David Cameron refused to sign up to a new European Union treaty with strict new curbs on taxation and spending within the euro zone.
There are reliable signs of heavy Downing Street briefing over at the Daily Telegraph, where the well-connected Ben Brogan is reporting that it was all the fault of the French, who crammed the text on the summit table so full of impossible demands that the British had no choice but to walk away. He writes:
The events of the past 12 hours have exposed a truth that many chose to ignore, namely that in its relentless pursuit of its national interest, France's strategic objective has been to drive the UK to the margins – if not out of the EU – and to destroy the City. The French narrative of the crisis is that it is all an Anglo-Saxon creation, and we must be punished for it. The failings of the euro so obvious to us are not recognised by the French. The British view is that packing the treaty proposals full of changes that Britain could never conceivably accept was a ploy to force us into a veto, and so into the departure lounge. Or here's another way of putting from inside the machine: "The French are out to screw us," one source tells me. "Despite all the jollity, the fact is that Sarko doesn't gives a s*** about us. It's all bull***. They have their view that the Anglo-Saxon model is a disaster and was responsible for the crisis."
But was the problem really concrete proposals in the treaty that was on the table last night? As it happens, there are good reasons to worry that the whole plan being cooked up to save the euro may not work, and may cause some agonising clashes between monetary stability and democracy.
For instance, to take a brief tangent, it occurs to me that if the new euro-plus fiscal union adopts its planned restrictions on taxation and spending, you could easily imagine a future general election in which one party's manifesto, full of Keynesian stimulus policies or tax-cuts, is run through a think-tank's calculators and discovered to be euro-incompatible, while a rival party's plan fits the criteria handed down from Brussels. At which point, it will surely be argued, it is pointless to vote for the first party, because the fiscal union will stop them from doing what they promise. That feels politically very dodgy to me.
But back to the summit of last night and today. Was the problem for Mr Cameron really that the French had loaded the table with proposals he could not accept?
The reporting from Brussels is rather different: that Britain was worried about the threat of future European legislation, especially in the field of finance, and wanted "safeguards".
What does that actually mean? The Telegraph's Brussels correspondent Bruno Waterfield was first with the scoop of the actual draft proposal presented by Britain and rejected by the others.
The Financial Times had a good, detailed explanation of the underlying British concerns, explaining:
Mr Cameron insisted that any agreement to tighten fiscal discipline in the 17-member eurozone should not distort the single market covering all 27 member states. He also wants a separate protocol to protect the City of London from excessive EU regulation, including an agreement to let Britain enforce bank capital requirements that are higher than the proposed European maximum.
Other demands include an agreement that the new European Banking Authority should remain in London and protection from EU regulation of London-based US financial institutions that do not trade with the rest of Europe.
Mr Cameron also wants a written guarantee – making explicit what is already the case – that unanimity should apply to any proposed “user charges” for financial groups, including any variant of the controversial European financial transactions tax.
All useful. But being a bear of limited brain, I found myself still wondering what—taking a step back—really happened last night, in the simplest political terms.
In the nick of time, a well-placed source (a senior official who is broadly neutral towards the British government in this fight) has given me his reading of what happened, and where it all turned sour for Mr Cameron. It rings true to me.
Mr Cameron had two problems, as my source sees it. The first was the nature of his demand, and how it was made. In essence, the British did not ask for an "emergency brake" clause or opt-out for financial regulation.
What they asked for was a protocol imposing decision-making by unanimity on a number of areas of regulation currently decided by majority voting. (If you want to be really technical, the choice is voting by unanimity or the special Qualified Majority Voting (QMV) used in the EU, which is a sort of super-majority system taking into account a certain number of countries and also their populations).
As my source puts it, this amounted to a big winding-back of the clock for many EU leaders, setting a "horrendous precedent" that could unravel the single market. As they see it, common rules for the common market have been adopted (with few exceptions, such as tax) by QMV ever since the Single European Act approved by Margaret Thatcher in 1986.
The much-discussed Financial Transactions Tax issue already requires unanimity and therefore could never be imposed on the City of London without Britain's agreement. What is more, as was pointed out in Brussels with some vehemence, when it comes to financial services there have hardly ever been any cases of Britain being outvoted in the adoption of such legislation.
In simple terms, that means that Britain's request to move to unanimity was taken as a huge ask that had nothing to do with the subject at hand (saving the euro) or was a sign of bad faith (because it is driven by mistrust regarding future legislation). In my source's view, Britain also tabled its request very late in the day, simply sending a whole draft protocol to the European Council legal service the day before the meeting without talking the ideas through with key allies and national capitals.
Then, says my source, came the second crunch moment for Mr Cameron. Once the 27 EU leaders gathered in the summit room, a sense rapidly emerged that a lot of countries did not share Germany's enthusiasm for full-blown treaty change, a process which is slow and fraught with risks (the markets might not wait that long, Ireland might have to hold a referendum, Britain would have to get a vote through the House of Commons and so on).
By a certain point on Thursday night, I am told, a majority of countries were growing interested in a quick and dirty legal fix, suggested by the president of the European Council, Herman Van Rompuy. The fix was dreamed up by lawyers working for Mr Van Rompuy. They said that a legal device, known as "Protocol 12", would allow the 27 leaders of the EU to agree most of the new rules and mechanisms for fiscal union in the euro zone by a simple, unanimous decision among themselves.
Suddenly, Germany looked isolated. Mr Van Rompuy, a former Belgian prime minister elected by EU leaders to chair their summits, decided to see if he could sweeten the deal for the wavering EU leaders, and asked Mr Cameron if he would consider dropping some of his requests. This made sense to some leaders in the room. Mr Cameron's demands were already more than many of his colleagues would tolerate, and Britain had already said publicly it would tailor its demands to the scale of the treaty change on the table. Mr Cameron said he would not lower his ambitions, and that his demands would be the same in the event of Protocol 12 being used, or a full-blown EU treaty.
A hostile view of this is that Mr Cameron overplayed his hand. In this version of events, the British prime minister thought the mood of the room was running towards Protocol 12, and because Protocol 12 is decided by unanimity, he thought he had the whip hand.
Instead, my source tells me, the room turned on Mr Cameron. This, I am told, "was the point at which the Protocol 12 route, which requires unanimity, was effectively closed down and one country after another accepted a new treaty at 17+."
Did Mr Cameron miscalculate? Did he want to end up with a treaty being crafted at almost 26, with Britain on the outside? My source is certain that was not Mr Cameron's goal, and my source is not alone in this thinking.
It is now almost inevitable that separate structures be set up, with Britain on the outside, it seems. Talk in London of preventing the "Eurozone-plus" from using the Court of Justice is also a mistake, I am told. Article 273 of the treaty allows just this.
You can choose to believe this account or not. It comes from a single source, who is well-placed but clearly viewing this from a particular perspective.
Time will tell. But what a mess.
Dec 9th 2011, 10:29 by Bagehot
BRITAIN did not walk out of the EU last night. But let there be no doubt about it: we have started falling out.
David Cameron finally did what British prime ministers have threatened in Europe so many times, and used his veto last night in Brussels, my BBC radio told me at dawn this morning. This is an astonishingly dramatic moment, the BBC added: the British prime minister has refused to sign up to a new EU treaty involving all 27 members, because the rest, led by France and Germany, would not grant him the safeguards he sought giving Britain powers to block unwelcome regulation of the City of London.
As a result of Mr Cameron's veto, the BBC said, 23 other countries have now agreed to seek their own fiscal pact involving deep integration around the tax and spending powers of member governments. Standing on its rights as a member of the current EU treaties, Britain argues that such a pact within a union should not be allowed to use the institutions that legally belong to the 27, such as the European Commission, the European Council or the European Court of Justice. At one point, an EU diplomat informed me in an overnight email, Mr Cameron could be heard arguing with his fellow-leaders that when members of the new club of 23 hold their planned monthly summits, they should not be allowed to use the buildings and meeting rooms of the European Council.
The BBC's exceedingly well-informed political editor Nick Robinson predicts this will lead to a long series of legal battles and rows with other EU countries, and to calls from gleeful British Eurosceptics to press on and seek a wholesale renegotiation of British relations with Europe (which they will then want put to a referendum, threatening to split the Conservative-Liberal Democrat coalition).
That stuff about drama and rows is clearly right. But I fear I do not see where Mr Cameron used his veto.
In my version of the English language, when one member of a club uses his veto, he blocks something from happening. Mr Cameron did not stop France, Germany and the other 15 members of the euro zone from going ahead with what they are proposing. He asked for safeguards for financial services and—as had been well trailed in advance—France and Germany said no. That's not wielding a veto, that's called losing.
Now, the EU is proposing quite a range of damaging and stupid new rules for financial markets. Anthony Browne, a chief policy aide to the Mayor of London (and key Cameron rival) Boris Johnson has a point when he writes this morning on ConservativeHome that:
Faced with a choice between an EU treaty to save the euro and retaining control of regulation of the City, President Sarkozy decided to retain regulation of the City
But nobody can say they were surprised. The French government has been saying for weeks that it would not allow Britain to have a sweeping opt-out from financial services rules. Only last week, I quoted a pair of French government sources in my column, writing:
France sees a strong Europe as a lever of influence. Disliking the enlarged EU of 27 countries (in which its clout is diluted), France wants to use the euro crisis to deepen integration around a core of countries that use the euro, under the political control of a handful of big national leaders. To comfort French voters, Mr Sarkozy has started talking up euro-zone integration as a shield against globalisation and bullying by financial markets.
Today’s unprecedentedly Eurosceptic Conservative Party sees a strong Europe mostly as a threat to Britain’s global leverage. Mr Cameron says he supports deeper integration within the euro zone, as long as Britain does not have to pay, loses no sovereignty and yet is not marginalised. That is not enough for Tory MPs. They want the prime minister to use changes in the EU’s architecture to secure concessions, such as opt-outs from European employment law or EU rules that harm the City of London.
French sources call it “totally unacceptable” to allow British banks to set up in deregulated competition just across the Channel. Britain wants rights of oversight over the euro zone, it is said in Paris: well, the euro zone needs oversight over the City of London. If Britain seeks to “profit” from the crisis, then rule changes can be agreed by countries that use the euro, excluding Britain
And a very big part of what happened last night was a reflection of Mr Cameron's weakness within his own party, following a rebellion over a Europe vote that saw 81 Tory MPs ignore a strict, three-line whip. What happened last night, in addition to a fight to protect the City of London, is that Mr Cameron failed to secure a deal that he felt able to sell to his deeply Eurosceptic party (with two cabinet ministers demanding a referendum on any new treaty in the last few days, and scores of MPs ready to rebel on any EU bill put through the House of Commons).
It is worth being clear about this. Mr Cameron says he refused to sign up because he was defending British national interests in the long-term. In the immediate term, he took the decision to reject a new EU treaty because he was not sure he could get it through the House of Commons.
Having failed, he walked away, empty-handed. Just three other countries walked with him—Hungary, Sweden and the Czech Republic—and one or all of them may yet end up joining the new pact. We are not very far away from a final division of the club with 26 countries on one side, and one on the other.
This moment was both predictable and predicted. Everything dates back to a first meeting between the newly-elected David Cameron and Angela Merkel in Berlin in May 2010. By chance, in my previous role as Charlemagne, I was in the chancellery that day as one of a small group of Brussels correspondents invited for briefings from the German government. Mrs Merkel badly wanted Britain to stay on the inside track of the EU, we learned, fearing that she would find herself alone in the room with France and the Club Med countries. She wanted Britain and others for balance, and was anxious not to push away allies such as Poland who in theory plan to join the euro one day and are desperate to avoid being in an outer core.
Thus Mrs Merkel wanted to push ahead with new treaties to save the euro at the level of all 27 countries. I stayed on to watch Mr Cameron's meeting and joint press conference, and heard the British prime minister explain that he wished the euro well, but could not commit Britain to any involvement in deeper integration. I wrote this:
Mr Sarkozy dreams of building a new power structure round the 16 euro-zone countries. But Mrs Merkel wants economic policy to be decided by all 27 EU members, precisely because she likes to balance “Club Med” members of the euro zone with more liberal countries, including Britain, Sweden, Denmark, the Czech Republic and Poland. Yet David Cameron, the British prime minister, is adamant that deeper economic co-ordination in Europe must affect only the 16. That may be savvy British politics, but it risks pushing Mrs Merkel into France’s arms.
A year and a half later, at some time around 4am last night in Brussels, Mr Cameron pushed Mrs Merkel into the arms of the French. She went along with this, and this was predictable too. In November I wrote a column from Berlin (sorry, last quotation from myself), setting out the German view:
there is frustration in Berlin at what are seen as British double-standards. Mr Cameron tells euro-zone members to do more to save their currency. Yet Britain does not offer to help and demands to be consulted on big decisions, for example on bank recapitalisation. In Brussels Mr Cameron tells the EU to beware of breaking up the single market, and stoutly defends free-trade rules that apply to all. Yet back in London, ministers talk of special opt-outs giving British business low-cost, deregulated membership of the common market.In Berlin the belief is that rewriting single-market rules would lead to many countries demanding more protections—the opposite of what Britain wants. Belgium, for instance, might push for more workers’ rights. Facing a tough re-election fight, Mr Sarkozy last week declared that Europe should not be a “dupe” when it came to global trade, and proposed EU import taxes to help pay for European welfare systems.
Germany’s priority is rules establishing unprecedented oversight of euro-zone economies. If Britain asks too high a price for its consent, Germany will reluctantly agree to a new treaty outside the EU system. This, it is expected, would involve more than 17 countries but fewer than 27. Britain would lose its veto
Berlin offered one more, very clear message: that British Eurosceptics were wrong to declare that Britain could become the leader of the 10 countries that do not use the euro, the ten "outs". There is no club of outs, I was told, and Mr Cameron had a bruising taste of this reality at an October summit when Mr Sarkozy angrily told some of the countries outside the euro that they had no interest in siding with Britain.
What happens now? Well, British Conservative Eurosceptics divide into two broad camps. A more moderate camp have convinced themselves that EU membership is blocking the sweeping supply side reforms that they believe would propel Britain to renewed growth. They think that if Mr Cameron can only shed the influence of hand-wringing Euro-Quislings in the Foreign Office and the Liberal Democrat party, he can play hardball and renegotiate a new, low-cost, low-regulation free-rider membership of the single market.
This moderate camp is guilty, mostly, of excessive optimism.
For a fine summary of this position, look at this week's Spectator magazine, and its main editorial, headlined: "Leadership, please."
Published on the summit eve, the leader says:
British Europhiles have long scorned the concept of a 'two-speed Europe', but that is, by default, what is likely to emerge from the mess. We will have a first tier bound by fiscal as well as monetary union, smaller than the current eurozone, and second tier which will be increasingly divorced from the Franco-German power axis. Ideally, the second tier should impose minimal regulations and resemble the free trade area we signed up to in 1975.
David Cameron is losing an opportunity to assert himself as leader of a wider European alliance. It could be an appealing place: promoting the free movement of goods, people and capital, but with each country retaining sovereignty and the power to set its taxes, prepare its budgets and retain a veto over rules which will be harmful to its national interest.
The Prime Minister is in a position of great strength, if only he would realise it. He is in the position that John Major was in the early 1990s, having lost a disastrous gamble to enter the Exchange Rate Mechanism (another bad idea which this magazine was alone in opposing). Then, it was all too easy to portray Britain as isolated in Europe. Now, there are already ten EU nations outside the eurozone who will play no part in any fiscal union. It is a constituency begging for direction—if only David Cameron would seize his opportunity
This fantasy politics lasted all of 12 hours.
The other Eurosceptic camp are essentially pessimists. A big dose of their pessimism about the flawed initial structures of the single currency has been borne out by events: to have a grown-up debate, this needs admitting. But they are much too gloomy about the single market, which they believe is not worth the cost of Britain's EU membership. They are much too sanguine, I would add, about the costs of a break-up of the euro (one Tory MP yesterday called for the disorderly break-up of the euro, while John Redwood, a darling of the right and former cabinet minister, today urges an orderly break-up of the currency as soon as possible). This camp thinks that British influence in the EU of 27 is not worth a candle. One red-faced misanthrope, Edward Leigh, yesterday told Mr Cameron not to come back from Brussels waving a piece of paper like Neville Chamberlain. For such Tory MPs, it is always 1938.
They would like Britain, essentially, to be Switzerland with nuclear weapons. I think Britain is bigger, and better than that.
Nor do I think we would be granted the sort of Swiss deal that British Tories yearn for. Switzerland is allowed access to the single market for relatively low cost because it is small. Because Switzerland is small, its absence from the single market table does not fundamentally alter the nature of that market. A walk-out by Britain, the largest free-market minded power in Europe, would change the nature of the single market fundamentally.
I also think that Switzerland's deal with the EU is not as good as British Eurosceptics think. It is built around accepting large chunks of EU regulation without any say in order to protect Swiss bank secrecy.
Oh yes, the banks. The City of London is very important, and the EU has some bad ideas for regulating it. But I find it hard to cheer the idea that Mr Cameron took an extraordinarily big decision last night about our relations with Europe because he was so convinced he could not win arguments in Brussels about those regulations.
A final thought. If we do end up leaving the EU for the sake of the City of London (a big if) it would be ironic if some of those same banks and hedge funds then turned around and announced they were leaving Britain anyway because euro-zone rules made it impossible to work in London, and so they were off to a combination of Paris, Frankfurt, Zug and Singapore. So sorry old boy, nothing personal.
PS for analysis of the wider euro-zone deal reached last night, which does not look very impressive, my Charlemagne colleague was up all night in Brussels and has posted here.
Dec 8th 2011, 18:33 by Bagehot
BEFORE a fresh tidal wave of Euro-news breaks over us all, this week's print column looks at religion (and specifically the Anglican faith) in austerity Britain. The Church of England looks suprisingly central to the national debate just now, with bishops making front page news by criticising government spending cuts and protestors camped out on the steps of St Paul's Cathedral. But in reality, I suggest, this moment of national crisis poses a tough test for the established church, whose position is weaker than it looks. Here's the column:
CONSIDERING that Britain is a deeply secular country, there is a lot of God about this Christmas. Austerity is a part of the explanation. With the core cultural activity of modern Britain—shopping for stuff—losing its lustre, there are hints of a nation groping for something more profound.
For millions, austerity Christmas will include a dose of carols. The trend has been noticeable for a couple of years. The great cathedrals expect to be packed on Christmas Eve. Charity services, family services, carols by candlelight and sing-along concerts abound. A London church, St Martin-in-the-Fields, is offering “carols for shoppers”, while across town the grand organ of the Royal Albert Hall, a 9,997-pipe monster, will pound through some two dozen carol concerts in December.
Anglican voices are prominent in less cosy contexts, too. On December 6th the Archbishop of Canterbury, Rowan Williams, made front-page news with a commentary on the riots that gripped English towns last August. Too many young people feel they have nothing to lose, the archbishop argued, decrying consumerism and government cuts to youth services. A fortnight earlier, 18 Anglican bishops wrote a joint letter condemning plans for a per-household benefits cap (intended to ensure that welfare recipients do no better than the average working family). This risked being “profoundly unjust” to poor families with children, said the bishops.
The Anglican church has become rather proprietorial about anti-finance protesters camped in the City of London outside St Paul’s Cathedral, after a muddled initial response that saw two senior clergymen resign. Yes, the protesters’ demands are vague, but that just shows that the Church of England is used as a place to air society’s “unspoken anxieties”, suggested Archbishop Williams last month. The Bishop of London has organised meetings between Occupy London protesters and the chief financial regulator, Hector Sants. On a homelier note, a priest reports that two protesters have started attending cathedral services.
It is possible to see why some Anglican clergymen are bullish about their church’s relevance in austerity Britain, despite decades of falling attendance and gibes about woolly, waffly priests wringing their hands at how complicated life is. The decade after the second world war witnessed a “new seriousness”, and a corresponding high point for the Church of England, says Lord Harries, a former bishop of Oxford and long-standing BBC broadcaster. The beginnings of a similar seriousness can be felt today. The Bishop of Leicester, Tim Stevens, points to the headlines generated when church leaders question government policies. If bishops can make the front page, is the country as secular as all that, he asks?
Actually, yes. The latest British Social Attitudes Survey shows just 20% of the British public calling themselves members of the Church of England, down from 40% in 1983. Roman Catholicism (about one in ten of the population) is more stable. Half of the population say they have “no religion”. More than half “never” attend a religious service. Non-Christian faiths are growing but small (6% of the population).
Come all ye faithful, and not
The evidence that the Church of England is returning to the centre of public life is ambiguous. True, religious music is popular. In some places that shows a yearning for faith. But if cathedrals are increasingly popular, it is in part because they are anonymous, admits a priest: there is no danger of being asked to visit a sick parishioner afterwards. Business is also booming for commercial carol concerts in non-church settings, where a mince pie and nostalgia are as much the lure as harking the singing of herald angels. Across the country, Raymond Gubbay, an impresario behind several shows at the Royal Albert Hall, is putting on 200 such Christmas concerts.
Nor is the St Paul’s Cathedral camp as flattering as it seems. The protesters wanted to surround the London Stock Exchange. Thwarted, they ended up at St Paul’s largely by accident. Headlines about bishops chiding the government are also double-edged. Too often, what is striking is not the daring of Anglican prelates but their lack of self-confidence. Time and again, bishops sound like shop stewards for the welfare state, taking to the airwaves to demand the preservation of specific benefits without mentioning the church, the role of faith or Christianity.
Welfare utopianism is an Anglican tradition. In the 1940s the church embraced the welfare state as a modern, professional alternative to charity, willingly dismantling voluntary relief networks and signing over thousands of church schools, hospitals and other bodies to the state, notes Linda Woodhead of Lancaster University. In a 1985 report the church attacked Margaret Thatcher for putting economic efficiency ahead of welfare. She retorted that church-going is not about wanting “social reforms and benefits” but about spiritual redemption and, indeed, God.
The church has a perfect right to comment on politics, says Lord Harries. If you love your neighbour, you must have a view on policies that affect his welfare. At the same time, he argues, the English have always been reticent about religious language. The clergy must use religious imagery “very shyly”, otherwise the English immediately back away.
Fair enough. England is an odd place: a secular country where an established church still has a role in public life (and, on the ground, does much unsung good). But the economy may be about to fall off a cliff. That poses a huge test for the Church of England and its claims to be a source of national strength. If the church cannot offer a message more spiky and distinctive than social democracy in a clerical collar, it will fail that test.
Update on December 13th. Lord Harries, the former bishop of Oxford interviewed above, subsequently responded to this column in a BBC broadcast, Thought for the Day, carried by Radio 4's morning news programme, Today. With his kind permission, the bishop's script is reproduced below:
Thought for the Day
9th December 2011
Good morning. An article in this morning’s Economist speculates what role the Church of England will play if we have another depression like that of the 1930’s. Would it have the moral authority to play a key role? For it is sometimes suggested that church leaders, including bishops now seem to speak more about social policy than they do about God, and for that reason they have lost their distinctive authority. There are two responses to this, one short, the other more nuanced. The short response is that when the state determines so much of our lives, as it does now, how can we love our neighbour without considering the effect government policies will have, for good or ill, on them? Of course Church leaders have to consider the effects of policy, not least on the most vulnerable.
But what about speaking more publicly about God? That requires a more nuanced answer. First, culturally the English are very shy about bringing religion into public discussion-in contrast to America of course where it is taken for granted, if not required. That shyness has roots in real religion. Some forms of Judaism for example refuse to even write or use the name of the Holy One for that very reason. As the poet W.H.Auden put it “Truth, like Orthodoxy, is a reticence”. The other reason for this apparent reluctance to use religious language in public utterance, as opposed to in Church is that religious words have been so overused, abused or seem lacking incredibility that they either fail to resonate,or even alienate.
This is not a new situation. When Dietrich Bonhoeffer was in prison for his part in the plot to assassinate Hitler he wrote a remarkable series of letters, one of which was to a young person about to be baptised. In it he said that the great Christian words “have become so problematical and so remote that we hardly date speak of them.” But he went on to affirm that “the day will come when men will be called again to utter the word of God with such power as will change and renew the world…Until then the Christian cause will be a silent and hidden affair, but there will be those who pray and do right and wait for God’s own time.”
So a certain reticence, far from being an abandonment of faith, can be an expression of its profundity. Meanwhile, that doing right to which Bonhoeffer refers, includes both personal behaviour and public policy.
Dec 6th 2011, 11:27 by Bagehot
FOUR months after the summer riots that struck London and towns across England, researchers from the Guardian newspaper and the London School of Economics have performed a valuable social service by interviewing 270 of the rioters. The results have been filling pages all week in the Guardian, and were turned into a long film for the BBC television programme Newsnight, last night.
The researchers draw a political conclusion from the findings, arguing that the government and much of the media incorrectly dismissed the rioters as criminals and opportunists who took advantage of a temporary collapse in law and order to grab consumer goods for themselves.
Instead, they say, these were in fact political acts of protest against government spending cuts, economic injustice and, above all, against the police, who the rioters hate as agents of oppression for stopping and searching them as they walk about their local streets.
A Guardian columnist, Gary Younge, put it this way:
Four months later the absurdity of the official response to the riots is painfully clear. It took a while. Given the spontaneous, geographically diverse and inchoate nature of these disturbances, there was never a credible single cause. Even if there had been, there were few among the rioters who would have been in a position to articulate those grievances. The journey from the margins to the mainstream is a perilous one, which few make intact without losing their voice.
The government's narrative may have been ridiculous, but in the absence of a counter-narrative, many believed it plausible. The impression of unclaimed chaos and the shots of burning cars, devastated shopkeepers and hooded youth lent credibility to claims that this was nothing more than young hooligans running amok. "A riot," said Martin Luther King, "is the language of the unheard." Now, thanks in no small part to a study undertaken by the Guardian with the London School of Economics, we've had a chance to listen…
First, the rioters were far more politically conscious than even many on the left, myself included, first thought.
This in no way romanticises their actions. Looting is opportunistic, and most of those involved freely admit to being opportunists. When asked how he heard about the riots, one interviewee said he got a message on his BlackBerry saying people were "getting free stuff out and about", so he joined in. One should not overstate the case: stealing trainers and burning police cars are not the hallmarks of political sophistication. But then nor are riots. They are the crudest tool for those who have few options. By definition, they are chaotic. Rich people don't riot because they have other forms of influence. Riots are a class act...
The second theme to emerge from the report is that the rioters' primary grievance is not the one most of us imagined…
…Cameron characterised the moral collapse that made the riots possible thus: "It is a complete lack of responsibility in parts of our society; people allowed to feel the world owes them something, that their rights outweigh their responsibilities and their actions do not have consequence." He could just as easily have been talking about bankers.
...Economic issues were important. The cause most often cited for the riots was poverty (86%), but unemployment (79%) and inequality (70%) featured prominently too. Few guessed, though, that this tinder in the box was lit at least as much by the long arm of the law as the invisible hand of the market. Almost three-quarters of interviewees said they had been stopped and searched by the police in the last year; 85% said "policing" was an important or very important cause of the riots. Just 7% believed the police do a good job in their area
Writing for the Guardian today, the Archbishop of Canterbury manages to express sympathy for the rioters and take a swipe at consumerism and (via a nifty analogy) float the idea of moral equivalency between the riots and the financial markets. I have read the piece twice, and can find no mention of sympathy for victims of the riots. It is too much to expect an Anglican archbishop to sympathise with large companies whose premises were looted, or the police injured during the violence. But it is striking there is no mention of the 213 small shopkeepers whose premises were looted, the five left dead, or those who had their homes robbed and burned. The archbishop expresses anguish over spending cuts, and his pity for "hard-pressed education professionals" attempting to teach in "almost impossible conditions". He makes no mention of the Church of England, religious faith or God.
The Newsnight film was a pretty portentous piece of work, filled with grave black and white captions, doomy music and the voice of the reporter who made the film intoning such lines as: television pictures showed images of mindless violence, but the rioters told us these were anti-police riots.
Now, put me in many contexts, and I am quite the hand-wringing bourgeois liberal. Watching Newsnight yesterday evening, I fear I came over all Judge Dredd.
The researcher’s contention, in a nutshell, is that the rioters were not criminals who ran amok for a few days in August, losing their moral compass when they realised their actions would probably be without legal consequences. Instead, we are asked to believe, they are angry young people who hate the police and believe that they were taking revenge on a heartless world.
The problem is that after wading through screeds of interviews, and watching the interviews on Newsnight, it is clear that the question is not one of either/or. The rioters interviewed come across as criminals with a faulty moral compass who ran amok and hate the police.
Newsnight devoted a long chunk of airtime to Daniel, a young man who was held up as a key piece of evidence that the riots were not about looting and mindless violence. It is true that Daniel was angry and articulate, set out his moral code (as when he spared the life of a policewoman because she was a woman), insisted he did not take part in looting and stressed the political and economic factors behind his hatred of the system, including cuts in welfare benefits and a hike in tuition fees.
The problem is that Daniel also told us that despite living under the tyranny of state welfare cuts, he only managed to attend the riots by cutting short a foreign summer holiday nine days early, after receiving video clips from friends in London of burning police cars, and calls to avenge the fatal shooting by police of an alleged gangster, Mark Duggan.
I don’t want to sound heartless (oh, alright, this is going to sound heartless). I have no idea what Daniel’s personal circumstances are, and they may be grim. But it surely takes a special sort of lefty myopia to stick someone on television as a case study of economic despair, only to explain all about their long foreign holidays, their smart phone and their ability to book an early flight home at short notice.
Now, is it possible that the police are rude and insensitive in some or many of their dealings with people like Daniel? I suspect it is quite possible. It is also a serious problem that many young people have failed to be convinced by government assurances that they need not fear higher university tuition fees (because they are not paid up-front but via state-subsidised loans). If that puts young people from low-income families off university, that is tragic.
But I fear, listening to the torrents of interviews last night, I also agreed with the pithy conclusion of one of Newsnight’s studio guests, the former Metropolitan police chief Lord Blair. He noted that a big majority of those arrested after the riots had previous criminal convictions. It is, he suggested, not surprising that such people dislike the police. And if they hate the police because they are stopped and searched a lot, well, maybe in their case the police are stopping and searching the right people.
Here is the BBC’s interview with Daniel:
Me and a couple of my friends were on holiday, and people were sending broadcasts. And a couple of my friends pinged me telling me what was happening.
[images of burning police cars and calls for revenge for Mark Duggan]
As soon as I saw that, I was happy, like. For some reason I just wanted to be there. I actually wanted to burn the cars and just see it burn. It was all like, cos the police, like from what I've been through my whole life, police have caused hell for me, like.
We all cut our holiday and came straight back to England. I always thought to myself when I was on holiday this chance may never come again I saw it as my opportunity like now was the opportunity to get revenge.
It wasn’t even just the police, just the whole government, everything they do they make things harder for us, they make it harder for us to get jobs. Even when we do get benefits, they cut it down, like some people are trying to change their lives and go to university, and they are raising up the prices, and then people can’t afford university so they go back to selling drugs and stuff and then when they arrest them and say right, we don’t understand why all of these young people are acting like this. When really and truly they are the reason why we are the way we are.
And if we get back to England and we actually damage, like do a lot of damage to the point where forget all the benefits they cut off they will have to pay like 20 times worse than that, so it was just our way of getting revenge.
"We thought, Okay, you want to financially hurt us? We'll financially hurt you by burning down buildings. I saw MacDonalds get set on fire, and it was completely set on fire, and I petrol-bombed it even though it was set alight, and I felt good.
When we first got there, we saw the police they had their shields up, running, so we thought ok like they are on the defensive so we just sort of started picking up bricks and bottles and threw it at them. It felt good, it felt like Call of Duty. It made me feel cold as well. Cos, I knew when I was doing it that it was somebody’s mum or dad, but I didn’t care about that. I just saw it as a chance to get revenge and I took it with both hands.
It was a war, and for the first time we was in control. We had the police scared, it was no more us being scared of the police. We actually had the choice of letting officers off the hook or seriously injuring them. I threw a brick at a policewoman, I saw her drop I could have just easily bricked her again, I didn’t cos she was a woman.
I wasn’t there for the robbing, I was there for revenge. I will always remember the day that we had the police and the government scared. For once, they were living on the edge, they felt how we felt. They felt threatened by us. That was the best three days of my life
As I said before, the London School of Economics researchers did us all a favour. It is sobering to know that people like Daniel think they were in a war with the police and the government in August. But having heard their grievances—and without ignoring the need to tackle social inequality, education, joblessness and other social ills—I still want them to lose that war.
Dec 4th 2011, 21:53 by Bagehot
THE weekend papers are full of angry quotes from British Conservatives, appalled by the idea that British voters might be denied a referendum on a new European Union treaty that imposes sweeping new restrictions on the taxation, spending and borrowing of the 17 countries that use the single currency.
Conservative MPs and activists correctly sense that the Conservative-Liberal Democrat coalition does not want a referendum on the new EU treaty which is being actively sought by Germany, and grudgingly endorsed by France (now that it is clear that the price for German aquiescence to some form of debt mutualisation or massive intervention by the European Central Bank is a binding agreement on automatic sanctions designed to stop euro-zone members from ever again running up unsustainable debts).
Under the terms of the European Union Act 2011, Britain must hold a referendum on new EU treaties which see powers passed from Westminster to Brussels. But as Nick Clegg, the Liberal Democrat deputy prime minister pointed out on the BBC this morning, that does not mean that a referendum would be triggered by shifts of sovereignty involving only the 17 euro zone members. As Mr Clegg told Andrew Marr of the BBC:
Let me be very clear. The test, which we've legislated on, is if we, the United Kingdom, give up more sovereignty in a big way to the European Union
That bit about "in a big way" raises alarm bells among British Eurosceptics, who think the EU Act falls way short of a "referendum lock". Actually, the EU Act is a pretty tightly-worded referendum lock, as I have written before.
But the point of dispute here is actually a different one. The contention of Eurosceptics is that such a leap towards fiscal union inside the euro zone would marginalise countries such as Britain which were not involved. As it happens, I think that is right.
British Eurosceptics further argue that even if France, Germany and the rest of the euro zone think that deep integration is the only plan that may save them in the short term (not least because it may well be Germany's price for agreeing to the use of the ECB to stem worldwide market panic about the break-up of the single currency), there is no guarantee that such integration will save the euro in the long term. For what it is worth, part of me fears this might turn out to be right, too (though I take the short term much more seriously than many Eurosceptics, who strike me as irresponsibly casual about the consequences of a disorderly break-up of the single currency).
So for all these reasons, they would like a referendum on a new euro-zone treaty.
Here is a prominent Eurosceptic member of the 2010 Tory intake to the House of Commons, Chris Heaton-Harris, arguing in the Sunday Telegraph for Britain to seek an all-purpose opt-out from EU laws that the British Parliament does not like, by wielding the threat of a veto over the new arrangements:
Whilst we can not be seen to be getting in the way of those countries that choose to allow themselves to be absorbed by fiscal and political union, we should not miss the opportunity to restructure our relationship with the Eurozone.Thus we should state that we are willing to do all we can to help get the new Treaty changes enacted in exchange for a new provision, a new mechanism that allows those countries in the EU but not in the Eurozone, following a successful domestic Parliamentary vote, to allow itself to withdraw from existing EU laws that it believed damaged an important national interest.
Following the successful passing of the European Union Act earlier this year, any EU Treaty change involving a significant shift of power from the UK now has to be put to a referendum here in the UK.
No one can deny the fundamental significance to the UK of treaty changes that allow for fiscal and political union for core European countries and the Government would be under considerable pressure should it choose not to allow a referendum on this emerging new relationship with the Eurozone.
Asking the British people if they would allow the Eurozone to integrate further in exchange for a potentially looser relationship with it would not be the in-out referendum that many people want, but it would be, at last, a step down the road to a new and better relationship with our neighbours
Here is Iain Duncan Smith, the Conservative work and pensions secretary and perhaps the most Eurosceptic member of the cabinet, speaking to Sky News (transcript via ConservativeHome):
The Prime Minister has always said if there is major treaty change — it is now legislated for — that we would have a referendum and he has never shied away from that. We’re the first government ever to have legislated for referendums on treaties, in other words the British public will have a say, will have a right to have a say
And here is Tim Montgomerie, the boss of ConservativeHome, as ever crisply summing up the consensus view of the Tory right:
The argument that Cameron and Clegg will deploy against a referendum is that we shouldn't put the UK's desire for repatriation in the way of a resolution of the €uro crisis. Resolving the €uro crisis, they will say, is Britain's number one economic priority. But a large majority of Tory members and Boris Johnson do not see preserving the €urozone as in Britain's medium term or long-term interests
Mr Montgomerie, Mr Hannan, Mr Heaton-Harris, Mr Duncan Smith, Mr Redwood, Mr Cash, Mr Carswell and all the other Tory Eurosceptics being quoted this weekend have the perfect right to want a referendum on a new treaty. They are also quite within their rights to argue that preserving the euro is not in Britain's national interests.
But given that the governments of Germany, France and the other members of the euro zone are determined to try to save the euro, I have a single, simple question for British Eurosceptics.
Suppose we do end up facing a treaty setting out new rules for the euro zone, and suppose that Britain did hold a referendum. What, exactly, do they think the others would do if Britain voted no?
Dec 2nd 2011, 22:12 by Bagehot
IT IS becoming clear that British diplomats had a very close shave in Iran when student members of a regime-controlled volunteer militia, the baseej, stormed two British Embassy compounds in Tehran on November 29th. The recently-appointed British ambassador to Iran, Dominick Chilcott, has given a remarkable interview to the BBC about what he and his staff went through on Tuesday, made somehow all the more chilling by Mr Chilcott's sober, matter-of-fact delivery. The world had already seen pictures of demonstrators crossing over the high, spike-topped brick wall of the main embassy compound in central Tehran, and images of vandalism inside the site (which is a bit like the campus of a British public school in feel, with a mixture of grand buildings and surprisingly homely cottages scattered around a walled park).
Today, we heard how the diplomats found themselves under physical attack, in a situation whose ground rules had abruptly changed from the familiar, almost theatrical protests that have long plagued the embassy in Tehran to something much more sinister. The full interview is to be broadcast on Newsnight in a while, but I saw long extracts while waiting at a BBC studio this afternoon to be interviewed about the euro crisis on a different news programme (a shorter extract is here). At one point, the BBC interviewer asks the ambassador if he thought that he and his staff were about to be taken hostage, in a repeat of the American embassy siege. I would not be telling the truth if I said it did not go through our minds, Mr Chilcott replied. The Iranian police were behaving so strangely, and failing to come to the assistance of the British diplomats, that they could not be sure how the whole protest was intended to end, he said. The embassy is very used to protests, and normally, indeed on every previous occasion, the local police have outnumbered the demonstrators. Mr Chilcott was too polite to say it, but there has in the past been something almost comically amateurish about many demonstrations.
I am no expert on Iran, but I did report from the country while working in Asia some years ago. I was working in China at the time, so was used to reporting in an opaque, complex dictatorship with secret police, travel restrictions on foreign reporters, heavy-handed surveillance and more sinister forms of spying, or so I fondly imagined. In Iran, what I found was a place that made China look as transparent as a pane of glass. Restrictions were ambiguous: someone who at first seemed to be wholly on the side of the state would turn out to be not so loyal in private. Those who seemed to be allies could not always be trusted. Middle class Tehranis seemed to be wary, even frightened of the controls that might snap shut on them in an instant. But there was nothing hermit-like about their lives. Private houses had illegal satellite TV on which CNN and the BBC played non-stop. Many divided their time between Iran and Europe, or were in contact with relatives in America. Catching an illegal taxi to the Chinese embassy (it's complicated), my driver got into a row with a uniformed policeman, and ended it by trying to run him over, gunning his engine as the officer ran backwards with his hands on the bonnet, hurling abuse. Nobody got arrested: a challenge to state power that would be pretty unthinkable in the Chinese capital. Yet in the shadows of an illegal demonstration, plain-clothes men in an unmarked car spooked other foreign reporters with more experience than me of Iran. A while before, I was told, such unidentified agents of some bit of the state apparatus had taken a western reporter into their car, beaten him badly (with special attention to his kidneys) and dumped him on the side of a highway miles out of town, leaving him to limp home. That did not happen in China: western journalists were harrassed, but never hurt, and you knew which agency was doing the harrassing.
Yet menace is sometimes matched by something like student cheek. The thoroughfare on which the British Embassy stands is named Bobby Sands Street, so that its postal address is a memorial to an IRA hunger-striker. A diplomat I knew in Asia who had worked at the British embassy would tell the story of student demonstrators who brought a portable sound system to one protest, but were thwarted when the small shopkeepers opposite the embassy got fed up with all the chanting and unplugged the PA system. After a moment, embassy guards heard a knock on the metal gates. They slid open the little hatch in the gate, and found the protest leader wanting to ask a question. My friend was called. Please can we plug our loudspeaker in to your power supply, the student leader asked. Startled by the request, my friend finally agreed to take the proffered plug and cable and see what he could do. He waited a while, then opened the hatch again. I'm so sorry, he fibbed to the student leader, our plugs are all the British three pin style, and yours won't fit. Oh, said the student, crestfallen. Another knock. Do you have a British flag we could burn? asked the student politely. No, said my friend, more brusquely this time, and slid the hatch shut.
There was nothing so quaint about this week's incursions. As Mr Chilcott makes clear in the BBC interview, this was an altogether more spiteful, sinister affair. First, the diplomatic police told the embassy there would be a protest at the main downtown embassy compound. The embassy duly put in place its well-honed procedures, sending home local Iranian staff and despatching non-core British staff and dependents to the embassy's second, 50-acre compound in the north of the city, known locally as Qolhak Garden. What the police neglected to say was that a second protest would hit Qolhak Garden without warning, and that officers would stand back and let the protestors make their way into the compound. Staff retreated to their "keeps", or strengthened safe areas inside embassy buildings, designed to hold out intruders just long enough for the police to arrive and rescue trapped diplomats. Except the police did not come to rescue them. Mr Chilcott described how a colleague made it to his keep, placed a heavy safe against the steel door, a bed against the safe, and then wedged himself against the bed. For 45 minutes protestors worked to smash their way in, finally destroying the entire door frame and getting inside. The keep did its job, he said, the Iranian police did not.
At the main embassy compound downtown, Mr Chilcott and his staff locked themselves in the secure top floor of their chancery building. They could hear demonstrators looting and smashing their way around other buildings, and trying to break into the chancery. Finally, they were able to enter a consular office and start a fire, sending enough smoke into the top floor safe area that the ambassador and his staff were forced to flee down a fire escape. By sheer good luck, by the time they reached the ground, the protestors had moved to another area, and the ambassador and staff were able to find a small party of Iranian police, who told them to hide in a remote building in the corner of the site, with the lights off.
This was the centre of the capital city, Mr Chilcott noted. If the police had wanted to stop this, they could have flooded the compound with officers and rescued the British. The police, and whoever was pulling the strings behind the attack, chose not to intervene for a long while. In the meantime, demonstrators matched acts the ambassador called spiteful: hacking and slashing at oil paintings of Queen Victoria and Edward VII in the main residence and smashing furniture. But this was not mindless violence, the ambassador pointed out. The student baseej took everything electronic they could find, from portable computers to hard drives and mobile telephones.
The violence had to be state-sponsored, Mr Chilcott ventured. But the bit of the Iranian machine that he dealt with day to day, the foreign ministry, seemed to be taken aback by the British response of pulling all its staff out of Iran and expelling all Iranian diplomats in London, closing both embassies (though not severing formal diplomatic relations).
"The risk is that certain people in the regime who liked the idea of confrontation, because they felt it would rally people to the flag, miscalculated how strong the response would be," Mr Chilcott told the BBC. "They probably didn't expect us to send home the Iranian embassy in London and, reading between the lines, you can see in the way they have responded to that move, some remorse in having provoked it. I think that might apply more generally too."
As mentioned in my last blog posting, France has led the way in offering European Union support, recalling its ambassador for consultations in Paris (in common with several other EU countries), and calling for a new sanction barring EU countries from buying Iranian oil. At a meeting of EU foreign ministers on Thursday there was much talk of solidarity, but no agreement on boycotting Iranian oil. Spain and Italy had grumbled at the level of diplomats in working groups that they would need more time to find alternative sources of energy. Greece, which is heavily reliant on Iranian oil because few other suppliers are willing to supply a country on the brink of bankruptcy, blocked a boycott. A report on the EUObserver news website quotes unnamed diplomats saying that some other countries were also hiding behind Greece, saying:
People don't say it out loud. But there is an understanding oil sanctions would hurt the EU rather than hitting Iran where it hurts and would make oil cheaper for China
In the British press, there has been some grumbling from right-wing outlets that Britain's response has been wimpish and demanding to know why we have not severed relations completely.
The sad truth, alas, is that not much has changed since the French president, Nicolas Sarkozy, summed up the options for the outside world with great clarity. We can seek a negotiated settlement with Iran, Mr Sarkozy said, or we can face a disastrous choice: "the Iranian bomb or the bombing of Iran.” That remains the basic calculation, and hawks need to be clear about the risks of bombing Iran, which could include retaliatory attacks on Israel, Saudi Arabia, NATO sites in Turkey and other targets, as well as a spiral of violence involving Iranian proxies in the region.
There is momentum for tougher sanctions in the EU, and some hope, it is argued, in the fact that China and Russia (who routinely block tough sanctions against Iran in the UN Security Council) firmly condemned Tuesday's embassy attacks.
Meanwhile, the pace of covert attacks on alleged Iranian nuclear sites, scientists and missile experts does seem to have stepped up, with talk of mysterious explosions and assassinations in Isfahan and elsewhere.
Not very much is certain about this week's attacks on British diplomats in Tehran, other than that they were swiftly endorsed by hardline politicians, and that some elements in the regime have an interest in confrontation. It cannot be certain how far the hardliners wished that confrontation to be taken this week, nor whether they may have miscalculated when it came to the British response, as Mr Chilcott says. What is quite certain is this: if the intention was to scare but not harm British diplomats, something could easily have gone badly wrong this Tuesday. Britain, and by extension all who fear an escalation of the Iranian crisis, had a narrow escape.
Dec 1st 2011, 16:42 by Bagehot
DAVID Cameron will visit Paris tomorrow for a tense bilateral meeting with Nicolas Sarkozy. Senior officials expect the French president to ask the British prime minister a blunt question: what, David, do you actually want from me, and from Europe just now? That is an almost impossible question to answer. In essence, Britain faces the following scenario as the euro crisis swirls. Egged on by France above all, the 17 countries of the euro zone are planning to try to save their single currency with deeper political and economic integration. Britain thinks that in the short term some sort of deep integration is a necessary condition for saving the euro, and fears the consequences of a euro collapse. But Britain does not want to take part in that integration, will not pay for it, knows that it will be marginalised by it, cannot veto it and probably cannot extract many concessions from the process of creating it. Oh, and deep down the British government does not think it will work.
The stage is set for a very nasty crisis, in which France and Britain will be at loggerheads. The irony is that in other ways, notably in security and defence, Britain and France have rarely enjoyed such good relations in recent times. Just look at the strong support that Mr Sarkozy's administration is offering Britain when it comes to Iran, and the Iranian student assault on Britain's embassy in Iran. France is proposing some of the toughest sanctions ever contemplated against Iran, directly touching Iranian oil exports. We are a world away from Jacques Chirac, Mr Sarkozy's predecessor, who once asked American interviewers if it would be such a disaster if Iran had a nuclear bomb (before aghast French presidential aides attempted to say that he had not said that on the record).
My print column this week, reported from London and Paris, attempts to puzzle some of this out:
SEEN from Britain, most Europeans are neighbours, but the French are family. Not close family, perhaps, but cousins—viewed with exasperation, distrust, superiority and yet (deep down) gnawing envy. France is where abroad begins. No other country offers such a perfect yardstick for comparison, involving near-identical levels of national wealth, population, military clout, diplomatic cunning and historical swagger. It has long made for a satisfying rivalry, marred by a nagging fear: that the contest matters more to the British than to the French.
There matters might have stayed, if only the world did not keep evolving so alarmingly. A cosy competition is being transformed in opposing directions: one promising, one ominous.
First, the promising. On December 2nd David Cameron was due in Paris for bilateral talks with the French president, Nicolas Sarkozy. When it comes to foreign policy and defence, the Franco-British alliance is in remarkable shape. In London and Paris senior figures reach spontaneously for the same phrase: co-operation is the best “since the second world war”. In the UN Security Council, where France and Britain argued bitterly over invading Iraq, the pair work closely on such tough dossiers as Iran or Syria. In a 2010 defence treaty, the two countries vowed to co-operate on everything from aircraft carriers to what an official calls “the core of the core”: nuclear-weapons research. Then came Libya—an early test of those paper promises. It was a risky mission, it is stressed in Paris. Its success makes Mr Sarkozy and Mr Cameron “brothers-in-arms”.
Talk is cheap. But Britain and France face real, expensive facts. They are midsized countries clinging to the military and diplomatic infrastructure of larger powers. Used cleverly, those assets still offer global influence. Neither can manage that alone.
France long dreamed of using the EU for military leverage, in preference to American-dominated NATO. Other Europeans dashed that dream. Between them, Britain and France account for nearly half of all EU defence spending. But the British will not join a “Europe of defence”, or a mooted EU defence headquarters. The Germans spend money on kit, but mostly will not use it. When Germany abstained rather than endorsing Libyan action at the UN, it was a bitter blow to the French.
French diplomats initially opposed Libyan action under a NATO flag, saying it would be seen as a “crusade” in the Arab world. They called this a “red line”. Britain, backed by a rather disengaged America (and some European allies wary of French bullying), insisted on NATO leadership. The upside of President Sarkozy’s pragmatic-yet-impetuous personality came into play. Mr Sarkozy, who led France back into NATO’s military structures soon after taking office, overruled his own officials, and the Libyan mission was run from a NATO base near Naples. Mr Cameron has his own pragmatic streak, allies say. The downside of Mr Sarkozy’s character surfaced over Libya, as he pushed for quick results or called grandstanding councils of war in Paris. Mr Cameron pushed back when needed, but left the glory to his colleague.
One can quibble about the promise. For instance, a lack of money will limit joint military ambitions even now that the political will exists. But neither country is ready to quit the global stage: as long as that is so, Mr Cameron and Mr Sarkozy believe their two countries are indispensable to each other.
Now for the ominous side of the relationship. It involves the crisis in the euro zone and pits the same two leaders against each other. France sees a strong Europe as a lever of influence. Disliking the enlarged EU of 27 countries (in which its clout is diluted), France wants to use the euro crisis to deepen integration around a core of countries that use the euro, under the political control of a handful of big national leaders. To comfort French voters, Mr Sarkozy has started talking up euro-zone integration as a shield against globalisation and bullying by financial markets.
Today’s unprecedentedly Eurosceptic Conservative Party sees a strong Europe mostly as a threat to Britain’s global leverage. Mr Cameron says he supports deeper integration within the euro zone, as long as Britain does not have to pay, loses no sovereignty and yet is not marginalised. That is not enough for Tory MPs. They want the prime minister to use changes in the EU’s architecture to secure concessions, such as opt-outs from European employment law or EU rules that harm the City of London.
French sources call it “totally unacceptable” to allow British banks to set up in deregulated competition just across the Channel. Britain wants rights of oversight over the euro zone, it is said in Paris: well, the euro zone needs oversight over the City of London. If Britain seeks to “profit” from the crisis, then rule changes can be agreed by countries that use the euro, excluding Britain.
Mutual suspicions seethe. The French were incensed when the chancellor of the exchequer, George Osborne, said on November 14th that financial markets were “asking questions about France”, alongside Greece and Spain. British sources say Mr Osborne was just justifying austerity plans and accuse the French of “spiteful” plans to regulate the City of London.
The best of times, the worst of times
A change of French president in elections next May would bring no comfort. Pierre Moscovici, the Socialist Party’s campaign chief, says the current crisis must be solved by Europe doing “more, not less” to protect employment rights. He also challenges British calls for an EU budget frozen in real terms.
The same force explains all aspects of Franco-British relations: a yearning by two established powers to preserve national greatness. In defence, this is working wonders. In the EU, a dangerous clash looms. Doomed by character, proximity and shared ambition, neither country has much room for manoeuvre at all.
Nov 25th 2011, 10:32 by Bagehot
IN MY print column this week I report on the intense pressure David Cameron is under from close allies, Conservative MPs and right-of-centre think tanks to go all-out for growth, and hang the consequences for public opinion. Helpful and not so helpful suggestions are pouring in from all sides, with a strong bias towards supply-side moves including tax cuts, the abandonment of targets to limit carbon emissions and radical surgery to employment law and other forms of regulation. If that leads to jibes that the Tories are a party for the rich and big business, or outrage at the idea of taking workers' rights away, so be it, one insider told me. The only thing that matters is saving the economy: without that, the next election in 2015 is lost.
Some Cameron loyalists told me that the debate is over, and that the prime minister has decided to go for growth. Other sources are not so sure, and suggest that the government is still locked deep in internal debate. As so often nowadays, the message from the parliamentary Conservative Party is sceptical, even suspicious: plenty of Mr Cameron's own MPs do not trust him or his chancellor George Osborne to risk politically-contentious supply side reforms. They seethe about the endless little micro-schemes, tweaks, prods and incentives pouring out of the Treasury and other departments, such as this morning's Youth Contract, a three-year scheme to subsidise the wages of young people taken on by private employers.
One thoughtful Tory MP on the right was rather despairing this week, telling me of a constituent who had just sold a small business for a couple of million pounds. "Now, he is just sitting at home watching daytime TV, because he cannot see the incentive to go through the hassle of starting another business," he related. To that MP, Mr Cameron and Mr Osborne are hamstrung by their privileged backgrounds. They do not feel the rage of self-made entrepreneurs suffocated by red tape. And because they are so conscious of their public images as creatures of privilege and inherited wealth, they are too reluctant to lay waste to employment rights, from maternity and paternity leave to unfair dismissal rules that Tories see as stacked against businessmen.
These suspicions go deep, and cannot be separated from backbench anger at the failure of Mr Cameron to win an outright victory at the 2010 general election, despite a Labour government on its knees. The party seems doomed to fight, again and again, the same argument between those Cameroons who think the process of modernisation and brand detoxification did not go far enough in 2010, and those on the right who think the party failed to push a mainstream conservative message, instead getting bogged down with nonsense about climate change and the Big Society.
A fair number of disgruntled Tory MPs think that Mr Cameron and Mr Osborne are still stuck in an opposition mindset. As the Tory right-winger cited above put it: "When you're in government, the whole premise is that you get to affect outcomes. And right now, fixing the economy is the outcome that matters. It's the economy, stupid. The image part should be secondary. The suspicion among some of my colleagues is that this government is still too focused on image."
Coalition tensions are rising, not because the Liberal Democrats are giving up on Mr Osborne's deficit reduction plans (their iron discipline when it comes to deficit reduction is something to behold, I defy readers to come up with one example of a Lib Dem minister breathing one word of dissent when it comes to fiscal matters). Nor are the Lib Dems wholly averse to supply-side economics (though earlier this week Vince Cable, the business secretary, did a heroic job of signalling scepticism about a package to deregulate employment law that he himself had just unveiled). The Lib Dems in government include some flinty free-marketeers and red-tape sceptics, such as Ed Davey, Danny Alexander and their leader Nick Clegg.
The bigger problem for the Lib Dems, even those on the free-market liberal "Orange Book" wing of the party, is that they simply do not think that the country can be galvanised into growth by tinkering with employment laws and cutting the top rate of income tax, especially in a country where much of the low-hanging supply-side fruit has been picked already (ie, trade unions are already pretty constrained by Thatcher-era laws that Labour never repealed, new workers can be hired on six week trial contracts and plenty of young people are employed on extremely flexible contracts guaranteeing them just 12 hours a week plus additional hours at the discretion of managers).
As one figure put it to me, there is nothing wrong with pursuing additional supply-side reforms when the evidence for them is there, but when the British economy is missing hundreds of billions of pounds of demand, the stuff some Tories want is just "pissing in the ocean". The Lib Dems feel the Tory right is indulging in displacement activity and prejudice-based politics, calling for the sorts of policies that Tory right-wingers always want. What is more, they believe they have the Treasury on their side in this argument.
Here is my column:
IF DAVID CAMERON is loathed by voters but grudgingly credited with economic competence, can he win the next general election? A few months ago the question would have sounded bizarre. Mr Cameron secured the Conservative leadership in 2005 with a pledge to decontaminate the party’s brand. Rescuing the “nasty party” was Mr Cameron’s mission, and he pursued it with well-bred cheer, whether being pulled by huskies across an Arctic glacier to show concern over climate change, talking of his devotion to the National Health Service or making the conservative case for gay marriage.
With Britain seemingly headed back into recession, the prime minister finds himself at a turning point. Close allies, Conservative MPs and sympathetic think-tanks advise him that the quest for economic growth must trump all other considerations. Wish lists are pouring in from all sides, with a bias towards supply-side reforms aimed at making Britain a lightly-taxed, flexibly-regulated and competitive place to do business. All point to the same conclusion: that Mr Cameron might have to retoxify the Tory brand to save the economy.
Suggestions include abolishing the 50% top rate of income tax and speeding up cuts to corporation tax. Keeping wealth-creators in Britain matters more than accusations of being the party of the rich, many on the right tell Mr Cameron and his chancellor of the exchequer, George Osborne. Ditch those huskies, others argue, and with them British pledges to reduce greenhouse-gas emissions faster than European neighbours. There are calls to postpone dreams of “rebalancing” the economy away from the finance-oriented City of London and the south-east of England: this is a moment for helping the strongest first. Defend City institutions from hostile European Union regulations, it is argued. Slash back employment laws and other red tape, say many MPs: if that involves a dust-up with Brussels, good.
Tories close to the leadership insist that Mr Cameron is willing to stake everything on the economy. The mood inside 10 Downing Street is now “all about growth”, says one. “We can be thought of as nice or not, but if the economy isn’t growing, we’ve had it.”
Alas, many Tory MPs do not believe their party leadership, suspecting that Mr Cameron and Mr Osborne are too focused on the party’s image to risk really unpopular reforms. As men of inherited wealth, the prime minister and chancellor cannot imagine the scrappy rage of the self-made entrepreneur drowning in red tape, suggests a Tory MP. Worse, their privileged backgrounds make them feel guilty about curbing workers’ rights.
Some senior Tories seem determined to force the pace of reform. Steve Hilton, the prime minister’s chief policy guru, commissioned a venture capitalist, Adrian Beecroft, to write a report on areas in which employment laws could be loosened. The Lib Dems rejected Mr Beecroft’s boldest idea—giving employers the right to sack unproductive workers with compensation but without giving a reason. Workers who fear the sack do not spend, argued the Lib Dem leader and deputy prime minister, Nick Clegg.
Amid the worsening economic gloom, Lib Dem ministers are showing signs of flexibility. On November 23rd the business secretary, Vince Cable, announced a new, two-year probation period before workers could claim unfair dismissal, and said he was seeking evidence on whether Beecroft-style “no fault” sackings might be allowed in the smallest firms. Disgruntled, unnamed Lib Dems told reporters this was a return to “Victorian employment practices”—a painful rebuke for Mr Cable, who earlier this year swore he would not help the ideological heirs of those who sent “children up chimneys”.
Yet for now, on the big political choice facing the coalition—to worry about public opinion or gamble everything on economic growth—Mr Clegg’s party is hedging its bets. Well-placed Lib Dems talk about the need to fix the deficit while advancing goals such as social mobility, and continue to argue that their presence in the coalition is softening the harshest Tory policies. On November 26th Mr Clegg was due to unveil an avowedly interventionist scheme to subsidise the wages of teenagers hired by private firms. Too many Lib Dems complacently point to opinion polls showing that voters may be wary of the coalition’s economic management, but distrust Labour still more.
Just now, only the economy matters
Coalition tensions are rising. Tories blame the Lib Dems for holding the coalition back, accusing them of terror at being seen as “mean and nasty”. Lib Dems deny that they are blocking pro-growth reforms, saying that the real divide is between realists and “supply-side fantasists” in the Conservative high command who think that tweaking labour laws can offset billions of pounds of vanished demand.
Enough. The economic stakes for Britain are too high for such squabbling. The Lib Dems still dream of being the kindlier half of the coalition. Yet without economic growth, this will earn them no voter gratitude in 2015. The Conservatives are being hypocritical: for all their bold talk of deregulation, the party is still defending right-wing shibboleths, notably plans to limit skilled immigration, even though government-commissioned studies predict that this will hurt growth.
A grand bargain beckons. The Lib Dems should accept new, pro-growth reforms to employment laws, welfare and education that anger the left. In return, they should demand concessions on things such as immigration rules that will enrage the right. Coalition government is rare in Britain: both parties should use it to overcome each other’s flaws and remove obstacles to growth. It is a risky strategy. But the alternatives are worse.
In this blog, our Bagehot columnist surveys the politics of Britain, British life and Britain's place in the world. The column and blog are named after Walter Bagehot, an English journalist who was the editor of The Economist from 1861 to 1877
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