Brexit and the waning days of the United Kingdom

[Sheilbh]

Yes and my own criticism but not only not competent but also doesn't really have a politics/set of beliefs. He's just very squishy soft left. So incompetent and rudderless.

I would add there's a piece in the New Statesman by the fantastic Ailbhe Rea which has some briefing against Starmer - but I've never seen this complaint about any previous PM that I can remember. Other PMs get criticised for being too in the weeds meaning decisions never get taken because they end up getting way too involved in policy detail and micro-managing - this was a common criticism of Sunak and Brown, for example. Someone said to her that Starmer has the opposite instinct "Keir doesn't want to know [...] it's how he led organisations in the past." I'd note he wasn't a popular Director of Public Prosecutions) and there may be some of that about it. But I can't think of another senior politician where that's been the complaint - and it maybe explains things like him disowning the "island of strangers" speech. He said he was busy at a NATO summit and he hadn't read it properly but he didn't agree with it. Honestly sounds like a bit of a nightmare boss - not particularly engaged and then likely to blame his team (who can't defend themselves).

I think the rudderless matters in our system where you have like a few hundred "political" people in the entire system (there isn't even a formal Prime Minister's Office and most minister have under 10 political people with them), in an organisation with tens of thousands of impartial, politically neutral career civil servants. If you don't have a clear vision of what you're trying to do the civil service don't know what sort of options to present up the ladder. So with Thatcher and Major want privatisation and reducing the size of the state, New Labour and Cameroons want public-private partnerships, Johnson wants something "levelling up-y", Sunak wants something tech focued - the civil service knows what sort of direction to explore and come up with policies for. With Starmer I don't think they have a clear idea what options they should be giving the PM - and I suspect that also because of that lack of a steer that decisions that should be made way down the chain have to get escalated because no-one really knows what Starmer wants.

It's why I think even Streeting might be better because he has a clear view of what he'd want to do - whether he could get the party to wear it is another matter. I'd add that as well as the Streisand effect they've also just had an excuse to have Streeting all over the TV today and he is a far better communicator than Starmer - just a bit more human. Asked if he'd rule out demanding Starmer to resign "Yes. And, you know, nor did I shoot JFK. I had nothing to do with Shergar and I don't think the moon landings were faked - certainly not by me."

[Valmy]

So we all thought no British government could be as incompetent as the Tories and Labour was like: hold my Newcastle?

[Sheilbh]

Britain will only join the EU on the same track as the United States will do the right thing, that is only after exhausting all the alternatives.  That's a long way off on the present timeline.

The restless shades of Harold MacMillan, Harold Wilson and Ted Heath have entered the chat.

I think that's probably right. However I think the EU would be wise to reject us because I think everyone else in Europe there is broad support across all parties and strands of public opinion for Europe as an idea and the European project. I think even with our most pro-European PMs the only one who was a true believer in European integration was Ted Heath. I don't think that consensus has ever existed in Britain and I think it's unlikely that it ever will - we tried to get, eventually got in and may well try to get in again for want of a better alternative and I think (once again De Gaulle was probably right) Europe would be well off avoiding it because I think the cycle would just repeat.

But I also think it will require a political movement and pro-Europeans don't seem to be organising from what I can see. I can't understand why they haven't taken over the Lib Dems for example.

Also my most rogue opinion/supposition is that if we are to try and re-enter it will happen under a government from the right. I suspect the polarities will flip again and, as in the 60s and 70s, Europe will be seen as a way to introduce more competition and discipline into the British economy. I also think the way that the rest of Europe is going that the right may end up quite attracted to an increasingly "civilisational" Europe defending "European" culture (again as in the 60s and 70s).

From today's standpoint, the UK won't seek re-entry because there is no compelling reason to do so; things will have to get quite a bit worse before that would happen.  The Trump shock could have been a catalyst; but his penchant for the Royals and his entourage's contempt for the EU and its non-Hungarian members pushed the needle the other way.

I'm not sure that would have been enough of a catalyst. A huge factor in Brexit being settled - even as public opnion moves against it - is that people hated the arguments and division around it and the Brexit years under May and Johnson. I think that experience more than the vote itself was the national trauma and I think it would take a lot for people to think it would be worth going through that again.

[Tamas]

Yes and my own criticism but not only not competent but also doesn't really have a politics/set of beliefs. He's just very squishy soft left. So incompetent and rudderless.

Agreed. This is a terrible combo in today's political climate.

[Tamas]

Britain will only join the EU on the same track as the United States will do the right thing, that is only after exhausting all the alternatives.  That's a long way off on the present timeline.

The restless shades of Harold MacMillan, Harold Wilson and Ted Heath have entered the chat.

I think that's probably right. However I think the EU would be wise to reject us because I think everyone else in Europe there is broad support across all parties and strands of public opinion for Europe as an idea and the European project. I think even with our most pro-European PMs the only one who was a true believer in European integration was Ted Heath. I don't think that consensus has ever existed in Britain and I think it's unlikely that it ever will - we tried to get, eventually got in and may well try to get in again for want of a better alternative and I think (once again De Gaulle was probably right) Europe would be well off avoiding it because I think the cycle would just repeat.

But I also think it will require a political movement and pro-Europeans don't seem to be organising from what I can see. I can't understand why they haven't taken over the Lib Dems for example.

Also my most rogue opinion/supposition is that if we are to try and re-enter it will happen under a government from the right. I suspect the polarities will flip again and, as in the 60s and 70s, Europe will be seen as a way to introduce more competition and discipline into the British economy. I also think the way that the rest of Europe is going that the right may end up quite attracted to an increasingly "civilisational" Europe defending "European" culture (again as in the 60s and 70s).

From today's standpoint, the UK won't seek re-entry because there is no compelling reason to do so; things will have to get quite a bit worse before that would happen.  The Trump shock could have been a catalyst; but his penchant for the Royals and his entourage's contempt for the EU and its non-Hungarian members pushed the needle the other way.

I'm not sure that would have been enough of a catalyst. A huge factor in Brexit being settled - even as public opnion moves against it - is that people hated the arguments and division around it and the Brexit years under May and Johnson. I think that experience more than the vote itself was the national trauma and I think it would take a lot for people to think it would be worth going through that again.

Also agree, at this stage, maybe the best outcome for the UK is to have a quasi-membership, so as close relationship as possible but without voting rights, so the United States of Europe can eventually form which will make us stronger as well.

[Tonitrus]

I don't know a damn thing about Wes Streeter, but my outside/Yank quick-take of immediate downsides is that his face seems very punchable.

[Sheilbh]

I think problem there is European opposition to cherry-picking and as I say the slightly "Middle Kingdom" view of the world from the Berlaymont. The world is split into the Union, candidates and applicants to enter the Union and Third Countries.

I suspect that they may end up with a slightly more flexible approach in the future - possibly prompted by challenges with Ukrainian membership or an increasingly hard-edged world forcing a recognition that some Third Countries (like Russia and China) are hostile, while others (like the UK or Canada) are basically pretty well-aligned, friend-shoring etc. which, I agree, may present the best route for the UK too.

[Sheilbh]

I don't know a damn thing about Wes Streeter, but my outside/Yank quick-take of immediate downsides is that his face seems very punchable.

Although I think that's true of literally Farage, Ed Davey, Zack Polanski and Keir Starmer -so literally every party leader except for Badenoch

[Tonitrus]

I don't know a damn thing about Wes Streeter, but my outside/Yank quick-take of immediate downsides is that his face seems very punchable.

Although I think that's true of literally Farage, Ed Davey, Zack Polanski and Keir Starmer -so literally every party leader except for Badenoch

Definitely agree on Farage...I'd think in the UK just his surname would be punchable as well. (maybe "Nigel" cancels it out)

[garbon]

I don't know a damn thing about Wes Streeter, but my outside/Yank quick-take of immediate downsides is that his face seems very punchable.

Although I think that's true of literally Farage, Ed Davey, Zack Polanski and Keir Starmer -so literally every party leader except for Badenoch

 

[Tamas]

Nobody has as punchable face as Farage, not even Steering. I hate the guy with a passion.

[Sheilbh]

FFS

FT reporting that Jonathan Powell, Starmer's National Security Advisor (a nonsense job that should be go rid of), has secretly been contacting the Kremlin to build covert dialogue with Putin over Ukraine. This was apparently without informing the Foreign Office or the Cabinet. Powell was, incidentally, the guy implicated in the collapse of the trial of Chinese spies because the government wouldn't give evidence that they considered China a threat.

(Not fully sure I believe the line that no-one in the Cabinet knew...)

[Richard Hakluyt]

Reeves will no longer be raising income tax in the budget as trying to calm Labour's infantile internecine struggles is more important.

UK bond yields have spiked upwards and the pound is under pressure.

They really are utterly useless.

[Sheilbh]

It would have been politically painful, but probably necessary. And so much of this is downstream of Rachel Reeves' choices: accept the NI cut, pledge no increases in the main taxes, impose very strict fiscal rules on yourself and sacralise the OBR's role. (Plus I think her comms strategy has actively harmed the economy repeatedly over the last eighteen months).

Politically I think we're also very much in the "in office but not in power" phase for both Reeves who has agreed to a level of interference from Number 10 that would have been a resigning matter for Brown or Darling or Osborne, and for Starmer too.

On this I'd just add that there was an extraordinary intervention last week when groups ranging from the very left-wing New Economics Foundation to the very right wing Institute of Economic Affairs issued a joint paper on reforming the tax system. Their point was it's one of the most complicated tax codes in the world, with lots of weird aspects that make for strange incentives to such a degree that basically every economist thinks is a problem. Adding an extra £20 billion of small measures to raise revenue will not help

Edit: Also, perhaps not immediately, but if the government chickens out of raising taxes having previously chickened out of cutting spending (through Winter Fuel and benefits) then what remains which come into the Treasury's cross-hairs is infrastructure spending and capital spending. Plus ca change

[Sheilbh]

For Brexit, as you say it is similar - the critics who knew what they were taking about pretty much got it right, the politicians looking to scare voters didn't, because they weren't really trying to.  The difference is that whereas the fallout from Trumpnomics has been partially covered up by offsetting economic trends, the Brexit hit in the UK was exacerbated by a reinforcing trend of crashed productivity.  Double whammy.

I just want to come back to this point because I saw something today which is interesting on the productivity issue.

It slightly undermines my general argument that the UK lost a business model in the crash (and I think this is a wider global picture which started in 2007, which is the end of Globalisation 1.0) and has never identified an alternative.

The complication with this is that private sector productivity recovers pretty quickly after the crash and has been on trend for the last 15 years. It is public sector productivitiy that just stops growing.

The problem with that is that no-one's quite sure why. The obvious answer is austerity - but the problem is it stops growing before austerity (i.e. in 2007 not 2010). Also the first six years of the coalition and Cameron/Osborne were austerity but there was a lot of spending under May and Johnson and the productivity problem doesn't seem correlated to either. My theory is possibly that current spending budgets were saved as far as possible but capital investment that could boost productivity over the medium run was cut as individual services tried to manage tighter budgets. But I'm not 100% sure on that (even less 100% is that I do think there may be something to the criticism of embedding DEI, ESG and other "governance" ideas and policies).

I mention all that because the latest mystery is that there appears to be an uptick in public sector produtivity (and it may be too soon to tell) which is similarly difficult to explain. Labour have a spent a lot of money but it was a really, really tough public spending round and I think something like 80-90% of the increased spending went to the NHS and an awful lot of it went on a 30% pay rise for junior doctors. But, from my understanding, the possible uptick appears to be broad based and not limited to the NHS or the pay-rised bits of the NHS. The other bit that makes it really complicated is that the 2010s did protect the NHS budget but pushed through a really complicated reorganisation - so perhaps that took up a lot of productive energy. Problem with that is the current government are (rightly) unwinding that reform which is also taking up a lot of time and energy from people in the NHS.

So it's really unsatisfying but Britain's productivity puzzle is very focused in the public sector and no-one fully knows why which is great from a policy perspective

On the wider Reeves budget, I heard Paul Johnson, former head of the Institute for Fiscal Studies (which is hugely important, respected and pretty neutral think tank in this area) talking about this before today's change of mind. And I think it's a sign the rudderlessness isn't just Starmer because he said he's an economistwho has spent his life working in this sort of but looking at her speeches and her policies he has no idea what Rachel Reeves' ideas for the tax system or the economy are.

It makes me think of Lord Mandelson who is understandably persona non grata but was one of the architects of New Labour. The point he always made was that the press obsessed over the fact that Labour professionalised their comms, introduced a new type of American style aggressive spin doctor (Alastair Campbell) and did lots of focus grouping. But Mandelson would always argue that was secondary. What mattered and why New Labour was "New" was that they had gone back to first principles and had a radically different set of policies and views from "Old Labour" (in many respects actually just picking up the Gaitskellite-Bevanite divide in the 50s: basically European style mixed economy, modernisation and social democracy, not a nationalised planned economy on the parliamentary road to socialism). The comms and the election strategy flow from that re-think that him and Gordon Brown and Tony Blair were doing in the early 90s.

And I think it seems that Starmer and Reeves and the people around them have basically just done the thinking around what builds an election winning machine and an electoral coalition once. But havn't actually done any of the thinking whatsoever on their political or policy analysis.