Archive for the 'Article 50' Category

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Cyclefree asks are Banks the new Unions?

Friday, January 20th, 2017

Back in the 1970’s unions were seen – and saw themselves – as a key constituency whom government had to listen to and consult.  Whether beer and sandwiches were actually served at Number 10 was less important than the perception and the reality that governments felt that it was wise to consult the unions on industrial matters and wider economic policy.  And this was done because of a desire to achieve consensus, to be seen as treating both sides of industry fairly, because union membership was large and strikes could cause significant economic and commercial harm.

It was also felt that union leaders were the only people able to control the wildcat strikers and other militants who were responsible for some of the disputes which so plagued Britain in the 1960s and 1970s.  And very few were willing to challenge the consensus that it made sense to involve unions in economic and industrial policy.  All this created what Bernard Ingham described as “the post-war impression of their invincibility”.  When a certain M Thatcher, then Leader of the Opposition, challenged this consensus and said that she thought that trade unionists should not get a greater say in the country’s affairs than any other voter, this was viewed with horror by some.  How could – why should – things be other than as they were?

Well, disasters usually help change perspectives and the Winter of Discontent finally persuaded many that it was time to cut the unions down to size.  28 years later the role of unions in Britain is vastly different to what it was then.  They have certainly been reined in but still exist and still perform useful functions for their members and for society as a whole.

The decline in the unions’ power coincided with the rise of finance.  Big Bang, the lifting of exchange controls, the focus on making money, privatisation, the entry into Britain of US investment banks and deregulation of many of the previous controls around credit led to an explosion in the City.  The financial services sector boomed and continued booming.  It was seen as the Goose laying Golden Eggs.  All parties worshipped at the altar of the City: the Tories because they saw it as an example of the sort of profit-focused entrepreneurship which had been lacking.  They conveniently ignored the fact that many of those who made money in the City were not so much rainmakers as lucky – lucky to be in the right place at the right time when the heavens opened and the rain fell.

Still, it is amazingly common to find people who have done very well in life downgrading the role of luck in their life and assuming that it is only their skill and intelligence which has resulted in them amassing riches beyond the dreams of Croesus (or, at least, those of most people).  The L’Oreal advertising slogan: “Because you’re worth it!” might have been written by bankers for bankers.  And Labour too loved the City – or at least entered into a Faustian pact with it – because, finally, it looked as if the City’s tax revenues could help Labour get past the charge that it would tax ordinary people more than they were willing to bear to spend on desirable public services which the public wanted.  Banks and bankers could be taxed; money could be spent on public services; the public would be happy and Labour would be in power forever (or at least for a very long time).

Well, we all know how that fable ended: with the 2007/08 crisis, the government having to bail out banks, evidence of widespread chicanery and criminality, some criminal convictions and a public perception that financiers had got away with it, that they had taken the profits and dumped the costs onto everyone else.  Governments learnt that some golden eggs are not golden at all and that banks with very large balance sheets can unbalance an economy.  And, yet, despite all the well-attested problems associated with an out-of-control and, arguably, too large financial sector, there is still an inclination amongst some in the sector to think that, because they bring in the money, their interests should predominate  It is an attitude not so very different to the unions of old: if you don’t do what we want, we can bring the economy to its knees (either through strikes or by upping sticks and moving elsewhere taking all our lovely money with us).

It is an attitude which shows a tin ear for how much of the public views the finance sector.  Rather than feel that banks have learnt their lessons and it is time to move on, many feel that banks have not yet been taught a lesson and have not fully paid the price for, at best, negligence and incompetence and, at worst, criminality.  It assumes that people are necessarily grateful for the tax revenues when they appear to come from greedy and/or disgraceful behaviour.  It assumes that money speaks and should speak louder than the votes of non-bankers.

Now, there is some hypocrisy in the public’s attitude to finance.  They like it when it allows them to spend and spend and appear to be richer than in fact they are.  And they like the tax it generates.  And they are notably disinclined to pay for proper financial advice, preferring to get “free” advice and complain later about mis-selling, or to educate themselves so as to be better able to navigate offers which are often far too good to be true.  But still, in the end, they have the votes and banks do not and the financial sector is not, after the scandals of recent years, in a position to take the moral high ground.  If you ostentatiously throw your weight around and cause problems for others, eventually those others will cut you down to size.

And yet finance matters.  It matters because the development of a modern society has gone hand in hand with the development of an efficient financial sector.  It matters because without it much of what we want to do (save, buy a home, spend, invest, start a business, grow a business) cannot happen.  And it matters that it operates – or should operate – competently, honestly, without drama and without an inflated idea of its own importance, no matter how much tax revenue it brings in, and that it remembers that it is a service industry, that it is there to serve others not primarily itself.  Naïve?  Hopelessly optimistic?  Possibly.  Nonetheless, at a time when banks have started taking some real steps towards the cleaning up of their industry (culture and behaviours and conduct risk are the buzzwords in banks these days and not all of this is just for show), the City finds itself friendless.

The financial crisis may have only been part of the context which led to Brexit.  But it – and banks’ reaction to it and their behaviour before, during and after it – is certainly one reason why this government has not made it a priority to argue the City’s case.  That and the fact that May does not give the impression of someone who venerates rich financiers in the way that her predecessors did.  Now, following May’s speech, we have announcements that some banks are looking to relocate jobs in Continental Europe.  Concerns have been expressed that this will be the start of a flood, that it will render us poorer, that we will miss the tax revenues and that by foregoing membership of the Single Market, we will hobble one of our primary and successful sectors.  Maybe.

The need to have the “passport” is only one of the factors affecting how financial firms structure themselves: automation, keeping shareholders happy, focusing on those areas where money can be made without undue risk, cost control are all factors which will affect what firms now do in a much tougher regulatory and economic environment.  Banks should not expect Continental European countries to be quite as enamoured of freebooting Anglo-Saxon financiers as Britain has been, however much they may welcome the jobs.  Maybe it will mean that the British economy can become a little more balanced, a little less dependent on one sector only.  Maybe – though Brexit is an odd and potentially harsh way to achieve such a rebalancing.

What is clear is that the City is now learning that it cannot expect the government to put its interests first.  No doubt this is a blow to its pride.  Perhaps it is a long overdue and salutary one. Whether it would have been better for the government to have made the case to British voters to stay in the Single Market in order not to harm the City is now an academic argument.  No politician would now be brave – or stupid enough – to put the interests of bankers before those of other voters.

Ironically, this country may end up doing damage (the extent of which is not clear) to one of its more successful industries at the precise time when that industry is finally learning to behave and when Britain needs all the successful industries it can get as it embarks on its bold solo adventure.

And the moral of this story?  “Ognuno e utile.  Nessuno e indispensabile.”  (Or, as the Irish might say, cemeteries are full of people who thought themselves indispensable.)  A lesson for the Tories – looking with disdain and glee at a Corbyn-led Labour party – and for Labour – seemingly entrenched in its heartlands – to ponder.

 Cyclefree



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Timing is everything. A review of Theresa May’s speech

Thursday, January 19th, 2017

 

There is a tide in the affairs of men.
Which, taken at the flood, leads on to fortune;
Omitted, all the voyage of their life
Is bound in shallows and in miseries.
On such a full sea are we now afloat,
And we must take the current when it serves,
Or lose our ventures.

Julius Caesar Act 4, scene 3, 218–224

Whatever else you think of Brexit, we are being led by powerful currents taking us far from familiar shores. Whether we find safe harbour or end up washed up on the rocks is yet to be seen.

Theresa May has grasped this. After months of silence and having insisted that she would not give a running commentary, she has delivered a speech which offers as much clarity as anyone could have wished for about Britain’s negotiating strategy. Her government is to prioritise controlling immigration and as a result she is not going to attempt to keep Britain in the single market. In her words, the future relationship between Britain and the EU will be “Not partial membership of the European Union, associate membership of the European Union, or anything that leaves us half-in, half-out.”

Presented as a strategy, this is in reality an admission of defeat. Some Leaver ministers have spent the last six months skipping like Julie Andrews enumerating some of their favourite things about the EU that they intended Britain to continue to benefit from. The Prime Minister is obviously more securely tethered to reality and has recognised that the EU’s many statements that it would not allow Britain to cherry-pick are not bluffs. She has concluded that controlling immigration is a non-negotiable component of Brexit and is proceeding accordingly. Rather than spend months pursuing the impossible, she isn’t going to make the attempt. Instead, she’s going to cut her losses now.

While this is an admission of defeat, it is also politically sensible. The Prime Minister has called this “Clean Brexit” and a more precise turn of phrase would be “Cauterised Brexit”, burning off some tissue in order to seal the wound. This was for centuries standard medical practice after amputation and entirely applicable here.

The domestic reaction came in two stages. That night, the tabloids were ecstatic. And the next day, HSBC and UBS announced their plans to relocate jobs from London – an early illustration of how Cauterised Brexit may have major costs.

For the first time, the Prime Minister also offered some olive twigs to the rest of the EU. She proclaimed her belief that the vote was not a rejection of shared values or to do harm to the EU itself (she would do well to slap down publicly some of her more excitable backbenchers on this last point). She stated that other Europeans would still be welcome in this country.

Despite the clumsy attempts at veiled threats that Theresa May dropped about how Britain could act in a hostile manner if a deal wasn’t reached, the speech received a moderate reception in the chancelleries of Europe (less so in the European press). The sense of realism and the dialling down of the rhetoric has undoubtedly helped. While there is still an enormous amount of work still to be done even to realise the very restricted Brexit that Theresa May is imagining, the risk of a chaotic Brexit has receded quite a way as a result of this speech being delivered.

The whole effort, however, has been undermined by a major flaw that is potentially very damaging indeed. Quite simply, this speech was far too late. The timetable for Brexit is demanding and Theresa May had long ago committed herself to triggering Article 50 in the early part of 2017. There is nothing that she said this week that could not have been said at the Conservative party conference. It would certainly have been a far better conference speech than the one that she actually delivered. Three precious months have been lost.

And it’s not as though those three months have been valuably or even neutrally spent. In the meantime, the British government has been burning its remaining capital with other European nations, insulting them, belittling them and threatening them. The mood is icy.

Brexit was always going to be a brutally difficult course to navigate. But by her delay, Theresa May might well find that the flood tide has been missed. Shallows and miseries might well be impossible to avoid now.

Alastair Meeks




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Theresa May’s big speech – a round up of reaction

Tuesday, January 17th, 2017



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Team Corbyn makes a generous New Year gift to Tim Farron given that 68% of current LAB voters think it is wrong to leave

Monday, January 9th, 2017

Mike Smithson




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The big BREXIT news – the resignation of Britain’s Ambassador to the EU only weeks before Article 50 due to be invoked

Tuesday, January 3rd, 2017

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A worrying Christmas present for TMay and the Brexiteers from Team Trump

Sunday, December 25th, 2016

The Trump administration planning to exploit BREXIT for the benefit of the US

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Tomorrow’s Times front page



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What’s missing this Christmas is any sign of peace and goodwill between LEAVE and REMAIN

Tuesday, December 20th, 2016

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Alastair Meeks on “The Remains of the Day”

It’s coming up to six months since the referendum and there doesn’t seem to be much sign of peace or goodwill in the Christmas period between Remain and Leave.  Remain-supporting newspaper op-ed writers vituperate the behaviour of Leavers.   Leave-supporting newspaper op-ed writers screech at the perfidy of Remainers.  On Twitter, the Brexit debate has become egg-bound.

Nor is this confined to the empty vessels making the most noise.  Opinion polls consistently show that the public remains as split about the correctness of the original decision to Leave as it was six months ago.  YouGov recently released a survey in which they asked supporters of each campaign to detail the main reasons why people voted for the other side.  The results were unedifying.

43% of Leavers thought voters chose Remain because of fear and uncertainty – as much as every other reason cited put together.   A further 9% cited stupidity or ignorance or Remainers being misinformed.  Remainers were still less complimentary about Leavers.  43% thought that immigration was the main reason for a Leave vote.  A further 36% thought that one of racism or xenophobia, Leavers being misinformed, stupidity or ignorance or lack of knowledge was the main reason.

It seems that Leavers think that Remainers are cowardly cretins and Remainers think that Leavers are bigoted cretins.  A political chasm has opened up.

So how is Britain going bridge that chasm?  What will post-Brexit reconstruction look like?  Both sides need to think carefully about the terms on which they are prepared to coexist.  This is a challenge for both the referendum victors and the vanquished.  For now, let’s stick with the losers.

Leavers are exhorting Remainers to move on.  What Leavers really seem to mean by this is that Remainers should recant their views, but the surface suggestion is a fair one. What does moving on mean?

Remainers first have to accept the fact of the vote.  Britain voted to leave the EU and you can deplore that all you like but that’s democracy.  In any case, Humpty can’t be put back together again.  The Article 50 notice has yet to be served but Britain is leaving the EU.  Even if Britain tried to perform a volte face, the EU should not want to stay tied to such a flaky, demanding partner.

The vote needs to be honoured in spirit as well as the letter.  From that YouGov poll, Remainers clearly accept that the vote was won through Leave campaigning on immigration.  The ability to place restrictions on freedom of movement from the EU is therefore a democratic necessity, no matter how disgusting you might find the basis on which that was achieved.

Next Leavers tell Remainers that they should work with them to make the best of it.  This is where it gets difficult.  If you think that a decision was an appalling mistake but must be respected, what’s “the best of it”?

Just because something is difficult, however, does not mean that it should not be attempted.  Too many Remainers have self-indulgently evaded responsibility, defining themselves not by reference to a positive vision but negatively in opposition to all that they despise in Leavers.  The referendum vote was lost in large part because the establishment had taken for granted that the benefits of the liberal consensus of the last generation were obvious.  For the last six months it has continued to do so.  By doing this, the field has been left clear for the battiest Leavers to put forward the most autarkic, introverted and soft-boiled visions of post-Brexit Britain.

There is no requirement to work with Leavers on this, whatever Leavers might say, unless those Leavers are themselves demonstrably prepared to move on.  Out of the ashes, Remainers can argue for a Britain that may well be far inferior to the Britain that would have remained in the EU but that could at least be better than the ravings that Leavers have in store for the country. By honouring the form of Brexit, Remainers can continue to argue for constructive engagement with EU countries, the pooling of sovereignty and a recognition that most immigration is good for the country, holding the government to account.  If, of course, that is what they still believe in.  So what do Remainers now believe?

Alastair Meeks

 




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POLL ALERT: Polling Matters / Opinium: Voters back ‘soft Brexit’ but reject second referendum – even if the economy worsens

Saturday, December 17th, 2016

 

The first poll commissioned by the ‘Polling Matters’ podcast, conducted by Opinium, shows little appetite for another referendum but we shouldn’t assume voters want a ‘hard Brexit’ either writes Keiran Pedley

Since the EU referendum result was announced last June, many have sought to explain on behalf of voters why they voted the way they did and therefore surmise what they want from any Brexit deal. To try and understand what is really going on we have commissioned our first poll with pollsters Opinium (and we are delighted to be working with them on this project).

What type of Brexit do voters want?

The poll focused on two subject areas. The first was to explore attitudes to a potential ‘hard’ or ‘soft Brexit’. We put two potential scenarios to respondents and asked them to choose between them. We deliberately did not use the terms ‘hard’ and ‘soft Brexit’ in the survey to try and avoid any bias that may result in using them. Respondents just saw the descriptions below. The results suggest a ‘soft Brexit’ is preferred overall by 6 percentage points with the public divided (as we might expect) by how they voted in the referendum.

Table 1: ‘Hard’ versus ‘Soft Brexit’

  1. You may have heard different descriptions of what sort of deal the UK might receive when it leaves the EU. Assuming that Britain does leave the EU and these were the options available, which scenario would you prefer?

table-1

Before we go further we should acknowledge that this is a difficult exercise to undertake in a survey environment. We are not suggesting that Britain’s choice – insofar as it has one – is as binary as described above. Indeed, many Brexiteers will dispute the idea that there is an economic trade-off with a ‘hard Brexit’ at all. However, we still feel that this is a useful exercise. In presenting the choice as we have above we can start to understand what voter’s value most in any Brexit deal and therefore the prism through which they will see what is eventually agreed.

So what to make of these results? The obvious conclusion to draw is that the debate over Britain’s exact future relationship with the EU is not yet settled. One in four polled either offer ‘no preference’ or ‘don’t know’ whether they would prefer a ‘hard’ or ‘soft Brexit’ whilst 15% of Leave voters actually prefer a ‘soft Brexit’.

There is more than enough ammunition here to challenge those that claim it is obvious what Leave voters wanted from Brexit and therefore also challenge the nature of the mandate Theresa May has when negotiating Britain’s withdrawal from the EU. Also, irrespective of how people voted last June, at the very least the Prime Minister would be wise to keep in mind that a large body of public opinion prioritises Britain’s economic future (and the future of Britain’s public services) over immigration or Britain’s withdrawal from certain EU institutions.

However, those that want Britain to maintain as close a relationship as possible with Europe shouldn’t get too excited. Delving into the numbers further complicates matters in that Theresa May’s base is largely in favour of a ‘hard Brexit’. Conservatives prefer a ‘hard Brexit’ by 13 points and those aged 65+ prefer one by 19 points. In contrast a ‘soft Brexit’ is preferred by Lib Dem voters (72%), Labour voters (58%), Scots (56%) and those aged 18-34 (52%).

Should there be a second referendum on Britain’s EU membership?

The second subject area our poll focused on was the concept of a second referendum on Britain’s membership of the EU. We asked respondents whether they thought there should be a second referendum on Britain’s membership of the EU once the terms of withdrawal were known and also whether there should be one in the event that the British economy significantly worsens as a direct result of Brexit. The results will make sobering reading for Remainers. Surprisingly, a second referendum is roundly rejected in both circumstances. In fact, the results are identical.

Table 2: Attitudes to a second referendum

  1. Once we know what terms the government has negotiated, should there be a second referendum on Britain’s membership of the EU, where voters can choose between leaving under the terms negotiated or remaining in the EU after all? 
  1. If the British economy is shown to get significantly worse as a result of Britain leaving the EU do you think there should be a second referendum on Britain’s membership of the EU?

table-2

In any case, right now public opinion is squarely against revisiting Britain’s membership of the EU in a referendum. Of course this could change in the future. If the economy does get worse then the reality of that could change minds.I must confess I was shocked by these results. Not so much the first as I expected a second referendum to be rejected there. Other polls have given similar numbers.

However, I did not expect such a strong rejection of a second referendum in the event that the economy significantly worsens. The scale of the rejection occurs because a significant proportion of the Remain vote (27% and 26% respectively) rejects a second referendum in each instance. Perhaps this is because these people simply consider the matter resolved by the first referendum in June or perhaps they were never that committed to Britain’s EU membership in the first place. We cannot say for certain. The idea of the Remain vote being soft in parts is rarely discussed but seems in evidence here.

Nevertheless, for now the message from the public seems to be that all sides should focus on the type of exit Britain should secure from the EU rather than whether Britain should exit at all. Theresa May’s challenge therefore will be to deliver an exit that satisfies the Brexiteers in her party without being seen to deliver significant harm to Britain’s economy and public services. Whether she can deliver will ultimately determine her legacy and how long she occupies Number 10. Time will tell.

Keiran Pedley

Keiran Pedley is editor and presenter of the Polling Matters podcast and tweets about politics and public opinion at @keiranpedley.

You can listen to the latest Polling Matters ‘Review of 2016’ podcast episode below.

For more information on the above poll (and data tables) contact Keiran at kpedley@gmail.com or consult the Opinium website. Opinium interviewed a nationally representative sample of 2,000 UK adults between Dec 13-16, 2016.