Category Archives: UK Politics

The future is open. A farewell to the United Kingdom.

It was a strange defence of the Union. Over-scripted and wooden, Britain’s Prime Minister, Theresa May, chastised Scotland’s nationalists for “playing politics with the future of our country.” Nicola Sturgeon, First Minister of Scotland, had just announced plans for a fresh independence referendum. London was apparently caught off-guard. But if the best that May can muster is that “politics is not a game”, then Scotland will soon be the world’s newest sovereign state.

Across the North Channel, talks are underway to form a new government in Northern Ireland. They are unlikely to be fruitful. The previous executive collapsed amid a major financial scandal, at one time lauded for being the result of ‘normal’ politics. Even before actual voting in the March 2nd election, politics had returned to tribal normality. Yet, in a shock result, Unionism lost its majority status in Northern Ireland for the first time.

Scotland and Northern Ireland share a deep cultural heritage. Ulster-Scots identity has forged much of what is recognisably ‘Northern Irish’. These bonds were cemented by Union. But the most prescient bond at present, that they are the two nations of the United Kingdom which voted to remain in the European Union, may mean the end of the Union.

Brexit has upended political calculations. Unionists and Brexiteers bat away any talk of danger for the Union. But they ignore three issues driving change.

First is the arrogance of a nativist nationalism which is condescending in its smugness. Second, negative divides abound: whether between people with different viewpoints or between regions, difference is framed in how bad the ‘other’ is. Third, and perhaps the most potent long-term force, is that young people want to live in an open, plural, outward looking society. The UK is no longer that.

In British terms, Melanie Philips gave the most recent example of national arrogance. She is but one in a long line of national chauvinists from Farage to Fox to Foster. Populist nationalists are now household names across Europe. Their success is built upon stressing a national strength which revels in turning away Syrian child refugees and ignores the irony of free trade as the answer to closing borders. It is an inhuman approach that puts greater value on native lives than human lives.

This world view, complimented by the left’s obsession with identity politics, is driving people further apart. People increasingly see the nationality or the ideology, not the person. Civil debate barely exists. As the Economist points out, Owen Jones’s decision to leave social media because of the abuse received is a depressing symptom of our inability to agree to disagree.

Furthermore, regionalism has driven a wedge into a British identity. Scotland is different from Lincolnshire, which is different from London. Past unity is no indicator of future prosperity. Without a positive vision for what the UK is, division will become ever more normal.

Which brings us to the ultimate divide of our times: that of open versus closed societies. Perhaps the greatest driver for the changes which are happening in Scotland and Northern Ireland is that, in the main, people under 40 want to live in places where people don’t care about skin colour or with whom you sleep.

Two decades ago it was easy to identify the UK as an open and progressive place. In a Northern Irish context, the Union worked. Irish society was defined by a national claustrophobia. That has changed fundamentally. Two years ago Irish people voted overwhelmingly to support same sex marriage. Thousands of people under the age of 40 returned home just to vote in an uncoordinated and hugely emotional expression of making sure that Ireland was on the right side of history. The cathartic impact of this cannot be properly expressed. And what was simply a moment in time has, with hindsight, become one of the defining moments of Ireland as a socially progressive, creative, and open society.

Scotland’s desire to remain part of the EU speaks to the embrace of being part of a bigger whole. The results of the Dutch elections, with a massive rise in support for liberal parties amongst educated millennial voters, is further evidence that the issue goes beyond the UK’s borders. But, it also highlights the divides between people who want to embrace the world and those who want to shut borders.

Chris Deering, writing before Sturgeon’s announcement, concluded in the Financial Times that “The UK may not see out the decade”. Writing about Northern Ireland’s election results, Fintan O’Toole declared in the Guardian that “a wide crack has opened in the foundations of the UK.” To survive, the Union needs a radical but realistically positive vision. People in Scotland and Northern Ireland need to have an emotional attachment to it. Otherwise, the crack won’t be papered over.

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Values and destiny: why Scotland should say no to independence

It wasn’t supposed to be this way. Two years ago, when the campaigns for Scotland’s independence referendum began, conventional wisdom held that support for independence would plateau at 40%. Someone miscalculated. Over the past ten days, polls have consistently shown that the end of the United Kingdom is now within the realms of the possible, not just the imagination. By Friday morning, Scotland might just have voted to become an independent country.

Three issues have converged to get us to this place. First, the Better Together campaign has failed to articulate a positive vision of the UK or of Scotland’s place in it. ‘No’ is an intrinsically negative position, but the Better Together campaign has taken that to an extreme. Surely no country decides its future based on what currency it will use. And yet, the No campaign has been obsessed with currency arrangements in an independent Scotland. Technicalities are important but vision beats detail.

Second, Alex Salmond and the Yes campaign have been disingenuous. They ignore reality. They seem confused about what independence really is. They promise a rosy future of a wealthy, confident, just, and fair Scotland. Oil money will keep the country afloat. Scottish culture will make the country punch above its weight. And Scottish society will be based on social justice once those nasty Tories and/or English are out of the equation. But the Nationalists’ economics are “flawed”: oil will run out, the banks will clear out, and demographics are not in favour of long-term social spending such as that promised by the SNP.

Never mind that the process of separating over 300 years of Union will be messy and complicated. Much of the Nationalist campaign’s predictions of a glossy future are premised on having the wind behind their backs in negotiations for a post-referendum settlement. Yet, as Martin Wolf writes, “A Yes vote will launch Scotland…into years of uncertainty.” The longed for Nordic-like future is undoubtedly possible for an independent Scotland, but it is folly to suggest that independence is a panacea.

Third, but most critically, few people see Scottish nationalism as a negative. But nationalism is inherently divisive. It is about separating people, about erecting borders, about saying that people would rather look inwards than be part of a cosmopolitan, open, and multi-national society. It matters not how innocuous and fluffy Scottish nationalism might appear: the argument of Scottish nationalists is that Scotland is only for the Scottish.

Nationalism says that organising and governing a particular area is best done by people who share a similar ethnicity, similar attitudes and a similar culture. Nativism and otherness are essential. Nationalism in Scotland is just as ugly as nationalism in the Balkans. Mark Blyth writes that “Nationalism, like most forms of identity politics, thrives only in the face of a foreign other.” Yes campaigners have used the politics of identity to blame the Tories, Westminster, and the English in general for what ails Scotland. It is ugly and narrow-minded.

The most successful societies and states in history have been those that champion cosmopolitanism and openness. Scotland is on the verge of saying that insularity, smallness, and national identity is of more importance in a globalised world than being part of a multinational society. Yet, as Philip Stephens’ writes, “prosperity and security in an age of great power competition belongs to those comfortable with multiple identities – the ones who bind themselves together in shared endeavour.”

Cultural confidence is to be celebrated. That Scots have a distinct identity from other parts of the United Kingdom is a good and positive thing. Where it becomes a negative is when that cultural and national identity becomes the definition of statehood. Common identities transcend borders; an accident of birth should be less important than the identity that we choose and build for ourselves.

Alex Salmond is a bully, but he has won the emotional argument regarding Scottish independence by building a vision of a hopeful and different future. Yes, an independent Scotland could undoubtedly be successful in the long-term. It would, provided the right decisions were taken, be able to build an economy, provide for its citizens, educate its young people, and care for its sick. But it is deluded to think that this can be done better in a state defined by its Scottishness.

The world is not binary. Why seek to divide yet further? A vote for Scottish independence merely solidifies the desire of some to divide based on culture and identity. It is saddening to think that, after the horrors that nationalism has wrought, people can still build a positive vision for the future around so insular an idea. Scots face a decision on what kind of values and principles they place more faith in: those of openness and diversity or those of narrow cultural identity.

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Thatcher, decency and criticism

Street parties were held across the UK this week. Spontaneous affairs, they were also long in the planning. Those who gathered in various cities felt that the appropriate way to mark the death of Margaret Thatcher was to dance in the streets.

Thatcher was a polarising figure. It is said that no one is indifferent in their view of the woman or of what she represented. People either loved or loathed her. Supporters say she put the “Great” back into Great Britain. Some critics long claimed that they would dance on her grave.

But being an opponent of the politician, or a critic of her political views, does not mean that decency should be forgotten. Some commentators compared Margaret Thatcher with the Nazis. Think about that for a moment.

Much is made of her ignorance of the plight of ordinary people. Unions speak of the devastation wrought on families when pits closed or when jobs were lost through privatisation. Thatcher, they say, was heartless.

Such criticism confuses the abstract with the personal. Owen Jones writes of Thatcherism as a “national catastrophe.” The current economic crisis results from Thatcherism having “wiped out the country’s industrial base in favour of a deregulated financial sector.” She didn’t fix the economy because it didn’t need fixed: “Britain’s most sustained period of growth and increasing living standards were the three decades after the war, with their high taxes on the rich, strong trade unions and state interventionism.”

That all sounds wonderful, but ignores basic truths. The country’s industrial base was on its knees. Three decades of growth after the war were premised on an explosion of consumer growth, changing lifestyles and a growing population. Growth, already stalling, screeched to a halt with the 1973 oil crisis. By 1978, much like today, the economy needed structural change. Thatcher recognised this, and she delivered.

John Rentoul stole my thunder by writing that Thatcher was “a necessary Prime Minister.” The economic reforms of the 1980s would have happened. Many Southern European countries are paying now for having delayed them for 30 years. The vitriol towards her stems from the social impact of these reforms; by carrying them out with such speed and verve, huge swathes of the country were devastated. Individualism is king today. If there was such a thing as society in 1983, it is a lesser thing in 2013.

Ken Livingstone, on the night of her death, blamed Thatcher personally for the nefarious effects of neo-liberal economics across all of the West. She may have dominated her party and country, but she was not the only champion of such policies. Has Livingstone never heard of Ronald Reagan?

The Left likely does not intend the compliment of attributing the West’s embrace of free market economics and individualism to Margaret Thatcher alone. It was Neil Kinnock, Labour leader during much of the 1980s, who pointed out that the humiliation of the Left was ably aided by the stupidity and arrogance of the Left. No fingers pointing at Arthur Scargill.

It is entirely fair to say, as several more moderate voices have said (including, surprisingly to me, Russell Brand), that many of her policies were either distasteful or downright immoral. Perhaps most appalling of all was her objection to sanctions against apartheid South Africa, paralleled by her support for Chile’s Augusto Pinochet. And Tories wonder where the nasty label came from.

Which brings us back to those street parties. Writing in the Guardian on Monday, Glenn Greenwald made the argument that because she was a public figure, criticism of Lady Thatcher should not be silenced: “[A] demand for respectful silence…is wildly inappropriate for the death of a controversial public figure, particularly one who wielded significant influence and political power.”

No one suggested that criticism of such a controversial figure should be silenced. People simply expect it to be respectful. Greenwald writes, much like a 16-year old with no argument would assert on a GCSE History paper, that Americans’ views of Ronald Reagan continue to be shaped by the “week-long tidal wave of unbroken reverence.” Pity those people whose entire world view is shaped by a week of historic reflection.

Pity those people who, railing against the mean-ness that Thatcherism engendered, express glee in her death. Pity those people who cannot channel their anger into advocating for a more beneficial capitalism. Pity those people, like Owen Jones, who miss the point completely in calling for a workers’ revolt.

The world has moved on from 1945, and from 1974 and 1984. The ease with which we communicate and travel means we are all better off today; both possible because of Thatcher’s reforms. Those who abhor Thatcher need to argue for a more social Britain, with more social equity and more community. Dancing on anyone’s grave does not advance that task.

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Leveson, the Lib Dems, and press freedoms

By lunch-time tomorrow, Lord Leveson’s report on press standards will be public. Downing Street continues to insist that the Prime Minister has not taken a firm decision on how to proceed with the report’s recommendations. The straws in the wind suggest otherwise. Most senior Conservatives, Michael Gove and William Hague among them, have been vocal in rejecting statutory regulation. Some Tories do support a firmer legal framework that would introduce statutory regulation for the press. But the bulk of support within the party is for an approach that stops short of legislation whilst moving the industry away from self-regulation.

Labour leader, Ed Milliband is calling for Leveson’s findings to be implemented without knowing exactly what the report will recommend. Tensions do exist within the Labour Party on the matter, with former Home Secretary, David Blunkett, gathering support for a letter opposing increased regulation. Despite this, the party appears to generally favour bringing the industry to task.

Of particular concern to government sources is the very real prospect of Nick Clegg, the Deputy Prime Minister and leader of the Liberal Democrats, supporting a different approach from that of his coalition partners. Lib Dem sources are clear that the party favours stronger legal regulation for the press. There is little doubt that, should the Tories and Lib Dems fail to agree a common approach, a serious clash between the government parties is looming.

That the Liberal Democrats are so freely supporting a tougher regulatory framework is something of a surprise. Few could ignore the egregious abuses carried out by some journalists and newspapers. The public and political revulsion at press malfeasance is why the Leveson inquiry was established. But the party that espouses liberal belief should surely be arguing for maintaining freedom of the press to as great an extent as possible. Instead, having abandoned bandwagons for principles earlier in this Parliament, the Lib Dems now appear to be be abandoning principles to hop on the latest bandwagon.

It is difficult to conceive of another European liberal party calling for constraints on a free press. Germany’s Free Democrats, Denmark’s Venstre, or Sweden’s Centre Party all look like an uncomfortable fit for a party calling for more state control of the press. Yet that is exactly what the Liberal Democrats are likely to be advocating by tomorrow afternoon.

Some senior party members, as highlighted in today’s Financial Times, recognise that the future will be more nuanced than that which Mr Clegg and Mr Miliband appear to desire. John Hemming, a Lib Dem MP is quoted in the FT as saying ““Nick Clegg has made a mistake in nailing his colours to the Leveson mast without knowing which way the ship is sailing.”

The winds do appear to be blowing in a prevailing direction. Most people expect Lord Justice Leveson to recommend some form of statutory regulation. A ‘pre-proposal’ from Lord Black, a former Director of the Press Complaints Commission, recognises that the current system requires change but rejects new legislation. No one disagrees that change is needed. The shape of that change is what will define press freedom in the UK for generations.

Suggestions that statutory regulation would empower the Mugabes and Assads of this world to enact tighter state control of the press under cover of ‘Britain is doing it’ are overblown. Tyrants need no empowerment, nor no fig leaves of cover to take whatever actions they want. Instead, there is a strange dynamic at work when a party that traces its roots to one of the West’s classical liberal forces supports the erosion of a fundamental tenet of liberal belief. Freedom of the press is no guarantee of a democratic society. But a democratic society that undermines press freedom in any way undermines the values on which it is based.

Some will argue that newspapers and journalists bear responsiblity for any future statutory regulation. This argument is false. Newspapers and journalists have seriously, perhaps irrevocably, damaged their standing in British society. Leveson uncovered not only press-hacking but corruption and other criminal acts. It is crucial that we remember all of the actions uncovered were criminal. Rebekah Brooks and Andy Coulson must yet defend themselves in a court of law.

That the industry’s attitude allowed media ethics – and common decency – to be so contemptuously ignored by some, will need to be addressed. Regulation will not do that. All industries suffer from the actions of selfish or compromised people. Regulation of the banking sector has not prevented selfish or unpleasant attitudes from taking hold. Yet the press needs to be able to investigate and act in a way that will question, and upset, politicians. And the press plays a more critical role in democracy and civic life than banks.

Instead of beating the popular drums for short-term revenge, the Liberal Democrats should be advocating the virtues of freedom of speech and freedom of the press. To do anything else tramples on its liberal heritage. We can recognise that the press has to change. We can even blame journalists and newspaper editors for bringing us to this point. If we end up with statutory regulation, it will be because politicians have introduced it. And because the party that should be defending an open and free society, will, most likely, be at the forefront of undermining it.

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Enough with the Corporation Tax argument…

The continuing (long-running) saga of reducing Corporation Tax in Northern Ireland has a particular knack of shoving me close to the edge of the cliff. I have a series of problems with the arguments in favour of reducing corporation tax, the biggest of which is the fact that the argument is being made at all.

The argument has been made for a reduction in corporation tax in Northern Ireland to 12.5% (the same as that in the Republic) for a few years now. So many years, in fact, that we’ve even had a time for an inquiry into the matter. Which said that the UK government wouldn’t do it. Cue a wail of horror from Northern Ireland’s politicians. This leads me to my second problem, but more on that later…

The rationale against any cut in corporation tax in Northern Ireland is simple. It’s illegal. Under EU law, no member country can reduce taxation in a certain area of the state without it being deemed state aid. Either the change is made across the whole jurisdiction, or it’s not made at all. The legality of this has been tested in the European Court of Justice (thanks to the Portugese government) with reference to the Azores. To be certain of the situation, I read the opinion of the ECJ myself. Now, I’m no lawyer, but it is very clear that reducing corporation tax in the Azores was deemed illegal because “The settled practice of the Commission … consists of classifying as aid tax schemes applicable in particular regions or territories which are favourable in comparison to the general scheme of a Member State …” In other words, the tax scheme in the Azores, which would have allowed for lower rates of income and corporation tax than those in the Portugese mainland, would have been favourable in comparison to the rates in the rest of Portugal, producing an unfair advantage deemed as state aid.

Stay with me. The ruling also highlighted that the European Commission might have ruled that the proposed system for the Azores was legal, if the rules applied to firms operating outside the financial sector, but it didn’t even find this because “the reduced rates of income and corporation tax are not justified by their contribution to regional development and their level is not proportional to the handicaps they are intended to alleviate.” In other words, the system went beyond just alleviating a supposed handicap inherent in the peripherality of the region and produced an unfair advantage to the Azores over the rest of Portugal.

The UK government added its weight to the argument in support of the Portugese government, largely saying that if the court found in favour of the Commission on the basis that tax rates had to be equal across the whole of a member state, then this called into question the possibility of devolving fiscal autonomy to particular regions, as well as the whole concept of devolution. Or, simply, no UK government would ever be able to offer Scotland, Wales or Northern Ireland the possibility of tax raising powers within their own legislative jurisdictions. For good measure, Spain supported the UK and Portugese arguments before the Court with reference to the issue of devolution.

The ruling of the ECJ is clear on this matter – lawyer or no lawyer. It outlines three scenarios where the issue of state aid might arise in reference to taxation policy, one of them being that if a regional or local authority “in the exercise of sufficiently autonomous powers” adopts a different tax rate from the national power. The ruling goes on to say that to be sufficiently autonomous “that decision must, first of all, have been taken by a regional or local authority which has, from a constitutional point of view, a political and administrative status separate from that of the central government. Next, it must have been adopted without the central government being able to directly intervene as regards its content. Finally, the financial consequences of a reduction of the national tax rate for undertakings in the region must not be offset by aid or subsidies from other regions or central government.” [Italics are my own emphasis]. To further augment this point, the ruling continues, that to satisfy EU law on political and fiscal independence from central government, not only must the regional authority have “powers in the territory within its competence to adopt measures reducing the tax rate..but that in addition it assumes the political and financial consequences of such a measure.” [Again, my italics].

The sticking point in the entire argument is that given their insularity and peripherial status, the Azores suffer from structural disadvantage from the rest of Portugal. So, it is incumbent, based on Portugese law, for the Portugese government and the autonomous authority in the Azores, to correct these structural imbalances whilst ensuring appropriate levels of public services. So, like Northern Ireland, the Azores benefits from a direct transfer of money from central government to ensure the delivery of appropriate levels of public services, meaning that any reduction in money to the Azores from a reduction of corporation tax would be offset by an increase in the direct transfer of money, resulting in an unfair advantage for the Azores…

My difficulty with the situation in Northern Ireland, with our local politicians and many senior business leaders calling for the government to cut corporation tax is based on a lack of leadership. It’s been deemed illegal by the European Court of Justice, so why even make the argument in the first place? Secondly, I’ve seen arguments made by the DUP (though I may have been dreaming) that to offset the loss of revenue from reducing corporation tax, the block grant (amount of money given by London to Belfast, Edinburgh and Cardiff) could be increased before being reduced. I say good luck to the DUP in trying to make that argument to Westminster. I also believe that the issue is more about what is being done to promote entrepreneurial talent from within Northern Ireland than seeking to base any growth on foreign investment. This is where leadership is sorely lacking.

Essentially, I take the view that our local politicians continue to make the argument about cutting corporation tax to extract further monetary concessions out of London, safe in the knowledge that if neither comes they can continue to wail that the politicians in Westminster took their dummy away. With the new Prime Minister visiting Belfast today, inevitably attention was focused on the corporation tax issue. Cleverly, the new coalition agreement, also published today, has a clever little mechanism to allow London off the hook altogether, and, to potentially hand the decision making power over to local politicians in Northern Ireland. The agreement simply states that the government in London “will work to bring Northern Ireland back into the mainstream of UK politics, including producing a government paper examining potential mechanisms for changing the corporation tax rate in Northern Ireland.” That mechanism, I predict, will be the transfer of tax raising powers to the Northern Ireland Assembly. And given that politicians in Northern Ireland have abdicated fiscal responsibility (re water charges) in favour of populism, I doubt very much that they are willing to assume the political and financial consequences of actually having to forgo a considerable chunk of money…

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