Bagehot's notebook

Britain's cheering gloom

Thu, 28 Jun 2012 23:56:43 +0000

MY print column this week looks at the deep anger and anti-politics contempt that suffuses national debate in Britain just now. I suggest that British voter rage is oddly encouraging. In lots of debt-ridden western nations, anger at the government is fatalistic, almost nihilistic, and too often focuses on preserving a crumbling status quo and clinging desperately to dwindling sectoral privileges. In Britain, I would argue, voter rage is more constructive: if people are furious about what they see as the unfairness of life in today's Britain that is because they expect it to feel fair.

The column is below. Before that, I feel I should apologise for my very limited blogging over the last month or so. At very short notice, I have been posted to Washington DC. Indeed, I caught a plane two hours after filing my last Bagehot column and am now writing these words in the American capital. Organising the move in a hurry left no time for this blog, to my regret.

Mine was a briefer than expected stay in Britain. After watching the country from afar for so many years, it was a great opportunity to report on my homeland, an outlier in so many ways, and something of a canary in the mine for the cause of free market liberalism.

Your comments have been instructive, I always read every one, as I did in a previous life as Charlemagne, and will again in the late summer when I start writing our Lexington column. Thank for your patience (I know, some of my postings can be rather long), and see you again soon. Here is the column:

THE rich West is a pessimistic place right now. Just 12% of the French, 21% of Americans and 28% of the British think the next generation will fare better than them, according to polling by the Boston Consulting Group. In China, by contrast, the optimists score 83%.

British voters are duly punishing their politicians, who seem impotent in the face of global economic storms. One leading pollster calls the net approval ratings of Britain's three big party leaders an “ugliness contest”, with the Conservative prime minister David Cameron on minus 18, Labour's Ed Miliband on minus 27 and—exploring such depths of public disdain that he will soon need his own bathysphere—the Liberal Democrat leader Nick Clegg on minus 53.

Pessimism has slid into general disillusionment and anger directed at higher-ups and better-offs. The peculiarly British scandal of MPs' expenses (think claims for duck houses and bills for moat-cleaning) broke at a wretched time, just as voter anger exploded at the rewards grabbed by City of London whizz kids who seemed to have blown up the economy. A research project by Policy Exchange, the prime minister's favourite think-tank, found voters disagreeing that Britain is a meritocracy by 74% to 21%.

Gloom also stokes the unusually intense rage over immigration. The British are more likely to describe immigration as a top concern than any other European nation, and they are quicker than people in most rich countries to call immigration a problem rather than an opportunity. Conservative Party analysts prepare a weekly word cloud of the issues that voters would raise with the prime minister if they met him. Immigration is the largest word each time. Because the British are so down on their own country, explains a senior Tory, their best explanation for why foreigners head there is that Britain stupidly hands generous benefits to newcomers.

Anti-immigrant anger is, in part, a British manifestation of the unhappiness about global competition that suffuses rich-world politics. On June 22nd Mr Miliband apologised for what he called the Blair government's mistaken decision to open Britain's employment market to workers from ex-communist countries as they joined the European Union. We were “too dazzled” by globalisation, Mr Miliband sorrowed: mass migration from the east was great for homeowners wanting a Polish builder but less good for local craftsmen. That is an empty apology. When Poland and the rest joined the EU, their citizens quite properly gained the right of free movement round the union, so huge numbers would have come anyway. Barring their road to legal work (as Germany, France and others did) merely expanded local black markets. By offering legal work, Britain got the youngest, best educated east Europeans. Still, voters are convinced that migrants steal jobs.

British attitudes to Europe, never warm, have also been made frostier by the general sense of impotence. Lots of voters dismiss the idea that Britain can shape the EU and conclude that they should seek a much more distant relationship.

Finally, there is a near-consensus that Britain's current social contract unfairly hits hard-working ordinary folk, while showering undeserved rewards on those at the top (eg, bankers) and at the bottom (ie, welfare recipients and migrants). Seeking to build on a popular plan to cap all household benefits, Mr Cameron hinted this week that a future Tory government would slash handouts further, perhaps cutting payments to those young enough to live with their parents.

So far, so sullen. But Bagehot—who leaves Britain this week for a new posting in America—finds himself oddly encouraged by the nature of British pessimism. This columnist came to Britain after 12 years in the new world and Europe. From afar, the British seemed to have found a distinctive way of handling globalisation: a mid-Atlantic compact based on greater individualism and tolerance of competition than the French, say, balanced with a more generous welfare safety net than might be found in America. To simplify, Britain looked American at the top and European at the bottom, and it seemed to work.

They are angry because they aspire to a better country

Bagehot thinks that compact is intact, if fragile. In much of Europe, competition is seen as a necessary evil and the opposite of solidarity. In Britain, competition is still tolerated so long as the rules of the game are just. (This difference of view has deep roots: several southern European languages talk of “disloyal” competition when English uses the term “unfair”.)

In other debt-ridden Western countries, including much of the euro zone, vested interests and tribal voter blocks are hunkering down to resist reforms and defend dwindling privileges. Yet the British still yearn to live in a meritocracy: 87% told Policy Exchange that in a fair society incomes should depend on hard work and talent.

Though the British are immigration-obsessed, overt racism is all-but taboo. Consider how the United Kingdom Independence Party, a populist outfit that wants much tighter curbs on foreigners, has played down issues of ethnicity or religion as it rises in the polls, recently ditching calls to ban Muslim headscarves. Even those who would quit the EU are guilty of excess optimism along with excess gloom: Eurosceptics cling to the rash belief that Britain could secure free-rider access to EU markets by walking out.

If the British are obsessed with society's unfairness, that is because they want it fixed—a finer ambition than clinging, fatalistically and cynically, to a crumbling status quo. Bagehot bids farewell to an unhappy country. But it is an unhappiness that looks to the future and wants to improve it. Britain is lost in this crisis. With luck and grown-up leadership, it will find a way out.

A Brixit looms

Thu, 21 Jun 2012 15:49:17 +0000

MY PRINT column this week considers the political implications in Britain of the deepening euro crisis:

DAVID CAMERON does not want Britain to leave the European Union, though he finds it exasperating and fears euro-zone meltdown could cost him re-election. His Liberal Democrat coalition partner, Nick Clegg, is a pro-European. Nor does the Labour opposition leader, Ed Miliband, want out. Mr Miliband is a European social democrat by instinct (his relatives were refugees from the Holocaust) and by judgment, seeing the EU as a way of delivering public goods such as action on climate change.

Yet the chances of Britain leaving the EU in the next few years are higher than they have ever been. A Brixit looms for several reasons. For one thing, the British never fell in love with Europe, instead weighing costs against economic benefits. Right now the EU is seen as a basket case (though British finances are hardly in great shape).

For another, if euro-zone members overcome their differences and integrate much more deeply, they would arguably be leaving Britain, especially if their integration fragments the single market that is the bedrock of British membership. Mr Cameron and his chancellor of the exchequer, George Osborne, may talk of the euro's “remorseless logic” compelling richer members to stand behind the weak. But there are paths of European integration down which no government led by Mr Cameron (or for that matter Mr Miliband) could follow. At the top of the Conservative and Labour parties, economic debate is dominated by those who saw the euro as a disaster and think they are being proved right. The public agrees, though their certainty has less to do with economics than misanthropy: the British do not like southern Europeans enough to offer them a subsidy union, and have never believed that other rich northerners, deep down, felt differently.

British politicians can be forgiven a degree of passivity, then. Yet if Britain is closer to the exits than before, politicians do bear the blame in one important way. A worrying number of MPs seem to believe that—as a happy result of this crisis—Britain can blackmail its way to more favourable terms of membership.

As Conservative Party leader in 1998, the current foreign secretary William Hague predicted that the single currency would turn into a “burning building with no exits” (in a speech mostly written by a young aide called George Osborne, as it happens). Now that the euro is ablaze, some Tory Eurosceptics want to park in front of the fire station, blocking treaty changes aimed at shoring up the currency unless the EU returns swathes of powers to British control. Their vehicle for such blackmail would be a “referendum lock” that became British law last year, guaranteeing a national vote on any future transfer of powers from Westminster to Brussels. Technically, euro-zone rescue plans could be crafted to avoid transfers of sovereignty from Britain. But some Tories, including—it is reported—some cabinet ministers, have told Mr Cameron that deep euro-zone integration would so alter Britain's relations with Europe that a referendum should be held anyway.

Tory leaders think they can win that argument. In parallel they also think that they can fend off calls from other Eurosceptics for a straight in-out referendum, calling such a vote the wrong question at a time of rapid change to Europe's structures.

Such arguments are relatively easy to win. Most Tory MPs do not favour outright withdrawal. They want a looser relationship with Europe, involving single-market membership without the bits they dislike such as environmental and employment rules, or big budget contributions. Most Tory MPs also realise that a block-the-fire-station blackmail strategy, unleashed at the height of a global economic crisis, is risky.

Instead, a supposedly safer wheeze is generating enthusiasm: to head into the next general election promising a formal renegotiation of British ties with Europe, with the results to be put to a “validating referendum”. The problem is that a negotiate-then-validate strategy is just a prettified form of blackmail. It amounts to a bet that other EU members will grant big concessions, knowing that otherwise British voters would reject the deal.

Nobody is going to pay Britain to stay

Germany—seen by Mr Cameron as the dominant force in a fast-changing Europe—has clearly signalled that Chancellor Angela Merkel will not be blackmailed into British opt-outs or special treatment. Germany accepts that in the event of treaty changes to create new euro-zone institutions, Mr Cameron would need concessions to get such changes endorsed by Parliament. Perhaps certain narrow powers could return to the national level for all EU members, Britain has been told. But push too hard and euro-zone integration will be pursued outside EU structures.

Germany may be bluffing a bit, but not wholly. Nor is it easy to see why MPs think a referendum to validate new terms of membership is safer than an in-out vote. Draw a map of possible outcomes, and to avoid defeat the future government would need to secure a renegotiation, win hefty concessions, convince the public that they were hefty and then persuade voters to answer the question on the ballot paper rather than generally vent spleen. A single wrong turn would lead to the EU exits.

Yet within Parliament and Whitehall, a startling number of senior figures think that one of the big parties will pledge an EU referendum before the next general election, forcing the others to follow. Labour, it is said, might call a referendum to split the Tory Party. The Conservatives might call one to shore up their core vote. Both might be bounced by rising support for the United Kingdom Independence Party, which favours withdrawal.

None of the party leaders want to leave the EU, but it could happen. All have much to lose from an EU referendum, yet such a vote is starting to feel almost inevitable. How this ends is unknowable, and only partly in Britain's hands.

George Osborne's horrible spring

Fri, 15 Jun 2012 06:10:05 +0000

MY PRINT column this week listens to a chorus of criticism about George Osborne, the chancellor of the exchequer, and considers which bits might matter.

EVER since he delivered his budget to Parliament on March 21st, troubles have rained down on George Osborne. He has U-turned and dodged, to the press's glee. The chancellor's colleagues ask whether he is steering Britain on the right course, amid the most perilous economic storms in memory.

Some on the right of the Conservative Party loudly assail the chancellor, accusing him of lacking a credible plan for growth. They roll their eyes at Mr Osborne's blame-shifting argument that a British recovery, already slowed by high oil prices and debts bequeathed by the previous Labour government, is being “killed off” by chaos in the euro zone. The euro is a menace, such right-wingers agree. That is why a proper Tory chancellor would call for its early break-up, not urge European colleagues to save it.

A second group, among them lots of Tory MPs first elected in 2010, is less critical than crestfallen after a run of missteps from a man they had thought the political genius of their generation.

A final group of worriers includes figures close to the Conservative leadership (as well as allies of Nick Clegg, leader of the Liberal Democratic bit of the coalition). These quiet loyalists still stand by Mr Osborne's Plan A—his gamble that in a debt crisis it is worth enduring painful spending cuts to reassure the markets and preserve Britain's low borrowing costs. But they wonder whether Plan A could do more for growth.

Of these three groups, right-wingers noisily critical of Mr Osborne and new MPs disappointed by him do not matter much. The quiet angst of coalition loyalists is a bigger problem.

Start with the angry right. For all their bluster, they do not want a Plan B, they want a more flinty Plan A. Their true-blue austerity would feature faster cuts to shrink the state, lower taxes, curb welfare costs and slash the foreign aid budget. They would boost business by ditching costly environmental pledges and make it easier to sack duff employees. In short, their Plan A is full of things that the Tory right always wants.

There are some novelties. Some on the right have developed a Gaullist enthusiasm for state-backed infrastructure, while remaining flinty Thatcherites in their views of current spending. Hang around the right sort of Tory donor or disgruntled business chief, and this hybrid position soon comes up. To caricature, they want Mr Osborne to dismantle the welfare state in order to pay for a new London airport.

Osborne allies are unruffled by all this. When under fire from Labour for cutting spending too fast, they say, it is helpful to have right-wingers saying the government is cutting too slowly: it makes the chancellor sound centrist. A new airport is being studied, they add, but mega-projects do not boost growth quickly. As for the right's belief that a swift euro-zone collapse would be a mercy, contingency planning suggests otherwise. The financial, contractual and even consular consequences of a chaotic break-up chill the blood (Treasury types still cite with awe the mess caused when tiny Iceland's currency imploded in 2008). The chancellor's support for euro-zone integration is born of pragmatism, not faith in federalism. Imagine the diplomatic costs of urging EU neighbours to let their currency die, allies say. Backing euro-zone integration is the least bad alternative.

The second group—disappointed Tory backbenchers—is still less of a threat. Like markets, parties over-correct, says a Tory MP: many 2010 newbies thought Mr Osborne had the Midas touch. Now they are sunk in excessive gloom. That does not mean lessons cannot be learned from the shambolic 2012 budget, and a string of small but humiliating about-turns on tax policy. Team Osborne was overconfident, his allies concede. Because the public had tolerated austerity measures that hit everyone, such as an across-the-board VAT rise, Team Osborne underestimated the perils of raising taxes on a few things, such as Cornish pasties.

Mr Osborne needs to shake this post-budget reputation for ineptitude before it sets hard. A new poll by Ipsos MORI finds him eight points behind the Labour shadow chancellor, Ed Balls, on economic competence: a setback for Mr Osborne since March, when he was level-pegging with Mr Balls. Most Tory MPs have not lost faith. They think Plan A will work in the end. In the meantime they would settle for more competence and fewer U-turns.

What of that third group—the quiet but fretful loyalists, both Conservative and Lib Dem? They want “Plan A plus-plus,” says a coalition source. That means sticking with austerity, while trying to think of ways to increase capital spending on things like social housing, schools or roads without spooking the bond markets. Various ideas are in circulation. The precise details matter less than the growing eagerness of coalition insiders to tweak Plan A.

The markets also want growth

Fretful loyalists worry that the chancellor currently prefers “clever wheezes” to nudge the private sector into spending, involving off-balance-sheet credit guarantees and the like. If the private sector is paralysed with fear, they say, such schemes amount to pushing on pieces of string.

Will he budge? Labour leaders would crow over any sign of adjustments to Plan A. Let them: Mr Balls's own ideas for boosting growth are populist and unconvincing, centred on such micro-wheezes as levies on bankers' bonuses and a temporary VAT cut to boost consumption. Mr Osborne showed boldness when drawing up Plan A. His cleverness is not in question. Enduring crowing from Mr Balls would merely require political bravery.

For all the noise and chatter about the chancellor in the press, the real story is that most Conservative and Lib Dem MPs are united behind his overall strategy. But some of the government's most thoughtful supporters are now worried about growth. They are not shouting loudly. Mr Osborne should still heed them.

The UKIP insurgency

Thu, 07 Jun 2012 16:11:36 +0000

MY COLUMN this week is about UKIP, the British political party campaigning for withdrawal from the EU.

ANGRY insurgents rarely prosper in British politics. Two big things help explain this: voting rules and sniggering. Britain's first-past-the-post voting system is rather brutal to small parties. And if electoral rules do not snare a would-be demagogue then mocking laughter probably will. It is a brave politician who stands before British voters, face red and voice shaking with fury. There is always the risk that at some climactic moment a heckler will interrupt, posing a variant on the ancient British question: just who do you think you are?

How, then, to explain the rise of Nigel Farage, leader of the United Kingdom Independence Party (UKIP), an insurgent (and at times quite angry) outfit devoted to Britain's withdrawal from the European Union? Once a near-irrelevance, UKIP haunts the thoughts of politicians across Westminster. The explanation lies in Mr Farage's talent for turning both Britain's voting system and its traditions of pomposity-pricking mockery to his advantage.

UKIP does not need to win a single House of Commons seat at the next general election to have an outsized impact. The party just needs to threaten, credibly, to siphon off enough Conservative votes to deny David Cameron's party victory in a decisive number of seats: a disastrous fate in a first-past-the-post system. In happier times such a menace might unite Conservatives against UKIP. These are not happy times.

Battered by grim economic news and a string of government U-turns, the Conservatives are some ten points behind Labour in the polls. Almost two-thirds of Tory voters say that they would like to leave the EU. On the party's right, the fact that Mr Cameron wants to stay in the union (and argues that an EU referendum is needed only if Britain is asked to hand more powers to Europe) fuels suspicion that he is not a proper Conservative. His decision to go into coalition with the pro-European Liberal Democrats after the 2010 general election fits the same narrative (right-wingers think he should have chanced a second, snap election).

Though UKIP draws some support from the left and boasts a hard core of voters furious at all big parties, recent gains have come disproportionately from Tory ranks. UKIP's current policy platform is a land grab of terrain ceded by Tory modernisers. It includes a five-year freeze on permanent immigration, increased military spending, a return to selective grammar schools, calling global warming “not proven” and ending smoking bans in pubs.

Mr Farage has begun briefing that local Conservative associations have begged him to consider joint Tory-UKIP candidates at the next general election. Recent opinion polls put UKIP within a point or two of the Lib Dems in either direction (though polls traditionally understate Lib Dems' local strengths). UKIP's next goal is to increase its foothold in local councils, he says, building grassroots networks in conscious emulation of the Lib Dems.

Why good cheer can work

If Mr Farage is adept at maximising his clout within the British electoral system, he is—as importantly—good at the derisive bit of politics. He is skilled at supplying disillusioned voters with arguments to sustain their rage. Yet at the same time, his public persona is cheeky and cheerful: he sometimes seems to heckle himself.

At a recent public meeting outside Bristol, in south-west England, Mr Farage played the packed room (Tory-faithful types, ranging from pensioners in blazers to brawny small businessmen) like a virtuoso. Tiny model Spitfire fighters flashing at his shirt-cuffs, Mr Farage told the crowd what it wanted to hear. Britain is run by “college kids”. The dead of two world wars are being betrayed by Westminster politicians “impotent” to defend democracy. Britain has turned its back on its “kith and kin” in the Commonwealth. It is an “outrage” that eastern Europeans can come and claim benefits. “Charity begins at home,” shouted Mr Farage, and the 250-strong crowd roared.

Questions from the floor were darkly angry. Could Britain be trapped into bailing out the euro by some hidden EU mechanism? Was “political Zionism” behind the world's woes?

Mr Farage turned the mood upbeat. He described how his post as a Eurosceptic group leader in the European Parliament had earned him a meeting with Germany's chancellor, Angela Merkel (cue chuckles). He had asked if it might be kinder to free Greece and other debtor nations from the euro-zone “prison”. He mimicked Mrs Merkel's solemn reply: that countries leaving the euro would end “the European dream”. The crowd cheered gleefully. He urged the questioner worried about Zionism to beware conspiracy theories: “We must, must, must be optimistic.”

Five counties to the east, such optimism is on display in Ramsey, a Cambridgeshire market town which is home to the only UKIP-controlled council in Britain. Ramsey's UKIP councillors take turns cleaning the public lavatories, clearing dog mess and patrolling local pubs at weekends. Pete Reeve, a UKIP councillor, spent the Diamond Jubilee celebrations dressed as the town's mascot, a furry ram. Yet Mr Reeve (interviewed in his ram suit while wartime melodies such as “We'll Meet Again” boomed from loudspeakers) also explained, earnestly, that Eurocrats were trying to build a European army and an electricity grid controlled in Brussels, so that in a few years Britain might not be able to leave the EU. Immigration is a big issue in Ramsey, he added, citing complaints about local factory jobs reserved for Polish-speakers.

In short, UKIP is trying something ambitious: upbeat protest politics for angry, anti-political voters. Will this achieve Mr Farage's short-term goal of supplanting the Lib Dems as Britain's third party? It may not matter. Mr Farage's real dream is to reshape Britain, by pulling the Conservatives to the right and bouncing Mr Cameron into a referendum on EU membership. If he pulls that off, his insurgency will be no laughing matter.

Some ideas for improving Britain's relations with Europe. Why they may not work

Fri, 01 Jun 2012 16:14:58 +0000

WEARY readers may find this hard to believe, but Bagehot tries hard to ration the amount that he writes about the European Union. After five years in Brussels from 2005 to 2010, including three writing the Charlemagne column for this newspaper, I am acutely conscious of the need not to dwell too much on one aspect of British policy.

Alas, the story of Britain's relations with Europe comes under the heading complicated but important (or even, a lot of the time, boring but important).

As patient readers may have noticed from a few columns and blog postings over the past few months, I think that Britain's relationship with the EU is in pretty ropey shape. Some of that is the fault of British politicians, quite a lot of it is not. Though accused here in London of being a hand-wringing Euro-quisling, I was taxed in Brussels with being a swivel-eyed Anglo-Saxon ultra-liberal Eurosceptic. I like to think that leaves me, in political terms, doggy-paddling somewhere in the middle of the English Channel dodging the ferries. But it's not for me to judge.

But I confess that in my reporting around Westminster and in my contacts with the government and opposition, I do try to keep an eye on what is happening with the euro-debate. It helps that the clan of people in London interested in Europe (whether pro-European or Eurosceptic) is pretty small. So like devotees of some strange cargo cult, when we meet, we do tend to exchange notes.

All in all, it struck me a few months ago that it might conceivably be of use to set down, in a longer format, what I thought was going on: to map, if you like, the current state of relations. The end result is a long (very long) 20,000 word paper for the Centre for European Reform think tank, who have kindly published the results this week (though I am, in general, a bit more sceptical about the project than the CER). The paper draws on meetings and interviews, on and off the record, with ministers, MPs, MEPs, politicians, national officials, EU officials and think-tankers, reflecting all shades of Euro-opinion, in London, Brussels, Paris and Berlin. It also offers a sort of potted history as to how we got here: why Britain is a uniquely grumpy member of the club.

The paper is called "The continent or the open sea: Does Britain have a European future?" Here is a link.

Below, for those who prefer to cut to the chase, is the ending. It involves a series of modest recommendations for things that might make relations a bit better. Of these, I think the most interesting involves setting up teams of MPs to scrutinise proposed EU laws and regulations at a much earlier stage, in a sort of system of parallel European select committees. This could achieve three things, I would argue. It could give bored and underused MPs something to do. It should improve Britain's chances of spotting bad ideas and heading them off much, much earlier, rather than triggering a fuss way too late in the process as happens now, all too often. Finally, if those same EU select committees were encouraged to travel to other national capitals and lobby fellow national parliamentarians, it would help Britain to build alliances and send a valuable signal that Britain thinks that national parliaments have a big role to play in holding the remote and technocratic European project to account. For all that British voters are sick of the House of Commons, I do still believe that national parliaments have a much stronger democratic mandate in most countries than the European Parliament, which is a navel-gazing, self-serving, smug, consensual, spendthrift, remote and barely democratic excuse of an assembly.

There are some other suggestions to do with a big decision that Britain must make soon to do with Justice and Home Affairs legislation, and whether to opt out of a huge range of EU measures in the field of police and judicial co-operation (eg, the European Arrest Warrant). I think that Britain should take the opt-out.

There is a bit on an EU referendum, and the growing pressure on all main parties to promise to hold one after the next general election.

Finally, and before I am accused of ignoring the small detail that the euro zone might be about to fall off a cliff, I do concede, absolutely, that the future of Britain's relations with Europe may well be decided by others and not by us. If I worry that Britain might walk away from Europe too soon, in a miscalculation of the costs and benefits of membership, I also admit that certain forms of euro-zone integration could amount to Europe walking away from us.

Where I part company from those columnists applauding and cheering on the idea of a bust-up is somewhere around the applause and cheering part. After five years covering the EU, reporting from almost every corner of the union, I think that British Eurosceptics are simply mistaken to think that a collapse of the EU would lead to something more to their liking. I am not about to defend the single currency project right now. I was never one to defend the Brussels establishment, nor their constant demands for new treaties and more powers for the centre. But a Europe without an EU, or with a core EU excluding Britain, is, I think, likely to be less open, less liberal and less outward-looking, and more statist, more protectionist and more prone to damaging trade fights and bidding wars over state aid and subsidies. Some British Eurosceptics dream of being Switzerland or Norway, enjoying arms-length, free-rider access to the single market. I think even that is a fantasy, but assuming we disagree, at least let Eurosceptics concede this. They want to be the Switzerland or Norway of today, with arms length, free-rider access to this single market. Take away that single market, and what does the deal look like then?

Here is the ending of my CER paper. Warning, it is quite long.

THOUGH watchful waiting is not a very stirring British strategy amidst the deepest crisis in EU history, the government does not have many alternatives. As long as Britain is not prepared to sign up to the eurozone's fiscal and economic rules and monitoring mechanisms, and is not willing to pay into eurozone bail-out funds, Cameron is hardly in a realistic position to dictate terms to France, Germany and other members of the single currency club.

A non-exhaustive list

If a true economic or fiscal union is established inside the eurozone, then a two-speed EU will exist, and Britain will be in an outer core. That does not mean there is nothing that Britain can or should do.Watchfulness is not the same as passivity.

★ Collect Lufthansa frequent flyer miles

Negotiating blunders revealed at the December 2011 summit are being examined within the British government machine, and rightly so. Perhaps the biggest mistake involved a misreading of Merkel's position. British ministers, diplomats and the permanent secretaries of Whitehall departments need to become better informed about German thinking. As a senior figure acerbically notes, it is never hard to persuade British civil servants to pop over to Paris for talks with the French (ideally over lunch). It should be just as routine to fly to Berlin for consultations, yet somehow there are always fewer volunteers.

★ Play at enhanced co-operation

The December summit revealed that there is no club of ten countries outside the euro, waiting for British leadership. But that does not mean that Britain cannot take any sort of a lead at all. It can speak up on behalf of the club of 27 (soon to be 28), urging the 17 core nations that use the single currency not to caucus among themselves and stitch up policies that effect the single market. If the future of Europe is one in which groups of vanguard nations integrate more closely, there may come a moment when Britain should play that game too. There is surely nothing to stop a group of like-minded nations agreeing among themselves to pursue deeper liberalisation of digital services, say, under the banner of “variable geometry”.

★ Throw red meat to the backbenches

At Westminster, it is welcome that a growing number of MPs are waking up to the reality that turmoil in the single currency is not a ‘golden opportunity' for Britain to stage a dawn raid on Brussels, returning with armfuls of repatriated powers. But the patience of such MPs is not infinite. To give eurosceptics a concession, the British government should take the 2014 JHA opt-out. The European Arrest Warrant is popular with the police, and has led to some bad men (and women) being extradited with greater ease than before. But along with other planks of European judicial and police co-operation, it rests on the problematic principle of mutual recognition – that is, the belief that a Greek or Bulgarian judge is just as trustworthy and professional as a Swedish or British one. The problem is that almost nobody believes that to be true. The EU always ends up in its most painful difficulties when the gap between what is written in the treaties and what voters believe deep down grows too wide. Mutual recognition between European justice systems is a fine idea that has come too soon.

The catch is that it may prove hard, having exercised the optout, to opt back into aspects of co-operation that make it easier to fight crime, notably membership of Europol and Eurojust.

★ Provide work for idle hands

The government should also put bored, under-used MPs to work. At the moment, EU legislation is examined by the fulltime European Scrutiny Committee, and – once it has been transposed into a draft piece of legislation – by ad-hoc European committees filled with (often unwilling) conscripts. The system should be expanded and enhanced, perhaps by forming standing European sub-committees for each of the parliamentary select committees that monitors the work of the government, department by department. That sounds dry, but so did the creation of departmental select committees three decades ago, and they now represent an increasingly powerful means of holding the British executive to account, as well as an alternative career path for ambitious, hard-working (and sometimes even talented) MPs who are not called to become ministers. Far too much EU-derived business currently passes through Parliament with only minimal scrutiny, so that problems are often identified only when it is too late. Open debate of European policies at Westminster would also offer a first, partial solution to the EU's problems of democratic legitimacy. National parliaments are not very popular right now, but they still enjoy more of a direct democratic connection with voters than the remote and selfserving European Parliament, a body that has failed to solve Europe's democratic deficit.

The Danes have the best known system, with ministers travelling to Brussels councils bearing a rather strict mandate from the EU committee of their national parliament. The Swedes have a similar system, with the added wrinkle that their prime minister appears before the EU committee of his parliament a day ahead of all EU summits, for a discussion of Swedish interests and plans, that is carried on television. In the British context, sending ministers or the prime minister to the House of Commons before European councils would probably turn into a circus.

More promising is the idea of tasking members of the British Parliament to track EU legislation from much earlier on, while it is still in the legislative pipeline. Those Westminster EU committees could be encouraged to lobby counterparts in other national parliaments, to help sniff out alliances and promote the idea that Britain's national parliament is an active EU player.

A referendum on EU membership?

As has been noted earlier, eurosceptic outfits from the People' Pledge to the ConservativeHome website have long called for an inout referendum on EU membership. In his May 2012 Hands Lecture at Oxford University, Lord Mandelson, the former Labour cabinet minister, co-architect of Blairism and ex-European Union trade commissioner, joined those calls. Voices on the Tory right reacted with enthusiasm, arguing that Cameron should follow Mandelson's lead and announce an in-out referendum so as to neutralise the threat from UKIP. A few days after Mandelson's speech, the Spectator magazine's well-connected political editor, James Forsyth, quoted a source “intimately involved in Tory electoral strategy” who stated that it was “basically a certainty” that the next Conservative general election manifesto would contain a promise to hold an EU referendum.

One favoured option would be to propose a renegotiation of Britain's terms of membership after the election, to be followed within 18 months by a referendum on the results of those negotiations, the Spectator reported. Though this is expressed less loudly, the implicit appeal of an in-out referendum for many on the Tory right is also that they want to leave the EU. Nobody could accuse Mandelson of being motivated by euroscepticism. Instead, he offered an analysis of Europe's democratic deficit that is hard to fault. Drawing on polling commissioned by Policy Network, the left of centre think-tank of which he is president, Mandelson notes that 56 per cent of respondents want a referendum on British membership. He also notes that the UK's first referendum on Europe, in 1975, “belongs to another time and another generation”. An in-out referendum would not be relevant until the future shape of eurozone integration became clearer, Mandelson argues. But if the eurozone takes anything like a great leap towards fiscal and political union, he argues that this will pose a deeply uncomfortable choice that successive British governments had striven to avoid: whether to take part in greater integration, or face an uncertain future outside the core of the club.

Yet a clean, in-out referendum would be hard to achieve. The central problem with British public opinion on Europe is that, when asked, most people want something that is not on offer. The new Policy Network polling falls squarely into this camp. As the thinktank reports:

“36 per cent of people think Britain should stay in the EU but only as a member of a free trade area, 18 per cent as we currently are but with no further integration, and 14 per cent of people say the UK should stay in the EU and play a full role in any further integration. A third think Britain should leave.”

Policy Network interprets these numbers as meaning that 67 per cent of voters want to stay in the EU, but that is a stretch. It really shows that two thirds of people either want to leave or achieve a pure free trade relationship (which means leaving, in truth), plus another 18 per cent wanting something that is not going to happen (no further integration). That adds up to 87 per cent or so being unhappy with the current arrangements.

Will a referendum be organised, and if so, would it be a good idea?

An optimistic view is that an in-out referendum would force Britain to have an honest debate about the fundamental costs and benefits of membership, moving away from tabloid populism to core economic issues. A more pessimistic view is that it is already too late to have a cool, rational debate on EU membership, as British hostility to Europe is now so well entrenched. There are many rational reasons for Cameron to fear any sort of referendum pledge. Most simply, such a vote might easily lead to Britain's departure. Though he finds the EU exasperating, the prime minister's allies insist that he does not actually want to leave the EU.

If his promise was for a referendum 18 months or two years after the next election, arguments about Europe risk “overshadowing half his second term”, says a close ally. If the referendum was not a straight in-out vote, but a vote asking the public to endorse the results of a negotiation with Europe, Cameron would face the risk of humiliation, in the event that other EU countries declined to give him the concessions he sought.

Reflecting such concerns, the Conservative foreign secretary and former party leader, William Hague, who stood on a fiercely eurosceptic platform when he led the Tories into the 2001 election, seems to be trying to dampen down speculation about an in-out referendum in the next general election manifesto. In an interview with the Sunday Telegraph on May 13th 2012, Hague praised the idea of holding referendums before any transfers of power from Britain to Europe, but described an in-out vote as the: “wrong question at the wrong time – partly because we don't know how Europe will develop over the next few years.” He added: “For us, Europe is not the euro. Europe is the single market, which is there, irrespective of the euro. It's the positive effect that it has on countries that want to join it, and it's still having that positive effect in the countries of the Western Balkans. So, it's very important to make a success of those things.” Yet Cameron could end up being forced into promising a referendum, concedes a senior Tory source, either because of a surge by UKIP in the run up to the next general election, or because the Labour Party promised an EU referendum of their own.

Might Labour promise an EU referendum in its next manifesto, knowing that such a pledge would act as a wedge to split the Conservative Party? If Ed Balls, the shadow chancellor and longtime sceptic of the euro, were the party leader, he would be tempted. At a seminar organised by the Centre for European Reform on May 14th 2012, Balls suggested that there might be a case for holding a referendum on Britain's membership of the EU. In contrast, the Labour leader, Ed Miliband, is instinctively pro-European. He fears that a referendum promise would create substantial economic uncertainty for Britain, in such fields as foreign inward investment. He also believes that Labour burned its fingers in the past by promising a referendum on the abortive EU Constitutional treaty, only to renege on that promise when the Constitution was voted down in France and the Netherlands, and was subsequently turned into the Lisbon treaty.

Yet, as with Cameron, the decision could be taken out of Miliband's hands by a surge in support for UKIP. If UKIP wins the 2014 European elections, “all parties would come under really intense pressure to hold an EU referendum,” says a senior Labour MP. “It would be pretty hard to resist at that stage.” As to whether an in-out referendum would be winnable, few British politicians are willing to bet on that any more, given the breakneck pace of events in the eurozone. “We've a better chance of winning a referendum if Labour is in power,” says the MP.

Conclusion

The current British government has no intention of walking out of the EU. No political party that supports withdrawal has won even a single seat in the House of Commons. There is nothing new about Britain being a grumpy, foot-dragging member of the club, while quietly following EU directives with more diligence than many supposedly ‘good European' neighbours. Senior British officials report that business leaders, even in the City of London, remain largely committed to making EU membership work. And yet, and yet… It would be a mistake to assume, complacently, that sullen British acceptance of the status quo will continue indefinitely. Within the government apparatus, senior figures committed to remaining inside the Union do not make that mistake.

To a striking and novel degree, when senior officials hold policy seminars or forward-looking strategy debates, it is no longer seen as outlandish or naïve to suggest that, if eurozone integration leads to grave clashes with British domestic priorities, Britain might end up better off out. As an idea, the possibility of British withdrawal is becoming normalised.

The author can list any number of soothing, cautious reasons why Britain will not leave. But taking a few paces back, two bigger points stand out: the relationship already looks much less stable than it has for a long time, and it is hard to see any way in which British public and political opinion will become more favourable over the coming years.

In politics, it is always dangerous when emotion collides with policy. Though British Conservatives are less gleeful about the eurozone crisis than they were a year ago, a sense of vindication informs talk of European irrelevance. That threatens their sense of perspective. Europe may be in relative decline, but Britain could double its trade with China and still not match its current exports to France.

Germany – bound by the same EU employment, social and environmental rules that supposedly hold Britain back – is a champion at selling to China. More pragmatic than his party, Cameron is committed to reforming the single market. Comparing the previous Labour government to Cameron's administration, one senior British official says that the Blair and Brown governments were too quick to see foreign policy as an ‘either/or' endeavour. The charge is that the previous Labour government privileged a handful of relationships (with the US and the EU, for instance) while ignoring longstanding allies such as the Gulf Arab states, Singapore and Japan. Similarly, Labour
downplayed Britain's traditional heritage in its excitement at selling ‘Cool Britannia'. In contrast, Cameron sees foreign policy as requiring a ‘yes, and' approach – maintaining core relationships while reviving neglected alliances and seeking new trading partners. When it comes to the hunt for new sources of economic growth and investment, that pragmatic approach sets Cameron apart from Conservative MPs who long to ditch tired Europe in favour of new markets.

Visiting the United States in March 2012, Cameron urged President Barack Obama to consider the advantages of an EU-US free-trade area. Though the British government has no illusions about the political difficulties of forging a transatlantic trade pact, diplomats have been struck by rising enthusiasm for such a deal from traditionally trade-sceptic EU member-states. With all of Europe desperate for new sources of growth, and given the vast scale of transatlantic trade flows, even modest liberalising measures would have a large impact, it is argued.

Speaking to students in New York during his visit, Mr Cameron made a striking case for remembering the importance of mature markets, and not being distracted by the excitement of the new. He said:

“…in an interconnected world, and a world in which China may not grow as fast as people previously expected, actually the fact that half of the world's trade crosses the Atlantic says to me that we should do even more to try and trade more with our traditional partners as well as trading out into the south-eastern parts of our world. Often in business, you find that you get the best by going after your oldest customer and trying to sell more.”

He could have been talking about the European Union.

General de Gaulle was not wrong about the British propensity to dream of the open sea. A powerful new theme in British euroscepticism involves dreams of the country roaming the world as a swashbuckling, globalised, stand-alone trade power, untethered from the rotting hulk of a continent in decline. But such visions are just that, a dream. Several European economies are in better shape than Britain. Nor can Britain roam the world's oceans: the country will always lie 21 miles off the coast of France, profoundly affected by European rules. Getting those rules right is the hard work of all EU governments.

Cameron accepts that, just as every British prime minister has since Thatcher. But Cameron's government operates under important new constraints, as will all British governments for the foreseeable future. A combination of the ‘referendum lock' enshrined in the EU Act of 2011, together with pressure from public opinion, the press and Parliament, makes it hard to see the country signing up to any further transfers of powers from Britain to the EU.

Yet at the same time, if eurozone integration proceeds without Britain, and so deeply that the single market starts to fragment into inner and outer cores, the strongest argument for British membership will be undermined. The situation is stable and unstable, familiar and unfamiliar. How this ends is unknowable, and is only partly in Britain's hands.

Order, order

Thu, 31 May 2012 17:20:28 +0000

MY PRINT column this week is a profile of John Bercow, Speaker of the House of Commons:

NOTHING in Britain's constitutional traditions obliges the Speaker of the House of Commons to woo voters. Within the Gothic halls of the Palace of Westminster, the Speaker is a mini-monarch, escorted to the chamber by a mace-bearer, a doorkeeper and a chaplain, while a policeman shouts at people to remove their hats. From his canopied chair, the Speaker can summon the prime minister to explain himself and silence the mightiest office-holder with a glance. The incumbent, John Bercow, comes from a safe seat, Buckingham, which he first won as a Conservative in 1997 but now holds as the non-partisan Speaker.

Yet one recent Friday Bagehot watched Mr Bercow criss-cross the West Midlands, wooing the public as if days from a crunch election and ten points behind. After an early train from London (second class tickets, an entourage of two) the day ranged from the dignity of a formal lecture to events that would leave a non-politician pink-cheeked with embarrassment. There was a speech to football coaches that had to be delivered at a bellow in one corner of a noisy sports hall. There was a photo opportunity in a bus station, involving Mr Bercow, a local MP, a mayor in a gold chain and a bus named after a local war hero. All gamely grinned for the camera while passengers looked on, puzzled.

The Speaker grinned because he was on a political campaign: not for himself but for Parliament, which he fears is suffering a crisis of voter abstention and anti-politics anger. At each stop, Mr Bercow was charming, attentive, unflappable and a bit odd. He is outwardly rather conventional. A diminutive, dapper man, his courtly manners when meeting the public would put some royals to shame. But this Speaker is a puzzle.

A rather strange man in a big job

He is a skilled (if hammy) public speaker who nonetheless denounces oratory and parliamentary eloquence as “19th-century politics” and deplorably male-centric to boot. Modern politics, he argues, should be about “interpersonal skills” and providing a good service at constituency surgeries. Women, he suggests, have a particular talent for such politics, with their preference for consensual, reasoned argument over verbal combat.

Mr Bercow talks with pride of his ordinary upbringing, his state education and his Essex University degree. He movingly recalls his Jewish family's brushes with anti-Semitism, and his late father's dignity in the face of bigots. But alongside this defiant narrative, he is self-conscious to a degree that stands out even in his thin-skinned profession. Unbidden, he will recount, verbatim, praise and criticism from colleagues as well as put-downs delivered to political foes years earlier. Again unbidden, he repeatedly brings up his strained relations with Simon Burns, a Tory health minister who once called him a “sanctimonious dwarf”.

At times he delivers a running commentary on himself. Meeting Asian women activists in Birmingham, he assured them that Parliament needed more of their ilk and fewer men in suits. Then he paused and imagined, aloud, their objection. With “all due respect to John”, he imagined them saying: “here he is today, in a fairly traditional suit, albeit a rather bright tie, so he is one of that besuited class.”

His speaking style is often florid. Asked at another meeting if weekend voting might raise turnout, he replied: “The idea of a Sunday [election] that you prognosticate is not offensive to me.” It can be startlingly matey. Presented with toys for his children by a clutch of teenage politics wonks, he said kindly: “That is so sweet, my children will pee themselves with excitement.”

The Speaker's critics—especially in the government, where his name provokes black looks and hissing—call his campaigning a colossal exercise in vanity. They think him obsessed with making the Commons “relevant”. A senior Labour MP accuses the Speaker of killing debate by curtailing speeches and of filling the Commons with tour guides and outreach workers, until “it feels like a sort of parliamentary Disneyland-on-Thames”. Critics attack Mr Bercow's weakness for self-promotion, shared by his wife, Sally, who has appeared in reality television shows and posed for the tabloid press clad only in a bedsheet.

Some think him a political turncoat. In his own words, he spent years as a “tub-thumping” Conservative of the hard right. Within less than a decade he had moved so far to the centre-left—notably on such social issues as gay rights—that when a Tory candidate was sought for the post of speaker in 2009 Mr Bercow picked up votes from Labour MPs wanting to annoy Conservatives. They succeeded: Conservative critics think Mr Bercow outrageously partisan. The angriest mutter that his leftward journey was a cynical, multi-year plot to become Speaker.

Nonsense, says Mr Bercow. He simply came to think his opponents had a point—a journey helped by cheering on a fiercely right-wing Conservative election campaign in 2001 and watching it crash to disaster.

In post-deferential Britain, the holders of big jobs must reach an accommodation with the public. Some, such as David Cameron on a good day, wear their responsibilities with such assurance that they put voters at ease. Mr Bercow has chosen another way: inhabiting his role with conspicuous modesty, ditching court dress, queuing for taxis and lunching on sandwiches.

Some of Mr Bercow's ideas are unworkable, such as state funding for would-be parliamentary candidates of limited means, especially women. He is self-obsessed and fond of modish jargon. He lacks a stiff upper lip. His wife verges on the exhibitionist. But that all sounds like modern Britain. Mr Bercow's critics basically think he is ghastly. That's their right. Yet he is decent and sincerely anxious about British democracy. As MPs try to reconnect with voters, he may be a better guide than they realise.

What the Diamond Jubilee says about Britain

Thu, 24 May 2012 16:24:56 +0000

QUEEN Elizabeth's Diamond Jubilee celebrations are just over a week away. My print column this week ponders what royal jubilees reveal about Britain.

BEFORE Queen Elizabeth's Silver Jubilee in 1977, the villagers of West Hoathly in Sussex were placed under secret observation. A file was drawn up, noting their views on the monarchy, the country and the impending celebrations. The royal family was marvellous but these festivities had better not cost too much, said one villager, recorded as “Nurse, female, 50”, explaining: “People are not in the mood.”

West Hoathly was reliably monarchist, the file records, with anti-republican sentiment boosted by recent American elections (“Fancy having Jimmy Carter,” a villager shuddered). But still its Jubilee enthusiasts sounded a bit bleak. We're due a celebration, said “Male, 53”—we've made it to 1977 without a nuclear war.

The files were commissioned by Mass Observation, a private social-research project that has studied the British since the 1930s. In all, 107 volunteers were recruited to record the Silver Jubilee. Their diaries and notes, together with complementary files on the 2002 Golden Jubilee, now form part of a vast archive held at Sussex University. On the eve of Queen Elizabeth's Diamond Jubilee—to be marked from June 2nd to 5th—the archives offer a remarkably evocative glimpse of the recent past.

The 1977 files describe a country that was tired and riven by industrial conflict. Its people talked of feeling a bit lost, and yet—from a distance of 35 years—they seem enviably grounded in a shared culture with deep roots. There was striking uniformity to their celebrations. Invited to have fun, people first grumbled then formed committees. It is remembered that at previous royal jubilees children were given commemorative mugs, prompting endless rows about paying for them. “The Vicar! He needs grinding up afresh, that one,” fumed a farmer's wife in north Wiltshire, on learning that her Women's Institute branch must buy mugs. “Not that I'm criticising him, of course,” she added hastily.

Celebrations in 1977 involved children's food—sausage rolls and jelly, hot dogs and ice cream—and beer for the grown-ups. There were violent sporting contests, from tugs-of-war to free-form football matches. To conquer reserve, fancy dress was worn, often involving men in women's clothing. From the West Midlands came news of an all-transvestite football game, with the laconic annotation: “all ended up in the canal.”

London displayed both patriotic zeal (flag-draped pubs in Brick Lane, big street parties in Muswell Hill) and hostility (cheerless housing estates, slogans declaring “Stuff the Jubilee”).

Scotland was a nation apart. A file reports “total apathy” in Croy. In Glasgow the anniversary was called “an English jubilee”. Snobs sneered along with Scots. At Eton College, a wooden Jubilee pyramid was smashed by old boys. At Oxford University, examinations were held on Jubilee Day, in a display of indifference.

The Silver Jubilee is not really about the monarchy, asserts a file from south Wiltshire: the day is about “people wanting a bit of fun”. A report from Wimbotsham in Norfolk, close to a royal estate at Sandringham, stands out for its focus on the queen's 25 years on the throne. Locals held a service on the village green, praying for the monarch in “happy togetherness” under dripping umbrellas before a tug-of-war, races and tea for 700.

By 2002 and the Golden Jubilee, Britain comes across as a busier, lonelier, more cynical place. The royal family was “just showbiz”, sniffed a diarist from Sussex. There is angry talk of Princess Diana and how her 1997 death was mishandled by the queen. There are fewer street parties than in 1977, all agree. This is variously blamed on apathy, the authorities (whose job it is to organise events, apparently) and above all on health-and-safety rules. In 1977, in contrast, one Wiltshire village cheerfully let a “pyromaniac” doctor take Jubilee fireworks home to add extra bangs.

The 2012 Jubilee finds Britain changed again. Diamond jubilees being rare (the last was achieved by Queen Victoria in 1897), the queen is firmly at the centre of the celebrations. Local councils have received more than 8,000 applications to close roads for street parties, suggesting that 2002's passivity is fading. The country is not returning to 1977 and its home-made fancy-dress costumes or Coronation bunting dug out of attics. Today's shops heave with Jubilee cakes, disposable decorations and flag-emblazoned baubles, letting consumers buy patriotism out of a box.

After 60 years on the throne, a jubilee about the queen

Visiting Wimbotsham, Bagehot is shown elaborate plans: cake-baking contests, pony rides, a teddy bears' picnic, a sports day, a pensioners' tea. But there will be no tug-of-war (people might hurt themselves) and the face painters have liability insurance. Still, the festivities will dwarf those seen in 2002, locals say. The monarchy endured a “big lull after Diana”, suggests David Long, the driving force behind Wimbotsham's Diamond Jubilee. As the queen grows older, she is “more highly thought of”. Linda Nixon, a Wimbotsham pensioner, credits Prince William's royal wedding with reviving enthusiasm. Prince William and his brother Prince Harry are “like everyday people”, she says.

In the Mass Observation Silver Jubilee files, critics grumble about the monarchy costing too much or entrenching privilege. Supporters say the queen confers global prestige or offers a bulwark against constitutional meddling by politicians. In short, the debate is about the best way to organise society. In both Golden and Diamond Jubilee Britain, by contrast, the issue is whether the queen deserves to be respected, and whether the public can relate to her. In short, individualism is all.

Diamond Jubilee Britain seems to be a hybrid. As in 1977, an unhappy nation fancies being cheered up, and the monarchy fits the bill. As in 2002, a truculent nation demands a monarchy on its own, emotional terms. Is that sustainable? Perhaps not, but it promises to be a fine party.

President Hollande's first tax refugee sighted in London?

Fri, 11 May 2012 16:53:04 +0000

IT BEING Friday, I hope readers will tolerate a snippet of breaking news from the streets of South Kensington, nerve centre of the French expatriate community in London. Bicycling down the Fulham Road a short while ago, Bagehot was passed by a gleaming Aston Martin, twin exhausts rumbling like a freight train, and French number plates (33 code, so from Bordeaux, at a guess). I was all ready to shout: "Bloody asylum seekers" at the driver, but decided the gag might not work in translation.

The chances of a British referendum on EU membership are growing

Fri, 11 May 2012 09:54:47 +0000

THE war drums are pounding among those dreaming of a referendum on EU membership.

As noted in a post last week, Peter Mandelson, the former Labour cabinet minister, co-inventor of Blairism and ex-European Union trade commissioner, stirred things up with a lecture at Oxford University, suggesting that pro-Europeans (of whom he is one) should support such a vote, if and when euro-zone integration deepens to such an extent that Britain finds itself an associate member of a two-tier club.

Lord Mandelson's democratic analysis was hard to dispute. He noted that 56% of respondents want a referendum on British membership. He also noted that the mandate secured by the government of Edward Heath in the only ever British referendum on Europe, in 1975, "belongs to another time and another generation".

A few days after Lord Mandelson's speech, the Spectator magazine's political editor, James Forsyth, quoted a source “intimately involved in Tory electoral strategy” who stated that it was “basically a certainty” that the next Conservative general election manifesto would contain a promise to hold an EU referendum. The goal of such a wheeze, as analysed by Mr Forsyth, is twofold. First, to shut down the threat from UKIP, the anti-European party which is currently siphoning votes from disgruntled right-wing Tories. Second, to “shoot the fox” of Boris Johnson, the Conservative mayor of London who is on record as supporting a referendum on Europe.

Something clearly being up, I made some calls yesterday to well-placed Conservative and Labour sources. I put it to one Tory source that the briefing smacked of Number 11 Downing Street to me, and George Osborne. This merely triggered a lot of mumbling and coughing, alas. But I note that this morning Paul Goodman of ConservativeHome is firmly fingering the Chancellor of the Exchequer, on the basis that (a) Mr Osborne has a fondness for such bold gambles, and (b) Mr Osborne might one day find himself in competition with Mr Johnson to succeed David Cameron as Tory leader, so has an interest in shooting foxes belonging to the mayor.

Now, I suspect that I start from a different place to Mr Goodman and Mr Forsyth on this question, for the simple reason that—while I enjoy a debate about internal Tory politics as much as the next hack—I don't actually want Britain to leave the EU, so find all this blithe talk about who would gain from a referendum a little alarming.

But Mr Forsyth is on the money, as far as I can tell, with his reporting that inside Tory high command there is a sense that Mr Cameron may not have very much choice about calling a referendum if UKIP's surge carries on, and if—as senior Tories suspect—Labour makes its own referendum pledge in its general election manifesto.

As the Spectator reported, one favoured option would be to propose a renegotiation of Britain's terms of membership after the election, to be followed within 18 months by a referendum on the results of those negotiations.

I cannot improve on Mr Goodman's pithy analysis of the risks for Mr Cameron if he were to promise British voters a new deal with Europe, to be endorsed by them at a referendum at the end of negotiations with the other EU nations. As Mr Goodman points out, the rest of the EU, led by Germany and France, might tell Mr Cameron to get lost, at which point he would face the unpalatable choice of campaigning to stay in the union anyway (a vote he might lose, and which would split the Tory Party), or campaigning to leave (a vote he might lose, and which would split the Tory party). Mr Goodman offers a third scenario, which I admit I think less likely, in which France and Germany take a pause from trying to save the euro, at immense pain to their public finances, and agree to give Britain what it wants, ie, low-cost, low-regulation free-rider membership of the single market. In that case, Mr Goodman asks, what happens if Mr Cameron puts his concessions to the country and gets a No vote anyway, because the public wants to kick the government?

So, is there going to be a referendum? I don't think it has been decided, but it cannot be ruled out.

There are lots of rational reasons for Mr Cameron to fear any sort of referendum pledge. Most simply—though Bagehot accepts that this is an argument that makes many people at Westminster yawn in boredom—such a referendum might lead to Britain's departure.

And although he finds the EU exasperating in lots of ways, the prime minister does not actually want to leave the EU. He does not love the European project, instead regarding membership as something to be nudged by a cool cost-benefit analysis. And weighing those costs and benefits today, Mr Cameron thinks that the right of his party are simply miscalculating where the balance lies. For him, the benefits still trump the costs, a close ally insists.

William Hague, the foreign secretary, ends up in the same place when he conducts his cost-benefit analysis, other sources tell me, even if—emotionally—there are aspects of European membership that he finds harder to swallow than the prime minister.

Yet the Tory leadership could end up being forced into promising a referendum, agrees a senior source, either because of a surge by UKIP in the run up to the next general election, or because the Labour Party promised an EU referendum of their own.

Might Labour promise an EU referendum in its next manifesto, knowing that such a pledge would act as a wedge to split the Conservative Party? If Ed Balls, the shadow chancellor and long-time sceptic about the European single currency, were the party leader, he would probably be “tempted”, a senior Labour MP says.

In contrast, Ed Miliband genuinely is instinctively pro-European. He thinks of himself as a European social democrat, and is surrounded by close aides, such as Stewart Wood, who think the same way. His own family background (his family came to Britain as refugees from the Holocaust) inclines him to run a mile from nativist and nationalist arguments.

Moreover, Mr Miliband fears that a referendum promise would create substantial economic uncertainty for Britain in such fields as foreign inward investment, I am told. Labour also “burned its fingers in the past” by promising a referendum on the abortive EU Constitutional Treaty, only to renege on that promise when the Constitution was voted down in France and the Netherlands and was turned into the Lisbon Treaty. It would perilous for Labour to make the same mistake again, says the MP.

It is true, I am also told, that some in the party wanted the leadership to be more opportunistic in October 2011, and to ally themselves with Tory Eurosceptics in the division lobbies in the vote that saw 81 Tory MPs rebel over whether to hold a referendum on EU membership.

Yet there is a good case that such opportunism would have been counter-productive. Had Tory rebels known that Labour MPs were going to be whipped to vote against the government then many of the 81 would have abstained or simply absented themselves from Parliament. By standing back from an internal Tory squabble and abstaining, “we probably maximised the Tory rebellion,” says a Labour source.

Yet as with Mr Cameron, the decision could be taken out of Mr Miliband's hands by a UKIP surge. If UKIP wins the 2014 European elections, “all parties would come under really intense pressure to hold an EU referendum,” says the same Labour source. “It would be pretty hard to resist at that stage.” As to whether an in-out referendum would be winnable, few British politicians are willing to bet on that any more, given the breakneck pace of events in the euro zone. “We've a better chance of winning a referendum if Labour is in power,” is all a Labour MP will say.

A final thought. If this debate strikes non-British readers as amazingly navel-gazing, given what else is going on in the euro, I understand that. But—unfortunately for Euro-rationalists like me—the chaos in the euro zone feeds directly into the British debate, turbo-charging the rage of those who want out of a European project they see as statist, sclerotic, spendthrift and doomed.

The debate of a British referendum on the EU is also being watched closely in at least some other capitals, I can report. Jose Manuel Barroso, the European Commission president, is particularly concerned.

Though a bit of a trimmer and waverer, Mr Barroso, a former Portuguese prime minister, is a free-market liberal and free trader, and an Anglophile. In his view, a British departure would be a disaster for the European project, condemning it to become much more statist and protectionist. A figure close to Mr Barroso, passing through London a few days ago, was certainly keen to know whether a referendum might be promised here.

Standing on the pavement in St James's after the meeting, the visitor from Brussels asked me, out of the blue, what the odds were of Britain leaving the EU by 2020. My instinctive response: 40%. A day or two later, I think that might be a bit low.

House repairs

Fri, 11 May 2012 08:43:21 +0000

MY PRINT column this week looks at the politics of House of Lords reform, and suggests that this dry-sounding subject is actually a rather important clash about power and its transmission.

SOME years back the BBC enjoyed a surprise hit with a spoof chat-show presented by Mrs Merton, a fictional northern housewife whose trick was skewering guests with mock-naive questions. One noted interview, with a willowy beauty married to a diminutive magician, featured the query: “So, what first attracted you to the millionaire Paul Daniels?” The concept of the “Mrs Merton question” duly entered the national lexicon.

Far from the world of sequins and greasepaint, Bagehot recently interviewed a political grandee about constitutional reforms being explored by the Conservative-Liberal Democrat coalition. The grandee expressed passionate opposition to a planned change that—it so happened—would disadvantage his own political party. This is a Mrs Merton question, Bagehot ventured—as in: what explains your principled objections to this reform that might cost your party the next election? The grandee pondered this impertinence but did not immediately respond. Yet, a while later, asked to explain his party's dislike of another constitutional reform, he murmured: “Mrs Merton reasons.”

Mrs Merton's spirit may need summoning once more, after the queen informed the State Opening of Parliament on May 9th that a bill would be brought forward “to reform the composition of the House of Lords”. Those few words signalled the start of a potentially titanic squabble about whether to abolish the upper house and its 800 or so members (a mixture of appointed life peers, 92 hereditary peers and 25 Anglican bishops and archbishops) and replace it with a fully- or mostly-elected Senate.

Lords reform sounds an abstruse subject to outsiders, on a par with the gilded and berobed flummery of the State Opening itself. Research by YouGov, a pollster, suggests it is a political priority for precisely no voters (though if prompted, most people prefer the sound of an elected upper house). David Cameron, the prime minister, once called it a “third term” issue.

Thanks to pressure from Liberal Democrats, for whom constitutional reform is a defining concern, legislation to reform the Lords should reach Parliament within weeks. Whether it becomes law is another matter, with even Lord Strathclyde, Conservative leader of the House of Lords, putting its chances at “50-50”.

To fans like Nick Clegg, the deputy prime minister and Lib Dem leader, the change would bring a “smidgen” more democracy to British life. Mr Cameron, speaking after the Queen's Speech, seemed warier. It would be good to achieve a smaller House of Lords with an “elected element”, he told MPs, though—arousing suspicions that his heart is not in the reform—he set the bar for success high, declaring that it could only proceed if the different political parties agreed to work together. Ed Miliband, the Labour opposition leader, endorsed Lords reform if backed by a referendum, while questioning “how on earth” it had ended up in the Queen's Speech at a time of economic crisis.

Opponents, including many Tory MPs and peers but also members of Labour and even a few Lib Dems, charge that an upper house with its own electoral mandate would threaten “the destruction of the House of Commons as we know it”, to quote one Conservative peer. In April a fiery meeting of Conservative backbenchers heard comparisons drawn between Lords reform and the rebellions over Europe that dogged John Major's government, and threats from junior ministerial aides to resign over the issue. Lib Dems are barmy, grumble Tory right-wingers. Lords reform will chew up weeks of parliamentary time during an economic crisis: voters will not forgive such self-indulgence.

As it happens, there are questions of real principle to consider. If current proposals are followed, the Senate would be only tenuously accountable to voters, with members elected from giant constituencies for 15-year terms by a variant of proportional representation. Yet even such arms-length democracy would test the century-old convention that in tussles with the House of Commons, notably on bills to do with spending or that enact election promises of the ruling party, the House of Lords backs down. Lord Strathclyde told reporters this month that an elected House would be more “aggressive”, musing aloud that Margaret Thatcher might not have got some privatisations past an elected upper house, had one existed in the 1980s. In theory Lord Strathclyde supports reform, but his warnings will have the same effect on angry Tory MPs as a stick poked into a wasps' nest.

It is always about power

So much for high principle. In private, peers, MPs and officials describe a debate steeped in self-interest and cant. Naturally lots of MPs want to keep an appointed House of Lords, growls a senior Lib Dem: it's where they plan to retire, or flee after losing seats. Talk of a referendum, favoured formally by Labour and informally by many Tories, is a transparent ploy to kill the reform, supporters worry—with voters in an anti-politics mood, they will not say yes to more professional politicians. As for talk of gumming up both houses of Parliament for months, that's a threat not a prediction, made by those planning on doing the gumming.

Of course Lib Dems want a proportionally elected Senate, counter Tory and Labour politicians: they think they would hold the balance of power there. Some Tories fret about rumours that, if the Lib Dems do not get Lords reform, they may withdraw their support for the Conservatives' favourite reform, a redrawing of House of Commons constituencies that could gain the Tories a dozen or more seats (the two items are not linked, says a Lib Dem, but the coalition's constitutional reforms are a “package”).

In short, the airy debate over Lords reform is really a brutal fight about power. Which is why a Senate will probably not happen, placing the coalition under fresh strain. As Mrs Merton might say, to expect anything else would be naive.

Britain says no to elected mayors

Fri, 04 May 2012 19:56:48 +0000

A WHILE back, debate gripped David Cameron's inner circle, on the subject of how to persuade a sceptical British public to embrace elected city mayors. A rather abstruse ambition to outsiders, the creation of elected mayors in towns and cities across Britain has been a gleam in the eye of those close to the prime minister since their days in opposition.

Those insiders have had a rough day, with nine out of ten cities that were holding referendums on whether to move to an elected mayor rejecting the idea. Manchester, Birmingham, Manchester, Newcastle, Nottingham, Sheffield, Wakefield, Coventry, Leeds and Bradford voted No.

Only Bristol was in favour. In a separate vote, Doncaster voted to keep its mayor.

What went wrong?

Left to his own devices, Steve Hilton, Mr Cameron's shoe-shunning head of policy and long-time political friend, would have imposed mayors all over the country, in a Big Bang designed to shock and awe the forces of municipal reaction into submission.

Mr Hilton's dreams were partly inspired by France, where even the tiniest commune has an elected leader in a tricouleur sash, well-known to local electors—“Bonsoir, Monsieur le Maire”—and thus accountable to them, and representing authority devolved to the lowest possible level. Mostly, though, his model was America, where Mr Hilton noted that many of the boldest public sector reforms of recent years—whether in policing, education or the delivery of community services—were pushed through by the dynamic city mayors, able to use their personal democratic mandates to take on vested interests from local business cartels to public sector trade unions.

It is no accident that when Mr Cameron visited America in March, Mr Hilton (who is about to leave Downing Street for a sabbatical in California) made sure that the prime minister found time between grand ceremonies in Washington and meetings with Wall Street bosses in New York to spend several hours in Newark, New Jersey, whose reformist mayor Cory Booker is something of a pin-up among the policy wonks at Number 10.

But Mr Cameron vetoed calls simply to impose elected mayors on British cities. The coalition government was already committed to multiple fights over public sector reforms, he told his aides: we need to pick our battles. As a result, plans were laid to ask voters in a selection of larger and mid-sized cities whether they would like an elected mayor, in a series of referendums.

How to win such referendums became a new debate, especially at a time of anti-politics rage among ordinary voters, fuelled by the economic crisis and parliamentary expenses scandals which left many convinced that all elected politicians are all on the take, all the time.

Optimistic, reform-minded Tories argued that the anti-politics mood might actually encourage voters to choose change. They pointed to cities such as Bristol, where power changed hands among a succession of little-known council leaders (city councillors elected to be first among equals by their colleagues, amid much backroom horsetrading) seven times in the last ten years. Perhaps, optimists said, voters will realise that the best way to kick the bums out and get more accountable leadership is to create a new political office.

Pessimists predicted that voters who already hated politicians would be unimpressed by the idea of fixing their woes with another politician.

In internal discussions, George Osborne, the chancellor of the exchequer and chief Conservative political strategist, ventured the thought that the best way to sell mayors to suspicious voters was to portray them as a means of saving money, perhaps by promising that a city with a new mayor would be able to do without some of its existing top officials, saving on their salaries.

That would have meant another fight with another whole set of enemies, so the idea was not taken up. Instead the Conservatives fought a rather half-hearted campaign for city mayors, organising referendums in ten cities on May 3rd, and sending various Tory bigwigs round the country to talk up the merits of direct elections.

The coalition campaign was hampered by the reluctance of the Liberal Democrats to weigh in on the side of direct democracy—held back by the reluctance of Lib Dem councillors to see their powers flow to better-known rivals.

Labour was split, with Blairite reformers such as Lord Adonis speaking alongside Tory colleagues in favour of elected mayors (Blairites like elected mayors), but lots of Labour machine politicians and trade unions fiercely resisting them—correctly sensing that mayors were Trojan horses for radical reform.

Voters said no for several reasons. Some complained that they did not know what powers the new mayors would hold. Some No campaigners talked up the idea that extremist parties such as the anti-immigrant British National Party would hijack mayoral races, leading to dangerous populists and local “dictators” taking office.

But speaking from personal experience when I reported from Bristol, the single most potent grumble was: why should we pay the salary of another politician? Anti-mayor leaflets came up with guesstimates of just how much the change would cost. It became like an auction: each election will cost a quarter of a million, they will have to pay the mayor and his aides another quarter of a million, then there will be expenses, it'll be a million pound mayor.

It proved effective, and—though rueful Conservatives may not like to admit it—they bear a lot of the blame for this. Since coming to office, Tory ministers, notably the cabinet minister in charge of local government, Eric Pickles, have endlessly talked about how many council chief executives are paid more than the prime minister, leaked horror stories to the tabloids about the expenses of local councillors.

Last year, when Britain held a referendum on whether to adopt a new voting system, the Alternative Vote, at general elections, the Conservative-funded and endorsed No campaign led on the cost of any switch away from the current system of first-past-the-post. The No campaign ran posters that insulted the intelligence of voters, depicting babies in incubators and soldiers in combat gear, and saying things like: He needs body armour more than a new voting system.

Some influential voices on the Tory Right still defend that No to AV campaign, and sneer at those hand-wringing elitists (like me) who had hoped for a more intelligent debate about which voting system might be best for Britain. It worked, they argue: how wrong the critics were.

I would retort: it worked, yes, but look at the consequences. If you talk about nothing but the salaries of elected politicians and the price rather than the value of democracy, then do not be surprised when a reform that you want is shot down on the same grounds.

Should Britain's government offer an in-out referendum on EU membership?

Fri, 04 May 2012 12:56:15 +0000

DESPITE stiff competition from local and mayoral election results involving almost 200 local authorities across England, Wales and Scotland, Peter Mandelson, the former Labour cabinet minister, co-inventor of Blairism and ex-European Union trade commissioner, is set to make headlines this afternoon by calling for Britain to hold an in-out referendum on EU membership.

Voices on the Tory right have already reacted with enthusiasm, with ConservativeHome arguing that David Cameron should follow Lord Mandelson's lead and announce an in-out referendum. Con Home explicitly says that the value of such a vote would be to neutralise the threat from the United Kingdom Independence Party, the anti-EU protest party which is today being credited or blamed (depending on who is doing the reporting) with triggering defeats for the Conservatives in such previous Tory strongholds as Thurrock in Essex and Tunbridge Wells in Kent.

Some caveats are needed at this point. Nobody is expecting UKIP to pick up lots of seats in the House of Commons at the next general election. There is considerable polling and focus group evidence that Europe is not, in fact, the top issue for core UKIP voters, who are more angry and anxious about immigration, globalisation (though this is expressed as anxiety about the economy) and what they see as a collapse in traditional values. But on the Conservative Right, plenty of people will tell you that UKIP is in danger of splitting the right-wing vote, and handing victory to Labour in lots of seats. They see ample evidence for this in the results now flooding in after yesterday's local elections.

Though this is expressed less loudly, the implicit appeal of an in-out referendum to many on the Tory right is also, not to put too fine a point on it, that they want to leave the EU.

Nobody could accuse Lord Mandelson of being motivated by Euroscepticism. In the same Hands Lecture this afternoon he will match his call for an in-out referendum with a plea for Britain to contemplate joining the euro one day, a suggestion that Sir Humphrey would call "brave" and which in part reflects Lord Mandelson's retirement from the messy business of getting elected.

So is he right? His analysis of the democratic deficit is hard to fault. Drawing on new polling by Policy Network, the left of centre think tank of which he is president, Lord Mandelson notes that 56% of respondents want a referendum on British membership. He also notes that the mandate secured by the government of Edward Heath in the only ever British referendum on Europe, in 1975, "belongs to another time and another generation".

He also argues that:

a fresh referendum on this will be necessary because the political parties cannot reconcile their own differences and come to a final conclusion on their own, and nor should they. While the Conservative Party is the home of visceral hostility towards Europe, to an extent, negative feelings about Europe are now more present in all the parties

All that feels like an accurate reading of British politics, and is duly being taken seriously in the press and on the blogosphere.

Before I venture my own opinion on an in-out referendum, I would make the case that, in fact, the most important argument in Lord Mandelson's lecture lies elsewhere. The former EU commissioner spends some considerable time examining the level of integration—whether fiscal, political or otherwise—that is likely to be needed within the euro zone to save the single currency. And he suggests that if such integration does take place within an inner core of 17 countries that use the euro, that Britain will find itself with fewer options than it thinks. In essence, having posed the question: should Britain have a vote about leaving the EU, he poses another: is Europe about to leave Britain? I think he might be right, though I still have a gut instinct that really deep integration in the euro zone is still some way off, for the crude reason that, as this crisis is revealing every day, we Europeans do not like each other enough to set up an American-style system of fiscal transfers.

Lord Mandelson draws a neat historical parallel between Sir Winston Churchill's 1946 speech in Zurich, in which he urged France and Germany to form a United States of Europe while suggesting Britain would remain a friendly onlooker, and the present government's stance of urging euro zone countries to follow the "remorseless logic" of currency union and embrace much closer integration, without involving Britain. Churchill, says Lord Mandelson, was of the last generation of senior British Conservatives to adopt a stance of urging much closer European integration without any desire for Britain to join in... until the present generation of Tory leaders, led by David Cameron and George Osborne.

Here is his take on the overlap between that wary, go-ahead-without-us stance of the Cameron government and the UKIP desire to leave:

We have long tried to believe that the EU would keep getting wider rather than deeper and we would never have to confront our own ambiguous feelings about Union. Events are conspiring to call our bluff.
And for us in Britain this will pose a sharp, for some deeply uncomfortable, choice that we have hoped and sought to avoid. A nation of “reluctant” Europeans will have to confront a choice between taking part in greater integration, including joining the Euro, or an uncertain future.
Having posed the problem thus, I don't think I can really end without some form of conclusion or prescription for Britain. I think my biggest challenge is to the pro-Europeans in the UK. In the version of the future that I have described there are two basic ways of being ‘out' of Europe for this country. There is the argument that just says we should be out altogether. The red tape. The bent bananas. The gravy train. What has become the UKIP view.
Then there is the argument that a looser relationship, a place on the second tier is fine for Britain, not out but not fully in. A Hong Kong to Europe's China. Or a Canada to Europe's United States. The second, I think, is where the current government, or the Conservative part of it, probably would be happy to come down.
My view is that both will probably amount to much the same thing

I think I am coming round to that point of view. I have written several times over the last couple of years that though Britain does not intend walking out of the EU, it could fall out.

I am with Lord Mandelson in thinking that there are grave dangers to walking out. I have written columns and blog postings arguing that in their cost-benefit analysis of EU membership, Eurosceptics routinely get their costs and benefits wrong, both underestimating the present value of the single market and overestimating the ease with which Britain would negotiate a more attractive free trade pact with the rest of Europe.

Where I think I part company with Lord Mandelson is that, crudely, there are things that Europe could turn into that would make me change my mind, and want to leave. There are degrees of integration, involving market-unfriendly corporatism and barriers to competition or claims to have created pan-European democracy via the European Parliament or a directly elected President of Europe, that I think would be intolerable, and also unsustainable (because I think that pan-European democracy is a fantasy).

Where I differ from British Eurosceptics is, crudely, that I think that we are some way away from that point of intolerable integration, and that for now the risks of departure greatly outweigh the advantages.

Lord Mandelson seems to be arguing that the risks of departure will always outweigh any advantages. Here is how he describes Britain's fate if it either walks out of the club, or sits in an inner circle outside a more integrated euro zone:

We will still have to meet EU standards to trade with Europe. We will simply have no or little voice in defining them. We will still seek to align ourselves with Europe internationally most of the time, as a matter of political and practical necessity.But we will have less say in Europe's own policy deliberations. For this reason, both outcomes seem badly flawed to me and should be rejected

He goes on:

Britain's eurosceptics are busy patting themselves on the back for their historical resistance to joining the euro. But it seems to me that assuming that the Eurozone is doomed to perpetual failure is assuming a lot. There is a strong case for a European single currency and in practical respects it has worked well. It is the currency union that is politically and institutionally flawed, the crisis may in fact be the key to its success – by forcing the necessary institutional and political reforms. The economic logic for staying outside the Eurozone can and probably will change. As the euro continues its rise to a global reserve currency. The logic for London and the euro may be the same. Hong Kong's strength is in large part a function of mainland China's weakness, and for all its problems, Europe hardly fits that picture.
Throughout this lecture I have purposefully tried to be as dispassionate as possible but you will have guessed where I stand. I believe in a prospect of euro-membership and closer political union and economic governance. Partly, I recognise, this is an emotional choice – I identify as a European.

But it is also because I believe that – if I can paraphrase Mrs Thatcher – for Britain, the facts of globalised life are European

Which makes his support for an in-out referendum all the braver. Such a vote, he says, "would not be relevant until the new shape of Europe, and the success or otherwise of its Eurozone Mk 2, finally emerges and a considered judgement is possible, something which is likely to be a fair way off".

But he is ready to risk one.

For what it is worth, and with grave misgivings, I suspect he may be right. My misgivings are mostly tied up with the fact that a clean, in-out referendum would be hard to achieve. The central problem with British public opinion and Europe is that, when asked, most people want something that is not on offer. The new Policy Network polling falls squarely into this camp. As the think tank reports:

36% of people think Britain should stay in the EU but only as a member of a free trade area, 18% as we currently are but with no further integration, and 14% of people say the UK should stay in the EU and play a full role in any further integration. A third think Britain should leave

Policy Network writes that up as 67% of voters wanting to stay in the EU, but that is a stretch. I would argue that it really shows two thirds of people either wanting to leave or achieve a pure free trade relationship (which means leaving, in truth), plus another 18% wanting something that is not going to happen, ie, no further integration. That adds up to 87% or so being unhappy with the current arrangements.

So given that I would argue strongly for staying for the moment, why would I want a referendum? Well, the optimist in me thinks that a referendum would force everyone to have a more honest debate, and explain the choices that really are on offer. The pessimist in me thinks that the debate might end up being pretty horrible, but that the status quo is just not very good for British democracy.

As it happens, to end a long posting, I suspect that those wishing for Mr Cameron to include an in-out referendum in the Conservative manifesto at the next general election will be disappointed. Yes, I can see that a continued UKIP surge could put intense pressure on Mr Cameron. Some speculate that Ed Miliband, the Labour leader, could trump the Tories and call for a referendum (though I wonder if Mr Miliband would want to risk such a vote, given his strong pro-European views). But surely the biggest problem for the Tories is that, if they suggested a referendum, they would then have to explain which way they would want the British people to vote.

If Conservative leaders made it plain that they would campaign to stay in (which would tally with everything that the prime minister currently says in defence of the single market), then the UKIP threat would not really be neutralised, would it? The Conservative Party in Parliament would also see some splits.

But if the Tory Party called for a referendum and then said that it would campaign for a vote to leave, that would make the whole election about Europe, bringing out every last voter-frightening obsessive on the pro- and anti-side.

And a fudge, in which party leaders said that Tory MPs would be free to campaign on Europe after the election according to their consciences, would also not really do the trick, either, surely? Because that would not stop people asking Mr Cameron what his own views were in interviews and in the televised leaders' debates during the general election campaign, and that would open up most of the traps and splits described above.

But the issue is not going to go away, and even Euro-pragmatists like me need to acknowledge that. Europe is on the move in unpredictable ways. Britain is not going to be able to stand on the sidelines forever, offering helpful advice.

Selling Britain to the world

Thu, 03 May 2012 15:49:34 +0000

MY PRINT column this week reports on William Hague's recent visit to south-east Asia and what it reveals about the Foreign Secretary's vision for British foreign policy. The essence of British diplomacy Hague-style, I suggest, can be summed up in a phrase I watched him utter in a crowded lecture theatre in Hanoi: friendliness mixed with self-interest.

You can add to that Mr Hague's hunch that all diplomacy, deep down, is bilateral, and his insistence that Britain needs to "get over" its neuroses about post-imperial decline or its sometimes tetchy relations with Europe, and instead focus on selling its best assets (he cites things such as Britain's armed forces, her universities, civil servants and service industries).

The end result, I conclude, is that Mr Hague is making a bet that Britain will mostly have to look after herself in the next phase of globalisation. He may be right, but if he is to win that bet, Britain will have to ensure that it really does have world-class services, products and capabilities to sell. That will involve unprecedented effort and hard work. Are we British ready to work that hard? I hope so, but I am not sure.

Here is the column.

BLUSHING lightly, the Vietnamese undergraduate had a question for William Hague. Britain's foreign secretary was in Hanoi, on the first leg of a tour of South-East Asia between April 24th and 27th, and had just made a pitch for local students to continue their education in Britain.

An unabashed salesman, Mr Hague reeled off impressive facts. His Oxford college was founded in 1458. One-quarter of the world's 20 leading universities are still British. There are 7,000 Vietnamese students in Britain now, and more are eagerly sought. It was then that a student shyly stood and asked: why?

Mr Hague offered a disarmingly honest reply. It's a mixture of friendliness and self-interest, he said: most good things in the world are based on a mixture of those two things. It was quite a British thing to say to a foreigner: candid, self-deprecating and with just a hint of coldness to it, despite being delivered in Mr Hague's warm, Yorkshire-accented baritone. It was also a helpful summary of the foreign secretary's vision for British diplomacy.

A decade ago Mr Hague was not much known for diplomacy of any sort. Chosen while in his 30s to lead the Conservative Party in opposition to Tony Blair, he fought (and badly lost) the 2001 general election wrapped in the flag, vowing to resist European integration and curb immigration. Today he is one of the coalition government's big beasts. In an underpowered cabinet, he stands out for command of his brief, for staying calm in a crisis, and for having a clear idea of what he wants to do in government.

Some years ago, Mr Hague says, it was predicted that the world would evolve into a series of fixed blocks. The only telephone numbers needed for diplomacy would be in Washington, Brussels and Beijing. That has been proved wrong: the world has never looked more multipolar and networked. He is duly expanding Britain's diplomatic footprint for the first time in years, opening posts in Latin America, Africa and Asia, placing a renewed emphasis on language-learning and deploying 140 extra staff to Asia, some 60 of them in China alone.

Diplomats have been told to focus on three objectives: defending national security, looking after British citizens abroad and—above all—boosting prosperity by promoting British business. If Britain moves quickly, it can be the first European country to spot the vital need for long-haul, bilateral diplomacy, Mr Hague suggests. Even so, it will be only just in time.

The commercial push can be felt everywhere. At Britain's embassy in Vietnam, the trade and investment job (once a bit of a backwater) is held by a high-flyer trained in Arabic politics, who proudly reports on work with a Midlands manufacturer of incinerators for animal carcasses. Across South-East Asia, Britain employs 20 expatriate and local officials to work on climate change: more than any other European government. The environmental focus began under Labour. But now officials also worry about how Britain might profit from their work (there is talk of selling British weather-forecasting kit to typhoon-lashed Asian nations).

Britain goes it alone

All this effort is as much a gamble as a plan. Britain can decide to strengthen bilateral ties with the world, but the world must see a matching interest in a far-off land of just 60m people. Nor does Britain lack for competition in fast-growing markets. In much of the world, even friendly British visitors arrive freighted with colonial baggage. These are hard problems. Mr Hague's solution involves briskness, both personal and in his political analysis.

He moves quickly, with minimal kerfuffle. Landing at Hanoi on a commercial flight, his small delegation canters through the airport unnoticed by milling passengers. Shaven-headed and crisply suited, Mr Hague could be an American executive, were it not for his ministerial red box and cufflinks bearing maps of Britain in blue and silver. A fast evening drive (police sirens, flags flapping on the ambassadorial car bonnet, families glimpsed eating supper in open shopfronts, a local tycoon's Bentley hemmed in by mopeds) takes him to a meeting with British businessmen. With Europe facing years of austerity, countries like this offer our only source of growth, Mr Hague says to them. Tell me issues you want raised with Vietnamese officials. Information gathered, he heads for his hotel. He has been in the country about two hours.

His analysis of Britain's place in the world is equally brisk. Britain is no longer a superpower? Get over it, he says—at the age of 51, his is the first generation that cannot remember the empire in its pomp. Britain is not loved by every European nation? Stop worrying about it—though he argues for continued EU membership, hailing the value of the single market and a united European front on trade, diplomatic sanctions and the like.

Britain is a smaller power than before. More interestingly to Mr Hague, it remains a serious power that is good at some hard things. Among other assets, he cites Britain's armed forces, its counter-terrorism know-how, universities, legal and financial firms, civil service and—in a rebuke to nativists in his own party—its commitment to overseas aid and fighting climate change.

Yet no salesman succeeds without the right product. Britain needs to watch the quality of its education, comes a warning from Vietnam: some students return from Britain with good degrees but rudimentary English. Graduates with American degrees are seen as more dynamic, says a financier in Singapore. Britain is respected and can plausibly play a role in Asia, says a think-tank boss, but the British must really want it.

Do the British really want it? Mr Hague's strategy is, in essence, a bet that Britain must rely mostly on herself in the next round of globalisation, buttressed by efforts to show voters at home that engagement with the world profits the country. That is a brave bet. To win, the British will have to work harder than ever.

If Tom Watson really believes Rupert Murdoch is a menace, why didn't he work for a cross-party report condemning him?

Tue, 01 May 2012 15:05:55 +0000

TOM Watson, the Labour MP who has done more than most members of the British Parliament to uncover wrongdoing within the media companies run by Rupert Murdoch, likes to compare the Murdoch press to an organised crime gang. Tiring of claims by James Murdoch—the patriarch's son and a former boss of the firm's British media interests—that he knew nothing of illegal behaviour in his firm's tabloid newsrooms, Mr Watson famously called him “the first mafia boss in history who didn't know he was running a criminal enterprise”.

Mr Watson has just published a book, "Dial M for Murdoch, News Corporation and the corruption of Britain", which makes a passionate case that News Corp and its British arm, News International, behaved for years like a "secret state", to a degree that threatened British democracy itself.

At its readable best, the book—which I reviewed for last week's print edition of The Economist—has the moral force and anger of a prosecutorial summing-up of the case against Mr Murdoch. (The book is less good, I argued, at answering a harder question: how to craft new forms of oversight and media-ownership rules that work, leaving Britain with a free press that is less horrible but still profitable.)

Yet today we were reminded that Mr Watson, a loyal ally of Gordon Brown and a man of high ambition within his own party, is not just a stern seeker after justice. He is also a partisan street-fighter for the Labour Party.

Today marked the publication of a new report by the all-party House of Commons select committee on culture, media and sport. Press headlines this morning, based on leaks of the report, predicted that the committee would formally criticise James Murdoch and damn the corporate culture at News International. In the event, the report both surpassed and fell short of those predictions.

The report surpassed expectations because it concluded that Rupert Murdoch is "is not a fit person to exercise the stewardship of a major international company", and was guilty of "wilful blindness" in failing to see the abuses rife in his British tabloid newsrooms. Those abuses have seen several former reporters, editor and senior executives arrested on suspicion of illegally intercepting telephone voice mails and corruption (involving the alleged bribery of police officers and public officials to obtain information).

The report fell short because it was not approved unanimously by all its members. Instead, all four Conservative voting members of the committee (a fifth Tory is the committee chairman, who does not usually vote) refused to endorse the wording about Mr Murdoch not being a "fit person", which was crafted by Mr Watson and Labour members, and so declined to vote to commend the report to the full House of Commons.

Because of that dispute, complained Louise Mensch, a Conservative MP on the committee, "that will mean it will be correctly seen as a partisan report, and will have lost a very great deal of its credibility."

Mr Watson would doubtless say that he and his five colleagues who voted for the report (four of them Labour MPs, and one from the Liberal Democrats) sincerely believe what it says about Mr Murdoch not being a fit person to run a major company. But as Damian Collins, another Tory on the committee, pointed out at the report's launch today, in several hearings on press misconduct, the committee took no evidence about Mr Murdoch's fitness to run a big company and did not investigate that question. In contrast, after several hearings with serving and former editors and senior figures from News International to discuss what they knew about phone-hacking, committee members were unanimous in their angry conclusion that several of those witnesses misled them and thus Parliament, Mr Collins said.

While the committee found no definitive proof that James Murdoch had misled Parliament in his appearances before them, its members were "astonished" that the younger Mr Murdoch had not sought to see evidence used by his own underlings when they decided to settle out of court with a football agent accusing the Murdoch's Sunday tabloid, the News of the World, of illegally hacking into his telephone voicemails, added the committee's Tory chairman, John Whittingdale.

Those charges of misleading Parliament are already a big deal. They would have been given greater force if the committee had been able to agree on a text that all its members could support. As it is, it will be easy for supporters of News Corp to brush the whole report aside as a piece of partisan politicking.

It will also be easy for Conservatives to dismiss Mr Watson as seeking to entrap the Conservative-led government and the embattled culture secretary Jeremy Hunt with that claim that Mr Murdoch senior is not a fit person to own a major company. Mr Hunt is fighting for his political life after being accused of overly cosy contacts with Murdoch aides while holding a "quasi-judicial" role last year, when it was his task to decide whether News Corp should be allowed to buy the whole of BSkyB, a big satellite television outfit in which it already holds a controlling stake.

Mr Hunt's fate is currently suspended ("and hanging by a gossamer", suggests a senior Conservative), pending evidence that he is due to give to a judge-led public inquiry on press ethics. Mr Murdoch's hopes of buying the rest of BSkyB rest, in turn, on a future ruling by Ofcom, the British broadcast regulator, that he is a fit and proper person to hold a broadcast licence in Britain (Mr Hunt asked Ofcom to consider this question last year).

As I recalled in the opening lines of my book review last week, prosecutors desperate to break up Al Capone's criminal networks in 1930s Chicago finally put the mobster behind bars on charges of evading income taxes. It was a tangential way to put a mafia leader in jail, but prosecutors pragmatically concentrated on their goal—saving society from Capone—and put all their efforts into their strongest case against him.

In contrast, Labour MPs today seemed to put politics ahead of pragmatism, settling for a split committee report that made trouble for Mr Murdoch and the government when they could have had a unanimous report alleging serious wrongdoing and false testimony to Parliament by senior figures representing Britain's largest media company. Elliott Ness, they ain't.

Why do people defend failing schools, but not failing hospitals?

Tue, 01 May 2012 12:19:24 +0000

CHARLOTTE Leslie, the thoughtful new Conservative MP for Bristol North West, makes an interesting suggestion in today's Daily Telegraph. Given that improving the quality of teachers is a big part of the vital task of improving British state education, and given that professions such as medicine have no trouble attracting high-quality recruits, might there be useful lessons for the educational establishment to learn from the professional training given to surgeons?

Ms Leslie, the daughter of a surgeon, notes that ministers have spent years wrestling with the puzzle of giving good teachers the freedom to teach while preventing bad teachers from wrecking the lives of children. Their solution to that puzzle has, all too often, been political interference in the classroom, with ministers setting out "national literacy and numeracy strategies", backed by endless targets and tests. This would not happen in medicine, she writes:

For all the political control over the structures of the NHS, what actually goes on in the operating theatre – what is acceptable practice, what new techniques and medicines should be introduced – remains firmly in the hands of the people who know it best: the doctors. Within the historic Royal Colleges, such as those of surgeons or physicians, excellent practice is celebrated, and proper standards are set, pushed and protected. The Colleges also provide a research base, in the form of journals and conferences, as well as a community championing the highest standards in the specialist areas they represent.
It works well. The medical unions – such as the BMA – can get on with looking out for doctors' welfare and benefits, while the Royal Colleges champion the standards of practice. Their views are respected because they are the voice of doctors, for doctors.

How about a Royal College for teaching, Ms Leslie suggests, providing a universally-recognised career progression to the teaching equivalent of the consultant surgeon, ie, a practitioner of the highest quality who also teaches younger colleagues?

Hmm. Would that work? Anything that weakens the dead hand of the teachers' unions is worth serious consideration. The House of Commons education select committee has today published a report calling for more payment by results in teaching, so that incompetent teachers are not able to hide behind a "rigid and unfair" national pay structure that currently hands bonuses for excellence to more than 90% of teachers. Bang on cue, Christine Blower, general secretary of the National Union of Teachers, is quoted denouncing the idea, saying that "children and young people differ from year to year, making it impossible to measure progress in simplistic terms" (translation: don't blame teachers for bad results, blame the children), and calling performance-related pay "divisive" (well yes, that's the point).

But I have an unhappy hunch that the medical analogy does not quite work for schools. Earlier this year, I heard a similar suggestion when I interviewed the chief executive of a non-profit outfit that runs a "chain" of secondary schools granted their autonomy from local authorities under the academy scheme. What schools need, he said, is something like NICE (the National Institute for Health and Clinical Excellence), the public body that assesses medicines and medical techniques for safety, clinical efficacy and cost effectiveness.

Is that really possible, I asked him at the time? Surely there is a big difference of voter psychology between schools and hospitals. If a regulator accuses a hospital of being rife with infections, or staffed by incompetents whose patient survival rates are way below the national average, then locals will swiftly demand wholesale changes. Yet when schools inspectors denounce schools for producing children with results way below the national average, the air is soon filled with excuses and indignation. You rarely see protests to defend failing hospitals. Yet there have been neighbourhood protests to defend failing schools.

A big part of that, surely, stems from the fact that nobody feels humiliated by catching an infection, or made to feel like a failure if their surgeon leaves his wrist-watch ticking away inside their large intestine. But if you tell parents in a neighbourhood that their children attend a school that is turning out badly-educated graduates without skills needed in the adult world, it sounds like an attack on their offspring.

This "don't talk down the kids" problem helps explain why generations of education secretaries, both Conservative and Labour, could be heard each year on the BBC hailing the news that—for the nth year in a row—record numbers of children had just passed GCSEs or obtained A grades in their pre-university A-levels. We must not take away from these remarkable achievements, ministers would intone: children today work much harder than in my day, and teachers are doing a wonderful job. And as long as nobody was cruel enough to point to international league tables such as the PISA tests, showing British results stagnating while other countries soared ahead, all was well.

All of which helps explain why Bagehot holds such hopes for the current education secretary, Michael Gove (even as my faith in the competence of many other ministers in the coalition government is tested). Mr Gove's reform plans are risky and bold, and it will take years to know for sure if they will work. But Mr Gove has already done a brave and novel thing. He has said, out loud and repeatedly, that the status quo in British state education is not good enough. That has offended all manner of interest groups, but he is right.

Are British newspapers a menace to democracy?

Thu, 26 Apr 2012 15:40:13 +0000

BAGEHOT spent today in Singapore on the final leg of a trip watching the British foreign secretary at work in Asia. A future column will discuss Britain's new foreign policy plans, but this week's print column—written from the road—examines a furore back home triggered by the latest hearings of the Leveson inquiry into press ethics. Ripples from the debate about the British press, and its unhealthily swaggering relations with the country's political leaders, reached Asia all week. To my slight surprise, I found myself watching Leveson coverage live at Hong Kong airport, courtesy of CNN, caught up on more footage late at night on streaming video, and my Blackberry hummed with endless headlines.

Why is a row about British domestic press regulation global news? Is it because British newspapers and newspaper tycoons really are a menace to democracy? I am not sure. In part, of course, it is because Ruper Murdoch, the tycoon whose evidence made most waves this week, is a global media baron. But in part, I argue in this column, Britain simply has a very odd media market. Here's the column:

WHEN Britain's biggest tabloid claimed credit for a Conservative general election victory with the front-page headline “It's the Sun wot won it”, its proprietor, Rupert Murdoch, was not pleased. Giving evidence on April 25th to a public inquiry on press ethics, Mr Murdoch explained that he had administered “a terrible bollocking” to the Sun's then editor, Kelvin MacKenzie. A “tasteless” claim, he said. “We don't have that sort of power.”

The inquiry—chaired by Lord Justice Leveson, a judge—this week shone a light on ties between the media and politicians. The most dangerous revelations were e-mails apparently detailing contacts between News Corporation, Mr Murdoch's company, and David Cameron's government during the firm's abortive bid to buy BSkyB, a satellite-television outfit. The relationship was sometimes friendly, sometimes tense, but always close—and rarely craven on the part of the media firm.

Another milestone in the Sun's political coverage does not seem to have earned a proprietorial rebuke. It happened in 1992, on the night that Britain was forced out of the European Exchange Rate Mechanism. The prime minister of the day, John Major, telephoned Mr MacKenzie to ask how the Sun would be covering the story. “Actually,” Mr MacKenzie replied, “I have a bucket of shit on my desk, prime minister, and I'm going to pour it all over you.” Asked if this tale was true during his own appearance at the Leveson Inquiry, Mr MacKenzie enthusiastically re-enacted it.

Mr Mackenzie's cheerful thuggery is unusual, even in Fleet Street. But the fact that he talked to a prime minister that way and kept his job suggests that relations between the British press and politicians are pretty unusual. Does that mean that the press wields democracy-threatening power?

The answer is complicated by the oddity of Britain's media market. In America, News Corporation is just one of five important media firms. In contrast, its British arm is a local titan. The Sun has 2.6m readers in a country of 60m people: scale that up, and an American equivalent would sell 13m copies a day. Seven British dailies have circulations larger than the biggest-selling French national newspaper.

That many titles have been out of control is not in dispute. Just ask Lord Justice Leveson, hearing allegations of illegal phone-hacking, bribery and paparazzi intruding on funerals. But press savagery towards the rich and powerful also taps into an ancient British tradition, that of instinctive derision for the strutting toff or politician, amid the battle-cry: “Who does he think he is?”

If prodded, politicians will insist (through gritted teeth) that press savagery is vital to democracy. They are more skittish about whether they think newspapers decide elections.

In his memoirs, Tony Blair—whose 1997 win was preceded by an endorsement by the Murdoch press—writes about a 1995 flight to address a News Corporation conference in Australia (a pilgrimage that outraged the left). Mr Blair explains himself with a rhetorical question. Murdoch newspapers had hitherto been “rancorous in their opposition to the Labour Party”. On being invited into the “lion's den”, Mr Blair argues: “You go, don't you?”

Addressing the Leveson inquiry, Mr Murdoch told how relations with Mr Blair's successor, Gordon Brown, soured after his newspapers switched their support from Labour to Mr Cameron's Conservatives. Once he and Mr Brown swapped tales of Scottish ancestors and their young children played together, he said. When his papers turned, Mr Murdoch claims that Mr Brown called to declare “war” on his companies. As for Mr Cameron, when the furore about press abuses took off in 2011, he declared that all party leaders had turned a blind eye to warning signs, because they were “so keen to win the support of newspapers”.

Newspaper campaigns clearly influence policy-making. Former Blair aides have credited Mr Murdoch, a tireless Eurosceptic, with helping to keep Britain out of the euro. But arguably their greatest day-to-day influence is indirect. British political leaders are drawn from an increasingly narrow, metropolitan pool. When tabloids bellow that they know the mind of the ordinary voter, it requires some self-confidence for an Oxbridge-educated, sushi-munching minister to ignore them.

Britain is an outlier in other ways. In lots of European countries politics encompasses angry extremes, with the hard-right and far-left attracting hefty votes. By contrast, newspapers in such countries are often small-circulation, centrist, and prim. Britain does things the other way round. Partly because of first-past-the-post voting, the big parties cluster at the political centre. The brass-band blare of dissent comes from a fiercely partisan press.

Call my diary secretary

Optimism may be hard this week. But the current stink could signal a general cleaning of the stables. Political leaders have already opened their diaries to disclose meetings with proprietors and editors. In parallel, fresh scandals over party fund-raising have revived efforts to reach a cross-party deal on donations, perhaps by capping the sums that individual donors can give.

Such reforms could help, says a senior politician. Donors, editors and proprietors have less influence than is commonly assumed. But they have enjoyed excessive access to party leaders, who for years devoted too much time to meeting them. Transparency over diaries should reduce such contacts. A cap on donations would do the same. If politicians meet media bosses and donors more sparingly and simply as professional contacts, that would be a good thing.

Such a change is overdue. Journalists and politicians can never be truly friends. Lowly reporters and MPs always knew this: given a big enough story, each will turn on the other. For too long, their respective bosses seemed to forget. Not any more.

Britain's educational secret weapon: chilly rigour

Wed, 25 Apr 2012 20:43:54 +0000

“YOU don't see many white people round here,” said the American lecturer, visibly startled to encounter Bagehot at the Banking Academy of Vietnam, a sprawling finance college in a far-flung district of Hanoi.

Actually, on this particular morning there were two more Europeans upstairs, giving an economics lecture on the optimal level of managerial ownership in a British company (not too little, but not too much either, I can report, otherwise managers start hoarding cash).

But learning was not really the point this morning. This visit by two academics from a branch of London University was really a thinly-disguised sales pitch, advertising the joys of studying in far-off Britain.

Vietnam is a young country—a quarter of the population are under 15—and its local universities are a source of endless complaint among the rising middle class. The teaching is pretty patchy, and students are obliged to leave their core studies to study such irrelevances as family planning, military drill and “ideology”.

As a result, Vietnam is seen as a boom market for western universities, notably in Britain, the top overseas destination for students from Hanoi (the southern middle classes from Ho Chi Minh City favour American and Australian colleges, reflecting both the legacy of American influence in southern Vietnam, and family ties to émigré communities in Australia and North America).

Your correspondent is in south-east Asia with William Hague, the British foreign secretary, reporting on his government's drive to deepen relations in fast-growing corners of the world such as south-east Asia.

Education is a high-profile part of the British pitch in this corner of the world, and on this leg of the trip I was keen to break away from the official delegation, if only for a morning, to get a glimpse of how Britain's wares are seen on the ground.

After taking a straw poll among local students, the tentative answer is that Britain's reputation is good. But it could be damaged if some universities and colleges lower standards too far in their hunger for foreign students and the fees they pay (Vietnamese undergraduates might pay £12,000 a year in Britain, apparently, and as much as £16,000 a year for a business-related Masters).

To quote one education professional who sees students return to Vietnam from Britain each year: “I am amazed. Some come back with a degree, even with a distinction in an MA, but they are not confident in their English. How come?”

British colleges have been “overdoing it” when it comes to recruitment, is the feeling. At education fairs or via sales visits to their colleges, students meet endless British professors and business development officers, all clutching glossy brochures and statistics about how high their institution features on student satisfaction rankings, staff-to-pupil ratios and the like. The recruiters “offer so much that very ordinary students think they can pick and choose, or ask for a scholarship,” I was told.

As it happens, the story from British universities is generally the opposite, with lots of grumbling about the country becoming unwelcoming to foreigners. Speak to British university bosses and their top concern is a recent tightening of visa rules for students: part of a general push by the Conservative-Liberal Democrat coalition to reduce net immigration.

Flying here via Hong Kong, the front page of Monday's South China Morning Post carried a report focussing on the rules that require would-be students to demonstrate a higher standard of English than is currently the case, and which tighten the rules on seeking work in Britain after they graduate. An accompanying cartoon in the SCMP showed a Hong Kong student being handed his degree by a British vice-chancellor, with the caption: Here's your degree, now go home.

Instinctively, it does seem an own-goal to make Britain less friendly to foreign students at the same time as the government is backing a big expansion in overseas student recruitment. But speaking to students and professionals at the Banking Academy and later on at the British Council, where Mr Hague took questions from a group of students, I have to admit that a counter-intuitive point kept coming up. In such a competitive market, it seems, Britain's unique selling point is precisely that it is not very friendly.

The sort of middle class Vietnamese able to contemplate an overseas degree has a pretty strong sense of the big players in English-language higher education. Australia is “relaxed”, and “fun”. The weather is good and there are lots of Vietnamese. Canada is a new market, and attractive because students believe it is easier to stay on after their studies, finding a job or making a new life there. America is “dynamic” and “energetic” and business-friendly, but is also seen as perilously relaxed.

Britain is “more old-school, more careful”, said Do Hoang Quan, a 20 year old from the country's best college, Vietnam National University.
British education is “very conservative,” said Nguyen Minh Tam, who has just won a Chevening Scholarship from the British government to study in Britain. She meant this as a compliment.

So should rule-tightening British border authorities and Home Office officials in fact be hailed, for making it harder to go to Britain and inadvertently preserving the country's overseas brand? That is precisely the view of Nguyen Thi Nhu Nguyen, director of The Education Company, a private agency that advises Vietnamese families on where to send their children for an overseas education. Dr Nguyen sends about 100 students a year to Britain, receiving a commission from the colleges that accept them. She sends students to Australia and America as well, but takes especial pride in sending students to “prestigious” British colleges (she also recruits for English boarding schools for children as young as 12 or 13, whose appeal to nervous Vietnamese parents includes the fact that Britain is seen as conservative and “safe”).

“I think it is quite good that the UK border is tightening up,” she told me. She likes the fact that it is harder for higher education institutions to gain “highly trusted” status as visa sponsors, closing down rogue colleges. She is pleased that students who fail their exams will no longer to be allowed to stay in Britain and look for another course—or “just hang about doing nothing,” as she puts it. She is delighted by stricter English language tests. All this rigour is “good for the image of the UK,” is her conclusion.

A final word goes to Hoang Anh, a basketballer-height undergraduate met at the Banking Academy. Under impertinent questioning from your reporter, he admitted to hearing that the British are not very friendly to foreigners, or as he put it, that “they do not want to talk to them”. Yet he is already deep into internet research on British universities. He has a sister studying in America now, he explained, and she has put him off. “She says her studies are very easy,” he said. “But easy is not good.”

The British government's prosperity agenda hits the road

Tue, 24 Apr 2012 17:25:49 +0000

REPORTING from a summit some years ago, your correspondent found himself following the foreign minister of another country into a press conference. The foreign minister in question, a celebrated public intellectual at home, was strolling at an easy lope into the room when his attention was caught by something to his left. The distraction, it turned out, was the minister's own reflection in the shiny glass of an interpreter's booth. The ministerial hand rose and came to rest on the ministerial hair, its owner oblivious to the British journalist just behind him. Pat, pat, smooth, went the hand. A last check. A nod. Oh yes. Looking good. And in we went.

Tonight, Bagehot is in Hanoi, watching a rather different foreign minister, William Hague, on a tour of south-east Asia. Keeping up with the British foreign secretary involves more jogging than loping, it turns out. There is a minimum of fuss. Landing at Hanoi, his small delegation of officials cantered through the airport, unnoticed by milling passengers. Shaven-headed and crisply suited, were it not for his Yorkshire accent and red ministeral box in hand, he could have been an American CEO, in town to inspect a new production site.

Taking office, the Conservative-led coalition vowed a new, business-centred approach to foreign policy. Trade and prosperity would be the watchword, rather than grandiose schemes to remake the world. Bilateral ties would be at a premium as Britain sought to promote its wares in a fast-changing world. Mr Hague, a sceptic about the European Union, vowed to lift the gaze of British diplomacy to far-flung, fast-growing corners of the world.

Events, notably the Arab Spring, have intruded on that commercial logic to a degree. But judging by a first evening on the road with Mr Hague, he means it about business.

Mr Hague is the first British foreign secretary to visit Vietnam in nearly 18 years, I was told on the drive in from the airport (the wail of a police escort's siren; honking horns; families eating evening meals in the relative cool of an open shopfront; flapping flags on the ambassadorial bonnet; a local tycoon's black Bentley hemmed in by mopeds).

Mr Hague is a long-haul foreign secretary, one of his ministerial colleagues told me recently. Get him away from the navel-gazing squabbles of Europe or the near neighbourhood, take him to a rising power on the other side of the world, and he comes alive.

Tomorrow will see calls on the Vietnamese prime minister, foreign minister and Communist Party general secretary. But tonight, less than an hour after touching down at the airport, Mr Hague stood in the wood-floored, sparingly-furnished octagonal hall of the ambassador's residence, thanking a gathering of locally-based British business bosses for contributing to British prosperity. Floor mounted posters flanked the room, declaring that "Business is GREAT Britain", and "Shopping is GREAT Britain", above black and white images of great British things.

Mr Hague began his travels on Monday in Luxembourg, he told us, at a meeting of European Union foreign ministers. Sitting at the EU table, the latest news was that the Dutch government had just fallen, in a political crisis triggered by austerity and the euro crisis. At moments, it looked like another European government might fall that afternoon. Austerity is biting, said Mr Hague. This makes for painful politics, including in Britain. Economically, Europeans are not going to find growth from government spending at home for a long time, perhaps a decade.

That means the best source—he corrected himself—the only source of growth is going to be growing our exports and our trade with countries like this, he told the gathering. He had inherited a Foreign Office from the previous Labour government, struggling with endless lists of objectives. He had reduced them to three: securing British prosperity, securing British security and looking after British citizens abroad.

He ended with a summary of his worldview. There was a time, some years ago, when it was said that the world was moving into a series of fixed blocks. The only telephone numbers needed would be one in Washington, one in Brussels and one in Beijing. That has been proved wrong, he suggested: the world has never looked more multipolar and networked. Britain was duly opening new embassies and offices and beefing up its manpower overseas, especially on the commercial side.

The gathering made no pretence at sociability, or Cool Britannia buzz. Everyone stood, a table of small things to eat waited largely untouched in a corner, and Mr Hague made his way among the besuited bosses, asking them about business and what they might like him to raise with Vietnamese leaders the next day. His information gathered and last hands shaken, Mr Hague was off to his hotel.

His expansionary, expeditionary vision could, of course, have been calculated to appeal to British country heads and regional CEOs in a fast-growing country such as Vietnam. Who does not want to hear that what they are doing represents the future?

But I am pretty sure Mr Hague also believes it. Will his strategy work?

The problem with foreign policy, as a diplomat once remarked, is that it involves foreigners, and trying to make them do what you want. For the moment Britain exports rather little to Vietnam, though local executives insist that the headline figure (of around £500m in annual British exports) fails to capture trade in services, which is where Britain does rather well. Can Britain greatly increase its trade with Vietnam, and thereby generate jobs and growth back home?

The cowardly but accurate answer is that time will tell.

This is an impressionistic blog posting, not a finished article. More postings will follow as the trip continues. But watching Mr Hague, jotting down my notes at the back of the British ambassador's drawing room, there is no doubting the austere seriousness of intent.

Why elected mayors matter

Thu, 19 Apr 2012 17:13:41 +0000

MY PRINT column this week is from Bristol, one of ten English cities that on May 3rd are holding a referendum on whether to have a directly elected mayor. There are larger cities holding votes on the same day, such as Birmingham, and cities that are convulsed by angrier rows about the quality of their local councils, such as Nottingham. But Bristol offers a particularly pure case study of what is at stake.

Power has changed hands many times in the last decade in Bristol City Council, with coups, ambushes, partial elections and backroom deals bringing down minority administrations and wobbly, ad-hoc coalitions. As a result, by the count of Conservative ministers in London the post of council leader (chosen from among the 70 elected local councillors after deal-making among the dominant party blocks) has changed hands seven times in the past ten years, though this is disputed by the current council bosses. Add in a quirk that the council holds partial elections in three years out of every four, and the sad result is that many Bristolians are thoroughly sick of local democracy. In the words of a piece of graffiti sighted in the tough St Paul's district of the city: "Whoever you vote for, the council wins".

All this rule by fudge, huddle and horse-trading has undermined accountability, and weakened any sense that voters can sanction policies they dislike, and reward those that they like.

Into this mess, if pro-mayor campaigners win next month's referendum, will step a single boss for the city, elected with a direct personal mandate and able to push through policies with the support of a third of the city's elected councillors. Enthusiasts say that such a champion is needed to get things moving in a dangerously sleepy city of 430,000 people. Opponents say that an elected mayor risks being an overmighty bully, trampling the delicate webs of consensus and consultation that come with rule by a group.

If the dividing lines feel rather familiar, that's because they are: the fight over elected mayors is oddly reminiscent of older arguments pitting Britain's first-past-the-post election system (which has traditionally led to majority rule by a single party, which is good for efficiency and accountability) against more proportional voting systems, which produce endless coalitions (but are arguably more representative). Accountable or representative? Efficient or consensual? Take your pick.

Other divides can be seen. I had to work a bit to find locals who had given the debate much thought yet (and final turnout could well be woefully low). But it was striking that some of the most vocal supporters of an elected mayor are entrepreneurs with a strong dash of impatience about their home city, which they feel has been resting complacently on its undoubted charms (a pretty, recently-restored harbour, varied architecture, two universities and lovely countryside just outside the city limits). While some of the most vocal opponents of change were locals with a fierce sense of pride in their community as it is now.

In short, the debate about having an elected mayor is more interesting than you might think, going well beyond dry questions of municipal governance. Speaking to people inside the government and in the Labour leadership this week, there is considerable doubt that Bristolians will vote Yes, and a sense that perhaps only a handful of the ten cities will choose a mayor. That would be a shame: dynamic cities need dynamic leaders, and this country needs more dynamic cities.

Few are more fired-up on this subject that Charlotte Leslie, the new Conservative MP for Bristol North West and a native Bristolian (well, ever since she was two years old). People in the city are fed up with the city council, she says. Bristol is an amazing place with vibrant creative industries, green tech and high-end manufacturing on the doorstep. But it also has terrible transport, and some of the worst-performing state schools in the country: "Anyone who thinks that Bristol is doing well is guilty of an unforgivable underestimation of what the city could do."

In these times of austerity and anti-politics anger, the most potent argument of the anti-mayor campaign is the possible cost of a change. Bristol City Council have produced a supposedly neutral information leaflet which costs a mayoral election at £400,000 a time, and which suggests that the new mayor would have no more powers than today's council leader. Nonsense, say Conservative ministers in London: the election would not cost half that much, and the whole idea is for new mayors to come to Whitehall with their personal mandates, bang the table and demand more powers over such policies as transport, housing or economic development. That is what London's mayors have done, ministers note. The government wants to hand powers to the local level: that is the whole idea.

Yet in a straw poll of locals, that figure of £400,000 elections came up again and again, together with the salary that would be paid to a new mayor. The Bristol vote is going to be a tight one.

Ms Leslie has a final argument to try on her constituents: "I have said to people, if the city says no to a mayor, I never want to hear another squeak of complaint about local politics again." That is them told. Here's the column:

LIKE many entrepreneurs, Rob Law—designer of the Trunki, a wheeled children's suitcase that can be ridden by small, tired owners—is impatient with established ideas. A cross between a toy and luggage, his creation at first baffled buyers from big shops and was turned down by “Dragon's Den”, a televised talent show for inventors. He has since sold more than 1.25m of them.

Mr Law's design studio in the south-western city of Bristol is built to resemble a space-station, boasting dummy portholes offering galactic views and an escape slide to carry staff between floors. Next month he will bring a big chunk of production back from China to a factory in England—betting that shorter lead times, lower transport costs and a redesign eliminating two dozen parts will make British manufacture pay.

On May 3rd Bristol will be one of ten English cities to hold a referendum on whether to stick with rule by council committee or hand powers to a directly elected mayor. Mr Law is keen on change. The Bristol area is a good place for business—home to two universities, aerospace firms and the animation studios behind Wallace and Gromit. But it could be better, he says. Transport is a mess, and key bits of infrastructure are missing. Bristol is “treading water”, says Mr Law. It needs a champion to get things moving, just as London's mayor champions the capital.

Another businessman, George Ferguson—an architect and owner of a theatre, brewery and independent retail complex—will stand as an independent if the mayoral referendum passes. Mr Ferguson, a Liberal councillor decades ago, now thinks non-partisan mayors have the best chance of representing a diverse city of sharp inequalities. He quotes graffiti from a tough city district: “Whoever you vote for, the council wins.”

Though the big national parties are divided over mayors, three of Bristol's four MPs broadly favour change. One, the Liberal Democrat Stephen Williams, says he may run for the post himself. Charlotte Leslie, a Conservative, argues that the status quo—by which council leaders are chosen from among the city's 70 councillors amid much horse-trading—drives local disgust with politics. It does not help that Bristol holds partial council elections in three out of every four years. Bristolians are fed up, she says. If they realise that choosing an accountable mayor is a vote against politics as usual, then the referendum can be won.

The municipal establishment broadly opposes elected mayors. Their reasons include the risks of populism and reduced influence for local councillors. The current council leader, Barbara Janke, a Liberal Democrat, adds that the precise powers of city mayors have not been spelled out. Moreover, she sniffs, America has lots of elected mayors and “quite a few” have been corrupt.

Bill Martin, a Labour alderman and head of Bristol's No campaign, is concerned that the new mayors will be able to take decisions with the backing of just one-third of councillors. To him, that smacks of a Tory plot to ram through changes such as the privatisation of council services. Campaigners against an elected Bristol mayor stress that such a city boss will cost money—almost a pound per resident for each mayoral election, they claim, plus a salary for a new “political fat cat”. In short, both the No and the Yes campaigns are appealing to the anti-politics mood.

To be fair, not all those wary of change are local grandees. Beast, a clothes shop, makes T-shirts celebrating local speech that are famed city-wide (and sold to homesick Bristolians worldwide). Top-selling shirts proclaim “Gert Lush” (slang for “good”), “Ark at ee” (look at/listen to that) and “Cheers Drive” (used when stepping off a Bristol bus). Beast's co-founder, Lucy Wheeler, is “kind of happy with how things are”. She worries about giving one person too much power, preferring rule by a group.

When it comes to attitudes to elected city bosses, the dividing line is not a neat one between left and right. Tony Blair's Labour government promoted directly elected mayors; some Tories think them a gift to Labour, dominant in many cities.

Democracy out of shape, Bristol-fashion

Listen to the debate around Bristol's referendum—set to be among the closest-fought of the ten—and the two sides do not wholly disagree. Above all, opponents fear that mayors are intended to push radical reform. They are right: that is why mayors are a good idea. Arguably, the dispute is between those who prize solidarity and consensus as bulwarks of a good society, and those who place their trust in staying competitive in a fast-changing world. Those who favour mayors are in the latter camp: a city only needs a champion if it plans to compete.

Steve Hilton, David Cameron's outgoing policy chief, sees cities as ideal test-beds for experimentation. When the prime minister visited America in March Mr Hilton ensured that—between White House ceremonies and meetings with Wall Street bigwigs—his boss found several hours to tour grittier Newark, whose reformist mayor, Cory Booker, is a Downing Street hero.

Elected mayors will have a personal democratic mandate to “deliver change”, says the Conservative cities minister, Greg Clark. Council leaders have no such city-wide mandate, nor the accountability that comes with high visibility. Mayors will have at least the powers of a council leader. Mr Clark expects most to demand more powers, over transport, housing and so on—just as London's mayors have grabbed powers over policing and planning. They will find a government “ready to negotiate”.

Will that be enough to produce Yes votes in next month's referendums? Turnout will be low, making results hard to predict. Yet the government's yearning to break up municipal vested interests is real. That lends credibility to talk of devolving powers to mayors. It would be depressing if the public's anger runs so deep that, just now, political power cannot even be given away.

Why the debate over British shale gas extraction is for high stakes

Tue, 17 Apr 2012 22:13:31 +0000

THE BRITISH debate about shale gas extraction has made headlines today, following the publication of a government-commissioned study suggesting that the unconventional drilling technique can safely be tested further, despite apparently causing two small earthquakes near the northern resort town of Blackpool. The domestic argument is already trundling along familiar tramlines. Environmental campaign groups and left-wing newspapers have expressed concern, arguing that it would be better to focus on renewable energy sources. Right-wing newspapers have accused green activists of having a "general hostility to fossil fuels".

Similar debates can be found in several countries which have looked into the use of hydraulic fracturing, or fracking, to unlock gas and oil deposits from rock formations with the help of high-pressure injections of water and chemicals.

Yet the British debate could turn out to have an international twist, and one that makes it edgier than most.

My understanding, briefly referred to in the print Bagehot column published last week, is that senior British officials were recently asked to pull together a briefing for the prime minister, David Cameron, on the potential of British shale oil and gas reserves. Those same officials take the view that shale gas could be pretty important. And that makes them worry about what some big cheeses in Whitehall see as an irrational European nervousness about science, technology and the environment.

France has already put in place a moratorium on fracking, they note. Other continental governments may follow, and British sources draw nervous analogies with European hostility towards genetically-modified crops, which have seen draconian controls imposed on all manner of GMO crops (often amid ugly rhetoric about "American corporations" launching a "foreign invasion" of Europe's pure and ancient fields), regardless of the scientific data.

That could spell another row between Britain and the EU, if European-level regulators were to put hurdles in the way of British shale gas exploitation. That would be awkward enough. But the stakes could be higher still.

Though British reserves of shale gas are still largely a matter of guesswork, some estimates point to rather large stocks. And—to delve into off-the-record discussions that I could not fit into the column—that could have geo-political implications that would turbo-charge the usual British impatience with Euro hand-wringing and science-scepticism. American sources have told British counterparts of hopes that their nation's energy security headaches could be transformed by fracking shale formations to release American oil and gas. If all goes well, America could find itself much less dependent on the Middle East and troublesome allies in the Arab world, is the message from Washington.

The nightmare scenario for some British government insiders is the reverse. Namely, Britain discovers promising reserves, but then is hobbled by irrational European environmental rules and as a result finds itself stuck in the only rich-world economic block that is still dependent on the Middle East for energy.

There is a fair way to go between the present talk of test drilling in a few spots around England and such a doomy scenario of geo-political isolation. But within the British government machine, this is a debate which goes well beyond round 18 of a long-running domestic dispute between British eco-lefties and conservative petrol-heads.

Cutty Sark Britain

Thu, 12 Apr 2012 15:35:19 +0000

MY PRINT column this week looks at a question that is coming to dominate British debate about Europe: is EU membership an economic advantage, or is it dragging us down?

OTHER countries show off warships or the vessels of great explorers. It says something about Britain that one of its best-loved ships, the Cutty Sark, was built for trade. After long repairs, the three-masted tea clipper will reopen to the public on April 26th in a new setting at Greenwich—her racing lines and brass-sheathed hull held in a lattice of glass and steel so that visitors may walk aboard, around and beneath her.

Launched in 1869 at the peak of British commercial power, the Cutty Sark was a response to globalisation. The abolition of protectionist laws had opened China-to-Britain shipping routes to fast American boats, capable of winning the lucrative annual race to London with the new tea harvest. Manned by sailors from a half-dozen nations, the Cutty Sark was built to win the tea race, at such high cost that her shipyard went bankrupt. Dogged by ill luck (a broken rudder, a captain eaten by sharks) she never won a China race, but later made a packet as the fastest ship on the Australian wool run. Today her bowsprit points across the Thames at another symbol of global Britain: the glass towers of the Canary Wharf financial district, home to risk-takers from 100 nations.

Something close to a Cutty Sark vision for Britain—nimble, free and ready to roam the globe in pursuit of profits—fills the dreams of Conservative politicians and policy types. As it happens, there is nothing wrong with trying to sell more to emerging powers. As was glumly noted on April 11th when David Cameron arrived in Indonesia with three ministers and a score of business leaders in tow, that country—the fourth most populous on earth—currently buys less than 0.2% of Britain's exports. Half of all British exports still go to the European Union (EU). Britain exports more to Ireland than to Brazil, Russia, India and China put together: a situation that the chancellor of the exchequer, George Osborne, calls a road to “economic irrelevance”.

Yet dreams of a swashbuckling, oceanic future carry risks, notably of bad policymaking towards Europe. Britain's EU membership is not an affair of the heart but an accounting exercise, in which economic advantages (above all from membership of the single market) must be weighed against the costs of red tape, lost sovereignty, and taxpayers' cash paid into the EU budget.

Recently, that calculation—is Britain paying too dearly for access to European markets?—has been overtaken by a new question: are those markets a prize at all? Eurosceptic MPs wishing to rouse an audience used to talk of a Euro-superstate trampling ancient British freedoms. Now, with euro-zone turmoil often in the news, their most potent lines of attack assert that Europe is a sclerotic, ageing, debt-crippled dead-end—that Britain is shackled to a “corpse”, to quote one Tory MP. Not only is such a Europe seen as unlikely to furnish new economic growth. More provokingly, the EU's perceived mania for regulation is seen as wrecking efforts to conquer more promising markets.

Such arguments convince many backbenchers. The Fresh Start project—a Eurosceptic grouping whose first meeting attracted more than 100 Conservative MPs—last month published a “Green Paper” questioning the high value Tories traditionally attach to the EU's single market. Although trade with Europe is important, the discussion paper argued, the union's share of world output is in rapid relative decline: securing single market access “should not come at the expense of Britain's ability to compete in fast-growing and emerging markets elsewhere.”

Within the Treasury and Downing Street, there is talk of those glass towers in Canary Wharf and the City of London becoming a financial capital for the BRICS nations (Brazil, Russia, India, China and South Africa). Yet like a British tea clipper tethered to a rotting continental hulk, the City is seen as threatened by hostile and risk-averse EU regulators who—worse—are being given new opportunities for mischief by closer euro-zone integration.

Other battles loom. The French presidential campaign has heard calls for trade “reciprocity” whenever non-European firms bid for EU public contracts: code for protectionism. Mr Cameron recently asked senior officials to investigate the potential for shale gas and oil extraction in Britain. Those aides fret, privately, that environmental hand-wringing from European neighbours risks throwing up EU-level hurdles to shale exploitation.

When Schadenfreude meets wishful thinking

Some fears are well-grounded: too many EU financial rules have been hastily drafted since the credit crunch, with too little heed paid to potential costs. Protectionism is a threat in Europe, as elsewhere. But in politics, it is always dangerous when emotion collides with policy. Though British Conservatives are less gleeful about the euro crisis than they were a year ago, a sense of vindication informs talk of European irrelevance.

That threatens their sense of perspective. Europe may be in relative decline, but Britain could double its trade with China and still not match its current exports to France. Germany—bound by the same EU employment, social and environmental rules that supposedly hold Britain back—is a champion at selling to China.

More pragmatic than his party, Mr Cameron is committed to reforming the single market, membership of which he calls a vital part of Britain's pitch to foreign investors. Visiting America last month, he advocated an EU-American free-trade area and praised mature markets, noting that success in business can come from “going after your oldest customer and trying to sell more”.

British Eurosceptics may yearn to roam the globe, untethered to a European club they never liked. But they will still be 21 miles from France, and profoundly affected by European rules. Bad regulations can hobble economies, but clever ones can create new markets and free trade. Getting rules right is the hard work of government. Leave maritime dreaming to the tourists.

David Cameron's bad week

Wed, 04 Apr 2012 17:12:52 +0000

MY PRINT column this week looks back at a run of grim headlines for David Cameron and his coalition government, and questions the idea that his biggest problem is being exposed as an out-of-touch toff:

“LET'S not mince words,” said one of the Conservative Party's heavy-hitters: our party has come to be seen as arrogant, selfish and—fatally—“out of touch”. The out-of-touch charge has rung in the ears of David Cameron and his closest ally, George Osborne, this week, after days of unforced errors. Lowlights included a party fund-raiser filmed allegedly offering access to ministers for donations, bungled preparations for a fuel-delivery strike and angry headlines about a budget that noisily cut the 50% top income-tax rate while sneakily raising tax on pensioners and hot bakery snacks (serious stuff: the British like their pasties).

The prime minister's net approval rating, measured by the pollster YouGov, fell 16 points in a single week, to a record low of -27. Much advice has been offered by Tories in Parliament and by the press: cull the suave “chums of Dave” who fill Downing Street; hire a new party chairman; give more ministerial posts to northern or working-class MPs; ditch totems of party modernisation such as support for gay marriage, and focus on proper, Conservative policies like bashing Europe and slashing middle-class taxes. The most hostile grumbling has a personal edge. Mr Cameron and Mr Osborne were born into privilege, expensively educated, then wafted into government via stints in the back rooms of political power, it is argued. In short, they are toffs.

Class is an appealingly simple explanation for the Conservatives' current woes. It is also a red herring. Go back to the heavy-hitter quoted at the start, William Hague. His lament about arrogant, out-of-touch Conservatives comes from 1997, and the moment that Mr Hague (state-educated, Yorkshire accent) took the baton of party leadership from John Major (state-educated, south London vowels, never went to university). True, a startling number of old Etonians slope, languidly, around today's corridors of power. But the Conservative Party spent years led by impeccably classless, self-made men, and voters still told opinion polls that it was a party of the rich, for the rich.

None of this means that Mr Cameron and his team escape all blame for their present woes. Mr Osborne should have made the case for the painful bits of what was overall a prudent budget, rather than sneaking them out. Not for the first time, a crisis—in this case a threatened strike—has left ministers looking inept. On party funding, it is small comfort that voters think Labour just as sleazy as the Tories, and as likely to allow donors (in Labour's case, trade unions rather than millionaires) to influence policy.

But in truth Tory critics do not dislike the prime minister and Mr Osborne for being too posh. They like some people much posher than Mr Cameron, starting with the queen. Instead, Tory critics think that their party leaders are too grand, with a dash of liberal, metropolitan elitism. They first sensed disdain for grassroots Tory values when Mr Cameron sought to “rebrand” the party with pledges to fight climate change, increase overseas aid and embrace gay equality. Traditionalists suspect that Mr Cameron looks down on voters who prefer cheap energy bills to windmills, who think that charity begins at home and who feel unsettled rather than liberated by fast-changing moral codes.

Take a step back, and the Conservative Party is having an argument about why Mr Cameron did not win an outright majority at the 2010 general election. The prime minister's allies are certain the election was lost because the project of detoxifying the Tory brand was incomplete: people wanted change from Labour but did not trust the Conservatives to deliver it. On the right, the consensus is that the election was lost by talking too much about modernising gimmicks, and too little about core issues, such as immigration, tax or Europe.

It is a fallacy that “if only we'd been more robust on Europe or immigration, we'd have won,” insists a senior ally of Mr Cameron's. Before the 2010 election, the Tories had a 39-point lead over Labour as the party trusted to reduce immigration, but led on economic competence by only 4% and trailed Labour on protecting the National Health Service by 3%. Tougher talk about securing the borders was not going to convince wavering voters.

The withering of the grassroots

More importantly, says the prime minister's ally, Cameron critics within the party are out of date to imagine that millions of natural Tories are out there waiting to be galvanised by a properly Conservative campaign. They have failed to grasp the big trend of recent years: that most voters are now floating to one degree or another, untethered to the mainstream parties.

The most alarming finding from focus groups conducted by the Conservative Party after last month's budget did not involve tax rates. It was that voters suspect that British budgets no longer much matter, because the country is just a little island buffeted by global forces. Most British fear their children will be worse off than they are. They are losing faith that governments can fix this.

An unprecedented 17% of voters told the latest YouGov poll that they favour non-mainstream parties. That “None of the Above” trend will matter long after rows about pasties are forgotten. It was underscored by a parliamentary by-election on March 29th in Bradford West, at which a safe Labour seat fell to George Galloway, an anti-war, hard-left populist who wooed Muslim voters and vowed to oppose all spending cuts.

Certainly, Mr Cameron and Mr Osborne need to show that they are in touch with the concerns of ordinary voters. Planned reforms to the welfare state, education and policing should help.

But a graver test looms. An earlier Conservative critic once coined a deadly phrase, calling the Major government “in office but not in power”. Today all big political parties face a similar charge. Their challenge is to convince unhappy, cynical British voters that politicians have power to do much good at all.

Intruding on the Easter of others

Mon, 02 Apr 2012 13:43:39 +0000

SHORTLY before Christmas, Bagehot wrote a rather grumpy column about the Church of England, arguing that a time of national austerity and general economic soul-searching was a big test for the national church, which I suspected its leaders were currently failing. True, there were the Occupy London protestors camped out on the steps of St Paul's Cathedral, and yes, the Archbishop of Canterbury and assorted bishops were regularly making headlines by speaking out against public spending cuts, criticising the government and generally fretting about austerity.

But the Occupy protestors had only ended up at the cathedral by accident, I noted. They wanted to camp in the London stock exchange but were prevented by security guards, forcing them onto the nearest open space around St Paul's. More seriously, I was struck by how seldom Church of England leaders mentioned religion or God in their essays, editorials and open letters. More often, I grumbled, sounded like shop stewards for the welfare state, defending specific benefits or attacking specific cuts. That was their right, I agreed: the Anglican church was an early enthusiast for the welfare state (indeed, the very term was coined by an archbishop of Canterbury). But is defending welfare enough, I wondered? Follow the logic to the end, and citizens fulfil their duties to society simply by paying their taxes. Surely the church is more demanding than that.

That would teach me. A few weeks ago BBC Radio 4 rang and asked if I would debate religion, capitalism and English Christianity with the former canon chancellor of St Paul's Cathedral, Giles Fraser, who resigned that post over the church's handling of the Occupy Protests. The idea was to wander around the cathedral debating Dr Fraser (who is currently working as a leader writer and columnist on the Guardian, while waiting to take up a new role in a parish in south London) for an hour or so. The conversation would then be edited down to 15 minutes, for broadcast in Easter week.

Dr Fraser was very genial. Yet as a non-believer I did feel as though I was intruding on someone else's Easter. Anyway, here's a link to the programme, which went out today.

Another reason why the Tory right are wrong about gay marriage

Mon, 02 Apr 2012 12:25:32 +0000

ACCORDING to the Daily Telegraph's well-researched front-page offering this morning—"Tory MPs round on Cameron and Osborne"—the gay marriage thing made it onto the list of stink-bombs lobbed at David Cameron during a "robust" private meeting last week with senior Tory backbenchers.

As I mentioned last week, I struggle to see the link between gay weddings and the government's recent, genuine offences against competence: a poorly-presented budget, and advice on preparing for a petrol strike that failed to take into account the detail that British motorists, when panicked, have the rational capacity of hens.

But there you go. For a certain sort of MP, Mr Cameron's enthusiastic support for gay marriage clearly remains a talismanic blunder, that exposes his failings as an out-of-touch elitist surrounded by amoral metropolitans.

When it comes to the ethics of gay marriage, I think I am right to support it (on grounds of equality, human kindness, the evidence that it improves the lives of thoroughly decent, upstanding gay citizens and simple good manners). Socially conservative MPs do not agree. But assuming that we must agree to disagree on the ethics, here are two more cynical, electoral arguments in favour of Mr Cameron's position, as set out in his 2011 annual party conference speech, that:

Conservatives believe in the ties that bind us; that society is stronger when we make vows to each other and support each other. So I don't support gay marriage despite being a Conservative. I support gay marriage because I'm a Conservative

The first argument is about salience. Tradition-minded MPs may be right that many of their grassroots core supporters would rather not see a Conservative-led government legalise gay marriage (though looking at poll data, this is less true among younger voters than the oldest). But anecdotally, several members of the 2010 intake of Conservative MPs tell me they do not think it is a priority issue for their voters.

Jane Ellison, the impressive, Bradford born and raised MP for the south London seat of Battersea, tells a story about the moments just after Mr Cameron's 2011 conference speech, as delegates and members of the audience streamed for the exits. Ms Ellison was just behind a smartly-dressed older couple of party members, when they were accosted by a campaigner proffering fire-and-brimstone leaflets against gay marriage. "Thank you," said one of them, as she declined the pamphlet: "But we're just not very bothered."

My second argument is more cynical, and has to do with the tabloid press. When I was starting out as a journalist in the early 1990s, every weekend seemed to bring a fresh sex scandal about a Tory MP, involved in ever-more baroque indiscretions. The standing excuse for all this door-stepping, bin-diving, chequebook-fuelled prurience was unmasking the supposed hypocrisy of the "back to basics" slogan of the Conservative prime minister, John Major, which the press interpreted as a call for a return to traditional morality (though it is said this interpretation was a mistake, triggered by a party spin-doctor giving a pre-speech briefing too many revs).

Assuming that today's bored, fractious armies of Tory backbenchers have as many issues with trouser-control as previous generations did, it is striking how Westminster sex stories are no longer common in the press. Affairs and divorces are barely a scandal. Tory MPs leave their wives and set up home with a man, and the nation yawns. That welcome change must be partly down to broader shifts in public opinion.

But it is surely also because Mr Cameron's government has stopped lecturing the country about sexual ethics. What the British really hate is hypocrisy. When it comes to evidence that MPs are human as the rest of us, a growing number of voters—like those pensioners hurrying for their train in Manchester—are just not very bothered.

Wait till the Sun hears that the EU won't let George Osborne reverse the pasty tax

Fri, 30 Mar 2012 10:47:16 +0000

THE Tory tabloids are still seething about what they are calling the "pasty tax", or George Osborne's decision to end the VAT exemption on sausage rolls, pasties, freshly roasted chickens and the like that are sold hot over shop counters or in supermarkets, for munching elsewhere. The Sun devotes two pages to the question and a leader, and links to a petition got up by the National Association of Master Bakers, demanding that the tax break be re-instated.

They had better hurry. I blush to admit it, but five years covering the European Union left me quite the connoisseur of VAT rules (you lucky people). And VAT is a one-way ratchet of a tax, thanks to its role in funding the EU budget. Put simply, the EU doesn't like VAT exemptions or special low rates. It cannot do much about those that already exist, because tax rules are decided by unanimity among all 27 member countries. But if a national government ever gives up a national VAT exemption, it is gone forever (unless all 26 other member countries can be persuaded to show mercy).

Scanning the fine print of the 2012 budget, VAT is going to be slapped on hot shop-sold food from October 1st this year. After that date, I would point out, Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax (or barmy Brussels bureaucrats, to use the correct tabloid term) will be standing between Sun readers and any return to tax-free hot sausage rolls. That's not a fight I would care to witness.