Dishy Rishi has some eggs to unbreak
Rishi Sunak’s anointment as leader of the Conservative party has brought about an abatement if not necessarily a sure cessation of the turbulence that has beset British politics and government for quite a while now.
I will come back to the crescendo in turbulence that rose over the four months since Mr. Sunak’s resignation from the Cabinet on 5 July, through the resignation of Boris Johnson as Prime Minister to Liz Truss’s resignation announcement of 20 October.
But, first, I want to look from a wider angle back to and beyond the Brexit referendum of June 2016 which is widely seen as having infected British politics with the ”turbulence” virus in the first place.
In January 2013, the then Conservative leader, David Cameron, Prime Minister in a coalition government with the Liberal Democrats, announced that the Conservative manifesto for the next general election would ask for a mandate “to negotiate a new settlement with our European partners” which would be put to a referendum:
…with a very simple in or out choice. To stay in the EU on these new terms, or come out altogether.
Mr. Cameron had two reasons not to be too uneasy about writing this political cheque. First, he fully expected voters to opt to remain in the EU if the referendum came to pass. Second, it was between possible and probable that the referendum would not come to pass because it was doubtful that the Conservatives would win an overall majority at the next election.
However, win an overall majority they did in May 2015, securing 330 out of 650 seats compared to 306 in 2010. This was an outsized return compared to the increase in the party’s share of the vote which rose from 36.1% in 2010 to 36.8% in 2015, the smallest vote share from which an overall majority had ever been eked out.
Moving swiftly on, Mr. Cameron conducted his renegotiation but left the political stage after losing the referendum, ushering in the leadership of Theresa May who immediately promoted her party as wholehearted guardians of Brexit and entirely committed to its delivery. On 19 April 2017, riding high in the polls, Mrs. May called a general election for 8 June, only 7 weeks later, to build a more secure majority.
Although local elections are only a partial barometer for national ones, those of 4 May 2017 suggested Mrs. May had made a good call. Her party’s vote share rose substantially compared to the local elections of 2016, from 30% to 38%. Labour’s vote ebbed and the anti-EU UK Independence Party (UKIP) lost all of the seats it was defending winning a miserly 4.6% of the vote.
But it went downhill from there. The 2017 general election delivered a hung parliament in which the Conservatives held 317 seats (eight short of a majority), losing 13 despite securing 42.4% of the votes, an increase of 5.5% compared to 2015. Mrs. May was unable to deliver any version of Brexit through parliament. Confidence in her and her party ebbed away. Come the local elections of 2 May 2019, the Conservative vote had fallen to 28%.
Worse was soon to come. In the 2019 European elections only three weeks later, the Conservatives secured only 8.8% of the vote finishing behind all other main parties. UKIP led the way with 30.5%. Unsurprisingly, this was construed as electoral disapproval of Mrs. May’s ineptitude in executing Brexit. Out she went and in came Boris Johnson.
With Brexit apparently locked in a cul de sac, Mr. Johnson eventually persuaded the other parties to agree to an early election in December 2019 and reached an exit agreement with the EU on the back of which he won 365 seats, a “stonking” overall majority of 80 seats. The following month, Brexit “got done”.
However, just as Mrs. May’s seat losses detracted from the hefty improvement in the party’s vote in 2017, Mr. Johnson’s seat gains (48) obscured a relatively mediocre incremental gain in the party’s vote in 2019 — only 1.2% more than 2017. And he was up against a particularly unpopular Labour leader in Jeremy Corbyn. His claim to be a uniquely wonderful electoral asset for his party was debatable even then.
Although there were bumps along the road especially during COVID times, Mr. Johnson remained monarch of all he surveyed for the following two years. The apotheosis of his ascendancy was perhaps the Hartlepool by-election of May 2021 where the Conservatives secured a majority of more than 20% in a traditional “Red Wall” seat.
But then on 30 November last, The Daily Mirror revealed that parties had taken place in Downing Street in the run up to Christmas 2020 when the country had been in “lockdown” beginning the slow slide to Mr. Johnson’s departure.
I rehearse all this ancient history to remind us of how much the tides in the affairs of men and women are influenced by luck and contingency and likewise the broader flow of history itself. Modest adjustments of fortune’s invisible tiller could have caused many things to go very differently at various twists and turns over the past seven years. Above all, though not exactly a roulette wheel, the British electoral system is a fickle translator of voters’ wishes into the distribution of parliamentary seats.
Now back to the very recent present.
On Saturday, 22 October, in the short interlude between Ms. Truss announcement of her departure from Downing Street and the choice of a successor, Pat Leahy of The Irish Times reflected on events through an Irish lens.
The headline over the article read:
Stop laughing and worry about what is happening to Britain
This was followed by a sub-headline:
Response in Dublin can best be described as concern about economic and political spillover to here
These summaries hit the nail alright, if not quite in its centre.
Leahy points out rightly that if the British economy catches flu, Ireland will at least suffer a mild cold.
…a British recession or a long period of stagnation — both seem likely — will hurt not just millions of blameless ordinary people across the UK, but also hundreds of thousands of Irish people who either live and/or work in the UK, or whose lives are in some way entwined with our nearest neighbours.
But the greater lesson of Mrs. Truss’ defeat at the hands of the bond markets is to remind us that there is no vaccine available to prevent the same thing happening in Ireland. Indeed, we know that because it already did in 2008 when the bond markets were reluctant to lend to us at any price, not even an elevated price. Leahy says rightly:
And this, in turn, means that the Government must run stable public finances, ensuring that current expenditure is covered by tax receipts and that borrowing for investment is kept at a sustainable level. That the promises to throw money at problems, with which politicians of all parties are so enamoured, are accompanied by realistic estimates of how much they will cost or how they are to be paid for.
It is a point that needs to be made about Ireland whatever about Britain. The shift has been gradual over time but more accelerated recently, that the role of government is not just to mitigate citizens’ hardship and contribute to their happiness, but to prevent the former and ensure the latter. Nothing should ever disturb the tranquility of voters’ innocent minds — and, if anything does, it’s the Government’s job to fix things.
A longstanding reason for this perception is politicians’ inability to restrain themselves from making promises they can’t keep and the public’s inability to admit to themselves what they know in their hearts that these blandishments are dud money. A second reason is that it suits both the media and ordinary punters to promote the notion that ordinary punters are always just getting by at best, but more often “struggling”, as now with the “cost of living crisis” — in the midst of which crisis, flights between Dublin and Lanzarote are full to bursting point.
But the perception has been reinforced by the apparently limitless debt funding at negligible interest rates through the past decade (until recently) and governments’ financial underwriting of workers and families during the COVID lockdowns. Now, there is wishful thinking that governments can magic away the effects of the externally generated shock of severely increased energy prices. The belief is now widespread that more money can always be found somewhere, somehow, from somebody; lenders, fat cats, behind the couch, anything but more tax on us. If the kids have to pay for it, what matter. Mrs. Truss’s misfortunes provide a salutary lesson that managing the public purse is not so simple.
My other quibble with the headline and substance of the piece is whether amusement and laughter have been the dominant reaction in Ireland to the events across the water. Instead I perceive (a) vindication — we always felt morosely that it might come to this, (b) schadenfreude (taking pleasure fromthe mere fact of another’s misfortune), but above all (c) poetic justice from which we derive no pleasure at all. And, to be fair, Mr. Leahy nods at the last two in his piece.
An achievement of which both our politicians and civil servants can be proud is the constancy, continuing relevance and broadly successful implementation of Ireland’s policy towards Brexit since the 2016 referendum. It was articulated by then Taoiseach Enda Kenny in a public address from Merrion Street early on the morning following that vote. These were the key points:
I am very sorry that the result of the referendum is for the UK to leave the European Union. However, the British people have spoken and we fully respect their decision.
We have previously set out our main concerns in the event of Brexit. These relate to the potential impacts for trade and the economy, for Northern Ireland, for the common travel area and for the European Union itself.
Our primary objective remains to protect and advance this country’s interests.
The implications of this vote for Northern Ireland and for relations between North and South on this island will require careful consideration. These will be a particular priority for the Irish Government.
Ireland will, of course, remain a member of the European Union. That is profoundly in our national interest.
Translated into plain English: “If Britain wants to leave the EU, that is its business. We certainly won’t leave and Britain’s exit will certainly be a disruptive nuisance for the rest of us (especially for us, given the land border on the island). But, we will do our damnedest to protect ourselves from the fallout. Brexit may not be a hostile act, but it is certainly not a friendly one.”
Britain’s position has always been different. Its definition of “sovereignty” as it applies to Brexit was not only that it was entitled to leave but that other countries should accommodate themselves to its desired mode of leaving because Britain was a “heavyweight” country. In simpler terms, Britain should be able to retain most if not all of the benefits of membership without being subject to the burdens or constraints. In time, this “cakeism” ran into the wall of the EU and its individual member States having at least as fine an appreciation of the importance of their own sovereignty — and collective leverage.
Of course, Britain’s economy did not go into immediate cardiac arrest after the referendum as some remainers suggested would occur. Instead of a blowout, the economic leakage has been more of a slow puncture from 2016 through the present and this has certainly been a contributory if not the primary cause of the erosion of financial markets’ confidence in the country’s management, culminating in the slaughter of Mrs. Truss’s budget.
The errors of Ms. Truss and Mr. Kwarteng run exactly parallel to those in the Brexit process. Just as Britain presumed it could conduct Brexit as it liked, the Prime Minister and her Chancellor presumed they could conduct budgetary and taxation policy more or less as they liked — and that lenders would still queue up to fund it. Both are outward signs of a prevailing national superiority complex — in government circles at least — and, incidentally, one that Mr. Sunak as a fervent Brexiteer is unlikely to admit to be entirely devoid of clothes.
Because let’s state it loudly and brutally, the contention that Brexit is a benefit to the UK has as much truth as the contention that Donald Trump “really” won the 2020 US Presidential election — and that is no truth at all. The first high profile promoter of either myth to recant will be burnt at the stake. The second might do a little better but wouldn’t want to count on his or her political survival. But, until Britain fesses and faces up to this fundamental truth, the effort to grow its way out of economic trouble will be fought with one arm behind its back.
In any event, just as the EU reminded Britain that others have sovereignty too, the gnomes of the financial markets reminded Britain that they have the “sovereignty” of being able to lend or withhold debt financing from any country according to their own judgements of the balance between risk and reward.
And, to the extent that Ireland might suffer economic fallout from more retrenchment in Britain as a result, we are entitled to be at least mildly exasperated if not a little angry. It is not merely amateur but positively negligent to treat your country as a laboratory for the application of economic “theory” without first having assembled evidence and forecasts, taken into account the circumstances and desires of your neighbours and, more pertinently, taken soundings of the markets. Even if the casual infliction of harm beyond its shores is not deliberate, Britain would do well to substitute some humility for the hubris that has been so much in evidence in recent times. Mr. Sunak would do well to talk less, listen more and think longer and harder than his recent predecessors did.
