A Voyage to Glumdreary

 

Being the account of a traveller to parts unknown

 

I took ship from Bristol in my thirtieth year, being resolved to join my uncle in a trading venture in the Indies. Three weeks into our voyage, after a day of unusual calm, a great storm blew up which tossed us around for many days and snapped the foremast. When it abated, we were still able to make headway, but the Captain confessed that he did not know in what part of the world we were.

We steered westward, but by now we were in need of water, since one of the barrels had been breached in the rolling of the ship. As we debated in which direction the nearest land might lie, the lookout spied an island five leagues to starboard. We changed course and the Captain directed me, with three others, to go with a cask in the ship’s boat and try to obtain water.

When we were within a league of this island we saw a crowd of people on it who were making a great commotion. They had gathered on the cliff, which rose to about a hundred foot at that point, and were wielding long wooden poles that reached down to the water. These poles ran through iron hoops that had been inserted into the face of the cliff.

I concluded that they were fishing and that the fish they were attempting to catch could for some reason only be caught from a great height. They quarrelled continually among themselves as they did this, and so churned up the water that I thought it would be unlikely they caught anything at all.

So intent were they on their task that we were within hailing distance of them before they saw us, and then they were greatly alarmed. They conferred together, and at last one of them came forward to the edge of the cliff and demanded to know what we wanted.

I responded courteously, saying that we were seafarers who had been driven off our course by a storm and needed to replenish our water-cask, which I hoped he would be Christian enough to allow us to do. His reply astonished me by its barbarity: it was, “We have little enough water for ourselves; why should we give any of it to you?”

As we rested our oars and considered whether we should row to a remoter part of the island and try to find water there, I pulled out my pocket-glass and was able to discern, quite clearly on the horizon, the outline of another island, or – it might be – the mainland itself. I said to my companions that it would be better to return at once with this news to the ship, rather than wait on the pleasure of this surly fellow. But, as we debated, he was pulled back from the cliff by another, who took his place. This gentleman, of pleasanter aspect (for the first glowered as if a pin had been stuck in a tender part of him), called out to us that we were welcome to “come aboard”, as he expressed it, and could leave our boat on a patch of sand below the cliff. But he must warn us that the island created much turbulence in its passage and we could not leave the boat for long.

I did not understand the latter part of his speech; however, trusting to the first part of it, we rowed to the patch of sand and drew the boat up on it, securing the rope around a rock.

He came down the cliff path to meet us, accompanied by two young men whom he introduced as his sons. He was a magistrate of the nearest town. He said his sons would come with us to the stream, where we could fill our cask, and afterwards he would be very pleased to entertain us at his house. He made it plain that he would be as indebted to us as we to him, since fresh faces were never seen on the island of Glumdreary and he, though he durst not say so, heartily regretted that it had ever severed itself from the mainland.

I could make no more of this speech than of his earlier one, but said nothing. At the top of the path the cliff-edge was greatly crowded by people jostling and instructing those with the poles in how to use them, which advice was not welcomed, and men bringing ropes and other equipment and insisting in its immediate employment in the task. The two sons brought us a cart, to which was harnessed a thin-looking mare, and we put our cask in it and walked together into the countryside.

It had a puzzling appearance: in some parts the soil looked thin and dry from over-use; in other places it was fertile but had been long neglected. The road was bad; often we had to steady the cart with our hands to prevent it from overturning. After about half an hour had passed in which we had seen cattle and cereal crops, but not in great abundance, and numerous women working in the fields but no men, we ventured to ask where all the men of that island were.

“On the cliffs,” said the younger of the two.

We asked what they were doing there, for such had been the confusion that it was impossible to make out.

The elder said with solemnity, “There is a constant need of oarsmen.”

I said, bewildered, “Those long poles are oars?”

“They are indeed, sir,” said the elder.

“It is heavy work,” the younger one explained, “and only men are fit for it.”

“But what,” I said, “are they rowing?”

They looked at me in astonishment. “Why, the island, of course,” they said.

We had now reached the stream, and my companions and I were glad to occupy ourselves with manhandling the cask out of the wagon and into the water. The stream flowed fast at that point since there was a declivity in the bed, and the cask was easily filled. Returning the way we had come, we talked of the countryside, of what crops were grown and in what the people’s diet chiefly consisted. It seemed to me lacking in variety although there was no shortage of potatoes, greens and carrots. Oats were grown for the horses, we were told, and the upper classes had meat. Fish were caught in nets: this was the young men’s trade. However, the shoals were diminishing for a reason that was not understood but might, it was conjectured, have to do with the speed of the island through the water.

I had decided to reserve my questions for the magistrate. But he, having seen to the lowering of our cask into the boat and set a man to guard it, then took us to his house where, directing his wife to bring refreshments, he began to ply us with questions about our voyage, the country from which we came, our various adventures, and the like. These we answered as well as we could, but never fully enough for his taste, for truly his curiosity was insatiable and arose, I thought, from some terrible affliction of the spirit, for often as we spoke he would groan, as though being shown an image of something he greatly desired but could not possess.

When we could tell him no more he said, in a quiet voice, that we were happy mortals, to rejoice still in that liberty which God had given to all men but which his fellow-countrymen had foolishly thrown away in pursuit of a dream.

I begged him to explain what he meant. Then, rising from his chair, he walked to the parlour door and locked it and afterwards cast a glance out of the window. Resuming his seat, he began to tell us the story of his island.

It had once, he said, been a great nation: one would not think it now, seeing the poverty of its inhabitants, the ruinous state of the highways, the deserted villages and abandoned mills, the silent boatyards and the rotting wharves. And although he acknowledged the smallness of it, he said with pride that it had once ruled half the world. How it had come to lose that lofty position was a tale too long to be told in an afternoon, but the effect of the loss had been twofold: it had fatally weakened the island’s polity and economy, and it had addled the brains of its inhabitants.

In this enfeebled state, it had entered into an alliance with the mainland. At the time, there had been some who maintained that by this act it would lose its ancient liberties. To which the rest retorted that ancient liberties did not feed anyone and that the alliance promised, through an increase in commerce, great prosperity. And for a while, said the magistrate, it appeared to be true. Trade flourished, there was peace where in former times there had been war, and many people came and went between the island and the mainland and lived in either place with amity.

But then a faction arose, drawn from the original number who had objected to the alliance, to whom were now joined others who had been swayed by various arguments, that said the benefits gained from the alliance were vastly outweighed by the evil and tyrannous behaviour of the mainlanders, whose sole purpose was to enslave the inhabitants of the island. And indeed, said the magistrate, they had at times been over-mighty towards other nations to which they were allied, although not, he judged, to his own; and it was also true that they demanded the islanders obey a great many of their laws, although, again, it had to be said that the laws were trifling and mainly concerned things like weights and measures and the proper appearance of apples, and were easily evaded. So that he himself, being a young man at the time, did not know what to think, and nor did most of the populace, but all might still have been well and the trouble confined to bad-tempered muttering in the market place, had not the government taken it into its head to ask the people what their opinion was.

Now since, as he had explained, they did not know what their opinion was, but since that did not constitute an opinion, they were reduced to saying the only thing they could say, which was that they were mightily discontented. And so they were, but largely with the government. But this reply was construed as meaning that the island should forthwith leave the alliance.

No sooner had this been announced than half the population realised that this was not what they had meant at all, while the other half rejoiced greatly (for they believed that by this means their lives would be much improved) and heaped insults upon the first half, calling them traytors. Which insult was richly returned by the first half, who called the second half fools. And thus, said the magistrate, what had been a contented and prosperous country became overnight a bear-pit of backbiters, traducers, stiletto-wielders, blackmailers, plotters, cheats, lawyers, special advisers, felons, newspaper magnates and knaves, while all the mainlanders who had come to live in the island made haste to leave, and all the islanders who had gone to live on the mainland clamoured to stay there because they preferred it, but were told they could not.

The government being replaced by a new one more in accord with the decision that had been taken, a further resolution was made whose carrying-through would necessarily be difficult. Nevertheless it was confident, the government said, that the thing could be done, and it added that in the circumstances there was no alternative because of the increasing malevolence of the mainland.

It was resolved to sunder the island from its base on the seabed and row it out to sea.

Examining our faces, the magistrate acknowledged that it was a bold undertaking, but said it was not beyond the capacity of his countrymen. It was evident that, while not agreeing with it, he admired the scope of its ambition.

“No-one was supposed to know,” he said, “in case our enemies tried to stop us, but we could all hear the quarrying and tunnelling, the falling of the rocks. Occasionally some poor wretch would be seen on the streets with a crushed leg, that had been injured in the workings. It took fourteen months to the day.”

“That seems not very long,” I said, chusing my words with care.

“It was done in haste. Medals were presented to the engineers and workers, and there was a publick celebration. We still had wine in those days. Now there is only beer.” He touched his cup. “And this.”

We were drinking a watery concoction flavoured with some herb. It was too astringent: I wondered if they had sugar. Certainly, in this latitude they could not grow it.

“So you see what has become of us through this ill-judged policy,” said our host. “Everyone has fled from us because they say we are mad. Nobody comes here. Your company, gentlemen, is the first diversion I have had in many years in this place. And nobody is allowed to leave.”

“Nobody is allowed to leave?” I protested in alarm.

“You will be, of course. But it is considered treason for any islander to leave the island. The attempt is punished by imprisonment. And, to be frank with you, that is a mercy, because if, for instance, I attempted to escape and was apprehended but left at liberty, I would not long survive, such is the feeling against citizens who do not entirely support the government in its bid for freedom.”

I said I did not understand his use of the word when what he had just described was the opposite of it.

He explained that he was talking about the untiring efforts of the islanders to free themselves from the influence of the mainland. It was hoped that within a year the rowing could stop: Glumdreary would have reached the mid-point of the ocean and would be able to drop anchor.

In respect to this hope, or our own thoughts, none of us said anything for a while. Then we all spoke with a common impulse, offering to smuggle him on to our boat inside a blanket, and assuring him he could disembark wherever he wished. I was confident that the Captain, out of humanity, would allow this.

He thanked us but refused. He had a wife and two sons, a house and garden where he grew vegetables, his post as a magistrate. He could not abandon these.

We left him at evening, with much gratitude for his kindness. As we rowed away from the island, I took out my spyglass: the mainland appeared not a whit further away than when we had landed.

With acknowledgements to Jonathan Swift

 

 

Reverse ferret

 

 

Someone must have told Nigel Farage to shut up, because he quickly amended his original statement – that he was in favour of a second Brexit referendum – to one that “maybe, just maybe” he was inching towards accepting the idea, although he did not like it. He claimed the government was plotting to foist one on us anyway.

This sort of manoeuvre is known among journalists as a reverse ferret.

Nigel had been in America and had missed the limelight. He had apparently also missed the fact that the British government has been saying for a year that a second referendum was out of the question because it would flout the will of the people.

Remainers rejoiced. A split in the enemy ranks! However, the referendum Farage is talking about is not the referendum which the Lib Dems, Tony Blair and others want to see. Farage wants a simple re-run of the in/out vote. The referendum Remainers want is a vote on the terms that are eventually agreed with the EU, or on leaving with no deal. (And in that referendum, staying in must be an option.)

Blair published an excellent article on the Institute for Global Change website on 4  January (https://institute.global/news/tony-blair-brexit-what-we-now-know). It was a clear analysis of where we are, enlivened by the occasional bit of dazzle: thus, of the 2016 referendum, “It was like having a General Election in which the question is ‘Do You Like the Government?’”

He nails the four options for negotiating Brexit: (1) to re-think and stay; (2) to exit the political structures but stay in the single market and customs union; (3) to exit both the political and economic structures and try to negotiate a bespoke deal; (4) to exit both structures and negotiate an FTA.

Of the last three, the Government has ruled out (2), is seeking to negotiate (3), but a substantial part of the Tory party is prepared to go for (4). The problem with (3), Blair  says, is that this is not negotiable without major concessions which make a mockery of leaving; the problem with (4) is significant economic pain.

He takes Northern Ireland as a metaphor for “the central Dilemma”: we are either in the single market and customs union, or we get a hard border and hard Brexit. It is the difference between the Norway and Canada options. “This really is a zero sum game: the nearer the Norway option, the more the obligations; the nearer the Canada option, the less the access.

“It is not a matter of who is the toughest negotiator. The Dilemma flows naturally from the way the single market was created.” Once this central Dilemma becomes manifest during the negotiation, he believes the split in the Government will re-emerge.

“The PM will still be in favour of option 3, making the concessions and trying to present them as consistent with ‘taking back control.’ The true-believer Leavers will recognise the concessions contradict the essential reasons for leaving and will be in favour of then moving to option 4…

“The risk is that we end up with the worst of all worlds. We muddle along, alternating between options 3 and 4, depending on what part of the Tory party is in the ascendancy, try to ‘leave’ without really leaving, with a patchwork of arrangements which allows the Government to claim Brexit has been done; but which in reality only mean we have lost our seat at the table of rule-making…

“Far better to fight for the right for the country to re-think, go to the high ground on opposing Brexit…”

But that, he acknowledges, will require a change of heart at the top of the Labour party.

In a splendidly optimistic piece in the Guardian of 9 September, Andrew Adonis predicted that Labour would be in favour of a second referendum by this summer: “Jeremy Corbyn can’t abandon his youth army and virtually his entire party by backing Theresa May on hard Brexit. The only way to disown May without taking responsibility for anything else will be to back a referendum.”

He thinks “sensible Tories” will support this demand and that “if the rebellion is large enough, May herself might agree to a referendum… to avoid her party splitting irrevocably.”

Can that referendum be won?

“If Chancellor Merkel and President Macron make an offer for the UK to stay in the economic institutions of the EU but with national control over immigration, I believe it can be won.”

He believes they might because many EU leaders, including Macron, don’t believe unrestricted free movement is integral to the single market; and because if Britain leaves, 80% of NATO resources will go with it.

At the weekend, Corbyn repeated that Labour would not support a second vote. Andrew Rawnsley in the Observer, 14 January, commented, “So long as neither the Prime Minister nor the leader of the opposition thinks they have an interest in asking the country for fresh instructions, it isn’t going to happen.”

What could change this is a shift in public opinion, says Rawnsley, but “Remain supporters just becoming more passionately Remainy is not what matters. What is required… is clear evidence of second thoughts among a substantial wedge of Leave voters.”

He tracks some hopeful developments: more people than before think we will be worse off out of the EU; fewer think Brexit will enhance Britain’s position in the world; there is “a gentle rise” in the proportion of voters who favour another referendum; 46% now think Brexit was the wrong choice while 42% think it was the right one – but still, he says, it is not enough.

Nevertheless, the chaos is mounting and the government is manifestly incompetent. If talks fail, the Labour leadership would face colossal pressure to back a referendum, says Rawnsley, and a lot of Tories, horrified by the prospect of the cliff-edge, are likely to support it.

Another scenario is that Parliament refuses to endorse the deal May produces (as it now can, following the Tory rebellion before Christmas) and there is a constitutional crisis. “A not unreasonable conjecture is that May would feel there was no other option but to go to the people.”

Hooray. Except that this is only the start. There is still surprisingly little “Bregret” in view of the piling-up of negative news about the effects of Brexit.  Chris Grey in his blog of 18 November (chrisgreybrexitblog.blogspot.co.uk/2017/11/why-is-there-so-little-bregret-and-what.html/) explores why.

Donnishly, Professor Grey suggests we think of the vote “in terms of the gap between Brexit as a symbolic act and Brexit as a series of concrete legal, economic and political arrangements.” He reports hearing Brexiters ridicule the idea that leaving the EU could mean needing visas to travel to Europe, that it could mean restrictions on air travel or that British people could face restrictions on retiring in European countries.

He thinks that two related things underlie such beliefs. One is a taking for granted of the familiar accoutrements of modern life without realising that they are the product of extensive, albeit largely invisible, institutional arrangements. The other is that “for many Brexiters the vote to ‘take back control’ was not thought about in concrete or legal terms but as a kind of symbolic, feel-good act.” He refers to Grimsby, where 70% voted Leave, and which is now seeking special exemption from tariffs for its fish-based industries.

“The same kind of disconnect can be seen across many aspects… The underlying thought process seems to be – these are not the consequences that we wanted from the Brexit vote and ‘therefore’ they are either nothing to do with that vote (denial) or are being unnecessarily forced on us by the EU and/or obstructive Remainers (blame).

He thinks it extremely unlikely that Leave voters will link the consequences with their vote, because people find it difficult to admit they were wrong. But if the narrative of blame can be re-directed on to the leading figures in the Leave campaign, “it is far more likely that Leave voters will accept the proposition that they were fooled by politicians – as indeed they were – than that they fooled themselves.”

Perhaps. I don’t think it is far more likely that Leave voters will accept they were fooled by politicians than that that they fooled themselves, just a little more likely. If you are fooled by someone, you have allowed yourself to be fooled, and since it is obvious that not everyone was fooled, the implication that you were a fool is hard to dodge.

In Grey’s article is a reference to something called “the backfire effect,” described as follows in The Skeptic’s Dictionary: “The more ideological and the more emotion-based a belief is, the more likely it is that contrary evidence will be ineffective.

“There is some evidence that lack of self-confidence and insecurity correlate with the backfire effect. More research is needed to fully explain what additional factors lead some people to respond to contrary evidence by treating it as if it were additional support for one’s belief.” (My italics.)

Bingo. This confirms the impression of all Remainers who have ever tried to talk rationally to Leavers about Brexit, or anyone who has ever listened to David Davis.

The question is what to do about this condition (although Googling it is worthwhile). It is serious for the individual affected, and if sufficiently widespread will be terminal for the country. Clearly there is no point in challenging it on intellectual grounds, since rational argument is what sustains it. This is a conundrum even worse than the Irish border.

I think that in time the condition will be self-correcting. Meanwhile, fortunately, it does not affect all those who voted Leave. There is a sizeable minority (Rawnsley’s “wedge”) that is accessible to reason. They need to be found while the window out of Brexit is still open.

I have a dream. One night, while the nation sleeps and the Prime Minister tosses uneasily in her bed, there will come through that window the creature that will save us.

A reverse ferret.

 

 

There will be one more post in the present series. Thank you for reading the fox blog.

Ale, bread and chickens

 

 

Liam Fox was off to China last week to talk about trade.

He has a romantic view of it. “For two centuries,” he told an audience in Manchester Town Hall in September, “we were the trading nation.” He spoke proudly of the Royal Navy’s patrol of the world’s trade routes and “the might and resilience of the British Merchant Navy.” He found it astonishing that “this small island nation, sitting at the northern end of Europe” had allowed its trade to be “outsourced” for the past 43 years to a common market that would develop into the EU.

Professor Stephen Weatherill’s reply to this nonsense (eulawanalysis.blogspot.co.uk/2017/01/what-is-free-trade.html) was sharp: “In Victorian times, to which Dr Fox pays much wistful attention… the UK’s economic and political strength allowed it to swagger its way to oceans of beneficial trading activity. The balances of power are different today.”

That is the very thing Brexit refuses to acknowledge. The rest of the world, meanwhile, sees it clearly. It is inconceivable, says Wetherill, that, post-Brexit, the UK will get anything other than a worse deal than it currently has either with the EU or with other trading partners.

It is madness to go into battle with your weakness more visible to the enemy than it is to yourself.  However, that is not the only disability under which Brexit labours. It doesn’t seem to know anything about the terrain, the rules of engagement, the level of sophistication of the opposing forces or their likely degree of ruthlessness.

The Government got a glimpse of the ruthlessness when the US Administration, following a legal action by Boeing, decided to impose a 219% import tariff on Bombardier C-Series aircraft partly manufactured in Belfast. It was a nasty humiliation to a British Prime Minister who had rushed to Washington as her best hope of a trade deal and had invited the President on a state visit. And it followed on a row over chlorinated chickens.

Undeterred, Liam Fox and his Department continue to parrot the rhetoric about Britain’s glorious opportunities to trade on WTO rules that has perverted public understanding of the issues for the past two years. Essentially this rhetoric assumes, in the words of Stephen Weatherill, “that WTO rules offer some kind of basic, entry-level framework for international trade which is sitting, ready and waiting, for the UK to revert to.” It is far more complicated than that.

“There is no free trade, there is only freed trade [my italics], and it is regulated trade. The people of the UK have voted to quit the EU and that will lead also to the UK falling out of the scope of the EU’s several dozen free trade agreements with third countries. That will not grant the UK free trade. It will diminish the UK’s enjoyment of freed trade.”

Free trade in the form that Liam Fox imagines it is unregulated trade, says Weatherill, and that doesn’t exist. His elucidation of this is interesting. He explains that “governments intervene in markets for myriad reasons and in myriad ways, and they have been doing so for a very long time,” and cites the way the composition of ale and bread was regulated in England for centuries for the protection of consumers.

Markets “are and have long been built on the correcting influence of public regulation,” he says, and this “readily transfers to the transnational plane. State borders cannot possibly entail a process of private traders arriving in foreign lands and striking deals with local buyers without regard to local laws. Those traders will be required to comply with the local rules that govern the operation of markets… and those rules will doubtless be different from those that apply at home… These are non-tariff barriers to trade.”

There are two ways of dealing with these non-tariff barriers, he continues. The first is to decide that regulatory diversity should be ignored, but in effect this means placing one’s market under the jurisdiction of a more lenient regulator in another state. The second is to create a common rule-making body.

He does not think it necessary to point out, but I will, that we are leaving the second, which places us at the mercy of the first.

Chlorinated chickens.

There is still an unresolved war raging between Michael Gove’s Dept of the Environment, which insists that chlorinated chickens will not enter the UK, and Liam Fox’s Dept for International Trade, which insists that they be allowed in as they do not pose a threat to human health. In fact it is not the health of humans that is under discussion here but the health of chickens, whose rearing conditions in the USA are so abysmal that chlorine is needed to disinfect their corpses, a matter on which Dr Fox has remained silent since chickens are beyond the remit of his Hippocratic Oath.

This internecine war over regulations will be the first of many. Meanwhile, the DIT has started to get an inkling that ahead of it lie deep waters.

Peter Ungphakorn’s piece on the International Centre for Trade and Sustainable Development website (https://www.ictsd.org/opinion/nothing-simple-about-uk-regaining wto-status-post-brexit) surveys these waters and is not optimistic about our chances of navigating them.

“The UK is already a WTO member, but its membership terms are bundled with the EU’s. Re-establishing the UK’s WTO status in its own right means both the UK and the EU would negotiate simultaneously with the rest of the EU’s members to extract their separate membership terms…

“For its part, the UK would have to negotiate with the EU itself, the US, China, Russia, India, Brazil and any trading nation or group of nations that matters… It would only take one objection to hold up the talks because the WTO operates by consensus.” (It has 162 members.)

… “To be an independent WTO member, the UK would be creating its own rights and obligations out of the EU’s. Extracting UK beef quotas out of the EU’s would require negotiations with all the countries, including Brazil, Argentina, Australia, Canada, New Zealand, Paraguay, Uruguay and the US, with which it has agreed beef quotas. The exporting countries will be pressing for the UK beef quotas to be increased, while British farmers will be pushing in the opposite direction.”

Now for the real game-stopper: “We don’t know what most of the EU’s current commitments in the WTO are. The UK would be negotiating a share of key quantities that are unknown.”

Becoming an independent WTO member would only become relatively simple and quick for the UK, he explains, if it becomes “Much more of a free trader, with low import duties across the board, and minimal subsidies for farmers.” No wonder there are politicians who advocate this route. They think it’s the only one that can be done, and never mind the cost. But what exactly is the cost? “Domestic opposition would have to be overcome first.”

The withdrawal of subsidies is not what the farmers of Cornwall voted for. There would be a lot of anger. And since the free-trading model would be associated with a wholesale loosening of regulations, and since those regulations concern consumer protection, worker’s rights, the protection of the environment and the numerous other matters the EU has officiously taken upon itself to worry about, it would not be surprising if the protests of farmers spilled over into generalised fury. I do not like the sound of the word “overcome” in the last sentence quoted.

Faced with a choice between a maze of mind-boggling complexity with a black hole at its centre and a sea of pitchforks outside Downing Street, what is a politician to do?  Make sure that not a word of what is going on gets out, naturally.

Liam Fox is trying. He has signed an agreement with his American counterparts in the UK-US Trade and Investment Working Group that any information relating to trade negotiations between the UK and USA will be “held in confidence unless otherwise jointly decided” (https://www.gov.uk/government/publications/arrangement-for-exchanging-information-during-the us-uk-trade-and-investment-working-group).

The information will be kept secret “for four years after the conclusion of this working group.” That should be long enough to stitch up the electorate.

The rationaldebate blog devotes an unsettling post to this development (https://rationaldebateblog.com/2017/12/21/uk-us-trade-deal-to-be-shrouded-in-secrecy). It notes the looming shadow of TTIP (the Transatlantic Trade and Investment Partnership) in the background. “This, too, was going to be negotiated in secret, and it was only massive public protest that opened up (and arguably scotched) the deal.”

TTIP, says the blog, would have made the NHS vulnerable to the US private healthcare market, would have undermined UK food safety standards, and would have incorporated the Investor State Dispute Settlement in the treaty. Those three key risks are still very much at the core of any trade deal with the US.

The ISDS mechanism, which is least understood, “gives foreign investors the right to take our government to private, secret arbitration panels to curb regulation… There is no appeal. Essentially it is a tool for multinationals to take over government… Local companies have no access to such arbitration panels and are therefore disadvantaged in their home markets.”

It is as impossible to reconcile this with Brexit’s mantra about taking back control as it is to reconcile what many British farmers voted for with what, under a hard Brexit, they will get.

“One has the increasing impression,” says Professor Weatherill, “that those who drove the people of the UK to vote for Brexit and who are now in charge of plotting the future do not understand the first thing about what ‘free trade’ means today.”

No, but they understand the political implications of it perfectly.

 

 

Joyful female submission and the gloved hand

 

A Roman soldier stands in a chariot, flexing his bow. One of the two horses is rearing; the arrow points skyward. The image is pretentious, and whoever drew it did not bother to find out what weapons the Romans used: not the bow and arrow.

These days anything goes, of course. But if you have given your organisation a name that appeals to history, a name you proudly say is Latin … wouldn’t you take a bit of trouble over your logo?

Legatum didn’t think facts were important. It was in a hurry.

The Legatum Group was set up in 2006 by Christopher Chandler, a New Zealand billionaire who, with his brother Richard, had made a fortune in Russia after the collapse of the Soviet Union. Its headquarters are in Dubai. Its “development arm” is the Legatum Foundation, registered in Bermuda and controlled by a company in the Cayman Islands, which is the main sponsor of the Legatum Institute, based in London.

The Foundation claims to be an educational charity, but this status is currently being investigated by the Charity Commission. The Institute is advising Government on Brexit. The Wikipedia page on the Institute describes it as an “independent non-partisan policy, advisory and advocacy organisation.” This is laughable.  A think-tank more partisan than the Legatum Institute is hard to imagine. It has espoused hard Brexit with fervour and total disregard for facts.

Here is a typical assertion from its recent document, The Brexit Inflection Point: “Historically, the British system of free trade made Britain, Europe and the world richer…” However, “the EU system that has replaced it  – of protectionism and harmonised regulation – has constrained economic growth for Britain and the world.”

The Financial Times commented, “Anyone tempted by this pre-1914 nostalgia would do well to check the data.” Using Bank of England trade volume statistics back to 1830, the FT found that “UK trade openness (total imports and exports as a share of economic output) has been more than twice as large on average during its membership of the EU than in the 1830 to 1913 period. Indeed the UK has traded more in every year since 1977 than it did in any year before 1912.”

Well, who’s counting?

Legatum has the ear of Government. It meets regularly with ministers, who heap praise on its economics director, Shanger Singham. Singham talks to ministers and anyone else who will listen about the fabulous trade opportunities for the UK after Brexit, opportunities that don’t exist, because the EU will not allow them or WTO rules do not permit them, or because, for instance, we would have to multiply our existing trade with New Zealand by a factor of 30 to make up for the trade we will lose with Ireland.

Legatum’s publications have been criticised as “riddled with misconceptions” (the FT)  and “not realistic” (George Peretz, a specialist in trade law), or as magical thinking (EU). There has been a scathing response to its proposals for the Irish border, which favour “creative thinking” and the use of “unmanned aerial vehicles and aerostats” (drones and air balloons. Why use plain language when posh language is available?)

If the last bit sounds remarkably close to the Government’s paper on the border, one may assume that Legatum drafted the paper.

It was not always like this. Legatum has come a long way.

It’s instructive to read a piece about British think-tanks by Zoe Williams in the Guardian of 27 October 2010. Williams chose Legatum as one of ten “to watch.” She said of it, “Not that big, but weird. Set up by four ex-Bush staffers, who would have been swamped in the US think-tank environment. Wanted to be taken seriously on a global level, so had to find a location between Washington and Everywhere Else. Which, it turns out, is Mayfair.” (My italics.)

If you want to be taken seriously you need more than a Mayfair office. For a long time, Legatum was struggling to find a place. Before 2016, it didn’t have a USP. Neoliberal and right of centre, it was nevertheless pro-EU. Shanker Singham voted Remain.  Anne Applebaum, the high-profile journalist and commentator, was also a Remainer. The referendum caused an earthquake. Applebaum departed, after what sounds like an almighty row, Shanker Singham underwent a Damascene conversion to Brexit, and Legatum embarked on an ideological crusade. Unbelievers were purged.

And Philippa Stroud arrived. With her arrival, Legatum, already “weird,” became weirder.

Created Baroness Stroud of Fulham in 2015, Philippa Stroud was appointed CEO of the Legatum institute in September 2016. She came from the Centre for Social Justice, which she co-founded with Iain Duncan Smith in 2004 and which collaborated with the Legatum Institute in its initial Brexit publication, Road to Brexit (2016). She had been a special adviser to IDS at the Department for Work and Pensions.

Philippa Stroud ‘s interest in social justice had begun at the age of eight; she remembered “lying across a massive Queen Anne armchair in our house in France, transfixed… by photographs of famine victims in Bangladesh.” (God’s Heart for the Poor, by Philippa Stroud and Christine Leonard, 1999). After university (it is unclear where, just as it is unclear why her family had a house in France when she grew up in Surrey, or at what age she became a Christian), she went to Hong Kong, where, rejecting her father’s career in international banking, she worked among drug addicts. She was elated to be there: “I loved it when rats ran across my feet in the dank darkness of sewer-like alleyways.”

After two years she returned to England, married David Stroud, an evangelical Christian whom she had met in Hong Kong, and founded the King’s Arms church, which offered practical support to the homeless.

She stood twice, in 2005 and 2010, as a Conservative parliamentary candidate, but was unsuccessful. By 2010 a change in public attitudes had brought the practices of the King’s Arms church under unfavourable scrutiny. An article in the Observer of May 2010 accused it, and Philippa Stroud personally, of trying to “cure” gay people by “driving out their demons.” A former administrator of the church commented anonymously in the Guardian, “Anything – drugs, alcohol or homosexuality, they thought you had a demon in you.”

Stroud contested the claims, but holds other fundamentalist views. She opposes abortion. She has drawn a parallel between the pro-life campaign and the anti-apartheid struggle of Mandela. The evangelical Newfrontiers Church, which she attends and of which her husband is a leader, proclaims itself “a church where…husband and wife embrace male servant leadership and joyful female submission…”

Voices were raised asking Cameron to sack her. She was a special adviser in a Government department in which her personal opinions would necessarily come into play. Cameron didn’t.

Now she is heading a think-tank steering Government policy in a matter even more fundamental, and for which she is unfitted in exactly the same way. She has a Rottweiler in this fight, and it’s dressed in sheep’s clothing. She hates the welfare state. Members of the Christian right may be individually good people, but their refusal to acknowledge the political causes of poverty drives them into positions that often cannot be distinguished from fantasy.

Baroness Stroud is a fantasist. What else can one call someone who is overjoyed by the sensation of rats scuttling over her feet in an alleyway? Never mind the demons or the cavalier approach to biographical fact. “A positive record of helping her community,” was the judgement of a former member of the King’s Arms project in the Guardian, “finely balanced with monumental delusion.”

Into this delusion, the project that is Legatum fits like a hand in a glove. For Legatum is deluded, too: a cursory glance at its pronouncements demonstrates that.

And perhaps here we have the answer to the mystery that is Brexit. A young right-leaning think-tank that desperately wanted to be taken seriously met a Government that was totally out of its depth and needed a hand to hold. It was a marriage made in heaven.

The consequence was folie a deux, which brought forth the Government’s Brexit policy.

Is this enough?

“Finance capital is clear about what Brexit is for,” states Brendan Montague in How Legatum has written the hymn sheet for a dirty Brexit on the Open Democracy website, 27 November.  “It is to transform Britain into a low-regulation state, and in turn break the semi-regulated cartel that is the European Union. This is necessary because capitalism right now is almost flatlining, and is not going to save itself. It needs to be fed, and your pension, and your planet, is its feed.”

The gloved hand is a fist. Legatum is operating on two levels: the fantasy floats above a reef. In this context, the financial background of Legatum’s founder, Christopher Chandler, and the offshore locations of its various head offices make perfect sense. Disaster capitalists make money out of disasters.  Those wishing to know what this means should read Naomi Klein’s The Shock Doctrine, which has a chapter on the collapse in Russia.

The question arises of whether people who profit from disasters have a hand in causing them. Of course they do, sometimes. There will always be a rationale. And at the very least, the disaster capitalist will want to be on the spot when the disaster unfolds.

So there sits Legatum, in its Mayfair office, waiting for the crash that will be Brexit and helping it on its way.

The second consequence of the Government’s happy marriage, therefore, will be the wilderness identified by Brendan Montague and the further enrichment of a few people who have their bank accounts in places like the Cayman Islands.

 

White water

 

“The Ayes three hundred and nine, the No’s three hundred and five,” pronounced the Speaker, and a portion of the House erupted while the Brexiters sat stony-faced like Scrooge at a picnic.

The Government’s Brexit steamroller had been stopped for the first time.

Early on Wednesday morning, David Davis had written to Conservative MPs asking them to support the Prime Minister in the vote over Clause 9 of the Withdrawal Bill. At stake was – if you believe Dominic Grieve, who tabled Amendment 7 to that clause –  the coherence of the Bill and the sovereignty of Parliament, or – if you believe the Government –  the safe passage of Brexit. The Government always says this, and it is inflammatory nonsense. Facts will defeat Brexit before MPs do.

Dominic Grieve spoke truly about the sovereignty of Parliament. Theresa May had repeated ad nauseam that Parliament would have a “meaningful vote” on the final Brexit deal, but had obscured the timing of it and had boxed rather too clever on the meaning of “meaningful.” So, yes, this was about sovereignty, but it was also about trust, and it turned out that a tranche of her own MPs do not trust her.

Eleven rebelled. The amendment was won by four votes. This means that MPs will be able to vote on the final deal with the EU before it is signed (which is one part of the meaning of “meaningful”), and that their vote will be written into law. The Government had repeatedly said that that was what it intended. This was far from the truth.

Behind the legal phrases and the dry-as-dust abstractions of the Withdrawal Bill loom the Henry VIII powers, which I wrote about in The height of pavements (10 September). They are called that because they are essentially undemocratic and are ascribed – perhaps unfairly – to the monarch we love to deplore. They give a Government minister powers which properly belong to Parliament and allow her or him to exercise them in secret and without redress. Legislation passed in this manner is called “secondary legislation,” which is itself sleight of hand since it implies that it isn’t anything to worry about.

Clause 9 of the Bill invoked these powers in relation to Britain’s departure from the EU. It said, “A minister of the Crown may by regulations make such provision as the Minister considers appropriate for the purposes of implementing the withdrawal agreement if the Minister considers that such provision should be in force on or before exit day.”

“Regulations” is the important word. It means, not by statute. It means, not following debate in Parliament. It means it can’t be challenged. (Theoretically it can. But there has been one successful challenge in 38 years, so don’t hold your breath.) This was how the Government proposed to legislate for the most profound change that will affect Britain for generations.

Dominic Grieve’s remedy was brief and to the point. He proposed to add the words, “subject to the prior enactment of a statute by Parliament approving the final terms of the withdrawal of the United Kingdom from the European Union.”

This quiet formulation contains a lethal bite and the Government was mortally afraid of it. It was afraid of two words: “prior” and “statute.” “Prior” meant that whatever Grieve was asking for had to be done before the Minister pushed through any of his regulations. “Statute” meant that what he was asking for was a separate Bill, an entirely independent piece of legislation.

In a written statement on Wednesday, before the crucial vote, David Davis promised that the Government would not use the Henry VIII powers to implement any parts of the Withdrawal Bill until after the Commons had voted on it. He said that vote would “take the form of a resolution in both Houses of Parliament and will cover both the withdrawal agreement and the terms for our future relationship [with the EU].”

The trouble with this is that (a) Davis’s promise is not binding – Grieve wanted a legislative guarantee that the secondary powers would only be used after the vote – and (b) that a statute and a resolution are not at all the same thing.  “A resolution would simply involve a yes/no vote on whether MPs approved the withdrawal deal, whereas statute means a bill – which would be amendable.” (Guardian, Politics Live summary, 13 December).

“The government is also promising a bill,” the Guardian summary explains, “but Davis says in his written statement the resolution would come first.” (My italics.) “Under his plan ministers would be able to start using sweeping Henry VIII powers …using a simple, binary vote. Under Grieve’s plan the bill, which would give MPs the chance to rewrite bits of the withdrawal plan, would have to come first.”

It emerges with stunning clarity from this explanation just what a sack of weasels this government is. It wanted to present Parliament with the take-it-or-leave-it option that it loves because it removes MPs’ freedom to think, and then rush the result into law by an archaic route that cannot be scrutinised. It called this manoeuvre “granting a meaningful vote” when it was the opposite of meaningful, pretended it would not do what it had every intention of doing, and perverted the natural uses of language to conceal what it was up to.

Naturally this was all about control, and not just control of the final process. Ken Clarke, in a masterly speech, pointed out that the amendment would affect “the tenor of the negotiations.” It would force the head of government to ask herself, as every other political leader in Europe would be asking, “Can I deliver to the House of Commons what I am thinking of conceding?”

It is obvious that any such consideration would not suit Theresa May’s book. However, until about half an hour before the division the Government still thought it would win. Then it was realised that the Whips had miscalculated, panic set in and a concession was hastily offered. It was insufficient, and much too late.

Theresa May had had a bumpy week. She had managed, somehow, to turn around the disaster with which the DUP presented her when it interrupted her lunch with Jean-Claude Juncker. The proposal on the Irish border concocted late on Thursday night was a fudge, but the EU accepted it in the cause of moving the talks on. Then David Davis, demonstrating a boast he had just made about not needing to be clever, announced that the agreement which Theresa May had just signed in Brussels was not legally binding.

The EU moved like a cat sighting a mouse. If the British Government regarded it as not legally binding, said Barnier, it would be made legally binding straight away.

Davis re-interpreted himself. It was his second narrow escape in a week. May, taking stock, might have thought that things could be worse: she hadn’t had to replace Davis, with luck she wouldn’t have to sack Boris for Irangate, and it was unlikely the inquiry looking into Damian Green and his computer would want to rock the boat. No wonder, with all this, she wasn’t thinking very hard about the steely resolution of Dominic Grieve and Anna Soubry.

The result was that, for the second time in ten days, she had to go to Brussels in sackcloth to endure the smiling company of Europeans whose overall grasp of the situation is far better than hers and whose patience she and her rabble of ministers are now close to exhausting. It is difficult to see what cards she has left to play.

And she will need cards. Stage two of the talks is going to be for grown-ups, and it’s not apparent that we have any. The EU wants to know what we mean by “Brexit.”  Parliament will want to know, too. As Jonathan Portes points out in the Guardian (15 December), the drama involving the Brexit vote is not over. Wednesday’s passionate debate will lose much of its purpose if the deal voted on does not include the future relationship with the EU.

Portes asks why Parliament would want to reject the deal now agreed on any of the three initial topics (citizens’ rights, financial settlement, border), or the transition arrangement which is yet to be negotiated. He finds no reason, either because no further movement is possible, or MPs are content with the terms, or voting against the border settlement would solve nothing.  But Parliament will certainly want a say on any post-Brexit economic integration with the EU, or a trade-off between single market/customs union access and the ability to negotiate free trade deals. Yet this is not something Parliament will be able to vote on when it gets its “meaningful vote,” says Portes: “by then it will be too late.”

The extreme tightness of the schedule for completing the talks was the only objection the Government was able to advance against Grieve’s amendment: his statute would take up time. Never mind that the main cause of the shortage of time are the weeks wasted by Mrs May’s election. Trade talks normally take years: these have no chance of being completed before 29 March 2019, although the EU thinks it may be possible to reach “heads of agreement.” Even that would be tight, and Theresa May has been trying to remove any flexibility with her foolish plan, now abandoned, to “enshrine” the time and date of Brexit in law.

And the Cabinet has still not met to discuss what its aims are.

Before the Government tables anything in Brussels for the phase 2 negotiations, says Portes, Parliament should insist on a proper debate on the future relationship. “Let’s settle the things we didn’t and couldn’t decide in the referendum. These are vitally important questions…”

They are.

As you approach the rapids, the water runs faster.

MPs will need to paddle very hard.

But we have to give them the paddle.

 

 

“Thick as mince, lazy as a toad”

 

It may be assumed from his demeanour – harassed, irritated, sucking a sweet – when he appeared before the Brexit Select Committee on Wednesday that David Davis did not want to be there. He had been told he must, by the Speaker.

He was there to explain himself. He had been rumbled. Having been directed by a Commons Opposition Day motion to release certain documents about the impact of Brexit on the economy which he had long said his department was preparing, having been ordered by the Speaker to obey that vote, and having promised to release versions that were unredacted, he had finally stopped prevaricating and given the Brexit Select Committee 850 pages in two lever arch files.

It was ridiculously insufficient and appeared to be highly redacted. It was accompanied by a letter saying that the documents the committee was expecting had never existed in the form MPs thought they did, and that he had repeatedly made this fact clear.

Committee chair Hilary Benn did not waste time (see Guardian, 6 December). Perhaps he had been told that Mr Davis had an important meeting in Brussels. He asked whether the fact that the Brexit impact assessments did not exist in the form that MPs had thought was the reason why the Minister had not handed them over.

That was correct, said Mr Davis. There were formal definitions of an impact assessment, and the work done by the Government did not fit those definitions.

Benn asked him if the Government had undertaken an assessment of the impact of Brexit. Davis said it had not, “not on a sector by sector basis.”

He was asked if it had assessed the impact on, for instance, aerospace, or agriculture. Davis admitted that it had not assessed the impact on any sector.

Wasn’t that a bit strange? Hilary Benn asked, with visible restraint.

The Secretary of State didn’t think so. The intention, when these sectoral analyses were carried out, was to help the government understand what the effect of Brexit would be. (He did not explain how that differed from making an assessment.) He added, rolling the sweet around his mouth, that he was not a fan of economic models because they had all been proven wrong.

Benn then asked him about comments he had made to a Commons committee in September, when he said detailed assessments were being carried out. Davis’s reply was illuminating, although not of the subject. He said, “Just because you are looking at the impact of something, that does not amount to an impact assessment.”

What, in that case, Benn asked him, had he been talking about when he told a committee that Theresa May would have seen “summaries of the assessments carried out”? Davis replied that he was referring to the “summary outcomes” of the reports that had been commissioned.

Seema Malhotra (Labour) took up the questioning and reminded the Minister that in September he had told a Lords committee that his department would “carry out a qualitative assessment.”

That was not the same as an impact assessment, said Davis.  He said that he had been using the term “sectoral analysis.” That was different.

Stephen Timms (Labour) asked how much had been left out from the 850 pages submitted. The Minister didn’t know exactly. He didn’t think it was a lot. And, no, he did not edit the material himself.

Indeed, it turned out he had not even read any of it. He had been provided with a sample two chapters before the material was given to the committee, but he did not read them. This was because he did not want to be responsible for deciding exactly what was and was not released. He would not have had time to read 850 pages.

It was not long after this that he said he was late for his next appointment.

Wera Hobhouse (Lib Dem) asked him where the misunderstanding that there were impact assessments had come from. He told her she would have to ask other people.

Incensed and incredulous Committee members debated, after the session, whether Davis should be charged with contempt for defying the Commons motion ordering him to publish the assessments in full. Non-parliamentarians might think that that was not the half of it. He had revealed that the Government had not carried out any assessment of what effect Brexit would have on the British economy. Was this not (as Seema Malhotra tweeted) a gross dereliction of duty? And he had lied. He and his underlings had at the very least “misled” the House (Joanna Cherry, QC, SNP justice and home affairs spokesperson). Parliament does not normally forgive this.

For a start, he had only “made it clear” for the past few weeks that the assessments never existed. For fifteen months he had exerted himself to give the impression that they were a real, ongoing process. The picture started to take shape as early as July 2016, when ministers told a parliamentary committee of the need to examine the impact of Brexit on various sectors (see jackofkent.com/2017/11/the-early-history-of-the-58-brexit-sector-analyses/  .

Then, at a Lords committee in September 2016, Davis spoke of carrying out “quantitative assessments,” used the words “sectoral analysis” and said, “they are working through about 50 cross-cutting sectors.” By December, the sets of analysis had grown to “about 57”, each of which had “implications for individual parts of 85% of the economy.”

In the largely fatuous White Paper on Brexit, the outlines of the great enterprise became clearer: “We have structured our approach by five broad sectors covering the breadth of the UK economy: goods; agriculture, food and fisheries; services; financial services; and energy, transport and communication networks, as well as areas of crosscutting regulation.”

In March, Davis was telling the Commons of a “huge amount of work,” and in April promising an in-depth assessment. The assessments were in “excruciating detail.” DexEu said it would shortly be publishing the list of sectors.

The list, which does indeed cover 58 sectors, was eventually published, after pressure from MPs, six months later. It runs from aerospace to wholesale markets and investment banking, taking in agriculture, business services, defence, fisheries, higher education, medical services, nuclear, pharmaceuticals, and a great deal more on the way. It is impressive. But then, a list doesn’t have to do much.

The documents which Vince Cable says he saw, “under a procedure rivalling access to the Crown Jewels,” in the room in which the Government has placed the documents for MPs’ viewing, hardly tallies with this prospectus. They were “descriptions of the sectors, not assessments of impact,” he said, and contained nothing that was not available on Wikipedia.

This flimsiness is assumed to result from a state of panic that struck DexEu in November when it realised that the game was up, and began frantically throwing material together in the three weeks that David Davis had said he would need to “collate” the information into a convenient form. The pressure had begun to mount on 10 October, when 120 MPs signed a letter demanding the release of the “secret advice” the government was assumed to have.

The rhetoric about the analysis was immediately rowed back on and “assessment” became a taboo word, but it was far too late to correct beliefs that had been foolishly nurtured. The Opposition Day motion was passed on 1 November, but it still took an order from the Speaker to get the documents, such as they were, released, and an Urgent Question from Keir Starmer followed by another intervention from the Speaker to get Davis in front of the Brexit committee.

What on earth was the department doing before that? However, that isn’t, of course, the point. The question is, what did David Davis think he was doing? And it’s an interesting question, if one can manage to bottle one’s rage and keep it on a shelf while considering the matter. How long did he think he could keep it up? Did he really think MPs were by now so cowed that they would never ask to see this stuff? That their constituents wouldn’t? Was he relying on his luck, on everything falling apart anyway, on a royal wedding?

Or, to dig in another direction, why didn’t he do the work?  Was he afraid of what the analyses would reveal? Or does he just not like work?

“Thick as mince, lazy as a toad, vain as Narcissus,” said Dominic Cummings (Vote Leave manager) of David Davis in July.

Perhaps it’s as simple as that.

The Brexit committee voted on whether to move for Davis to be held in contempt of Parliament. They voted by 11 to 8 that “in view of the fact that no impact assessments have been undertaken [my italics], the Government’s response to the resolution of 1 November has complied with the terms of that resolution.”  In other words, since the assessments had never existed, Davis could not be held to be in contempt of Parliament for not publishing them.

The 11 in favour were Tories and one DUP member; the eight were all opposition MPs.

The Government went to some trouble a few months ago to ensure that government members on a Commons committee always outnumbered opposition ones (see my blog post of 10 September, The height of pavements). This is an early fruit of those labours.

Someone on the Government side is working diligently.

 

 

 

Not a sausage

 

Theresa May does not, as Tony Blair once put it, have bandwidth for anything except Brexit. If she talks about something else, it is to smooth the way for Brexit. She has just been in Saudi Arabia, selling the Saudis weapons with which to kill the Yemenis so she can pay for Brexit.

So why, I wondered, had she devoted her entire speech at the Lord Mayor’s banquet to Russian interference with western democracy? It was as if she was expecting something to happen. I noticed that she hadn’t mentioned Britain. But of course she couldn’t: that would be to acknowledge that Russia might have had its fingers in the referendum, which would suggest that the referendum ought to be re-run.

A few days later a friend sent me a link to a piece by Louise Mensch on the Patribotics website (https://patribotics.blog/2017/11/24/exclusive-brexit-referendum-may-need-to-be-redone/). It claimed that “sources say that UK intelligence is minded to recommend to Theresa May’s government that the Brexit vote be redone.”

What sources, I immediately wanted to know, but Louise Mensch was not going to tell me. It’s an exasperating piece, crucially vague. Ms Mensch has been having a nasty spat with the Guardian, which accused her of making things up. She rebutted this angrily. A former Tory MP, living in New York, once a chicklit author and now working for Rupert Murdoch (yes), writing about the alleged corruption of the UK’s political system by Russia… one wonders where she’s coming from.

But I can’t dismiss the piece, not only because it has become impossible to ignore the evidence that the UK’s political system has been corrupted, but because, reading around it, I came across some disturbing things.

Mensch claims that, according to her unnamed sources, “the level of money and the reach of the fake bots and targeted data funded by Russia, using Cambridge Analytica, were so great that M15 and M16…did not believe that the Brexit referendum could be said to have been ‘free and fair.’”

The article continues: “Sources cautioned, however, that an absolute decision had not yet been made and that the Prime Minister and her government opposed a revote. Reasons for this included both the public reaction, and the fact that it is thought that any second vote is likely to have the same final result as the first one.”

That’s the authentic voice of Whitehall. But how about this?

“Sources with links to both UK and US intelligence also believed, however, that there was major anxiety within the British government… of politicians’ links to the Russian state being exposed.”

Which politicians? Links of what kind? This is not about going to a party at the Russian embassy and drinking too much vodka.

Mensch then fingers other political players who are said to have been recipients of Russian generosity – the SNP, Labour, UKIP (she has nowhere explicitly mentioned the Tories) – before dropping her reader from a great height with: “Sources speculated… that any re-do of a corrupted Brexit vote might be announced after the arrest of Nigel Farage, which, separate sources assert, is a certainty.”

Let’s not rejoice prematurely.

Russian interference in the American presidential election is now beyond dispute. Because of the close links between the Leave campaigns and the Trump campaign, and Putin’s evident interest in a British exit from the EU, questions about Russia’s involvement in the EU referendum have been getting louder in recent weeks.

Boris Johnson had a fit of absence of mind when asked whether he had seen any evidence of Russian interference in British politics but eventually managed, “I haven’t seen a sausage.” This provoked incredulity from Chris Bryant, MP, vice chair of the all-party parliamentary Russia group, who used the words “distinctly fishy” and said, “Even as a junior minister in the foreign office, Russian stuff came across my desk every day.”

Boris was feeling the heat at the time because he had on 19 October attended a Brexit fundraising dinner at which he had met, and been photographed with, a Mr Mifsud who is named in an FBI investigation as a high-level go-between linking the Trump campaign and the Russian government (Guardian 11 November). Ben Bradshaw, MP, expressed amazement that British intelligence, who must have been told by the FBI about Mifsud, allowed this accident to happen.

The only way he could explain it was that “Our own agencies are keeping information from Johnson for some reason… which only begs further worrying questions.”

It’s an extraordinary suggestion. It suggests a distance between the intelligence community and government, and – worse – distrust. And it takes us back to Louise Mensch’s reference to “politicians’ links to the Russian state.” We already know that, for instance, Matthew Elliott, founder of the TaxPayers’ Alliance and chief executive of Boris’s Vote Leave campaign, and now reportedly being lined up for a senior role at the head of the Conservative party, was a member of Conservative Friends of Russia, “a Moscow influence organisation” (Carole Cadwalladr, Guardian, 4 November). Is Boris one of these politicians? If May thinks he is, she is likely to be not just worried but pacing the floor.

But then, I began to realise, if there’s Russian influence it doesn’t stop at Boris.

How strong does a link have to be, to be significant? In many cases we’ll never know what links exist. They will be scrambled, covered over, sent on baffling detours. But here’s one link that certainly ought to be pursued, because it’s in full public view and it’s operating at the highest level. It’s the link between the Government and something called the Legatum Institute, “a handsomely-funded extreme free-market think-tank fuelled by offshore cash from the Caribbean and Dubai,” behind which “stand the Chandler brothers, who made their billions in Russia’s most turbulent years, and once owned 4% of Gazprom” (Gina Miller in the Guardian, 28 November).

The Legatum Institute has emerged from nowhere and is deferentially mentioned on the BBC as an adviser on Government policy, without any explanation of what qualifications it has for that role. Michael Gove attended a seminar held by Legatum’s director of economics, Shanker Singham, ten days ago, alongside people from Downing Street.

I’m not suggesting that Legatum is a Russian front. The Mail is, though. An eye-widening article in the Sunday Mail online (25 November) was headlined: “Putin’s link to Boris and Gove’s Brexit ‘coup’ revealed,” and alleged that Shanker Singham was involved in drawing up the “ultimatum” letter sent to Theresa May about Brexit.

I have long wondered who is pulling Theresa May’s strings. I should have realised that, in a matter like this, the closer one gets to the answer the more the answer recedes.

Money is everywhere in this story. Follow the money and names come up. Follow the names and you fall over more money. The money in Legatum. (The Chandler brothers are disaster capitalists. Why are they interested in the UK?) The “dark” money behind Arron Banks’ s funding of Leave.EU. The £485,000 given by the opaque Constitutional Research Council to the DUP during the referendum campaign (no disclosure about donor required because different standards apply to Northern Ireland). The £625,000 Vote Leave gave to a 23-year-old student for his pro-Brexit campaign. The money which swashes around London.

“London is one of the main outposts for Russian financial and political influence programmes in the west,” said Bill Browder, Anglo-American businessman and campaigner for the Magnitsky Act.  “There’s a huge reluctance to strangle the golden goose. Because a lot of people close to the centre of power are financially benefiting.” (Cadwalladr, Guardian, 4 November.)

How close to the centre of power?

“The big question now,” Gina Miller writes, “is to what extent Russian money came into the Leave campaigns, and is in effect funding a cold war.”

A UK parliamentary committee has asked Mark Zuckerberg to supply any information he has on activity by Russian-linked Facebook accounts during the referendum campaign. The Internet Research Agency, a Russian state-backed “troll farm” operating out of  St Petersburg, is said to have targeted Facebook users in the USA before the presidential election; Facebook has promised to create a tool that will allow users to see whether they were targeted. However, about the UK, Facebook has said nothing.

Ben Nimmo, of the Atlantic Council think-tank, said evidence of Russian online interference in the referendum was “incontrovertible” (Cadwalladr, Guardian, 4 November). In the campaign, Vote Leave and Leave.EU spent lavishly on, respectively, AggregateIQ, based in Canada, and Cambridge Analytica, set up by an American billionaire and with links (illegal) to AggregateIQ: these were companies that scooped up Facebook users’ personal data, analysed it and sent tailored messages to them (see my blog of 26 May, Say you like it). Mensch says that Russia funded Leave.EU’s use of Cambridge Analytica; I’m not aware of the evidence, which doesn’t mean it doesn’t exist.

We already know quite a lot about Russian-linked fake Twitter accounts. They posted almost 45,000 messages about Brexit in the 48 hours around the referendum. Research by Swansea University and the University of California tracked 156,252 Russian Twitter accounts that mentioned Brexit; most although not all were pro-Leave. Many appear to have come from the troll farms.

What is Britain doing about all this? There’s the request to Mark Zuckerberg. There are demands for the parliamentary Intelligence and Security Committee to investigate. The Electoral Commission is examining the possibility of breaches of the electoral rules by Vote Leave and Leave.EU (“I’m terrified,” said Arron Banks). The Intelligence and Security Committee is only now about to be re-constituted after the general election (why has it taken so long?) At the request of Tom Brake, MP, there will be a three-hour Commons debate on Russian interference on 21 December.

Across the Atlantic, there are five separate FBI investigations under way into Russian involvement in the Trump campaign, and Americans talk openly about impeachment. Here, the Prime Minister has still not used the words “Russia” and “Brexit” in the same sentence, and is presumably behind the timetabling of a debate on the subject three days before Christmas, when, with luck, ten MPs will be present.

Smiley must rap on the door of No. 10. No-one else can do it.

But Smiley needs our help. We have to shout, loud enough to rattle the panes in that decaying building on the Thames. Loud enough to put this corrupted government to flight and replace it with something cleaner.

 

The drones won’t do it

 

“One unintended consequence of Brexit is that Ireland finds itself for the first time in its history on the stronger side of the table in negotiations with the UK,” noted Brigid Laffan, Director of the Global Governance Programme at the European University Institute, Florence, in the Guardian (23 November).

Leo Varadkar knows it. He has repeated his warning that he will block Britain’s progress to the second stage of negotiations with the EU unless he receives a binding commitment that there will be no hard Irish border.

Arlene Foster, party leader of the tiny DUP faction that props up May in Westminster, called it blackmail. The Sun spat fury from its gutter: “Leo Varadkar should shut his gob.” The Government’s lackeys are whipping up outrage that an Irish premier should try to interfere with “our” Brexit. One would think it had nothing to do with him.

In fact the Irish border has been near the top of the EU’s concerns ever since the referendum vote: it has always been known that the UK would have to clear this hurdle, and that the failure to get it right would entail serious economic consequences for both parts of Ireland. Worse, there might be dangerous political consequences. Leo Varadkar has every right to be worried.

So does Britain, but more of that later.

It is still the Government’s position, rejected by the EU, that the border issue can’t be settled until trade talks have begun because the two are related. This is convincing for the first few seconds until you think about it. Then you realise that the problem is that the British government has two mutually irreconcilable imperatives – the border needs to be material enough to present an obstacle to goods and people, and immaterial enough to be invisible – and that problem cannot be solved by discussing trade or anything else; it can only be solved by discussing the problem itself.

To put it another way, as Brigid Laffan crisply does, the Government’s argument is bogus because “There is no future trade deal available to the UK that will lead to frictionless trade if it leaves the single market and customs union.”

The keyword here is “frictionless.” That is what the border needs to be. It’s a word the Government likes, but it doesn’t seem to understand what it means. “Frictionless” means without custom declarations, tariffs, non-tariff barriers, that sort of thing. To get that, you  have to pay a price. The Government won’t pay it.

The rational solution to the border problem is for Britain to stay in the customs union and single market. Over May’s dead body will it do either. The reasons for this are not particularly obvious.

Theresa May, when she took office, did not have to embrace hard Brexit. She did not have to turn her back on the two brilliant ideas that bound the EEC, later the EU, together and made it the second largest economy in the world. After all, we hadn’t been told in the referendum campaign that this was what leaving the EU would entail. We had been explicitly told that this was what it would not entail.

Was the power balance in what would necessarily become her cabinet already so weighted in favour of the numpties? Whatever the cause, she made her choice, and then, some nine months after the vote, she made a serious mistake. She called an election.

The result was catastrophic for pretty well everyone involved. She lost her majority, and we got the DUP.

I have expressed my opinion of that party, and the shabby pact the Government made with it, in a previous post (www.foxoutinfront.com/bacon-from-limerick-stout-from-dublin/), but I focused then on the fact that this narrow sectarian group would enable May to cling on to a mandate which the electorate had just denied her. It was not yet clear how much the DUP would affect the Brexit negotiations. It’s clear now.

Northern Ireland voted by 56% to 44% to remain in the EU. Among the 44% were the supporters of the Democratic Unionist Party, which wants a hard Brexit and has become the fall-back bulwark defending it. As long as Theresa May is dependent on these 10 MPs for her hold on power, there can be no possibility of a rethink on the single market and customs union, no special customs deal or regulatory alignment for Northern Ireland (the DUP can’t allow the six counties to be marked off in any way from the mainland UK), and of course no question of moving the border to the Irish Sea, which would likewise solve the problem.

By ruling out these avenues, the DUP makes inevitable what everyone agrees can’t be countenanced: a hard border, with surveillance cameras, checkpoints, customs posts…   With breathtaking inconsistency, it doesn’t want a hard border, either. It’s afraid it might be bad for Ulster’s farmers.

It will, and not Ulster’s farmers alone. It will hugely complicate the lives and businesses of hundreds of thousands of Irish people in both the north and the south. Eighty per cent of Ireland’s trade goes through the UK; if there’s a hard border, goods passing through it will be subject to tariffs, inspection and delays. A third of Northern Ireland’s milk goes south across the border every day to be made into cheese, butter and infant formula. Some dairy farmers will go out of business.

Many other items, at present seamlessly, go back and forth: Guinness crosses the border twice before it’s shipped out from Dublin. Between 23,000 and 30,000 people, living in the north and working in the south, or vice versa, commute, hardly aware of it since the border is invisible; farmers cross it several times a day from one field to another; people visit relatives. Dogs are walked, horses are ridden, along roads on which, if the border comes back, they’ll need documents.

When the EU taskforce dealing with Brexit and the border listed specific areas of collaborative activity that would be adversely affected by Brexit, it found no less than 142. They ranged from security coordination against paramilitary threats to bus routes.

However, the strongest argument against a hard border is that it might undermine the still-fragile peace process.

Someone left a pipe bomb at Omagh two weeks ago. Dissident republicans are out there. A hard border starts as a soft target: all the bomber has to do is attack a single customs post. Then all the customs posts along the border will have to be fortified, and his job is done. This idea is dismissed in London as fantasy. It is not dismissed in Ireland.

It’s not just in relation to the border that the British Government is shamefully neglecting its responsibilities, or that the DUP is behaving like a spoilt child in a sweetshop. Power-sharing in Belfast broke down in January as the result of a scandal involving the DUP and a green energy scam. As conditions for power-sharing to resume, Sinn Féin want equal status for the Irish language and the ban on same-sex marriage in the province lifted. The DUP want Ulster Scots (spoken by a much smaller percentage than speak Irish) included in the language clause, and believe that same-sex relationships are sinful.

After a lengthy stand-off, Westminster will soon have to resume direct rule. Nobody wants direct rule – certainly Westminster doesn’t – but Arlene Foster last week sounded not too upset at the prospect.

Sinn Féin are upset at the prospect. The reason is both glaring and shocking. The peace in Ireland is founded on the Good Friday Agreement. The Good Friday Agreement is based on power-sharing. Power-sharing is partly based on the principle that the British Government, which is one of the guarantors of the Agreement, is politically neutral. Direct rule is undesirable but not against the principles of the Agreement; but the present British Government is kept in office by the DUP, which is one of the parties to the power-sharing.

Naturally the DUP does not acknowledge that this is a problem. Well, it wouldn’t, would it? It got a cool billion out of its deal with May. And the Government can’t acknowledge it because it can’t do without the DUP’s support in Parliament. It defeated the Labour amendment to retain European law on fundamental rights by 10 votes.

The terrible truth about this government is that it doesn’t give a damn about anything but its own survival. Ireland can go hang. Ireland is, of course, aware of this attitude.

But now Ireland, which used to be a friend (how stupid of the government to lose that friendship), has turned hostile, and what is May to do? It is desperately urgent to get trade talks going: she has to solve the Irish riddle, and on EU terms. Her proffered solution (drones, electronic registration) has been rejected. The EU is steering her towards the single market and customs union but, in addition to a humiliating U-turn, that means facing down the Brexiteers and junking the DUP. She is afraid of the Brexiteers, and if she junks the DUP she loses power.

If she had courage, and understood more about what she is doing, and could find it in herself to trust the British people, she would tell them the truth and put the future of the country where it belongs, in their hands.

That is not going to happen. She is heading for the edge, and taking the country with her. Unless it wakes up.

If it doesn’t, there is yet hope for Ireland. It is that, if Brexit drags Northern Ireland out of the EU, against the wishes of most of its population, the Ireland-wide poll about reunification that is provided for in the Good Friday Agreement is held, and returns a “yes” answer.

But it would be so much better if the Irish could be left to do that when they’re ready; if we could have our own poll first, and junk Brexit, May and the DUP in one fell swoop, and then welcome in the dawn.

 

 

Hurry up please it’s time

 

Theresa May panics easily. A tide has started to run against Brexit. It has to be stopped.

The date on which the UK leaves the European Union will be “enshrined” in law, according to an amendment the Prime Minister proposed ten days ago. It is to be 11 pm on 29 March 2019. The shrine is a bit off kilter because everyone assumed it would be midnight, but it can’t be because it has to be midnight in Brussels as well, and on 29 March Britain will still be on GMT. This neatly encapsulates the power relationship between Britain and the EU, but in the Commons nobody cared about that except Frank Field, who made a valiant attempt to bring back unicorns by suggesting we postpone the time of departure by an hour, by which time it would be the next day, but only in Europe.

The Commons took no notice: it had the entire EU Withdrawal Bill to chew its way through. Nevertheless, the PM’s unexpected bit of law-making caused a furious Tory rebellion. Harsh words were spoken: “Utterly foolish” – Kenneth Clarke; “pointless” – Tom Tugendhat; “incoherent and thoroughly stupid” – former attorney general Dominic Grieve. Grieve announced his intention of voting against the Government whatever was done to him. Goodness knows what he thought might be done to him, but the Daily Telegraph was in a nasty mood, plastering the photographs of Tory rebels across its front page as if inviting readers to get up a posse.

The obvious fear, shared across parties, is that the amendment could force the country out of the EU before it is ready to leave. It tied the Government’s hands, said numerous speakers; it would leave no room for last-minute manoeuvre; it might “come back to haunt us.”  That it would leave no room for last-minute manoeuvre was of course the point. Keir Starmer was right to call it “a desperate gimmick.” It has a whiff of the suicide bomb about it. But May perhaps does not see that. Who knows what she sees?

Starmer pointed out that it could stand in the way of an orderly transition. Others connected it with another of May’s bright ideas, that the final deal, having been voted on by Parliament, should also be enshrined in statute. They said this offer would be made meaningless by fixing the date of the UK’s departure, because there would probably not be enough time to pass the legislation before the date elapsed.

The matter of the parliamentary vote on the deal is sunk in as deep a morass of confusion as anything else to do with Brexit, which is saying a great deal. The confusion became heated when David Davis a few weeks ago informed a Parliamentary select committee that, because the EU negotiations might go to the wire, there might not be time for Parliament to vote on the deal, and had to be contradicted first by the Prime Minister and then by his own department before he had the sense to contradict himself and thereby restore the illusion that this is a democracy. The question was not satisfactorily laid to rest, and Wednesday’s stormy debate resurrected it. Nor has anyone explained how negotiations could “go to the wire” on 29 March 2019 when they are supposed to be concluded by next October.

The Prime Minister’s proposal to put the final deal which Parliament had accepted into law was an attempt to reassure the country that there would be a vote, and that it would be “meaningful” in that it would be taken before Britain left.

However, it would not be meaningful in any other sense, because it would give MPs only the choice of accepting whatever terms the Government had negotiated or leaving the EU without a deal. This is what the Government has always intended, ever since, under pressure, it deigned to allow a parliamentary vote at all. Anna Soubry described this “concession” (yes, that is what the Government is calling it) as “insulting.”

Roughly half the Commons seems disinclined to worship at the shrine. The Government has been warned it must rewrite the date amendment or face defeat in a Commons vote in December.

This unlooked-for defiance has set the Government running in dazed circles. One source said that a “possible solution was for the Government to fix the date but make it clear it would try to extend Article 50 if an act of parliament approving the withdrawal agreement was not passed in time for that date” (Guardian 17 November).

In which case, what is meant by “fixing the date”?

David Davis dropped shrouded hints that the Government might abandon its amendment. The Government denied it was thinking of any such thing. It said, in the tones we have come to know and love, “What this amendment does is provide certainty over our position that we are leaving the EU on 29 March 2019.”

Just before it issued this statement, a source in Whitehall divulged that the Government was “trying to think of a way of watering down its amendment without taking out its reference to 11 pm on 29 March 2019” (Guardian, 17 November. My italics).

Fortunately, sanity still rules in the EU. The 27 have sought a legal opinion from the European Commission on the possible extension of the two years allowed for talks under Article 50. The 27 do not envision a lengthy extension: one diplomat explained, “This extension would only be if we are near striking a deal and need a few extra weeks or months” (Guardian, 17 November.)

Another thing the EU is doing is preparing for a no-deal Brexit.

The drumbeat in Westminster for no deal has been growing louder in the past weeks. May continues to say it is not what she wants, while seeming clueless about how to prevent it. To get a Brexit deal, she has to do the second stage of talks. To do the second stage of talks, she has to get through the first stage. To get through the first stage, she has to resolve the budget contribution, citizens’ rights and the border.

The budget, as I write, is being discussed at an urgent meeting of the Cabinet; more must be offered (more is owed!), but an increase in the contribution will be politically explosive. An agreement on citizens’ rights may be within sight; nothing of the kind is in sight on the Irish border, a conundrum May cannot resolve because she has blocked herself in by refusing to stay in the single market or customs union. The Taoiseach has threatened to block progress to second-stage talks unless Britain commits itself in writing  (don’t they trust us?) to no hard border and a continuation of the Common Travel Area.

It doesn’t look possible without a radical shift in thinking at the top. This is why, despite a mounting chorus of alarm from business and the direst warnings of what will happen, we are heading, it seems inexorably, for a no-deal Brexit.

Will it really be so bad? Yes, it will be an absolute disaster. I will talk about this in another post; meanwhile there’s a manageable summary on the BBC website by Chris Morris, 14 October. Even the BBC thinks it’s not a terribly good idea. Who could possibly want this near-doomsday scenario?

Well, some people do and they have their reasons. They don’t talk about most of them, but they will point with satisfaction to the House of Lords judgement in March that, if Britain leaves the EU without a deal, it will probably have no legal obligation to pay into the budget. The judgement adds that not paying would “antagonise the rest of the EU and further sour relations. Legal action … could not be ruled out.” But I can’t see no-dealers being bothered by a spot of French colère.

These are the people pulling May’s strings, and the amendment seeking to fix the date of Brexit is intended to reassure them. In spite of her constant reiteration that there can be no monkeying about with Article 50, Theresa May isn’t so sure. She is said to have taken legal advice on whether Brexit can be revoked; she is not telling anyone what answer came back. There is for her an unnerving possibility that negotiations might stretch out, the EU might prove inconveniently accommodating over the date and Brexit may vanish in the tangled grass. Fixing the date both removes that danger – it’s a guillotine – and puts enormous pressure on those innocent souls who are still striving to make negotiations work.

May’s puppeteers don’t want a good deal, they want no deal, and they presumably welcome the increasing evidence that a good deal can’t be negotiated. Closing off a genuinely free vote solves half their problem; fixing the date solves the other half because it provides cover. They don’t want time. Time will make the Government’s failure more apparent. It is not really a failure, of course: it’s a betrayal.

And afterwards, when there are a million pieces to be picked up, the Government can disclaim responsibility. It was constrained by the law, which the House of Commons voted for.

This monstrous trap is quite simply dealt with.

If there is no alternative to “no deal”, then the alternative to no deal is no Brexit.

 

 

 

 

 

All honourable men

 

 

 

“Everyone with an ISA is involved in tax avoidance.” So said Lord Sassoon, former Treasury minister and beneficiary of a trust fund based in the Bahamas, amidst the furore that broke a week ago.

The very rich can be very obtuse. Equating a saver who has a few hundred pounds in an ISA and is earning 0.25% interest on it with, for instance, a sports celebrity who has just-about-legally avoided paying £220 million in VAT on a private jet by registering it in the Isle of Man is not just ridiculous, it’s an insult. Lord Sassoon should apologise to ISA holders. He won’t, of course.

The so-called Paradise Papers, 3.4 million confidential documents leaked by the offshore tax firm Appleby, lift a curtain on the world of what are repulsively known as “high net worth individuals.” They offer a baffling insight into the web of practices used by such people to hide their wealth in places where it can’t be taxed. The practices are convoluted, opaque, bizarre, but all basically dedicated to concealing who owns what. Sometimes even the accountants don’t know what’s going on.

As Molly Scott Cato, MEP, said in relation to the Panama Papers last year, Britain is right at the heart of this web. “More than half the companies listed were registered in the British Virgin Islands, and the data showed that other overseas territories and countries with a rather murky relationship with the City of London dominate that data.”

The Tories are on the wrong side of this, in the nature of things. They are traditionally the party of the privileged and propertied. New Labour may have been “relaxed” about extreme wealth, but it was Margaret Thatcher who made the ambition to be filthy rich respectable, and it was the Conservatives who recently cut the 50% tax rate and lowered corporation tax.

True to form, the Government last month voted down Labour amendments to the finance bill which would have forced UK beneficiaries of overseas trusts to declare their sources of property and income on a public register. Theresa May is still refusing to commit herself to a public inquiry or to having open registers for shell companies and secret trusts. Note that these are merely requirements for ending secrecy, not for changing the substance of the law, let alone for hanging the rich from lamp-posts.

However, the Government is merely being logical. The end of secrecy spells the beginning of the end of the practice, because the squirrelling away of money where the taxman can’t get at it is thoroughly hated – by people who don’t have large sums to squirrel, could not afford the services of tax accountants and, most important of all, are the ones who stand to lose. It is also deeply distasteful to many well-heeled citizens who have both the motive and the ability to engage in it, but who understand that it is corrosive of society.

What could all that money do if paid in full to the Treasury and put to its proper use? A recent study part-authored by the economist Gabriel Zucman (https://gabriel-zucman.eu/files/AJZ2017b.pdf) found that wealthy Brits had stashed about £300 billion –  equivalent to 15% of national GDP – in offshore tax havens. “This would more than cover our entire educational budget into the 2020s. It is the equivalent of £350 million being paid into the NHS every week for the next 16 years…”

Oh, there it is, that £350 million!

The avoidance or evasion of tax – the first is legal, the second is not, but, whatever you call it, the result is the same – robs public services of the funds they need and contributes to an inequality which is already of shocking dimensions. Do we want to live in a civilised society? Then we have to do something about it.

Current suggestions are directed at abolishing the secrecy. By an Order of Council, the Government could force overseas territories such as the Cayman Islands to adopt tax transparency measures. “We could change the rules on Lords and Commons’ members’ interests so that all offshore holdings would have to be registered” (Aditya Chakraborrty, Guardian 7 Nov.) Zucman has called for the creation of a worldwide tax register.

Any of this would be a welcome first step. However, transparency is not enough. A lobby group representing offshore business spoke of having “superb penetration” at the higher levels of the UK government before the G8 summit in June 2013. It congratulated itself when measures far less radical than those originally proposed were agreed.  A country in which that can happen should look hard at itself.

Here is the same point made more uncomfortably: “We’re not just complicit in what happens, we are central to its success,” said Margaret Hodge, MP, former chair of the Public Accounts Committee, in a recent adjournment debate on tax avoidance and evasion on the Isle of Man (zero tax on companies). She said funds from the British taxpayer were being used to enable the island to operate as a tax haven.

And here, perhaps, is part of the (intolerable) explanation: “HMRC is colonised by the tax avoidance industry and large corporations, who dominate its operations and are, in effect, allowed to write tax law” (Guardian, 6 November, article by Prem Sikka, Emeritus Professor of Accounting at the University of Essex). (My italics.)

Readers half-stunned by that last piece of information might reflect that David Cameron slashed the number of HMRC staff by 11,000 and that Theresa May plans to cut another 8,000.

It is legitimate to ask, in the light of this, whom our Government serves. It is not us, the people. Whom does Whitehall serve? The Government: that is its purpose. But, some will say, it is precisely for this reason that “the people” voted to leave the EU in the referendum; that vote was largely a protest about the way the country had been governed for decades in the interests of an elite.

Very well. Whom does Brexit serve?

Leave.EU was set up as a wholly-owned subsidiary of a finance firm based in Gibraltar that offered tax avoidance services. It specialised in “separating and relocating intellectual property and treasury functions to low- or no-tax jurisdictions.” Arron Banks, who contributed £8.5 million to Farage’s campaign, had been a substantial shareholder in the parent company (Guardian, 7 November 2015).

The association of Brexit with people who keep their money overseas is documented in a Guardian article of 9 November this year, ‘The Brexiters who put their money offshore.’ Here Arron Banks appears again, as co-owner of the Isle of Man’s Conister Bank, among whose clients was a businessman whose gambling firm was pursued by the US Dept of Justice for allegedly laundering billions of dollars in illegal proceeds. Charges remain outstanding. Banks himself is under investigation by the Electoral Commission for his contribution to Leave.EU’s funds.

Another familiar figure is Jacob Rees-Mogg, who has interests in an emerging markets fund in the Cayman Islands and Singapore. Andrea Leadsom’s brother-in-law runs a multi-billion-dollar hedge fund from Guernsey.  Brexiteer James Mellon owns the Hoxton Pony in Shoreditch, which apparently is very hip, through an obscure arrangement involving a UK-registered company owned by an Isle of Man company with four shareholders. The Barclay brothers, who live in the Channel Islands and Monaco and whose Daily Telegraph is an unfailing source of poisonous misinformation about Europe, cloak their financial affairs behind a nominee shareholding in which their names do not appear on the register.

There is no suggestion, the Guardian emphasises, that any of the individuals it mentions are suspected of criminality. Of course not. We are talking about tax avoidance. They are all honourable men. But the argument has moved beyond that. It has moved into the sphere of morality, and it needs to move into what is legitimate in politics.

In January 2013 the European Union produced an action plan for new legislation that would end tax-avoiding practices among its member states. The plan came to fruition in the Anti-Tax Avoidance Directive, published on 28 January 2016  (https://ec.europa/taxation_customs/business/company-tax/anti-tax-avoidance-package_en).

As Prime Minister, David Cameron fought a doughty campaign against the EU measures.  It is instructive to see how at two crucial points the lead-up to Brexit chimed exactly with the EU’s progress on tax reform. On 23 January 2013, less than a month after the EU presented its draft plan for the Directive, Cameron made a speech at Bloomberg in which he spoke of holding a referendum on whether Britain should remain in the EU.

Three years later, on 20 February 2016, within a month of the EU’s adoption of the Directive, he announced the date on which the referendum would be held.

The EU had stipulated the date by which the Directive has to be implemented by member states. It is 1 January 2019. That is just short of three months before the UK has to leave the Union. Theresa May is now exercising what little power she has to ensure that the departure date is written into British law.

A bit close, eh? But still…

The EU is now, after talking about it for a long time, drawing up a blacklist of tax havens. The UK’s favourite children – the Virgin Islands, the Caymans, Anguilla et al. – will be fingered. The list is expected in December.

That is close. On the other hand, who’s going to take any notice of a blacklist? Britain will soon be shot of the EU and all its works.

It’s impossible, at this point, not to see the apparition looming out of the fog that has long surrounded Brexit. It has been there all along, but it shuns publicity as vampires do the daylight. It cannot live with transparency, which means it cannot live with the EU and its meddlesome directives. The Brexit negotiations may appear to be a shambles; the Government is a shambles: for the vampire, none of this matters. Hard Brexit? The harder the better.

Get out quick and cut the rope.