All posts by Max

JR Max Wheel is a business consultant and freelance writer based in Cambridge UK. I have worked for the financial services industry in the UK and overseas.

Break-up of the UK’s traditional political parties or damp squib?

20 February 2019 JR Max Wheel

What’s going on at Westminster? Is the sudden crack in the ranks of traditional parties by the formation of an Independent Group any more than individual desperation over Brexit or the beginnings of a big change in UK politics. Most moves like this, resignation from parties fizzle out even when like the SDP they created a viable party, but these are not normal times. Things are changing in the UK, and in many respects these changes are long overdue.  It is not only clear that the first past the post system (FPTP) has serious failings in terms of representation, and most especially when there is a close result, but that the old largely class and interest-based groupings are increasingly irrelevant to younger age groups, if they can muster any interest in voting at all.

It is also not solely about the vexed topic of Brexit although it is an important driver. References to “broken politics” are frequent. Matters European have been unravelling since the financial crash of 2008, the austerity measures, the incompetence of public sector service management and the downright greed of major transnational corporations, easily able to choose where and when to move capital and people across frontiers, with scant regard for the consequences of those affected.

The Commons has over 650 members, this is grossly overstaffed at one level and under-representative at another, namely the ability to respond to legitimate issue or grievances. The unstitching of the UK via representative assemblies or Parliaments in the constituent countries has hardly proved a resounding success either but is a sop to nationalist ideals and a divisive and expensive way to try to square the circle. It has manifestly not worked in N. Ireland. barring the relief from the troubles but the basic question of United Kingdom or United Ireland, kept on ice as too provocative. Result, a non-functional Stormont. This is a serious impediment to community harmony, let alone the deliberately provocative issue of the RoI/N.I. border.

Scotland is no better, after a failed referendum in 2014, nationalist sentiment simmers beneath the surface. Wales has an Assembly but is still a Labour dominated country more reminiscent of its industrial past than its current stagnant economic future. All three have been paid scant serious attention by Westminster since it is the golden triangle of the South East, London, Home Counties and University cities like Oxford and Cambridge that dominate. This is equally scandalous for the other English regions, whether South West, Midland, North West or East.  When taught economics years ago there was a “location of industry” theory where governments in their wisdom were supposed to pay attention to the balance of industrial and service industry distribution and with it the necessary and supporting infrastructure. This was dismissed as a result of “pork-barrel” politics and the patent failure to make sensible choices about what to back where. It was left to the market. That was a long time ago and it needs to be resurrected in the most aggressive and determined way if communities are not to left to rot.

Fixing British politics means radical change, given that cooperation and compromise are needed more than ever. It may require an acceptable version of PR, as no party has a monopoly of wisdom.

It certainly requires drastic pruning of the House of Lords or its abolition. The regions must be properly represented for decisions of national importance- just what kind of body can answer that is tricky but why not a second chamber with representatives from the 4 countries rebalanced – in effect a Federal Britain. We have long resisted the Federal Europe on offer and on balance it seems an unlikely event given the resurgence of the nation state and regional powers, these need to be recognised whether in Barcelona, Belfast or Edinburgh.  If the Independent Group can grasp any of the real needs, then they just may redraw the constitution in a way fit for purpose and government of the UK in an increasingly fractious world. It’s got to be better than the current system.  

BREXIT- The ongoing travails, courtesy of Article 50.

JR Max Wheel

17 Jan 2019

 

It is a pretty nearly accepted fact that triggering Article 50 prior to establishing some idea of what kind of exit from the EU was likely, acceptable and could be planned was aa major mistake. It was but just as bad was the notion that Article 50 could ever provide for satisfactory negotiations. Since it was only reluctantly accepted for inclusion in the Giscard drafted EU constitution aka the Lisbon Treaty. It was really designed to suspend or remove member states who had gone rogue and failed to comply with the EU’s provisions. As such being both a rules-based process and subject to a bizarre sequencing of withdrawal agreement and then well talk trade, this could never form the basis of any meaningful negotiation, other than staying put or be instructed how the EU wished a relatively large economy like the UK to leave. So, it has proved.

Michel Barnier is unquestionably a skilled( and perhaps typical) French bureaucrat , he Has also held all the cards since day one as enshrined in the Article, so it has always been a case of the UK negotiating on the back foot, whilst some fervent Remain voters have done their level best to throw a bagful of spanners into the negotiations whether by amendment or often clandestine meetings held with EU colleagues. This does not excuse for a moment the delay or incompetence of the UK’s negotiating team.  However, it was always the case that leaving an institution would be uncertain and hard to define other than in broad terms about the sense of loss of control of decision making – real sovereignty and the malign effects of capital as it slides effortlessly around the globe seeking better cheaper deals with scant regard for impacts on the host countries. This damaging effect – which it is true the UK could have tackled earlier and with far more vigour and the mishandled response by many to the 2008 financial fallout has and continues to produce a massive backlash – now visiting many EU member states.

I conclude that Article 50 was never fit for the purpose of negotiating the exit of a country like the UK or indeed of any major economy. Indeed Prof. Ingrid Detter, the Swedish international law professor concluded as early as summer of 2016 the worst case for the UK would indeed be triggering Article 50.   So Barnier is no magician, he just knew the strings to pull and had the support of the remarkably quiet 20+ EU states. Fundamentally it remains France and Germany that continue to dominate EU matters of state, whilst mostly there is near silence from the rest.

I have reluctantly come to the view that despite not sharing the EU desire to create a federal state – which still looks very far away that the UK is now so run down and defeatist that the giant kick up the *ss needed to reorder both our politics and economic prospects can only be served by staying put. Despite having voted to leave for reasons that are broadly based on the experience of watching over the decades, a raft of legislation, including contentious regulations, decisions and directives and passed down to us from the Commission and enacted by Parliament with so far as I can see astonishingly little real scrutiny. I did vote to join as to stay in in 1975 and to join. The EU if it is to thrive or even survive will need urgent reform and to avoid it being half-baked the UK must play a role – this time preferably with a better bunch of politicians

Article 50- a baked-in recipe for failure.

26 October 2018

JR Max Wheel

When some historian comes to write up the tortured negotiations between the UK and the EU they might like to reflect on the now infamous Article 50. This  was a contentious after-thought to Giscard d’Estaing’s EU “constitution”.  It is a mess almost certainly by design and so it has proved in reality. Since no large member state had ever attempted to leave the Union until now, we were always in uncharted waters and the article’s scant detail totally inadequate for the purposes of reaching a fair agreement, since it gives all the negotiating cards to the remaining member states. Worse its sequencing into a two-phase approach means that many issues which are needed to reach agreement on the withdrawal phase are stupidly left to the definition of the future relationship including trade.

There has been a concerted effort to characterise the talks between both parties as negotiations, when they most clearly are not. EU member states have a rule-book to follow, into which bucket they can put pretty much what they like. Hence “negotiations” are immediately bogged down in endless complexities and little or no progress is possible. For reference this links to the wording: http://www.europarl.europa.eu/RegData/etudes/BRIE/2016/577971/EPRS_BRI(2016)577971_EN.pdf

Leaving aside for a second one’s own prejudices about whether to leave or remain, would anyone have seriously entertained this way of trying to reach any constructive agreement? The answer is likely to be a resounding No! Article 50 is inappropriate, designed only to protect the status quo ante.  It is therefore dysfunctional as a methodology and should have been challenged immediately or never triggered at all. This is not an exercise in flying a kite, Prof, Ingrid Detter de Frankopan, a widely respected international lawyer and Prof. Emeritus at Stockholm University warned back in 2016 that the one critical factor in then forthcoming UK/EU talks was to avoid triggering Article 50. It being so obvious that to do so would merely create a one-sided EU determined process.

This is precisely where we find ourselves in late October 2018, unable to exercise a sensible choice since EU tripwires have been carefully positioned so as to frustrate any progress. Worst of these, but by no means alone is the vexed question of the Irish border. It is fair enough to recognize that most member countries have historical oddities left over from Europe’s turbulent past. Andorra, San Marino, the Grand Duchy of Luxembourg itself, Liechtenstein and a host of others.

Even by EU standards the choice of Ireland is an especially unfortunate (and completely avoidable) one. Not only because of the common travel area between the UK and the Republic, and the major flow of goods between the two countries, but quite obviously because of the potentially fragile Good Friday settlement. There are no good compromises here, only future technological border solutions, mainly way off, but because any sensible negotiations need to be bilaterally determined between the UK and the RoI- not the EU. Hooking themselves to the EU position will not resolve this issue and risks upsetting the delicate balance and trust built up between the communities in the North over the past 20 years as well as violating the sovereign status of the UK. This is massive overreach by the EU and they should drop it before any real damage is done.

I have previously critiqued the 4 freedoms as being aspirational constructs, not fundamentals. Even in a pre-globalized world free trade in goods and services was recognized as an economic benefit. Globalization has supercharged it to the extent that very little is not now tightly integrated. Free movement of capital and people has however become increasingly problematic. At one level technology renders borders as nearly irrelevant, however this is only part of the story, identity, culture and historical context all influence how peoples interact.

Monnet had a profound disillusion with the failure of the inter-war League of Nations and his philosophy was always for European integration and a federal structure, which became enshrined in the EEC and later EU. His was a very different world however and informed by very different experiences.

The current backlash against the inequalities created by the manifest downsides of a globalized world has led to a re-recognition of nationalism. It never really went away, although this is not properly recognized. Now member states are just that, national states. Those so-called freedoms of capital and people allow firms to relocate financial and production resources at will and with little/no consideration for the host country. Freedom of movement for people touted and even enjoyed as a benefit has turned out to be an authentic nightmare. Since a nation state’s first duty is the protection of its citizens neither the precarious nature of migrants, nor the self interest of firms should be allowed to override policy provisions by individual states. To do so is to invite mass uncontrolled movement, exactly what we have been experiencing. The combination of free capital movement and open migration have proved to be double edged swords. The consequences of being economically “left behind” and opening borders to uncontrolled movement are major causes of our decision to leave the EU.

In truth the EU was from inception always a Franco-German project and one where the UK played a reluctant and often marginal role, hence staying in to reform this 1950s project to make it fit for purpose in the 21stC is and remains a fantasy.

 

The EU/UK Stand-Off – An Epic Historical Muddle

12/05/2018

JR Max Wheel

As a divided UK wrestles with leaving the EU, it is worth reminding that many of the arguments for and against, over the power of a state to exercise its sovereignty dominated the debates prior to our accession to the then EEC. Many heavyweight politicians from both major parties worried away at the loss of national sovereignty and the fundamental differences in the way that laws are made under the UK’s unwritten constitution. The LSE’s Piers Ludlow has revisited this subject especially the debates of October 1971. Objections from the anti-EEC camp focused on three key areas, UK’s long-standing support for free trade, its internationalist stance and laterally the importance of making its own laws, as proposed and voted on by Parliament.

Interestingly much of the focus was on negative consequences for dominions and former colonies, whether sugar or banana producers in the Caribbean or lamb and butter from New Zealand and Australia, part of the terms of access and a deep-seated issue since the cheap food policy -the need to import food which lay behind the 19thC repeal of the Corn Laws. The “terms of entry” thus assumed a much bigger role than in any in depth assessment of what we were joining and serious public discussion of the terms of the acquis communitaire. The latter imposed a set of circumstances on the UK which included all EEC legislation back as far as 1958. Equally the aims and aspirations of the EEC towards a federal state were both well-known, but never made clear to the British electorate, rather it was presented much more as a trading bloc. This was a mix of sleight of hand, which rather echoes Valéry Giscard d’Estaing’s celebrated comment on the proto-constitution contained in the Lisbon Treaty of 2004- “public opinion will be led to adopt, without knowing it, the proposals we dare not present to them directly”.

Failing to inform directly or acknowledge what was envisaged in the acquis was a grave error and the beginning of a long-lasting suspicion over the EEC and later EU that the British media exploited relentlessly, and it sowed the seeds of Euroscepticism, even outright hostility that are still with us.

The nature of the acquis is that not only would a large swathe of EEC agreed legislation from the original six members pass into English law, but thereafter under the terms of the European Communities Act of 1972, all manner of directives, directions and decisions (laws) and treaty obligations would pass into British legislation. Whether these were properly debated and critiqued by successive Parliaments is a moot point. Further interpretation of this body of law was to be subject to the interpretations and rulings of the European Court of Justice (ECJ) effectively making the very point that the anti-membership debaters in 1971 feared.

Such a body of information, with its complexity easily passed over the head of much of the electorate who were sold the benefits of the EEC as a trading bloc, to escape the dire UK economic performance in the 1960s and early 70s. If it had been more carefully explained, there would have been a more realistic appreciation, if not necessarily whole-hearted support. In this way it uncannily mirrors the equally inept arguments used by both sides in the 2016 referendum.

Enlargement of the Community from 1980s and 2004 has brought with it a further layer of complexity, many aspiring members had limited recent experience of democracy, Portugal, Spain, Greece were recent dictatorships and the Central and Eastern Europeans recent escapees from the domination of the Soviet Union.  Their identities, cultural and history was often removed from that of the original members.

Finally, the nature of the now infamous Article 50 of the Lisbon Treaty aka EU constitution was never designed to accommodate an orderly and voluntary withdrawal process by a member state but rather to seek actions against “rogue” behaviour by member states, e.g. suspension of the rule of law or similar violations.

That is why it was always the wrong forum for negotiations on the UK’s decision. Whilst it by no means excuses inept UK management of the process, the error was in triggering it and by so doing allowing a completely one-sided arrangement, determined entirely by the EU and creating endless wrangling. No international negotiations are like this except after defeat in a war. The omnipresence of EU laws is like a one-way ratchet whereby they have been caught up in every nook and cranny of UK life and law. It is like trying to reverse an industrial loom, the fabric is now an inextricable mix, where new problems and trip wires appear constantly. Much, if not all of this could have been avoided if the terms of the original deal had been properly presented and understood, for that successive Governments are intimately responsible.

 

European Disorder.

Reviewing Prof Simms New Statesman article 24-30 November 2017.

 

JR Max Wheel

30 November 2017

 

Amongst the near endless name-calling and brickbats over Brexit in the UK, a very interesting and insightful article appeared in the New Statesman this week, written by Prof. Brendan Simms, from the University of Cambridge’s politics and international studies department.

Since the UK remains so deeply divided on this issue, it is good to have a take on the EU which throws some light and not heat.

 

Most mainstream media outlets have pinned their colours to the Leave or Remain mast and hence are even less trustworthy than normal as sources of information, but have degenerated into presenting emotive and deliberately slanted presentations- click-bait.

 

Simms points out some important messages, one, that populism far from going away is now rife in many (most) member states, sometimes powerfully so, whether in the splintering of a broad political consensus; Germany, Austria, the Netherlands and Greece have suffered from it as well as the UK. Poland and Hungary are in near open revolt at EU rulings from Brussels. Worse still, there is now a strong regional identity issue in Spain over Catalonia, the North in Italy, as well as the ever-present issues between Walloons and Flemings in Belgium. This is disturbing as the EU was supposed to have substituted the nation state with the prospect of an overarching federal Europe. That now looks impossible. The creation of the Union to supplant the nation state was never the foregone conclusion that many of its proponents believed. Indeed, as Simms argues powerfully far from transcending the nation state, the EU has thrown a lifeline to it after a near death experience in two world wars of the 20th.C. De Gaulle viewed the Union as a “L’Europe des Nations”, not what its founding fathers envisaged at all.

 

Suddenly regions matter as well as nations. This is a unique achievement, the EU has spawned the very opposite of what it promoted, a “Balkanisation” of Europe instead of a cohesive Union.

 

In large part this stems from its messy single currency, which has aggravated many of the underlying economic issues between members since the Crash of 2007/8. This has driven up unemployment, meant that achieving competitive balance is impossible and works only in favour of the most advanced and productive countries, especially Germany.  So, we have a common currency and a common travel area administered by a de facto confederation, not a federation, and on frequent occasions, an agenda driven by a key member State, Germany or in the past, France. The founding Franco-German axis may rebalance or not, what is certain is that the status quo cannot persist in an era of mass migration, globalised trade in goods and services. Many parts of the EU economy are still not open, in services especially, but also in the protectionist tariff wall, which also masquerades as a harmonisation of standards. Such standards largely emanate from UNECE anyway and are transcribed into EU law.

 

Large swathes of industry in individual member states have languished economically, the economic decline being mirrored by the rise of an angry electorate, ready to punish its leaders for falling to recognize the economic damage or seeming to care much about it.

 

It is worth looking at the problem of post-election politics in Germany.  After 12 years in power as Bundeskanzelerin, Angela Merkel seems vulnerable. Never a political visionary, Merkel was always a cautious political manager, seeking a consensus, when she did act decisively according to her instincts, in opening the borders to a massive immigration wave, it spectacularly rebounded threatening to stymie a largely cohesive system. The Centre Right CDU/CSU party and the Centre Left SPD have been outflanked to the left and right. Far from being the bastion of free trade and stability in the wake of what is painted as populist upsurges in the UK and US, she is likely to be overwhelmed by it. Simms also uses an interesting analogy for these times, that of Klemens von Metternich, Austrian Chancellor after the Napoleonic Wars. Metternich’s aim was to stifle uprisings, contain radicalisation and revolutionary movements until it hit the buffers of the 1848.

 

Brexit was never the real catalyst for a break-up of Europe, even if some of its wilder promoters desired it, it was always the underlying political and economic factors affecting real people.

 

There are only a few choices, accept that there are limitations to the Federal Project as conceived or to try to forge a smaller and consensual European Union, which may have to be a lot smaller and economically, and politically cohesive. Even that is unlikely to be acceptable or sustainable without deep-rooted changes.