Scotland wants to leave the UK and there will be referendum on membership of the EU. Britain must decide what kind of country it wants to beby Bill Emmott / May 21, 2015 / Leave a comment
Before the 2010 general election, David Cameron lamented what he called “broken Britain,” but quickly dropped the idea once he got into office. Now that he has won office again, such words promise to come back to haunt him. His legacy, when he stands down in 2020 if not before, could be to leave Britain truly broken.
It is universally accepted—for it could hardly be more obvious—that the triumphant and probably somewhat surprised Prime Minister faces two huge tasks: he has to craft a new constitutional settlement to satisfy not just the roaring lions of the Scottish National Party (SNP) but also the English, the Welsh and the Northern Irish; and he has to sort out Britain’s relationship with the European Union sufficiently to be able to campaign for the country to stay in the EU when he holds the referendum he has pledged.
Yet these are merely aspects of a larger task: to restore Britain’s confidence in itself, in its future and in the strategic choices it has made over the past half century about how best to protect the country and to project its influence around the world. That choice has been to do so through our ties both with the United States and the EU, through the use of our armed forces inside and outside Nato, through our support for international organisations, through our openness to all the forces of globalisation, and through the soft power of entities such as the BBC. All that now stands in doubt.
Or think of it another way. Anyone who has travelled through airports abroad, especially in Asia, may have seen posters from the “GREAT Britain” campaign, launched by Cameron in 2011, bragging about how we are culturally GREAT, creatively GREAT, entrepreneurially GREAT and all the rest. Cameron’s task is to prove that this advertising campaign has not just been phony or a big mistake. Whether he succeeds in this will depend essentially on how much he really cares about these issues, and on how much we do, too.
“The UK is at stake, and with it the country’s place in the world. Both have been withering in recent years”
For the electoral worry about whether Cameron had the passion to win will now become the governing worry: does he have the passion, and the guts, to do what it will take to restore confidence in Britain, in Britishness and in Britain’s international strategy? In practice, if he does have that passion he will need to show it by repeating his approach during the 2010 coalition negotiations with the Liberal Democrats and again making “a big, open and comprehensive offer,” this time about both the constitution and Europe.
In both cases, a cheese-paring, half-hearted and narrow offer will guarantee failure. For it will hand the initiative to those who do care, and right now there is a big caring imbalance inside Britain. In Scotland, we know full well how much the Scottish National Party and its voters care, which so far means a lot more than the English do. In the United Kingdom as a whole, on the issue of our international strategy the ones who have shown they care the most are the eurosceptics in the Conservative Party, voters for the UK Independence Party and the anti-EU and anti-immigration print media, led by the Daily Mail and the Sun. If he wants to win, Cameron has to make the rest of us care, too, in order to deal with that imbalance. Indifference is the real enemy.
The UK is at stake, and with it the country’s place in the world. Both have been withering in recent years. This is strange, because normally when a country enjoys an economic growth rate that is among the fastest in the rich world its confidence and status rises, not falls. Even though Britain is outside the euro, one might also have expected our stronger recovery and effective reforms to have won us friends and admirers in Europe, rather than being increasingly ignored on the sidelines. It is an exaggeration, but the perception is real: that Britain has been withdrawing from the world stage.
Indeed, we are trying to confirm the perception. On 7th May, 49.5 per cent of voters supported the two parties dedicated to holding a referendum on Britain’s EU membership and to putting the tightest lid on immigration, the Tories and Ukip, and 50 per cent of Scottish voters supported the secessionist SNP. As a result, a phrase that will be heard more and more over the next two years will be “the British question.” You don’t ask such questions when you feel tall and confident of the answer.
When applied to Germany in the 19th century, such a national “question” concerned how best to unite the Germans, and a century later the German question came to concern how best to cope with Germany’s strength in the middle of Europe. For Britain it is now the opposite: how best to deal with the country’s internal divisions and with its apparent instinct for self-isolation from Europe.
Yet it may be more helpful, in the light of the election results, to think of this as “the British questions” and to divide them into three, albeit overlapping, interrogations: Who (or how) are we? Who do we want to govern us? And, most important of all, who cares?
Who are we?
The division of Britain into the Scottish yellow of the SNP and the English blue of the Tories reflects a nation divided about what it is, and perhaps about what it is for. This has just repeated the evidence of last September’s referendum on Scottish independence: the Yes campaign in September won 1.6m votes for its 44.7 per cent share, while on 7th May the SNP garnered 1.45m votes for its 50 per cent share of a lower turnout.
In trying to explain this vote, and the fact that the independence referendum happened at all, to foreigners, I have often struggled to define quite what in the history of this country has entailed that a place that calls itself “the United Kingdom of Great Britain and Northern Ireland” has come to have such a messy set of governing arrangements. A browse through the election results rather underlines this.
For example, in Northern Ireland, the nation of the UK where the majority is keenest on maintaining the union, none of the national parties fields candidates. Meanwhile in Wales, the nation containing the largest proportion of people fluent in a local language other than English, 87 per cent voted for Tories, Labour, Lib Dems, Ukip or the Green Party rather than Plaid Cymru, the Welsh nationalist party. And Scotland, which provided much of the leadership of the previous Labour government, now looks like a one-party state.
All of this has its various historical roots, but to outsiders just confirms what a rum lot we British are. And in the election, there were at least two other dividing lines related to who we are. These are whether we are on the left or the right, and whether we feel comfortable being open to the world or whether we would prefer to be more closed.
The issue of left or right is more the stuff of traditional politics, and would normally have been answered simply by whether the winners were Labour or the Tories. However the SNP’s demolition of Labour’s decades-long dominance in Scotland (Labour used to command 50 per cent of the popular vote, too) has complicated matters. Did Scotland vote left while England, Wales and Northern Ireland voted right? Or is that tempting conclusion blurred by the nationalist desire either for independence or greater autonomy?
The answer is not at all obvious, however much the SNP leader Nicola Sturgeon talks about having won “a mandate to end austerity.” All Britons, not just Scots, have had a painful time since the 2008 financial crash. Living standards have fallen every year since then, in the longest period of declines in real wages since records began in 1855, according to the Bank of England—a decline that has ended only in the past nine months or so.
Scotland may have suffered more than England during the 1980s, but that has not been true of this slump. The Scottish unemployment rate has tracked the UK rate closely during the recession, and in May, at 6 per cent of the labour force, was only slightly ahead of the UK figure of 5.5 per cent—and is a lot better than the 7.5 per cent rate in the northeast of England or the 6.7 per cent rate in Wales. Such joblessness figures might explain why Labour won 25 of Wales’s 40 seats, or why Ukip fared well both in Wales and the north of England. They don’t explain Scotland.
Had the opinion polls turned out to be correct, the Tories’ failure would have been explained in post-election punditry largely by the lack of a “feel-good factor”: strong figures for Gross Domestic Product growth had not reached sufficiently into people’s sense of wellbeing. That ought, however, to have applied more or less equally to both Scotland and England.
This is also the background to the revival—for that is what it is—in British concern about immigration. While Britons have felt grumpy about their falling living standards, well-educated Europeans have been flocking to Britain, seeing it as a land of opportunity, especially London. There has also been an inflow of lower-skilled workers from eastern Europe and from outside the EU, which are the ones that catch the headlines and the eye. So, whatever your view of immigration, there has been a triple-whammy: lower-skilled migrants to bring votes to Ukip, migrant professionals to alarm the middle class and pressures on the National Health Service from a growing population to alarm everyone.
Which again leaves Scotland unexplained. There, despite supposed worries about jobs, incomes and public services, Ukip picked up barely any votes (1.6 per cent) and the SNP has said it wants to encourage more immigration, not less. This is, to liberal ears, a welcome and rational response to demographic pressures and the desire to boost economic growth. But it doesn’t fit with any notion of the Scots either as pre-Thatcher lefties or as Braveheart blood-and-soil ethnic nationalists.
Who do we want to govern us?
It fits more readily with another theme: grumpiness not solely about economic prospects or immigrants but about a perceived lack of control, or at least voice. The answer to the question of who we want to govern us has become a matter of which place that government is in, and whether we think it is near enough to reach out and give it a thump when we feel like it.
This is why the idea propagated by Nigel Farage and Ukip that three-quarters of UK laws are made in Brussels is so powerful. Statistically, it is nonsense: research by the House of Commons Library has long shown that even on the widest definition of “law,” the proportion is never much above a quarter. But Brussels is to London what London is to Edinburgh, Belfast or Cardiff: a far-away, uncomprehending and incomprehensible place that especially in bad times can seem to have someone else’s interests in mind rather than your own. And a place that often does its best to confirm this impression.
Which brings us back to Sturgeon and her claim of a mandate to end austerity. Anyone who delves into the numbers knows that even on the most generous of assumptions about allocation of North Sea oil tax revenues, a Scotland with full fiscal autonomy would have to have more public austerity, not less, as its budget deficit would be larger than the UK’s even on unchanged public spending plans and it could not expect to be able to borrow large amounts of money on its own.
So what can she be asking for? Taken literally, she will be seen as asking English taxpayers to increase their subsidisation of Scotland (as expressed by the Barnett formula block grant of cash) through higher UK public borrowing. Or she may simply be using “austerity” as a currently easier line with which to beat the new Conservative government than would be independence, given the referendum defeat last September, intending to switch back to independence once she has been rebuffed and when the Scottish parliament elections approach next year.
What this creates, though, is a wide opening for Cameron. With hindsight—though this also was widely commented on at the time—the devolution of power to Edinburgh and Cardiff that New Labour enacted in 1998 came with one crucial flaw. It did not match the transfer of spending and decision-making power with a corresponding transfer of tax-raising powers or financial responsibility.
On election day, I happened to be at an event in Switzerland, the St Gallen Symposium, which had a theme of “Proudly Small” into which Scotland slotted perfectly. The opening talk was by Bruno Frey, an economics professor at the nearby University of Zurich. While defining what he saw as necessary for viable political entities, he said something that made every Brit in the audience wake up. “An entity without taxation is a useless entity,” he said. Without the power to raise their own taxes, the Scots (and the Welsh and Northern Irish) do not have the real ability to make their own choices and to be accountable for them. Which means the ability to make their own mistakes.
So what Cameron needs to propose, in a “big, open and comprehensive offer,” is a package to give them precisely that. This would have to mean the transfer of the bulk of tax-raising powers to each of Wales, Scotland and Northern Ireland, as a path to a properly federal system. Doing so would be a way to call the SNP’s bluff while anyway moving the UK in a direction it needs to go if it is to be sustainable: you want more powers and more freedom, well now be accountable for it to your voters, your taxpayers, all under the benign umbrella of the UK. Let us compete with one another for the best policies and incentives, the best paths to economic growth and fairness, subject of course to EU state aid rules: we all believe in competition, don’t we?
Something on those lines will be needed both to deal with complaints about where the UK’s nations are governed from and about supposedly different political cultures or policy preferences in those nations. It will be complicated, since the constitutional details surrounding it, about electoral constituencies and systems, the House of Lords and how to deal with England, will also have to be agreed upon. That is why to focus on tax-raising powers may be wisest: we all care about our taxes and how they are spent far more than about boring constitutional structures.
Dealing with Scotland and the EU simultaneously sounds challenging but might actually be an advantage. Tory and Ukip opponents of Britain’s 40-year-long EU strategy care about regaining sovereignty and being governed from London rather than Brussels; but they also care about the Greatness of Britain, believing as they do in the country’s ability to prosper outside the EU. The parallel prospect that it could instead split up, with the SNP guaranteed to demand a fresh independence referendum if the UK votes to leave the EU, ought surely to give pause, at least to some of their supporters.
That sense that there is a contradiction between the two elements of Ukip’s name—“United Kingdom” and “independence”—could provide some of the fear-factor in the EU referendum campaign. But alongside such a negative tactic, Cameron will also need something more positive to make voters care about staying in the EU and sticking to the strategic path laid down by his predecessors Edward Heath and Margaret Thatcher.
For that, he would be wisest to make a “big, open and comprehensive offer” to the 27 other EU member states at the same time as he bargains for adjustments that meet some of the eurosceptics’ complaints. If he is to achieve those adjustments—to EU migrants’ welfare entitlements, for example—he is anyway going to need allies inside the EU. To get them, he would do best to persuade countries—led by the Netherlands, Sweden, Poland, Italy and above all Germany—that with Britain they can create a better EU and a healthier European economy than without it. If Britain looks committed to that better EU, other countries are likelier to agree to make concessions.
To do that, he will need to get a sense of what sort of initiatives are likely to garner such European support. Looking at what the European Commission is already pushing for, and bearing in mind the demand being made by Germany on indebted eurozone countries—liberalise your markets to boost growth—the most fruitful area is likely to be the very policy that Thatcher helped initiate back in the 1980s: the still unfinished single market. Another related area is the creation of a fully connected energy grid (for electricity and gas), which can be pushed as the best long-term way to reduce Europe’s dependence on Russia as well as a cost-effective way to counter climate change.
Such a package, in effect a joint British and German push to extend the single market into services and digital commerce and to build an energy union, would satisfy a useful EU principle: if you see an open door, push on it. That is a better approach than banging your head against a wall, which is what demanding rapid changes in EU treaties, as many eurosceptics want, would amount to.
Brick walls are Cameron’s biggest political opponents, but when it comes to the public the enemy is not that. It is indifference. Europe is never high on opinion poll rankings of which issues matter most, and what little the public knows about the EU tends to be the negative stories about bent bananas rather than positive ones. If the Prime Minister cares about Britain staying in the EU, and remaining the United Kingdom, he is going to have to make the rest of us care too, by making the UK feel more workable and the EU feel more constructive. In the battles of the next two years, the outcome will be a paraphrase of the SAS motto: “Who cares wins.”