The Worron Office

Conservative leadership elections tend not to be predictable. It is said that the favourite never wins or that the party favours outsiders. 

The latter is often true, but history shows there are three, very different, ways to be an outsider.

• A leader may be a social outsider, remote from the ruling elite
• They may be an ideological outside, challenging the Parry’s ideological mainstream
• They could be of maverick temperament, or eccentric in behaviour

The first social outsider Tory Prime Minister was George Canning in 1827. The Whig grandee Earl Grey had declared could Canning never lead the country as he was the “son of an actress.” A reminder that the Whigs, not the Tories, were the truly grand and rich aristocrats.

The definitive outsider was Benjamin Disraeli, who became leader in 1868. He was not an aristocrat, was of Jewish heritage, and with a “flamboyant” style.  Ideologically Disraeli brought the party over to social reform and working class voting. He did however live his life with one big mission: to become an insider. He firmly believed in the principle of aristocratic rule and sought to be part of it. In the early 20^th century the Party selected the Canadian-born Bonar Law, the first genuine businessman to lead. Ideologically though he was in the party mainstream as a firm supporter of Tariff Reform.

In contrast, aristocratic party leaders could be intellectually unorthodox.  Lord Salisbury, leader in the late nineteenth century, was from one of the grandest families in Britain, but was sympathetic to women voting, and full of ideas for social reform. He was, in the manner of the true intellectual, simultaneously sceptical of these ideas.

Aristocrats could also be prone to eccentric behaviour. Randolph Churchill was the son of a Duke but successfully posed as an outsider. He was a maverick in Cabinet and lively public speaker.   Ideologically, he championed the working man against the Whig aristocrats.  The depth of his conviction is unclear. When asked if he had any actual ideas to improve working class life he replied “No, but Salisbury has.” Randolph was never leader but his son of course was. Winston could be as mercurial as his father but was far more constructive in office. Ideologically he meandered, but his outsider status through much of his career reflected his buccaneering temperament as much as ideological differences with other Conservative politicians.

Stanley Baldwin, leader from 1923-37, had a traditional background and low-key political style but was fascinated by ideas. Baldwin’s political life was initially unremarkable. He came from a rich business family, essentially inherited his seat in Parliament at 40 and was not made a Minister for another 8 years. As Prime Minister he developed a consensual style but had a strong vision of social cohesion in inter-war Britain. However, he put a lot of effort in to masking this passion for ideas, occasionally by mocking his own.

Harold Macmillan similarly hid his intellectual curiosity in order to become leader.  As an Old Etonian married to the daughter of the Duke of Devonshire he seemed the archetype of the union of aristocratic and commercial wealth dominating the early twentieth century Conservative party. He was though an ideological rebel with his calls for a Middle Way and more state intervention in the economy.

He was also a sensitive, often eccentric figure, he once sang Rule Britannia in the Commons Chamber for example. Macmillan did not thrive at first. Alliance with Churchill advanced his career. He developed a calm, fake-Edwardian persona, his ideas became more mainstream, and he became Prime Minister. It was a remarkable transformation. Intellectually however, MacMillan never quite stood still. Even in the 1960s, when he was thought laughably old-fashioned, he was still hungry for new ideas on economic modernisation. His Edwardian persona was an ironic joke to him, but eventually seemed to confirm his insider status to the public.

From 1965 the Conservative Party leadership became open to those of less privileged backgrounds, and by 1990, being a social insider was a crippling drawback for Old Etonian Douglas Hurd.  Heath (1965) and Major (1990) were not dissimilar leaders. They had unprivileged backgrounds, but neither were ideological or stylistic risktakers.

Margaret Thatcher, as a woman, was an outsider in a whole new way. She offered ideological clarity, which was popular with Party members but not, initially with many Conservative MPs. In terms of communications Thatcher’s style always remained distinctive. Even today her broadcast footage is challenging, original and sometimes surprising. She combined authority with a hint of outsider originality.

21^st century Conservative leaders failed to match this combination. Hague, Howard, IDS and May were all from inoffensive middle class background but never developed a compelling media persona or noteworthy ideological position. May has undoubtedly wanted to innovate ideologically, but Brexit has proved too much of a distraction.

David Cameron, the most successful 21^st century Tory leader, desperately sought to play down his insider social status. Ideologically, he challenged the party on some, but not all issues. In terms of style he regularly let us see hints of real personality and sense of humour, although whilst still maintaining as much authority as seems possible in this undeferential age.

So what next? How will social, ideological and behavioural outsider traits shape the next Conservative leader?

Social origin will be interesting but not decisive in the leadership election. Candidates who are women, from an ethnic minority or a humble background will offer potential electoral benefits to the party, but ultimately others factors will prove more important in choosing a leader. The Party has been agnostic on outsider social status for 200 years, and will continue to be.

On the issue of Brexit the next leader will need to be with the party mainstream and a firm Leaver. On other issues though a lot is up for grabs, both in terms of the role of the state in the economy, and whether the party seeks to appeal more to the values of older or younger voters. Conservative party members get a lot of criticism, but the trend over the past 20 years has been a willingness to compromise on every issue except Europe. A candidate who offers interesting ideas could do well.

What about candidates with an unorthodox style? In a social media age this is more advantageous than ever. It makes a politician more human, enables their communications to cut-through, and makes them more memorable and compelling. History shows though, that successful leaders never take eccentricity too far and combine it with a sense of authority and competence.

We have a new Prime Minister, should there be a General Election? Historical precedent says not, but that hasn’t stopped  Labour, the Lib Dems and the Greens demanding one.

Politicians are hilariously inconsistent on this of course. Labour didn’t want a General Election when Brown replaced Blair whilst the Conservatives, specifically David Cameron, spent three years demanding one.

The question we need to ask is simple: will an election help or hinder getting Brexit right? We need to consider two elements: the impact of going through an election process, and the impact of the potential outcomes.

First of all the process can only hinder Brexit negotiations and economic stability. UKIP will run riot during an election, crying imminent betrayal and forcing Conservative and even Labour politicians into ever more intransigent negotiation positions, which will hinder us from  getting  the right deal. The election will also add more market uncertainty, harming the economy just when we have a chance to start to re-build certainty.

Then let us consider the potential outcomes. Only one outcomes can end well – a majority government  led by an experienced politician with a mandate to pursue Brexit. Quite frankly we have that now, even if it isn’t everyone’s choice of party forming the majority . Looking at other possible outcomes in turn these will clearly be worse for the country.

Conservative minority: would have a weak hand in Brussels due to lacking a majority, could maybe depend on Lib Dem and moderate Labour allies in getting a Brexit deal approved but would be vulnerable to threats from extreme Eurosceptics on the Conservative backbenches and in UKIP.

Labour minority: similar problems, but with the added wild card of the Scottish Nationalists applying pressure.

Labour majority under Corbyn’s leadership: This seems unlikely, but presumably it would cause an immediate rout in the markets, and then Corbyn would be in an impossible position in the House of Commons.

Labour majority under a new, more moderate leader: This is a plausible option, and perhaps workable, but the new Labour leader would have considerably less experience than Theresa May and would find it hard to put together an experienced team, and with residual party management problems. Whatever your overall view of the parties which is better placed in the foreseeable future to manage the Brexit negotiations?

Labour majority under a new more moderate leader committed to Remain: This is a wild card. A new Labour leader might decide their best option in a General Election would be to tap the electoral power of 48%, and in that way secure a Parliamentary majority. This would cause an immediate constitutional crisis, only resolved by a fresh Remain vs Leave referendum. If Remain won that vote we would return to some sort of normal, but imagine if Leave won again. The new PM would have to resign, and then call a fresh election. We could then in theory be in a cycle of referendums and elections forever.

The best outcome then would be continuity – so what point an election?  I fully understand that Labour supporters will want Labour to have its chance at being in power, but as we only had an election a year ago its not unreasonable to delay that opportunity a couple of years.

To conclude: getting Brexit right is the priority now. For that we need stability and it is hard to see how an election can reinforce stability and easy to see how an election can undermine stability.

The people are never wrong, but I am still finding it hard to genuinely accept that idea this weekend. We have entered a future filled with risk and uncertainty. In particular, I feel it was reckless and cavalier to put the residency rights – one of the most basic rights of all – of millions of British and European citizens at risk through this process.  This is before we get to the questions of Scotland, Gibraltar, Northern Ireland and the economy.

However: the people are never wrong. And in the coming years, we most definitely cannot afford to be.

We do have a model for what to do next, and that model is Singapore, a city expelled from Malaysia in 1965. It was a bleak island, defenceless, and denied any trade with its former partners, a land whose prospects seemed hopeless. It thrived, and in thirty years was wealthier than Britain. We don’t need to copy Singapore’s authoritarian governance or any particular policy solution. We do need to copy its habit of very clear thinking.

Singapore was led for that 30 year period by Lee Kuan Yew, and one sentence in particular from his memoirs stands out:

A soft people will vote for a soft way out, when in truth there is none

Here will be the test of the coming months: did we vote for the soft way out, trying to run away from the world, or have people voted against the soft way by consciously embracing all the risks of Brexit? The decisions we make now, and how we make them, will be the test of us . We will need to take hard decisions, and take them quickly, to focus on them with much greater clarity than we have before.

If we are to get into the habit of clear and direct thinking, here are five thoughts from me of what we can do in the next week:

1. This is a shameless steal from Rohan Silva in the Sunday Times today but worth repeating again and again: slash corporation tax to 10%. This is a clear way of stating the UK will ensure it is still a good place to do business. It could be announced this week.

2. Commit to a new London runway: if Britain is closing one door to the world then we need to announce we are opening another. Again, it should be done this week. Boris needs to be the big man and take the hit on this one and accept he will not get his way.

3. A review of the welfare state: it is my firm view that a lot of working class voters, particularly those who do not vote in General Elections, turned out for Leave because they feel they compete with immigrants to access to council housing, and to a lesser extent other welfare. It is a damning indictment that our public administration could not get its act in gear to design a fair system of allocating welfare that commanded public confidence. I am conscious that this is my mushiest recommendation, so I propose sticking the word failure in the title to concentrate minds.

Having just been pretty direct, borderline rude, to our neighbours it is time to be very nice indeed. Two thoughts:

4. A big and generous budget contribution offer to the EU: access to the single market is worth a lot to us and we will have to pay for it. Let’s put ourselves on the moral high ground and practical front foot, by announcing early, within days, that we will make a big contribution to structural funds. By big I mean properly big: as large as our current net contribution. The money can be taken from the foreign aid budget if necessary. Personally, I happen to think supporting the economic development of Eastern Europe a good cause anyway.

5. A big and generous offer to EU citizens: any EU citizen here on the day we formally leave has the right to stay, end of. Yes, there is the risk that this might flood the country with people, but that would be a good sign, showing that people are voting with their feet for Britain’s economic prospects. This also puts us on the front foot morally regarding the rights of UK citizens in Europe. Finally it is in fact the only practical solution, and if you waste time and energy trying to avoid that fact, then you are soft.

Amongst all the talk about Labour’s problems, I was struck by this tweet:

It leads to an important point. Labour  needs to be more like the rest of the north European left, and less like the southern European left. If I think of the south European left I think of noisy, passionate street politics – an impression undoubtedly reinforced by coverage of Greece in the last few weeks.

The southern European left includes varied shades of opinion in broad alliance, from moderates through to genuine socialist and Marxist strands. The north European left in contrast are pragmatic reformers: the privatising and deficit-cutting Swedish social democrats of the 90s, or the Gerhard Schroders labour market reforms in Germany in the noughties. France of course, incorporates elements of both. It is the epitome of noisy street politics AND pragmatic left-wing government.

I do not attribute this difference to the supposedly passionate Latin character of southern Europe, but rather to the history of the late 20th century. Southern European societies have traditionally been poorer and more unequal, and the left needed to unite against the authoritarian right  – Franco in Spain and the colonels in Greece for example.

Germany of course has its own right-wing authoritarian history. But this strand of belief  was thoroughly discredited after 1945, in a way it was not in Italy, where of course fascism ruled for much longer. Furthermore the moderate left and the communists had always been enemies in Germany. Indeed, the communists deliberately betrayed social democrats to the Nazis after the Nazi-Soviet pact.

The reality is that for all the passion some in the Labour movement bring to politics, not always a positive passion one might add, they live in a north European country with an unexciting domestic history, needing practical, reformist politics.

So a piece of advice: some countries don’t need a revolution, get over it.

An old blog post caused a stir on twitter on 22^nd June by bringing up the hoary old chestnut of praising Nazi economic management. An ironic re-emergence on the anniversary of the Nazi invasion of the USSR of course.

The piece points out that something doesn’t become bad just because the Nazis liked it, and unoriginally cites vegetarianism as evidence. The piece also makes two claims worthy of rebutting for their inaccuracy: that Nazis were good for the German standard of living, and that the Nazis practiced a form of Keynesianism. Despite its age I thought I would explore this.

The first point is easily rebutted. Nazi economics from 193-39 was driven overwhelmingly by two factors – Aryanisation, i.e. seizing property from Jews, and preparing for war. War on a massive scale, definitely against the Soviets, and probably against Britain and France. The result was that resources were poured into weapons, not domestic consumption. Living standards during Nazi peacetime rule recovered from the Weimar nadir of 1932 but was never the same level as the late 20s, and in fact private consumption declined as a share of national income – from 71% in 1928 to 59% of national income. International comparisons are instructive, real wages in Germany in 1939 were 9% higher than in 1913, in Britain and France there were over 50% higher. In practical terms this meant that, for example, German meat consumption was only three-quarters that of the average British meat consumption. Vegetarianism is indeed a bad thing when it is not a choice, and indeed, a tactic to conserve resources for aggressive war.

The resources went on preparing for war instead. In 1939 23% of German economic output went on the military. To put this into perspective, NATO members currently have a 2% share of GDP for defence target.

The second point is more complex: were the Nazis Keynesian? This is worth exploring, both because it reveals some technical points about the Nazi war economy but also highlights some common misconceptions of Keynesianism.

First of all the semantic/ anachronistic points.  Keynesianism here I take as the broad belief that there can be too much saving, hence declining return on investment, and that this needs to be countered by government spending to create inflation and increase consumption. (Perceptive people may note that Keynes belief that the rate of return on investment is always moving towards 0 is the exact opposite of the arguments of Thomas Piketty, but that is another story.)

The key point though is that Keynesianism is not, as often reported, by for example Will Hutton, a drive to increase investment. It is in fact an attempt to decrease investment and drive up consumption in the short-term.

In terms of deficit fuelled consumption – consumption of weapons that is – the Nazis were the masters. They borrowed, stole and bartered all they could in the quest for weapons. Every dodgy deficit wheeze their bankers could come up with – the ‘Mefo Bills’ for example where used to manipulate credit. At first glance this is a kind of demented Keynesianism on drugs.

On closer inspection though this summary does not add up. Firstly because weapons are a deadweight consumption – they cannot drive up further activity, even if not being used. However, the result was that there was no output gap – unused capacity in the Nazi economy after 1936. At this point Nazi policy was to move in the exact opposite direction of Keynesian, pumping resources not into any form of consumption but directly into new factories and mines to expand war-making potential, including synthetic rubber and fuel, iron ore, chemicals and non-ferrous metals. Much of this was unfinished when war started, but it was in fact such a scale that in 1945 German “capital stock,” accumulated investment in factories and facilities was in fact higher than at the start of the war. Despite the massive destruction at the end of the war.

So no the Nazis weren’t Keynesians, because they invested too much.

Why are we talking about kitchens, and the number thereof? How did our politics come to anything so trivial?

The answer to this is simple: because the Labour party, first Brown, and then Miliband, said that these things were important. Ed in particular said that we shouldn’t be ruled by a “cabinet of millionaires,” a phrase he first used in 2012 in a debate on banking reform.

Ed’s argument was simple: that what you inherit, where you went to school and what you earn is more important than the ideas you have. Ed, followed eagerly by much of the Labour party, said that it is more important to pre-judge than to listen. That impression – or style – is indeed more important than substance. He and his party have said it again and again and again.

Why did they say it? They said it because it is easier and more effective than debating ideas. But perhaps because they wish to deflect from the fact that Labour party is now so obviously the party of privilege in some ways.

Privilege is now at the heart of how Labour is itself run, with the rise of its own aristocracy: the Miliband brothers, the Straw, Kinnock and Prescott sons, the five generations of Benns with the privilege of sitting in Parliament to, um, fight inherited privilege. It shouldn’t matter who their family are of course: but Labour themselves say it does.

The real issue is Labour’s approach to public spending, because again and again they support public spending not for social justice but to protect the system’s winners.

If you have the  good fortune of paying  only a “social rent” for a one and a half million pound council house – and such properties exist very near where I write this,  then Labour is on your side, whether you need that house or not. If you are well-paid but run a failing children’s services unit somewhere in the country, Labour councillors might well be on your side. If you are a community “elder” benefiting from biraderi, Labour are on your side. I could go on, but there are plenty of examples.

More important than Labour’s rhetorical inconsistency is a pyramid of privilege in the public realm that anyone who really believes in social justice should want to challenge, to scrutinise and to hold accountable. 

The new hard-left Syriza government may manage to keep Greece in the Euro or they may not. In many ways though the story will be much the same:the Greeks will go through an immensely difficult economic period and eventually they will need to introduce market reforms and a streamlined public sector. They will eventually introduce Thatcherism.

More likely for the moment is that the Greeks will become the latest of the battered spouses of socialism, economic policy will consist of granting money to favoured groups or hare-brained schemes, weakening real incentives to produce.

The abusive partner is an metaphor for socialism: always talking of love but in reality seeking control.  The fact is that the greatest trick socialism ever pulled is convincing people it exists. There are in reality two economic systems available to humanity: capitalism, where people co-operate for their own ends, and feudalism, where people are directed for the rulers’ ends. Socialism is simply the latter in disguise. The disguise of course never lasts, and when that happens the result is so often the same, the protestations of love turn to hate as the system finds victims to blame the people’s woes.

Still we might be lucky, maybe Syriza will introduce capitalism in  disguise instead.

The Sunday Times has good coverage today (£) about David Haines, who is sadly a British hostage held by ISIS. It’s worth dwelling first of all on the use word of that word “British”– a concept that is y in danger of losing much of its meaning after 18^th September

Yet it’s meaning here is very important for David Haines can only really be described as British. He was born in England, served in the British armed forces and married and lives (normally) in Scotland. If we were able to be there then he – unlike tens of thousands of Scots living in England – would be able to decide Scotland’s future.

Upon independence then David Haines’ safety would technically become Alex Salmond’s responsibility. Alex Salmond would need to have the special forces on standby to rescue him, to have the resources to gather intelligence, to be trusted to share intelligence with other powers. Of course protecting Scots around the world is way beyond Salmond’s planning. Organising a currency is beyond Salmond’s planning.

This reflects Salmond’s poor sense of timing. Scottish independence was an idea for the end of history. History refused to end and now the economic and geopolitical situation looks very serious.

The bigger issue though is that David Haines would not be left to depend on Alex Salmond. He was born in England and ‘rUK’ government would continue to work for his release. This brings us to the heart of the matter. Enduring political unions are built on unions of people. Haines encapsulates that union, someone born in England who became a member of the community of Scone. He, and so many others whose lives are, fortunately, more mundane, will always be part of both communities.

It is this union of peoples that many in the SNP really hate, and which they really want to bring to an end. However, it is this union that, whatever the outcome on the 18^th, they never truly can. In the meantime, all of us, both sides of the border, must hope for the best in the case of David Haines.