Such is my professional life, I attended a Pensions conference in Dublin this week as the guest of the editor of a leading pensions investment magazine. Needless to say, Brexit loomed large in nearly all discussions.

Here are a few thoughts from key guest speakers, delegates (and a few taxi drivers!) on the UK and Brexit. I am not saying they are wholly representative but they were the sentiments that I heard most frequently expressed in conversations:

• The mess we have got ourselves into is embarrassing and damaging to the UK’s reputation. It is (and will continue to do so) speeding up our declining influence in the world.
• Are we mad, stupid or both?
• That in voting for Brexit, we have entirely over-reacted. We should have just ignored many of Europe’s strictures rather than leave. Many other countries do this.
• That we will be missed in the EU as a voice of common sense, particularly by the Irish.
• That there is no way there can be a hard border between Ireland and Northern Ireland. Its symbolism would be disastrous. Some in the UK, like the ludicrous Boris Johnson, underestimate this. The Troubles are still too fresh in people’s minds.
• Many people in the UK and Ireland are ambivalent about the political direction of Northern Ireland anyway.
• Leaving European security structures such as those that allow for a European Arrest Warrant would significantly damage our safety.
• The value of an Irish passport is soaring…

As the week unfolded and the chaos got worse in parliament, there was growing sympathy for our predicament. And you know how dangerous that is…

The fact is that the hard Brexiteers, in unwitting collusion with the Opposition, have overplayed their hand this week. Theresa May stumbled and should have published the legal advice on her deal; but she will not go quietly into the night now after all the pain and suffering. The meaningful vote might well be delayed if it looks like she is facing a rout.

There is no point in further speculation. Literally anything might happen in the next few days. But what is clear is that the odds of a People’s Vote have got shorter and the odds of a no-deal longer as parliament gets back in the driving seat. That is the only good news in a week of political calamities. To get us through all this, as they say in Dublin, we will need the luck of the Irish…

It was my Company’s annual seminar yesterday and I was really pleased to have Matthew Parris as our guest speaker. The content of his talk, however, couldn’t have been bleaker.

The Government is in huge chaos over Brexit; we are heading for a constitutional crisis; politicians or indeed journalists have no idea what will happen next; the Conservative Party is split down the middle; the Brexit ‘Taliban” wing (my words) of the Party is more than happy to shove the country over a cliff edge; the Opposition are useless. The list goes on…

What is certainly the case is that Brexit will make this country poorer and more irrelevant on the world stage. It is an unprecedented act of national self-harm.

So on this cheery note, here are the odds on possible outcomes. See it as a humble guide to what might happen next:

1. The likelihood of TM’s deal going through the House of Commons in its current form? Despite seemingly insurmountable opposition, enough MPs might just reach the conclusion there is no alternative hence the relatively high percentage score. 30%
2. If the Meaningful Vote fails, the likelihood of TM resigning? She has hung on so far and seems able to take unbelievable amounts of punishment in the name of public duty. 10%
3. A second vote on a slightly amended TM deal? 50%
4. Back to the drawing board with a humiliating request to the EU to delay our departure? This would almost certainly end TM’s premiership but is probably one of the more likely outcomes. 40%
5. New start. Approval of the Withdrawal Agreement only, followed by a negotiated Norway option – partly based on outcome 4) above? Unlikely. The Europeans would probably object, it doesn’t solve the immigration issue and TM would almost certainly have to resign if this was pursued.  But it also has powerful supporters. 30%
6. Implosion of the Conservative Party in its current form? Unlikely. Even they recognise the dangers of Turkeys voting for Christmas. 10%
7. General Election? Least likely option. It would tear the Conservative Party apart. Corbyn as PM. See Turkeys comment above. 5%
8. A People’s Vote? Unlikely as no consensus on the question. TM would almost certainly have to resign or navigate a stunning U-turn. The EU departure date would have to be put back particularly if the Tories seek a new leader. It will only happen if the country faces a constitutional crisis. 30%
9. A new centre party? In the near term 10%. In the medium term 50%

There you go. No certainty in any direction. Nobody really knows what is going to happen but after the economic forecasts of yesterday we will all suffer financially and a constitutional crisis beckons. An environment full of opportunity but only if you are a journalist…

The Brexit deal is a mess. Riddled with inconsistencies and with much heavy lifting to do in the transition period, it simply perpetuates uncertainty for another 18 months. The betting is that the transition period will be extended and this is what really scares hard Brexiteers. They fear we may never leave or not without a “Peoples’ Vote” which becomes more legitimate if it is several years hence. Hooray…they should be scared!

May’s deal leaves the UK as a EU rule taker without representation. It is unique to the UK but not in a good way. We had a unique deal in the first place with an EU budget rebate, being outside the Schengen Agreement and also the working time directive. None of this was discussed in the referendum let alone Northern Ireland, backstop agreements and an accurate, honest assessment of the divorce bill.

The politicians in this country have ironically been in full control of damaging the UK’s future. Congratulations to them. They have succeeded.

Yet it could have been worse… Admittedly a Norway style agreement might have worked better but this was long off the table. That left us with a no-deal scenario and everyone I have spoken to in government says they are sitting on information that would scare the public to death. The complacency of the Tories’ hard right, in the face of facts they well know, is genuinely shocking.

So well done Theresa May for getting some sort of deal. Her tenacity and sense of public duty in crossing a temporary finish line is magnificent to behold. The punishment she has taken from colleagues, particularly from those wishing to remove her at a crucial stage of negotiations, is quite frankly a disgrace; the experience of watching the dramas unfold has been akin to a scary fairground ride or horror movie; the Opposition, not fit to hold that title, has opposed with ignorance, stupidity and self-serving drivel. The Prime Minister deserves a medal, her Party does not.

As for the future? My guess is that TM gets the deal passed, incredible as that seems at the moment, and hangs on to the Tory leadership for longer than people expect. Do Labour then lose patience with Corbyn? Not this side of the election.

As for the Tory Party as a whole? It has lost its reputation for loyalty, competence and common sense. It should fear a new centrist party as much as anyone. And for the mess they have put this country in, sad to say, it deserves everything it gets.

Look at the sorry cast so far; the DUP, Corbyn’s Labour Party, Boris Johnson, David Davis, Iain Duncan-Smith…the list goes on. And now Dominic Raab and Esther McVey. What happened to collective cabinet responsibility? None of them have really succeeded in their jobs or could be perceived ever to do so.

We will have weeks of grandstanding, tantrums and further resignations whilst the small issue of the country’s future hangs in the balance. But in reality will Theresa May prevail? The answer, if she gets through the next few days, is still probably.

And why? Because this deal is the best balance that can be achieved in the face of fierce fire from all sides.

Those at the heart of government know how serious a no-deal would be. It has been under-played to avoid seeming like another chapter in ‘project fear’ but the threats to supply lines, from industry to food and medicines, are very real, as is the damage which would be inflicted on the economy overall. The blasé dismissal of these threats by the hard Brexiteers is an abrogation of responsible government.

The deal that has been negotiated by the PM, as we currently understand it, buys sufficient time to allow those who support Brexit to deliver a clear plan with minimal disruption to the economy. Admittedly, there are hostages to fortune; but at this stage I would rather my captor was the EU than the sorry list of those above.

So what now? There could be more resignations and TM may be challenged for the Tory leadership. I trust she will decide to hold on but who could blame her if she said she has had enough!

If the Tories don’t implode in the next few days, the real battle will take place in the House of Commons. If the PM fails to get the deal through, she could resign or try again. A second failure would certainly lead to an interim Tory leader, a humiliating request to extend the EU departure date whilst there is a leadership election, and then a new Tory leader who would restart the clock. The least likely option is a General Election.  The Tories couldn’t stomach the possibility of losing.

However, the real pressure is now on Labour moderates in the face of Corbyn’s shameless approach to Brexit. Will they put the country’s future in the hands of sensible centre ground politicians, or the right and left-wing extremists on either side of them? The centre is where the electorate lies; it is where the country’s future lies. A General Election, or even a second referendum at some stage, will confirm this.

Meanwhile the time for compromise is over. It is time for ‘muscular moderation’ to reassert itself amongst the sorry mess called Brexit.

Nowadays, you go to bed on election night with a sort of dread of what you will wake up to in the morning. First Brexit, then Trump, followed by the Tories losing their overall majority in the 2017 General Election, giving the whip-hand to the hard Brexiteers.

So it was with a sigh of relief that I woke up this morning to the news that the Democrats had taken the House of Representatives in the US midterm elections. But it wasn’t good enough. The Democrats should have wiped the floor with this most divisive of presidents. The fact they didn’t just confirms deep frustrations with the quality of opposition to Trump.

In the Senate the Republicans gained Indiana, Missouri and North Dakota. There was evidence they would lose Florida but seem not to have done – it has gone to a recount. What is it about Florida?

My recent trip to the US brought home to me the dominance of the Trump agenda. It is about Him, economic nationalism and external threats such as immigration and unfair trade practices. He is everywhere and the Democrats are nowhere. Protest politics from the likes of Bernie Sanders and Elizabeth Warren are not enough when the economy is booming, there is a sense of injustice amongst many sections of the electorate, and race and immigration issues are demonised.

The Democrats need a new centre-ground agenda, a fresh faced leader and real fight. Sadly it won’t be the defeated Senate candidate for Texas, Beto O’Rourke, at least not yet…

So what happens now? Dangers lurk just as much for the Democrats as for the Republicans. Legislative gridlock beckons now the Democrats have seized the House of Representatives but this provides an easy target for Trump and could provide a launch pad for a 2020 victory. Plenty of other presidential incumbents using this tactic come to mind… Clinton and Obama to name just two…Meanwhile Trump can continue his controversial appointments including a slew of conservative judicial ones through the Senate unheeded.

The future of this divided nation is more uncertain than ever and the vicious level of debate takes place in the most benign of economic circumstances. Just imagine when the economy turns as it surely will under a burden of debt, rising interest rates and lack of much need legislative reform?

The US stock market is up so far today. Quite why I don’t know. It is clearly not an accurate predictor of the political risks ahead.

 

 

Nothing on the UK’s Budget this week. It was well leaked and consequently boring. You just hope the Government doesn’t lose its reputation for prudence, which is the only really positive attribute it has left…

More important just now is analysis published this week by the Living Planet Report 2018, compiled by the Zoological Society of London and the conservation charity, WWF, concluding that humans are to blame for a staggering 60% loss of the world’s wildlife from 1970 to 2014, the most recent year for which data is available.

The list of damage done is depressing. Elephants in Tanzania down by 60% since 2009, grey parrots in Ghana down 98% since 1992 and Borneo’s orangutans down by 50% in just 16 years. These are just a few of the alarming statistics.

‘Exploding human consumption’ is the culprit as palm oil, soy plantations, dams, roads and overfishing chew up vast tracts of wildlife habitat.

We have Trump in the White House tearing up international agreements, now Bolsonaro in Brazil who may allow even greater deforestation there and, to cap it all, China has just lifted a ban on rhino and tiger ‘remedies’.

Have we ever had a more irresponsible governing class globally, who seem to be racing to destroy the planet for the next generation? Great campaigns on global warming and removing plastic from the seas are something; but if world leaders don’t play ball more widely, we have no chance of improving our environment in all senses.

And where are young people in all this? If they cared enough and voted, they would be a force to be reckoned with in key democracies. We don’t need votes for 16 year olds. Just getting decent numbers of 18-24 year olds out to vote would be a start. If it is not too much of a stretch, there are similarities with Brexit here in the UK. Like Brexit, the disastrous impact of our actions on the environment and the wildlife we share it with disproportionately affects younger generations. We need a generation of activists. Get onto it!

In addition, the UN needs to be more aggressive, the EU bolder and, yes, governments more interventionist driven by the concerns of the electorate. The dire consequences of the race to ever cheaper food in western countries must be articulated. A laissez-faire approach is no longer an option. There isn’t the time.

 

Yes, it is Trump’s America. Over the past ten days, I have travelled from San Francisco to Milwaukee, Chicago to New York. Trump is everywhere, and that is his secret. Loathe him or love him, the media dances to his tune, rising to his bait or praising him lavishly. CNN makes no pretence of being the Democrat’s mouthpiece, likewise Fox News speaks for Trump. But it doesn’t really matter. All channels including social media follow Trump’s agenda anyway.

Politically, the Democrats are nowhere. They have no clear leader and no clear response to Trump. The only thing I can remember from them during my visit was Elizabeth Warren bizarrely issuing the results of a DNA test proving her claims to Native American heritage. Who cares? As the Democrats drift to the Left, overwhelmed with political correctness, Trump, cleverly advised, unfairly paints them as an extreme, ‘left wing mob’. They don’t help themselves by failing to seem relevant and the strategy galvanises Trump’s base.

Trump’s approval ratings in advance of the midterm elections have just hit a record high of 47%, fuelled by a booming economy, a ruthless focus on immigration and clever politics. Incredible after his behaviour over Brett Kavanaugh and a recent exchange of tweets on his alleged affair with Stormy Daniels. In relation to the former, mocking a woman who gave evidence on her sexual assault and, in relation to the latter, twitter exchanges making references to ‘horse face’, genitalia size and blatant accusations of lying. It should make the US public blush with embarrassment; but they have become immune to the drama and corrosive level of public debate. Trump’s initial response to the murder of  the journalist, Jamal Khashoggi, last week, even if less hypocritical than some US dealings with the Saudis, underpins his lack of moral compass.

Interest in the midterm elections is at a record high but that might not save the Democrats who currently seem on course to deliver a disappointing result against high expectations. Eight years of Trump are as likely as ever.

This is a great country but it feels a line is gradually being crossed on a number of fronts. The economy roars but debt is soaring. Courtesy of Trump’s tax cuts, latest figures suggest servicing this debt now comfortably exceeds $500 billion annually, up nearly 15% on the last fiscal year. This stores up enormous problems for the years ahead. Excess wealth and extreme poverty is widespread. This has probably always been the case but what is new is that any political consensus about the way forward has all but evaporated. Public discourse is often untruthful, vicious and demeaning. Few offer a consensual way forward to this nation’s growing longer term challenges.

Will America hold together? Almost certainly. It is the world’s only superpower (for now) and the vibrancy and energy that got it there is not easily dissipated even with a gridlocked political system and some appalling standards of public conduct. But to be fully certain, it surely needs a ‘political saviour’ to put the country back on course. The problem is that person or party is not currently visible.

 

 

 

 

Phew! Returning from the Conservative Party conference and watching Theresa May’s speech at my desk, with my heart in my mouth, it is now over: positive, optimistic, serious and well delivered. Supporters can now relax!

I didn’t agree with some of the content, particularly on Brexit, but there was some good stuff on domestic policy and it has bought the PM a little more time with the Party faithful. My, does she need it.

And what of her opponents? I am relieved to say that Boris Johnson blew it. His speech yesterday was obviously box office in a dull conference but many of the same people applauding him were back today applauding Theresa May. It was witty in part but long on objectives and short on solutions. It was like musical theatre; nice on the ear, entertaining, but with no definable substance. The growing irritation with Johnson from his parliamentary colleagues is what really matters and the recent photograph of him running through a field of wheat in parody of the PM to many was the final straw…

Nobody really wants the PM’s job before next March (except the former Foreign Secretary) and my betting is that she has another year or two. There is a strong consensus that Theresa May is a real trouper and deserves to be supported now but shouldn’t be allowed to lead the Tories into another General Election. That would still give her 4/5 years as PM and a chance to deliver Brexit. There are worse premierships.

Lastly, a few additional insights from Conference:

• Graham Brady, Chairman of the 1922 Committee, which decides the leadership rules for leader, confirmed in conversation, that some MPs claiming to have submitted a no confidence letter to him on Theresa May have actually done no such thing!
• The PM understands that a fudge to get Brexit over the line on March 29th with the real decisions being taken in the transition period is untenable. The uncertainty and damage to the economy would be too great.
• A no-deal has really serious implications for supply chains and ministers say quietly there is no exaggeration in some of the dire predictions if talks break down. It drives the desire for a deal even if it requires further (limited) compromises.
• Should there be a leadership election, in reality Boris is almost certainly a busted flush with his parliamentary colleagues. The next leader will come from centrists in the Cabinet; Sajid Javid, Jeremy Hunt (although his speech comparing the EU to the Soviet Union was poorly received) and possibly David Davis as a stop gap from outside the cabinet.

There you go. Theresa May survives and ends the conference a little bit stronger. Only a Brexit deal to deliver in a matter of a few weeks!

 

‘Oh Jeremy Corbyn’ has spoken and it doesn’t sound good for those of us who believe in free markets. Fluent for him, with some witty lines, he took apart capitalism at his Party Conference claiming our economic system is broken.

Indeed, there was a flurry of economic initiatives throughout Labour’s time in Liverpool and, uncomfortably, it reminded me of the 2017 General Election campaign. However impractical, sharply defined policies sounding superficially good were showcased, making the Tories, drowning in Brexit, appear flat footed. Umm…Ground Hog Day…

And those policy initiatives will resonate with many of the electorate. Taxes on the rich, massive increases in public spending, hundreds of thousands of ‘green’ jobs, extended childcare, workers on boards, wholesale nationalisation of utilities and a scheme to hand out 10% of the shares of big companies to workers. These policies could really fly and a Labour Government is not nearly as improbable as it should sound. The only firewall is a few DUP MPs keeping the Tories afloat. It all feels a bit precarious.

Of course the shear incompetence of the Labour front bench, the fact that nationalisation doesn’t work despite the failings of some privatisation structures, massive debts which will ultimately be paid for by the ordinary public, all mean many of these policies would be disastrous.

The first problem of course is that many voters don’t remember the chaos of a left-wing Labour Government. The second problem is more intractable; capitalism globally has failed in several respects over the past decade and is losing popular support.

A brilliant article by Martin Wolf in Wednesday’s FT summed it all up incisively. Inequality is rising across the West, driven by quantitative easing and inflated asset prices. Austerity is being borne by the poorest, global corporations avoid tax due to tax structures rarely crossing borders and excessive market liberalism, which caused the 2008 financial crash in the first place, has fuelled migration causing enormous tensions and the rise of populism.

Capitalism should be reformed and in the UK I would rather that was undertaken by the Right rather than the likes of Corbyn.

So what needs to change? As Wolf says, those who govern us should ‘promote a little less liberalism, show a little more respect for the ties binding citizens to one another and pay more tax’. Only in this way can we keep politics close to the centre ground and protect the social liberalism and democratic values that we take for granted.

There needs to be negotiations on comprehensive global tax structures. At home, subsidies favouring the rich such as higher rate tax relief on pension contributions need to end.  The obsession of cutting corporation tax has also run out of control. Planned further cuts should be frozen and companies also need to reform excessive remuneration structures. It is perfectly fair to reconsider reforming NI contributions for the self-employed too so that they are treated equally with other workers. Then there has to be comprehensive social care reform and a commitment to infrastructure spending in the North.

As for immigration pressures, they should be managed but the solution is not Brexit. It is at least a pan-European issue and we are walking away from the table at the very moment our influence is needed.

If there is any bandwidth outside the Tories’ obsession with Brexit, they need a radical agenda to reform capitalism that most of us can buy into. Otherwise Corbyn will do it for them and not in a good way.

 

 

I am a Remainer. Always have been, always will be. But even I felt the urge to shout f**k off at the TV as I watched Donald Tusk give his statement that the Chequers solution for the UK’s departure had been wholly rejected by EU leaders at their summit in Salzburg. The language was blunt, Theresa May ambushed and dismissed. The attitude had arrogance written all over it.

The problem with those EU leaders driving an ever closer union is that they are out of touch with their electorates and certainly the Commission is out of touch with almost everyone. It has fuelled populism and provided an easy target for those advocating Brexit.

In treating Theresa May so badly, they continue to be blind to the consequences of their actions. It may fuel a rise in support for Brexit, and I suspect a rise in support for Theresa ‘the battler’ May. She came out fighting today and pictures of her isolated at the summit in a striking red jacket facing a gang of mostly white, bullying European male leaders will resonate with all sections of the British electorate. A People’s Vote should no longer be seen as a route back to EU membership. Well done Merkel and Macron…not.

However, the UK has always underestimated the strength of commitment of Germany and France to the EU as a political project. Our negotiators in advocating a Chequers solution which threatened this have made the same mistake again. A deal will probably still be done but don’t bank on it. Theresa May politically can’t budge from where she is and has thrown down the gauntlet to the EU. The EU will find it difficult to backtrack from here. There is either some brilliant acting going on or a ‘no deal’ is now a real possibility. Oh dear.

The obvious solution to this impasse is to join the European Free Trade Association a la Norway (see an earlier blog). This could be sold as stage 1 of a decisive break from the EU with an extended transition period leading to further escape routes from the EU’s embrace. Sounds like Michael Gove? Umm…what is this disastrous process turning us into…

The problem with this solution is that it crosses Theresa May’s foolish red lines and she would have to go. A General Election? Corbyn? None of these options are palatable to the Tories so for the time being we stay as we are. A ‘no deal’ is possible with really serious consequence for the EU as well as the UK and all because arrogant European leaders in Salzburg overplayed their hand.