Competence Beats Idealism

~ Julian Samways ~ Leave a comment

The manifesto read well. It was bold, radical even, with policies that might appeal to much of the electorate. And then I read the words ‘Labour Party’ and at that moment you knew it was doomed to failure….Memories can be selective, so whatever the shortcomings of state ownership, policies that nationalise rail, water companies and soak the rich in today’s climate of frustration strike a chord. However, we are also in a period of immense challenge as we seek to leave the EU and only a minority would entrust the next few years to the current Labour leadership. It is simply not up to the task. The individuals on the whole are poor quality, divided and often ideologically highly unpleasant. Hopelessly split on their response to Europe, they lack credibility on this overarching issue alone, without adding responsibility for a larger State on top.

And now to the Conservative Party, or should I say Theresa’s Team. With solid competence the front bench led by her largely look the part. The manifesto was a major upgrade on the short-term populism of Cameron, yet in many ways felt low key. It seeks constructive solutions to long term care, casts a baleful eye on free markets to make sure capitalism thinks more carefully about all stakeholders, and starts to reverse a disproportionate share of wealth going to the older generation, regardless of how much money they have, at the expense of the young. And on Europe, whilst a hard Brexit would be a disaster, I can already see room within a tough, competent approach for making gradual concessions on exit bills to be paid and the length of transition period.

As for the other parties. Oh dear. UKIP are a busted flush. The SNP may have been out-manoeuvred. And what happened to the Liberal Democrats? One surprise of this election is that the Remainers do not see them as their last hope. Their leader appears somewhat lightweight and the failure to rise in the polls again seems a victory for competence over idealism.

Manifestos are irrelevant and the Conservative Party is the only game in town. In the long run this is not good for either politics generally, or the Conservative Party in particular, but it feels right for now.

Macron and the UK

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A collective sigh of relief could be heard across Europe as Macron’s clear victory was announced. With Angela Merkel quietly accumulating regional victories in Saarland and now Schleswig-Holstein she should be a shoe-in in Germany in September and with Renzi’s comeback in Italy it is quite like old times…well no. Marine Le Pen doubled her father’s 2002 vote and will focus on 2022 whilst Britain is leaving Europe. The Five Star Movement in Italy is strong and populism remains a powerful force. If Europe falls back into complacency, it will only have itself to blame if its future deteriorates further. President Macron is simply a breathing space.

For the UK, it is said Europe wants a strong Theresa May to negotiate with and so should we want a strong Europe. A new French President with real influence and a clear commitment to raising Europe’s game is in Britain’s interest. With a clarity of purpose and sharp red lines on both sides, Brexit negotiations may not take less time but they will be cleaner and this is what Macron’s victory brings.

It was pointed out to me by a senior Conservative source that there is no such thing as a hard or soft Brexit – it is a pointless distinction. There can be no compromise on freedom of movement from both sides so we are leaving the single market full stop. If the Conservatives are returned with a large majority, however, the Prime Minister will have much more room for manoeuvre on the length of transition and exit bills to be paid aided with some irony by a rejuvenated French, German axis. These diminished ambitions is what a soft Brexit now means

Snap UK election could mean a smoother Brexit

~ Julian Samways ~ Leave a comment

The Prime Minister, Theresa May, today called a General Election for 8 June. She will have to negotiate around the Fixed Term Parliaments Act which prohibits early General Elections without a two thirds majority.

However, as Jeremy Corbyn, the Labour Party Opposition Leader, has already welcomed the election, this shouldn’t be a problem.

So what are the implications of this Election? Obviously, short term uncertainty and a media agenda which will be further dominated by political concerns. Longer term, however, this is likely to strengthen the Prime Minister’s hand and ironically that of the soft Brexiteers which is good for the Financial Services sector generally.

If, as the current opinion polls suggest (Conservative lead of 9-23%, weak Labour leadership etc), the Conservatives win the election, Theresa May will have a stronger hand in confronting the Hard Brexiteers in her own party, negotiating terms much more amenable to a smoother exit.

The pro-European Liberal Democrats are also likely to gain seats and the weak Labour Leader will subsequently be replaced most likely by a stronger and more pro-European candidate offering stronger opposition. The Scottish National Party north of the Border may do well but so might the Conservatives too from a rock bottom base. The UK Independence Party are hugely diminished. So, all in all, on balance, good news for Remain/soft Brexit supporters.

Coming hot on the heels of the general election in the Netherlands and the first round of the French election due this coming weekend, clearly today’s decision simply adds another level of complexity to the European project.

From a communications perspective, it will be interesting to see the manifesto promises and debates from each party over the coming weeks, and whether this may present any challenges – or indeed opportunities – for investment firms.

Longer term analysis of what this all means for Britain and its future can only be seriously considered once the election has taken place but even in these turbulent times, this – at least for now – seems one of the more predictable elections in terms of the likely result.

Brutal Brexit Comes Out to Play

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So it is happening. The Letter triggering Article 50 has been sent and the UK is on the path to leaving the EU. In the run up to this momentous week, the Hard Brexiteers have run an unintentionally brilliant strategy. In demanding that the UK has a complete break with Europe they may force the end of the Union. With the SNP voting for a second referendum and the Nationalists scoring victories in Northern Ireland, by the time we leave we may be so small that nobody notices our departure…. And that is before London declares UDI and the Welsh start stirring….

But seriously, never has UK politics been so challenging and for many so depressing and who would have Theresa May’s job? Trapped between the public’s antipathy to current immigration levels (the prime reason for Brexit whatever the ‘elite’ anti Europeans say) and the economic nihilism of the Hard Brexiteers, she has had no alternative but to pursue the current, and skilfully implemented parliamentary path to full Brexit.

But how do firms, particularly in the financial services sector, conduct their business against the backdrop of all this uncertainty. First, they must engage with their industry bodies to ensure their interests are protected in negotiations. They should be voluble in criticising any cavalier approaches to maintaining a comprehensive trading relationship with Europe, making politicians realise the full implications of a lack of agreement on such issues as regulatory regimes for example. At the same time, a careful balancing act is required to reassure customers of their commitment to the UK and ensuring as much as possible it is business as usual. Communication professionals should be at the top of their game as they have never been so important in delivering this careful balancing act.

The UK in recent months has often seemed a much more inward looking, crueller and consequently diminished place. Combined with longer term economic forecasts of weaker growth confirmed in the recent Budget, the last year may seem an unprecedented period of self-harm. Government will essentially be on hold for the next two years, with much needed reform of a range of services delayed. Political risk will dominate. Never has business, and the business of communications, been so important in cutting through the rhetoric, to protect the future economic welfare of this country.

President Trump: Let the Show Begin

~ Julian Samways ~ Leave a comment

Rather like waiting for a dental appointment, you want the pain to be over as quickly as possible and so it is with Donald Trump’s inauguration.

It is upon us and The Donald (unless those tapes appear….) is the 45th President of the United States. No bluster, no conspiracy theories, no insults. It’s your show now Donald and everything that happens from here on in, is on your watch.

And what should we expect? Is this a march backwards from 40 years of liberal democratic progress or a mere blip on a continuing path we have complacently taken for granted? Well, three points, one bad (really bad) and two good (one potentially very good).

First, the bad. In this new Administration, Trump is the least of your worries. Vice President, Mike Pence, is far more socially conservative and may signal an erosion of liberties we take for granted on this side of the Atlantic far more actively if he became President. Then there is the cabinet…. who could independently tear up the Iran agreement, embrace Putin (although splits are appearing), walk away from environmental safeguards and tear up global trade treaties. That is before the appointment of an Israeli Ambassador who decries a two state solution. This has major implications for us in the UK and beyond. Umm…

And now on to the good points. First, this is likely to be an Administration which understands business and markets and may, in embracing Putin, be cannier in sorting out Syria and ultimately curtailing Putin’s expansionist ambitions. In the case of Syria, a resolution will aid the pressures of immigration facing Europe’s borders.

The second good point however may be most important of all and certainly most significant for the UK as that the reasons for a Trump victory are correlated with Brexit. It is about those who have politically lost, principally the moderates from the centre left and right, understanding and learning from their mistakes. You can’t win elections not listening to those who have been side-lined by globalisation. You can’t win elections without understanding pride in one’s country and shared values is not something to be sneered at. You can’t win elections without being a muscular moderate. Being as focused and ruthless in winning the argument, just as the further Right has been, is something liberals must learn. No more hand-wringing please.

So what does all this mean for us? If liberal democracy re-calibrates its message to a wider audience and toughens its approach, 2016’s events will be seen as a corrective blip. We don’t need a hard Brexit and we don’t need to fear an isolationist America if our relationship with Europe remains close. And, for all communications professionals, now is the time to start preparing to confront fake news in social media more aggressively. Lastly, you never know, when a Trump presidency is not depressing and worrying, it may even be comical. Hold on for the ride…

You will only miss it when it has gone…

~ Julian Samways ~ 1 Comment

On a tide of populism we have experienced Brexit and now, with a gasp of disbelief, the election victory of Donald Trump. Liberal Democracy R.I.P? Possibly.

But we should not really be surprised. Trump’s popularity was trending upwards far more than his manifest lack of suitability for the presidential role should have allowed (hence my desire to campaign for Hillary Clinton on a recent business trip to the US) and the reasons he succeeded are clear.

It was for the same reasons that Britain voted to leave Europe. As I have written before, globalism has disenfranchised many voters and not only issues such as immigration but the increasing disparity of wealth is fueling discontent. (E.g. FTSE CEO’s pay up 10% in 2015, wages largely stagnant in the US since the 1970’s, 75% of the wealth held by the top 10% … etc).

The signals from democratic elections are a stark warning. We operate in global markets. The capitalist system as a whole, upon which liberal democracy resides, owes it to voters to be more accountable, meeting the needs of society as a whole.

So correcting short termism in markets, from company behaviour and the actions of asset managers, to the needs of asset owners, is a start. It will help ease some of the current tensions between business and society, reversing the tide of populism. Aligning more closely the interests of all major stakeholders; employees, shareholders, suppliers, customers, creditors, communities, the environment is a crucial initial step and the sensible parts of the media are already on the case.

A while ago you would have become a millionaire if you had bet £1.00 on Leicester winning the Premier League, Brexit and a Trump victory. Odds on Marine Le Pen winning the presidential election in France are now 7/4. Liberal Democracy R.I.P? Possibly. For so many reasons you, will miss it if it goes.