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Tories have profoundly damaged the UK. You Should Join the Tories.

2016 happened because decent people don’t join political parties, leaving the business of Government to socially inadequate, physically repellent gits with an axe to grind*. In normal circumstances, this makes politics easier for genuinely impressive people to progress through the flotsam of monomaniacs. To be a Grown-up in the Tory Party 1997-2010 was to be able to consider an issue beyond the EU. For Labour it’s all about not dreaming of Strike Action by “the workers”. Thus the Liberal Centre consolidated a hold on the country, but became complacent to the poison seeping into parties even as the Smug centrist consensus made everyone fat and rich.
There has been a steady, and persistent hollowing out of the political parties. Labour used to be allied to a Trades Union movement that delivered services – health insurance, education and so forth to its members. The Trades Unions of Pre-War Britain where an overwhelming force for good. Atlee’s welfare state nationalised all the good the Trades Unions used to do, and so corrupted both the principle of welfare (now far, far from Beveridge’s original vision of low, universal payments like Child benefit, topped up with contributory elements) and the Trades unions which became a mere tub-thumper for more state spending. This left the Labour party with the sole purpose of defending a welfare settlement that is not under threat, and a Trades Union movement whose purpose had been nationalised so simply became resistant to all and any reform which might make the system as is function better; unions a mere vested interest of public-sector workers. This isn’t a place where people capable of holding more than one idea at a time feel comfortable, and so the Labour party was colonised by people who think not shaving is a political act.
This malodorous and poorly groomed cancer has destroyed the Labour party. It’s over, there’s no point being in Labour unless you’re a Identity politics obsessed Corbynite who laments the end of the Soviet Union. 
Labour, 2010-Present
The Tories at least had the sense to try to vomit the most toxic of their nutters into a bucket marked UKIP, a bucket the dog is unfortunately returning to. The Conservative party my Grandfather joined (from CPGB, as it happens, Labour even back then were cliquey dick-heads) used to be a forum for the upper middle class (and anyone who aspired to join them) to meet, mate and do business. But the horrible young Tories of the ’80s, and the Euro-nutters of the ’90s meant that by 1997, the Tories were only really suitable for people who were prepared to discuss “Europe” endlessly in ever-more foaming tones, persuading themselves that the EU is a historic enemy like Napoleon, the Kaisar, Hitler or the USSR. To their credit, the Tory Leadership has long known what to do. All David Cameron ever asked of his party was to “stop banging on about Europe”. They couldn’t stop picking at the scab, and the result is a catastrophe that has already crashed the Pound, weakened the UK (perhaps fatally) and may yet cause a political crisis in Europe and embolden Putin to start rebuilding the USSR.
Tories, 1997-2010
The more say over policy and leadership given to the membership, the more the membership has dwindled (unless, like Labour, the membership criteria are designed to invite entryism for the purposes of choosing a leader – by people who’ve been quietly loyal to the Bennite project for decades). Giving members a say in who leads the party is absurd. Who the prime minister is, should be a matter for MPs, and MPs alone. It is they who must give the Prime Minister a majority and internal party democracy risks, well, exactly what has happened to Labour. 
However, that Rubicon has been crossed. Party members now expect a vote on the Leader. The question is what to do about this, and the answer is to choose to be a member of a party at all times, hold your nose if necessary. Do NOT identify with the party, but consider which is best placed to advance your objectives. At the moment, the foul bigots, monomaniacs and morons of UKIP are being re-absorbed from a position where they can do little harm beyond foaming at the mouth and masturbating to Daily Express editorials, to one where they can choose the next prime minister, and Mrs May isn’t a healthy specimen. The ex-‘KIPpers chance may come to choose their PM sooner than expected.
I’m often asked “How come you’re still a Tory?”  
Were the Liberal Democrats stronger, I’d be considering them, but I don’t trust them on electoral reform (about which they’re as silly as Tories are about Europe). But as the Lib-Dems are so far from power, I don’t see the tactical benefit of leaving the Tories in a huff, and I broadly agree with the Tories on everything except Brexit. What I’m worried about is the ‘KIPpers who’re returning to the fold. Unless you want a foul, divisive and ignorant Brexit headbanger to replace May in 2023 or so (Gove for example), Join the Tories, because thanks to Labour’s meltdown, Tories and Tories alone will choose the next PM. All not joining a party does is strengthen those (*we) weirdos who still do. Labour moderates, disgusted by Corbyn should cross the floor to the Tories or Liberal democrats, instead of flouncing off to the V&A and opening the way for UKIPish Brexit-o-twats to fight and win a by-elections under Tory colours. Were Tristram hunt now a Tory, not only we could soften this brexit idiocy but also signal just how broad a church the Tories are. 40% of Tory members voted Remain. The tribe that needs to understand the value of a bit of entryism is the liberal centre, who need to abandon any loyalty to their Parties and go to where the power is. The Liberal Centre is complacent because they have for so long occupied the ground sought by all parties, they’ve not really had to compromise. 
At the moment the business of Government is, and will be for the foreseeable future, a Tory-only affair. That need not look like Nigel Farage, but it will, if Remainers abandon the Tories entirely.

Brexit: Four scenarios.

There has been a significant rally in markets, if not yet in business sentiment since the Brexit referendum. Much of this rally is down to currency, as the UK local (stocks with >60% UK earnings) remains down, especially if you measure it in $ terms. But there has been significant relief that the chaos of the first few days didn’t last. A remainer with a safe pair of hands promised to deliver. “Brexit is Brexit” became the mantra of the prime-minister after she won in a contest which reinforced the Conservatives’ reputation for ruthless efficiency. I doubt May wants to go down in history as the PM who ended the UK by triggering article 50 and precipitating Scottish independence, but nor does she want to go down in history as the PM who “stabbed UK in the back” and split the Tory party for good by refusing to deliver on the referendum result. So she’s done, skillfully, what all good politicians do in a tricky spot: Act like a Rugby full-back: take a sidestep and boot the ball into touch.

To this end, David Davis and Liam Fox, two prominent campaigners for Brexit have been given their own Brexit playpens to try and thrash out what they want. They are, of course learning on the job. Brexiteers are the dog that caught the bus: they don’t know what to do with it and many of them, like Michael Gove are being scraped out of the tyre treads as we speak. It’s clear neither Davis nor Fox have any clear idea what “trade deals” can deliver, or what the single market is, or why it’s valuable. But they’ve been barking their half understood points now for so long, that when asked by grown-ups “what do you mean?” they blink stupidly and repeat the same turgid tropes as if that will solve the many manifest problems that were pointed out at such length two months ago.

Brexit is, remains and was always going to be a terrible idea. This will slowly dawn on the people charged with delivering it. It’s going to be very very hard, will require the total commitment of the entire UK state to deliver a good outcome, as well as skilful diplomacy and the goodwill of our European partners. The Brexit Referendum was not binding, it was explicitly advisory. The apparatus of the UK state has little enthusiasm for Brexit: not the civil service, not the PM, not the diplomatic corps and there’s little goodwill towards the UK in European capitals. There are a great many who will try to overturn the result. And there is more than an outside chance they (we) will be able to do so. “Brexit” may mean Brexit for now, but no-one’s defined Brexit or our post-brexit relationship with the EU. Because “no relationship” isn’t an option. 

Several things are already clear: Article 50 is not adequate for the task. Greenland (population: several polar bears) had one issue, fish, and leaving the EU took three years. Do you think the world’s 5th largest economy can successfully extricate itself in two after 40 years in the club? No. Article 50 was inserted into the lisbon treaty in order to appease UK brexiteers, and was never intended to be used. (The moral of the story: never try to appease the unappeasable),

Every month, the triggering of article 50 gets pushed back, from “by the end of the year” when May came to power to “some time in 2017”. As 2017 draws nearer, and the UK is still no closer to working out what it wants from Brexit, people will realise that the French and German elections will enable the UK to *start* pre-article 50 negotiations with the new Governments in late 2017. This pushes article 50 back to 2018 at the earliest. This is the Head-Banger position: “Article 50, come what may and to hell with the cost”.

But once you get into 2018, the UK general election is hoving into view. As should be clear, Triggering article 50 is likely to provoke a recession, and if you want a discretionary recession, it’s probably best to get it out of the way early in the parliament. Few parliamentarians want to lose their seats because of an angry electorate being given what they asked for. The electorate’s memory is short, and you can take credit for the recovery afterwards. So it is more likely that the Conservatives will go into the 2020 election (which they will probably win comfortably) with a manifesto commitment to trigger article 50 (or leave in some other way) in that parliament. Ironic really, because the person who made the party electable after 13 years in the wilderness asked one thing of his party: to “stop banging on about Europe”. His legacy: a decade of talking about nothing but.

And by this point the rest of Europe will really rather want us to shit, or get off the pot rather than having Brexit clog up the machinery of EU governance for another decade. Anger at the UK for having the temerity to leave will have faded, and cooler heads who see a mutually beneficial solution will be best all round, will prevail. Already Germany is making friendly noises about a special UK deal. Martin Roth:

‘Given Britain’s size, significance and its long membership of the European Union, there will probably be a special status which only bears limited comparison to that of countries that have never belonged to the European Union’

This seems reasonable. But it won’t be delivered quickly, nor will it be easy to deliver it via article 50. More likely it will be delivered via a new treaty with the EU some time in the next parliament.

By which time the deal we’re likely to get is taking shape. And It’s looking likely that the best deal on offer was the one we already enjoyed, perhaps with some bone thrown to the UK on freedom of movement. But remember we’re talking about a situation in which a New Parliament, unbound by any constitutional obligation to trigger article 50 beyond the manifesto, has negotiated a new deal within the EU. The 2016 Referendum would be ancient history, and there will be calls for the new deal to be put to a referendum because “a mandate is needed”. And the madness stalking democracy will have passed. And so if there is a second referendum, this time, remain will probably win. But that happy outcome remains an outside chance.

Article 50 delivered some time this parliament: 20% (& falling)
Article 50 triggered early next parliament: 30%
Leaving the EU, but not by article 50, possibly following 2nd ref on “the deal”: 20%
Second referendum on “the deal”, remain wins: Article 50 not triggered at all: 30% (and rising).

The longer we wait for article 50, the less likely it will be triggered, the less likely we leave, and the greater the likelihood, if we do leave of a good deal, mutually beneficial to all concerned. Those clamouring for “Hard Brexit”, now are mainly Turnip Taliban, obsessed by immigration and unconcerned by the economy. Thankfully, May seems to be in no hurry, the Chancellor said Brexit would take 6 years, and most of the Brexit hardliners have already vomited themselves into an increasingly irrelevant bucket called UKIP. Either way, in or out of the EU we’re probably watching the slow-motion betrayal of the most fervent Brexit voters. Their howling at the EU was nothing more than resentment of the modern world, and so they are unappeasable. So there is no point trying to please people who simply voted to smash something people they resent, valued.

This is as it should be. No country which aspires to greatness can for any length of time have its agenda set by ill-educated, elderly losers, waiting to die in depressing hell-holes at the end of the line. Thankfully, with sensible people back in charge, the outlook is improving in inverse proportion to liklihood of Brexit.

So We Have a New PM. Yes, this is Democracy.

So Theresa May is going to be Prime Minister soon. We live in a representative democracy, not a direct one, and the Conservative party was elected by an electorate who (could have) had the full knowledge that Cameron wasn’t going to contest the 2020 election. May is part of his top team, and represents continuity. There is no need for an election, and she has a job to do.

I suspect Brexit is going to happen, but May will be more likely to manage to remain in the single market. The worst elements of the Brexit camp have now been sidelined. If the immigration obsessives can be thrown under the bus in favour of “passporting for the banks”, so be it. After all, immigration wasn’t on the ballot. “Democracy” you see…

If there is to be a bright economic future for the UK, the single market is probably part of it. Quite what benefits this brings compared to being in the EU is beyond me; the faith in “free trade agreements” to be part of this are likely to be overdone. Within the single market, we will still pay in, and obey all those rules that so “hamper” the UK (which was until a couple of weeks ago was… um.. the best performing developed economy, and no brexiteers could point to unnecessary rules). What the UK still exports are unlikely to be particularly hurt by small tariffs, and FTAs rarely cover services, which the UK is good at.

If we can remain in the Single Market via some sort of bespoke deal, with some token bone thrown on free movement, then that might be a compromise which will end the issue that has poisoned politics for so long, for good. The crucial negotiations to withdraw from the EU are going to be handled by grown-ups. rather than a tryo of questionable competence.

My guess – a framework for Brexit will be negotiated with partners after the French and German elections in 2017, with article 50 to be triggered at some point within the parliament. However, I see no reason why those of us who want to remain, should stop campaigning for it to not be. Democracy, after all, is a process, not an event. One man, one vote, once is the “democracy” favoured by dictators. If we can get a new deal with the EU, perhaps one with a significant changes to the relationship, there might be grounds to stay in the EU.

I suspect the one risk is that this process will not be quick enough for the “bastards” (John Major’s description…), who will want article 50 triggered more or less immediately and who will sniff betrayal at every step. The “Remainiacs” may well get stronger as time passes, and of course the bastards have a point that the longer before article 50 is triggered, the less likely it will be. If you don’t like this, UKIP is over there, folks. You know what to do. Don’t let the door hit your arse on the way out.

The Mary Whitehouse Experience

The “Bastards” who see the British membership of the European Union as the central question of politics are not only petty-minded nationalists. They are also mostly small-minded, authoritarian christian bigots. They aren’t just coming for free movement, they’re against gay marriage too. They’re against most of the modern world. It’s true, I do agree with them on the economic questions of the 20th century, but that no longer matters, the economic liberals’ victory is pretty comprehensive.

Leadsom represents the conservatism of Mary Whitehouse, not Margaret Thatcher. This is why Leadsom has such enthusiastic support from UKIP. She is the culture war, as well as the brexit candidate. This isn’t about Europe. It’s not about economics. It’s not left and right. It’s open vs closed society. 
They don’t just want to reverse the European Union, but roll back the “permissive society” of the 1960s. These are the purse-lipped miserablists who write into local papers complaining about “filth” on TV or “hooligans” in the street, who in reality are just boys playing football. This is the racist aunt, who now feels confident to say she doesn’t like Mrs Patel in no.34 because she smells funny. This is the Daily Mail (Paper, not website) made flesh, obsessed by what other people do in the bedroom, and absolutely terrified someone, somewhere might be having fun.
This is where we are, when Theresa May is the standard bearer for the liberal cause. What a time to be alive.

Labour and Tory are Electoral Coalitions Which Have Been Broken

The referendum last week as a fundamental break in British politics. While article 50 remains uninvoked, I remain hopeful it won’t be. There is now a pro-European backlash representing nearly half the country. Maybe more, given the buyer’s remorse from leave voters who didn’t expect to win and now realise the consequences are potentially vast.
Whatever, the die is cast. There were 2 leave campaigns. One, an open-society, free-trade vision with which I have some sympathy. Already, the USA, Canada, Australia and Ghana have reached out for free trade with us. New Zealand, those dear, distant friends (except during the 80 minutes of a Rugby match) have gone further and offered their trade negotiators to boost the UK’s corps of 12.
This is welcome, and it’s a start. But it won’t go close to replacing the benefits of the single market. Not least because many of the benefits of free trade with these Nations we effectively enjoyed or will have enjoyed anyway one day within the EU.
This free trade vision of post-brexit Britain was not the loudest voice, and the main effect of the brexit referendum was to draw the battle lines between those who desire and open Society, and those who desire a closed Society.
If the Tory Labour split was mainly about economics, taxation and redistribution, a battle the free market privatising Tories comprehensively won. the new culture war is about what sort of society we want to be. Imagine this split looking something like spectrum between the Liberal Democrats, and UKIP. The current electoral coalition is no longer fit for purpose.
It looks like the party that has brought this catastrophe upon us, will end up being the chief beneficiary in electoral terms, at least in the short term. If the Tories manage a coronation of Theresa May and not go to the party in the country with a final shortlist of two, they will have achieved a vision of competence that perhaps they no longer deserve.
Assuming no major disaster beyond that expected, labour being in complete disarray will be unable to capitalise on the chaos of the brexit negotiations. Furthermore labour have been abandoned by large swathes of the electorate in the Heartlands of the North, adding to their wipeout in Scotland.
John Major’s “Bastards” however, are working hard. Having won the first battle in the culture War they are looking to press home their advantage and install one of their social conservative candidates as prime minister. UKIP candidates already rejoining the Conservative Party.
However it is premature to write off the Conservative Party to the morlocks just yet. UKIP will become an electoral Force across large swathes of England. Corbyn will have achieved his function and destroyed the Labour Party reducing it to a few hold out in a few cities.
If UKIP does indeed become electrically successful, expect to see the right of the Conservative Party move that way. This leaves a space within the Conservative Party for the sensible elements of the Labour Party who have come to terms with the twentieth century’s economic settlement to make common cause with their fellow open Society advocates across the floor of the commons.
Just as the Labour leadership election going on at present is about the ownership of the Labour brand, (does it belong to hard left socialist, or the social Democrats of the centre?) so is the Tories’. If Leadsom wins the leadership election, then the Tories will move right and absorb UKIP. May, supported almost exclusively by the Tory MPs who favoured remain, Leads the liberals, but whichever way The Tory Party will dominate politics for the foreseeable future (about 3 days at present…)
The Be.Leavers may think this choice of Prime Minister is about Europe, but actually it’s about an open vs a closed society.
The European Union was a hard institution to love. I was certainly a harsh critic of it. It’s hubris in assuming the trappings of a state, are a large cause of the resentment. Unbecoming arrogance from the panjandrums of Brussels didn’t help.They revelled in the myths of their omnipotent Power, myths which fed the Paranoid delusions of the people who want to leave.
However I never felt compelled to make destroying it my life’s purpose. I suspect the EU is an institution who’s value only becomes apparent when it’s gone. It seems that the Scots viewed Europe as something of a counterweight to the hegemon to their South. As such the European Union had become one of the ties that bound the Union together. The the European Union was Central to the Anglo Irish settlement.
Above all above all the European Union was a crucial part of the Post cold war security architecture of Europe. It seems likely that Russia under Putin will get a much easier ride from a European Union that does not contain the United Kingdom. We are weakened. And Putin is emboldened. As are the idiot populists of the democratic world, who seek to thow up borders, pull up the drawbridge and sulk at the modern world.
I’ve seen this flick before, and it doesn’t have a happy ending.
This also comes down to identity. We have seen a rise of English and Scottish identity, and a fall of British identity. Britain is the loser. British is an identity into which it is much easier to assimilate  new  citizens. And as for me, I am not English. I am British. I am not European, I am a man of the West. Brexit has divided Britain. It’s risks dividing to West. And it almost certainly will makeus  poorer weaker, and less able to confront the new threats of the world. It is, for most people who voted for it, a vision of little England, not caring about the Scots, or the Irish, or our friends and allies accross the continent. This isn’t the United Kingdom of Great Britain and Northern Ireland I have served most of my adult life.
I Lament the loss of the world European Union was trying imperfectly to create: one of trade openness and political stability. A Unified West Staring Down our enemies and keeping the world free. If there is one lesson of history it is that revolutions eat their children, and nothing good comes from smashing functioning institutions.
Pour your bile into the comments. I have chosen my side. It’s whoever stands for an open Society, free trade, low taxes, constitutional conservatism and economic competence. That half of the Conservative Party still exists.
Just.
My Great Britain still exists.
Just.

Well, The Wish Has Been Granted

So, the polls were rightish, and the Turkeys did vote for Christmas. A sledgehammer has been taken to the post-cold-war security architecture, and Vladimir Putin is happy.
What Next?
Well. There is much that can happen. Article 50 will be invoked by the next Prime Minister, but still needs to be ratified by Parliament. So it is possible a General Election could get in the way. A new parliament will not necessarily be bound by the referendum result.
In the looming crisis, I reflect on this: The Tory right couldn’t help but pick at the scab for 40 years. All they needed to do was, as Cameron asked, stop “banging on about Europe”, and they coukd have been in government for 20 years. But the Tory right’s mania about Europe couldn’t be assuaged. And in giving in to it, it seems likely they will shatter not just the EU but the UK. Scotland is Angry. The Dutch, Danes, Swedes, Greeks and others will want a referendum too. Which is why I don’t expect the EU to play nice.
Welcome to the fun new Zero-sum world. It’s probably now in the UK’s interest to see the European project fall. No-one will be better off as a result.
Let’s negoitate a deal with the EU. Put it to another vote (so we know what we’re voting for this time). Obviously the Be.Leavers who believe so fevervently in “democracy” will understand, then invoke article 50.
Or, an EEA-style agreement with free market access and free movement satisfies the demand to leave the European Union, with less damage. The people who thought the referendum was about immigration will be disappointed, but I really don’t care what such people think.
There are no upsides to what has happened. I hope the UK survives. I hope there isn’t a knock on populust surge around the democratic world. I hope Vladimir Putin doesn’t get tempted to try to break NATO too. I hope the recession isn’t too bad, but it’s probably just that it falls hardest on the areas that voted for it. Which it will. The one part of the the UK that will be fine no matter what is the city. The government will protect its interests, and being “offshore” may even help it.
As for the Tory party? It has got what it has long wanted. There will be a recession. The reputation for economic competence, hard won by Cameron and Osborne, has been sacrificed on the European altar. Again. Be careful what you wish for.

Referendum Prediction: On Polling Day. And After.

You know my views on this, and it looks like sanity will prevail over the dread forces of nativist populism.

I think a few Tories who threw their lot in with Leave will wake up relieved, as if from a fever, that their frenzy didn’t result in too much damage. There hasn’t been all that much Blue on Blue action whatever the papers say. I think Gove will not be welcomed back. His hyperbole was too great. But Gove aside, the Tories will find it easier to put the party back together than pundits suggest.

Farage will try to do to England what Nicola Sturgeon did to Scotland. He will tour the country whipping up anti-establishment feeling in all the worst places. Mostly, he will fail, but It remains to be seen whether UKIP can supplant the Labour party in its abandoned heartlands. The habit of voting and activism may have been regained amongst the working class. This is a cure to the ennui they feel, in and of itself. They do matter, and can change things. After all, whatever happens, they just have.

As for Labour, who went AWOL under their laughable leader: well quite a few of the grown-ups will have been working with the saner Tories, and these tribes may find they don’t hate each other quite as much as they hate the more extreme elements of their own parties. This is the new divide in politics: Cosmopolitans vs Nativists, Mangerialists vs Idealogues, those asking “what do we do” vs those asking “whom do we blame”. This fun new culture war doesn’t tie down nicely along party lines. It spreads across groups more used to voting on economic solutions, not matters of identity.

This yawp of dissatisfaction, mainly by people which Labour elite once thought they could rely upon, without having to listen, represented a great wail of anguish at the modern world, which settled upon the EU as a scapegoat, may well sweep the Labour party away.

There are too many working parts, tribal loyalties run too deep. Personalities too difficult to see from afar. UKIP, Tory right and Labour left are not a comfortable coalition. Tory and Labour centrists? Or maybe there will be a new Social Democratic party. Or maybe Labour’s centrists may attempt a takeover of the Liberal Democrats….

As for the EU, the panjandrums know deep down, they narrowly dodged an existential crisis, brought about by arrogance, hubris and a tin-ear. They would do well to read this.

But sanity prevails. The broad west can now get on with being the shining light on the hill, the example to other societies for riches, productivity and freedom, to which huddled masses not lucky enough to be born in one of our countries will struggle and risk death to get to. Immigration will remain a fact of life, for as long as the UK is a better, freer, happier place to live, offering more opportunity than elsewhere. All we need is the French to reject Le Pen, and the Americans to reject the Trump. Luckily both look like they will do so comfortably.

Nothing’s perfect. Here’s my Rallying cry:

WHAT DO WE WANT?
GRADUAL IMPROVEMENT!
WHEN DO WE WANT IT?
WHENEVER ECONOMIC CONDITIONS ALLOW.

Not one to get the masses to the barricades, but it’s delivered more wealth, happiness and prosperity than any other.

'Leave' Has Just Lost its Economic Argument

Michael Gove, who is likely to be the person most responsible for setting the parameters of Britain’s negotiation with the EU after a leave vote,  indicated on the BBC Today programme the UK will not stay in the common market. We would seek a free trade agreement like Albania, or Iceland.
This means the risks of #brexit have gone up. The prospects of a risk-free slip into the EEA have gone. We must therefore run the risk of the foreign investors on whom we rely to cover are triple deficit (current account, fiscal and trade) going on strike.
Where this to happen, In order to tempt them back, the Bank of England would need to raise interest rates , which slows growth. The UK may not be a default risk , but as a country with I need for constant inflows of foreign capital we may need to print more money to cover the bills . Investors will therefore need a higher return to compensate for the risk.
This is one mechanism by which leaving the EU could slow growth. There are others. The UK may become a less attractive place for foreign companies to invest. And not just because of access to the single market. For all its faults, the EU has been consistent in its application of laws surrounding state intervention in business and preventing government’s interfering too much in markets. Leaving risks that benign business environment.
The risk therefore of a catastrophic cycle of interest rate hikes and currency issues has to be set against the sheer paucity of the potential benefits from leaving the EU . Just what are we hoping to achieve? Why are we risking prosperity in this way?
An honest answer would make use of Gandhi’s aphorism ” it is better to be governed badly by oneself, than well by other people.” If it is simply about democracy, then supporters of brexit will need to be honest about the potential economic costs.
The post EU UK could become the free market prosperous business-friendly place of brexit fantasy, but it could equally become a paranoid insular protectionist hell hole of UKIPpery, or worse yet, the Labour Party could nationalise everything in sight. These are both outcomes European Union protects us from.
The problem is brexit becomes a tabula rasa on to which everyone can paint their own ideal post EU UK . Then arguing against brexit becomes an argument against everything that person holds dear. Many have spent decades seeking confirmation for a prior belief that the EU is behind all the bad things. Nothing can persuade these people that leaving the EU isn’t a panacea to solve all the UK’s ills. It’s a peculiar Mania.
The lesson of the ERM debacle is not that the EU is evil, but that the UK should not have joined the euro, and we didn’t. It doesn’t follow we should leave the EU too. The EU is not the enemy. The UK is not going to join the euro. EU is not going to Force the UK into a superstate, a European army, or a single currency.
The European Union is a collection of some the freest, most prosperous and happiest democracies on Earth. The Euro project has impoverished half the continent on the altar of political vanity. But that is not the question we are asking in this referendum. We are asking specifically whether the UK should leave the European Union.
What are the benefits of leaving the EU? If they aren’t economic, they seem mostly to accrue to politicians who gain greater freedom to interfere in our lives. And what do we the people gain, to offset the probability of a negative economic outcome?
Will we lose the right to live, work and travel at will from Helsinki to Lisbon and from Warsaw to Dublin? Probably not, but it’s a risk. Will UK be better off economically speaking speaking? Probably not. That means people will lose jobs.
The risks are real, the benefits seem ephemeral. And very fact that we are having this referendum now means should the EU develop in a way that is an anathema to British interests, for example if  as I am told is “inevitably” going to happen,  the Euro is forced upon the UK, we can always leave another time. The very fact of this referendum undermines fatally the sovereignty argument.
Thankfully the polling seems to indicate the remain campaign is winning.

The 2016 Budget; Things Other Than The Sugar Tax…

There is much to like, and much to deplore.

The steady cuts to personal income taxation continue the trend under this Government of moving the tax burden from income to consumption. The continued cuts to corporation tax are welcome, and whatever idiot journalists say are virtually cost-free to the exchequer, as money not paid out in corporation tax mostly ends up in wages (to be taxed more highly) or investment (which everyone says we don’t have enough of). Companies don’t pay tax, people do, so corporation tax is a fiction and always has been. Did I mention we don’t have enough investment? Capital gains tax has been cut. Because taxing capital is silly. And the ISA allowance has been raised for the same reason.

Now the only people who pay capital gains taxes are people with large lump sums outside ISAs. These are people who’re so rich they can afford to save more than £15,240 a year, and those who inherited money. So big ISA allowances are moderately progressive.

So far, so good. But there are further disincentives to selling property: namely the increase in stamp duty for buy to let landlords. And there are further tax privileges for the first home in the form of the ‘help to buy’ ISA into which the Government bungs some taxpayers money to help first time buyers “get on the housing ladder”.

The UK’s insane system of property taxation of encourages home-hoarding, and entrenches the perverse idea in the British public’s mind that your house is an investment, not just something to live in. In most of the world, rent and purchase are more-or-less interchangeable. But in the UK, the disincentives to sell are behind much of the continual ratchet up of house prices. The problem isn’t that there aren’t enough houses – everyone has a roof over their heads after all. The problem is that the UK housing market is insufficiently assortive: people can’t afford the RIGHT housing in the right place and must therefore pay through the nose.

We need to scrap stamp duty on property entirely, and increase the taxation of property values giving empty-nesters an incentive to sell that property on to someone who might value its space higher. Unfortunately council tax, which needs re-banding, is a political third rail.

Families cannot afford family homes, because family homes are being held onto by people whose families have long-since flown the nest. So families are being brought up in rabbit hutches, because Granny has no incentive to downsize. Indeed she has an incentive to rattle around in the big house until she dies, when that house will be once more privileged in the inheritance tax system. She will then pass it on to her children, whose own children will have already flown the nest too, and so the cycle continues.

Meanwhile, the assault on Buy-to-let landlords means the supply of rental homes will dry up too. The “housing crisis” will be made a little worse by this budget.

If a family wants a family house, either Daddy has to be very, very well paid, Granny has to die young, or be very, very generous. And the Tories have a massive blind-spot about people’s houses. Thatcher’s dream of a “property-owning democracy” casts a long shadow, and measures to facilitate this, are now actually behind the sheer unaffordability of property for the average worker, while working against increasing the supply of reasonably priced rental homes.

One thing I will say for the Chancellor, the Sugar tax has done its job. It’s a pissy, regressive, fabian authoritarian little bit of nanny state spite. If you think taxing sugary drinks is about obesity, I’ve a bridge to sell you. It’s a bone thrown to the Daily Mail authoritarians, gets a noisy and oddly influential mockney prat with a fat tongue to support the Government and because everyone’s talking about it, It’s an effective dead cat, flung on the table to distract from controversial cuts to benefits, income taxes and corporate taxes, which are mostly going unnoticed; as is the “miss” of fiscal targets.

Ah yes, the targets. The worst thing about political journalism is the absurd weight that is put on Office of Budget Responsibility fiscal forecasts. If there’s one thing less interesting than the deficit, it’s an official guess as to what the deficit might be in 5 years. Then, armed with this utterly fictional state of the finances 5 years out, journalists hyperventilate about whether the Chancellor has “hit” or “missed” his target to balance the books by the end of the parliament, and go on, and on about how much he “has to spend” or “has to find” in the future. So the chancellor puts measures in that may or may not come to to be superseded in future budgets, just to “hit” a “target” that only really still exists in the minds of journalists.

Labour excoriate the chancellor for “missing his own target”, while opposing anything that might bring the books into balance. The deficit is falling, perhaps not as fast as many would like, but debt to GDP isn’t rising all that much, and may soon start to fall. Thus the deficit is under control, to the satisfaction of international creditors, and there’s no risk of a run on Sterling. So the target to balance the books, and get the debt burden down is a noble one, it’s also pretty low on a sensible chancellors list of priorities right now. The rabbit he’s hoping to pull out in the next few years is a big increase in productivity which will finally close the “output gap” bring down the deficit and raise people’s living standards, and cover the “living wage” without increasing unemployment, all in one go.

I don’t think there’s an awful lot the chancellor can do to increase productivity, though cuts to corporate taxation will help a little. We’re still dragging ourselves out of the mother of all balance-sheet recessions, which means investment is low, productivity growth is low, nominal wages aren’t rising fast enough, and the economy sits on a permanent risk of deflation.

Personally I think the Chancellor’s threading the needle between “stimulus” and Japan-style debt mountain pretty well in what remains an extremely cash-constrained fiscal situation. But let’s encourage him to deal with the perverse incentives in property taxation that have long poisoned the British economy, before bleating about fictional forecasts or whining about a silly nanny state sugar tax. The fixation people have on stuff that really doesn’t matter is beyond me.

The Madness Stalking Democracy will Pass.

“Has there been a general election, Mr Blackadder” asked Mrs Miggins, unaware, until Edmund points it out, as neither she nor Baldrick have a vote. “Hardly seems fair to me” she says.
“Of course it’s not fair — and a damn good thing too. Give the like of Baldrick the vote and we’ll be back to cavorting druids, death by stoning, and dung for dinner”

And that, in a nutshell is the problem with democracy. You simply cannot allow the enthusiasms of the noisier, politically enthused bit of the population to be indulged. The young prats currently cavorting after Jeremy Corbyn and Bernie Sanders seem blissfully unaware of the misery that socialism wrought even within their parents’ lifetimes. Nativist chauvinism, a yearning for the “strong leader”, the admiration of Vladimir Putin by the likes of Nigel Farage, Donald Trump or Marianne Le Pen: we’ve seen this before too.

This is why “elites”, in most of the world limit the choice available to electors to people within the bounds of reasonable discourse. It is possible to expand the bounds of reasonable discourse over time, to move the centre of politics around which that “overton window” opens. Clement Atlee did, Margaret Thatcher did. But what is happening right now, in response to a decade of stagnating living standards, is different.

One way of looking at it is a revolt of the left behind. That is behind the rise of UKIP, Le Front National and Donald Trump. After a hollowing out of the traditional working class, as the most able have moved on and up, and after generations of assortative mating, the shallow end of the British gene pool face competition from far more able and energetic immigrants and they don’t like it one bit. If you listen to a ‘KIPper, you’ll hear that they’re “fed up” about “not being listened to” by the “metropolitan elite”. Cameron offered these bloody people their referendum. They now hate him even more. This mood cannot be pandered to, because the policy solutions they demand don’t work. If your response to a few years of stagnant wages and a Polish couple moving in next door is to try to elect Nigel Farage, then you don’t deserve to be listened to. You deserve to be told to shut up and do your homework again. These people have captured the Republican party in the USA, and the party will not elect a president until the “elites” get control back.

And on the left, the highly educated marxists who once would have been guaranteed solid middle-class status as teachers, lecturers and officials, are now competing with self-employed tradesmen who often earn far more, for housing and schools. People, once solidly middle-class find themselves outcompeted by people they regard as inferior, and they don’t like it. The erosion of the status of the Nomenklatura vs. “trade” offends their sensibilities, and panders to an old snobbery against grubby money-making. The old socialism espoused by Corbyn plays to these prejudices, offering status at public expense. Thankfully most people going to University ignore the student politics of the hard-left, and seek a qualification to enable them to compete. And in competing they make themselves, and society richer. These student trots who never grew up are creatures of ridicule. They have however completely captured the Labour party, which is finished as an electoral force for at least a decade.

Morons, it seems favour either full socialism, or some form of fascism, because these ideas simple, easy to understand and wrong. It’s time for those of us who understand the world to stop imagining the grunting ignoramuses or starry-eyed ideologues have a point at all. They deserve ridicule. Point at the Corbynista or the ‘KIPper and laugh for having been taken in by nonsense.

Meanwhile, in the middle you have the broad mass of people doing OK. Unemployment is low. Most people are getting small annual pay rises. Price rises are low, and for capital goods, prices are falling. However people like nominal rises more than they like real rises. And the low-inflation, low interest rate reality means even as people’s real wages, even after housing costs (outside London and the south east anyway) are rising strongly. A lack of nominal increases makes people grumpier than they should be. There is sympathy for Farage and Corbyn shaking things up. Thankfully, the broad mass of the basically OK middle are sensible, and when push comes to shove, see the status-quo is far from intolerable. And those doing basically OK are far greater in number than the UKIPish left-behind and the Socialist-minded Corbynista class.Traditional politicians such as Cameron, who can reach out to this broad middle while keeping the coalitions of which their party is made together, will still win elections.

Assuming the Tory Party holds together after the referendum, and doesn’t go EuroBonkers, they will need to find another politician who can reach out to the broad centre. If they can, Labour, entirely captured by voter-repellent lunatics, will offer no resistance to another decade in power. Over the pond, Trump will attract a little more than a third of the vote. Everyone else will hold their nose and vote for Hilary Clinton however crap a candidate she may be. And in the rest of the Democratic world, people will flirt with lunatic populists along these lines, but will mostly vote for a steady-as-she-goes mainstream candidates.

Democracy – keeps testing these bad ideas, but mostly seems to work. This madness will pass.