Ideology, the Tory party and Brexit.

May must stick with sense over sensibility, writes Rachel Sylvester in todays The Times (October 4, 2016). The party, she writes, is divided between pragmatism and ideology, or head and heart. This clash will define and dominate the next two years of politics after the Brexit vote. The vicar’s daughter in 10 Downing Street prides herself on being rational, reasonable and realistic, suspicious of dreams and driven by a sense of duty. ..

But many of her party’s members and MPs, including several senior ministers, are driven by ideology, writes Sylvester. “In the run-up to the EU referendum, Mrs May weighed the competing issues of immigration and security that came across her desk at the Home Office and decided that on balance she would support Remain. It was the practical implications of Brexit for intelligence sharing and crime fighting that bothered her rather than any arguments about sovereignty. One reason why she never gave a passionate defence of staying in the EU–as David Cameron wanted-was because she didn’t fell that strongly about it.

For the Brexiteers, though, the referendum campaign was a romantic bid for independence, a once-in-a-generation chance to break free of the shackles of Brussels. It was an idealistic as well as an ideological mission to which many Eurosceptics had dedicated their lives..

Now the cabinet’s Brexiteers David Davis, Liam Fox and Mr Johnson suggest, Sylvester continues, that the UK will be able to continue trading freely with the EU while curtailing immigration. The truth is that when nations prosper by interacting with the rest of the world, it is impossible, because of globalisation, for any country to “take back control”. Yet the true believers maintain the fiction..

Ken Clarke, the veteran pro-European former chancellor, compares Conservative Eurosceptics to crocodiles snapping around the leader’s boat; you can keep feeding them buns, he says, but the problem comes when you run out of buns.

Mrs May has been chucking out buns for all she is worth this week: there’s been the promise of a Great Repeal Bill and a pledge to trigger Article 50 by March next year. But there will come a point when she has to define what Brexit means to her and if she sticks to her pragmatic approach that will be the moment when she runs out.

The compromises required to secure a good deal for the country will inevitably be seen as a betrayal by the Tory Eurosceptics who must retain the purity of their political principles. Then question then will be: does Mrs May have the strength to beat back the crocodiles who have already eaten up two Conservative Prime Ministers? There is a lot hanging on the Tory party’s battle between sense and sensibility”.

My comments.

What is noticeable about Rachel Sylvester’s argument is that she assumes there is no ideology on the Ken Clarke side of things. She also fails to place Brexit in a wider European context. My argument is that the Brexit vote is in fact bringing the UK much, much closer to the existing pragmatic muddle that is Europe. And by taking that muddle into account, Prime Minister May may find an indefinite supply of buns to feed her crocodiles.

Let me proceed. “Many of the party’s members and MPs, including several senior ministers, writes our pundit,  are driven by ideology, especially when it comes to Europe.” This is obviously meant as a description of Leavers. In fact, it applies first and foremost to Remainers, and most notably, to the arch Remainer Ken Clarke.

It was as plain as a pikestaff that once the referendum was announced, and Cameron had initiated his 4 “concessions”, that the Remain camp was in deep trouble. The clue was the “concession” that parliament, in alliance with  55% of other member state parliaments, could show a card to the Commission, thereby indicating that the Commission would have to think again. Alongside the sorry sight of Cameron touring  member state capitals, and begging for a concession on what after all is a UK determined benefit system, this parliamentary alliance mechanism illustrated better than anything else that Cameron and Remain were proposing that voters sanction the UK’s future as four provinces in a USE.

In order to disguise this, sundry advisers, now lowered to the House of Lords, proposed Project Fear, that there would be hell to pay in a Leave vote. Not without foundation, but not the key issue.

The key issue was self government for the UK, and alongside that, the UK as a champion of a supranational Europe or a Europe of the states.

Since 1972, and the European Communities Act Section 2.1., Whitehall has been consistent as a champion of a supranational Europe. Section 2.1, states and it is still on the books until the Great Repeal Bill removes it, that EC/EU law takes precedence over UK law.

It cannot be sufficiently repeated and emphasised that France has NEVER signed up to this doctrine, and Germany most definitely rejected it categorically in the judgement of the German Constitutional Court on the Lisbon Treaty. The GCC stated  that the EU was no more and no less than an alliance among sovereign states. In other words, the GCC was saying that the EU was a Europe of states, an alliance, and that the Commission and the ECJ in no way overrode German law.

To put it mildly, EU member states have different definitions of what the EU is. The UK, with Ken Clarke in the vanguard, is the only member state which subscribes to the extreme view that the EU has a supranational end point, which even Juncker seeks to distance himself from–without, it is true, much credibility.

I wrote in the INSEAD Knowledge blog, that the referendum was Cameron’s to lose. http://knowledge.insead.edu/blog/insead-blog/the-best-case-scenario-for-avoiding-brexit-4639

All he had to do is have a QC advise to alter the wording in Section 2.1., giving parliament oversight of what laws came onto the UK books, and he would have won by my guess what would have been an 80% majority. But no. Cameron refused: he told Johnson he would not do that. So he went to the country in effect on a platform that the UK’s future, as defined by the UK, not it must be said as defined by other member states, was to be as  a province in the USE.

This was so obviously a ploy to perpetuate the unaccountability of Whitehall to the electorate, as the domestic plank of what is or was in effect UK policy to be the lead power in supporting the Commission’s and ECJ’s claims to exercise supranational authority, that Cameron was figuratively launched into political outer space. And deservedly so.

The EU of Heath was a putsch against parliament, and the electorate put a stop to it on June 23, 2016. There are a number of quite bizarre consequences to this UK-on-UK feud about a mythical EU.

The first is that Saint Theresa has proposed a great Repeal Act. The UK presumably will be outside the EU. My proposal was that a tweaked Section 2.1. would have enabled the UK to champion vigorously a European alliance of constitutional states to re root the EU in the constitutional and political realities of the member states. As it is, with Whitehall’s covert support, the ideologues have taken the helm in Brussels, and surprise, surprise, the “populists” are being shown the royal highway to high office in member states. The UK is now going to have to support a Europe of the states from outside. Ken Clarke, the ideologue, was most assuredly for no change to Section 2.1. Well now he is staring at its repeal. So much for foresight.

Second, now that “Brexit means Brexit”, the prime support of a supranational Europe is leaving. Germany is NOT a supporter of a supranational Europe. It supports the single market because its corporations’ strategies, and their supply chains, are predicated on its continuity. Germany is NOT an unconditional supporter of the Euro: since 2010, Germany’s body language is quite clear: on my terms only.  The old adage that Germany would become European has in effect been turned upside down that Europe now has to become German.

Hence the six years of a European depression; the vast, China scale current account surplus; the VW scandal; Germany’s blocking of an effective banking union, its Nein to nuclear policy and much else besides. We will see what Mrs Merkel does if and when Deutschbank goes bottom up: bail it out and watch the political fall out in other Euroland states; or have it work out and watch the impact on global financial markets. Germany most definitely acts as if the only Europe it can live with is a Europe of states.

Third, France could theoretically be a champion of a supranational/federal Europe to give legitimacy to the Euro and make the break through to the federal highlands, as proposed in the Five President’s report. But there are  one, or two, or three or more hurdles on the way. France would have to accept no Transferunion. To escape permanent economic underperformance it would have to liberalise labour markets, and much, much else besides, notably the multiple corporatist arrangements which conservative interests are comfortably snuggled into. There would have to be a rewriting of the French constitution, involving the non trivial matter of giving new meaning to “la France, une et indivisible“. Then there is the reality that 62% of respondents in a recent Pew opinion poll are hostile to the EU(UK at around 46%). A Big French Push to move to a federal EU would likely open the gates to revolution at home. So it won’t happen.

There is not going to be a Big Leap to a federal union. There have been moments when a supranational Europe, of Heath’s, Howe’s and Clarke’s dreams, heaved into sight. Initially, that was seen by some as the “1992” programme, but the programme was powered on the concept of mutual recognition, not on harmonisation. The concept of mutual recognition essentially said you can do things differently, but that is no barrier to open trade. Delors of course seized on the “1992” programme in order to push through to monetary union, so that the Bundesbank would never again dictate to France what France had to do, as was the case in March 1983. In other words, the Euro was designed to coral  the Bundesbank. Instead, its turned out to coral  France, as power has drifted to Berlin. The reason is that in the Euro, all member states march in step. The music comes from Berlin.

Jean Monnet’s dream of a supranational/federal Europe, which so penetrated the minds of UK “Europeanists” in the late 1960s and early 1970s, was, is and will remain a dream. The idea was to banish “national egoisms”. Instead, national egoisms are more prominent than ever, especially in Euroland. Britain’s national egoism was to convert Europe into one market for finance. It is nowhere near being realized.

There is only one, practical and urgent escape from the European present drama, and that is to update Charles de Gaulle’s vision of a Europe of the states, and re root the EU as an alliance of constitutional states. In that alliance, the Commission could be granted closely defined powers, not interminably expanding “competences”. The ECJ would be given clearly circumscribed powers(for the moment, the powers it claims are not founded in any Treaty, and are self concocted). Not surprisingly,  its judgements are very impartially applied. The Euro has to be recast, best as a parallel currency, and a sensible interpretation be given to the EU’s open market.

There is no way that such a diverse entity as Europe can submit to absolutes, like a single currency, the 4 freedoms, etc. Persisting in this direction is the mark of ideologues, who in effect do no more than mask more red in tooth interests, vis Whitehall’s to be free of parliamentary scrutiny, or Germany to conceal bare faced nationalist interest below an EU apparel.

Europe is in dire straits. And UK ideologues, in league with ideologues in the EU, have brought it to its present pass. The paradox is that June 23 brings the UK a whole lot closer to reality. Lets hope that a sensible Prime Minister May realises the opportunity beckoning.

 

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About Jonathan Story, Professor Emeritus, INSEAD

Jonathan Story is Emeritus Professor of International Political Economy at INSEAD. Prior to joining INSEAD in 1974, he worked in Brussels and Washington, where he obtained his PhD from Johns Hopkins School of Advanced International Studies. He has held the Marusi Chair of Global Business at Rensselaer Polytechnic Institute, and is currently Distinguished Visiting Professor at the Graduate Schoold of Business, Fordham University, New York. He is preparing a monograph on China’s impact on the world political economy, and another on a proposal for a contextual approach to business studies. He has a chapter forthcoming on the Euro crisis. His latest book is China UnCovered: What you need to know to do business in China, (FT/ Pearson’s, 2010) (www.chinauncovered.net) His previous books include “China: The Race to Market” (FT/Pearsons, 2003), The Frontiers of Fortune, (Pitman’s, 1999); and The Political Economy of Financial Integration in Europe : The Battle of the Systems,(MIT Press, 1998) on monetary union and financial markets in the EU, and co-authored with Ingo Walter of NYU. His books have been translated into French, Italian, German, Spanish, Chinese, Korean and Arabic. He is also a co-author in the Oxford Handbook on Business and Government(2010), and has contributed numerous chapters in books and articles in professional journals. He is a regular contributor to newspapers, and has been four times winner of the European Case Clearing House “Best Case of the Year” award. His latest cases detail hotel investments in Egypt and Argentina, as well as a women’s garment manufacturer in Sri Lanka and a Chinese auto parts producer. He teaches courses on international business and the global political economy. At the INSEAD campus, in Fontainebleau and Singapore, he has taught European and world politics, markets, and business in the MBA, and PhD programs. He has taught on INSEAD’s flagship Advanced Management Programme for the last three decades, as well as on other Executive Development and Company Specific courses. Jonathan Story works with governments, international organisations and multinational corporations. He is married with four children, and, now, thirteen grandchildren. Besides English, he is fluent in French, German, Spanish, Italian, reads Portuguese and is learning Russian. He has a bass voice, and gives concerts, including Afro-American spirituals, Russian folk, classical opera and oratorio.
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