Not joining the Euro was the beginning of the end for pro EuropeanBritain

When in 2007 Gordon Brown announced that the United Kingdom would not be joining the Euro few British pro Europeans like me realised that this signalled the beginning of the end for Britain in Europe. Despite the fact that almost all the major EU countries were in the Eurozone Britain had previously secured an "opt out" that it would not be a condition of its EU membership to join them. The Labour Government which took office in 1997 had declared its intention to adopt the single currency subject to certain conditions being met. But by 2007 this had looked increasingly unlikely and this led to the Government's decision not to pursue the matter further. Part of the reason was undoubtedly political. Labour was under pressure not just from the anti Euro Conservatives but increasingly from the further right "United Kingdom Independence Party" which actually had the symbol of the Pound Sterling in their logo! Politically rejecting the Euro took one area of criticism of Labour off the table. But for Britain that decision meant that we were increasingly to be on the fringes of the Union on key economic and financial issues.

The case for the Euro within the EU was always political. Membership of the Eurozone forced integration and "ever closer union" - a key EU goal. Every nation state knows  that how it manages its finances - especially its currency and associated exchange rate and interest rate levels - is a key part of its governance. So if the EU was to act co-jointly across the governance spectrum a single currency was highly desirable. By not joining the Euro the UK opted out of more than just the single currency. It opted out of being a major player in the Union at all despite the UK's size and importance in other areas.

When the world was rocked by the financial meltdown and banking crisis of 2007 onwards the Eurozone as a whole was hit hard and some countries within it especially. The single currency was work in progress - the most ambitious experiment in trans-national economic cooperation ever attempted. It was going well. Businesses and citizens alike were benefitting from the lower costs that resulted from no longer needing to pay to  exchange currency. You could drive from Holland  to Belgium to France to Spain to Portugal and pay in one currency (and effortlessly compare prices along the way if you wanted to). If you used your Dutch credit card in Spain you paid what you paid - there were no currency exchange costs added when your monthly bill came in. The business case was also very strong indeed - for the management of the supply chain it was a boon. Costs of procurement, transport etc. were  transparent and no currency hedging was necessary. But at a national governance level it was more difficult. 

A Eurozone member could not fix its own dollar exchange rate - especially important if you are a net importer of dollar denominated commodities like oil and gas, as most Eurozone countries are. The exchange rate is a mechanism of fiscal management and potentially crucial in the control of your balance of payments - you can boost your exports,  if that is what you wish to do, or similarly lower your import costs if you feel that is necessary. The Eurozone members forewent the this crucial lever of national economic control in return for participating in and benefiting from the single currency. Technically each member of the Eurozone participated in the setting of the external exchange rate but in reality it was the big players - Germany especially - who ruled the roost. For a while this was not a problem but the turmoil of the banking crisis from 2007 meant that the "one rate for all" imperative of the Eurozone came under pressure. 

The introduction of the Euro saw some convergence of interest rates  - but countries in the zone remain free to determine their own rates - especially important in managing Government expenditure as well as being a means of boosting growth, or dampening it down to control inflation. 

The response to the financial crises from 2007 onwards was made more difficult because some countries - notably Greece - had entered the Euro at an exchange rate which overvalued their currency, the Drachma. This, combined with an economy which boomed in the good times but crashed in the bad, caused the Eurozone's biggest crisis. Doom merchants forecast not only that Greece would leave the single currency but others as well leading to the Euro's complete collapse. British politicians across the parties congratulated themselves that we had had the good sense, as they saw it, not to join the Euro. But Greece is still in the Euro and the single currency has shown that it is robust to turmoil. So far the merchants of doom have been proved wrong - but the rescue of the Greek economy has been and still is at a cost. Unemployment, especially among young people, is shockingly high as a result of cuts to Government expenditure and other austerity measures. The crisis has also caused a rethink of some aspects of the Eurozone's processes and priorities. 

Britain has largely been on the sidelines as all this has been going on. Gordon Brown played an important part in the European response to the financial crisis but he was not a player on the crucial currency issues. And Cameron's Governments have been largely sidelined in Europe on matters relating to the single currency and the management of the Eurozone. The gradual modification of some aspects of the way the Euro is managed has been without Britian's involvement. Most notably the recognition that the single currency is a political tool and that you have to have more central control of essentially political matters - like the levels of Government expenditure by nation States - has occurred without any meaningful input from Britain.

The European Union is about more than economics and currency management. Britain and other non Eurozone countries play a constructive part in the EU on such matters as trade - but the single market is more effective when currency exchange is not an issue. Not least because trading arrangements can be longer term when fears of exchange rate fluctuations between trading partners are removed. For Britain and other non Euro countries the penalty is either higher costs (via currency hedging) or greater uncertainty which is never good for business. But it can work and has been working.

As I say the decision of the U.K. not to enter the Euro was a mistake - in the longer term anyway. The recovery from the crisis of 2007 onwards in Britain was partly helped by the UK retaining the pound and managing its own foreign exchange (etc.) so, yes, in the short term it was beneficial. But looked at strategically and politically Britain would have been better at the centre of the EU/Eurozone than on the fringes. And in time all the other benefits of the single currency would have justified a bit of short term pain. 

Britain has always been an unconvincing European partner. Maastricht opt outs, rebates from the budget, and above all the failure to join the Eurozone have made us at times peripheral. But this could have changed and, I think would have changed had we voted "Remain". We had the chance to at last be at the centre of Europe rather than on the edges (I have no doubt that in time this would have seen us adopt the Euro). But sadly that is gone and we have chosen the wide open sea. It's desperately sad. 

It was Farage wot won it…

The “Good Cop/Bad Cop” theme is at the heart of much Police drama. You know the story. The police operate, and especially interrogate, in pairs. One of the cops is blunt, tough, forceful. The other is your friend. Understands you. Maybe even places a reassuring arm around your shoulder. And between them they get you to sing.

The “Leave” the European Union campaign was split down the middle – or so, at least, both sides wanted us to believe. The official “Vote Leave” campaign (the “Good Cops”) had a Board of Members of Parliament and well known political figures including Michael Gove, Boris Johnson, Lord Lawson, Lord Owen, Liam Fox  - mostly, but not all, Right Wing Tories. They were the “respectable” face of the Leave campaign. Alongside them, but not openly connected, was the “Leave.EU” group – the “Bad Cops”. Their political face was the most famous anti EU politician of them all – a man who has built his whole career on this single issue – the UKIP leader Nigel Farage. The ties between “Leave.EU” and UKIP were strong – the main funder of the campaign was Arron Banks also a major donor to UKIP.

There was barely disguised warfare between the two Leave groups throughout the referendum campaign. Many in the media and politics generally thought that this split was a weakness. As it turned out it was a crucial strength. The official campaign was (comparatively) cerebral and restrained. It seemed to be directed primarily at Conservative voters and as such it can be judged to have succeeded – 58% of Conservative voters voted “Leave”. “Leave.EU” however had a different target.

For some time now it has been clear that in the UK, as elsewhere in Europe, the main breeding ground for support for the hard Right is among the working class. In Austria recently an extreme Right presidential candidate almost succeeded – and his core support was in the working class areas of the cities, especially Vienna. In France Marine le Pen of the Front National gets substantial support in the “classe populaire” . In their book on the rise of UKIP “Revolt on the Right” Rob Ford and Matthew Goodwin identified the working class vote as being UKIP’s most fruitful recruitment area. In the 2015 General Election 39% of men who voted UKIP and 33% of women were in the C2DE social class. That’s around 1.5 million voters.    

As this graphic from Lord Ashcroft Polls shows 25% of the “Leave” vote was delivered by those who voted UKIP at the 2015 General Election. Add in the 21% which came from Labour voters and you have nearly half of the total “Leave” vote coming from voters whose main class demographic is C2DE.
 

If the official “Leave” campaign was comparatively (!) cerebral that from “Leave.EU” was far from that.. They understood that the target group they were trying to reach was unlikely to be persuaded by elegant arguments or by a long manifesto. Or by the likes of Lords Owen and Lawson for that matter. And while Boris Johnson, Michael Gove and Iain Duncan Smith would reach out to Conservative voters who shared their politics these three, and their Tory “Leave” colleagues,  would not appeal to the majority of the C2DE electorate. But Farage would! And Farage’s campaign – and that of “Leave.EU” as a whole - made a simple gut feel appeal to the this electorate. The poster at the top of this blog is the most notorious of its advertisements. But it is not atypical. Anti immigration, a fear campaign over Turkish entry to the EU (barely disguised Islamophobia) and the dog whistle “Take back control of our country” ( a deliberately ambivalent slogan which could mean “take back control from the EU” but also “take back control from immigrants”) was the core campaign.     

So UKIP voters made up a quarter of the “Leave” vote  but Nigel Farage delivered almost as large a number from Labour. And it is this final statistic that was crucial. Labour could not persuade sufficient of its own supporters to back “Remain” nor could it “get back” any from its traditional working class support who had switched over the years to UKIP.

Whether there was actual collusion between the two “Leave” campaigns and an agreement that one would be the “Good Cops” and the other the “Bad Cops” I do not know. It wouldn't surprise me. But collusion or not the split was clever with both target groups being covered. And this made the difference. But in a tight race the delivery of the UKIP and Labour vote to “Leave” was the crucial factor. The former could be assured. But it was Nigel Farage’s delivery of a substantial number of Labour voters that swung the outcome in Leave’s favour.

It was Nigel wot won it. 

have been challenged to say on Facebook how I will be voting in the EUReferendum, and why, in 900 words. Here goes:

An aging baby boomer and his ten year old great niece. It's her future.

As a Baby Boomer, part of the immediate post war boom, I have lived through nearly 70 years of peace. Something that my parents' generation and their parents' generation did not enjoy. Without question the spur to this was that politicians in Europe in the immediate post war period, and led by Winston Churchill, decided (in his words) that "Jaw Jaw" was always better than "War War". History teaches us that, the odd civil war aside, if people are united in pursuit of a common goal then they tend not to fight one another. 

In Europe that goal has been peace and prosperity. Prosperity means economic growth and the sharing of the proceeds of that growth and a necessary condition is economic freedom. The levers which direct these freedoms include free movement of Labour and Capital, but also regulation. Europe did not need to be taught that the totalitarianism of the Right (the Nazis) or the Left (Stalin's USSR) discarded freedoms of all types. Nor that democracy is the defence to the extremes. In essence on a continent with over thirty nation States you can only guarantee these freedoms by cooperating and by (in some cases) discarding old enmities. As recently as the early 1990s we have seen what happens when this does not happen - the break up of Yugoslavia showed that violence is sadly only just below the surface even for civilised peoples living on the edges of Europe.

So the gradual growth of European cooperation was a practical response to the half a century of conflict that preceded it. But this had to be more than the creation of a "talking shop" - the League of Nations and the United Nations showed us that "Jaw Jaw" was not enough. There has, as I say, to be a "common goal". The modern world is increasingly interdependent in part in response to the sheer scale of the major players. The USA, China, Russia, Japan and catching them up the rapidly growing newer large economies such as Brazil and India are huge and this is not going to change. In Europe no single country can think to be able to match these mega powers - certainly not the United Kingdom. So economic cooperation is a no brainer. To compete you have to do it.

The European Union has gradually evolved as an economy to rival the big players. Indeed collectively it is now the world's largest economy - bigger even than the US. It is not a "Super State" as some against it charge nor is there some anonymous European culture which superimposes its will on the 28 sovereign States. The differences between (say) Sweden and Italy, or Germany and Portugal in respect of culture and character are as vibrant and enjoyable as ever they were! But a modest surrender of sovereignty has strengthened the economic alliance, created fairness with regulation, and enabled competition - that necessary condition for genuine free markets - to work.

The EU is not perfect. It needs to change. It needs to build on its already strong democracy with more of the same. I believe that not only will it do this but that it will do it better if the UK remains part of it. Our peoples will travel, work, study and improve their lives if the walls between us are as low as we can make them. I'm proud to be British but I am equally proud to be European. I dread the thought that our nation - unquestionably one of the major forces for cooperation in Europe in the post war years - would walk away. It would be a shaming moment. And it would hand a "hospital pass" to our children and grandchildren. Young people want us to be in Europe and actively so. My generation must not let them down. 

When the reference frame moves to the Right it can have deadly consequences

If, as seems probable, Tommy Mair was a deranged person committing the ultimate hate crime this should not stop us from analysing why he hated and where his hate came from. The last few months, coinciding with the EU Referendum campaign, has seen elements of the right wing British media stirring up opposition to multiculturalism, immigration, the EU, Turkey, Islam and (of course those of us who oppose their underlying prejudice and bigotry) in their "news" and comment. Let's name names. The Express newspapers. The Mail. The Sun and often the Telegraph as well. The Spectator. Add in such pseudo-respectable websites as Breitbart and you have the widespread dissemination of Right Wing propaganda of the most gruesome kind. 

Then there's the politicians. We are used to the foul-minded and offensive lies of Nigel Farage and his coterie of bigots in the UKIP leadership. They have upped the ante recently culminating in the rightly condemned recent vile posters. But they have been joined by some Conservatives who should know better (and probably do) like Gove, Johnson and co. Ambition and obsession has made many of the Brexit Tories move towards Farage's gutter.

This then is the climate in which extreme opinions become almost normal, lies abound and previously "respectable" politicians and commentators decide that the means justifies the ends. These "ends" of course being a "Leave" vote in the EU Referendum.

If the reference frame shifts to the Right (it has) then those who are influenceable, and ignorant, may think that what was once extreme is now mainstream. This does not mean that the Far Right (right of UKIP from the BNP and "Britain First" to the EDL and “Liberty GB” and even further to overtly Fascist groups) has suddenly become more numerous in its support. But it does mean that these extreme groups do feature in the media and that gives them awareness – as of course does their open presence on the internet. So those whose views do naturally tend to the extreme see the Mail front pages and the UKIP posters, listen to Farage and the rest and think (however mistakenly) that they have been given cover and support for their own extreme and paranoid delusions. And it is one of these who reaches for a gun.