Don’t let the BBC and Brexiteers confuse you: Norway and Turkey aren’t the same

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This blog's track record on Brexit remains solid. A while ago I predicted that the UK would opt to stay in the (or a) customs union with the EU. That hasn't happened yet, but the tectonic plates are slowly but surely moving that way. Meanwhile opponents of the idea are trying to undermine it by confusing people about what it amounts to, and the media, even the BBC, aren't helping.

First: what is the difference between soft and hard Brexit? A hard Brexit means a complete break with EU institutions and trading with the EU either on World Trade Organisation (WTO) terms or through a tailored trade deal, such as the one the EU has negotiated with Canada. You might call these the Japan and Canada options respectively. A soft Brexit means remaining part of some EU institutions, without being a full member. It boils down to two main options: the Norway option or the Turkey option. There is technically a third: the Swiss option, but EU officials regard this approach as a failure, and are likely to prefer a hard Brexit.

The Norway option is given support by this week's Economist. It means being part of the the Single Market, but not the customs union. This Norway does though membership of the European Free Trade Association (EFTA), which includes Iceland and Lichtenstein as well. This excludes agriculture and fisheries. It means accepting EU directives as far as most trade goes, and the "four freedoms" - goods, services, capital and labour. It has been given a bad press by both sides of the EU debate. Brexiteers say that it turns the country into a vassal state because it has to accept regulations without a right of veto, and only limited consultation. Remainers say much to the same thing, so why leave? The Economist valiantly makes the case nevertheless. It would be the least disruptive approach for British business, while giving the country significant new rights not available to EU members. Apart from agriculture and fisheries policy, this includes doing trade deals with other countries; Iceland has made a deal with China, for example.

Norway does pay significant sums into the EU budget, though - a bit of a flash-point for Britons. But this is not as bad as it looks: it is mostly aid to Eastern European countries, which is separate from other EU aid, and Norway has a lot of say over where it goes.  So it is actually politically quite useful.

So might this be the elegant compromise that brings the two sides together without entirely satisfying them? There are two big problems. The first is border controls. Not being in the EU customs union means that goods have to be checked as they cross the border, as happens between Norway and Sweden. Since one of the UK's aims is a frictionless border in Ireland in particular (helpful in Gibraltar too), the Norway option would fail. This is one of the toughest issues emerging in the whole process (as predicted from the start by this blog). Brexiteers, who tend to deal in broad visions and not detail, can't stand this instance of the tail wagging the dog. They hope that if Britain says that there will be no checks on goods coming into Northern Ireland, it will force the EU to reciprocate. But that turns out to be more difficult than it sounds - unilaterally waiving tariffs creates issue under WTO rules - as well as being reckless with the Irish peace process.

But there is an even bigger problem with the Norway option: the four freedoms. Or rather one of them: labour. Claims by Brexiteers that more than a minority of their voters wanted a total break with the EU are hard to sustain: the Leave campaign deliberately obfuscated the issue by using Norway as an example of what Brexit might mean. But a claim that those voters wanted complete control over the movement of labour into the country is perfectly credible. The Economist argues that there is more Britain can do to manage incoming EU workers more strictly within the Single Market. I don't think that washes.

The Turkey option addresses both these problems. There are no customs checks at the border, and there is no free movement of labour. The lack of customs checks means that most of those complex supply chains that cross the border between the UK and the rest of the EU should suffer reduced, and manageable, disruption. Agriculture and fisheries can be excluded (as are services, most likely - but this is where the Single Market works less well anyway). What's not to like? It means that doing trade deals with non EU countries can only happen for those goods excluded from the customs union (agriculture and services most likely). The more extreme, neoliberal branch of the Brexit movement, well represented in the Conservative Party, has set great store by doing such deals. And yet to most critics of Brexit this has always looked to be the weakest part of the Brexit case. These other countries are far away, drive hard bargains, and Britain's negotiating position is weak. There is little evidence that the voters are that bothered. Nobody could accuse Turkey of being a vassal state to the EU, so why should they be?

And so the Turkey option looks the most viable form of soft Brexit. In a speech today the Labour leader is taking a step towards it by advocating a customs union with the EU. However he is blurring the issue by suggesting that he wants to be part of the Single Market too. And yet he wants exemptions to suit his agenda, especially on state aid and free movement. The EU will never wear that because of the political difficulties it would create within the union. I would go as far as to say that it is dishonest of Mr Corbyn even to suggest it. It would be much clearer to go straight for a variation of the Turkey option. Still it has served to put the customs union idea on the agenda, and presents the possibility of linking up  Tory soft-Brexit advocates, who have a much clearer grip of the key issues.

And what of the government? It has rejected the idea of a customs union out of hand. But this is just words, meant to placate hard-Brexit advocates within Tory ranks. What the government says it wants is what it has called "Canada plus plus plus". That is almost as dishonest as Mr Corbyn's Single Market minus. The government wants to stay integrated in some sectors but not others. This looks like the sort of cherry-picking the EU so dislikes. But it could be an intermediate negotiating step towards a Turkey-like solution, even if they try to avoid the words "customs union". I believe this may be the game plan of Theresa May, the prime minster, and David Davis, her pragmatic Brexit Secretary. Whether they have the political skills to pull that off is open to question, though.

Meanwhile supporters of hard Brexit are trying to turn the public against the Turkey solution by conflating it with the Norway one. This includes Australia's undiplomatic ambassador, Alexander Downer, to his great discredit, on the radio last night. This allows them to suggest it means accepting free movement of labour, for example. They also suggest that it means that the UK cannot do trade deals with other countries: that is not true either, though the scope of those deals would be restrained. Britain could import US chlorinated chicken and Australian wheat tariff-free if it wants to, as agriculture is not in scope.

For now the politicians are exercised about a potential vote in parliament over the customs union. Expect the government to defer this until the actual shape of its deal with the EU becomes clear. Something like a customs union with the EU is on its way. It is exactly the sort of compromise the country should be aiming at.

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Do not underestimate the Labour Party

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Britain's Labour Party is neck-and-neck with the Conservatives in opinion polls. Surely, many claim, this means that Labour are in trouble, and its leadership is woefully complacent? The Tories are in an utter mess, the argument goes, so if Labour aren't streets ahead now they never will be. I'm not so sure.

The first part of that argument is surely correct. The Conservatives are caught in a conflict between Brexit fundamentalism and reality. Such conflicts, when you are the governing party, bode ill. Government pronouncements are almost comic. Today, for example, David Davis, the Brexit Secretary, raised the prospect of a Mad Max dystopia after Brexit, which we can happily avoid, he suggests, by staying in the EU in all but name. Well that's how it sounds. But worse, Theresa May is a lacklustre leader, neither able to present an inspiring vision, nor to handle the everyday give and take of networking and negotiation the role requires. The party is shrinking, and it is failing to capture the interest of younger voters, by which I mean under-50s. Its chosen core support base is literally dying. The party is being hollowed out in a way reminiscent of the not dissimilar situation it faced in the mid-1990s under John Major.

But then a relaunched Labour Party under Tony Blair established a massive poll lead and then crushed the Conservatives in the election of 1997. So why isn't today's Labour Party doing much better than it is? It is reported that the Labour leadership feel confident that they can repeat their performance in last year's election of a poll surge during the campaign itself. And yet surely the Tories will not run such a dire campaign? They may be running out of activists but they have no shortage of donors. A halfway decent manifesto should mobilise the oldies better, and in a second attempt they can surely create doubts about Labour under Jeremy Corbyn's leadership. And the voting system is tilted in their favour.

What the Conservatives have to play with is Labour's lurch to the left under Mr Corbyn, and the rapidly growing hold of his supporters, organised by the Momentum movement, over the party. This has awoken traditional fears of Labour - and this seems to be propping up the party's poll rating, as well as motivating wealthy donors. In the 1990s Mr Blair tacked his party to the centre and wooed Tory backers. He left his opponents with no oxygen; how different is Labour's strategy now.

But I have underestimated Labour's leadership once (last year), and I don't want to do it again. Labour retains some key strengths, and the Tories some concealed weaknesses. This will not guarantee Labour victory in the next election, but it will give them a base from which to make a serious challenge.

Labour's first strength is that they are building a solid political coalition of core support. Last week I described an idea that I called "Brixton liberalism", and how it gave me hope about the future of liberal values. Labour has a stranglehold on Brixton liberals, notwithstanding the party's distinctly un-liberal instincts. They have seen off two challenges: from the Liberal Democrats, following the period of coalition in 2010 to 2015, and the Greens. The Lib Dems, my party, seem to have retreated to the professional middle classes; they are hoping to win liberal voters from Labour through anti-Brexit feeling. This shows no sign of making headway. The Greens have been almost completely crushed; Labour's intent to maintain their stranglehold was recently shown by their airing of policies on animal welfare. They are presenting themselves as the Green Party by other means.

The Brixton liberal coalition comprises many younger professionals, especially those linked to the public sector, and the new working classes, who are often members of ethnic minorities. A common theme is that these people have been priced out of owning their own property, and have no prospect of secure social housing. It is particularly strong in London. To these can be added trade unionists, who see real hope of extending their influence, through job protection, nationalisation and subsidies for declining industries. How will Labour fare amongst traditional, white working classes, especially outside the cities? These are the Labour heartlands that Mrs May hoped to capture last year, and came closer than many credit to succeeding. But the Tory appeal to this group may have peaked. It is very conservative, and Mrs May was a good standard bearer for that type of conservatism - she might have succeeded if she had offered more to older voters. But her reputation for competence has taken a knock, and any successor is likely to a sharper, more liberal type who will be distrusted by working class voters. We can expect Labour to continue their studied ambiguity on Brexit and immigration, so as not to scare off this group.

The second thing going for Labour is that they are doing careful work on their policies. Their critics dismiss Labour's policies as a throwback to the failed policies of the 1970s. Public ownership of utilities, the roll-back of public-private partnerships of all kinds, free university education, and so on all seem to play to that narrative. But Labour are quietly giving a modern gloss to these policies. They will argue that they developing new models of managing the public sector, and not going back to the bad old days. No doubt they plan to have it both ways - invoking nostalgia for the old days alongside enthusing newer voters. Besides, some of those old ideas don't look that bad in hindsight: council housing for example. By contrast any new ideas the Conservatives come up with are likely to be more neoliberal fare that will themselves look dated. While South America shows that we should not write off neoliberalsim, it is only likely to make a comeback after voters have experienced a long period of badly implemented socialist policy.

And the third thing in Labour's favour is the diminishing hold of traditional media, which have acted as the Conservatives' attack dogs for generations. Last year's election was something of a watershed there. Jeremy Corbyn was their dream target, but they could make no traction. Their current campaign that Mr Corbyn was a cold war spy show that they still haven't got it. Who cares?

And the Conservatives hidden weakness? They are not preparing for the next election in the way that Labour is, or the way that David Cameron did before 2015. Last year's snap election showed how important such preparation is. Mrs May turned out to be flying blind, without any of the usual preparatory groundwork. Two things are spoiling the outlook for the Conservatives. First is Brexit - it so hard to see how it will play out over the next few years, and therefore what message will work best for the government. Could it be a big anticlimax, defying the Remoaner critics? Could there even be some quick wins, allowing a pro-Brexit counterattack?Or will there be early victims, forcing the Tories to find appropriate scapegoats? And an even bigger problem is the leadership. Mrs May showed herself up as inept in national campaigning, and if anything she has deteriorated since. And yet her party dare not replace her, as each of her rivals shows even deeper flaws. If a new, more dynamic leader should emerge later in the parliament, as many Tories hope, he or she will not have long to pull together an effective campaign, which can take years.

And so if the Labour leadership look quietly confident, they have every right to be.

 

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If Brexiteers want to reassure Remainers they will have to start talking specifics

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There was a certain inevitability about the Foreign Secretary Boris Johnson's speech yesterday. It was meant to reach out to Remainers by presenting a liberal case for Brexit, but instead it drew raspberries. Britain's polity is bitterly divided. It was always going to take more than a few speeches to change that.

Is there anything useful to be learned from this episode? One of the central themes of the speech was perfectly sound, if unwelcome to Remainers. The result of the referendum cannot be reversed, and Brexit is going to happen in some shape or form. The reason for that is basic politics. The leadership of the Conservative and Labour parties have both signed up to it. The Tories can rely on Democratic Unionist support. We've already had a general election following the referendum. There simply isn't the political support to reverse Brexit.

And as for another referendum, Mr Johnson made a perfectly sound point. Another period of political battle between the two camps will only make things worse. There is no sign of a major shift in opinion in either direction. Remainers are clutching at straws when they look at polls suggesting opinion has shifted. It was looking at the polls that got is into the mess in the first place.

That makes the case for Remainers to try and get used to the reality. But those facts don't make the pill any easier to swallow. What Mr Johnson tried to do on top of that was persuade Remain supporters that Brexit will not be as bad as they fear. And here the speech was a complete failure. He came out the same old platitudes and generalities that have been a feature of the Brexit campaign from the start. There have always been two prongs to the Brexit case. One is an appeal to conservative voters who oppose immigration and feel strongly that national sovereignty is a birthright that trumps any freedoms in the world beyond the country's borders. The second is an appeal to liberal types with the idea that post-Brexit the country can be a liberal haven, free from the restraints of EU obligations. The problem is that these two lines look dissonant. It is easy enough for Brexit supporters to concentrate on their preferred line of argument and ignore the others. For sceptics it is that very dissonance that worries them.

And to overcome that fear it will be necessary to address that dissonance. How? By moving on to the specifics. Which regulations do you want to dismantle to make us free? How will you satisfy the need for regulatory alignment promised to the Irish without becoming a vassal state of the EU like Norway? And how will the rights of young people to travel and work in Europe be secured? And so on. Mr Johnson did not begin to do this.

Only one government minister seems to have understood what needs to be done: Michael Gove, the Environment Secretary. He is trying to show us in concrete terms what opportunities leaving the EU might bring - for example in making the EU's clumsy system of farm subsidies much more focused.

In the absence of such substantive proposals the government gives the impression that it has not made up its mind and is putting off hard decisions. We are instead told that such detail might harm the country's negotiating position. But most of us suspect it is because of deep disagreements in the government, and not just between Brexiteers and closet Remainers, but between the Brexit liberals and their illiberal supporters.

It is a situation that is crying out for strong political leadership from somebody that has both vision and a grasp of detail, and from somebody that knows how to build and maintain political coalitions. That person is not our Prime Minister, Theresa May, nor is it the Labour leader Jeremy Corbyn. And yesterday's speech showed us that it is not Boris Johnson either.

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What is liberalism for? What I have learned from a Brixton school

What are the five fundamental British values? If you have missed that in your schooling, you can always go to a primary school in Brixton, talk to a Somali-heritage child and ask him or her to tell you. You are likely to get an enthusiastic answer. I have, on visits to the school where I am a Chair of Governors, not far from Brixton prison. And there is plenty of evidence from the children's parents that they think these values are a good thing.

The five values are: democracy, the rule of law, individual liberty, mutual respect, and tolerance of those with different faiths and beliefs. This formulation came from  a Conservative-led government at a time of moral panic, when it was thought that immigrant communities were undermining our society. But it is, of course, the immigrants who are most enthusiastic about them.

There is a curiosity about these values. Looking at that list in isolation, would you think that "British" is the word that best defines what they have in common? Do these things make Britons different from Americans or Swedes, or even French? No. The common adjective that most comes to mind instead is "liberal".

Liberalism is under attack from many sides. A lot of people say that it means treating foreigners too well compared to your own people. Or that it stands in the way of effective government action. Liberalism is, in many people's eyes, middle class, elitist and Western, with a clear white ethnic character. It is a source of hypocritical lecturing by Westerners to people from countries that they have a long record of undermining or oppressing.

This is causing many people who hold liberal values as core beliefs a lot of angst - and I am among them. At various points I have suggested that liberalism needs to be rethought to break out of its white middle class ghetto. But I have struggled. My mistake is the usual one: I am over-intellectualising it. You might not think that appealing to Ludwig Wittgenstein is an antidote to intellectualism, but it was he who said: "Don't ask for the meaning, ask for the use". So just what is the use of liberalism?

At which point I remember my south London school. The school community is ethnically diverse (African, Afro-Caribbean and Hispanic all feature strongly) and predominantly working class. Why should they find liberal values so appealing? Or useful.

And the answer is clear. It forms a basis for people of different cultures to cooperate. And in such a diverse community people must cooperate in order to overcome common problems. And it also gives people the hope that they can get on in society based on their own merits. And, to many, it all looks a lot better than the state of things in the countries from where they draw much of their heritage - however proud of that heritage they are.

But Brixton liberalism is a much grittier and more basic affair than the Cambridge sort that I was brought up on. Many young girls wear the hijab in public; and the attitudes of many towards gays is probably best described as "toleration" rather than "embrace". But liberal values achieve real, positive, tangible things - literacy, numeracy and a more self-confident attitude to the world. Human rights means saving lives and stopping arbitrary torture, not just allowing prisoners access to cats (as our Prime Minister Theresa May once tried to suggest in an appalling speech while she was Home Secretary).

So why is liberalism so unpopular in swathes of our land, from the Daily Mail reading middle classes of Maidenhead, to the working classes of Doncaster? To them there is a better alternative: sticking together with their own group, and stopping other groups from having what they have got. These communities are not diverse, either ethnically or in terms of class. Or not as diverse as south London, anyway. To them liberalism just lets the foreigners in to walk all over them.

So is liberalism only useful to a middle class elite, who easily navigate the upper echelons of a liberal society, or to minority groups seeking to make their way against the odds? If so then it really is in trouble. Liberalism should be by its nature inclusive. If it is seen as exclusive, then it is in trouble. It isn't in Brixton. It is in Doncaster and Maidenhead.

So the challenge for liberals is to show how liberalism is useful to the besieged middle-classes defending their privileges, to the white working classes with insecure job prospects, or, for that matter, to tight-knit Muslim communities in Midland or Northern towns who feel their culture is under attack. And the first step towards that is to convince ourselves.

And here we can learn from Brixton. People there show us that  liberalism isn't just about promoting a clever elite. It is about embracing diversity and about allowing everybody to get on in life. The world is being forced to change. It must face up to advancing environmental catastrophe, and the unavoidable march of technology. To do this the people of different nations and communities must work together. We must embrace diversity.

And there is something else we can learn from Brixton. Amongst the most positive things that a liberal society has done for this community is to provide them with good schools. In common with the rest of inner London, Brixton's schools are generally very good, notwithstanding high levels of disadvantage. and their ethos is unmistakably liberal.

If you want to see the use of liberalism it is easiest to do so in schools that are inclusive and help people to embrace the world more confidently. It's been said many times before, but that doesn't make it less true: you cannot beat a good liberal education. And there is no good reason why everybody in our society should not have one. That should be the loudest rallying cry from liberals.

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Automation should not lead to a workless society. Bad economic management could.

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The current issue of Liberator, an anti-establishment house magazine for the Lib Dems, bemoans the lack of policy on the advance of automation and robotics:

If we are heading for a world in [which] relatively few people conventionally work - because machines can perform tasks better and cheaper - how will the non-working population be paid, and what will it be paid for?

Such thoughts are prevalent in chattering circles these days. On one occasion I expressed a little scepticism in a Facebook conversation, given that current employment rates have never been higher - and I was quickly shouted down for having my head in the sand. As it happens the Lib Dems are developing policy here, with a working group on the "21st Century Economy" in the advanced stages of deliberation, having already held a consultative session at Conference. But what should liberals be thinking?

The claims about automation and robotics are not all hype, though there is a fair bit of that too. Artificial Intelligence (AI), and its harnessing of "Big Data" is in the process of revolutionising many areas of work. This has proceeded faster than I personally expected, after AI had gone through decades of marginal progress combined with absurd hype. Many jobs  are now threatened, including vehicle drivers and many professional roles. Just how far this is going is very hard to say. Colossal resources are being ploughed in, and there have been some spectacular achievements, and yet few of the breathless boosters of the technology appear to have much idea of what intelligence actually is - they just project present progress into the future and assume that AI will catch up with humans. There is no magic in the human brain, after all, just cells, chemicals and electrical connections. My guess is that at some point AI will hit a point of diminishing returns, and progress will slow.

But not for a while yet. Meanwhile undoubtedly consume many jobs will be replaced there will be a lot of economic disruption. But are we heading to a near jobless society? Here I struggle. Quite a bit of progress has been made already, after all, and yet in many countries, Britain in particular, employment has never been higher. And not just that. We are constantly aware of jobs that need to be done that are being cut. This is a lot of what is behind the fuss about austerity. Not enough care workers, doctors, or police officers: the list goes on. And there are plenty of new fields of endeavour that are opening up: cancer treatments, mental health care, green energy and so on. So the jobless society looks like self-harm rather than an inevitability.

Indeed a conventional economist would say that there is nothing much to worry about. Similar things were being said in the 19th century, as new technology cut swathes through agriculture and textiles. That didn't work out too badly in the end did it? As one industry becomes more efficient, it simply creates demand for others. I believe that a lot of this has been happening already. A lot of the new jobs are being created in low productivity sectors of the economy, meaning that overall economic growth is not advancing as much as many expected. That's just the nature of the beast.

But that is too complacent. A closer examination of 19th Century economic development reveals a lot of human misery as workers were thrown out of modernising industries. It was not at all clear for many years that human wellbeing was being advanced. In any case economists tend to overlook the the specifics of how particular technologies affect the overall economy. The massive advances in working class and middle class welfare in many economies after 1945 until the 1970s is often attributed to good management of overall demand in the economy. And yet it had everything to do with the advance of light industry and office work, based on technological breakthroughs made in the war years, which were particularly good for the creation of medium-skilled jobs. We do have to look closely at the specific implications of technologies of the age, and adjust our economic management to ensure the best outcome for overall human wellbeing.

The post war boom was particularly happy on two fronts. It threw up a lot of new things that people wanted to buy, from cars to washing machines to cosmetics and new textiles. And producing them was intensive in mid-level jobs on the factory floor, distribution and administration. Further, other industries, like insurance, produced the same mix of things people wanted and lots of jobs. But modern technology is focusing on efficiency rather than labour intensive new products. A lot of it is about replacing labour with capital, without necessarily producing much more product or service.

But are what people are going to need more of? Overall we do not need to consume more things or eat more food, though in parts of our society that is clearly true. The technology sector itself will generate a lot of demand, in the development of new systems, and in teaching people how to make best use of them. A second obvious area is health and care. The health economy has huge potential to expand, especially here in Britain - it is much larger in the US, even when so much of the population is excluded from it by lack of insurance cover. And an ageing population will not only need more health services, but general care too. Automation and AI in health and care is also likely to generate more work, by opening up new treatments and by making diagnoses more available, faster than it destroys work by making things more efficient. That has been our consistent experience to date. And a third area of potential expansion is what is being called "experiences" - entertainment, travel, games and so on. This is mixed up a further wrinkle: a possible increase in leisure time. People may want to work fewer days and hours. This will both create work (depending on what they do in that leisure time) and reduce time available to work.

But there is an obvious problem with all this: money. And by money I do not mean limits to real resources, but the fact that if there is not an even distribution of spending power, too many people will not able to afford these things, while a minority will have more money than they can actually spend things that create work, rather than being part of a churning cycle of finance and property . That cycle of finance, incidentally will also create some jobs - but this looks more like part of the problem than the solution. The problem is that the jobs being created, in sectors with low productivity, are often too badly paid or insecure for people to buy enough services and things. This is the way things seem to be heading in too many developed societies.

Technological advance should be a good thing. It allows us to do more while consuming fewer of the world's scarce resources. But s skewed distribution of income means that the changes to work patterns risk suffocating the economy rather than advancing wellbeing. That is one of the central challenges of our times.

 

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