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Monday, April 3, 2017

Britain Needs More Than Just Brexit – It Needs a Radical Reboot

PM Theresa May started her term strong, but she's going to need to kick it up a few notches to bring Brexit where it needs to be.

Theresa May has gotten so much right since she became Prime Minister. She made it immediately clear that she would respect the referendum result – understanding that any attempt to ignore, frustrate, or dilute the largest ever tally of votes in British history risked undermining public faith in democracy for good.

Theresa May communicated her openness to deploying the most talented team possible for her country’s most difficult post-war negotiations.She understood that the vote for Brexit was partly a vote for a fairer Britain – in which politicians like her needed to strive harder to protect the casualties of our “multigeddon” era, when those with least margin for error are simultaneously hit by huge economic, security, technological, and (too often forgotten) familial change.

Then, in appointing the civil libertarian David Davis, with whom she had repeatedly clashed during her time as an authoritarian Home Secretary, she communicated her openness to deploying the most talented team possible to maximize Britain’s chances of success in what will be our country’s most difficult negotiations of the post-war era.

Her trademark straight-dealing is clearly impressing the public – and she sensibly safeguarded that reputation with her decision to force Philip Hammond to abandon his manifesto-bending changes to National Insurance. Some polls even show the Scots thinking a Tory PM is doing a better job than Nicola Sturgeon, their Nationalist First Minister.

On the Other Hand…

Mrs. May has also made three significant mistakes, however, and they deserve study. I’ve written about the oddest one for CapX already. I still do not understand why she hasn’t gone to Paris, Prague, Rome or another major EU capital and made a declaration of love for Europe – its nation states, its peoples, and its achievements.

Too many Europeans, who see too much of Nigel Fawlty-Farage on their TVs, as well as our sometimes less than edifying tabloid front pages, could be forgiven for thinking we Brits don’t much like them. It is a tragedy that our Prime Minister, who rushed to give such a pro-American speech to the new Trump administration (and, it should be noted, a very good one), has not done more to underline the fact that most Brits love Europe – and it’s just the EU that two-thirds of us resent and 52 percent of us have chosen to leave.

Mistake two has been a lack of expectation management. We Brexiteers have enjoyed mocking George Osborne and those “expert” banks and multinational organizations for getting their post-vote predictions of economic calamity so wrong. Despite what Mr. Osborne’s international ring-round encouraged his fellow Davos summiteers to say, the UK economy has been resilient (although built on too much consumer debt) and major international companies have kept investing in Britain.

But I sometimes wonder whether the last year has bred a dangerous complacency. The next two years will not be easy. Although I don’t regret my support for Brexit, everything I’m hearing from people I trust does suggest that I underestimated the determination of EU leaders to defend the Brussels project – even if that hurts the interests of some of their own country’s most important industries.

We should all be ready to ride the equivalent of Nike’s famous “swoosh” over the next few years, going down before heading up, up, and up again.I’m still hopeful that sense will prevail, and the much-threatened punishment deal will be avoided. But let’s not be naive.

A Europe led by uber-federalists like Schulz and Macron will not be as pragmatic as one guided by Merkel and Fillon. Rather than constantly insisting that the Brexit deal will be “red, white, and blue” and generally marvelous, Downing Street should have done more to fix the nation’s attention on the medium- to long-term gains of freeing ourselves from the dysfunctional EU.

It may happen later than Boris Johnson thought during the referendum campaign, but we should all be ready to ride the equivalent of Nike’s famous “swoosh” over the next two to three years – which means the real possibility of travelling downwards, at least relative to what we’ve been used to, before heading up, up, and up again in the long run.

But “up, up, up” won’t happen automatically, and we cannot afford to be complacent. My third, final and biggest worry about the May era, therefore, is that I see very little sign of the kind of national reboot which our future prosperity demands, on the scale it demands – the kind for which millions of people voted for last June.

Philip Hammond’s two Budgets have tinkered. None of Mrs. May’s key ministers has undertaken reforms that can compare to those of Gove, IDS, Osborne or Greg Clark under David Cameron. Most damning, the analysis by the Resolution Foundation proves that economic adjustments are still falling most heavily on the poor.

When I make these points in conversation, I’m invariably told that the Government has no bandwidth for anything other than leaving the EU. And I am also often told that, as a Brexiteer, I’m in no position to complain. The rebuke is not entirely unfair – but neither is it close to being the whole truth.

When the Institute for Government recently warned that Brexit-related parliamentary bills could account for up to 75 percent of the next Queen’s Speech, I was left wondering what the Government would do with the other 25 percent of parliamentary time. Beyond modest plans for the reintroduction of grammar schools, a cautious industrial policy and some clever tweaks to housing policy, we are hardly witnessing a revolution of the kind that Margaret Thatcher pursued when she faced such unimpressive political opposition.

Brexit Reform’s Four Brakes

If we are to overcome the current timidity – while also avoiding Lady T’s poll tax-shaped, third-term mistakes – at least four other brakes on reform need to be addressed.

First, there is the been-in-ministerial-cars-and-the-Westminster-bubble-too-long problem. This Government is actually at the age when all governments start looking a bit weary. It may not be halfway through its second term, but it’s not that much younger than the points at which the administrations of Thatcher and Blair began to run into trouble.

This partly reflects the fact we’ve, unusually, had two successive five-year parliaments before this one. Most of the Government’s senior ministers – including Mrs. May herself and her Chancellor, Health Secretary, Education Secretary, Business Secretary, and Leader of the House of Commons – have been working 15-hour days, six days per week for 12 years (albeit five of them in Opposition).

Yes, the Foreign Secretary may be new to Whitehall, but he’s not new to government. The Home Secretary is pretty fresh, but you get the strongest impression that her predecessor is still back-seat driving. And rather than using her power of appointment to bring new thinkers and new ideas into Cabinet, Mrs. May brought in solid and competent types, made in her image, like Damian Green, Karen Bradley, and James Brokenshire.

If you think our times primarily need good administration, you’ll approve. If you think June 23, 2016 was a vote for a different kind of government, you won’t.

If you think our times primarily need good administration, you’ll approve of the current government. If you think June 23, 2016 was a vote for a different kind of government, you won’t.New ideas might once have come from the think tanks – just as the Centre for Policy Studies and Institute for Economic Affairs powered Thatcherism, and Policy Exchange, and the Centre for Social Justice helped to define Cameronism. London’s centre-Right think tanks still make a difference today, but most are much more micro in thinking than even 10 years ago. The Centre for Policy Studies’ investment in this website, and its commitment to big-picture thinking, is largely exceptional: think tanks tend now to be more invested in developing the micro policies that attract corporate funding.

The commercialization of Tory party conference was a particularly major driver of this. The move from seaside resorts to major cities didn’t just put millions into Conservative coffers. Savvy think tanks started to earn tens of thousands of pounds during conference week by hosting worthy but often dull fringe seminars for specialist lobby groups and industries on regulating the widget and altering administrative affairs directives. The ties initiated with these sponsors in this way have only grown since.

Think tanks that rely upon lobbying and commercial interests for funding, rather than benevolent big donors, echo those same interest groups’ priorities. They hesitate to challenge the sometimes self-serving, even crony-capitalist hands that feed them. Most of all, they no longer invest as much in bigger picture thinking.

Part of the lobby for the same-old, same-old is Whitehall. We are kidding ourselves when we talk about Britain’s Rolls-Royce Civil Service. While there are many brilliant mandarins – many of whom are underpaid and demoralized by the 1970s-style, and hugely inflexible, public sector “incomes policy” –  there are far too many others who are generalists.

They are high-quality generalists, but they are ill-equipped to master some of the very technical challenges that our times present: negotiating Brexit comes to mind, for example.

Another problem is the staffing merry-go-round. Civil servants don’t hold individual positions long enough to see bigger projects through. Ministers regularly complain that civil servants who X months ago promised to do Y have moved on to something else, disappearing from key meetings, undermining any sense of accountability. Unless you are a Government with a strong and determined agenda, the Sir Humphreys will grind you down.

And the fourth problem is that Mrs. May lacks the M&Ms – a mandate and majorities. The largely non-Tory House of Lords can, quite properly, block her proposals for grammar schools because they weren’t included in David Cameron’s 2015 manifesto and carry no stamp of democratic legitimacy. There’s even a possibility that the handful of anti-grammar Tory MPs, led by former Education Secretary Nicky Morgan, will mean the Lords is superfluous. The parliamentary majority Mrs. May inherited is simply too small to get controversial things done – even if there was a will to do so.

The Natural Bumps of Change

We are right to leave the EU. It’s an entity built six decades ago and incapable of modernization. The euro is a job-destroying, inequality-creating straitjacket of a problem. Its 27 nations can’t agree on big decisions. Whether it’s fracking or GM crops, there’s a powerful anti-science tendency within Brussels – or at least there would be if 27 nations led by politicians of different colors, riding different electoral cycles, could agree on anything very much.

Delivering a smooth-as-possible Brexit is important. But smoothness wasn’t the key demand from the vote. It was change.With its member states beset by rigid labor markets, expensive energy policies, high welfare bills and an aging demography, the EU needs to be nimble, but can’t be.

But let’s not pretend that exiting the EU will solve the challenges which the 52 percent demanded be addressed, or that the tough process of leaving explains the timidity of Theresa May’s agenda.

There’s also the small majority and lack of mandate to get anything of her own through the Lords – a situation we are stuck with so long as she avoids triggering a general election. There’s the fact that her Government has been at the exhausting center of power for a long time now – and won’t be refreshed by her preference for appointing Damian Greens over Dominic Raabs.

There’s the lack of big ideas from the think tank community – not helped by the lack of openness to alternative thinking exhibited by her own No 10 operation. And then there’s the Civil Service – which she shows no signs of wanting to reform, despite the awareness of her former colleagues that this is unsustainable, notably Nick Herbert, who with his GovernUp work has accurately diagnosed Whitehall’s inadequacies.

Delivering a smooth-as-possible Brexit is important. But smoothness wasn’t the key demand from last June’s vote. It was change.

Republished from CapX.

  • Tim Montgomerie is a Conservative commentator based in the United Kingdom.