Boris got it done. Or did he?

He got it done!

Boris showing the way forward. And the subtle approach he took

Boris got Brexit done. 31 January, 2020, Brexit Day, is a date to remember. It’s the day that Boris Johnson ended Britain’s 47-year membership of the EU.

Well, ‘done’ is perhaps a bit of an overstatement. It’s one thing for the husband to leave the house, suitcase in hand. It’s quite another to finalise the divorce arrangements, divide the property and start paying the alimony.

What makes it worse is that the lovely young thing from accounting for whom the husband precipitated the split may not turn out to be quite so accommodating as at first he convinced himself. She may, indeed, to be at least as demanding as the wife he left. Not perhaps a problem if you’re Rupert Murdoch, with the resources to meet pretty much any demand from a string of wives. Not so hot if you’re a middle-ranking executive whose income will have trouble stretching to cover both alimony and the mortgage on a luxury new apartment.

That’s when the new-found freedom starts to look a little expensively purchased.

Britain’s in that position. It’s walked out, head held high, nose in the air, daring the deserted spouse to do its worst. But far from being done, the really difficult part of Brexit starts now. The lawyers, in this case negotiators, are getting in on the act, and sharpening the knives.

Brexiters have always claimed that Britain would, somehow, be in the driving seat. It would dictate terms to the remaining 27 EU members, who would fall over themselves in their eagerness to sign a trade deal, on terms favourable to Britain, at the earliest opportunity.

Equally, the rest of the world would be beating a path to Britain’s door to do the same. In the lead would be the US, with Trump enthusiastic, anxious even, to provide his friend Boris with an agreement which might go so far as to sacrifice some US interests, such is his determination to see Boris right.

Meanwhile, the Faragists of the Left, or Lexiters as they call themselves (left-wing Brexiters), claim that leaving the EU is going to free up the country to look after its workers and its poor the way they’d like. Once away from the devious, conspiratorial capitalist club that is the EU, Britain will be free to usher its people into a sunlit, socialist upland.

Maybe all that will happen. If so, I will hold up my hand and admit I got things wrong. My fear is that Brexiters have been deluding themselves that the country is in the position of Rupert Murdoch when, in reality, it’s like the middle-ranking executive. And the US isn’t the demure assistant from accounting, anxious to do her new man’s bidding, she’s the former actress and model used to having all the best in life brought to her and thrown at her feet by admirers who are all but worshippers.

The EU 27 have already warned Britain that they see themselves calling the shots. A hugely favourable deal is on offer, but only on certain conditions: the UK must accept that it will be on a level playing field with the rest of Europe. That means maintaining the same standards concerning quality, state aid and workers’ rights. In other words, it means behaving as an EU member, with no say over the regulations it has to follow.

As for the US, it too is going to have its demands. Great deal, on condition that Britain accepts US food standards, drug prices and commerce regulations generally. Brexiters promised that Britain would be taking back control. It seems to me that, in reality, it will be a rule taker.

As for the socialist uplands, the results of the December general election show that this is at best a remote dream. The Conservatives are firmly in power now, and with a majority that may well see them through the next election too. Paradoxically, the Faragists of the Left blame Brexit for this, though it leaves them as keen as ever on Brexit itself.

I could, as I said, be wrong about all of this. That would be a huge relief. But I think that’s the task on Brexiters now: their job is to prove that they can deliver on their promises. And Lexiters have to show how they plan to guarantee better rights and living standards for the underprivileged they claim to represent.

The night of 31 January will be a time of celebration for them. They have the weekend to recover. Then the real work starts.

Let’s hope the hangover won’t be too awful. Because, sadly, it won’t just be Brexiters who suffer it. Sadly, I fear the rest of us will be paying the price of their self-indulgence too.

It isn’t Brexit. It’s the austerity, stupid

There is always a well-known solution to every human problem — neat, plausible, and wrong.

That was the American journalist H. L. Mencken in 1917. His words keep coming to mind whenever I hear some Brexiter explaining that it’s time for the debate to end, and for Britain simply to leave. ‘Out is out’ one told me recently, uninterested in the obvious truth that even to leave a room requires choosing a doorway (or possibly a window), and that it might be best to pick one that led somewhere one actually wanted to go.

An interesting new attitude has also developed on the so-called left. I say ‘so-called’ because the real left has always been internationalist, whereas this strange left, inside Britain’s Labour Party today, is dominated by Little-England thinking. Some even argue that it’s easier to bring in a socialist programme in a small country, like Britain, rather than a large collection of nations, like Europe.

Stalin argued the same for the Soviet Union. And it didn’t work for him either.

These Lexiters (left-wing Brexiters) argue that the argument about the EU is a distraction from the real questions. A recent internet piece points out that these are austerity, the NHS, benefits payments, housing, food banks and homelessness (I’m not sure how homelessness and housing are distinct issues but, hey, I didn’t compose this list).

Lexiter propaganda: they have a little list...

Within that list, the most important issue is austerity. It is at the root of the other problems. It is the policy of reducing government spending in order to stop piling up public debt.

It’s based on thinking appropriate to an ordinary household. If I were to start spending significantly less, I could build up some savings and certainly avoid debt. The same, austerity politicians believe, is true of government.

However, if I changed my spending rather than reducing it, I might do far better. If, for instance, I bought another house and rented it out, I might be out of pocket for a while but, once inflation had boosted the rent above the loan repayments for the house purchase, I would be making money. On top of that, in the long run, I would have not only the rental income, but a fully paid-for asset in the form of the house.

Governments, too, can make investments that yield returns. For instance, to take one of the other examples from the list, it could pay for a lot of new housing. That would help tackle the problem of homelessness. It would also boost employment, reducing dependence on benefits and food banks – other items on the list. It would cost money at first, but in time the tax paid by the building workers might well outstrip the cost of investment, and with rents coming in on top of those taxes (or indeed income from house sales), the public sector is more than likely to end up making money. That means it could invest in the NHS and even, in time, begin to pay down public debt.

This is a special instance of an economic phenomenon known since the eighteenth century: the paradox of thrift. Saving money reduces spending and therefore takes demand out of the economy, leading to its contraction. That means that the revenue of a government pursuing austerity falls and, if its reaction is to reduce spending further, it takes more demand out and accelerates a downward spiral.

But who’s right? Does austerity economics actually work or is it true that there’s a paradox of thrift?

When the Conservatives came to power, leading a coalition in 2010 and on their own since 2015, public debt stood at just over £1.2 trillion. Nine years on, it’s a little over £1.8 trillion.

A centrepiece of the Conservative campaign in 2010 was that it was iniquitous to burden future generations with paying so massive a debt. But, far from reducing the burden, the Tories’ austerity policies have massively increased it.

So it makes sense for Labour to campaign to reverse austerity. Simple.

Simple maybe. But it leaves out a massive element of difficulty, so obvious that it’s hard to believe its proponents have missed it. Reversing austerity would certainly improve our position in Britain, if we could do it from our present level.

But Brexit will increase unemployment and prices. The change would be relatively small if Brexit were soft, far larger following a hard Brexit. That would make the benign cycle, of investment leading to more work, leading to more revenue, far harder to launch.

As the Red Queen told Alice in Through the Looking Glass: 

... here, you see, it takes all the running you can do, to keep in the same place. If you want to get somewhere else, you must run at least twice as fast as that!

The Brexit race:
run as fast as you can and you might just stand still

Brexit will take us into a looking-glass world where we have to run very fast just to get back to where are now. And a lot faster still to improve.

That’s why combatting Brexit isn’t a distraction from the campaign against austerity. It’s an essential component of it.