Never waste a good crisis

I am a big fan of the Irish economic commentator David McWilliams, not least of his brilliant ability to state my views much better than I can and his essential maxim that “what is important is never complicated and what is complicated is never important”. He recently won the award for Ireland’s “‘most influential Tweeter”. If only! Ireland (North and South) would be an awful lot better if he had more real influence!

I agree with him almost entirely again here – it’s really, really worth a listen. He most particularly challenges economists for ghetto-ising their knowledge by surrounding it in impenetrable jargon, leading to a lot of impotence and anger among the public.

The article’s headline is a little misleading. Mr McWilliams doesn’t quite say that humanity is incapable of learning from mistakes (admittedly he does flippantly say we don’t learn anything; a little extreme!) – quite evidently it is capable of doing so. What is true is that people are emotional; and also implicitly that we are products of our culture – the framework for our own actions/emotions and the actions/emotions of others. Entire societies function in this way.

Trying not to be simplistic but… the United States is flavoured by the fact it was founded by people at great risk spreading west across a continent, so of course it has a gun culture and an individualistic attitude to health; Germany is flavoured by wild inflation and a mad murderous dictator, so of course it is austere and prefers consensus to “charismatic leadership” now; England does evolution not revolution, so surely you didn’t seriously believe the “Vow” for vast constitutional change within months?!

So what’s this about never wasting a good crisis? If I were advising, say, a Commission set up to advise the potential next UK Government on the NI Economy I would suggest two things are core to this before we even begin:

- Northern Ireland has its own culture within which solutions must operate (theoretical academic solutions are hopeless, we need practical solutions in tune with our emotions about who we are and what is feasible); and

- keep it simple (leave out the complex stuff, just focus on the simple issues of revenue and spending, exporting and importing, receiving and contributing).

What is really necessary is a 30-year vision for Northern Ireland. If you go long term, you actually find it easier to get buy-in. Then, focus on the simple points. These include:

- you cannot spend money you don’t have (it doesn’t matter why you don’t have it);

- when you do spend, it should be on the basis of value (there’s no point spending “on the basis of need” if it doesn’t solve that need);

- it’s easier to raise revenue than reduce spending (remember the endowment effect – people value what they have more than what they could have, so once something is done “by the State” it becomes almost impossible to suggest subsequently that it shouldn’t be);

- to deliver change you have to make choices and these will make you unpopular (unpopularity is a sign you are doing something right – but is distinct from disengagement, which isn’t);

- people will support change they feel involved in even if they disagree with it instinctively (and they will oppose change they feel detached from even if they agree with it instinctively); and

- emotions (including issues of identity and religion) matter to people – they are what makes us interesting humans rather than boring robots.

Can we agree these things for the future and thus not waste the current crisis?

Conservatives are two separate parties – in England

Why is it the Conservatives score much better in England than in the rest of the UK in the 21st century? I would suggest it is because the Conservatives consist of a coalition effectively of two parties – one centre-right pro-business near-liberal; the other essentially Nationalist (and now under severe challenge from UKIP).

When “Nationalist” really meant “Imperialist”, these two did not jar as obviously. Broadly, the Empire was in businesses’ interests, and thus the two clearly belonged to the same side.

Additionally, UK politics even after the War consisted essentially of Socialists (Labour) and Not-Socialists. What is now registered in the record books as “Conservative” was actually a conglomeration. Michael Heseltine was initially “National Liberal”; Neville Chamberlain, representing Birmingham, described himself as “Unionist”; there were other descriptions too. In some cities, Conservatives even stood aside for Liberals in return for a safe neighbouring seat.

Over time, however, the interests of business have begun to diverge as Imperialism has given way to “Euroscepticism” – perhaps better termed British (or even English) Nationalism. Conservatives in metropolitan areas such as Zac Goldsmith are a million miles from the likes of Edward Leigh in more rural constituencies. As ever these things are generalisms, but the Conservative benches thus consist of two very different types of MP – the Classical Liberal internationalist on one hand, and the English Nationalist on the other. The current conundrum is that UKIP is snapping at the latter, making English nationalism effectively the centre-right battleground, much to the bemusement of the Classical Liberal Internationalists who cannot comprehend this at all.

This explains also why the Conservatives do much worse in Scotland and Wales, where the “Nationalist” market is already spoken for by the SNP and Plaid, who have both also emerged as pro-EU. In Northern Ireland, of course, a wide range of Nationalist (in the broadest sense) options already exists – and precious little else! Thus, outside England, Conservatives are only in the “Classical Liberal Internationalist” market – the very market being ignored by the Leadership as it tries to resolve its obsession on its Nationalist-Eurosceptic (English only) side.

In other words, the type of person who regularly votes SNP or Plaid in Scotland and Wales actually votes for Conservative English Nationalists in England – particularly in rural areas. This means that the Conservatives are only half the party in Scotland and Wales that they are in England. It is also why they continue to run the risk of becoming completely England-only – another challenge to the very viability of the UK itself.

Northern Irish need to learn not to vote for gridlock

Never has faith in Stormont been so low screamed the Belfast Telegraph on the basis of a Lucid Talk poll last week – and no doubt it is true. Yet the very same poll showed that if an election were held tomorrow, the DUP and Sinn Fein – the parties responsible for Stormont and thus for that low faith – would romp home with half the vote.

This is plainly senseless. Yet still it seems a majority of us outside the DUP and Sinn Fein don’t understand this “democracy” lark.

One Belfast Telegraph correspondent openly called for Direct Rule. That would be Direct Rule by a Conservative-led administration, despite the Conservatives being rejected at every post-Agreement election in Northern Ireland. At the last European election, they came last, securing less than half the vote of a new party which had imploded the day before polling. If we wanted a Conservative-led administration locally or in Europe, we could have voted for one – yet we didn’t. It is thus fundamentally undemocratic to argue that we should get one (other than at UK level – we have accepted that by accepting that we should remain within the UK at a referendum in 1998). We have tried ignoring the fundamentals of democracy before – it gave us half a century of incompetent single-party rule followed by a generation of terror. I wouldn’t recommend we try it again.

Others demand we reform the institutions. Of course, I have recommended reform myself. But the are not going to be reformed by those who benefit politically from leaving them the way they are – namely the DUP and Sinn Fein. They will coolly blame each other of course, but the reality is no party or coalition willingly changes the system through which it gained power… unless it becomes genuinely scared that it will soon lose it…

It is a strange form of democracy admittedly. This is not because it is a “mandatory coalition” (firstly because it isn’t; and secondly because Grand Coalitions are quite normal in Europe); it is because parties are entirely communal and derive power from playing the blame game against each other. This is quite normal politics of course, but in our case they are obliged to stay together – frankly for the quite sensible reason that power-sharing is necessary in a society whose past consists of violence founded upon segregation and consequent ignorance and hatred. So to be clear power-sharing and Grand Coalition devolved government are the only show in town – if you want people to work them better, you want people to reform them at the edges, and frankly you want people who are more representative (we need more women for an obvious start), we need to stop just talking about it. Get out and campaign and stand and vote for change!

This is the point. We need to face the fact that we have gridlock because that is what we voted for – and apparently would continue to vote for. If you want proper government rather than gridlock, don’t vote for the parties which have delivered it. If you want reform of the structures, don’t vote for those who derive their power from the current structures. If you want better politicians, well, it is your responsibility to get them elected.

Ryder Cups and Killer Instincts

This is a most bizarre table.

European (EU) score first Matches won Overall
Year Venue Win Fourballs Foursomes Singles Match Score Holes +/-
1979

1981

1983

1985

1987

1989

1991

1993

1995

1997

1999

2002

2004

2006

2008

2010

2012

2014

USA

England

USA

England

USA

England

USA

England

USA

Spain

USA

England

USA

Ireland

USA

Wales

USA

Scotland

US

US

US

EU

EU

Tie

US

US

EU

EU

US

EU

EU

EU

US

EU

EU

EU

3-5

3-4

3-3

4-2

6-2

6-2

5-1

3-4

2-6

5-2

4-1

4-3

4-2

4-2

2-3

4-2

3-5

2-4

4-3

2-6

4-4

4-4

4-3

2-4

2-6

5-3

5-3

4-2

4-3

3-4

6-2

3-1

2-3

4-3

3-5

6-0

3-8

3-7

4-5

7-4

3-6

5-7

4-5

3-6

7-4

3-7

3-8

5-2

7-4

8-3

4-7

4-6

8-3

5-4

11-17

9-18

13-14

16-11

15-13

14-14

13-14

13-15

14-13

14-13

13-14

15-12

18-9

18-9

11-16

14-13

14-13

16-11

-18

-26

-6

+15

-2

-5

-8

-4

-3

-6

-16

+18

+13

+23

-13

+2

-17

+16

EU leads overall wins 10-7 67-52 68-57 81-96 216-205 -37

Also replicated here for easier reading, it shows a quite bizarre thing – although Europe leads in Cup wins comfortably, and in match wins marginally, it is actually behind in holes won since 1979.

I choose 1979 because that is both when Continental Europeans began competing in the Ryder Cup and when the matches switched to their current format – eight fourball matches (all players play and the best score win the hole for his team), eight foursomes (pairs play a single ball, using alternate shots), and twelve singles.

Yet even if we take the time after 1985, when the United States lost a Ryder Cup for the first time in 28 years, we see a remarkable thing. In 14 tournaments since then, the United States has won just four and lost nine – but has actually won two more holes during that period! In fact, Americans are only behind by one hole overall over the past three Ryder Cups – an astonishingly balanced record – yet have lost all three.

The last Ryder Cup in the United States, the so-called ‘Miracle of Medinah’, was the ultimate example of this. The Americans actually won more holes in 2012 than in any Ryder Cup since 1981 – and lost! What was remarkable about it was that a staggering 13 of the 28 matches (i.e. almost half) made it to the final green – of those, the Europeans won nine, lost just three and halved one. Of the remaining 15 matches which didn’t make it that far, Europeans won only five (and even three of those on the 17th!) and lost ten. Europe won the final hole decisively more than three quarters of the time (even the half was a comeback from one-down) – having otherwise been comprehensively outplayed by historical standards.

I am not totally clear what this demonstrates – but I suspect it is something to do with the value of teamwork and a killer instinct. What has happened – consistently – is that Americans have won the matches they have won by big margins, but when the margins have become tight the Europeans tend to have come out on top.

US cannot sort out Syria on its own in multi-power world

20 years on from the terrorist ceasefires, Northern Ireland is definitely a safer place. 13 years on from 9/11, however, the world most certainly isn’t. As ever, the problem for the West is politics. Politics requires the perception that we are safe; yet perception is vastly different from reality.

Just over a year ago the UK Parliament stopped proposed military action in Syria. This was a very good thing – intelligence from research I myself was doing for a client in London indicated that the premise used to promote the proposed intervention (that Assad had used chemical weapons) was incorrect, just as in 2003 with the “weapons of mass destruction”. In fact, all the intelligence said that the Syrian opposition had used chemical weapons, not Assad. Is it not now interesting that we have come to view that opposition, not Assad, as the problem?

Last week I reluctantly supported military action. When genocide is ongoing within a democratic state which requests your assistance to stop it and you have the capacity to assist, you assist. However, no one supporting that assistance is suggesting a few RAF bombs will solve the problem; they are but a tiny part of a long-term and complex solution.

We still like to think we live in a binary world of “goodies” and “baddies”, but it’s a lot more complex than that – and actually there are a lot of “baddies” out there. To base intervention on particular atrocities would see intervention on different sides of the same conflict, so that’s useless (which was why I opposed intervention in either Iraq or Syria). To base intervention on which side suits the West only creates further outrage and fundamentalist opposition to the West in the long run. And the “sides” change all the time anyway!

The other issue, which I raised last month, is that the United States is no longer politically (or arguably even financially) in a position to sort these things out alone. Indeed, it never was – it has only been the sole superpower for two decades (while the Cold War looked and felt dangerous at the time, actually two superpowers provide enough coverage and a surprisingly secure sort of equilibrium which we haven’t had since 1991). Those two decades have seen the United States directly attacked, and then become embroiled in conflicts which served no purpose, cost lives, and reduced Allies – many countries involved in the first Gulf War had dropped out of the Western Alliance by the second.

Barack Obama was a horribly inexperienced President right from the outset, but even the greatest Foreign Affairs genius of all time in the White House could not solve the basic problem that is unclear what the United States should do; and it is clear that there are significant practical limitations on what it can do. Europeans now spent woefully little on their military to be of any real use as allies; and the IS surge in Iraq/Syria is in any case tied in all kinds of ways (primarily religious and trade) with conflicts ongoing all the way from the Sahara to the Black Sea.

What we are seeing in the world in 2014 is a shift to multi-powers, with the rise of China and perhaps other BRIC countries (with insecurity enhanced by their own and their neighbours’ jostling for power as others, including religious zealots, fill various new voids left by American inability or unwillingness to act decisively). It does look alarmingly like 1914, when a similar shift from Pax Britannica to the Cold War began and the lamps went out for a generation. It is extraordinarily difficult to see what we should do about it, however – the only thing which is clear is that if we are waiting for the United States to do it all, it will be a forlorn wait.

The English Question

My piece before the Scottish Referendum on the complexities of a Federal UK did not even attempt to answer the “English Question”. The obvious reason for that is that I don’t have an answer to it! A few thoughts, however…

Firstly, in principle, I think there is little doubt that “English-only votes on English-only issues” is now an accepted principle. Labour was foolish initially to seek to deny this, for nakedly partisan reasons. However, as I noted (and others began to note on Referendum Night) this also requires an “English Executive”. It does mean that a UK General Election could see one Government returned at “Federal” level and another at “English” level. Frankly, so be it! (An alternative to this, of course, is that there should be no more UK General Elections – each country should have its own Legislative Elections and then appoint/elect a Federal Senate, perhaps to replace the House of Lords, from there. I don’t think this is a realistic proposition – England just doesn’t do change on that scale, and certainly not just to suit the remaining 15% of the population.)

Secondly, the obvious way to deal with the “English Question” is a set of Regional Assemblies. However, this has been tried. The eight English regions outside London did have Regional Assemblies for some time – by appointment (not unlike a Civic Forum). However, when the North East was offered the chance to elect its, it rejected it by 7 to 2. England just doesn’t really do regions – standing alone, it is the most densely populated country in Europe and, generally, it therefore looks to its cities for identity and attachment rather than regions (which the English often find a suspect “European” thing). This does not totally rule out a return to English regional devolution, but it does mean it would be in the face of the electorate’ own preference – it is not likely, therefore.

Thirdly, there is also the “London Question”. Should London (i.e. Greater London) become more like a “fifth federal unit” of the UK? In my own proposals, I left the option open. My instinct is to avoid that initially (see below).

Fourthly, there is no reason that “Greater City Regions” shouldn’t take on the precise same roles as the Mayor of London and Greater London Assembly in exactly the same way. All law-making powers for England would remain at Westminster; however, significant delegated policy-making authority, particularly in transport and planning (as well as health and welfare budgets), could be delegated to “City Region Authorities” (with areas falling outside those City Regions having their policies made by a specific Department for English Rural Affairs in Whitehall, or perhaps via conglomerations of rural/metropolitan councils). This could be tested in Greater Manchester, and then be put in place at the very least for Tyne & Wear (Newcastle-Sunderland), West Yorkshire (Leeds-Bradford), South Yorkshire (Sheffield-Rotherham-Doncaster), Humberside (Hull-Grimsby), Merseyside (Liverpool-Wirral), West Midlands (Birmingham and surrounding area), East Midlands Urban Area (Leicester-Nottingham-Derby), Avon (Bristol and surrounding area), Urban Hampshire (Southampton-Portsmouth) and perhaps West Sussex (around Brighton and Hove). Most of these already co-operate at local authority level, and could continue to do so. They would have the precise same powers as Greater London – this commonality would be important.

Fifthly, as a final point, there is the absolute potential for such City Regions to raise their own income taxes to pay for infrastructure, or to have borrowing powers.

In other words, some are focusing on English legislative and governance arrangements while others are focusing on devolving powers to English regions or cities. In fact, I think it is obvious both should be done.

A quick fix to Stormont’s broken system

Straight and to the point from my online sparring partner Andrew G. – as noted here last week, it is not so much the system which is broken as our willingness to share the burden, and often unpopularity, of government.

I have written many times before that the problem in Northern Ireland remains that each side is being sold a vision of outright victory, where the “other side” will just go away. For Unionists, Northern Ireland is “British” (whatever that now means), and thus “British” people should have precedence. For Nationalists, Northern Ireland is “Irish” and thus “Irish” people should have precedence. Anyone else is a “guest” – oh yes very welcome of course, but on the home side’s own terms only…

Whatever system you come up with, we still therefore live in a society where people elect parties to deliver outright victory. Since outright victory is impossible, this means eternal gridlock. Each side of that gridlock demands elections and so on, which will only deliver further gridlock. However, we need to remember something: it is not the politicians delivering gridlock. The politicians are only there because we put them (or allowed them to be put) there. We are responsible for the gridlock!

Therefore it doesn’t much matter what “system” you have in place, until we elect parties who are honest enough to recognise compromise isn’t a dirty word, and that in an inevitably multi-party government it will be absolutely necessary, there is no chance of progress. Frankly, we need to stop being selfish and demanding it all our own way or no way. (I have written before how “Progressives” are as guilty of this as anyone else.)

In short, the issue isn’t that we don’t have an opposition, it is that we don’t have a government! It is not that the government isn’t held to account – it is that it is, to the extent that it is even held to account by its own members, rendering effective governance impossible. (That is not to say that a large minority cross-community ‘opposition’ wouldn’t help, by the way – it is just that the problem needs defined properly and we need to be realistic about the prospects of delivering this.)

It so happens, to force some progress, I would establish an external “Independent Standards Commission” on a similar basis to the previously existing “Independent Monitoring Commission”. This would have a remit to do two things:

  • assess the validity of Petitions of Concern, with the power to instruct the Speaker to render them invalid if: a) they do not have signatures from more than one “designation”, and b) it is not clearly indicated how the issue would negatively impact in a discriminatory way on a specific group; and
  • hold judicial authority to remove/bar a Minister found guilty of breaching the Ministerial Code.

This would mean that Petitions could only in future be used as they were intended in the Agreement (i.e. as a genuine protection); and that the Ministerial Code (which was central, we should recall, to the DUP’s “victory” at St Andrews) would be enforced.

This would have an important practical outcome as it would no longer be necessary for both the DUP and Sinn Fein to agree on things for them to pass: either the DUP or Sinn Fein would be free to seek an alternative majority (in practice requiring at least two designations) from among other parties to get things through. This would have the effect at least of limiting gridlock. It would also re-establish the primacy of the Rule of Law and consensus – Ministers would no longer be able to attack the police or the judiciary, nor would they be able to go on “solo runs” on big issues only to find them subsequently overturned in Court.

However, this would still only be a sticking plaster until such time as the electorate realises that if it wants progress for all of Northern Ireland, it has to vote for parties who represent progress for all of Northern Ireland. It’s that simple.

If you’re going to be a pedant…

Ulster Unionist leader Mike Nesbitt corrected Alliance leader David Ford in the Assembly this week – when the latter used the word “referendums“, the former couldn’t get in quickly enough to interject with “referenda!

Well indeed, every Oxbridge-educated scholar would know that the plural of neuter second declension nouns in Latin is -a.

Except, ahem, referendum is not a second-declension noun. It is a gerund, and thus has no plural as such.

It is true that gerunds have plural forms. However, because it is a gerund, referendum in Latin means “referring thing” or perhaps more idiomatically “referred matter”; thus the plural form referenda would mean “referred matters”.

However, only one matter was referred to the people of Scotland last week – thus it was a referendum. The clear context of Mr Ford’s remarks was to refer to similar instances of a single matter being referred – in which case the productive plural formation is quite correctly referendums.

If you’re going to be a pedant, it pays to know your stuff. Quod erat demonstrandum.

Did SNP strategy blow independence this decade?

It was certainly a respectable, if not remarkable, “Yes” vote in Scotland last week. Credit for that goes partly to the general political and social trends of this decade inside and outside Scotland, as well as to an astonishingly well run “Yes” ground campaign.

Yet I cannot help but wonder if an alternative SNP strategy would have secured a “Yes” vote – and possibly even a sizeable majority.

If, instead of producing a 700-page document of its version of an Independent Scotland, the SNP had instead said that a “Yes” vote would be considered a mandate to negotiate a sovereignty deal to be put back to the people in March 2016, would there in fact have been support for that? In this alternative world the SNP would have said “We will consider a ‘Yes’ vote a mandate to negotiate a Currency Union with England and Wales, and accelerated member state status within the EU; then we will come back to you with the outcome of those negotiations with two options – support the outcome, or reject the outcome and declare independence unilaterally.”

It is almost certain that the outcome in those circumstances, in September 2014, would have been a majority for the concept at least of “Scotland being an independent country”, as the uncertainties that “No” was able to play on would have been removed (at least for the time being). A referendum outcome like that would have been a huge mandate that would have left London’s negotiating hand a lot weaker than it would have been even if “Yes” had won last week.

In the event, the outcome of the negotiations may well have been “here’s a mega-devo-max” offer from London and a “Look, you’re going to have to join the Euro” from Brussels. In which case those two options could have been put to the Scottish people with absolute certainty as to the practical outworkings of each. Of course, they may well have opted for the former, rendering the answer to my question in the headline of this piece “No”. But they may not…

I quite admired the SNP’s determination to go for it straight. It worked a lot better than I and many others reckoned it would. However, it also left a lot of uncertainty – which remains, even after. I just wonder if there was another route.

Borrowing key, not Corporation Tax

This piece on a “Federal UK” requires some more thought on the fiscal issues. Frankly, I am no expert on these!

However, I am increasingly of the view that the only two taxes really in play for devolution are duties (on drinks or flights or whatever) and income tax. 

Listening to interviews with the key decision makers on this issue, the relevant point here is that corporation tax is always assumed to be remaining UK-wide (except, naturally, by Northern Ireland’s First Minister in the Assembly yesterday). There is an understandable wariness to devolve this (at least in totality), partly because it is complex (for example, you have to stop Tesco, BP or HSBC just moving its office of registration) but mainly because it would simply encourage a “race to the bottom”.

There is just about the possibility now that Corporation Tax powers could be devolved to Northern Ireland alone as part of a “scatter gun approach”. This would be an error – the fundamental lesson must be that each of the four countries should have the same powers exactly (whether they choose to use them is up to them). However, the strong probability is that Corporation Tax powers will in fact be taken off the table – possibly replaced by income tax powers.

With regard to VAT, I should emphasise that, despite the First Minister’s positivity, I never saw it as a candidate for devolution either (again, just too complex). However, I do see scope to enable any growth in VAT receipts in a particular region to be retained b the region delivering the growth – potentially that even includes City Regions, not just devolved countries.

Note that the likeliest thing is that income tax will be set at 10 percentage points below the current rate, with each country then entitled to raise the remainder as it sees fit.

For all that, the very biggest fiscal requirement for me is one which is never mentioned – borrowing powers. There are two aspects to this:

  • each devolved country should be able to retain any under-spend at the end of each financial year to put into its own pot the following year (currently, except where specifically negotiated, any money left over is returned to the Treasury; the result of this is the mad February/March spending sprees we see to get the money spent, which means it is often spent in a very short-termist and ineffective way – on programmes which don’t help or pavements which don’t need repaired);
  • each devolved country should be able to borrow money, probably from the Treasury (which would need a contingency of its own), or to bid jointly for money from a “Federal Programme Fund” (say for cross-border roads, ferry subsidies or whatever).

It is these borrowing powers, combined with a non-requirement to return under-spends, which would probably make the biggest practical difference – boringly technocratic though they sound!

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