Brexit day 13: "We may pride ourselves on being a back-of-the-envelope nation, but this was excessive"

The news agenda today was led by Sir John Chilcot’s inquiry into the Iraq War. A report of huge depth and detail, it provides a forensic analysis of repeated errors in policymaking and weaknesses in process  in the lead up to the invasion of Iraq and during the occupation. The BBC nutshells the findings here. Today’s issue is therefore shorter than usual.  

Conservative leadership

Then there were three. Fox was eliminated in the vote and Crabb withdrew shortly afterwards. Both put their support behind May who is now screaming into the lead in the Parliamentary party. Unless there are further withdrawals from the contest, the final two runners will be known on after the second round of voting on Thursday evening. The candidate with the least votes will be knocked out and the final two will go to the membership.    

However, the possibility of a coronation of Theresa May has been kicking around over the last day or two. A coronation would entail May being elected leader without having to face a vote in the membership. How could this happen? Just thinking aloud here:

• Both Leadsom and Gove withdraw before Thursday’s ballot, leaving May the only candidate standing (feels unlikely to me but in these strange times, who knows?)
• Gove beats Leadsom on Thursday and then withdraws before the membership ballot in an act of martyrdom (that would need some heavy duty ‘stop Leadsom’ tactical voting)
• Leadsom beats Gove and then withdraws before the membership ballot (perhaps because of the unhelpful stories about her CV, her blog postings, her tax affairs and her ‘UKIP links’ floating around)

May has said she doesn’t want a coronation, and one could argue that the personal mandate that comes from a full membership ballot is pretty valuable for a ‘unity’ candidate. But a colleague points out that she could hardly say the opposite! If a coronation does come to pass, then what? Theresa May would elected leader of the Conservative party, and constitutionally would be able to assume the premiership very quickly. Like in days.

If it isn’t a coronation, another question being posed is: why is the process going to run on for the best part of a further two months if we will know the final two by Thursday evening? Good question. We should probably just get on with it, get the new PM in and get to work instead of drifting for weeks.

Labour leadership

Nothing substantive to report today – including from Tom Watson’s ‘last roll of the dice’ meeting with union bosses yesterday. A former Labour leader seems to have been more in the spotlight. Jeremy Corbyn apologised on behalf of his party for the Iraq War. Tony Blair said he would do the same again.

Trading places

All 28 member state parliaments will get a vote on the Canadian/Europe trade deal known as CETA. While some deals have been fast-tracked in the past, member state governments are increasingly sensitive to the anti-trade sentiment bubbling up around Europe. As such the deal will have to be signed-off national parliaments, in an attempt to address what critics say is the secretive and undemocratic process of negotiating trade deals. Trade Commissioner Malstrom said: “We call upon the member states, who have all asked for this agreement, who have all welcomed it, to also show the leadership to defend it vis-a-vis their parliaments and their citizens…This is a really good agreement.” Brussels watchers say the deal is highly likely to succeed, if on a slower timetable.

An interesting – and provocative - view from Terence Corcoran in Canada’s Financial Post: ‘After days of ritual condemnation of Little England as a bigoted anti-globalization nation, CETA offers a handy reminder of the existence of Little Europe. When it comes to globalization, free trade and the movement of investment and people, every nation — not just Britain — finds reasons to impose limits.’ The first point part of Corcoran’s quote is OTT – he is a columnist after all - but the second part points to a major trend of our time, namely that the benefits of globalisation are increasingly contested.

Companies and markets

Yesterday I was bemoaning the weak pound, and I am today too. That’s largely because, as I’ve mentioned before, the dollar/sterling exchange rate directly impacts the cost of our holiday to the US in September. Whether I will have to get a slightly smaller steak for dinner or drink the house red, of course, is not material to my economic security. It is, as they say, a first world problem. Families (and there are lots of them) who scrap and save to afford their annual holiday will not be so sanguine. Stepping back from the household, and looking towards the economy as whole, the weak pound is an essential shock absorber at this time of economic stress and we should be relieved to see it go down. A weak pound makes sterling assets and exports cheaper (and of course the inverse for assets and imports denominated in other currencies). For those of you who need a pithy explanation of the interaction of exchange rates, current accounts and capital accounts, you could do worse than reading this Lex note.

An interesting email sent to me by a wine-lover. It’s from vintners Clark Foyster and says that their prices will increase in the near future once they have run out of the euros they bought in advance of the vote. Of course, if it applies to wine, it also applies to food.  

People are looking at any number of indicators to divine the health of the economy until official data appear later in the year. Admit it, you’ve looked at Zoopla haven’t you? (wow, the Jones at number 12 have just cut the asking price by £25k!). Chris Giles, Economics Editor at the FT has compiled a Brexit Barometer to look at measures of economic activity. The piece is worth a look, saying that the worst impact was felt just after the vote with a modest improvement in recent days. I wouldn’t read too much into the data this soon after the event but this quote caught my eye: ‘officials in the Treasury say privately that the signs are considerably worse than had previously been estimated and no one knows what is happening across the country yet.’ Let’s see how it all pans out.

Machinery of Government: Lessons of history edition

Despite explicit warnings, the consequences were underestimated. The planning and preparations were "wholly inadequate".

Q. Does the above quote refer to a. Chilcot or b. Brexit?
A. It refers to a. and is slightly adapted from the BBC’s coverage today.

However it could equally apply to Brexit and seems to point to something that seems to have gone deeply wrong in our policy making machinery in recent years. Lord Hennessy is one of Britain’s leading historians of the post-war era and has chronicled Cold War Britain in fascinating detail (often with the assistance of more spooky part of the establishment). He is an expert (one of those!) on the inner workings of government – including a definitive work on Whitehall -  so we ought to pay attention to what he has to say. This is what he told the House of Lords yesterday, and I quote it at length:

 We may pride ourselves on being a back-of-the-envelope nation, but this was excessive. Never have I encountered so many people with so few ideas about what to do in the face of a first order crisis. The litany of post-war crises, which, as a professional historian, I write about from time to time—the sterling devaluations of 1949 and 1967, the Suez affair of 1956, the IMF crisis of 1976 and Black Wednesday in 1992—seem mere blips on the radar screen in comparison.

Never in my lifetime has our politics seemed so envenomed, poisoned still further by a palpable dearth of trust between the governed and the governors. All this at a time when our two major political parties give every appearance of eating themselves, with copious tranches of nervous energy absorbed by their internal stresses and strains.

 In my judgment, the referendum result was like a lightning flash illuminating a political and social landscape long in the changing, exposing yet again fissures we knew about—disparities of wealth and life chances—but whose depth and rawness I admit I had not fully fathomed. What can be done? Winston Churchill, that supreme wartime crisis manager, had a favourite phrase about “rising to the level of events”. That is our pressing duty—all of us in public and political life and the civil and diplomatic services too.

 It is time to stand back and take a long, candid and careful look at ourselves. May I suggest that we need two separate but related inquiries? First, our place in the world. Can we, should we, still aspire to punch heavier than our weight in the world in the way that we do when on autopilot as a nation with a remarkable past and a continuing and sustained appetite for global influence? Secondly, we need to look at our internal constitutional arrangements—the relationships between the nations, regions and localities of the United Kingdom. In my darker moments, I think that 23 June lit a fuse beneath the Union. I profoundly hope not, as a man who loves Scotland deeply and cherishes the union of the United Kingdom almost beyond measure.

 My preferred instruments for these inquiries would be a pair of royal commissions—an ancient institution, rusted by disuse, but it is time to unsheathe it. Failing that, perhaps a brace of Joint Committees of Parliament.

 Of one thing I am certain: now is the time to think above our weight, to draw deep from our wells of tolerance and civility; perhaps even to fashion a new political vocabulary to help us think aloud together as a people and a nation about what is to become of us;  o rise to the level of events; and perhaps even to surprise ourselves and the watching world by the quality, the care and the foresight of what we do.

Money in politics: Leave raised more money than Remain during campaign

The fourth and final pre-poll donation report for the EU referendum was been published today. This covers the period from 10 June to 22 June, the last day of campaigning before polling day. Over the course of the period covered by pre-poll reporting requirements, which began on 1 February, registered campaigners reported a total of £31,834,885 in donations. This includes £14,276,376 donations for those campaigning for 'Remain' and £17,558,509 donations for those campaigning for 'Leave'. By contrast, the 2015 General Election spending was £39,023,564 in total.

Social media posting of the Day

From Have I got News for You: