The week started very badly for our new PM and her Chancellor. Last weekend, Truss and Kwarteng still insisted that they would not budge on their signature “mini-budget” despite its disastrous impact on the UK economy and financial system. By Monday morning it became clear that the government would have to drop the planned scrapping of the 45p tax rate in order to avoid a defeat in the House of Commons that could have spelt the end of Truss’s premiership. Worse still, the announcement of the climb-down came during the week where all the media attention was on the Conservatives who congregated in Birmingham for their annual Conservative Party Conference (CPC). The U-turn – in no small part orchestrated by Michael Gove and Grant Schapps – then led to more demands for changes to the government’s plans, including keeping Johnson’s promise of benefits rising in line with inflation, which Truss refused to commit to.
Things did improve somewhat for Truss after that shock start to the CPC2022, with her party speech deemed unspectacular but less bad and better delivered than expected by commentators like Alistair Campbell and Rory Stewart. By the end of the week, it seemed like she had bought herself some time with her MPs, but clearly a rebellion against her is smouldering just below the surface. More importantly, perhaps, recent polls indicate a dramatic turn against the Tories under her leadership. The most recent polls indicate 24% voting intensions for the Tories compared to Labour’s 51% and her personal approval ratings at an abysmal -47%. She may have staved off an early revolt against her premiership (but not against her policies), but clearly her troubles are only just beginning.
In the shadow of all the political tohubohu and turmoil – amplified by the CPC2022 – three interesting Brexit-related things happened, which may indicate that the tide is slowly changing.
NIP
Firstly, the tone around the UK-EU technical talks over the Norther Ireland Protocol (NIP) has markedly changed. Talks have resumed on Friday and to some extent the atmosphere seems to be more constructive than it was back in February when the previous round of talks faltered. On Monday, in a surprising move, arch-Brexiter, European Research Group (ERG) member, and Northern Ireland minister Steve Baker apologised to Ireland and the EU for his and Brexiters’ attitude during the Brexit process. He also said that “[w]e need to be very, very practical, move this conversation forward, and come up with a deal that works for everyone.” While he stopped short of saying that the decision to push for a hard Brexit and against Theresa May’s deal was a mistake, he went as far as calling the UK Northern Ireland Bill – which would unilaterally tear up the NIP – a ‘wish list’ rather than a ‘red line.’ This contrasts considerably with the government’s previous approach of arguing that only if you can credibly threaten that you are willing to ‘push the red button,’ would the EU listen. Whether or not this is a genuine and permanent shift in approach by the Northern Ireland Office and the UK government remains to be seen. The PM herself sent some contradictory signals, initially saying that Baker spoke for the government, but at the same time – in an interview with the Belfast Telegraph; so probably with unionists in mind – stating he was speaking for himself when apologising.
The relative détente did seem to bear fruit. On Friday, the Northern Ireland Secretary Chris Heaton-Harris and Ireland’s foreign minister Simon Coveney stroke an optimistic note over the chances of reaching an agreement. While no deal will be signed before October 28th, 2022 – the deadline for the Stormont Executive to reconvene before triggering a new election for the Northern Irish Assembly – both politicians suggested that a big step forward was possible, which might convince unionists to return to the power sharing executive they left in February.
Much will depend of course on the Democratic Unionist Party (DUP) whose decision to withdraw their ministers from the Executive in February has led to the current situation. The DUP met this week for its annual conference for the first time since 2019. Its leader Jeffrey Donaldson warned the PM that if the unionists’ demands are not met over the NIP they would not re-enter the Stormont Executive and thus trigger a new election. It may very well be that, under pressure from activists, these demands are interpreted in a maximalist way, i.e. that nothing short of getting rid of the NIP entirely would be acceptable. Indeed, various unionists are cited as considering the government’s conciliatory stance as a betrayal of their commitment to scrap the NIP.
EPC
Secondly, UK PM Truss attended the European Political Community (EPC) inaugural meeting in Prague this week. The EPC emerged from an initiative by French President Emanuel Macron. It constitutes a new forum attempting to bring together European countries beyond the EU in the face of increasing external threats. While some observers are sceptical about the need for another inter-governmental organisation on the continent, the establishment of the EPC is an important development, because it may indicate that perhaps some in the EU starts understanding that it needs new ways of dealing with ‘third countries.’ Indeed, as I wrote a while ago in relation to the Swiss case, the EU’s relationships with third countries are notoriously complicated, often fraught with tensions and threats. Creating a new forum that is not dominated by EU institutions, focuses pragmatically on a narrow set of issues without an expectation to move towards closer integration, may provide a starting point for the EU to develop a more productive model for managing relationships with countries who do not want to become member. Such a forum may obviously be good news for Brexit Britain.
It is significant that the UK government seemed more interested in engaging with this initiative than the isolationism of the past years may have led us to expect. Indeed, Eurasia Groups’ Mujtaba Rahman interprets the UK’s participation in the summit as a sign that the “days of permanent Brexit revolution and aggression toward the EU appear to be over.”
Truss’s participation in the meeting seemed to bear fruits immediately. Her childish and ill-advised jibe against the French President during the Tory leadership hustings had reportedly derailed an agreement with France on preventing migrants crossing the English channel in small boats. The meeting in Prague has allowed Truss and Macron to mend their relationship and issue a joint statement committing to collaboration on energy, immigration, and the two countries’ support for Ukraine.
Perhaps this is a sign that it starts dawning on Brexiters that the UK remains part of Europe and needs to somehow re-establish a functioning relationship with its closest neighbours. The EPC as a new forum that the UK can contribute to shaping from the beginning may provide the political space to do that without Brexiters losing face by reintegrating existing European institutions.
Creating a new enemy
A third development this week reinforces the view that we may be turning a corner in terms of Brexit. The PM’s CPC speech was much less focussed on Brexit than Johnson’s speech at last year’s CPC, which was all about alleged Brexit benefits. Truss did mention that the Conservatives ‘got Brexit done and we will realise on the promise of Brexit’ and she referred to European judges, but here too it feels like Brexit may no longer be seen as the one vote-winning slogan that keeps the Tory party together. Importantly, there was very little Remainer or Rejoiner bashing in Truss’s speech.
That said, while Truss’s government may have shed most of Johnson’s levelling-up populism, it remains fundamentally a government whose ideology is deeply rooted on populist division to survive. Therefore, as this week provided early signs that the Brexit divide – which has proven so useful to the right-wing ideologues who have taken over the country – may not do the trick anymore, the Truss government is proceeding to create a new enemy. Of course, Home Secretary Braverman still seeks to play the Brexit-related immigration card with her despicable comment about dreaming of deporting people to Rwanda. But Truss herself is more relaxed about immigration and is taking the Tory politics of division in a slightly new direction by fabricating a new enemy: The anti-growth coalition.
Who are the people in this coalition? In her speech, Truss mentioned explicitly Labour, the Lib Dems, and the SNP, as well as “the militant unions,” “the vested interests dressed up as think-tanks,” “the talking heads,” a new species called “Brexit deniers” (what exactly that means is unclear – probably those denying that Brexit was a good idea), Extinction Rebellion, people living in North London townhouses, those working in BBC studios, and people doing broadcasts and podcast.
Conversely, Truss claims as her allies those “who make things in factories,” those “who get up at the crack of dawn to go to work,” “the commuters who get trains into towns and cities,” as well as the “white van drivers, the hairdressers, the plumbers, the accountants, the IT workers.” It is the latter, who in Truss’s universe, suffer from the “enemies of enterprise [who] don’t know the frustration you feel to see your road blocked by protesters, or the trains off due to a strike.”
Whether the ‘anti-growth coalition’ slogan will catch on is doubtful, given that a few road blocks to draw attention to the fact that humanity is facing an immediate existential threat in the form of climate change, probably causes a limited amount of disruption to enterprise compared to the costs imposed on them by new trade barriers with the EU, new Brexit red-tape, duplication of regulations, the uncertainty caused by Brexit, and anti-immigration induced labour shortages. Indeed, Channel 4’s Krishna Guru-Murthy rightly asked Tory PM Edward Agar whether Brexiters are the real anti-growth coalition. Even the not exactly ‘far-left’ CityAM editorial board sees Truss’s talk about the new enemy as ‘bizarro fifth-column paranoia.’ Together with the fact that her economic strategy over her first weeks in office has managed to alienate the Tories’ most crucial electoral base – namely home owners –, this does not bode well for her chances to win the next General Election.
Apocaliz Now: The beaver in the room
The eventful week that just passed should not make us forget one thing though; namely, that above anything else, the Truss government is mainly a very unfortunate distraction from the real problems we are facing. While her ideology clearly does not catch on with the public and even with Tory MPs and usually Tory-supporting groups in society, she does have the power to shape the agenda and the way we speak about things. Her, ‘growth, growth, growth,’ rallying cry has promoted criticism, but mostly because of (legitimate) doubts that tax cuts and borrowing are the right strategy to deliver growth. Indeed, the claim that Trussonomics is what will deliver growth is questionable in itself, as I argued before. But even worse – and almost completely neglected – is the fact that Turssonomics is based on the wrong idea that economic growth – defined as growth in Gross Domestic Product (GDP) – in itself will solve any of our problems. Given that trickle-down-economics does not work, economic growth necessarily needs to be combined with some form of redistribution to have any positive effect on the less well-off strata of the population. More fundamentally, the fetishising of GDP as an indicator of well-being needs to be debunked, but Truss’s unapologetically pro-growth discourse has made it dangerous for any group in society to suggest they are anything else than pro-growth themselves.
Even if we accept that, given the world we live in, economic growth is necessary – but clearly not sufficient - to increase living standards across the board, the fact is that there are many different ways in which you can grow GDP. I remember our ‘Econ 101’ professor at uni illustrating what an ambiguous measure GDP is by explaining that a car crash increases GDP. In this sense, one way of generating GDP growth is by radically cutting regulations, lower taxes, and attract all sorts of dodgy investors to the country. That will increase GDP, but create asset price bubbles rather than jobs. That is essentially Kwarteng’s car crash plan with his Big Bang 2.0 strategy or the government’s car crash idea that companies with fewer than 500 employees will be exempt of regulations (Although, this week has also shown that the PM’s deregulatory zeal has limits, as she reportedly quashed a ‘half-baked’ labour market reform proposed by Business Secretary Rees-Mogg).
Another way to growth GDP would be to invest in the inevitable changes that all economies will have to go through in order to increase our chances of surviving the looming climate catastrophe. Indeed, once the resistance of vested interests will be broken, low-carbon goods and services will inevitably become the growth industries of the future. Shifting to a low carbon economy will require massive investments but also have the potential to deliver large numbers of new jobs and economic growth. That sort of growth is different from Truss’s ‘growth, growth, growth,’ which is based on the old absurd ideas of unlimited natural resources and endless expansion of human industrial activity at any cost.
Despite the timid signs of realism regarding Brexit, when it comes to the ecological catastrophe we are facing, Truss has not shown any pragmatism, but instead shows her most childish and petulant self. This week, for instance, the PM opposed a plan by Business Secretary Rees-Mogg to encourage British households to save energy and she advised King Charles III not to attend COP27 climate summit. Such decisions are hard to explain with anything else than ideological denial of reality. It is striking to see that her attitude towards the natural environment is more reactionary and reality-denying than that of her predecessor who – in spite of his many faults and two-facedness – used last year’s CPC speech to promise rewilding 30% of the UK’s country side and gave a special mention to the return of beavers and otters to UK rivers. More evidence that even by recent very low standards the current government must be the most reactionary the UK has ever seen.
Overall, then, this week has provided some hopeful signs that there may be a change in the Tory’s approach towards Brexit and that at last the Brexit divide may start losing its prominence in British politics. Yet, the bad news is that if realism is returning and perhaps preparing the ground for a less ideological approach to Brexit, in the area of the environment Truss and her far-right gang remain deeply stuck in their denial of reality. The good news is, that this approach places her firmly on the wrong side of history, as denying the ecological emergency we are facing may be just about viable for another few years, soon enough the looming catastrophe will be too obvious for anyone to deny. By trying to please her far-right libertarian backers, Truss is in the process of alienating another group who are aware of that and potentially could provide her with important electoral support, namely rural communities and people who care about nature, as the backlash against her policies from the National Trust and the RSPB indicates. As Chris Grey noted this week, the government’s hopelessness is our best hope at the moment.