Sunday 28 February 2016

The problems with the staying in the EU argument

The referendum date has been set and the campaigning has started in earnest. Even at this early stage, it looks likely that the vote to remain will win. David Cameron and George Osborne will be stressing the threats to the UK if we vote to leave the European Union, and this concern about the loss of jobs will trump any worries over immigration or British sovereignty.

The argument that we should vote to stay in the EU because of the jobs loss that will result if we leave is a powerful one, but is it the best course of action for the pro-EU side? I think they would prefer to run a positive campaign that inspires people about the role the UK can play in Europe, but they will ultimately fall back on the vision of an isolated and impoverished Britain outside the EU.

The industry that stands to lose the most from an EU exit is the finance and banking industry. The City of London is the financial core of the EU and, if we vote to leave, then many global finance companies will relocate to Frankfurt to get better access to the EU’s financial markets. The resulting loss of jobs would be felt up and down the country, when we consider the supply chain that financial companies are plugged into. Many companies outside the City are dependent on the economic activity that goes on there, and if you remove those London companies there will be job losses in Newcastle, Bristol and Blackburn.

I hate having to admit that the UK economy is dependent on the whims of bankers; that they could choose to leave at any movement, and that would cause a lot of economic problems. That line of thought leads to the argument that we need to be as nice to bankers as possible - not tax or regulate them too much - to keep them happy and employing everyone else. There is a serious argument to be made about how unbalanced the British economy is and how dependent upon the finance sector we are, but in the short run we have to work with the economy we have.

Do we want to be a part of a Europe that exists to further the interests of the financial industry? Not really, is my answer, but an existence of principled poverty is equally unappealing. Still this argument is not the stuff of folk songs and banners. "Vote yes so that we're not totally fucked." “Daddy, what did you do during the great EU debate of 2016?" "Well son, I soberly told everyone that the EU is not perfect but we are reliant on it and we need to make a pragmatic decision based on jobs and the economy." This is no one’s ideas of our finest hour.

The argument that we are more secure within the EU goes beyond the jobs that will be lost if we leave. Europe is facing an unprecedented level of challenges, from migration to Russian expansionism, from environmental crisis to financial instability. The UK needs to be involved with Europe to participate in the solution to these problems, rather than just burying our heads in Union Flag bunting and hoping that the problems will go away.

However this is also another scare tactic to convince people to vote to stay in. The message is that Britain will be overloaded with refugees we cannot house, then drowned under melted polar ice, bankrupt from financial chaos and then crushed by Russian tanks. It is not an argument to convince anyone to love the European Union, it just makes voters frightened of the lonely world outside the EU.

The EU needs better PR if the stay campaign want to really convince people that EU membership is something important to be protected. The yes campaign is trying to be positive about the benefits of EU membership, but it will not be as effective as a scare campaign. After all, a positive message about British togetherness and shared successes during the Olympics had little effect during the Scottish Independence Referendum. Messages of doom and gloom if Scotland left the union did work.

The issue is that not many people in Britain love the EU. Although most will probably vote to stay in out of fear of the consequences of leaving. The problems of Britain's antipathy towards the EU will not be resolved by a campaign that bullies voters into staying in. The yes side need a campaign that appeals to people's hopes and aspirations for a better tomorrow, what we can achieve by working with our European neighbours. It needs to be positive and effective to settle this issue once and for all.

My biggest fear is that a yes campaign based on scare tactics will ultimately win but will not satisfy anyone. Britain will remain a part of the EU, but dislike of the EU will be at an all time high. Being reminded that we need the EU because we have to keep the finance industry happy - or else they will take away our jobs - and that the finance industry likes the EU is not a strategy to inspire affection and confidence in the European Project. Britain may vote to stay in, but the desire to leave will be stronger than before.

Ultimately this will not settle the issue and will only sow the seeds of another referendum, especially if a new EU treaty is proposed. We need a debate around this referendum that leads to some concencious over the EU, not one which leads to more hostility in the future. Those who are set in taking the UK out of the EU must get the clear message that Britain wants to stay in, or else they will begin this process all over again.

The problem with the yes campaign is that a strategy based on frightening the electorate will not settle the issue of whether EU membership is in Britain's interests. We need a positive campaign about the EU to convince the electorate once and for all of the benefits of Britain taking an active role in the EU. A scare campaign maybe the easiest route to victory, but in the long run it will fan the flames of the desire to leave the EU.

Sunday 21 February 2016

The left wing case for staying in the EU

Recently I laid out the left wing case of leaving the European Union. This was aimed more as a counterpoint to UKIP and their xenophobia than it was to those who want Britain to remain a part of the EU. Many on the left believe there is a lot to be gained from Britain having an active role in Europe, so here is the left wing case for staying in the EU:

The EU is generally more left wing than the British government has been over the last few decades, especially on economic issues. EU regulations prevent the worst excesses of private business. Health and safety standards and working time directives protect us from unsafe working conditions and long gruelling hours. I cannot imagine the Cameron or Blair governments passing the same laws.

Atlantean free marketeers (like Douglas Carswell) see this EU referendum as an opportunity to reduce regulation and government oversight of the British economy so that it becomes more competitive. George Monbiot aptly describes these as “rules that prevent children from being poisoned by exhaust fumes, rivers from being turned into farm sewers and workers from being exploited by their bosses.” Without the EU we will have less job security and less safety in the workplace.

The issue of large companies avoiding tax is also one that can only be tackled at an international level. The Conservative government has shown that it is intensely relaxed about large companies paying little or no tax, despite the fact these companies benefiting from government spending on education, healthcare, transportation, etc. The European Union has already indicated that it might force Google to pay more tax than the paltry sum which George Osborne negotiated with the search giant. In the age of globalisation and multinational companies, only multinational governments can hold large private firms to account and make them pay their taxes.

The greatest argument in favour of Britain taking an active role in the EU is that our future is intertwined with the EU countries, whether we are inside the EU or not. Our cultures and people are intertwined. There are 2.3 million people from other EU countries living inside Britain, bringing with them a huge diversity in language, food, religion and culture. There are also 1.26 million British people living abroad in other EU countries. If we left the EU these connections will still be present, the people of Europe will still be mixed together, but Britain would have no political voice in this shared European society.

I love the diversity and that immigration that EU membership brings to this county. I believe it makes us a more tolerant and flexible society, easily able adapt to the challenges of the future. With conflict spreading in the Middle East, China's economy slowing down and environmental crises looming Britain needs all the strengths and diversity of opinion it can get. The right thinks the free market can solve these problems, the left knows that only with European governments working together through the EU can these issues be tackled.

In the refugee crisis, Europe is being tested by an external shock. All the countries in Europe have been affected by the huge influx of people. With climate change meaning more environmental disasters and sea levels rising, we will see a lot of immigration into Europe over the next few decades. This will affect all of Europe and Britain needs to part of the solution. Pulling up the drawbridge will not work.

I believe in the wider EU project, the idea that it is in the interest of all the European countries to work together to solve the problems we are all facing. Europe is stronger when its countries are united in government as well as in purpose. The EU is the larger structure that allows European governments to respond collectively to the challenges of a globalised world. A country like Britain does not have the clout or the economy to influence global events alone, but by working with our neighbours we can be a powerful force for good in the world.

The nations of Europe have not fought a war between each other since the inception of the European Union, because we recognise that it is in all of our best interests to work together, share resources (such as labour and capital) where needed and to tackle problems with a united front. The EU is certainly not perfect and reform is needed to improve its ability to achieve this mission, but if we are to meet the challenges of the future then we need a multinational government with British representation. Leaving the EU is to sacrifice co-operation with our neighbours in favours of a mythical belief in the superiority of Britain.

Tuesday 16 February 2016

The left wing case for leaving the EU

"Who will speak for England?" the Daily Mail asked, last Thursday, as they tore into Cameron's negotiated deal with the European Union. The announcement of this framework acts as a firing pistol for the race to secure Britain's place either in or out of the EU and has triggered a national debate about the merits of Brexit.

Certainly the EU is not perfect; the way Greece has been treated over the last few years has led me to firmly consider a vote to leave. However one issue is not enough for me to make up my mind. The arguments for both staying and leaving are complex, and reflect the politics of the person arguing. We have heard a lot from Nigel Farage, Douglas Carswell and Chris Grayling about the horrors of the EU, but in the midst of all this anti-immigration table thumping it has been largely overlooked that there is a solidly left wing case for leaving the EU.

On some level I feel obliged to support the EU just to spite the people I really hate - namely UKIP. Personally, I do quite well out of the EU. I live in London, which is awash with European cash, and no one loves the European city break more than me. However, I recognise that other people might not benefit quite so much from EU membership and I want to vote in the interests of people who are not as well off as I am, rather than my own.

On that note, what follows is the left wing case for Brexit. At some point in the near future the left wing case for staying in the EU will follow.

The first major point is that most people do not know what the EU is for or what it does. Aside from a few nebulous points about bringing Europe together, what does the EU actually do? The EU does has a profound affect on all our lives, mainly it provides the regulatory framework that Europe wide businesses operate under. These large companies employ a significant proportion of the British workforce and heavily contribute to our GDP. However the British voter is so disconnected from the decision making process behind this regulatory framework that we cannot have much of a say in how the EU is run.

Due to this, the EU is less accountable than our own national governments. Most people do not have a good understand of the issues and factions within the EU, which makes it very hard to have an informed opinion during European elections. I am very interested in politics, and even I cannot name the main centre left and centre right blocs within the MEPs.

I find it deeply worrying how disconnected we are from the debates in Brussels, which fundamentally limits the British voter's ability to have a say in how the EU is run. For this reason I would prefer decisions to be made closer to home, so that more people can participate in and feel affected by politics. This opinion extends to a belief that more power should be moved from Westminster to town halls around the country.

The regulatory framework that the EU provides exists to make it easier for multinational companies, mainly banks, to operate in the single European market. It grew out of the European Coal and Steel Community and has always sought to make Europe richer by providing a more stimulating environment for business. Whether intentionally or not, it mainly serves the interests of large financial companies and companies wanting cheap labour to drive down the cost of production.

TTIP (the Transatlantic Trade and Investment Partnership) deal is good example of this. It is a proposed agreement between the EU and the USA, which will erode national government’s powers to regulate businesses. This is a clear example of the EU putting the needs of multinational corporations above its citizens. If we don’t want to be a part of TTIP then we need to leave.

Another example is the austerity imposed by the European Central bank on poorer EU nations. This has damaged the provision of social security, led to redundancies and wage cuts, depressed their struggling economies and resulted in huge privatisations in many countries. I do not want to be part of an EU that strips welfare and removes the provisions of public services from its poorer citizens.

Should a genuinely left wing government be elected in the UK, then the EU’s regulatory framework will make it harder for said government to implement its policies. Policies such as financial sector reform or higher progressive taxes on the wealthy will be difficult to implement in the single market of Europe, where it is easy for companies or individuals to move overseas where circumstances are more favourable. If the left wants to achieve socialism in Britain then we need to leave the EU and be fully in control of our own destiny.

Iceland is a shining example of how we should have dealt with the 2008 financial crisis. They allowed a few large banks to go bust, implemented legal reforms on the surviving banks and jailed bankers who were found to have broken the law. Iceland is also outside the EU and probably could not have done any of this if they weren’t. There are advantages to not having a seat at the table when the table is on fire.

As much as I love being able to interrail from country to country on my British passport, the reality of membership is not so rosey for low paid workers. Open borders and free movement of labour has driven down wages of low skilled workers, while allowing British firms to move jobs overseas where labour costs are less. Jobs in trades or construction that used to be well paid are now minimum wage jobs because of the income eroding power of the unregulated EU labour market.

This could be prevented if the government provided more protection to workers and invested in training for the low skilled. However this Tory government has clearly put the needs of large companies, which save money from the supply of cheap low skilled labour, above the well-being of these workers themselves. The only option to protect low skilled workers is to vote to leave the EU.

The case for voting to leave the EU goes beyond the anti-immigration arguments of UKIP and eurosceptic Tories. There are strong left wing arguments for leaving the EU, as the EU is more interested in helping businesses than helping ordinary people. If we want to use government to challenge the power of the financial sector and to help the poorest members of society, then it will be necessary to leave.

If you are interested in reading the left wing case for staying in the EU then it can be found here.

Sunday 7 February 2016

What makes a leader?

Sometimes it feels like our leaders are cut from a different cloth than the rest of us. They are frequently tall and good-looking, always smartly dressed and knowledgeable. They project these characteristics with confidence; this is how you know who is in charge when you walk into a room.

A myth has grown up around our political and business leaders that they have the most experience, they are the most knowledgeable and have the most creative ways of tackling problems. Why else would they be in charge? The rest of us have to have faith that the people in charge know what they are doing. We believe that our leaders are creative, innovative and original thinkers and that the incentive system rewards creative, innovative and original thinking. In reality our leaders are none of these things.

Professor Aeron Davis has specialized in studying our leaders, the elite or the 1%. He has talked to powerful people in the worlds of business, finance and government, including CEOs, venture capitalists, senior civil servants, politicians and policy advisers. Last Tuesday, in a lecture at Goldsmiths University, he shared some insights into what he has discovered about the people who control our lives.

The first thing that Professor Davis discovered is that leadership is like speed dating. This may seem like a strange comparison, but when you consider speed dating is a lot of people hopping from table to table quickly, then this is quite an accurate analogy for leadership. In his research, Davis discovered that a third of CEOs had been in their current positions for less than 2 years, and two thirds had been in their job for less than 5 years. One-year contracts for top executives are becoming more common. Top executives move in, work briefly in a senior position and then move on to another one at a speed that is completely alien to most people’s career progression.

The same is true of top positions in the government. Davis discovered that most cabinet ministers hold their job for less than two years. Senior civil servants and advisers are also moved from role to role every few years. In the world of finance, the average time a share is owned before being traded has dropped to 22 seconds. All of this makes me wonder how CEOs, investors or ministers can have any knowledge of what they own or run? The simple answer is that they do not. Often our leaders have no experience or understanding of what they lead. How can they when their tenures are so short?

Leaders many not understand the government department or company which they are running, but they understand the problems they are trying to solve, right? Surely in our modern competitive world, you can only get ahead by providing a solution to a need or want experienced by a large number of people? Not according to Professor Davis, who said that the lives of CEOs are a never-ending conveyor belt of fast-paced meetings. Their understanding of the needs or wants of our lives are limited.

Most senior business leaders or politicians only associate with each other in environments from which ordinary people are excluded. A good example is the arcane customs of parliament, which make outsiders feel unwelcome but send subtle signs to elites that they are in their own space. During the documentary Inside the Commons, David Cameron remarked that parliament looked like a cross between a church and a school. My school, a state run prefabricated modernist structure, did not look remotely like the neo-gothic pomposity of the Palace of Westminster, but parliament is not a place for people like me, it is a place for people like David Cameron.

We have an image of leaders - especially in business - as brilliant iconoclasts, people who think differently and create new products or ideas. Steve Jobs, for example, was someone who created a dazzling array of new consumer goods and conquered the technology market. Never mind that Jobs did not invent the computer, MP3 player, smart phone or tablet, most leaders are not even original enough to refine a product that someone else has invented. Due to their short contracts, leaders are quite risk-averse and creating something new is risky.

If doing something new it goes wrong, then a CEO can wave goodbye to the extremely high-paid speed-leadership scene and go back to living like the rest of us. CEOs would rather not risk it. Following what other companies are doing is much easier. Apple can popularise the tablet and then every other company can follow them into that market. It is safer that way. Maybe this is why we have a huge number of smart phones on the market but no flying cars.

Jokes aside, the image of the freethinking innovative business leader is a myth. Professor Davis claimed that leaders are more like lemmings, blindly following each other in the same direction. This is as true for politicians as it is for CEOs. Thatcher brought in neo-liberalism, and Labour followed suit. Blair had his army of spin-doctors and media-trained professional politicians, and now the Tories have the same. Original ideas are too risky. This is why every economy in the world liberalised their financial sector and transferred enormous power to their banks. Finding a different economic model was too risky, even when the risk of financial meltdown was high. This is why we have not had banking reform even after the 2008 financial crash.

The final one of Professor Davis’s insights into our leaders is the culture of targets. He said many of the CEOs and financiers that he met told them that neo-liberalism is a superior economic model to socialism or a mixed economy, but in application they did not see how free markets worked any better than state intervention. What works is targets. Targets set by leaders and then implemented by everyone else.

CEOs or government ministers are very good at gaming this system of targets to their own advantage, mainly because they set the targets. This has led to everyone else’s work becoming part of a giant computerised accounting system, where we are all compared to how efficiently we achieve our targets. The long-term effects of this have been wage stagnation and insecure employment, but also rapid economic growth and spiraling rewards for those at the top. Most people think the financial incentive system is set up to encourage effective leaderships, whereas in reality it is exploited by our leaders for their own financial advantage.

The leaders of business, finance, the civil service and politics live in a world isolated from everyone else, where they set their own short-term targets, follow what everyone else is doing, see a short-term uptick, and then rapidly move on to a better-paid position somewhere else. We have to complete their targets and have faith that our leaders know what is best for us. Over time, inequality has worsened, living standards have fallen and our leaders have become more remote from us. The net result of all this is that the world belongs to the 1%, and the rest of us just live in it.