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29th April 2015, Washington DC
Project for the Study of the 21st Century (PS21)
The UK Election Does it really matter?
Moderator: Sir Michael Leigh
Dan Roberts Washington Bureau Chief, The Guardian
Peter Foster US Editor, The Daily Telegraph
Scheherazade Rehman Professor of International
Business/Finance and International Affairs, George
Washington University
Sir Michael Leigh:
Good evening everyone. My name is Michael Lee. Im a former
official of the European Commission. I
was there for many actually, in different capacities, most
recently working on the enlargement of the
EU, the accession negotiations, and Im now an advisor at the
German Marshall Fund here in
Washington. I work on various European themes, Britain and the
EU obviously, but also external
relations and foreign policy. I follow developments in the
Eurozone quite closely, so quite a range of
European issues, and being here in Washington and working for
GMF, which is dedicated to trans-
Atlantic cooperation. I also look at the implications of these
developments in the U.S.
Well, what I thought was: we would divide our discussion this
evening into several parts. We might first
look at the situation leading up to the elections and look at
the record of Mr. Camerons coalition
government and the manifestos of the different political
parties. Their claims as to what they would do
if they were elected. And then, we might put our heads together
and do some informed speculations as
to what the outcome of the elections could be and then consider
the implications of that. If thats
agreeable to you, I suggest we begin by a few words on
developments over the last five years,
particularly viewed from here in Washington. What do we think
about the current state of Britain, the
achievements of Mr. Camerons coalition government, and
preoccupations here in Washington? I
contributed, last week, to a piece produced by Carnegie Europe,
that was looking at the state of the so-
called special relationship between the United States and the
United Kingdom and a number of real
concerns were expressed on that occasion. I wont go into them
right now because Id like, mainly, too
here from you, but how do things stand, from your viewpoint now,
just ten days or so before the
elections. Who would like to intervene on this subject?
Dan Roberts:
Im happy to kick things off. Ive been based here for a couple of
years as the bureau chief of The
Guardian here, but I used to be based in London, so I followed
the beginning of the coalition, if not the
end of it. I think whats interesting from a U.S. perspective
particularly, is how economically focused this
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election has been and a very interesting test case in austerity
economics and deficit reduction being
pushed as the primary focus of the coalition government. I dont
know how many of you remember the
dark days after the banking crisis. They coincided with the last
U.K. election and the coalition that was
formed between Tories and Lib-Dems was very much forged in a
moment of crisis, frankly, and people
didnt quite realize how precarious the U.K.s finances were at
that moment. The U.K. had been hit by
the same banking crisis that hit the U.S. The difference was
that we didnt have a reserve currency and
there was a very serious risk of a run on the pound. The U.K.
election happened almost at the darkest
days of that. The economy had just begun to turn the corner. The
elections were too tight for any one
party to form a majority and a coalition was in the cards. The
markets started to panic and there was
real sense that something had to be done very very quickly and
it was all about stability.
This election, to my mind, has become a vote on whether that
worked or not and whether the pain that
a lot of the country felt it had to go through was justified.
The Tories have run very strongly on the idea
that we turned the corner and the job picture looks quite rosy
and Labour has fought very hard on this
being unnecessary austerity and an excuse for the ripping apart
of the welfare state and an ideologically
driven exercise in rolling back fifty years of welfarism in
Britain. Some on the Tory right would
celebrate that. Increasingly its become a twofold exercise. One
stabilizing the national finances and
one correcting what many people felt had become an overly strong
state. The complication has been
the arrival of two other parties into the game.
Sir Michael Leigh:
Staying with the economy for a moment, lets pick up on some of
those points that you made. So the
conservative party goes into these elections with the claim that
its fiscal consolidation has succeeded. It
quite ironic that in the course of this government, Mr. Osborne,
the Chancellor of the Exchequer, the
finance minister, found himself challenged by, of all
institutions, the IMF, to some degree, that argued
from the more Keynesian perspective, that expansionary
contraction is a contradiction in terms. There
were almost tensions between the government and the IMF. But
here they are now with the economy
growing around three percent, although the last quarter showed a
somewhat diminished growth rate
compared to the twelve months previously. Do you think its
convincing to the electorate that these
policies are perceived as having been successful and therefore
the government can go into the elections
feeling confident that the electorate will consider that they
are the best-placed to handle the economy?
Scheherazade Rehman:
I think that the voters would like quicker results. Thats clear.
I think we may need to step back a little
bit. What happened in the aftermath of the financial crisis that
began in 2007 was very devastating. We
had a crisis here in the U.S. which was the largest crisis we
had seen in eighty years. Europe not fell into
that crisis, but then had another one on its own in 2010 with
the sovereign debt crisis. The U.K.,
fortunately, did crisis management a lot better than anyone else
did in continental Europe, as we have
seen. Part of that has led to the success of having roughly
between two and three percent growth. As
you can see, there is zero growth in most of the E.U.
continental countries, negative growth in some,
and barely one percent in most others.
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Austerity measures were seen by the marketplace as something
that was necessary in Europe and when
there is a panic in a crisis, markets dont care whether youre
Portugal, Spain, or Greece. You all look the
same. The U.K. government, by default, was almost forced to
implement austerity measures, even
though what happened there was different from what happened in
the rest of Europe. Having said that,
there was one thing that they did that the Europeans didnt do
and that was crisis management. They
followed the U.S. and provided liquidity into the system. That
liquidity forestalled more serious
repercussions in terms of investments being pulled back and here
we are, seven to eight years into this,
and pound is stable. The economy is coming back. The U.K. has
the largest capital markets in the world.
Financial markets are still viable. Investments are coming in.
They look nothing like Italy or Spain or
some of the other countries.
Sir Michael Leigh:
They can boast that theyve done a good job yet, as in the U.S.,
voters dont seem completely convinced
by this. And, as in the U.S. where you have relatively low
unemployment, only 5.6%, but also a lot of
low-paying jobs and growth without median incomes increasing.
So, many voters are really skeptical
about this claim. How do you feel about that?
Peter Foster:
Its interesting, isnt it? From an American perspective, and the
Americans have been on the Germans
case to invest in more infrastructure and actually to open the
spigot and, in fact, from an American
perspective, the British austerity was something that never
happened. Quantitative easing, interest
rates are still low, there was talk of raising them two or three
years ago and here they still are at flat
rates. In lots of ways, it was the austerity that never
happened. It was sold as austerity, but in lots of
ways its actually a QE-led growth story. I think whats
interesting for British voters, and this is as a
result of what happened with the SNP and what happened to UKIP,
is that I suspect a lot of British voters
would like to vote for the status quo which is a Tory government
with a sort of Lib-Dem break, a leftish
break. But there is no way for them to do that. If you look at
the SNP, the Scottish Nationalist Party,
who are going to prop up the Labour Party, and you look at their
spending proposals, 170 billion pounds
and they run an 8 billion pound deficit, do British voters want
that? I suspect they dont actually. I
suspect these voters are pretty clear that we couldnt live on an
entirely credit based society. People
were burnt by what happened in the credit markets, and I suspect
that the anti-austerity spending plans
that are being advanced by the SNP and the kind of economic
fudge that would be required to prop up a
Labour government would upset a lot of English voters.
Sir Michael Leigh:
Id like to stay with record for the time being and then come to
the perspectives in a few moments.
Moving on from the economy, but also with the view from
Washington, what does the record look like
in terms of Britains relations with the U.S., Britains standing
in the world, Britains contribution to
NATO, and Britains partnership with the U.S. in the wider sense?
Viewed from Washington, is there any
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continued sense in the notion of a special relationship and how
has the performance of the British
government over the past five years played into that?
Peter Foster:
Ive been out of the U.K. Ive been watching the U.K. struggle
from the perspective of China etc. and the
narrative, I think, is really interesting. You have Britain
feeling the cold shoulder of the Obama
administration, very much a Pacific-looking administration,
really feeling that in the first term, pressing
the administration to get more involved in Syria, getting very
frustrated when Donilon went to all the
capitals during the elections and said its nothing doing. There
was a point where Ambassador Ford,
Clinton, and Gates were kind of indicating that there would be
U.S. involvement in Syria, but Obama put
the shutter down. Then Cameron failed to whip that vote in
Parliament. A lot of people were surprised
by the lack of appetite among British citizens to get involved
in Syria. Phillip Hammond, who was then
Defense Secretary, came here, and Dan, you were probably in that
briefing, and said, You know what?
As soon as the media put pictures of children dying and writhing
from gas on the screen, then there will
be a change of heart. Then we will be prepared to enforce
redlines. Of course, thats not what
happened.
I think that ever since then youve seen frustration in the White
House. Where does Washington go
when it needs real movement on Ukraine sanctions? To Angela, not
to David. He has marginalized
himself in Europe. Pulled the conservatives out of the EPP group
and launched a referendum to save his
own skin, to fix a domestic problem, which is how to deal with
the Euroskeptics on the right. Bundle
that together with historical problems, the failure of the
British Army in Basra, the failure of the British
Army in Helmand, still strong intelligence, but there is a real
sense when talking to people in Washington
of how the Brits are drifting away and you look at the French
who are doing stuff in Mali, who still have
an ability and a willingness to project power, although
ironically with a socialist Prime Minister. You can
see how the Brits are starting to get marginalized. I will say
this: its a two-way street. The Obama
administration, clearly in the Middle East, is buying into an
any man for itself world. A G-0 world.
They can skin the cat any way they like, but basic policy is
increasingly that its any man for itself. You
could argue, for example, when the Brits joined the Asian
Development Bank, it infuriated Washington.
But, in a world where its every man for himself, can the Brits
be blamed for making a self-interested
decision about their trade?
Sir Michael Leigh:
Well, I think there was a moment where the tactics around that
grabbed a lot of attention because the
Brits wanted to be the first to join, in fact, they were the
second because Luxembourg jumped in first,
but then all the other major member states of the EU also
indicated that they were going to join.
Peter Foster:
Traditionally, we wouldnt have done that. In the world that
existed before Obama I just cant see how,
from a politics point of view.
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Sir Michael Leigh:
Clearly, there is a big disparity over China. Cameron had been
criticized to some extent for dropping all
the values issues, the human rights issues vis--vis China and
going with large delegations of business
people and not even raising some of this issues. The U.S., on
the other hand, through TPP and other
means is more intent on isolating China and perhaps the golden
mean is somewhere in between. But,
certainly there is a big divergence between Washington and
London on how to handle China. I think
thats one of the things that has emerged over the past few
years. Another huge challenge right now for
Europe, of course, and the U.S. as well is the developments in
Eastern Europe, particularly Ukraine and
the first time weve really seen open warfare in Europe since the
war in Yugoslavia. One of the main
comments that has been made during this period has been the
absence of the Brits from the scene. Do
you think that is something that is felt in Washington?
Scheherazade Rehman:
You mentioned that its every man for himself. Quite frankly,
when the financial crisis hit, it was
everyman for himself in Europe, in the U.S., and in the U.K.
because the crisis was so deep that people
did retract. When youve got the middle class taking a 40% hit in
wealth across the board, their appetite
to go to war or engage overseas diminishes. You have to pander
to that. We know that in both
countries, here and across the pond, this issue of income
inequality is taking front page news and the
joblessness numbers, no matter how good they are, we know they
are erroneous in the sense that there
is hidden unemployment in the system or underemployment in the
system on both sides.
Sir Michael Leigh:
There is an irony in that many European states have been hit
very hard, harder than Britain, by the
economic crisis, but not all have lost the appetite for foreign
policy to the same degree. The Minsk
process, for what its worth, certainly the Germans and the
French have been very active and, from time
to time, the Poles have participated. But Britain has been
really notable by its absence.
Peter Foster:
When I was China, from 2008 onwards, the Brits were in lockstep
on the values stuff with the Chinese
and the Chinese did what they always do. Obama saw the Dalai
Lama and they literally put the Brits into
deep freeze and they did it full on. The diplomats hardly got
meetings. They dont dare do that to the
Americans. There was a time when American value leadership,
American determination to see China
grow as a responsible actor and not to isolate them, to create
the conditions that would see China grow
responsibly. It required people, reliably like the Brits, to not
make selfish short-term economic decisions
in order to set longer-term rules of the road that guaranteed
global prosperity which will not happen
without China. Its about helping China get rich before it gets
old. Such a symptom of where Obamas
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taken the world, and how Britains reacted to it, we of all
countries, Britain and America are not in
lockstep about that issue.
Dan Roberts:
I agree with your description of how the special relationship
feels frayed at the moment, but I do think
that its not just Britain that the U.S. is realigning itself
with. There are a lot of other traditional allies,
whether its Israel, whether its Saudi Arabia, whether its
Pakistan, who also feel slightly bewildered by
the Obama foreign policy. I think the Obama foreign policy is a
very pragmatic one rather than a loyal
one. Traditionally, the Western alliance was a very static thing
and you knew which side you stood on,
and I think the way Obama is approaching Iran or Cuba or Syria
is very much an ad-hoc lets fix some
problems that need fixing, but its not about youre on my side
and youre on the other side. That is a
bewildering thing for a lot of diplomats in Washington, a lot of
traditional allies. I think it reflects the
multipolar world were moving in. The West is broke, to your
point. The West doesnt have the
appetite for fighting endless wars. This particular
administration is doubly determined not to be the
global policeman. Everybody is searching for a role. Britain is
not unique in that. Britain is probably
fairly typical.
Peter Foster:
I totally get that our public dont have the appetite. We cant
afford it. The difference is, I think, for
Britain, and this goes to the election, in a G-0 world, in a
world where everyone is retrenching, and
America prospers in that world, it may not prosper in the same
way that it did, but America will prosper
because it has a big diversified economy, it has a younger
population, it has immigration, it has a tech
base, its traditional allies, Japan, Israel, as you say,
Britain, its strategic raison detre rested on
American coattails, we suffer. I dont think the public, because
theres been no discussion of it in the
election, gets the cost downstream of whats going on.
Sir Michael Leigh:
Its very unusual for foreign policy to be a major issue in an
election, here to for that matter, unless it
affects the daily lives of the electorate to some extent. In the
last few days, the Labour leader Ed
Miliband, has tried to inject foreign policy into the debate,
mainly talking about the debacle in Libya. Do
you think this will succeed? Do you think he will be able to
convince the electorate that the Tories are
mishandling foreign policy or do you think this looks just too
much like an electoral gambit?
Scheherazade Rehman:
Hes definitely picking up on the whole immigration/asylum issue
because we know that a lot of this has
to do with the chaotic situation in Libya which has really
fast-forwarded this whole immigration issue.
On April 19th, 700 people died. This makes headlines and hes
probably going to make that link that they
had something to do with the resulting immigration/asylum issues
at this point.
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Sir Michael Leigh:
British journalists, who are famous for their hard talk, pushed
Miliband and asked, Are you claiming
that the Prime Minister has blood on his hands? He refused to
answer that but, how do you think this
will play out?
Dan Roberts:
I think its a very legitimate point to make. The specifics of
Libyan refugees are very different from the
broader economic drive that is forcing immigration across the
rest of Africa and we basically screwed up
that country. There was a very poorly executed intervention
after the third, fourth, fifth intervention in
a Muslim country in as many years that was equally poorly
executed. I think we fail to learn our lesson
which is: you go into these countries expecting to clean up a
mess by dropping bombs, but instead
youre making an even bigger mess. You have to look at Iraq and
Afghanistan to see not learning from
our lessons. One of Milibands claims to fame was that he stopped
the vote that would have led to the
same thing in Syria. I think youre right, the Americans that I
spoke to at the time were bewildered
because it came out of left field and there was no warning of
that. But, it got Obama out of a hole as
well. It gave him reason to pause. He was going to lose a vote
in Congress.
Peter Foster:
This is exactly the desperate situation were in. It got Obama
out of a narrow little domestic political
hole.
Dan Roberts:
It stopped another dreadful Western intervention.
Peter Foster:
Or it aided the absolutely historic dissolving of red lines. You
have a situation where there have been
chemical weapons treaties since the First World War, where the
president of the U.S. says, If we see a
mass use of chemical weapons, there will be reprisals. Nothing
happens. That is the beginning of the
rise of Putin. Obama tied himself in knots. Kerry made a
throwaway line at a press conference, which
after the event was sold as strategy. It was nothing of the
kind. This is the president of the U.S. Ed
Miliband, of all the people Cameron would have had blood on his
hands if hed sat back and watched
Gadhafi massacre a city. In a nutshell, its rich coming from
Miliband. Hes right, but its rich coming
from Miliband, the man who stabbed Cameron in the back with the
Syria vote. Cameron tried to show
leadership on foreign policy and Ed stabbed him in the back and
then he comes out and says, How dare
you
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Sir Michael Leigh:
Im sure we could have a long debate about this, but lets bring
it back to the elections. Will these issues
play out at all, do you think, in voters minds? You suggested it
would be through the migration issue or
is all of this just too far away for most voters to pay
attention?
Dan Roberts:
I dont think foreign policy has been, apart from this one point
you make about the Libyan migration, an
issue in this election.
Scheherazade Rehman:
I didnt mean the migration. I meant the Libyans facilitating
excessive migration and human trafficking.
Sir Michael Leigh:
The trafficking was there before, but with the breakdown of the
regime, the controls are now infinitely
weaker. You see these terrible tragic incidents because law and
order has simply broken down in Libya
and one could argue, to some extent, that the government shares
some responsibility for that, but I
agree that this is not likely to be a very salient issue for the
electorate. What about the economic
relationship between Britain and the U.S. with the mutual trade
and investment? The negotiations are
fitfully underway for the trans-Atlantic trade and investment
partnership. Is this something that could
attract anyones interest and attention or is this also taking
place behind closed doors and too uncertain
for the time being to be an issue in the record of this
government that some voters might pay a little
attention too?
Dan Roberts:
I think it will erupt in British politics. I think were slightly
behind the curve compared to America. I
think there is already a very vigorous debate in Congress about
whether trade for trades sake is good
for all Americans. Theres no doubt that, economically, trade
helps, but the distribution, I think, is
becoming a big issue. There is a feeling that free trade
agreements generally benefit the rich and
businesses. That is getting a good airing in Washington. I dont
think that has yet to get a good airing in
the U.K., but it will over time. I think people are recently
feeling that, especially after the banking crisis,
the game is rigged. I think the expression youre seeing of that
is actually popping up in these fringe
parties, popping up in the increasing socialist-sounding SNP.
This rage, this sense that the game is
rigged is echoed on U.S. politics on the right and the left,
whether its the Rand Pauls or the Elizabeth
Warrens. I think our equivalent of the Rand Pauls and the
Warrens is the SNP and UKIP. Everybody is
going, Wait a minute. We bailed these banker out. We have a
broken system and nothing is changing.
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I think that anger, whether its with trade or other issues, is
going to bubble up. Its not going to go
away.
Scheherazade Rehman:
I think its a no-win either way for British investments because
if Cameron wins, then hes promising a
referendum thats going to scare the investors in terms of
investment coming into the U.K. Banks will
simply move to locations like Frankfurt or Paris. On the other
hand, if youve got the Labour Party
coming in, again, youre talking about budgetary issues, youre
talking about, perhaps, a slow-down in
the economy. We dont know at this juncture.
Sir Michael Leigh:
Perhaps for the benefit of those in the U.S. who are following
this discussion, what are we to think about
the different partys programs as they go into the elections? Is
there little to choose? Is there me too-
ism with differences between Labour and Conservative only on the
margins? We could cover, perhaps,
the smaller parties a little later on. What are the salient
feature of the programs of the two main parties
that differentiate them the most?
Dan Roberts:
Theres the perception and theres the reality. The perception is
that Labour stands for spending and
Tories stand for austerity. I think the reality is that the
Tories have been tracking back quite rapidly in
the last few weeks. The polls show them slipping behind. George
Osborne, the Chancellor, is suddenly
finding another five billion or so for the NHS in a back packet
that hed forgotten about. I think theres a
lot on the Left in the U.K. who would say that Labour has been
far too mealy-mouthed and not very
forceful in expressing the alternative. These are two parties
scrapping it out over tiny differences in
spending levels. Again, I think thats one of the reasons why
youre seeing the rise of these alternative
parties.
Peter Foster:
Its one of the driving forces of homogenization in politics.
There is so little fiscal wiggle room that even
if you elected the raving lunatic party, you couldnt do much
different from the other guys. In this
country, there isnt that much fiscal wiggle room either, but you
have a bifurcation of politics on social
issues and on racial issues that you dont have in the U.K. When
I grew up, Margaret Thatcher was
knocking it out and the unions were being brushed and Britain
was becoming a modern country and it
was the Left and Right. That also contributes to public apathy
because, actually, the needle doesnt
move that far depending on who you vote for and the rise of
fringe parties, the end of two-party politics.
Its interesting that we consider ourselves a two-party system
because last time there was a four day
hiatus and a coalition. This time, I think its very likely that
well see minority governments. We thought
that channel protected from being like the rest of Europe and we
wake up now and discover that, like
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lots of the rest of Europe, were in the thrall of minor parties.
The thrall of a breaking up and a chop in
surface politics. If you go back to the trade agreement, you
have a situation where it looks like the TPP
is going to happen. We talked to people up on the Hill about the
negotiations with the Europeans. The
trans-Atlantic deal is going nowhere and people up on the Hill
see very little appetite from the Germans
and the French. The French actually more-so than the
Germans.
Sir Michael Leigh:
Obama said he hoped to reach an outline of agreement at least by
the end of this year, but lets wait
and see.
Peter Foster:
Does Europe want it? Does Europe appreciate what a world will
look like without TPP?
Sir Michael Leigh:
I agree. This is an important issue.
Scheherazade Rehman:
Can I add something? Youre forgetting that the U.S. is almost an
eight trillion dollar economy. The U.K.
is less than three trillion. We understand history and where the
U.K. was. Both candidates are giving
the impression that theyre big enough to sit at the table by
themselves and perhaps that may not be
the case without the E.U. I think that is a reality check that
they are trying to give the persona that we
are big enough to sit at the table. There may be a coalition
government, but the issues are roughly the
same with the two-party system here. One party promises never to
raise taxes, so that we can help you
because you got hurt recently.
Sir Michael Leigh:
The conservatives are even now promising to enact a law.
Scheherazade Rehman:
Thats exactly right, with no new taxes. Income tax, insurance
tax, and the VAT.
Sir Michael Leigh:
No Read my lips.
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Scheherazade Rehman:
Thats exactly right. On the other hand, the Labour party is
saying, We know youve been hurting.
Were here to help. We understand the hurt that happened after
this crisis. Basically approaching the
same constituency from different angles.
Dan Roberts:
One of the big things that worries me, going into next Thursday,
is that we dont have a constitution
ready for coalition politics. We have an incredibly archaic
system where the queen invites a prime
minister to form a government and everybody assumes that that
would be the party with the largest
number of seats, but none of it is ever agreed in advance.
Sir Michael Leigh:
Its a fascinating moment. We live in constitutional monarchy,
but there is a very narrow area of
discretion at this point that the monarch can exercise. This is
probably the one remaining area where
the queen still has, if not power, at least influence.
Dan Roberts:
What really worries me is that its going to be incredibly messy.
Labour has already said they dont want
to form a formal coalition with the SNP, who may have the
balance of seats. They also ruled out a less
formal coalition which would basically avoid a vote of no
confidence. They may well try to form a
minority government, which is a government that cant pass laws
without persuading member of other
parties to join them on an ad-hoc day-by-day basis. This
government may just limp through for six
months and may have to force another election. Were in totally
uncharted constitutional territory.
Sir Michael Leigh:
Before we get into that, and I would like to get into that in
just a few moments, but for the sake of our
American and other international participants and people
listening in, could you just briefly characterize
the smaller parties? Who are we talking about? Were talking
about the Liberal-Democrats. Were
talking about the Scottish Nationalists. Were talking about the
United Kingdom Independence Party.
Maybe Ulster Nationalists. Could you briefly characterize these
parties? What do they stand for? Are
they just minority protest parties?
Peter Foster:
On a left-right spectrum, we have the Conservative party who,
are themselves on the spectrum between
centrist conservatives, David Cameron would be one, but they
have the perennial problem of their anti-
-
European right wing whove been appeased by this promise for a
referendum in 2017 if David Cameron
gets it.
Scheherazade Rehman:
The British Tea Party, right?
Peter Foster:
They are. Now, to the right of that conservative party spectrum,
the UKIP, which is an anti-European
party. Kind of our equivalent of pitchfork politics. Its old,
white, pot-bellied Britain who, like a lot of the
Tea Parties, in a fairly incoherent way, feel fed up with the
world thats moved on and not really taken it
with them. It comprises some Tory anti-Europeans. They might
only get one seat or two seats, but they
will poll nearly ten percent. Nearly three million voters will
vote for UKIP, which is an amazing thing
actually. UKIP made a big mistake in talking about four or five
seats, and, because of our first-past-the-
post system, might only get one seat. But they may well get ten
million votes. Ten million pitchfork
politics votes. A mixture of Tories, who are disaffected with
the Tories for not being anti-Europe
enough, and what used to be the British National Party, which is
old fashioned Marie la Penne, Front
Nationale, pretty racist old Britain. Theres a horseshoe there,
isnt there? Between disgruntled blue
collar Labour Voters and disgruntled Tory voters who meet around
the other end.
Sir Michael Leigh:
Maybe a little less toxic than the National Front, in that they
have issue. The racism aspect is less strong
Peter Foster:
Nigel Farage, the UKIP leader, one of his big things is, We put
the BNP out of business. If you talk with
Midlands MP, where I was born, and he will tell that the UKIP
members of his constituency, which is
half rural and half failed urban constituency, he said that if
you talk to UKIP members in the rural areas
and theyre Tories who want the end of Europe, but when you get
into the old ex-industrial areas, kind
of like your Midwest I guess, you get in there and they are
basically previous BNP members. Thats why
the party gets so much trouble. Nigel tries to have a sort of
pint and cigarettes.
Sir Michael Leigh:
So theyre not entirely a single issue party, but its mainly
arguing for, these days, withdrawing from the
E.U., but it shades into the extreme right, with aspects of
nationalism and even, youre suggesting, some
form of extreme right-wing?
-
Dan Roberts:
I have a slightly more charitable view in that I think theyre a
protest party and I think theyre a protest
at both Labour and Tories. There are aspects of them that are
particularly unpleasant, but I dont think
its necessarily fair to compare them with Front Nationale in
France. They were born out of a concern
about uncontrolled boom in immigration, a concern that quite a
large part of the spectrum now shares.
It was a broken immigration to the extent that it took everybody
by surprise.
Peter Foster:
But it does contain those elements. Nigel Farage was talking
about his HIV statement. Pretty nasty dog-
whistle politics, that.
Dan Roberts:
Like the Ted Cruz of British politics.
Sir Michael Leigh:
On that note, the liberal democrats, what do they represent in
the political spectrum?
Dan Roberts:
I think the trouble was their high point was about two months
before the last election when Nick Clegg,
this face from nowhere, suddenly performed very well in debates,
which was the first time debates
played a big role in British elections. They were an import from
America and they slightly upset the
apple cart because people latched on to this new interesting
figure in the middle. He appealed to
Labour who were actually to the left of Labour on many issues
and ended up surprising many people by
forming a coalition with Tories mainly because the arithmetic
wouldnt allow a Lib-Lab coalition, and as a
result, when the Tory government became associated in many
peoples eyes with this very austere
ripping apart of the welfare state, a lot of people blamed Clegg
on the left for not checking that enough,
and a lot of people on the right in Tories found it irritating
because they felt he was a check on their
agenda. He ended up this tragic figure who may well lose three
quarters of his seats, I think.
Sir Michael Leigh:
Is that because hes taken such a distance from his base? He
seemed to abandon some of them.
Dan Roberts:
-
I think the trouble is the expectation of a junior partys power
in a coalition and reality are so out of
step. The thing is that, even in the last election, they won
fifty eight seats, so although Cameron had to
make him deputy Prime Minister, its a bit like Joe Biden. This
man is not full of power.
Sir Michael Leigh:
I remember a comment about the powers of the Vice President. I
wont repeat it in polite company.
Lets move on to the Scottish Nationalists. The title of the
party would give the impression that, they
too, were a single issue party, but that turns out not quite to
be the case. Theyre being described now
increasingly as left-wing party with some of their domestic
policies as well as some of their foreign
policies and positions on defense. Who would like to jump in to
characterize the SNP for the sale of our
participants?
Dan Roberts:
I have a slightly less charitable view in that I think that they
are analogous to UKIP in the sense that
theyre the Scottish version of English Nationalism. I do think
that nationalism is the overriding feature
and that most of the rest of their politics is largely
opportunist. And I say that because, for a long time
were, after the Thatcher government and the Tories got wiped out
of Scotland, the Labour party in
Scotland and were seen as, more like UKIP, a party of small
businessmen and people who wanted a shot
at London, but were no rabid socialists. They were the Labour
Party. I think, in the run-up to the
independence referendum, they very smartly realized that,
actually, there was an awful lot of rage and
anger about the economy that you could tap into if you tacked to
the left. They ran a very campaign, I
think, as radical party that would promise the earth if there
was independence. Theyd be able to live
off the North Sea forever and build a thousand hospitals a day
and it would all be peace and harmony.
That didnt quite work, but almost worked and shocked everybody.
It frightened everybody. Having lost
the referendum, I think there is now almost like a wrecking
tactic going on. A sort of, We havent been
able to get independence, but were going to bring down
Westminster. There is a very cavalier view.
Nichola Sturgeon, who is a very effective politician, who has
been the star of this campaign, this
election, who is the new head of the SNP. Shes not a Westminster
MP. Shes not standing in this
election herself, but she runs a party that may, nevertheless,
have the deciding vote. She may well be
the Nick Clegg of the next coalition, although she wont be able
to be in it herself because shes not an
MP. They have an enormous opportunity to generally be
mischievous and I think, having lost the
independence referendum in quite bitter circumstances.
Sir Michael Leigh:
Do you share this rather critical view?
Scheherazade Rehman:
-
You mentioned the Queen, so let me mention a kingmaker. The SNP
might very well be the nest
kingmaker. We know this race is going to be very close between
the two major parties and we know
that their leaning a little bit to the left. Its a little bit of
an advantage. I think they ran a campaign that
tapped, as you said, the rage. Thats something not to be
ignored. They are a force to be reckoned with
in this election.
Sir Michael Leigh:
Do any of the other small parties merit a mention?
Dan Roberts:
The Greens are interesting, not because theyll be decisive in
any particular way, they may lose their one
seat, because they also had a moment in the sun. There was some
media interest and idealism on the
left, which I think is just interesting because it shows how
bored everyone is with Labour and
Conservative. People are willing to entertain some pretty kooky
candidates.
Peter Foster:
The SNP phenomenon is that nobody quite saw it coming. They lost
the independence referendum by
ten points. What happened was, they ended up absorbing all of
the independence votes, whereas the
side that won, its machine was fractured between the Tories and
the Labour Party. Everybody suddenly
woke up to the fact that the SNP had this machine and had an axe
to grind. This is why theyre
decimating Labour, and why they may win fifty seats. A lot of
big Labour fish are going to find
themselves on the beach. A lot of the old Labour, which would be
the more left-leaning, were really
upset with what happened in the referendum. You had all these
new Labour types coming in from
London and screwing up their independence hopes. They all
transferred to the SNP. Its one of
Camerons great wheezes. The referendum created a monster. If
there is a wrecking ball socialist-
leaning SNP keeping Ed in Number Ten, in a minority government,
doing economic deals that require
English people to subsidize Scotland, there is real recipe for
English nationalism.
Dan Roberts:
I hope he will avoid that.
Peter Foster:
As someone who believes in the union, and actually, speaking of
the Balkanization of Europe and the
U.K. punching its weight, it would be a disaster if the U.K.
broke up.
Sir Michael Leigh:
-
Before we jump into that, and thank you for characterizing the
different players in this election, let us
now some, hopefully informed, speculation as to what the outcome
of the election might be. And lets
do a little table round amongst us. What is our best guess as to
the outcome of the election in light of
the opinion polls, the debate, and the discussion? Its often
said that there will be no winner, that its
most unlikely that any party will have a majority. Lets, each of
us, say a few words about what seems to
us to be the most likely outcome that we might expect.
Dan Roberts:
I think the most likely outcome will be wrong. It is one where
are the scenarios are within the margin of
polling error so that is the first thing to be said. The second
thing is, and I have a sneaking suspicion,
that Labour wont do quite as badly as suspected. My own reason
for saying that is that a lot the polling
before the referendum said that the SNP were going to win and
they didnt. Im a little skeptical about
the polling accuracy in Scotland. Having said that, I think
Labour will probably just hit the Tories in terms
of actual number of seats and be faced with this unpalatable
prospect. There are three scenarios. One
is a formal coalition, on the assumption that the Dems get
largely wiped out, with the SNP. Or they form
this sort of coalition lite, they call this confidence and
supply, where they agree to back the government
in tow scenarios. One: if there is a vote of no confidence in
the House. And two: on budgetary matters.
This is seen as just enough to let the government limp along.
Any other bills, an education bill, a
defense bill, whatever, would be free for all and Labour would
have to rely on the Tories to prop them
up. That would be very unstable. There is an even more unstable
scenario, which is a minority
government, where they dont join the Scots try to do it on their
own and try to persuade Tories to join
them, bill by bill. In a way, more like the U.S. system. There
is a great fear about this in the U.K. because
weve have years and years of prime ministers doing basically
whatever they wanted because they had
big majorities. I think were moving into a scenario where
Parliament will become a low unto itself,
literally.
Sir Michael Leigh:
You said that the Liberal-Democrats would be wiped out, but
maybe they will retain some votes, some
seats, maybe twenty, maybe fifteen, maybe ten. Couldnt the
arithmetic work out that that might make
all the difference?
Dan Roberts:
Its conceivable that they could form a coalition with the
Lib-Dems and still be five or ten short of an
outright majority. I havent seen any scenarios suggesting a
Lib-Lab coalition will be big enough to form
a majority government.
Sir Michael Leigh:
Would you agree with this?
-
Peter Foster:
Were getting into a great wave of hypotheticals. I wouldnt
disagree with anything Dan has said, if you
look at the polls. You could get a Tory minority government.
Historically, because people dont like to
admit to pollsters that they vote Tory, they tend to outperform
where they were on polling day. Right
now, for the two main parties 324 is the magic number for a
majority. Lets say the Tories get to 287
and you have a situation where the Lib-Dems, and no one quite
knows how the UKIP vote will hold up
when its really confronted on polling day I do think the Tories
have a good point. The English dont
like the Scots. If you look at a map of the England, the Labour
bits are in London and the urban northern
pockets. The rest of the map, in Scotland, is the SNP.
Ed Milibands ratings have risen, but hes still under water.
Politicians go into office on a wave of
popularity and we watch them decline. Hes not a man whom the
British public want to be prime
minister. Ed Miliband propped up by a Scottish nationalist
government, frankly, just gets up the nose of
most English people. Its a pretty unpalatable prospect. I just
advance the idea that youll end up with a
minority Tory government where the Lib-Dems get thirty seats,
not fifteen. The Tories get 286. And
then youve got UKIP. Honestly, the Lib-Dems will not go into a
coalition with UKIP. I do think that Ed
Miliband will be in a weak position, morally speaking, to form a
government.
Sir Michael Leigh:
Just to understand this hypothesis: this would be a minority
conservative government with the smaller
parties making up to the necessary majority of 326. Will it
remain a minority government?
Peter Foster:
It might well remain a minority government. If the Tories have
significantly won the most seats, lets say
the Tories get 290, and Labour gets wiped out on Scotland and
gets 265-270. That puts Ed Miliband, an
unpopular prime ministerial figure, in a really tough position
when it comes to laying moral claims to be
the Prime Minister of Britain. We still live in a world
internally, us Brits, where the Prime Minister is the
leader of the country. We dont have a presidential system of
government or politics. Hes still the
leader of the country.
Dan Roberts:
This is where I think our constitutional weakness could result
in a very very nasty situation because I
think that ambiguity puts a huge onus on the Palace in a way
that people will be very suspicious of.
Again, we may part company on this. I think it puts an enormous
amount of power in the hands of the
media, who are already very very shrill on the warnings of the
dangers of this. Lets not forget on of the
big divisions on press regulation where Ed Miliband was one of
the few British politicians who to my
mind with the balls to stand up to Murdoch during the phone
hacking situation and whose promised
-
regulation. You will have the Daily Mail and the Murdoch
empires, and others, screaming blue murder
in those days after the election.
Peter Foster:
Its an English media. This is the U.K., but Dan is right about
that. Its an English media and the English
do not want a weak prime minister in Ed Miliband, both
numerically and personally, as he is being
perceived, being wagged by a wrecking ball SNP. I do think that
is a recipe for real rancor, in a way that
you havent actually seen in British politics. Real rancor.
Dan Roberts:
Only to be matched by the rancor if that Fleet Street coalition
puts a minority Tory government in
power.
Scheherazade Rehman:
Perhaps Labour is being led by the wrong Miliband. David
Miliband had a lot more political oomph, as
one might put it. The bottom line here is that no single party
is going to win a majority. Both your
scenarios are right. This is a difficult situation. I think the
only certainty here is increased market risk
because of this. There is going to be uncertainty and volatility
because no party is going to win a
majority.
Peter Foster:
It hasnt affect the market now, has it? The market is sanguine
as we speak.
Scheherazade Rehman:
Hopefully this show will raise the awareness of that.
Sir Michael Leigh:
Lets now look at the implications of these outcomes. Lets look
at an issue that weve only referred to
indirectly. Having spent some thirty-four years of my life in
Brussels, Im not uninterested in it. We
know that Europe is an issue that divides parties and is not
very salient to the electorate. It comes
towards the bottom of the list of issues that the electorate is
concerned with. I would say, of all the
issues perhaps, it is the one that seems to distinguish the
parties the most clearly. What would actually
happen if we had, for example, a conservative minority
government? We know that Cameron has
promised if hes the next prime minister, he will hold a
so-called in-out referendum on E.U.
-
membership inn 2017. My first question is: if he is a leader of
a minority government, will he be in a
position to honor this pledge at all? We he be able to get an
act through Parliament providing for a
referendum at all? If not, would be perhaps secretly welcome
this as a way out or would he,
nonetheless, hold a referendum? What is likely to be the drift
of events if he is able to hold a
referendum? We can come to the other hypothesis in a moment with
a Labour government, but how
would you see things panning out on this issue?
Scheherazade Rehman:
Major disruptions, I would say. If hes able to hold a
referendum, and thats a big if, and lets say if the
referendum falls in favor of leaving the E.U., which I doubt it
will because it will put enormous negative
pressure on exporters, from automobiles to pharmaceuticals, not
to mention investments coming in and
banks leaving London and reorganizing themselves somewhere else,
you have to ask yourself why
theyre doing this. Theyre doing this because there are so many
other pressures: the immigration
pressure, the bureaucracy of the E.U., and this whole issue of
open borders where U.K. jobs are taken.
There is a political dimension to the referendum. Looking from
the outside in, a referendum to leave
the E.U. is just, in my mind, a dumb one.
Dan Roberts:
Im more sanguine, mainly because I cant see it happening. This
is a function of internal Tory party
politics more so than a groundswell from the country to leave.
This is a reaction to the rise of UKIP.
They were bounced into this promise at a time of weakness. I
think the Scottish referendum showed us
that British voters are naturally risk averse when it comes to a
major constitutional change.
Peter Foster:
You dont think theyll vote to leave or you dont think there will
be a referendum?
Dan Roberts:
Neither, to be honest. I think that Cameron will do absolutely
everything in his power to avoid one, and
youre right, a minority government would be a good excuse to
avoid it. I think the thing it might play a
role in is if Cameron loses. If Cameron isnt the next prime
minister, there is going to be a Tory
leadership challenge from Boris Johnson which may well divide
down the lines.
Peter Foster:
Regardless of whether there is a referendum, Cameron promised
the referendum to get himself out of a
hole with his own party. If there is a Labour government, or
minority government, the issue festers.
There is no referendum and the Tory party even splits. If were
going to enter a world where the British
public are more accustomed to minority politics, you could see a
world where the Tory party splits and
you get a Euroskeptic wing of the Tory party called, say, Tories
for Britain. You end up with a rump
-
Cameronite wet Tories and Blairite new Labour in coalitions. In
a minority government, Cameron has an
excuse not to have a referendum. Does that shut up the one-third
of his party?
Dan Roberts:
I think it depends on how UKIP polls. One of the determining
factors would be, as you say, its not down
to the number of seats they get, but if they get a large amount
of votes and become a political force,
then I think the pressure will be back on the Tories to adopt
this.
Scheherazade Rehman:
Youve got a situation where nobody wants a referendum here and
even if they do hold one Imagine a
world where youve got China sitting here, the U.S. sitting here,
the E.U. sitting here, and in this little
seat youve got the U.K.
Sir Michael Leigh:
I think that before we take this as read that we will be in that
situation, I think all the new MPs who are
elected through the selection process are likely to be strongly
euroskeptical so arent we likely to have a
House of Commons where the conservative party overwhelmingly are
euroskeptical? Would there be a
significant rump of pro-Europeans.
Dan Roberts:
The last couple of elections have seen of younger euroskeptic
Tory MPs coming through. Just to play
devils advocate, and, I think, justify some of the
euroskepticism, they have looked at the performance
of Europe over the past five years with horror. It wasnt that
long ago that we were weeks, months
away from taking us into the single currency and you can look at
whats happened since. Many people
are grateful it didnt happen. The euroskepticism of old was a
slightly Little England, recapturing the
empire and go it alone. I think the more modern euroskepticism
is born out of a genuine feeling that
the project is quite badly eroded.
Scheherazade Rehman:
Yes, but there is difference between joining a single currency
and keeping the pound and joining the E.U.
for trade issues.
Dan Roberts:
-
I would agree. George Osborne deciding to sign up to the Asian
Investment Bank, I think, is a classic
example of a type of Tory that would much prefer to be more
flexible. Not a Tory that thinks Britain is
going to recapture and conquer the waves, but a Britain that
forms its own strategic alliances.
Peter Foster:
But Britain exports more to Ireland than it does to China,
India, and Brazil combined. The irony of
Europe is that Europe is Balkanizing, but increasingly, in a
digital economy, its never been more
important that comes together and events are driving Europe
together. The euro-crisis has forced the
ECB to back European bonds. A Greek exit standoff is actually
going to deepen economic integration.
The crisis in the Ukraine and Merkel and sanctions. The
immigration in the Mediterranean issue. Again,
a pretty weak showing from Europe, but it only works if everyone
works together moving in one
direction.
Sir Michael Leigh:
I think this is a case of half-full/half-empty. You might well
be right, but one could also make the
opposite case. And on Ukraine, if you look at the all the
actors, the Austrians, the Bulgarians, the
Slovaks, and others, you do see quit a diversity of view. When
the sanctions come up for review in June,
I would like to bet that exactly how that will fall out. Just to
stay with this for a moment, lets imagine
that Cameron is prime minister, he does find the votes to get a
referendum through the House of
Commons, and then he engages in a mini renegotiation with the
other member states of the E.U., what
would the outcome be? If there were a referendum in 2017, would
the British vote be so conservative
or afraid of an uncertain future that when they go into the
ballot box they will, nonetheless, vote against
leaving the E.U. or there is really a significant risk, or
possibility, depending on your perspective that
they might vote to leave?
Scheherazade Rehman:
I think they will probably not leave because the risk is huge in
terms of investments and business.
Peter Foster:
I do think there was huge gap between reality and public
opinion. There was poll that showed that 75%
of Europeans thought that current corruption was rampant in the
E.U., but if you look at the audit, its
about the same as the U.S. federal government. I do think people
will contemplate filling in customs
forms to go on holiday to France. When they start to look at
immigration as a two-way street, Brits
living in Spain, etc. Its hard to look at the freedom British
businesses have because of our levels of opt-
out to hire without regulation compared to the French. One of
the problems is the argument, and the
press is responsible for this because the press is infantile
about Europe, if the arguments really took
place, maybe there needs to be a referendum. Maybe we actually
need to think about what happens if
-
we leave. Back to your point about when were in a room with
China and America, where does Britain
think it will be?
Dan Roberts:
Thats a positive scenario, not unlike marriage vows, which is
that there is a referendum and it gets won
convincingly and comes affirmatively. A lot of peoples beef
about Europe is also that it is an
undemocratic super state. The upside of a referendum would be a
sense of participation.
Scheherazade Rehman:
But theyre not alone in this. Youve been in the E.U. long enough
to know that any time there is
pressure in the system, and usually it is economic pressure, two
entities get blamed: the E.U.
bureaucracy gets blamed and immigration gets blamed right off
the bat. They just go for them.
Dan Roberts:
I think a lot of Brits feel about Europe in the same way that
Americans feel about Washington. I think
most people get that it has to be there and there isnt really an
alternative, but its a great whipping boy.
Its a great symbol that someone else is to blame.
Sir Michael Leigh:
Looking at a Labour government with the support of the SNP, we
know that some of the position taken
by the SNP on security and defense would give cause for concern
to Washington, I think. I mentioned
the little piece about the special relationship by Carnegie
Europe and, in preparing for that, I spoke to a
number of people, for whom defense is a crucial issue. That fact
that the U.K. is not pulling its weight
and is way below the two percent target for GDP for defense
expenditure, notwithstanding increased
risks in the south and the east, but, in addition to all of
this, the SNP is also in favor of getting rid of what
we used to call Britains independent nuclear deterrent. Its not
renewing the Trident submarine
program. Do you think that such a government is cause for
concern her in Washington, in terms of
security, defense, NATO, and so on?
Dan Roberts:
I think it will cause concern. Not sure it should. I think that
a Labour government that allowed itself to
be blackmailed into giving up the nuclear deterrent would never
form a government again. The Tories
would rip them to shreds and they would never come back from it.
This is one of the reasons Miliband is
being very coy about refusing. The current manifesto for the SNP
wants to get rid of the Tridents. There
is no way they can win another election if they let that happen.
Personally, Im quite ambivalent about
-
Trident. Within the mainstream of British politics, it is seen
as essential and it is certainly not something
that could be given away as a bargaining chip to get Labour into
power because that would just backfire.
Peter Foster:
I do basically agree with that. I think its something that the
nationalists can hang out there and they
can give away if there is going to be this deal it will have to
be something that they have to park. They
want fiscal autonomy, but they dont actually, because if they
were given fiscal autonomy theyd have to
pay their own way. I dont think that Washington will really
think that the fast lane is going to be shut.
I, like you, am ambivalent in Trident since I dont think we can
afford it. We need to spend the money
we spend on Trident on a deployable force that makes us
relevant. If we are going to stay with a stake
in world affairs, which were rapidly losing, we need the
money.
Scheherazade Rehman:
I definitely think the U.S. will have a more reluctant partner,
under Labour, in engaging in its own foreign
policy agenda overseas in terms of coming on board, but given
the retraction of this administration from
foreign policy, that may be not such a big issue at this point.
Where it will change the debate, I believe,
is in immigration in Europe. That will change under Labour.
Sir Michael Leigh:
Id like to thank our three panelist very much indeed for your
contributions. I certainly have learned a
lot from the discussion and I hope thats been true of everyone
who has been listening in. I think we can
say that this will be one of the more interesting elections
taking place in the U.K. We hope the British
people show wisdom in their choice. Watch this race. It will be
very interesting to see the outcome the
evening of the 7th of May. Thank you very much.
Outside Question:
What kind of impacts has Boris Johnson had on the election thus
far?
Sir Michael Leigh:
I have no inside track, but one thing I can say is that Boris
Johnson masqueraded as a convinced
euroskeptic. I remember his father as a colleague in the
European Commission. I believe he went to the
European school in Brussels. It may be opportune in British
politics now to strike this pose, but I wonder
how deep it really runs? We didnt discuss whether he was likely
to take over as leader of the
Conservative Party or not in the event that the conservatives
lose. This might happen, but I certainly
have doubts as to whether his euroskeptical conviction run
beyond populism and opportunistic benefit.
Thanks again to everybody and I look forward to another such
discussion in the not-too-distant future.