David Cameron at the annual Confederation of British Industry (CBI) conference on 10 November. Photo: Getty
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Leader: David Cameron has no answers to the global crisis he describes

While highlighting dangers abroad, Cameron ignores those at home, including the long decline in living standards, the lack of investment and an overheated London property market.

Even before the damage from the last economic crisis has been repaired, the danger is growing of another. After briefly showing signs of recovery in 2013, the eurozone has slumped back into stagnation. Meanwhile, Japan has entered recession again, growth in China is slowing down and geopolitical threats proliferate.

David Cameron’s warning that “red lights are flashing on the dashboard of the global economy” was justified, even if his motives were primarily political. It is in the interests of the Conservatives for voters’ attention to be concentrated on this issue, rather than immigration, on which Ukip leads, and on the NHS, on which Labour does. By alerting the electorate that the storm has not passed, Mr Cameron aims to persuade them not to take a chance on the opposition at the general election. The hope is that a vote for Labour will appear too risky and that a vote for Ukip will appear too frivolous.

But if the Prime Minister’s jeremiad was politically astute it was also disingenuous. Having blamed the 2008 crisis on Labour’s profligacy, rather than global forces, he cannot now reasonably cite the same conditions as an alibi for the coming UK slowdown. While highlighting the dangers abroad, he ignores those at home, including the long decline in living standards, the lack of public and private investment and an overheated London property market.

Mr Cameron is correct to note the harm inflicted on Britain by the parlous state of the eurozone, our largest trading partner, but refuses to add that this results not from an absence of austerity (the policy he promotes for growth) but from a dangerous excess. As Mehdi Hasan writes on page 33, Europhiles should question their faith in an EU that has done so much to choke off demand in member states and so little to support it.

In these circumstances, voters in the UK and elsewhere are easily susceptible to populists and demagogues who seek to demonise immigrants. Politicians have spent a decade complaining that we do not talk about the issue. The truth is that many voters hear about little else. By too often reinforcing the myths about immigration, rather than challenging them, the two main parties jointly ensure that Ukip is the main beneficiary. No voter who heard Labour’s panicky pledge to ban migrants from claiming out-of-work benefits for two years after their arrival and to limit tax credits for those in employment would be reminded that migrants contribute considerably more in taxes than they receive in welfare payments. An OECD report last year, for instance, found that they make a net contribution to the UK of 1.02 per cent of GDP or £16.3bn, because they are younger and more economically active than the population in general.

The truth, which almost no politician will dare utter, is that Britain will need more, rather than fewer, immigrants in the future to meet the challenge of an ageing population. The Office for Budget Responsibility forecasts that should the UK maintain net migration of roughly 140,000 a year (significantly higher than the government’s target of “tens of thousands”), debt will rise to 99 per cent of GDP by 2062-2063. But should it cut net migration to zero, debt will reach 174 per cent.

The Conservatives never miss an opportunity to boast of their “long-term economic plan” and their commitment to balanced growth. But the gap between rhetoric and reality has seldom been greater. Fixated on their ideological commitment to achieve a budget surplus by the end of the next parliament, the Tories offer none of the innovative thinking required to remake the British economy for this new insecure era. After Mr Cameron’s cynical promise of £7bn of tax cuts, even their devotion to fiscal restraint is now questionable.

Rather than managing decline, both Britain and the eurozone need an ambitious programme for growth. In the absence of economic leadership, the world is likely to remain at best trapped in what Keynes called “the long, dragging conditions of semi-slump” and at worst caught in the rapids of another global crisis. 

This article first appeared in the 20 November 2014 issue of the New Statesman, The deep roots of Isis

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Hannan Fodder: This week, Daniel Hannan gets his excuses in early

I didn't do it. 

Since Daniel Hannan, a formerly obscure MEP, has emerged as the anointed intellectual of the Brexit elite, The Staggers is charting his ascendancy...

When I started this column, there were some nay-sayers talking Britain down by doubting that I was seriously going to write about Daniel Hannan every week. Surely no one could be that obsessed with the activities of one obscure MEP? And surely no politician could say enough ludicrous things to be worthy of such an obsession?

They were wrong, on both counts. Daniel and I are as one on this: Leave and Remain, working hand in glove to deliver on our shared national mission. There’s a lesson there for my fellow Remoaners, I’m sure.

Anyway. It’s week three, and just as I was worrying what I might write this week, Dan has ridden to the rescue by writing not one but two columns making the same argument – using, indeed, many of the exact same phrases (“not a club, but a protection racket”). Like all the most effective political campaigns, Dan has a message of the week.

First up, on Monday, there was this headline, in the conservative American journal, the Washington Examiner:

“Why Brexit should work out for everyone”

And yesterday, there was his column on Conservative Home:

“We will get a good deal – because rational self-interest will overcome the Eurocrats’ fury”

The message of the two columns is straightforward: cooler heads will prevail. Britain wants an amicable separation. The EU needs Britain’s military strength and budget contributions, and both sides want to keep the single market intact.

The Con Home piece makes the further argument that it’s only the Eurocrats who want to be hardline about this. National governments – who have to answer to actual electorates – will be more willing to negotiate.

And so, for all the bluster now, Theresa May and Donald Tusk will be skipping through a meadow, arm in arm, before the year is out.

Before we go any further, I have a confession: I found myself nodding along with some of this. Yes, of course it’s in nobody’s interests to create unnecessary enmity between Britain and the continent. Of course no one will want to crash the economy. Of course.

I’ve been told by friends on the centre-right that Hannan has a compelling, faintly hypnotic quality when he speaks and, in retrospect, this brief moment of finding myself half-agreeing with him scares the living shit out of me. So from this point on, I’d like everyone to keep an eye on me in case I start going weird, and to give me a sharp whack round the back of the head if you ever catch me starting a tweet with the word, “Friends-”.

Anyway. Shortly after reading things, reality began to dawn for me in a way it apparently hasn’t for Daniel Hannan, and I began cataloguing the ways in which his argument is stupid.

Problem number one: Remarkably for a man who’s been in the European Parliament for nearly two decades, he’s misunderstood the EU. He notes that “deeper integration can be more like a religious dogma than a political creed”, but entirely misses the reason for this. For many Europeans, especially those from countries which didn’t have as much fun in the Second World War as Britain did, the EU, for all its myriad flaws, is something to which they feel an emotional attachment: not their country, but not something entirely separate from it either.

Consequently, it’s neither a club, nor a “protection racket”: it’s more akin to a family. A rational and sensible Brexit will be difficult for the exact same reasons that so few divorcing couples rationally agree not to bother wasting money on lawyers: because the very act of leaving feels like a betrayal.

Or, to put it more concisely, courtesy of Buzzfeed’s Marie Le Conte:

Problem number two: even if everyone was to negotiate purely in terms of rational interest, our interests are not the same. The over-riding goal of German policy for decades has been to hold the EU together, even if that creates other problems. (Exhibit A: Greece.) So there’s at least a chance that the German leadership will genuinely see deterring more departures as more important than mutual prosperity or a good relationship with Britain.

And France, whose presidential candidates are lining up to give Britain a kicking, is mysteriously not mentioned anywhere in either of Daniel’s columns, presumably because doing so would undermine his argument.

So – the list of priorities Hannan describes may look rational from a British perspective. Unfortunately, though, the people on the other side of the negotiating table won’t have a British perspective.

Problem number three is this line from the Con Home piece:

“Might it truly be more interested in deterring states from leaving than in promoting the welfare of its peoples? If so, there surely can be no further doubt that we were right to opt out.”

If there any rhetorical technique more skin-crawlingly horrible, than, “Your response to my behaviour justifies my behaviour”?

I could go on, about how there’s no reason to think that Daniel’s relatively gentle vision of Brexit is shared by Nigel Farage, UKIP, or a significant number of those who voted Leave. Or about the polls which show that, far from the EU’s response to the referendum pushing more European nations towards the door, support for the union has actually spiked since the referendum – that Britain has become not a beacon of hope but a cautionary tale.

But I’m running out of words, and there’ll be other chances to explore such things. So instead I’m going to end on this:

Hannan’s argument – that only an irrational Europe would not deliver a good Brexit – is remarkably, parodically self-serving. It allows him to believe that, if Brexit goes horribly wrong, well, it must all be the fault of those inflexible Eurocrats, mustn’t it? It can’t possibly be because Brexit was a bad idea in the first place, or because liberal Leavers used nasty, populist ones to achieve their goals.

Read today, there are elements of Hannan’s columns that are compelling, even persuasive. From the perspective of 2020, I fear, they might simply read like one long explanation of why nothing that has happened since will have been his fault.

Jonn Elledge is the editor of the New Statesman's sister site CityMetric. He is on Twitter, far too much, as @JonnElledge.