Not wading but drowning. (Photo: Getty)
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If David Cameron can't bully the broadcasters, how's his EU renegotiation going to work out?

David Cameron has muffed his strategy as far as the debates are concerned. Even if he gets away with it, it's a bad sign if he ends up having to renegotiate Britain's relationship with the EU.

If David Cameron is returned to Downing Street this May, his jubilation will be short lived. As Ed Miliband's head rolls and Labour becomes a circular firing squad of recriminations, a nagging internal voice will be ruining the Tory leader's moment: “Hey Dave, how's that EU renegotiation going?” He'll try and push it aside, but the voice will get louder and louder: “Lovely day to repatriate some powers from Brussels, wouldn't y'say?” Worse, this voice will be less persistent and more polite than his backbenchers and previously friendly media allies.

If he has any self-awareness, Cameron should be beginning to question whether he's the right man for the job. One thing the TV debate furore has taught us is that Cameron's negotiating skills are pretty limited. If he can't influence Sky, ITV, Channel 4 and the BBC, what hope has he got persuading 27 other EU members to make terms noticeably more favourable to Britain by 2017?

The TV broadcasters were supposed to be a pushover. Bound by strict election impartiality laws, all that was required was for the Tories to make some positive but non-committal noises, play down the clock, shrug and say “we tried.” They just needed to avoid anything too provocative, like, oh, I don't know... writing an antagonistic open letter blaming their addressee for “a deeply unsatisfactory process”, while simultaneously ducking meetings. And they absolutely shouldn't send a insufferably chummy Grant Shapps on TV to repeat the inplausible accusation over and over again while heroically ignoring the interviewers' logical counter-points. 

Bullying the Beeb should be a cake-walk when you're holding a giant novelty cheque over its collective head, yet Cameron's team has somehow managed to be so obnoxious and inept that even they've summoned enough courage to bite the hand that feeds. Well, nibbled it. They're considering empty chairing the PM, but giving him his own one-man show for balance - a bit like slapping someone in the face, then driving them to A&E and demanding 24 hour care. But hey, maybe they'll surprise everyone and dress the Prime Minister's podium up as a giant pram, with a series of toys scattered around it. This not-so-subtle symbolism would neatly back up what the polls say everyone's thinking.

Even if the debates don't happen thanks to a legal logjam, Cameron has overplayed his hand. He'll be blamed, and seen as cowardly, calculating, conniving and a pick of other choice 'C' words. This sorry spectacle doesn't bode well for Europe. It seems our Prime Minister has just the one negotiating gear: 'agree to my terms, or I'm not playing'.

If he can't intimidate four broadcasters - one of whom is so timid that it's contemplating giving him An Evening with David Cameron as a peace offering - how on Earth is he going to get his way with 27 highly skilled politicians? Despite the higher stakes, his tactics have been eerily similar to date: complain loudly to alienate the people you need to ingratiate yourself too, and then threaten to leave if you don't get your way. Cameron won great respect from a supportively jingoistic press for using his EU veto in 2011, but far less column inches were devoted to the subsequent U turn when Europe collectively decided to ignore Brave Dave and push on regardless.

How does Cameron think this petulance plays out with the people he ultimately wants on his side? Thomas Matussek, a former German ambassador to Britain once told The Guardian, “The 'my way or the highway' strategy that Margaret Thatcher pioneered is certainly getting on a lot of Germans' nerves, because they feel Cameron is constantly setting ultimatums rather than trying seek compromises”. Cameron's unique take on the diplomatic charm offensive seems to hinge overwhelmingly on the offence part.

Sir John Major – much lampooned for being weak on Europe by his party – understood that Britain couldn't just demand to get everything its own way. He managed to achieve a couple of major concessions with the Mastricht Treaty, even though – as Andrew Rawnsley points out - none of our European partners wanted to give way. While Major built bridges, Cameron seems determined to jump up and down on them until they crumble.

Maybe I'm completely wrong, and Cameron is a stronger negotiator than I thought, but all the signs point to someone who never lost at Risk, because he used his 'veto' to pack up the board and go home. Ironically, his stubbornness with the broadcasters might make it moot: an empty chair in front of 22 million Britain's could remind them why they don't want him practicing his petulant poker face in Brussels.

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The Future of the Left: A new start requires a new economy

Creating a "sharing economy" can get the left out of its post-crunch malaise, says Stewart Lansley.

Despite the opportunity created by the 2008 crisis, British social democracy is today largely directionless. Post-2010 governments have filled this political void by imposing policies – from austerity to a shrinking state - that have been as economically damaging as they have been socially divisive.

Excessive freedom for markets has brought a society ever more divided between super-affluence and impoverishment, but also an increasingly fragile economy, and too often, as in housing, complete dysfunction.   Productivity is stagnating, undermined by a model of capitalism that can make big money for its owners and managers without the wealth creation essential for future economic health. The lessons of the meltdown have too often been ignored, with the balance of power – economic and political – even more entrenched in favour of a small, unaccountable and self-serving financial elite.

In response, the left should be building an alliance for a new political economy, with new goals and instruments that provide an alternative to austerity, that tackle the root causes of ever-growing inequality and poverty and strengthen a weakening productive base. Central to this strategy should be the idea of a “sharing economy”, one that disperses capital ownership, power and wealth, and ensures that the fruits of growth are more equally divided. This is not just a matter of fairness, it is an economic imperative. The evidence is clear: allowing the fruits of growth to be colonised by the few has weakened growth and made the economy much more prone to crisis.

To deliver a new sharing political economy, major shifts in direction are needed. First, with measures that tackle, directly, the over-dominance of private capital. This could best be achieved by the creation of one or more social wealth funds, collectively held financial funds, created from the pooling of existing resources and fully owned by the public. Such funds are a potentially powerful new tool in the progressive policy armoury and would ensure that a higher proportion of the national wealth is held in common and used for public benefit and not for the interests of the few.

Britain’s first social wealth fund should be created by pooling all publicly owned assets,  including land and property , estimated to be worth some £1.2 trillion, into a single ring-fenced fund to form a giant pool of commonly held wealth. This move - offering a compromise between nationalisation and privatization - would bring an end to today’s politically expedient sell-off of public assets, preserve what remains of the family silver and ensure that the revenue from the better management of such assets is used to boost essential economic and social investment.

A new book, A Sharing Economy, shows how such funds could reduce inequality, tackle austerity and, by strengthening the public asset base, rebalance the public finances.

Secondly, we need a new fail safe system of social security with a guaranteed income floor in an age of deepening economic and job insecurity. A universal basic income, a guaranteed weekly, unconditional income for all as a right of citizenship, would replace much of the existing and increasingly means-tested, punitive and authoritarian model of income support. . By restoring universality as a core principle, such a scheme would offer much greater security in what is set to become an increasingly fragile labour market. A basic income, buttressed by a social wealth fund, would be key instruments for ensuring that the potential productivity gains from the gathering automation revolution, with machines displacing jobs, are shared by all.  

Thirdly, a new political economy needs a radical shift in wider economic management. The mix of monetary expansion and fiscal contraction has proved a blunderbuss strategy that has missed its target while benefitting the rich and affluent at the expense of the poor. By failing to tackle the central problem  – a gaping deficit of demand (one inflamed by the long wage squeeze and sliding investment)  - the strategy has slowed recovery.  The mass printing of money (quantitative easing) may have helped prevent a second great depression, but has also  created new and unsustainable asset bubbles, while austerity has added to the drag on the economy. Meanwhile, record low interest rates have failed to boost private investment and productivity, but by hiking house prices, have handed a great bonanza to home owners at the expense of renters.

Building economic resilience will require a more central role for the state in boosting and steering investment programmes, in part through the creation of a state investment bank (which could be partially financed from the proposed new social wealth fund) aimed at steering more resources into the wealth creating activities private capital has failed to fund.

With too much private credit used for financial speculation and property, and too little to small companies and infrastructure, government needs to play a much more direct role in creating credit, while restricting the almost total freedom currently handed to private banks.  Tackling the next downturn, widely predicted to land within the next 2-3 years, will need a very different approach, including a more active fiscal policy. To ensure a speedier recovery from recessions, future rounds of quantitative easing should, within clear constraints, boost the economy directly by financing public investment programmes and cash handouts (‘helicopter money’).  Such a police mix – on investment, credit and stimulus - would be more effective in boosting the real economic base, and would be much less pro-rich and anti-poor in its consequences.

These core changes would greatly reform the existing Anglo-Saxon model of capitalism and provide the foundations for building support for a new direction for progressive politics. They would pioneer new tools for building a fairer, more dynamic and more stable economy. They could draw on experience elsewhere such as the Alaskan annual citizen’s dividend (financed by a sovereign wealth fund) and the pilot basic income schemes launching in the Netherlands, Finland and France.  Even mainstream economists, including Adair Turner, former chairman of the Financial Services Authority, are now talking up the principle of ‘helicopter money’. For these reasons, parts of the package are likely to prove publicly popular and command support across the political divide. Together they would contribute to a more stable economy, less inequality, and a more even balance of power and opportunity.

 

Stewart Lansley is the author of A Sharing Economy, published in March by Policy Press and of Breadline Britain, The Rise of Mass Impoverishment (with Joanna Mack).