The optimism at the end of Sarkozy's era vanished as Hollande (centre) seemed to dither. Photograph: Raymond Depardon/Magnum Photos
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The sorrows of Mr Weak

Since the minister in charge of tax avoidance was forced to admit to a secret Swiss bank account, François Hollande’s entire government has begun to look shaky. How did it go so wrong, so fast?

One blustery day in mid-April, I left my pied-à-terre in Paris’s 11th arrondissement and headed south towards the Seine. I crossed the river by the Île Saint-Louis and made for Gibert Jeune, a large bookshop on the Left Bank at the northern end of the Boulevard Saint-Michel. I was searching for a copy of Rien ne se passe comme prévu (“nothing goes as planned”) by Laurent Binet. It is a quasijournalistic account, inflected with some of the mannerisms of American New Journalism, of François Hollande’s 2011-2012 campaign for the French presidency.

I’d enjoyed Binet’s novel, HHhH, and was interested to discover what he made of Hollande, the upper-middle-class doctor’s son, born in Rouen in 1954, who had committed himself to the politics of the left at a young age. I remembered the excitement that his campaign, with its commitment to levy a 75 per cent tax on high incomes, had elicited in Labour circles on this side of the Channel. Was this deceptively mild-mannered fonctionnaire, whose rhetoric often evoked the days of the Popular Front in the 1930s, a model for a new generation of social-democratic leaders in Europe?

By the time I arrived in Paris, however, the excitement that Hollande once induced on the left was a distant memory. The 75 per cent tax on those earning more than €1m a year had been ruled unconstitutional and the accidental president’s poll ratings were in free fall. The weekly news magazine L’Expressseemed to catch the popular mood with a cover depicting Hollande as “Monsieur Faible” (“Mr Weak”).

Having found a second-hand copy of Binet’s book, I walked west to the seventh arrondissement to meet the English writer and academic Andrew Hussey. He works at the Paris outpost of the University of London and his office overlooks the Esplanade des Invalides, close to the National Assembly, the lower house of the French parliament. The following week, the esplanade would be thronged with protesters, most of them Catholic, agitating against legislation to legalise gay marriage and adoption. In the small hours of 18 April a scuffle broke out on the floor of the Assembly when a rightwing opponent of gay marriage brandished a woman’s shoe that belonged, he claimed, to a young female protester. The next day the papers were full of excited talk about a Catholic “printemps français” (French spring) and even a right-wing version of the protests of May 1968.

None of this would have surprised Hussey, who has made the subject of intellectual and political violence in France his own. Over lunch, we talked about the lurid rhetorical overinvestment that so often characterises French politics, the obsession with gloire and grandeur. It struck me later that the French still expect their president to embody national grandeur, and that the mild and reticent Hollande struggles to do so.

Just how much he is struggling was made clear in an opinion poll published in Le Journal du Dimanche on 21 April, less than a year after he replaced Nicolas Sarkozy in the Élysée Palace. Seventy-four per cent of respondents declared themselves “unhappy” with his performance.

Never in the 55-year history of the French Fifth Republic have approval ratings for an incumbent president been so low so early in a presidency. Sarkozy achieved a comparable level of dissatisfaction (72 per cent) in April 2011, but by then he was almost four years in to the job; hisimmediate predecessor, Jacques Chirac, earned the opprobrium of 70 per cent of those polled in November 1995, and that was in the middle of a general strike. The only other Socialist president of the Fifth Republic, François Mitterrand, managed a disapproval rating of 65 per cent in December 1991, three and a half years in to a second seven-year term. As for the architect of the Fifth Republic, Charles de Gaulle, the worst it ever got for him was in March 1963, when a poll showed that 40 per cent of voters were unhappy with his leadership.

Hollande’s abject standing in the polls owes something to the humiliation of his former budget minister, Jérôme Cahuzac. On 2 April Cahuzac finally admitted, after a series of straight-faced denials, that he had used a secret Swiss bank account to avoid paying tax in France.

By then, the affair had been rumbling on for several months. In December, the investigative website Mediapart claimed that Cahuzac, who began his career as a cosmetic surgeon specialising in hair transplants, had kept an account at UBS in Geneva since the early 1990s. Mediapart’s case relied heavily on a report into Cahuzac’s financial affairs written in 2008 by Rémy Garnier, a former tax inspector in the south-western department of Lot-et-Garonne, where Cahuzac’s parliamentary constituency was located.

Cahuzac’s response to the revelations was swift and robust. He described Mediapart’s claims as “defamatory” and insisted in interviews that he had “never” had a bank account in Switzerland or anywhere else outside France. He also assured the prime minister, Jean-Marc Ayrault, of his good faith. The strategy seemed to be working until, in January this year, magistrates in Paris began building a case against him. Cahuzac’s resignation, which he finally announced on 19 March, was by then inevitable.

As a consequence of the affair, Hollande has become the focus for deep disaffection with what the French call “la classe politique”, the caste of ideologically nimble and sometimes extravagantly wealthy technocrats who usually fill governments of both right and left.

Like most front-rank French politicians, Hollande is an énarque, a graduate of the elite École Nationale d’Administration. He graduated first in his class in 1981. Among his contemporaries were his ex-partner Ségolène Royal, who ran as the Socialist candidate for president in 2007, the former centre-right prime minister Dominique de Villepin and the head of the new bank for public investment, Jean-Pierre Jouyet.

To the sociologists Michel Pinçon and Monique Pinçon-Charlot, the authors of President of the Rich: an Investigation into the Oligarchy in Sarkozy’s France (2010), the Cahuzac affair was cause for “intense intellectual jubilation”. They told the political weekly Le Nouvel Observateur: “The affair validates our theses concerning this caste which dominates France, this micro-society composed of people from left and right who function in the same way, with their wealth and their networks . . . It was another example of the power of oligarchy after the Dominique Strauss-Kahn scandal.”

Voters have no doubt made this very connection between Cahuzac and the disgraced Strauss-Kahn, whose likely run for the Socialist nomination for president was derailed by the exposure of a sex scandal in May 2011. (The two men were political allies; they also share a lawyer.) The public will also have recalled that Cahuzac had been leading the Hollande government’s struggle against tax fraud. He helped to draft a finance law that included important measures to combat tax evasion (notably the introduction of a 60 per cent levy on undeclared funds held abroad by French citizens).

Hollande’s response to the scandal has been uncharacteristically decisive. On 10 April, rather than leave it to Ayrault, the president, in the glare of television cameras, announced a wide-ranging “transparency” programme designed, among other things, to “remoralise” public life. The most eye-catching of these emergency measures was the requirement that cabinet ministers make a public declaration of their assets. They did so in short order – Ayrault revealing, to some amusement among journalists, that in addition to two houses worth more than €1m in total, he owns a 1988 Volkswagen kombi valued at €1,000.

It was the second time in a week that Hollande had gone on television to address the French people directly, something they weren’t accustomed to. He declared himself “hurt by what has happened”, an unusual admission from one who makes such a fetish of his sang-froid.

Catherine Fieschi, who is the director of the British think tank Counterpoint and has advised French administrations of all political complexions, tells me that communication has been Hollande’s biggest challenge. “The tragedy of it is that he’s not actually doing badly, though he’s doing very badly in the polls,” she says. “He’s got a huge communications problem.

“The big reproach is that he doesn’t govern. But the fact is that he does govern in most cases, but he’s been very bad at keeping people informed of what he’s doing –wilfully to begin with, because he wanted to break with the Sarkozy model.”

The president recognises that he must offer decisive leadership at a time of national crisis, yet this sits uneasily with his profound mistrust of the imperial presidency that was one of de Gaulle’s most ambiguous legacies. Shortly after Sarkozy was elected in 2007, Hollande denounced the new president’s method, which consisted, he said, of pretending that “the president can do it all alone” and “announcing this on television”. The irony is that Hollande has found himself doing exactly what he criticised Sarkozy for – supposing, as an article in Le Monde put it, that for every crisis, one can concoct a law in response. The Hollande presidency was meant to have broken with such legislative hyperactivity in the name of “normality” and the “exemplary republic”.

Suspicions on the French left about the institutions of the Fifth Republic have a long history. The strong presidency proposed by de Gaulle in 1958, as an antidote to the political instability caused by the Algerian war of independence, was opposed by the leaders of the non-communist left, Mitterrand and Pierre Mendès France. In 1964, Mitterrand published a book, Le coup d’État permanent, in which he accused de Gaulle of replacing the idea of popular representation with that of the infallible strong man. However, this didn’t stop Mitterrand running for president the following year, and again in 1974 and 1981, when at last he won, beating Valéry Giscard d’Estaing.

Once he was established in the Elysée, Mitterrand’s misgivings about the “permanent coup d’état” soon evaporated. He had campaigned on the promise of restoring to parliament its “constitutional rights”, but in practice he left it little more room for manoeuvre than de Gaulle had ever envisaged for it. (That said, he was forced to endure “cohabitation” with two prime ministers of the right, Jacques Chirac and Édouard Balladur, an arrangement de Gaulle would have found unconscionable.)

Mitterrand’s exercise of the office of president – the cultivation of courtiers, the manipulation of cliques and the dispensing of favours – earned him the nickname “the Florentine”. Even if Hollande were temperamentally disposed to operating in this way, he could never gather around him enough placemen to build a Machiavellian court. “One of the big problems,” Fieschi says, “is his position within the Parti Socialiste [PS]. He might have been a party apparatchik but he had no support inside the PS headquarters in rue de Solférino. He was an accidental candidate. They rallied behind him when they saw he had a chance after the fall of Strauss-Kahn, but I don’t think he really had the party with him.”

Indeed, the party was notably quick, in the person of its first secretary, Harlem Désir, to criticise the government’s handling of economic policy, which Désir judged too focused on deficit reduction at the expense of growth and the fight against unemployment. This criticism was echoed recently by three ministers, including Arnaud Montebourg, who ran to Hollande’s left in the Socialist presidential primary in autumn 2011. Montebourg expressed scepticism at the balancing act that Hollande and the finance minister, Pierre Moscovici, are attempting: making the reduction of the deficit –which, at the end of 2012, stood at 4.8 per cent of economic output – their main priority, in deference to their German partners, while denying that this requires “austerity” measures of the kind being adopted elsewhere in Europe.

Hollande has two problems in this regard. First, he has to manage the expectations of his own party and of PS supporters more broadly. And here the shadow of Mitterrand looms once again. March 2013 marked the 30th anniversary of his “turn to austerity”, when, in the face of rising unemployment, high inflation and exchange-rate difficulties that led to a succession of devaluations of the franc, his government formally abandoned the model of statist economic management it had adopted in 1981.

March 1983 was a seminal moment in the history of the Parti Socialiste. Arthur Goldhammer, a historian of French politics who teaches at Harvard, has written that the PS remains divided “between those who have deeply internalised the U-turn of 1981-83 as a step in the right direction”, an accommodation with the world as it is and not as Socialists would wish it to be, and “those who look back on it as a mistake”. Hollande belongs in the first camp; Montebourg and critics to the president’s left place themselves in the second.

Hollande’s other problem is that his economic policy is failing on its own terms. In the election campaign, in order to outflank his opponent, he accepted Sarkozy’s commitment to reduce the deficit to 3 per cent of output by the end of 2013, partly by means of €10m worth of spending cuts. Despite forecasts of anaemic growth, Hollande reiterated this commitment in office. What Ayrault called a “fighting budget” was announced and the target of a 3 per cent reduction pronounced “realistic”.

In November 2012, during the parliamentary debate on the European “fiscal compact”, many on the left of the party, including the PS first secretary, as well as the foreign minister, Laurent Fabius, a wily political streetfighter who served as prime minister under Mitterrand, protested that the treaty meant “austerity for life”. That same month, the European Commission declared that it was unlikely France would reach the 3 per cent target.

 Hollande insisted it could be achieved, and continued to do so until February this year, when he left it to Ayrault to make the following announcement: “We will not be exactly at 3 per cent at the end of 2013, but we will not be far off.”

Who was the minister despatched to tour the radio and television studios to warn that a recalibration of expectations was imminent? None other than Jérôme Cahuzac. As the right-leaning newspaper Le Figaro reported with some glee, one of Cahuzac’s last acts as a minister was to prepare people for the “burial of a presidential promise”.

Jonathan Derbyshire is the culture editor of the New Statesman

Jonathan Derbyshire is Managing Editor of Prospect. He was formerly Culture Editor of the New Statesman.

This article first appeared in the 29 April 2013 issue of the New Statesman, What makes us human?

JON BERKELEY
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The empire strikes back

How the Brexit vote has reopened deep wounds of empire and belonging, and challenged the future of the United Kingdom.

Joseph Chamberlain, it has been widely remarked, serves as an inspiration for Theresa May’s premiership. The great municipal reformer and champion of imperial protectionism bestrode the politics of late-Victorian and Edwardian Britain. He was a social reformer, a keen ­unionist and an advocate for the industrial as well as the national interest – all values espoused by the Prime Minister.

Less noticed, however, is that May’s excavation of Chamberlain’s legacy is a symptom of two larger historical dynamics that have been exposed by the vote for Brexit. The first is the reopening on the British body politic of deep wounds of race, citizenship and belonging, issues that home rule for Ireland, and then the end of empire, followed by immigration from the former colonies, made central to British politics during the 20th century. Over the course of the century, the imperial subjects of the queen-empress became British and Irish nationals, citizens of the Commonwealth and finally citizens of a multicultural country in the European Union. The long arc of this history has left scars that do not appear to have healed fully.

The second dynamic is the renewal of patterns of disagreement over free trade and social reform that shaped profound divisions roughly a century ago. Specifically, the rivalry was between a vision of Britain as the free-trade “world island”, supported by the City of London and most of the country’s governing elite, and the protectionist project, or “imperial preference”, articulated by Chamberlain, which sought to bind together the British empire in a new imperial tariff union, laying the foundations for industrial renewal, social progress and national security. The roots of these commitments lay in his career as a self-made businessman and reforming mayor of Birmingham. A leading Liberal politician, Chamberlain broke with his own party over home rule for Ireland and, with a small group of Liberal Unionists, joined Lord Salisbury’s Conservative government of 1895, becoming colonial secretary. He subsequently resigned in 1903 to campaign on the question of imperial preference.

The fault lines in contemporary political economy that Brexit has starkly exposed mimic those first staked out in the early part of the 20th century, which lie at the heart of Chamberlain’s career: industry v finance, London v the nations and regions, intervention v free trade. This time, however, these divides are refracted through the politics of Britain’s relationship with Europe, producing new economic interests and political ­alliances. What’s more, the City now serves the European economy, not just Britain and her former colonies.

Chamberlain is the junction between these two critical dynamics, where race and political economy interweave, because of his advocacy of “Greater Britain” – the late-Victorian idea that the white settler colonies of Canada, Australia, New Zealand and South Africa should be joined with the mother country, in ties of “kith-and-kin” solidarity, or more ambitiously in a new imperial federation. Greater Britain owed much to the Anglo-Saxonism of Victorian historians and politicians, and was as much a Liberal as a Conservative idea. Greater Britain was a new way of imagining the English race – a ten-million-strong, worldwide realm dispersed across the “white” colonies. It was a global commonwealth, but emphatically not one composed of rootless cosmopolitans. Deep ties, fostered by trade and migration, held what the historian James Belich calls “the Anglo-world” together. It helped equip the English with an account of their place in the world that would survive at least until the 1956 Suez crisis, and it was plundered again by latter-day Eurosceptics as they developed a vision of the UK as an integral part, not of the EU, but of an “Anglosphere”, the liberal, free-market, parliamentary democracies of the English-speaking world.

Greater Britain carried deep contradictions within itself, however. Because it was associated with notions of racial membership and, more specifically, with Protestantism, it could not readily accommodate divisions within the UK itself. The political realignment triggered by Chamberlain’s split with Gladstone over Irish home rule, which set one of the most enduring and intractable political divides of the era, was symptomatic of this. For Chamberlain, Irish home rule would have entailed Protestant Ireland being dominated by people of “another race and religion”. Unless there could be “home rule all round” and a new imperial parliament, he preferred an alliance with “English gentlemen” in the Tory party to deals with Charles Stewart Parnell, the leader of Ireland’s constitutional nationalists.

The failure of Chamberlain’s kith-and-kin federalism, and the long struggle of nationalist Ireland to leave the UK, left a bitter legacy in the form of partition and a border that threatens once again, after Brexit, to disrupt British politics. But it also left less visible marks. On Ireland becoming a republic, its citizens retained rights to travel, settle and vote in the UK. The Ireland Act 1949 that followed hard on the Irish Free State’s exit from the Commonwealth defined Irish citizens as “non-foreign”.

A common travel area between the two countries was maintained, and when immigration legislation restricted rights to enter and reside in the UK in the 1960s and 1970s, Irish citizens were almost wholly exempted. By the early 1970s, nearly a million Irish people had taken up their rights to work and settle in the UK – more than all of those who had come to Britain from the Caribbean and south Asia combined. Even after the Republic of Ireland followed the UK into the European common market, its citizens retained rights that were stronger than those given to other European nationals.

In 1998, the Good Friday Agreement went a step further. It recognised the birthright of all the people of Northern Ireland to hold both British and Irish citizenship. Common EU citizenship north and south of the border made this relatively straightforward. But under a “hard Brexit”, Britain may be asked to treat Irish citizens just like other EU citizens. And so, unless it can secure a bilateral deal with the Republic of Ireland, the UK will be forced to reinvent or annul the common travel area, reintroducing border and customs controls and unstitching this important aspect of its post-imperial, 20th-century settlement. Will Ireland and its people remain “non-foreign”, or is the past now another country?

 

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Today’s equivalent of 19th-century Irish nationalism is Scottish national sentiment. Like Gladstone and his successors, Theresa May is faced with the question of how to accommodate the distinct, and politically powerful, aspirations of a constituent nation of the United Kingdom within the unsteady framework associated with the coexistence of parliamentary sovereignty and ongoing devolution. Scotland’s independence referendum bestowed a sovereign power on its people that cannot be set aside in the Brexit negotiations. The demand for a “flexible Brexit” that would allow Scotland to stay in the European single market is also, in practice, a demand for a federal settlement in the UK: a constitutional recognition that Scotland wants a different relationship to the EU from that of England and Wales.

If this is not couched in explicitly federal terms, it takes the unitary nature of the UK to its outer limits. Hard Brexit is, by contrast, a settlement defined in the old Conservative-Unionist terms.

Unionism and federalism both failed as projects in Ireland. Chamberlain and the Conservative Unionists preferred suppression to accommodation, a stance that ended in a war that their heirs ultimately lost.

Similarly, the federal solution of Irish home rule never made it off the parchment of the parliamentary legislation on which it was drafted. The federalist tradition is weak in British politics for various reasons, one of which is the disproportionate size of England within the kingdom. Yet devising a more federal arrangement may now be the only means of holding the UK together. May’s unionism – symbolised by her visit to Edinburgh to meet Scotland’s First Minister, Nicola Sturgeon, in the first days of her premiership – will be enormously tested by a hard Brexit that cannot accommodate Scottish claims for retention of single-market status or something close to it. Separation, difficult as this may be for the Scottish National Party to secure, may follow.

The idea of Greater Britain also left behind it a complex and contentious politics of citizenship. As colonial secretary at the end for 19th century, Chamberlain faced demands for political equality of the subjects of the crown in the empire; Indians, in particular, were discriminated against in the white settler colonies. He strongly resisted colour codes or bars against any of the queen’s subjects but allowed the settler colonies to adopt educational qualifications for their immigration laws that laid the foundation for the racial discrimination of “White Australia”, as well as Canadian immigration and settlement policies, and later, of course, the apartheid regime in South Africa.

Nonetheless, these inequalities were not formally written into imperial citizenship. The British subject was a national of the empire, which was held together by a common code of citizenship. That unity started to unravel as the colonies became independent. Specifically, a trigger point was reached when, in 1946, the Canadian government legislated to create a new national status, separate and distinct from the common code of imperial citizenship hitherto embodied in the status of the British subject.

The Attlee government responded with the watershed British Nationality Act 1948. This created a new form of citizenship for the UK and the colonies under its direct rule, while conferring the status of British subject or Commonwealth citizen on the peoples of the former countries of empire that had become independent. It was this that has made the act so controversial: as the historian Andrew Roberts has argued, it “gave over 800 million Commonwealth citizens the perfectly legal right to reside in the United Kingdom”.

This criticism of the act echoed through the postwar decades as immigration into the UK from its former empire increased. Yet it is historically misplaced. The right to move to the UK without immigration control had always existed for British subjects; the new law merely codified it. (Indeed, the Empire Windrush, which brought British subjects from the Caribbean to London in June 1948, docked at Tilbury even before the act had received royal assent.)

At the time, ironically, it was for precisely opposite reasons that Conservative critics attacked the legislation. They argued that it splintered the subjects of empire and denied them their rights: “. . . we deprecate any tendency to differentiate between different types of British subjects in the United Kingdom . . . We must maintain our great metropolitan tradition of hospitality to everyone from every part of our empire,” argued Sir David Maxwell Fyfe, the Tory shadow minister of labour and future home secretary.

As the empire withered away in the postwar period, some Conservatives started to change their minds. Enoch Powell, once a staunch imperialist, came to believe that the idea of the Commonwealth as a political community jeopardised the unity of allegiance to the crown, and so was a sham. The citizens of the Commonwealth truly were “citizens of nowhere”, as Theresa May recently put it. As Powell said of the 1948 act: “It recognised a citizenship to which no nation of even the most shadowy and vestigial character corresponded; and conversely, it still continued not to recognise the nationhood of the United Kingdom.”

Once the British empire was finished, its core Anglo-Saxon populace needed to come back, he believed, to find their national mission again, to what he viewed as their English home – in reality, the unitary state of the UK – rather than pretend that something of imperialism still survived. On England’s soil, they would remake a genuine political community, under the sovereignty of the Crown-in-Parliament. If Greater Britain could not exist as an imperial political community, and the Commonwealth was a fiction, then the kith and kin had to live among themselves, in the nation’s homeland.

Contemporary politicians no longer fuse “race” and citizenship in this way, even if in recent years racist discourses have found their way back into mainstream politics in advanced democracies, Britain included. However, the legacies of exclusivist accounts of nationality persist, and not merely on the populist right. British politics today is dominated by claims about an irreconcilable division between the attitudes and national sentiments of the white working classes, on the one hand, and the cosmopolitanism of metropolitan liberals, on the other.

But thinking and speaking across this artificial divide is imperative in both political and civic terms. Many Remainers have the same uncertainties over identity and political community as commentators have identified with those who supported Brexit; and the forms of patriotism exhibited across the UK are not necessarily incompatible with wider commitments and plural identities. Above all, it is vital to challenge the assumption that a regressive “whiteness” defines the content of political Englishness.

 

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Brexit thus forces us once again to confront questions about our citizenship, and the question of who is included in the nation. In an ironic twist of fate, however, it will deprive the least cosmopolitan of us, who do not live in Northern Ireland, or claim Irish descent, or hold existing citizenship of another EU country, of the European citizenship we have hitherto enjoyed. Conversely it also leaves a question mark over the status of EU nationals who live and work in the UK but do not hold British nationality. The government’s failure to give guarantees to these EU nationals that they will be allowed to remain in the UK has become a matter of deep controversy, on both sides of the Brexit divide.

As only England and Wales voted for it, Brexit has also exposed the emergence once again of distinct identities in the constituent nations of the UK. Although Scottish nationalism has been the most politically powerful expression of this trend, Englishness has been growing in salience as a cultural and, increasingly, as a political identity, and an insistent English dimension has become a feature of British politics. Although talk of a mass English nationalism is misplaced – it can scarcely be claimed that nationalism alone explains the complex mix of anxiety and anger, hostility to large-scale immigration and desire for greater self-government that motivated English voters who favoured Brexit – it is clear that identity and belonging now shape and configure political arguments and culture in England.

Yet, with a handful of notable exceptions, the rise in political Englishness is being given expression only on the right, by Eurosceptics and nationalists. The left is significantly inhibited by the dearth of serious attempts to reimagine England and ­different English futures, whether culturally or democratically.

It is not just the deep politics of the Union and its different peoples that Brexit has revived. The divisions over Britain’s economy that were opened up and positioned during the Edwardian era have also returned to the centre of political debate. Though as yet this is more apparent in her rhetoric than in her practice, Theresa May seems drawn to the project of reviving the Chamberlainite economic and social agendas: using Brexit to underpin arguments for an industrial strategy, a soft economic nationalism and social reform for the “just about managing” classes. She has created a new department responsible for industrial strategy and advocated places for workers on company boards (before watering down this commitment) as well as increased scrutiny of foreign takeovers of British firms. Housing policy is to be refocused away from subsidising home ownership and directed towards building homes and supporting private renters. Fiscal policy has been relaxed, with increased infrastructure investment promised. The coalition that delivered Brexit – made up of struggling working-class voters and middle-class older voters (or the “excluded and the insulated”, as the Tory peer David Willetts puts it) – is seen as the ballast for a new Conservative hegemony.

Presentationally, May’s vision of Brexit Britain’s political economy is more Chamberlainite than Thatcherite, a shift that has been obscured in Brexit-related debates about migration and tariff-free access to the European single market. Her economic utterances are edged with a national, if not nationalist, framing and an economic interventionism more commonly associated with the Heseltinian, pro-European wing of her party. In a calculated move replete with symbolism, she launched her economic prospectus for the Tory leadership in Birmingham, advertising her commitment to the regions and their industries, rather than the City of London and the financial interest.

It is therefore possible that May’s project might turn into an attempt to decouple Conservative Euroscepticism from Thatcherism, creating a new fusion with Tory “One Nation” economic and social traditions. It is this realignment that has left the Chancellor, Philip Hammond, often exposed in recent months, since the Treasury is institutionally hostile both to economic interventionism and to withdrawal from the single market. Hence his recent threat to the European Union that if Britain cannot secure a decent Brexit deal, it will need to become a deregulated, low-tax, Dubai-style “world island” to remain competitive. He cannot envisage another route to economic prosperity outside the European Union.

It also leaves those on the Thatcherite right somewhat uncertain about May. For while she has sanctioned a hard Brexit, in crucial respects she appears to demur from their political economy, hence the discontent over the government’s deal to secure Nissan’s investment in Sunderland. As her Lancaster House speech made clear, she envisages Brexit in terms of economically illiberal goals, such as the restriction of immigration, which she believes can be combined with the achievement of the new free trade deals that are totemic for her party’s Eurosceptics.

In practice, the Prime Minister’s willingness to endorse Hammond’s negotiating bluster about corporate tax cuts and deregulation shows that she is anything but secure in her Chamberlainite orientation towards industrial strategy and social reform. Her policy positions are shot through with the strategic tension between an offshore, “global Britain” tax haven and her rhetoric of a “shared society”, which will be difficult to resolve. May has embraced hard (she prefers “clean”) Brexit, but a transformation of the axes of conservative politics will only take place if she combines Euroscepticism with a return to pre-Thatcherite economic and social traditions. This would make her party into an even more potent political force. The recent shift of the Ukip vote into the Tory bloc and the notable weakening of Labour’s working-class support suggest what might now be possible. This is the domestic politics of Chamberlain’s social imperialism shorn of empire and tariff – only this time with better electoral prospects.

 

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There are some big pieces of 20th-century political history missing from this jigsaw, however. In the 1930s, Chamberlain’s son Neville succeeded where his father had failed in introducing a modest version of tariff reform, and trade within the empire rebounded. Britain abandoned the gold standard in 1931 and cheap money revived the national economy. The collectivism of the wartime command economy and the postwar Keynesian settlement followed. New forms of economic strategy, industrial policy and social reform were pioneered, and the Treasury beliefs in limited state intervention, “sound money” and free trade that had defined the first decades of the 20th century were defeated.

This era was brought to an end by the election of Margaret Thatcher in 1979. Her government smashed the industrial pillars and the class compromises that had underpinned the postwar world. The ensuing “New Labour” governments inherited a transformed political economy and, in turn, sought to fuse liberal with collectivist strands in a new settlement for the post-industrial economy. What many now view as the end of the neoliberal consensus is, therefore, better seen as the revival of patterns of thinking that pre-date Thatcherism. This tells us much about the persistent and deep problems of Britain’s open economic model and the continuing, unresolved conflict between finance and parts of industry, as well as London and the regions.

Brexit brings these tensions back to the surface of British politics, because it requires the construction of a completely new national economic and political settlement – one that will be thrashed out between the social classes, the leading sectors of the economy, and the nations and regions of the United Kingdom.

Few peacetime prime ministers have confronted the scale and kinds of challenge that Brexit will throw up: holding together the UK, revitalising our industrial base, delivering shared prosperity to working people and renegotiating Britain’s place in Europe and the wider world. This is the most formidable list of challenges. Lesser ones, we should recall, defeated Joe Chamberlain.

Michael Kenny is the inaugural director of the Mile End Institute policy centre, based at Queen Mary University of London

Nick Pearce is professor of public policy at the University of Bath

This article first appeared in the 19 January 2017 issue of the New Statesman, The Trump era