I was at Cambridge last weekend for a conference of The Wilberforce Society, a think-tank run by undergraduates, on the theme of “Small Island, Big World: Visions of Britain in a Global Era”. The various panels contained far more distinguished speakers than I, and Lord Williams, former Archbishop of Canterbury, opened proceedings, fittingly enough, perhaps, as the event took place at the divinity school, over the road from St John’s College.
My own panel was the last of the day which meant a slightly more compact although I hope more dedicated audience. Our sub-theme was “How should Britain mitigate the risks and capitalise upon the opportunities presented by globalisation?”.
Fellow speakers included Sonia Roschnik, Director of the Humanitarian Centre, and Professor John Holden of City University. But the show was stolen by our fourth panellist, Lord (Paul) Boateng, former Chef Secretary to the Treasury and then British High Commissioner in South Africa. Funny, passionate – simply brilliant. And very friendly with it.
All in all, a jolly event. I had dinner afterwards at The Oak Bistro with my old friend and Cambridge resident Gary Hicks, whose latest book The First Adman (Victorian Secrets) is a life of the Regency entrepreneur Thomas Bish, then off next morning to 8am Mass at the beautiful Church (small cathedral, really) of Our Lady and the English Martyrs before jumping on a train south.
Here is my contribution. The mid-section is lifted from my New Year’s Eve blog assessing the predictions in Larry Elliott’s and my 2012 book Going South, so feel free to skip to the end.
Thank you for asking me here today. It is a great pleasure to be making what is only my second visit to this fine city. I am not sure why this should have been the case – I guess as a Sussex native who, for family reasons, has always looked west, I have tended to believe East Anglia and I ought to respect each other’s personal space.
Needless to say, this attitude has pained by co-author Larry Elliott, an old Fitzwilliam man, and I hope my presence here today will make up for any grief I may have caused him on this topic.
Mention of Larry leads on to the reason I am here today, our book Going South, published in 2012. It suggested Britain, the United Kingdom, was best seen as a de-developing nation, a nation heading for what was called, and sometimes still is called, Third World status. The theme of today’s gathering, of course, is Britain in the world. So it must have seemed to the organisers that it may be interesting to hear how a country going through such a change – from developed to de-developed – would sit in the wider world context.
It goes without saying that not everyone – to put it mildly – agrees with our analysis. I shall turn to those objections in a moment. But first, a brief summary of how we see the de-developing, nascent Third World Britain in today’s world.
Our starting point is that a change in status of this magnitude introduces a new variable into international affairs. If one variable can be seen as the shifts in policies, intentions and general behaviour of one state in relation to others, as ,moving along a horizontal axis, then this “status variable” can be seen as moving along a vertical axis. It takes little imagination to see that having a relatively large economy and relatively large military power prone not only to the sideways movements common to all states but also to sudden downward movements, introduces a new element of uncertainty on to the world scene.
These are not, of course, separate movements. The “horizontal” changes to the nation’s external stance will become increasingly bound up with changes of a “vertical” nature to its status.
The upshot of all this is that we believe the UK is likely to become an increasingly unreliable and unpredictable player on the world stage. Indeed, this has already started to manifest itself.
Let us imagine you were told of a nation in Africa or South America that displayed the following characteristics.
An oil-rich province has fallen under the control of a secessionist movement which is to stage an independence referendum in the autumn. Should the vote go in favour, the country is question will break in half. The secessionist movement has pre-announced a disposition to default on its share of the national debt. Not to be outdone in terms of dubious legality, there have been suggestions that the national government will, in the event of a vote for independence, declare that a key piece of territory, containing nuclear submarine pens, will be designated a “sovereign base”.
There are other secessionist movements elsewhere in this country of which we are speaking. One such is to be found in a corner of the country that suffered a quarter-century armed insurgency and has been pacified by the twin tactics of keeping vague the ultimate question of whether the province concerned really “belongs” in the country or ought to be transferred to another jurisdiction and of physically segregating the largest population groups more completely than was the case during the insurgency.
Real earnings in our mystery nation have fallen for five full years. This is probably not too surprising, given that productivity is abysmal –the labour market appears as a version of the old Soviet-era joke: we pretend to work and they pretend to pay us.
It is not easy to get hard data on this un-named country because official statistics range from suspect to worthless. Senior police officers openly admit, for example, that the crime figures are fiddled.
The nation’s chief external attachment –one that many believes leaves the nation with only the sort of limited self-government seen in colonial territories in the mid-20th Century – is increasingly unpopular with the general public, yet the political class is determined that the attachment shall stand. Its members’ only area of disagreement is how to achieve this end.
Finally, the mystery nation – Country X – has enormous public and private debts, has not run a trade balance or surplus in 30 years and is proving an unreliable military ally, swinging from gung-ho to no-go at the drop of a hat, as seen in the politically-ordered scuttle from one commitment and the sudden refusal to engage in another campaign that its leaders had promoted enthusiastically,
So, as I say, this country is in Africa or South America. Or perhaps it is a former Soviet republic. What was your reaction as I told you of its troubles? Perhaps as the nice liberal people I know us all to be, you took it as read that this country had suffered external interference – by scheming diplomats or greedy corporations, maybe by both. Its people, you may have thought, could in no way be blamed for having been so ill-served by both their own elites and the outside world.
Or if you were less well-disposed towards the developing word, if you were a testy and florid-faced ex-colonial administrator (if there are any still about) perhaps you would have taken a certain grim satisfaction in having been proved right when you predicted all those years ago that these chaps could never run their own show and that you would not be surprised were they to put themselves once more under the tutelage of the gentlemen from the Colonial Office or the Kremlin.
But of course, Country X is not in the tropics or in one of the dusty bits of the old Soviet Central Asia. It is right here.
Now it is possible to dispute the above facts. But let us at east agree that they are reasonably accurate within themselves. Then it would be possible to argue that while the facts are accurate, they have been selectively assembled and are counter-balanced or negated by other facts. Of course there are no directly antithetical facts to hand, none suggesting that, for example, the union with Scotland is strengthening, that real earnings are going up, that the crime figures are accurate or that the national debt is falling instead of rising.
Instead, the “counter facts” tend to be of a vaporous, not to say gaseous, nature. Thus we are told Britain has an amazingly creative population that leads the world in “knowledge industries”, that the products of its schools and universities excel in “soft skills” rather than tiresome old-hat accomplishments such as maths or engineering, that its distended capital city with its bloated financial-services sector is a “world hub” and that its population is diverse, vibrant and exuberant.
This last word ought to set alarm bells ringing for those of old enough to remember when rich western countries would qualify criticism of ill-governed countries in South America, the West Indies or the South Pacific by praising their “natural exuberance”.
But the question remains – how is our analysis, our prediction, shaping up?
For those to whom "Third World" is synonymous with "poor", the answer has to be - not very well. But we have never suggested that a Third World economy is necessarily and at all times mired in poverty. Here was our definition:
"The symptoms of this vertiginous plunge in the world's rankings are already starkly apparent: a chronic balance of payments deficit, a looming shortage of energy and food, a dysfunctional labour market, volatility in economic growth and a painful vulnerability to external events.
"Then there is the large number of unproductive workers engaged in supervisory or 'security' roles, on the streets, in public parks, on the railways and at airports, their prestige apparently directly related to the inconvenience (and sometimes worse) that they are able to inflict on the public. There are the wars fought without the proper resources to do so...There is the ramshackle infrastructure existing in parallel with procurement contracts that run billions of pounds over budget and are then cancelled."
Not much change in all that since 2011/2012, is there? And if some aspects have yet to emerge (food shortages, for example), others have more than done so - for example, before Christmas it emerged that businesses may be asked to stop using electricity during periods of shortage during afternoons in the winter of 2014-2015.
Perhaps the best way of assessing the accuracy or otherwise of our general forecast is to look at some other developments that have taken place largely or wholly since the book appeared.
Here are ten, in no particular order:
One, All pretence at "re-balancing" the economy away from consumption and towards productive activities has been abandoned. Yet again we are embarking on an election-buying boom using borrowed money.
Two, In true Third World style, shanty towns are springing up across our country in the form of "beds in sheds", the illicit dwellings into which thousands or tens of thousands of cheap labourers are crammed.
Three, foreign policy is increasingly conducted on Third World lines with, on the one hand, grovelling to rich foreign countries - such as China - in the hope they will conduct their banking operations in our no-questions-asked offshore financial centre or will fund vanity projects such as HS2, and, on the other hand, the insistence that unsuccessful wars have, in fact, been triumphs to rank alongside Napoleon's at Austerlitz.
Four, authentically Third World is the habit of the three leading parties, all of which agree on almost everything, to practise "divide and rule", separating the population into "hard-working families" (alias "the strivers") and their two sets of arch-enemies, the "skivers" (who allegedly live on benefits) and that old favourite of mountebanks in developing countries, the "parasitic" middle class that has apparently snaffled all the good jobs, houses, university places, internships and so on and against whom the mountebanks promise to crusade in the name of "social mobility". Two factors inhibit said crusade. One, the politicians themselves tend, as individuals, to be rather grander than the "privileged elite" against whom they fulminate and, two, the "parasites" tend to be the only people who can make anything work.
Six, this is linked to a phenomenon common in developing states, the destruction in the name of ideology of the high-quality administrative machine inherited from the now-despised former rulers. Here is James Forsyth in The Spectator on December 7 2013:
[H]aving been in office, ministers now know that the civil service machine is broken. Those who are in government again having served under the last Tory Prime Minister agree that standards have fallen markedly. Ministers find their own names misspelt in letters, there are factual errors in answers to parliamentary questions and grammatical mistakes in press notices. It has become normal, even during the busiest times, for civil servants routinely to take Fridays off, and work from home on other days.
It may or may not be connected with this that, since our book was published, four institutions that we have been told for years are the "envy of the world" - the civil service, the police, the BBC and the National Health Service – have lost some of their “envy” status, at least in the developed world.
Six, following on from this is the notion of "former times", the unhappy pre-revolutionary period before we were all, in some ill-defined way, set free. The only real divide in politics is a pointless argument as to the exact date of this non-event: was it the accession of Margaret Thatcher in 1979, before which all was darkness, or was she part of the darkness, with daylight arriving finally with Tony Blair in 1997, with John Major having served as a sort-of transitional figure, a South London version of Bishop Muzorewa?
In keeping with this, public figures confess their "errors" during the "former times", whether comparing gay marriage to wedlock with a dog (Boris Johnson) or hanging out with the now-disgraced tycoon Rupert Murdoch (almost all senior politicians). In the manner of a comic-opera banana republic, the police try to exorcise their former closeness to Murdoch’s henchmen by launching dawn raids on their houses.
Seven, separately, but again in keeping with developing (or, in our case, undeveloping) status, is the chronic inability of political figures to distinguish means and ends. Free-marketeers rail against the European Union for its "red tape", apparently unable to conceive of someone wishing Britain to be (a) independent and (b) heavily bureaucratised of its own free will. Similarly, leftish types insist EU membership is key to preserving social democratic values, presumably fearing their fellow countryfolk, left to their own devices, will take us back to the days of the workhouse without a second thought.
A prime example of this intellectual slurry can be found in the Scottish Government's white paper Scotland's Future, in which the case for independence is presented in large part in terms of the "free stuff" that a stand-alone Scotland could supply its citizens. Presumably, an independent Scotland (for which an excellent case can be made, although personally I'm a unionist with a small u) would be free to elect a government espousing the frugal principles of Adam Smith rather than the giveaway mentality of The Price is Right? It is hard to tell.
Eight, official information is in danger of becoming meaningless, as we saw earlier. Senior police officers admit the crime figures are fiddled, train companies lengthen journey times to "show" their services are punctual, the long-standing inflation of exam grades has supposedly been stopped in the school system but may well be continuing in higher education, hospitals have lied about "patient care" only to be exposed by whistleblowers and meaningful immigration statistics seem almost impossible to come by.
Nine, independent institutions are, in true Third World style, under constant attack. The independence of the legal profession is threatened by changes to Legal Aid and the Government has provided for state licensing of the press (having said it would not). More than 60 journalists have been arrested since the spring of 2011, many (apparently) for the heinous crime of listening to famous people's answering-machine messages.
Ten, as with the basket-case economies of pre-1989 eastern Europe, Britain is locked into a system that its "leaders" are required to hail as an enormous success story, albeit one in need of reform. In our latter-day Warsaw Pact (albeit with better cars and fridges), "everyone" agrees the EU needs to "do less and do it better", the result of which is the EU continues to infiltrate every nook and cranny of public (and sometimes private) life to ill effect.
Were one to use the word "negotiation" as it is understood in developed, English-speaking countries, David Cameron would appear the world's worst negotiator, having apparently promised that, whatever the outcome of his negotiations, he will campaign for Britain to stay in the EU in his promised 2017 referendum. But then, this is not negotiation in the accurate sense of the word, any more than the "political consultative committee" of the Warsaw Pact had much to do with consultation. It is more an elaborate, pre-scripted ritual of fraternal solidarity during which Comrade Merkel will produce something with which Mr Cameron can quiet his regrettably-backward people.
To conclude, I believe three features will mark de-developing, sub-merging, Britain on the world stage.
One, it will be unreliable, whether that be in ramping up the case for armed intervention in Syria and then ducking out or whether that be in signing up for international rules on banking and then seeming to waive them to tempt Chinese institutions to set up in London.
Two, it will be unpredictable. Will it be one country or two a year from now? Will it leave its current main attachment, the EU?
Three, it will be penurious, sucking up to all and sundry in the hope of bringing in money, whether that be the Chinese in our attempt to turn London into an offshore centre for trading the renminbi, whether that be to Islamic finance, whether that be to American regulators in order to let our banks do business there.
The global risk for this country is that it will do nothing to deal with its problems and become a source of instability.
The opportunity is to find a development model, whether one along free-market lines such as Singapore or one based more on Scandinavian social democracy. Which one to chose is, I feel, a topic for another day.
Going South: Why Britain Will Have A Third World Economy By 2014, by Larry Elliott and Dan Atkinson is published by Palgrave Macmillan