Merkel and May: Common Origins, Shared Failures and Different Prospects

Angela Merkel and Theresa May are both the daughters of clergymen, so they grew up in the psychologically comfortable environment of a clergy house with attentive members of the local community willing to support them even though the majority of the outside population was post-Christian. May's route into politics was typical of an Oxford graduate who had always been a young Conservative. The much rougher road that Merkel followed depended on the collapse of East Germany, on Helmuth Kohl's determination quickly and fully to integrate the east and the west, and on the ruthlessness that she had learned under Communism to move in at an opportune moment and slip herself into Kohl's place. By contrast. Mrs May's accession to the party leadership was by default of David Cameron, whose panic flight from the tragic situation that had been created by his daft, imprecise referendum question was one of the most shameful incidents in British history.

Mrs May's great 'weakness' as Home Secretary was the abject failure of her department to come anywhere near meeting the policy requirement to reduce net immigration to the UK to fewer than 100,000 non-students a year. In one sense, the target was unattainable under EU Freedom of Movement rules; Mrs May should have said that clearly: she had no way of limiting EU immigrants. She would then have had to establish and enforce a quota of non-EU immigrants; and that would have to be a tight one. That would be impossible to enforce, too, because almost every MP is constantly battered with demands and petitions from their Asian constituents to support the immigration of family members, and to support cousin-to-cousin mail-order marriages; many urban constituencies could be swung if the whole south-Asian population united to support one party [Labour, if the Tories in government had imposed a real cap on immigration]. George Osborne was apparently scathing about this'failure' in and out of Cabinet meetings: so she had to dismiss him on taking up office as Prime Minister; and superficially journalism's loss is her political gain in not having his constant carping at her elbow. He will, however, be a powerful enemy outside the Westminster hothouse, and he will surely dissect her ongoing failure to address Brexit adequately.

Mrs Merkel's massive mistake was to allow around half a million chancers from the Muslim world to claim to be asylum-seekers when she opened Germany to Syrians who were genuinely in flight from the appalling chaos of their home country. Many of these men - Afghans, Eritreans, Pakistanis etc - claimed to be juveniles, despite their appearance being clearly that of adults. She and her ministers appealed to Germany's Christian tradition as a major ground for welcoming the homeless: a sound point, in principle, which was instantly vitiated by the recognition that the chancers must include some jihadis and some potential recruits to jihad. Other EU countries have refused to take the quotas of these thugs that Germany has persuaded to EU to thrust upon them, and that will continue to be a source of discord within EU institutions for years to come.

Even if May is able to achieve a half-sensible Brexit, with the help of Merkel [which is by no means guaranteed], there is no reason to think that this will make May's position in the UK more secure: it could create the situation in which the Tory party can ditch her. May has, however, one cunning ploy that she has used already and will doubtless play heavily in her Florence speech today: that the UK can contribute materially to 'security' in the EU on an ongoing basis, after Brexit. That could well have a positive resonance, [particularly with Merkel and with the central Europeans who are resisting the quotas of chancers and thugs whom Merkel is foisting on them]. But everything is 'up for grabs' in a quickly-changing world and European context; with Trump and Putin spoiling on the sidelines.

The Glory of a Mixed Economy

Between 1950 and 1972, Britain boasted of its Mixed Economy. Then, in the 'seventies, the misapplication of Keynes's principles by the self-styled NeoKeynesians combined with the OPEC cartel to create an inflationary spiral that threatened to destroy the economy. That situation, in turn, made the opportunity for Thatcherite Monetarism and the 'free markets' dogma to be installed: with apparent temporary success and long-term ruinous outcomes. I have issued sufficient jeremiads about the latter state to give it a rest for the moment, and to pick out instead the features of the economic policy [broadly pursued by both Labour and Conservative governments] that prevailed beneficially under the generic description of the Mixed Economy.

During World War II the coalition government published the Beveridge Report, which promised a universal, compulsory social insurance scheme that would provide healthcare, unemployment insurance and old-age pensions for all contributors and their dependents. Both the major parties in the coalition were committed to implementing the scheme, and though the costs - especially of the national health system - always exceeded the income of the national insurance fund it was hoped that a time would come when those books would balance and a subsidy from general taxation would not be necessary. The National Health Service, in particular, was immensely popular and it delivered massive benefits to the entire nation.

Labour won the 1945 election, with a clear mandate to nationalise core infrastructure services and the 'commanding heights' of the industrial system. Under the infrastructure policy, the clapped-out railways, the partially-derelict canals, the major bus companies and the biggest road haulage companies [with their depots and other support facilities] were nationalised. The railways already owned some ports, and major hotels near stations, and these were taken into state ownership as well. For the first decade of nationalisation there was an attempt to support all of these facilities; but with the rapidly rising popularity of private cars and the consequential demand for the state to provide an appropriate road network the aggregate costs became too great. The slow death of the canals continued, and the subsidy of railways became excessively burdensome until a Tory government appointed a 'technocrat', Dr Beeching, to manage the railways. He just adopted a slash-and-burn approach, reducing the system too much in an orgy of destruction that is pretty universally regarded with hindsight to have been absurdly excessive. But the core railways system was preserved, to become a success eventually: and the motorways were built.

Coal and steel were among the 'commanding heights' of the economy which were nationalised, reorganised, and subject to massive investment and modernisation: which worked beneficially for a couple of decades. Electricity and gas services were nationalised, with massive investment in new power stations and the creation of the national grid for electricity and the beginning of a similar system for gas distribution. Telephones had been developed as a state monopoly, under the Post Office, and their availability increased immensely. Television had been suspended for the war, and it was reintroduced [BBC only, at first] to become massively popular.

The state managed all these things, while making good the massive destruction that had been effected by German bombing during the war and the massive wear-and-tear on all types of plant and equipment that had happened while concentration on war production had meant that maintenance and repairs had been minimal. Perhaps the greatest achievement was in housing. Private builders were enabled to develop private estates while the state sector built hundreds of thousands of houses. So great was the success of that programme, that under a Conservative housing minister in the later 'fifties 400,000 houses were completed in a single year. By contrast, the pathetic shower who govern us now cannot orchestrate the 'market economy' to provide so many as 100,000 homes in the face of desperate need.

Not all was perfect in those years; but things felt better than they do now because there was a feeling of common national purpose with significant objectives being achieved by the public and proivate sectors of the economy working in concert.

Brexit Britain Divided

The United Kingdom is more deeply riven by economic, political and social issues than it has ever been before. I say this with the benefit of a quarter of a century teaching Economics and economic History in a major university followed by a further quarter-century living in Tower Hamlets and active in the City of London. Thus I have half a century of reading, listening and probing; and, as a bonus, I have the luck to have a second home in the Peak District where I hear another spectrum of opinions and lore. Throughout history, most constituencies were controlled by a single party, after the dominant landowners surrendered control during the nineteenth century. Rural areas and affluent inner London were solidly Tory, some mixed-economy areas tended to return Liberal MPs, and the heavily industrial and mining areas were solid Labour. There were - and still are - anomalies: the constituency in which I first had a vote [Darwen, now Rossendale and Darwen] has improbably elected Tories all my life; but such exceptions are rare. However, in a rapidly-changing context, the old certainties have gone. The Brexit vote cut right across party traditions, and leaders' admonitions had minimal impact on voters' choice.

In the nineteen-nineties the Labour Party was split by the Blairites, who did not eradicate old-Labour in the new century but instead left stagnant pools of Marxist infantilism to fester while the legendary pragmatism of the big-union bosses became heavily diluted. The present mushroom growth of a new-left Labour is both an indication of voter dissatisfaction - especially [but not only] among the young - and of a search for ideals. The cupboard-love of the students and graduates who liked Corbyn's reckless 'pledge' about tuition fees during the recent election has dissipated, and the peak of the latest boom has probably passed.

The Conservative Party has never been in such disarray as it now displays: the old establishment of 'grandees' who could remove a leader with swift silence seem to have disappeared, and everything now hinges on a speech in Italy which has been heralded for weeks and will prove in the event [on Friday] to be a display of the Prime Minister's incomprehension, confusion and insecurity. Even if her cobbled-together second kitchen cabinet is able to deliver a more rational speech than I expect, the Tories will be left with the recollection that they set the referendum hare running - expecting a different result - and they have no idea what to make of the situation that they have created. Mrs May said "Brexit means Brexit", a supremely silly phrase which will haunt her even more than "strong and stable"; and she has given no indication of whether she thinks the vote was to leave the political institutions of the EU [only] - as would gain massive popular approval - or to cut adrift from the customs union and the common market, which would smash the economy and make the Irish situation irresolvable.

Tories and Labour are split on which sort of Brexit was intended by the voters, and by their opinions as to where to go now. The LibDems and ScotNats are determined remainers, and may well swing parliamentary votes: especially by the LibDems in the House of Lords.

Meanwhile, media commentators cannot agree whether or not the country has a wider gap between better-off and worse-off citizens; though the gap between the most highly remunerated and the lowest has not been greater than it is now, since the economy and society were put back to zero by the Second World War.

An early General Election would not resolve the situation. In England the LibDem vote might go up, which would mitigate Labour gains and produce the spectacle of Corbyn and Cable negotiating a coalition: that would then have to try to attract the ScotNats and some Irish contingent [most of whom hate Corbyn as an IRA supporter].

Most people know that they are getting worse off. Many worry about their borrowing. Many are extremely anxious about the homes they can barely afford to keep or those they cannot afford to rent or to buy.

Just as the majority of Russians are content to have Stalin rehabilitated, and his statues refurbished in some places, so there is a nostalgia in Britain for the mixed economy and the welfare state that the Thatcherites and the Blarites did so much to destroy.

To that I will return tomorrow; as my recent blogs have become overlong.