The risks of simple majority referendums: learning from Quebec

duncan bannermanBritain voted to leave the EU in a simple majority referendum. Gordon Bannerman (University of Guelph-Humber) argues that it would have done better to follow Canada’s example. After Quebec narrowly voted to avoid separation in 1995, the country revisited its approach to referendums. Indeed, not all UK referendums have involved a simple majority.

Canada has often featured on the LSE Brexit pages in terms of its past and prospective trading relationship with Britain. But surprisingly little comment has been made on the constitutional precedents Canada provided for pre-Brexit Britain, especially arising from the 1995 Quebec referendum, which resulted in a narrow 50.58 per cent to 49.42 per cent majority rejecting separation.

quebec flag

The Quebec flag. Photo: abdullahh via a CC BY SA 2.0 licence

Afterwards, alert to the potentially momentous implications of a simple majority popular vote, government set to work to provide a new legal framework for referendums. Mistakes had been made. The federal government had no input in drafting the question, with the impetus handed to pro-independence parties (Parti Québécois, Action démocratique du Québec, and Bloc Québécois) whose question asked if voters agreed Quebec “should become sovereign after having made a formal offer to Canada for a new economic and political partnership”.

The convoluted, hedged language, described by the British High Commissioner to Canada Sir Anthony Goodenough as “gobbledygook”, concerning the future of Quebec/Canadian relations was not new. Even greater obfuscation had characterised the referendum of 1980, with a question consisting of 106 words, to grant Quebec’s government a mandate to negotiate “sovereignty-association” with Canada. In both cases, the language conveyed the impression of a smooth transition to independence amidst the willing cooperation and assistance of the federal government. The reality was that such a scenario could not be guaranteed. The Quebec nationalist parties had also threatened to make a unilateral declaration of independence (UDI) should a vote for separation not be honoured within one year. The Canadian government of Jean Chrétien, acting largely on the ideas of Stéphane Dion, the Minister for Federal Provincial Relations, requested the country’s Supreme Court to rule on the legality of UDI, relative to international law and Canada’s constitution. Acting on the 1998 judgment Reference Re Secession of Quebec, Chrétien codified the Supreme Court’s recommendations in the Clarity Act (Bill C-20) in 2000. Any future referendum question had to be presented in the House of Commons and approved by both Houses. Section 1(4) stipulated that questions providing only a mandate for future negotiations with Canada would be considered unclear and invalid. The question had to be “clear”, and voted by an (unquantified) “clear majority” for the Federal Parliament, as arbiter, to recognise its validity. No longer would 50 per cent + 1 be deemed sufficient for far-reaching constitutional changes – in future, a stronger mandate would be required. There the question has rested, as no referendum has taken place since 1995.
As some Canadian commentators have argued, Britain should have learned from the Quebec experience.

Some diplomats and politicians, such as Sir Anthony Goodenough and Malcolm Rifkind (Foreign Secretary, 1995-1997), did see important lessons from the Canadian experience but these were more pointed towards drawing parallels between the nationalist movements in Quebec and Scotland. While lauding the Canadian government’s measures in undermining separatism, the example of the Clarity Act in strengthening central government did not seem to gain traction in Britain.

Yet examples existed closer at home. Since the 1970s, referendums – previously almost unknown in Britain – have been used in popular decision-making. There has been no fixed formula. In the 1975 EEC referendum a simple majority was required, but the 1979 devolution referendums in Scotland and Wales, preceded by legislative acts, were framed more cautiously. Parliament was firmly in control of the process, and an amendment (Section 58(2) of the 1978 Scotland Act) by the Labour MP George Cunningham, supported by Conservative and Labour anti-devolutionists, stipulated that for the Acts to become law, an affirmative vote of 40% of the total registered electorate would be required as well as a simple majority.

The amendment imposed a qualified majority, by making the vote of every registered voter count – meaning non-voters were counted as votes against. The electoral register used was based on a qualifying date of October 1978. There were over 500,000 “unavoidable non-voters” including prisoners, hospital patients, and those moving home. Most notoriously, the amendment meant those registered in October 1978 who had since died were counted as votes against. The grievances were not all on one side—some argued the 40% rule reduced the anti-devolution vote, since many voters, by equating abstention with casting a vote against, stayed at home. The 40 per cent threshold was not attained in either country but in Scotland a majority of votes cast (51.6 per cent) voted for devolution but on a 63.72 percent turnout, the total amounted to only 32.9 per cent of registered voters. While making no difference in Wales, the amendment negated the simple majority achieved in Scotland.

The historical and political context was crucial in establishing the framework for the respective referendums. The 1974 Labour government, lukewarm on devolution but needing SNP parliamentary votes, reluctantly acted on the 1973 Kilbrandon Report’s recommendations, but readily accepted the Cunningham amendment as a safeguard. By contrast, the 1997 referendums for a Scottish Parliament and Welsh Assembly promoted by the pro-devolution Blair Government imposed no qualified majority rule. Despite the establishment of the Electoral Commission (EC) with referendum management, via the Political Parties, Elections, and Referendums Act (PPERA) of 2000 being statutory acknowledgment of referendums as a fixture in the UK’s political landscape, little has changed. In 2014 and 2016 the EC played a key role in ensuring intelligible wording of questions but it neither drafts original questions nor decides what constitutes a majority vote – those decisions are made by Parliament, and subject to the vicissitudes of party politics.

The simple majority formula used in the 2011 AV vote, Scottish independence vote of 2014 and the EU referendum of 2016 followed the format of 1975 and 1997 rather than the more cautious provisions of 1979. The assumption that the policy preferences of the main Westminster parties were shared by a majority of the electorate was reckless and dangerous. While validated in 2011 and 2014 (though for Scotland, as with Quebec, the result was perhaps closer than it should have been) the gamble did not pay off in 2016.
The Cameron government was remarkably complacent not only in setting the referendum terms but in failing to make any contingency plans (unlike in 1975) in the event of an EU exit – an extraordinary dereliction of duty, which, as the 2017 House of Commons report ‘Lessons Learned from the EU Referendum’ stated, led to unnecessary political instability: “Such preparation would negate the need for the Prime Minister to resign … It should be reasonable to presume that the sitting Prime Minister and his/her administration will continue in office and take responsibility for the referendum result in either eventuality”.

How far David Cameron was genuinely committed to the referendum promised in 2013 remains unknown. If a “bluff-call”, it clearly failed but in having to deliver a referendum it would have been wise to have considered the format more carefully. Qualified majorities are often used in the public and private sectors (not least in the EU), and in an electoral system underpinned by majoritarian principles, it is questionable how difficult it would have been to impose. While the proposal would probably have met with opposition from Eurosceptics within the Conservative Party, that doesn’t seem like a good reason for adopting a hazardous simple majority formula, lending credence to the view that Cameron was guilty of putting party before country.

Leading political scientists, including Vernon Bogdanor and Peter Hennessy, have expressed grave misgivings over using referendums, and the lesson for post-Brexit British governments seems to be to tread carefully. Before the 2016 referendum, Lord Kerr of Kinlochard was one of the few who found the absence of a threshold “constitutionally quite surprising for a decision as big as this”. Afterwards, of course, many Remainers concurred.

Britain’s non-codified constitution ensures referendums are considered legally advisory rather than politically binding but in practice, no government has been prepared to ignore the outcome of a referendum. Given these customary pressures, it makes sense to ensure a proper balance between expressions of the popular will while minimising the chances of a fierce populist outburst.

How different things looked in 1817, when George Canning stated:

“When I am told that the House of Commons is not sufficiently identified with the people, to catch their every nascent wish and to act upon their every transient impression,—that it is not the immediate, passive, unreasoning organ of popular volition,—I answer, thank God that it is not! I answer, that according to no principle of our constitution, was it ever meant to be so;—and that it never pretended to be so, nor ever can pretend to be so, without bringing ruin and misery upon the kingdom.”

By using referendums, we have moved far from Canning’s deliberative assembly model, but the Canadian example indicates that referendums can be – and should be – more closely managed. Canada’s Clarity Act might have been a useful reference point for British policy-makers, for protecting territorial integrity and promoting political stability are fundamental elements of responsible government. Imposing more rigorous conditions may seem Machiavellian to some, but it is far from incompatible with maintaining democratic legitimacy – in many ways it may ensure more mature and measured decision-making in the contemplation of far-reaching constitutional issues. The alternative can be decisions made on a transitory and/or ill-informed basis.

This post represents the views of the author and not those of the Brexit blog, nor LSE.

Gordon Bannerman is a professor at the University of Guelph-Humber.

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Understanding Boris Johnson’s ‘retropian’ appeal to Conservatives

paul david beaumontThe election of Boris Johnson once again highlights the salience of nostalgia to the Brexit debate. This is more than a throwaway attack line, writes Paul David Beaumont (Norwegian University of Life Sciences). Drawing upon social psychology can provide the theoretical basis for why and how Johnson’s “retrotopian” rhetoric appeals to old, wealthy, and nationalist Brexiteers.

The election of Boris Johnson by the Conservative party membership should – but won’t – put to bed the popular hypothesis that Brexit was chiefly a rebellion by the ‘left-behind’ against the establishment. In this account, a combination of unchecked EU immigration and a decade of austerity had left great swathes of the working class, especially those in the North, in dire economic straits and angry at the establishment. The Brexit referendum was a welcome opportunity to take revenge. As a result, the last three years have seen  intrepid reporters voxpopping Wearsiders, with the subtext that these are the turkeys that voted for Christmas.

Yet the ‘left behinder’ thesis is at best partial. Indeed, one will not find many ‘left-behinders’ among the Tory party membership who selected Britain’s new Prime Minister. Johnson stood on the promise to Brexit, come what may. Indeed, the Tory membership offers a snapshot into the relatively wealthy, older, middle-England voter that seldom features on BBC news, yet also voted in high numbers to leave the EU.

The election of Boris Johnson also offers a timely excuse to revisit an article I wrote back in 2017: Brexit Retrotopia, and the Perils of Post-Colonial Delusions. As the title implies, it offers a plausible explanation for some of the reasons why this group voted Leave, and a why they are now doubling down on no-deal Brexit. The work sought to complement a number of quantitative studies that highlight how national identity and values are at least as important in driving Brexit as economic factors. However, I suggested that we needed to unpack the identity ‘variable’. After all, it is not a given that nationalists are Eurosceptic, and Britain has no monopoly on nationalism. Moreover, the EU is similarly bureaucratic, inefficient, and rule-imposing for other members, which begs the question of why Britain –  rather than say, Italy – chose to exit. (To be clear, I am not arguing that voting leave is irrational; there are plenty of good reasons to dislike the EU. Rather, it is an argument for why Euroscepticism has been especially strong in Britain.) Given this, a full explanation of how identity mattered to Brexit requires analysis of the quality of British nationalism: What is it about Britain’s identity narrative that made Brexit appeal to nationalists?

Drawing on social psychology, and a touch of Zygmunt Bauman, my article sought to add empirical and theoretic ballast to the now frequent refrain that nostalgia for Britain’s past informs Brexiteers’ plans for Britain’s future. Indeed, while Brexit baffles economists, social psychologists will not have been surprised to see Brexiteers risk diminished economic wellbeing for seemingly intangible identity reasons. Social identity theory (SIT) suggests that individuals are often willing to forgo economic gain in order to improve their social group’s status, enable positive comparisons with outgroups and thus generate pride and self-esteem. It should be immediately clear how provisionally SIT may relate to Brexit: voting Leave could be understood as a radical strategy for making their national social group more positively distinct from Europe. Yet as intuitively appealing as it appears, there is a snag with the standard SIT model’s applicability to Brexit. It is unclear why nationalists would consider Britain to compare poorly with other EU members in terms of what Brexiteers themselves considered important: ‘sovereignty‘. Britain enjoys bespoke treatment within the EU, unrivalled by other members: it has more opt-outs than any other member, and receives a rebate of approximately 66% of its annual net contribution. Britain, if anything, had privileged status in the EU.

While the standard SIT model founders, introducing a temporal dimension can help illuminate what underpins Brexiteers’ status concerns. An offshoot of the Social Comparison Theory that SIT is based upon, Temporal Comparison Theory (TCT), suggests that individuals do not just compare themselves to their peers but also to their former self’s status: people seek to maintain a coherent narrative of the self that shows self-improvement over time. When one struggles to make favourable comparisons with the past self, it can prompt low self-esteem in the same way that unfavourable comparisons to peers can. Scaling up this argument, Joshua Freedman has argued that China’s status dissatisfaction and subsequent status-seeking activities demands an understanding of how its identity narrative requires China to remedy its “century of humiliation”, and regain its former glory.

It should be clear by now that TCT is well placed to shed light on Brexit. If we assume that individuals often rest their self-esteem upon temporal comparisons with their social group’s former self, then what does this illuminate about Brexit? In short, my article suggested that two key features of Britain’s identity narrative make it particularly susceptible to Eurosceptic arguments. Because Britain’s mainstream national identity narrative relies upon glorifying its former empire (and lamenting its loss) together with fetishising the second world war, devolving power to the EU undermines nationalists’ sense of progression and self-esteem. To a country that once boasted (and still learns) how “the sun never set” on its empire, the EU’s practices of compromise compare poorly. Cooperation is easily presented as subordination.

Indeed, Britain’s present EU relationship – regardless of how much economically better off it may be than before, regardless of how much ‘more’ sovereignty it retains vis-à-vis its fellow members – seemingly turned Britain into a rule-taker rather than a rule-maker. Perhaps most ignominiously, from this perspective, Britain can be presented as having ceded power to the very countries it fought off in the second world war. All this enables Eurosceptic leaders to present a narrative of decline that calls for an urgent halt via Brexit. Indeed, Brexit embodies a vision that Zygmunt Bauman might have diagnosed as retrotopian: a nostalgic vision for the future based upon a lost but undead past. As such, the nature of the UK’s self-narrative – constantly reproduced via popular culture and the media — can thus help explain why arguments pertaining to “sovereignty” resonate so powerfully in the Brexit debate among older, wealthier, and more nationalistic Englishmen, who have certainly not been left behind.

While my article only provided provisional evidence supporting the plausibility of the thesis, two years on the argument appears to be holding up well. A growing body of research has fleshed out and nuanced the nostalgic underpinnings of Brexit and its post-colonial overtones. Meanwhile, second world war references continue to pepper Brexiteer discourse: scarcely a week goes by without a Brexiteer calling for Brits to reawaken the ‘spirit of Dunkirk’, rather than worry about the damage done by a no-deal Brexit. Perhaps most pertinently, Britain’s new PM Boris Johnson has risen to power on the back of almost cartoonish retrotopian appeal. Indeed, campaigning for Brexit, Johnson exhorted voters “to take the chains off the giant, unshackled Britannia and let the lion roar again!”, while his first speech as prime minister concluded with the call for Britain to “recover our natural and historic role”. As Edoardo Campanella put it in Foreign Policy, Johnson is “the ‘quintessentially nostalgic leader’.

It is certainly understandable that Johnson, and any state leader, wants their citizens to feel pride in their history. Indeed, glorifying the past can help solidify national cohesion; after all, if a nation is just a series of stories we tell about ourselves, why not make those stories good ones? The danger is when hubris based upon the past meets with the hard realities of the present. Little of what Johnson has said so far suggests he recognises the challenges that lie ahead either in renegotiating with the EU or in leaving without a deal. Indeed, Johnson’s claims that Brexit merely requires more ‘energy‘ and positive thinking resemble those of a self-help guru rather than a prime minister. It may well be exactly what Brexiteers would like to hear, but I doubt it will change either the EU’s calculus or soften the effects of a no-deal Brexit.

This post represents the views of the author and not those of the Brexit blog, nor LSE.

Paul David Beaumont is currently finalising his PhD dissertation, The Grammar of International Status Competition, at the Department of International Environmental and Development Studies at the Norwegian University of Life Sciences. He tweets @BeaumontPaul​.

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To deal or not to deal: these are the questions

Why is the new government prepared to countenance no deal, when it would be so damaging to Britain? Iain Begg (LSE) says the question is not whether but how much it would harm the country.

To judge by the early pronouncements of the Johnson government, a ‘no-deal’ Brexit is not only worth contemplating, but could well occur. Although both sides continue to profess their hope – and expectation – that a withdrawal agreement can be negotiated, the risks have plainly increased, despite Johnson’s bold assessment of there being a one in a million chance of a no-deal Brexit.

His stance is belied by the ramping-up of no-deal preparations and a statement in the Sunday Times on 28 July from Michael Gove (now charged, as Cabinet Office Minister, with over-seeing a possible exit without a deal) that: “no deal is now a very real prospect, and we must make sure that we are ready”. For several ministers, it appears, no-deal is now the working assumption.

Manifestly, after the bluster and increasingly exaggerated claims made during the Tory leadership campaign, the reluctance of the EU to re-open negotiations on a withdrawal deal is now being taken seriously. Gove is one of a small number of senior ministers assigned to a new cabinet committee charged with accelerating no-deal preparations. The EU Exit Strategy Committee (its beguiling shorthand code is ‘XS’) is to be chaired by the Prime Minister, with Gove as Deputy Chair, and will meet frequently to review progress. Intriguingly, two-thirds of the May government’s cabinet committees have been culled, leaving just six, of which three have the word ‘exit’ in their title.

Leaving aside the vexed matter of whether the only ‘pure’ Brexit is one which extricates the UK fully from the EU prior to negotiating some form of future relationship, several questions about the new willingness to countenance no-deal need to be answered.

First, what does no-deal mean in practice? The simplest answer is “not Theresa May’s deal”, or being prepared to walk away if all that is on offer is one on broadly similar terms. What was thrice rejected by the House of Commons covered citizens’ rights on both sides, settlement of financial accounts and, especially, arrangements to ensure no hard border in Ireland, thereby reconciling Brexit with the commitments made under the Good Friday Agreement.

These three components are the EU’s pre-conditions for moving on to negotiations on a subsequent deal to redefine the relationship between the EU and the UK, yet in all the recent talk of no-deal, this has barely surfaced. Hence, a second question is how no-deal now would influence the future relationship. The most plausible answer is adversely, especially if it were accompanied by equivocation over the UK’s willingness to honour its EU budget commitments.

Third, what would the consequences be for the Irish border? No-deal would mean the UK leaving the EU customs union and, necessarily, different trading regimes applying in the two parts of Ireland, yet all sides have committed to avoid border controls. This is why the backstop was devised. The ironic outcome of no-deal could be the hard border no-one wants; vague promises of (untried) technological solutions will not do.

What about the economy?

A fourth set of questions concern the aggregate macroeconomic effect of a no-deal Brexit, and its implications for particular sectors of the economy and UK public finances. There will also be an economic impact on the EU27, with member states trading most intensively with the UK – Ireland in particular – most affected.

The answer from external analysts, such as the IMF, is unambiguous: no-deal will damage the British economy and is a risk for the global economy. Even if similar analyses by the likes of the Bank of England are summarily dismissed on the (disturbingly spurious) grounds of pro-EU bias, the same conclusion has been drawn by all but a tiny minority of commentators.

Studies looking at the effects on the EU27 – for example by Goldman Sachs – suggest the aggregate effect could be a little greater than for the UK, but relative to the size of the respective economies, the magnitude would be five times as great for the UK. The car industry – a major UK exporter – would be profoundly hit, as would certain agricultural producers, such as Welsh hill farmers.

Much the same is true of the public finances. The Office for Budget Responsibility (OBR), in its 2019 Fiscal Risks Report, uses the IMF scenario as a basis for estimating the fiscal consequences of no-deal. As the OBR puts it, the scenario “is not necessarily the most likely outcome and it is relatively benign compared to some”, but it would nevertheless add £30 billion a year to public debt from the 2020-21 fiscal year onwards. By fiscal year 2023-24, public debt will have increased by 12 percentage points of GDP, undoing the effects of the last decade of austerity and pushing debt well above the level reached in the aftermath of the financial crisis. The OBR states that a more disorderly Brexit “could hit the public finances much harder”.

Inevitably, such estimates are condemned by pro-Brexit optimists as the latest manifestation of “project fear”, usually citing in evidence the recession predicted by the Treasury that did not happen after the referendum. But it is disingenuous to regard any economic assessment of anything to do with Brexit as inherently flawed or misleading. Projections are subject to margins of error, but hardly anyone doubts no-deal will hit the economy. The double question for those relaxed about no-deal is not “whether” the economy will be hit, but “how much?” and “for how long?”.

The political implications of no-deal

One of the obvious attractions of a hard deadline for Brexit is to enable the country to move on and to start focusing on what many see as the real problems of our economy and society. But in the latest of a series of analyses of no-deal, Anand Menon observes “whatever the superficial, intuitive attraction, no-deal will not make it easier to focus on other things. On the contrary, it will make it harder”.

This brings us to questions about UK politics and governance. The prospect of no-deal has already elicited strong objections from the Scottish and Welsh First Ministers, and who knows how it could affect the delicate politics of Northern Ireland. For the Conservative Party, the exile of so many prominent ministers from the May government to the backbenches portends trouble which could metamorphose into a fresh contest between parliament and the government.

Meanwhile there is a growing recognition in the Labour party of the damage being done by the weak and indecisive leadership of Jeremy Corbyn. Labour is performing badly in the polls at a time when it ought to be prospering, given the disarray in the Conservative party, while the case for a softer Brexit (or none at all) is being inadequately put. At the end of July, one party grandee, Peter Mandelson, openly called for Corbyn to go. The wonder is that it has taken so long.

Without persuasive answers to the many questions about what will happen if a mutually satisfactory withdrawal deal cannot be secured, the UK would face great uncertainty. As should be repeated and repeated again, no-deal would not result in the maintenance of the status quo, but a fundamental shift in how the country relates to the rest of the world. It would also affect how many domestic policies, from agriculture to anti-terrorism, are conducted, because policies and regulatory arrangements would have to be recast, potentially in a disorderly manner.

Summing up, the most telling question is why the Johnson government would knowingly plump for a no-deal expected to have an adverse effect on the UK economy, to foment division inside the UK, to raise the prospect of a break-up of the Union, and to pose an existential threat to the Conservative party? The most benign answer is that is a bluff designed to put pressure on the EU.

Granted, no-deal might further discomfit the Labour party and pave the way for a Tory general election win, but are these valid justifications? The more worrying explanation, however effective the preparations are to limit the damage, is that the new government has failed to think through the consequences and has allowed its zeal to deliver the referendum result to trump (to coin a phrase) its judgment.

Let’s hope the remaining grown-ups dotted around the green benches of the House of Commons can find the parliamentary wherewithal to stop this folly.

This post represents the views of the author and not those of the Brexit blog, nor LSE. It first appeared at the Dahrendorf Forum blog.

Professor Iain Begg is the Academic Co-Director of the Dahrendorf Forum and Co-Chair of the Dahrendorf Working Group “The Future Of European Governance”. He is also a Professorial Research Fellow in the European Institute at the London School of Economics and Political Science.

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Long read: Post-Brexit trade policy must serve British society, not just free trade

Brexit provides an opportunity to agree new Economic Partnership Agreements with the world’s largest economies such as the US, China, and India. These cannot make up for the trade it will lose through leaving the Single Market, according to Swati Dhingra (CEP & LSE) and Josh De Lyon (CEP). Nevertheless, the UK has an opportunity to forge a new generation of trade deals that could help spread the benefits of free trade and address widespread unhappiness with recent waves of globalisation.

The UK is one of the most open economies in the world – and international trade and investment are the biggest areas of economic policy that the UK will need to decide on as it prepares to exit the EU. Greater integration with the EU can limit the economic costs of Brexit, and does not need to prevent the UK from pursuing beneficial Economic Partnership Agreements (EPAs) in the future.

port of dover

The Port of Dover. Photo: frattaglia via a CC-BY-NC-SA 2.0 licence

All trade agreements begin with a sense of realism on which trade partners to prioritise for negotiations, which can be lengthy and demanding of resources. The EU is the UK’s most important trading partner, making up around half of the UK’s international trade and investments. The UK economy is highly integrated with the EU and separation would be very costly. It is estimated that a ‘No Deal’ scenario would cause a 40% reduction in trade with the EU over the next 10 years, translating to an average cost of £1,890 per household every year. These costs would be halved if the UK agrees a comprehensive ‘Norway-style’ deal with the EU. The evidence suggests that potential gains from greater integration with the US, India, and China cannot offset the losses of leaving the EU, at least in the near future.

The UK government has shown some level of appreciation for this: the so-called ‘Chequers’ statement set out proposals for a single market for goods between the UK and EU, and a customs arrangement that seeks to accomplish smooth trading relations with the EU while maintaining the ability of decide UK’s tariffs outside the EU. However, the proposal remains vague on practicalities. Most importantly, it provides few details on services, which make up 80% of the UK economy and where single market membership provides greater market access than even the most ambitious of EPAs.

Until the 1990s, trade agreements focused on reducing tariffs. Today, tariffs in most industries are low and the services sector – which has no tariffs – dominates economic activity in many countries including the UK. The bulk of modern trade agreements is about reducing the costs of doing business across borders by, for example, streamlining customs procedures or avoiding regulatory duplication between countries. These are so-called ‘non-tariff barriers’ (NTBs). The aim is to create an integrated international market where domestic and foreign businesses play by the same rulebook.

These modern trade deals can stimulate economic activity. But there is an inevitable trade-off between integration and national sovereignty as countries must agree to similar rules and standards. For countries with similar preferences over these standards, the costs of alignment are relatively small. For instance, the UK gives up some sovereignty when it applies the EU’s Toy Safety directive on its businesses but UK consumers are unlikely to object to safer toys.

EPAs aim to balance market access for businesses with the need to maintain high standards in products, services, environmental, labour and consumer rights. But they have not always been successful in striking this balance. The rules-based trading system is facing the pressures of the increasing dominance of multinational corporations, the centrality of global supply chains, and the growing importance of services trade. They have generally not been able to uphold the spirit of equitable rights across stakeholders. Dani Rodrik argues that the regulatory standards in EPAs tend to empower politically well-connected businesses, including international banks, pharmaceutical companies, and multinational firms.

The UK has an opportunity to help shape a model trade policy that recognizes the new realities of the rise in global value chains, services and multinationals and that takes on board the concerns of those who have been left behind by the growth of the last few decades. The UK could gain an advantage by leading the way on a new generation of EPAs that promote inclusive growth.

There is a concern that the UK could be pressured into a race to the bottom on domestic standards, especially when it is negotiating with large countries with very different standards. The UK can alleviate these concerns by drafting a modern EPA, which ensures that the same rules and rights apply to all stakeholders – domestic businesses, multinational firms, workers, consumers or investors.

Non-discrimination across stakeholders has always been the fundamental principle underlying EPAs, but it has been eroded by the fragmentation of production across borders. The key to the success of a post-Brexit policy will be the extent to which it reinstates the principles of National Treatment for all businesses and Non-Discrimination across all stakeholders.

Reinstating National Treatment for all firms

National treatment is a fundamental principle of most EPAs, which ensures that countries do not discriminate against foreign companies so that all businesses compete on a level playing field. The UK could take a leadership role in advocating national treatment by applying the same rules on the opposite side – multinational enterprises (MNEs) should be accorded the same treatment as smaller businesses and domestic firms.

MNEs directly account for half of global exports, a third of world GDP and a quarter of all employment. They have the ability to source inputs and credit from different countries and to shift profits across different tax jurisdictions. This amounts to MNEs facing different business conditions than firms that might be smaller or purely domestically oriented. Tax shifting is the most striking example of this. About 40% of multinational profits are shifted to tax havens globally, and non-tax haven EU countries, like the UK, are estimated to suffer the greatest revenue losses as a result.

It is feasible to plug the loopholes that enable MNEs to shop around for tax benefits and other cost reductions and the UK has been involved in previously negotiated tax treaties and data sharing. One approach for reinstating national treatment is through multilateral bodies to enable coordinated action, but many would argue that their multilateral provisions are weak because they are non-binding guidelines and do not prevent a race to the bottom whereby countries offer attractive tax breaks to attract MNEs.

The UK could support multinational efforts by implementing unilateral actions such as taxing all MNEs that sell in the country and enforcing equal treatment of all domestic firms and MNEs in terms of profits. Any planned action would need to involve carefully weighing the potentially conflicting commitments in previous tax or investment treaties with the objective of maintaining real competition. A post-Brexit reset in trade policy is an opportune political moment to have this overdue discussion.

Reinstating non-discrimination for all stakeholders

Non-discrimination has been eroded because many EPAs give greater rights to investors over other stakeholders. Since 1975, the UK has negotiated over ninety bilateral investment treaties, almost all of which include provisions to enforce investors’ rights. Until now, the bulk of these treaties have been with countries that are net recipients of investments from the UK, so the investment agreements were largely designed to protect UK investors from expropriation of assets in developing countries with politically unstable conditions.

With the fragmentation of supply chains, most EPAs today contain provisions regarding settlement of disputes brought by investors against host governments. These are often referred to as Investor State Dispute Settlement (ISDS) clauses. They give foreign firms the right to bring claims against the host country if they have not been given fair and equitable treatment. ISDS clauses are increasingly being used by investors to challenge governments in developed countries.

The main contention with ISDS clauses is that the language of what constitutes a violation of investor rights is too vague. This constrains governments from changing laws and can lead to a regulatory chill due to the fear of expensive litigation from foreign investors. Furthermore, the settlement procedure is typically opaque and costly. There is also a growing recognition that ISDS confers rights to foreign companies that are not available to domestic companies.

There still isn’t a standard solution to balancing the rights of foreign investors for fair compensation and the right to regulate for host governments. New solutions for balancing investor rights with regulatory discretion are being proposed, and the UK can join these efforts to develop workable proposals such as enabling countries in EPAs to opt out of ISDS as well as reviewing foreign investments in sensitive areas and providing safeguards in these sectors.

The UK could go further in ensuring that its public services and domestic standards are not compromised through ISDS procedures. One way that many EPAs do this is by including chapters on social clauses – environment, health and labour rights – and ensuring that stakeholders, like workers and consumers, have similar rights and dispute settlement procedures as those that are given to investors.

Instituting a new social compact

Wages have decoupled from productivity and many working families in the UK have never really shared in the prosperity that globalisation has brought to many global firms and their workers in the last few decades.

The UK economy has suffered as a result of the Brexit vote. Immediately following the referendum, sterling suffered its biggest one-day loss since the introduction of free-floating exchange rates in the 1970s. The sterling depreciation from the Brexit vote was expected to benefit UK exporters and improve the earning potential of domestic workers. But new research from the Centre for Economic Performance shows that wages and training of workers have fallen since the referendum. The rise in the costs of imported inputs have led to lower wages and fewer training opportunities for workers in the UK, which could reinforce the trends of anaemic wage and productivity growth.

As a starting point, what’s needed is an adjustment assistance fund that compensates people who are displaced by economic changes. A post-Brexit UK would be more inclusive of ordinary working families if they had access to an enforceable mechanism to compensate them for job losses induced by broad economic changes.

But compensation alone will not solve the problems of the constant churn to which workers are exposed. To undo the years of economic stagnation faced by many, a post-Brexit economic policy would need to commit to investing in skills so that people face lower risks of being left behind in the future. Ultimately, wage and productivity growth require re-training and upskilling of the workforce. The UK can ensure these policies are supported along with market access provisions in EPAs by linking clauses on labour rights, compensation and rehabilitation policies.

Multinational tax revenues raised through instituting national treatment could provide the funds necessary to support these upskilling activities. This is a practical proposal by Philippe Martin from the French Council of Economic Analysis to ensure globalisation and technological progress are politically and socially sustainable.
Anticipating exactly who will be hurt from a particular policy is always difficult – it can take years before the link between job displacements and economic policies becomes apparent. Whether the UK operates its post-Brexit trade policy independently or via a customs union with the EU, it should be pushing for EPAs that deliver market access without compromising the UK’s high standards on labour, products, services and safety.

It will be exceedingly hard to replace any loss of access to the EU market and to find trade partners that share the high quality standards that the UK has always maintained. Any new EPAs with China, India or the US need to respect these high quality standards. If it ends up outside of the EU customs union the UK’s best strategy would be to pioneer a new generation of trade deals that balances the rights of different stakeholders and addresses the new economic reality of global value chains and multinationals. The three rebalancing provisions – national treatment, non-discrimination and a new social compact – would be the first steps towards an inclusive economic model. In the current era of strong anti-globalisation sentiments, a post-Brexit trade policy must be re-geared to truly serve British society, not just free trade.

This post represents the views of the author and not those of the Brexit blog, nor LSE. It is an edited extract from Brexit and the Future of Trade by Swati Dhingra. 

Reference

S. Dhingra, ‘Brexit and the Future of Trade‘, in G Kelly and N Pearce (eds.), Britain Beyond Brexit, The Political Quarterly, Vol 90, Issue S2, 2019, pp. 21-31.

Josh De Lyon is a Research Assistant at the Centre for Economic Performance at LSE and a DPhil Economics candidate at Oxford University.

Swati Dhingra is Associate Professor of Economics and Research Fellow at the Centre for Economic Performance at LSE.

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Don’t be fooled: the last thing Johnson wants is a no-deal Brexit

dimitro zenghelisBoris Johnson’s tack to no deal is aimed at neutralising the threat from the Brexit Party and triggering a general election, argues Dimitri Zenghelis (LSE). Whatever the outcome of that election, he can avoid the terminal damage that a no-deal exit would inflict on his premiership.

Last month, I argued that as Prime Minister Boris Johnson would have no interest in a ‘no deal’ outcome, and would tack to the centre, disappointing many Eurosceptics on the right of his party in the process. I was wrong. But only for now.

Johnson’s strategy is becoming increasingly transparent. Far from tacking to the centre, he has boxed himself in to the most extreme form of Brexit. He has promised to leave the European Union on 31 October, “do or die” – closing off the option of another extension, while declaring himself unwilling to negotiate until the EU drop from the deal any version of the ”anti-democratic” Irish backstop (a device designed to keep the UK in the EU customs union by default, until a solution to the Irish border issue is found). These uncompromising positions are likely to prove unacceptable to the European Council, making the default a departure from the EU on 31 October without a deal. However, a no-deal outcome is likely to prove unacceptable to parliament, raising the prospects of an early general election in the autumn.

This seems to be exactly what Johnson is angling for.  Claiming he has been blocked by both the EU and parliament from executing “the people’s will”, he will have neutered the electoral threat from the Brexit Party by fully taking on their agenda. Johnson has also begun his term with a series of high spending promises. Billions for the NHS and social care, new transport infrastructure projects, full fibre broadband and support for education. ”Boosterism” his team call it. Electioneering is how others see it.

Johnson the populist and his booster’s billions hope to take on the fragmented and weak opposition with his Churchillian talk of Britain’s “historic role… generous in temper and engaged with the world”. The “doubters, the doomsters, the gloomsters” he promises “are going to lose their shirt”. It’s a long shot, but in view of the prevailing chaos, one can see why he might take it.

But what then? What happens after the autumn ballots have been cast? There seem to be three main possibilities. The first is that he cruises to victory with a landslide majority (or at least, a working majority). He would no longer rely on the DUP to pass key legislation and with a five-year term in the bag, the threat from the Brexit Party and his own party’s Eurosceptic European Reform Group (ERG) wing would be much diminished. In this scenario, he can pass an enhanced version of May’s deal (by putting lipstick on a pig, as some call it) and get on with reaping the rewards of the economic boost to confidence that follows any deal. Much of the right wing of his party will back him, not daring to bite the hand of a popular Tory PM (who’d have thought it?) who fed them their seats.

The second possibility is that the opposition get their act together, perhaps through tactical agreements to stand down candidates in key constituencies so as not to split the Remain vote, and as a result the Tories cannot form a majority government. Such an outcome would kill Brexiteer aspirations to no deal or even a hard Brexit.

The third outcome is that the electorate remains split and no party wins an outright majority. Johnson might again seek to rely on a confidence and supply arrangement with the DUP in order to secure the keys to Number 10. This is where I return to the argument in my previous post. In such circumstances, Johnson is likely to tack to the centre.

Having failed to receive an electoral mandate for no deal, he will argue that the people have voted for compromise. This could take the form of a resuscitated version of May’s deal carried through a new parliament that wants to “get on with” Brexit. If the DUP or ERG threaten to vote against a deal, or push for a no confidence motion, Johnson will counter with the credible threat to put the vote to the people if he does not get his way “putting an end to this national pain once and for all”, potentially ending all hopes of Brexit altogether. The DUP and ERG won’t like it, but they will like this even less.

Such a strategy is not without its risks. Johnson might go down in history as the shortest-lived Prime Minister ever. But in these drab times, Johnson’s breezy gung-ho optimism has caught the public mood. It may win him votes but it will not survive contact with reality. The public will not be voting for recession, job losses, industrial closures, medicine rations and TV footage of the mass slaughter and burning of livestock, as would be expected in the event of no deal. This would be followed by endless negotiations with the EU from a position of much greater weakness. Johnson is no Eurosceptic ideologue, he is a populist: if he achieves a full five-year term as Prime Minister, why would he jeopardise it?

This post represents the views of the author and not those of the Brexit blog, nor LSE.

Dimitri Zenghelis is a Senior Visiting Fellow at the Grantham Research Institute on Climate Change and the Environment at the LSE. Previously, he headed the Stern Review Team at the Office of Climate Change, London, and was a senior economist on the Stern Review on the Economics of Climate Change. Before working on climate change, Dimitri was Head of Economic Forecasting at HM Treasury.

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Is Boris Johnson’s Brexit posturing just a power play?

phil syrpisBoris Johnson said the chances of no deal were ‘a million to one’. His government is also actively preparing for it. Phil Syrpis (University of Bristol) argues that the new PM’s true intention is likely to be to hold a general election as soon as possible.

The new Prime Minister, Boris Johnson, has promised that the UK will leave the EU by October 31. His stated aim is to renegotiate the Withdrawal Agreement. Should that be impossible, he promises that we will be ready to leave without a deal on that iconic date. He has assembled a Cabinet, and a team of close advisors who include Dominic Cummings and Matthew Elliott – both, like Johnson and Michael Gove, leading figures in Vote Leave – who support these aims, and who are determined and optimistic that they will be able to achieve them. We will, do or die, they say, realise Brexit.

johnson

Boris Johnson arrives at No 10 on 24 July 2019. Photo: Number 10 via a CC-BY-NC-ND 2.0 licence

It is of course possible that Boris Johnson is true to his word, and succeeds in delivering Brexit on or before October 31. This piece – which builds on a Twitter thread I wrote on July 25 – suggests that the reality may be different. It assumes that Boris Johnson’s principal motivation is not Brexit, but power. It suggests his aim is not to achieve Brexit by October 31, but rather to establish a narrative to enable him to win a pre-Brexit general election. Were he to win an overall majority he would be able, in the new political context, to reconsider his Brexit options. In this reading, the determined pursuit of Brexit – and in particular of a no-deal Brexit – is not the end, but merely a means to the end.

The problems with the stated aim

To begin with, there is very little chance that the renegotiation with the EU will be successful. The European Council decision of 11 April 2019 extending the Article 50 period, in its paragraph 12, expressly excludes any reopening of the Withdrawal Agreement. There is no sign of a ‘solution’ to the Irish border conundrum. And there has never, to my mind, been a convincing explanation as to why a ‘credible threat’ of no deal, forecast to cause significantly more damage to the UK than to the EU, will result in new ‘concessions’ from the EU, whose overriding interest is – and will remain – the protection of the integrity of the single market. It looks as though the renegotiation may be over very soon. It is not difficult to hear the beginnings of a case being made against the intransigent, inflexible, undemocratic, European Union.

And next, the path towards ‘no deal’ by October 31 is by no means smooth. This is for three linked sets of reasons. First, it is likely that there will be strong opposition within the Conservative Party, and within Parliament, to any move towards a no-deal Brexit. Given that his majority looks likely to be cut to 2 after this week’s by-election, Johnson can ill afford any internal opposition. And although the opposition to Johnson is divided, it is united in the desire to avoid no deal (though MPs have missed more than one opportunity to ‘take no deal off the table’). It is far from certain that PM Johnson would survive a vote of no confidence if his renegotiation fails, and he begins to actively pursue no deal.

Second, the delivery of any no-deal Brexit is difficult. We are, both legally and economically, as reports this week from the CBI and the Institute for Government illustrate, categorically not ‘no deal’ Brexit-ready. As the government’s preparedness notices amply illustrate, much of what is needed to ‘manage’ no deal relies on the passage of legislation – and hence Parliamentary support on which Johnson would be unwise to rely – and on coordination with the EU, whose likely first ask will be… a guarantee relating to the divorce bill, citizens’ rights, and the Irish border.

And third, any no-deal Brexit necessarily involves making the abstract Brexit, which won 52% support in the referendum of 2016, into something concrete. Almost inevitably, this reification of Brexit will alienate some of its erstwhile supporters. It has become almost axiomatic that proponents of Brexit fail not just to deliver it, but also to define it: Vote Leave was a deliberately broad church, Theresa May treated us to months of ‘Brexit means Brexit’, and even now, urgent questions about what a no-deal Brexit might entail remain stubbornly unanswered.

The case for a pre-Brexit general election

This all goes to show that leaving the EU by October 31 is likely to be very difficult, both from a political and a practical perspective. It may be that Johnson’s strategy is not to deliver no deal, but instead – having been thwarted first by an intransigent EU, and then by a remainer Parliament (Jacob Rees-Mogg is just the man to ensure that Parliamentary proceedings are presented in a suitably arcane and labyrinthine way) – to be forced to call a general election, in which he can position himself as the champion of the UK and the champion of the people.

If this is indeed his strategy, it is not without risk. But he is in a difficult position, and none of his options are risk-free. Given the timetable, it is likely that he would require an extension to Article 50; something which Johnson has said that he will not countenance. But if MPs conspire to make it impossible for him to deliver no deal – for example if a handful of Tory MPs refuse to support him, or if a majority of MPs supports a vote of no confidence against his leadership – he may credibly be able to say that his hand has been forced. Were an extension request to be made in October, it is of course possible that the EU will reject it, but it is more likely that they would be prepared to grant an extension in order to enable a ‘democratic event’, such as a general election, which provides a (perhaps slim) prospect of unlocking the impasse in the UK, to occur.

The greatest risk for Johnson is of course that he may not win a majority in a pre-Brexit general election. He is vulnerable on the one side from Nigel Farage’s Brexit Party, and on the other, from Labour, the Liberal Democrats, the Greens and the Nationalist parties. Nonetheless, he has reasons to feel optimistic. His pitch – that he is fighting the election in order to stand up to the twin evils of the EU and the remain establishment and achieve a mandate to (finally) deliver Brexit – will mirror that of the Brexit Party. If the Brexit Party continues to poll strongly, he may be able to consider some form of electoral pact with Nigel Farage. If he is feeling confident, he may instead choose to take him on. He also has grounds to suspect that the remain-leaning opposition parties will be divided. Relations between Labour, the Liberal Democrats and the Scottish Nationalists are strained. There is, in addition, no coherent message emerging from the various disparate factions. Some want to deliver a better Brexit; some hope for a people’s vote; only a few are prepared to make the call to revoke Article 50. He has assembled a team which seems well equipped to exploit his opponents’ weaknesses, and to fight – and win – an election. Given the divisions in the opposition, a 30-35% vote share is likely to afford him a majority in the House of Commons.

If he wins, he acquires the ability to reconsider his Brexit options. The problems associated with Brexit will remain the same, but the political context will be much changed. He will, at that stage, be in a position to reveal, or perhaps to begin to formulate, his true intentions. He is brazen enough to resile from inconvenient promises. He may opt for no deal or he may, for example, opt for leaving on the basis of the current withdrawal agreement, with a Northern Ireland-only backstop, aiming to secure a free trade agreement between GB and the EU. He will be guided by the possibilities which the new Parliament creates for him. His desire will be to move beyond Brexit, and – for better or worse – to deliver his vision for the UK.

This account may of course be wrong. Johnson may genuinely do all he can to deliver Brexit by October 31. He may succeed. If he fails, this may become his ‘Plan B’. And it may play rather better for him than a successful ‘Plan A’.

This post represents the views of the author and not those of the Brexit blog, nor LSE.

Phil Syrpis is Professor of EU Law at the University of Bristol Law School.

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Brexit behaviourally: which do you think is the bigger figure – £350m a week or £4,300 per household per year?

tessa buchananThe Leave campaign’s ‘£350m a week’ figure cut through to voters in the 2016 referendum, while the Treasury’s ‘£4,300 per household per year’ didn’t. Was the relationship between the two figures intuitively self-evident? One is six times bigger than the other. Tessa Buchanan (University College London) looks at some of the behavioural lessons that can be learned from the campaign.

Psychologist Daniel Kahneman, who picked up the Nobel Prize for economics in 2002, describes himself rather charmingly as “mediocre in math”. It’s fair to say that this is in comparison to university classmates who went on to become world-class mathematicians. However, this all-too-human admission underlines a wider psychological point.

As Kahneman wrote in his 2011 book ‘Thinking, Fast and Slow’, while many people do simple calculations (e.g. 2 + 2) in their head using their automatic ‘System 1’ processes, they shy away from complicated sums (e.g. 17 x 24) that require them to engage the more effortful ‘System 2’ style of thinking. And if people are indeed reluctant to do the maths, then this has important implications for communicators, including those who worked on the 2016 EU referendum.

For example, if you were asked: “Thinking about the UK as a whole, which of these figures do you think is bigger: £350m a week or £4,300 per household per year?” what would your immediate answer be?

Sources: Vote Leave campaign 2016/ Stronger In, citing HM Treasury, 2016

This question was posed as part of a wider piece of research I carried out in September 2017, findings from which were published this June in Mind & Society. Given that pollsters, journalists and academics alike were surprised by the results of the referendum, I wanted to explore what behavioural lessons could be learned from the campaign – not on the basis that behavioural science could fully explain the result, but rather on the assumption that in a close contest, even marginal gains could make a difference.

Over 450 Leave voters took part in a survey designed to test the extent to which individual elements of the MINDSPACE framework (2010) had been at play. This mnemonic was developed by academics including LSE professor Paul Dolan and founder members of the UK’s Behavioural Insights Team, then working at the Institute for Government, to raise awareness among civil servants of “nine of the most robust (non-coercive) influences on our behaviour”.

“I”, in this instance, represents “Incentives”. As described by Dolan et al.:

“Our responses to incentives are shaped by predictable mental shortcuts such as strongly avoiding losses.”

Loss aversion was an early discovery by Kahneman and his research partner Amos Tversky. They established that people care twice as much about potential losses as gains. In politics, this can be linked to nostalgia (consider the sense of loss in the phrase ‘Make America Great Again’). Certainly, it was deployed by both sides in the referendum campaign. Dominic Cummings (portrayed by actor Benedict Cumberbatch in the 2019 Channel 4 drama ‘Brexit: The Uncivil War’) was the campaign director of the official Vote Leave campaign, and is now a senior advisor to the Prime Minister. In a 2017 blogpost, he said that he amended his initial slogan of ‘Take Control’ to ‘Take Back Control’ as: “‘back’ plays into a strong evolved instinct – we hate losing things, especially control”.

In my study, I asked participants: “In your opinion, which of these slogans worked best?” My expectation was that twice as many would prefer the longer version. In fact, four times as many opted for “Take Back Control” over “Take Control” (67% vs. 16%).

One factor may be that, according to a 2016 British Election Study report, control was a particular issue for Leave voters. Those with an ‘external locus of control’ (who felt they had little control over what happened in their lives) were “much more likely” to vote Leave than those with an ‘internal locus of control’, it said.

Loss-framing was also used to present two of the most important economic arguments used in the campaign: the £350m which the Leave campaign said was being sent to the EU every week, and the £4,300 per household per year which HM Treasury said UK households stood to lose if voters opted for Leave (albeit after 15 years in one of three potential scenarios).

The figure of £350m a week was announced relatively early in the campaign and has since become indelibly associated with the UK’s new Prime Minister Boris Johnson. Research published by Bobby Duffy in autumn 2018 suggested that 42% of the UK public still believe it to be true, despite criticism from the UK Statistics Authority that it was a “clear misuse of official statistics”. And views are split. One in five Remain supporters believe the figure, compared with two-thirds of Leave supporters.

The Treasury figure was linked to George Osborne, then Chancellor of the Exchequer. Gary Gibbon, political editor of Channel 4 News, describes in his 2016 book ‘Breaking Point’ how he was summoned to HM Treasury for the announcement of their figure. “Fingers in ears, the government fired off its great gun and waited for reaction,” he wrote. “Then they waited some more. And then a bit longer still.” This was in contrast to the Leave campaign’s £350m a week, which Gibbon said “got through to people”.

Why did the Treasury’s figure fall flat? Geoffrey Evans and Anand Menon, in Brexit and British Politics (2017) argued that it had “spurious specificity”, being too precise for what was essentially a forecast. But was the relationship between the figures intuitively self-evident? Putting to one side questions about credibility and any time preference effects, I asked participants to compare the two figures at face value in the present time. Given that there were 27m UK households in 2016 (ONS), the question can be expressed mathematically as follows:

Is £350m × 52 weeks > £4,300 × 27m households?

The left-hand side of the equation amounts to £18.2bn a year, while the right-hand side amounts to £116.1bn a year – a figure six times larger.

When I asked participants in this study if they remembered these figures, £350m a week was recalled by ten times more people (72% vs. 7%). This was unsurprising as it was used prominently and spent longer in the public eye. I then asked participants: “Thinking about the UK as a whole, which of these figures do you think is bigger: £350m a week or £4,300 per household per year?” Only a third (35%) gave the correct answer, as against 39% who thought the Leave figure was greater and 26% who didn’t know.

Finally, I gave the participants the information needed to perform the calculation (the number of UK households) and asked them to choose which of four graphs showed the figures in the correct proportions. The correct graph was the least popular choice, picked by only 15%. The majority (39% + 18% = 57%) chose options showing
£350m a week as the larger figure.

Fig. 1 £350m a week vs. £4,300 per household per year

“If there are 27m households in the UK, which option do you think shows £350m a week (in red) versus £4,300 per household per year (in blue) in the correct proportions?”

It is well known in psychology that many humans find the relationship between smaller numbers easier to grasp intuitively than that between larger figures. For this reason, it is commonly held as best practice in government communications to do as the Treasury did, and reduce big numbers to more human-sized amounts.

In this instance, the folk wisdom failed, and this was not the only surprising finding that emerged from my research. Looking at the other elements of MINDSPACE, as a messenger, an anonymous “local businessman” was seen as more trustworthy on every issue tested than a cabinet secretary; the study threw up clues as to why the status quo bias, seen as the default by many, didn’t prevail; and by deploying affect and other behavioural insights in a narrative, I found that Leave voters’ views on immigration were not necessarily fixed.

However, the main message for communicators is that even experts can benefit from seeking out evidence on which to base their decisions. It’s good advice, as the Behavioural Insights Team suggests, to ‘Test, Learn, Adapt’; and to make it easy for people to understand your message. And it’s clearly rash to assume that voters will do the maths for themselves. After all, as Cass Sunstein and Richard Thaler say in ‘Nudge’ (2008), when it comes to politics: “voters… seem to rely primarily on their Automatic System.”

References

Daniel Kahneman’s self-penned biography is published on the Nobel Prize website.

MINDSPACE (2010) was produced by the Cabinet Office and the Institute for Government and co-authored by Paul Dolan, Michael Hallsworth, David Halpern, Dominic King and Ivo Vlaev.

Thanks to Dr Shabnam Mousavi, Dr Severine Toussaert, Dr Lee de-Wit, Dr Alan Renwick and Dr Matteo Galizzi for their advice and support.

This post represents the views of the author and not those of the Brexit blog, nor LSE. It draws on an article published in the June 2019 edition of Mind & Society (Tessa Buchanan, 2019. “Brexit behaviourally: lessons learned from the 2016 referendum,” Mind & Society: Cognitive Studies in Economics and Social Sciences, Springer; Fondazione Rosselli, vol. 18(1), pages 13-31, June.)

Tessa Buchanan (@UCLTessa) is a doctoral student at University College London. She studied for a master’s degree in Behavioural Science at LSE.

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Pressures to recall Parliament over the summer seem likely – what if they occur?

meg russellWith less than 14 weeks remaining before the current Article 50 deadline, the Commons is not due to meet again for almost six weeks. This creates some very obvious scrutiny gaps. Meg Russell and Daniel Gover (UCL Constitution Unit) suggest that pressures for a Commons ‘recall’ during the summer recess seem likely, but that this will revive difficult questions about who can, and should be able to, recall MPs.

On 25 July, MPs left Westminster for the summer recess. Yet the new Prime Minister has only just arrived in No 10, making immediate parliamentary scrutiny of the new government’s key decisions all but impossible. An added pressure, of course, comes from the Brexit context. The current Article 50 deadline for the UK to depart the EU is 31 October, but parliament is due to remain closed for around half that time – for almost six weeks initially, until 3 September, followed by another break for the party conferences. During this period, calls for parliamentary scrutiny of the new government – most obviously over Brexit – seem very likely to grow.

commons may pmqs

Theresa May leaves the Commons after her last Prime Minister’s Questions on 24 July 2019. Photo: UK Parliament/Roger Harris via parliamentary copyright.

In this post we examine the pressures that may build for a recall of parliament during the summer, and what mechanisms exist for MPs if they do. Crucially, a formal Commons recall can only be initiated by the government – which may push parliamentarians towards innovative solutions. In the longer term, pressures for reform of the recall process may well be revived.

Why there may be pressures for recall

Demands for the Commons to be recalled from a recess are not unusual, as discussed below. However, they seem especially probable this year. MPs broke up just one day after the new Prime Minister took office, while the tensions over Brexit and how Boris Johnson intends to handle it are running high.

There will be very little time under current plans for parliament to quiz the Prime Minister on his Brexit strategy. The immediate start to the recess hence already looks problematic, and claims that the new Prime Minister is dodging scrutiny may be made.

Given the pressing deadline, the new Prime Minister and his Brexit Secretary will quickly seek to enter negotiations with EU leaders and other governments. Public statements – through speeches or media appearances – are likely. But with MPs not sitting, the usual parliamentary mechanisms of accountability such as government statements to the House of Commons, or (particularly if these are not forthcoming) ‘urgent questions’, will not apply. This is in stark contrast to previous months, when ministers made frequent statements on Brexit. During sessions in both January and February, for example, Prime Minister Theresa May faced MPs at the despatch box for almost two and a half hours at a time.

A key question will be whether the new Prime Minister appears on track to negotiate a revised withdrawal agreement, or whether he appears set on pursuing a ‘no deal’ Brexit. The latter would be of particular concern to MPs. Given indications that various senior Conservatives might be prepared to vote down the government if it pursued such a strategy, there could even be suggestions that the Prime Minister has lost the Commons’ confidence – with no opportunity for that claim to be tested formally.

Calls for recall therefore appear quite likely, from the opposition, from concerned government backbenchers, from media critics, and possibly from the wider public. Questions seem inevitable about whether it is appropriate for the Commons to take an extended break at a time when the UK is potentially just three months away from a chaotic ‘no deal’ Brexit.

Why MPs may be frustrated

Recall of the Commons is however not easy to achieve, as the government effectively possesses a veto over such a move. The process for recalling the Commons when it is ‘adjourned’ (although not when it is ‘prorogued’ or ‘dissolved’) is set out in its Standing Order No. 13. This states that a recall can only be initiated by a government minister, with the Speaker empowered to grant the request if satisfied it would be in the public interest. The rules also state that the business to be discussed during recall is ‘such as the government may appoint’. Other MPs play no formal role. By contrast, the Lord Speaker is empowered to recall the House of Lords based only on ‘consultation’ with the government.

The government’s control over Commons recall has in the past led to loud complaints that ministers can be inappropriately shielded from parliamentary scrutiny and accountability. Most notably, during the escalation of tensions around Iraq in 2002–03, concerns were expressed about the inability to scrutinise Blair’s government when the Commons was not sitting, feeding calls for reform discussed below. More recently, David Cameron encountered complaints for having not recalled the Commons over the situations in Gaza and Israel and over Tata Steel in 2014, while Theresa May faced criticism last year for not recalling the Commons prior to military intervention in Syria.

What action could parliamentarians take?

Despite the formal limitations, MPs are not entirely powerless when it comes to creating pressure for a recall. As with so much at Westminster, the written rules tell only part of the story. Were demands for recall to grow, the main difficulties facing ministers would hence be political rather than procedural. Ultimately, it could prove counter-productive for government to resist serious demands to resume parliamentary business.

The first option available to MPs is to appeal to ministers, either through private or more public channels. This has often occurred in the past. For example, on the situation in Gaza and Israel cited above, Labour MP Debbie Abrahams presented a multi-faith petition to the Prime Minister in support of recall. Nonetheless, David Cameron rejected the suggestion as unnecessary. On Brexit (and indeed on the current tensions in the Gulf), pressures could more easily become overwhelming – particularly if supported by Conservative backbenchers.

An interesting question arises regarding whether peers could force a recall of the Lords, given the Lord Speaker’s greater discretion when compared to his Commons counterpart (which is traceable to the time when the Lords presiding officer was the Lord Chancellor – i.e. a government minister). Although the Prime Minister himself would not be present at a Lords recall, one of his ministers could at least be held to account in that forum. But this would very much be a second-best option, and in any case its likelihood is doubtful. The Lord Speaker would normally exercise discretion to recall the Lords only if the Commons itself had been recalled. However, if calls from peers became widespread, the pressure on him could be significant.

The more likely course of action if MPs’ demands for a recall are ignored is that they take matters into their own hands – and there is precedent for this approach. In 2002, when Blair’s government resisted calls for recall over Iraq, Labour backbencher Graham Allen drew up detailed plans to hold a ‘rebel, unofficial Parliament’ (as he explained in a Commons debate on 2 April 2009). The government having resisted pressure for recall, Allen consulted other MPs and, finding demand to be high, booked Church House in Westminster for the sitting to take place. He also gained agreement from a former Commons Speaker to preside over the debate, and from the BBC to live broadcast the proceedings. Recognising the risk of major embarrassment, the government relented and recalled the Commons for a formal sitting.

Repeating this strategy over Brexit is quite possible, and indeed similar proposals were recently made by the former Conservative leadership contender Rory Stewart in the context of a possible prorogation. Such an unofficial meeting would have clear limitations: it would not hold any formal power, and there is no guarantee that ministers would attend to respond to questioning. But a well-attended unofficial sitting could nonetheless have considerable political clout while, as in 2002, even the threat of such action could be enough to force the government’s hand.

Options for reforming the power of recall

Past controversies have fed calls for reform of the recall process, and various proposals have been made – including by a previous government (as set out this Commons Library briefing). Should tensions mount this summer, past proposals may well be revived in the longer term.

The simplest change would be for recall powers to be vested entirely in the Speaker, possibly with an inbuilt requirement to consult ministers first. Following the controversy over Iraq, Graham Allen pursued a cross-party motion to achieve this, and the Commons Procedure Committee subsequently made a similar recommendation in 2003. Such an arrangement would not be entirely new to Westminster: it already exists in the Lords, while (as set out in Erskine May) the Commons Speaker has had this responsibility in the past. Such a model also applies in other legislatures, including the Scottish Parliament, and the lower chambers of Australia and Canada.

This kind of arrangement would put considerable power in the hands of the Speaker. Hence an alternative would be for the Speaker to be empowered on the request of a certain number of MPs. In 2007, Gordon Brown’s government proposed this, with the necessary threshold being half of all MPs. However, the plan was never implemented. In 2017 the current Speaker, John Bercow, suggested that the threshold might be set at a quarter of all MPs, with an explicit requirement for cross-party support.

A third approach would be for a specific group of MPs to be empowered to trigger recall directly. In the past Conservative backbencher Peter Bone has argued for a new Business of the House Commission to be handed responsibility for recall. This is reminiscent of the proposal for a cross-party House Business Committee to schedule Commons business, as most notably made by the ‘Wright committee’ (the Select Committee on the Reform of the House of Commons) in 2009.

Whatever happens over recall this summer, other Brexit controversies – regarding prorogation and MPs’ taking control of the order paper – look set to fuel a wider debate about reform of the Commons’ control over its own time and agenda. When the dust finally settles, various such proposals are likely to be revisited.

This post represents the views of the authors and not those of the Brexit blog, nor LSE. It is an updated version of a post that first appeared at the UCL Constitution Unit blog.

ProfessorMeg Russell is Director of the Constitution Unit, and also a Senior Fellow at the UK in a Changing Europe studying ‘Brexit, Parliament and the Constitution’.

Dr Daniel Gover is currently a Research Fellow at the Constitution Unit, and is also a researcher at Queen Mary University of London.

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‘I didn’t say it’: how families negotiate tensions around Brexit

katherine daviesHow do ordinary people, outside the Westminster bubble, negotiate the tensions surrounding Brexit in their family lives? Katherine Davies (University of Sheffield) shares some of the initial findings from her research project.

It goes without saying that Brexit has dominated UK politics over the past three years. What has been less visible has been the ways Brexit has pervaded everyday life, making its way into conversations at work, in front of the television, in family WhatsApp groups as well as expressed through silence and the avoidance of talking politics.

When the media’s gaze has moved away from Westminster, the focus has often been on Britain as a nation divided by Brexit. These tropes of division fail to grasp the complexities of Brexit as experienced in everyday family life. Based on qualitative interviews with 31 people from a range of backgrounds and including both ‘baby boomers’ and ‘millennials’ and those who voted Leave and Remain, I suggest a reframing of some of the central questions and themes that have thus far dominated debates.

Tenacity rather than division

Rather than a nation ‘deeply divided’ over Brexit, people I interviewed as part of my research were working hard to avoid falling out with their family over political differences. Many of the people I spoke to had family members or friends who had voted differently from them and, though arguments did occur, they employed a number of tactics to avoid these differences resulting in relationship breakdown. These tactics included biting their tongue, carefully judging when and where to talk politics as well as ‘reading’ the reactions of others in order to determine whether to raise the subject of Brexit. The overwhelming sentiment that arose in the interviews was about the tenacity of family relationships. These relationships, formed well before Brexit, were seen as valuable enough to weather the storm, even if this was sometimes hard work. As Sarah, a 52-year-old woman who voted Remain stated of her Leave voting brother; ‘We could have had a massive falling out, but I think you think, what’s the point?…At the end of the day, he’s my brother and we get on very very well. He’s got a right to do what he thinks is right, hasn’t he?’

Silence as action, not apathy

Many people I interviewed talked about avoiding conversations about Brexit. Some tried to avoid talking politics altogether. As Kate, a 64-year old woman, stated: ‘There’s three things you never ever discuss round a dinner party, and it’s politics, religion and money. And if you avoid these three subjects everything’s fine.’ Others talked about sometimes ‘biting their tongue’ to avoid causing an argument or upsetting family members. Take the following example from Claudia, who bit her tongue in a discussion with her friend: ‘He said he was going to vote Labour, and I wanted to say to him that, ‘I can’t understand why anybody in their right mind would vote for them’, but I didn’t say it, because I didn’t want to cause any sort of controversy.’

It would be easy to assume that staying silent about politics is a symptom of political apathy, but this would overlook the role of silence in everyday family life. Silence is an important tool used by people to keep the peace and to continue their family life despite political difference.

Biography and memory, not ‘baby boomers’ versus ‘millennials’

The idea of a generational divide between ‘baby boomers’ who are said to have voted mainly to leave, and ‘millennials’, said to have overwhelmingly voted to remain, has pervaded much media coverage of the Brexit vote. However, my research indicates that it is not so simple. Though there was no clear-cut generational divide in terms of voting behaviour, the role of people’s memories and biography was an important part of their orientation towards Brexit. Many people who can be viewed as part of the ‘baby boomer’ generation, for example, recalled the 1975 referendum to join the EU and felt that these memories gave them a different perspective on their Brexit decision. Take John’s discussion below where he feels that his decision to vote Leave can be explained by his memories of the original referendum:

‘If you want to be blunt about the European Union it’s not what we signed up to join…We agreed to join the common market in 1973 [sic], there was no mention of anything to do with the way it is right now. It was a common market, end of story. And that story was put out intentionally. You’ve only got to go back through history and look at some of the interviews that took place in 1973 and the misleading statements that were made by politicians. And really people were misled in 1973 as to where it was going.’

Others drew upon more personal memories of key moments in British political history. Take the following example, where Rosemary is talking about her memories of the 1984-5 miners strike. It is clear that this has affected her politics today, including her views of austerity:

‘Yeah, no, my dad never liked the unions I must admit. Obviously all that sort of thing did have a big effect because I know somebody whose father was a miner… it affected his growing up very, very much… nowadays I just think it’s really bad the way that the government is not looking after the people, I’m sure that there’s some way that they could sort out their money without making the general public suffer.’

Thus, whilst it is important to avoid making crude generalisations about the voting behaviours and motivations of different generations, the role of political memory and biography is a significant part of how people live with and make sense of politics in the present. Rather than outright generational division, it was these memories that could sometimes set people apart from others in their family.

The mundane and everyday, as well as Westminster and Brussels

Ultimately, this research has pointed to the importance of looking at mundane and everyday interactions about Brexit. Outside of Westminster and Brussels, people are making sense of Brexit in relational ways, managing disagreements and differences within their existing relationships and forming opinions within the context of their own biographies. My current research project, undertaken with Dr Adam Carter at the University of Sheffield, seeks to tap into the ways that Brexit is lived in ordinary, everyday lives. The project will work with a small number of families over time in order to understand how the ebbs and flows of Brexit map onto their everyday lives. Methods will include the keeping of Brexit diaries as well as Gogglebox-style television viewing to get a sense of how conversations and silences about Brexit might arise in families. These micro lived realities of relational life in ‘Brexit Britain’ are often overlooked in media coverage and political commentary – yet they have crucial implications for governance post-Brexit. It is vital that we avoid framing our Brexit discussions in ways that obscure what matters in people’s everyday lives.

This post represents the views of the author and not those of the Brexit blog, nor LSE.

Katherine Davies is Senior Lecturer in Sociology at The University of Sheffield. Her latest research project, Brexit, Relationships and Everyday Family Life, is funded under the ESRC’s Governance After Brexit initiative.

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The seductions of Boris Johnson: hot air as political strategy

candida yatesBoris Johnson’s public persona has been carefully honed over the years, writes Candida Yates (Bournemouth University). Most male politicians have been paternalistic in style: the new PM has instead sought to resemble a fraternal figure, who conjures up a nostalgic irreverence for authority.

Last week, an inflatable ‘Boris blimp’ could be seen floating over London as thousands marched against Brexit and Boris Johnson. Now he has been crowned the Conservative party leader and Prime Minister. As with Donald Trump, who was also given the blimp treatment on a visit to London, there are similarities between the ‘real’ Johnson and his inflatable double – both signifying emptiness and plastic superficiality buoyed up by an inflated sense of self-worth. It is not surprising that Johnson, who resembles a kind of toy with whom the electorate can play, lends himself so well to the comical blow-up doll floating above the crowds, inflated by so much hot air.

boris johnson

Boris Johnson visits Birmingham on 26 July 2019. Photo: Number 10 via a CC-BY-NC-SA 2.0 licence

The performative, upbeat style of Johnson’s leadership campaign – as optimist, blagger and loveable rogue – represents a continuation of the public image he has built up over the years. His communication skills have been honed in various media and political settings, and his celebrity status is such that he is regarded as ‘political box office’ (Channel 4, 2019). Johnson continues to draw on the familiar, playful routines that worked so well for him during his time as London mayor (2008-16), a period which he regularly cites in interviews. Given his woeful record as foreign secretary (2016-18), one might even see that period in City Hall as his heyday – despite reports of his ‘baffling’ incompetence with regard to financial expenditure and other matters (Jenkins, 2019). While his charismatic public image enabled him to shore up his power base in his bid to become party leader and PM, it is not always easy to square his professional ambition with his comical masquerade and public reputation.

His seemingly authentic and spontaneous, unspun qualities as a fearless ‘can-do’ politician have been key to his ability to connect with the public, and his recourse to the language of ‘feeling good’ also reflects the close relationship between the performativity of celebrity politicians and the emotionalisation of politics today (Yates, 2019). The ways in which certain sections of the electorate relate to and identify with politicians such as Johnson provide further examples of such emotive processes at work. Deploying a psychodynamic analysis of the emotional investment in Johnson as a populist politician allows us to understand the structures of feeling that shape his appeal, and also the affective dynamics of contemporary political culture more widely.

As we know, Johnson has constructed a persona as a benign, old-school English eccentric, who refuses to identify with superego figures of authority – such as those labelled in pejorative terms as members of the out-of-touch ‘metropolitan elite’, or as faceless EU technocrats. He deployed a similar strategy when opposing Jeremy Hunt whose capacity to be ‘on top of policy detail’ was also spun as dull and technocratic. In the past, psychoanalytic studies of leadership have focused on the processes of fantasy around politicians as idealised parental figures, where the vertical structures of identification shape the relationship to them as objects of the psycho-political imagination. Today, however, Western democracies are influenced by a loss of faith in the old structures of authority: the hierarchical Oedipal identifications in public life have been challenged by the sociopolitical and cultural forces of late modernity. As an ambitious politician, Johnson is both a product of this wider context but also one who has been able to exploit the shifting patterns of identification to his advantage.

The increasing influence of social media across all levels of society often leads to more horizontal, ‘sibling’ structures of fantasy and identification. The popularity of Johnson’s playful persona with sections of the Conservative electorate – who are predominantly men – invites such fraternal rather than paternal identification, providing a perfect foil for perceptions about the ‘faceless authoritarian’ figures of the EU and the ‘elitism’ of its governing bodies. With his teddy bear looks and public gaffes that make people laugh, Johnson is, for some, a seductive figure; any notion of governance associated with his role as a senior politician is thus undercut and can be deflected elsewhere onto his opponents and the so-called ‘elite’, of which he is course a member. His apparent lack of deference to the establishment sits well with an electorate who are increasingly cynical and disenchanted with politics, and he manages to ward off any potential ressentiment of his position as an elite politician by representing himself as an un-impinging figure that people can enjoy.

Johnson often mocks the pomposity of those in the establishment who lack his ‘optimism’ and who too often call on the so-called ‘dull’ authority of ‘experts’. By contrast, Johnson’s very traditional English trait of celebrating amateurism and of refusing to take things too seriously taps into his populist appeal. It allows him to associate himself with a mode of English nationalism underpinned by the symbols of English cultural nostalgia, thereby appealing to his English base within the Conservative party membership – a generation raised on Jammie Dodgers and comics such as The Beano with cartoon characters that resemble the comical persona of Johnson himself. And yet, this nostalgic cultural imaginary also represents a retreat to a realm of psychosocial and political relations shaped by the values of empire and the injuries of racialisation, gender and social class.

The use of nostalgia as a defence against the losses and uncertainties of contemporary culture has been discussed at length, and the desire to turn back also taps into deep-rooted concerns about change and of being ‘left behind’ by the forces of modernity (Yates, 2015). For many, such anxieties played a key role in motivating them to vote to leave the EU, and Johnson’s image and leadership style resonates in that respect (Eaglestone, 2018). A cultural desire to look back – or at least to turn away from contemporary malaise and to identify instead with Johnson’s retro style – can be seen in this broader psycho-political and cultural context, but it is also framed by the experience of social and economic precarity. At the collective level, a fantasy of history is returned to and remains unmourned as, for example, in Jacob Rees-Mogg’s (2019) idealised account of Britain’s place in the world as a colonial power.

In contrast to figures such as the strangely serious and fastidious-looking Rees-Mogg, Johnson – like his hair – functions as a signifier of chaos and vivacity which, in the UK at least, is still unusual for high-profile politicians in public office. Johnson’s ‘Samson moment’ – having his hair cut in order to appear more convincing as a PM in waiting – is a reminder of his ‘as-if’ status as a boy in the public domain. However, as we have seen, there are a number of tensions between Johnson’s comical Just William persona and his new role as the PM who has set a course to sever ties with Europe. We are told that Johnson likes to be liked, and was shocked when he was heckled by Londoners as he left his house following the referendum result in 2016. Despite his current popularity with members of the Conservative party, the contradictions of his public persona will be tested, and the public may grow impatient with the vacuity of his performance as so much hot air.

References

Eaglestone, R. (ed.) Brexit and Literature. London: Routledge.
Rees-Mogg, J. (2019) The Victorians: twelve titans who forged Britain. London: Random House.
Yates, C. (2019) ‘“Show Us You Care!” The gendered psycho-politics of emotion and women as political leaders,’ European Journal of Politics and Gender (in Press).
Yates, C. (2018) On the psychodynamics of Boris Johnson and Brexit, New Associations, (25): 4-5.
Yates, C. (2015) The Play of Political Culture, Emotion and Identity. Basingstoke: Palgrave Macmillan.
Yates, C. (2014) Political Sport and the Sport of Politics: A Psycho-Cultural Study of Play, the Antics of Boris Johnson and the London 2012 Olympic Games. In: Bainbridge, C. and Yates, C. (2014) (Eds.) Media and the Inner World, Psycho-Cultural Approaches to Emotion, Media and Popular Culture. Basingstoke: Palgrave Macmillan. pp. 34-53.

Acknowledgment

My thanks to Iain MacRury for pointing out the Johnson ‘Samson moment’.

This post represents the views of the author and not those of the Brexit blog, nor LSE. An extended version of some of the themes raised here can be found in: Yates, C. (2018) ‘On the psychodynamics of Boris Johnson and Brexit’, New Associations, (25): 4-5.

Candida Yates is Professor of Culture and Communication at Bournemouth University, UK. She is a Director (with Caroline Bainbridge) of the research network Media and the Inner World and a Founding Scholar of the British Psychoanalytic Council. Her publications include: Political Leadership and the Psycho-Cultural Imagination (forthcoming, Routledge); The Play of Political Culture, Emotion and Identity (2015); Media and the Inner World: Psycho-Cultural Approaches to Emotion, Media and Popular Culture (co-ed, 2014), Television and Psychoanalysis (co-ed, 2013) Emotion: New Psychosocial Perspectives (co-ed, 2009); Culture and The Unconscious (co-ed, 2007) and Masculine Jealousy and Contemporary Cinema (2007). 

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