Vaccine strategies in Europe. France battles anti-vaxxers, while Merkel is blamed for procurement failures.

7 Jan

With the Government under enormous pressure to accelerate its vaccine programme, it’s easy to believe that the UK is unique in the difficulties it faces in upscaling quickly. 

But across Europe, and indeed the world, many others are facing similar operational challenges, from delays in manufacturing, to questions over where to issue vaccines, to whether people will have a jab in the first place.

One country that has had particular difficulties is France, which delivered just 516 vaccines in the first week of their availability, and only 7,000 by late Tuesday (since the started on December 27). Emmanuel Macron has apparently likened the pace of the vaccine roll out to a “family stroll”, “not worthy of the moment or the French”.

So what’s the hold up? The consensus seems to be that bureaucratic barriers have stopped France from progressing more quickly, starting when the government issued 45 pages of guidance for the Pfizer-BioNTech jab. 

Procedures at nursing homes, in particular, have been criticised for taking too long, as they often involve managers having to obtain consent from residents’ personal doctors, who have to sign off the vaccine at least five days before it’s given. France’s health minister has promised to speed up these processes, as well as saying that 500 to 600 vaccination centres will be set up by the end of January.

Even if France is able to overcome these bureaucratic challenges, it’s worth pointing out that it could face more of a challenge with anti-vaxxers. A poll by Ipsos Global Advisor, in partnership with the World Economic Forum, shows that only 40 per cent of French people want the vaccine, compared to 77 per cent in Britain, so the Government will have its work cut out trying to get them on board.

One of the ways France plans to do this is via an online platform, which will allow people to register for their jab. No doubt ministers hope this will cut out some of the red tape, as well as countering some of the scepticism.

Another country that is fighting hard to speed up vaccine roll out is Germany, albeit it has moved much faster than France, with 239,000 people receiving a vaccine starting on December 27. Its government has been accused of not obtaining enough vaccines, and of being too slow at moving forward with the inoculation campaign.

Angela Merkel has been attacked in particular for not having the right strategy in place. Olaf Scholz, the Social Democrats finance minister, presented her with a four-page list of questions about her handling of vaccine management, in what was described as “more like a committee of inquiry”. According to one newspaper, Merkel blocked an initiative by German, Italian, French and Dutch ministers to order more vaccines. After her intervention, they agreed to drop their plan and hand over control to the European Commission.

There are signs that Germany will speed up its vaccine process; it expects to receive over 5.3 million doses of the Pfizer-BioNTech vaccine by mid-February according to its health minister, and BioNTech is also said to soon open a production site in Marburg. 

It is also reported to be considering the strategy now being used by the UK, which involves administering as many doses of the Oxford-AstraZeneca or Pfizer-BioNTech shot as possible, with second doses planned for 11 or 12 weeks’ time, rather than the originally planned three week window.

Given Germany’s previous successful handling of Coronavirus testing, it could be the case that it moves forward very quickly vaccines – but much of its issues have been attributed to the EU’s vaccination strategy. Even Özlem Türeci, BioNTech’s co-founder and Chief Medical Officer, has criticised its strategy, telling one magazine the EU had assumed there would be “a basket of different suppliers… But then at some point it became clear that many would be unable to deliver so quickly” and by “that time it was too late to make up for under-ordering.”

To add to tensions in the EU, Karl Lauterbach from the Social Democratic Party recently accused the French government from preventing it from buying more Pfizer-BioNTech jabs, so that French competitor Sanofi would have an advantage, whose vaccine is still in development.

The French Deputy Minister for European Affairs has called the accusations “unacceptable and false”, adding that Europe “played as a team”. But clearly the vaccine procurement programme has raised questions over that idea.

The biggest decision has already been taken. We have left the EU. So let’s treat whatever comes next as an opportunity.

14 Dec

The EU is right.  If in future it changes its social laws and we don’t change ours; and if then it slaps tariffs on our exports, and raises non-tariff barriers too, this in no way lessens our sovereignty.  We do what we like.  The EU does what it likes.  Brexit is uncompromised.

Having cleared that up, on to present obscurities.  The texts of a possible treaty, which some claim is “95 per cent done”, haven’t been made public.

So few outside the negotiating room, and certainly neither this site nor its readers, are able to pronounce authoritatively on exactly who or what is preventing agreement – assuming that disagreement is real, a supposition we’re inclined to make – or why.  Or whether a deal will have been agreed by December 31, the real deadline.

Nonetheless, the general contours of the difference between the two sides of the table in this negotiation seem clear enough.

As far as can be seen, both accept a level playing field based on “non-regression” – in other words, that neither party should lower the social standard, as it were, that existed within both the UK and the EU on the day that Brexit took place.

But what happens if either side in future wish to raise that standard?  The EU wants “dynamic alignment”.  The UK does not.  And they disagree on whether the non-binding Political Declaration includes commitments to it.

The EU reportedly wanted arbitration in the event of either the UK or the EU raising its social standard in future.  It seems that the UK resisted this particular arbitration proposal, though other reports suggest that the Government is not opposed to arbitration per se – and indeed that a potential solution may now be taking shape.

At any rate, it is agreed that the EU then went further – proposing that it be entitled to respond unilaterally if it raised its own standard and the UK didn’t follow.  It is this change in approach that plunged the talks into their recent crisis, which has not been resolved as we write.

Did Emmanuel Macron raise the stakes, mindful of his own domestic elections – and convinced that the UK would crack under pressure?  Was Angela Merkel actually the key mover?

Was it the Government’s declared intention to break international law that made the difference, inflaming EU fears of the unpredictability and waywardness of Boris Johnson?  (And if so, why – given that the EU itself is, as Ambrose Evans-Pritchard has pointed out, a “serial abuser of international law”?)

Such are the most convincing explanations we have of how we got where we are on the crucial issue of a level playing field – leaving the other main ones: state aid and fishing policy.

Fear on both sides is clearly a key factor.  The EU sees itself as offering the UK unique quota-free, tariff free access to its Single Market, and worries that we will get the best of both worlds – privileged access and lower standards.

As Catherine Barnard pointed out on this site last week, this reflects a curious lack of confidence in the coherence and power of the Single Market.

Meanwhile, the UK would say in response that such an arrangement suits the EU just fine, since it runs a trade surplus with us, and is offering nothing on services.  And that the EU seems set on using its economic muscle to pressure us into becoming an imperial outpost rather than Global Britain.

This, by the way, suggests a point that runs in the opposite direction to Barnard’s.  If the UK is confident in its own trading future, why not simply take the hit from any EU reprisal measures, and use our new freedoms as we think fit?

Our answer is that the Government should not, repeat not, settle for accepting a proposal that is manifestly unfair – in other words, one that would give the EU the right first to change its social laws and then, were we not to follow suit, to decide for itself both the width, speed and depth of retaliatory measures.

Such would be the classic bad deal – and, as Theresa May’s original formulation rightly has it, No Deal is better than a bad deal. But we don’t suggest for a moment that the consequences would be an easy ride.

In the long-term, what shapes a country’s economic future is its tax system, its spending control, its regulatory framework, the quality of its workforce, its education system, its capacity for innovation, its openness to investment, its relationship between labour and capital – and so on.  Not tariff and non-tariff barriers.

In the short-term, we are not so sanguine about the consequences of disentangling the UK, in the event of No Deal, from an EU with which it has been merged for the best part of 50 years.

In other words, No Deal would present the likelihood of short-term pain (the interplay with Covid; shortages; lower investment; scraps over fishing; damaged co-operation on crime and terrorism) against that of long-term gain, if we get our economic framework right.

Nonetheless, No Deal also has the potential to cut both ways, as John Redwood suggests on this site this morning.  For example, a fall in the pound could more than make up for the effect of tariffs.

Much will depend, if it happens, on how agile Rishi Sunak and Alok Sharma are response.  Meanwhile, No Deal would hit our EU neighbours hard, too.  In particular, it would be a political and diplomatic defeat for Ireland, in the wake of its win in the Withdrawal Agreement over the land border.

In the first few days after No Deal, the Cabinet would rally round the Prime Minister; so would Conservative MPs; so, beyond a doubt, would ConHome’s panel of Party members.

The EU and, in particular, France would be blamed by the Tory press and many voters.  The effects wouldn’t simply spill over into fishing and the North Sea.  Potentially, they would menace the security co-operation of the only two substantial military powers in western Europe.

We are less sure of what would happen in week eleven than week one.  We would put money on the response of Tory members hardening, together with that of some Conservative MPs.

However, we wouldn’t slap down a bet on all the Cabinet behaving in the same way.  The institutional interests of the Treasury and BEIS are against No Deal.  Michael Gove will be exposed if it happens, as the Cabinet Minister responsible for the UK’s response.

Our sense it that there would soon be stories of splits between Cabinet “hawks” and “doves”.  And Tory MPs, many of unfamiliar with normal Parliamentary proceedings and unprepared for unpopular decisions – how would they respond?

That would ultimately depend on their constituents, the British people – and the clash between what David Goodhart has called the Anywheres, gainers from globalisation who identify with similar gainers abroad, and the Somewheres, who are less mobile, more rooted and have a stronger sense of national identity.

One point is certain. We have decided to quit the EU twice over.  First in the 2016 referendum.  Then in the election of almost a year ago.

So in the event of No Deal, there will be no going back.  No political party or movement of any significance is suggesting rejoining the EU (which would now take place on less favourable terms than before.)  Which means that the best way of dealing with No Deal, if it has to happen, is to treat it less as a problem than as an opportunity.

The Government is up against the clock to justify its next set of restrictions – as the Covid Recovery Group grows

17 Nov

Will they or won’t they? Is the question being asked of MPs in regards to whether they will extend the current lockdown restrictions in England. Although these measures are due to expire on December 2, at yesterday’s press conference, Matt Hancock told the nation that it was “too early to know” if they had worked.

The Government’s post-lockdown plan is to return to the tiered system of lockdown. But even that could shift. At the same press conference as Hancock, Susan Hopkins of Public Health England, threw a spanner in the works when she said there had been “little effect from Tier 1”, and that the Government might have to “think about strengthening” tiers “to get us through the winter months until the vaccine is available for everyone.”

Despite some encouraging statistics about the nation’s battle with Covid – intensive care admissions have fallen, and hospitals are running at “normal capacity”, according to Carl Heneghan, a professor director of evidence-based medicine at Oxford University – there are signs the Government will play it safe when it comes to imposing more restrictions.

There was the fact that Rishi Sunak recently expanded the furlough scheme so that it will last until March. More recently, a newspaper printed emails from George Pascoe-Watson, Chairman of Portland Communications, who had been advising Dido Harding and James Bethell on strategy and communications, revealing he had been “been privately advised that tier 2 restrictions will be imposed on London until at least the spring of next year.” 

In short, it wouldn’t be unreasonable to make the following prediction (contingent on hospitalisations being at a manageable level): the Government will phase out the lockdown (thereby keeping its promise and avoiding the difficulties of an extension being approved) but then move parts of the country into Tier 2, 3 or 4 (as has just been imposed on 11 local authorities in Scotland) – with the measures in place until spring. Therefore, many will be left feeling that they are in de facto lockdown. 

One reason the Government might feel emboldened to keep restrictions going is the news of two vaccines, as well as the knowledge that mass testing is being rapidly developed. It’s far easier to ask people to “sit tight” if they know an exit strategy is on its way.

But one group that is going to present a big headache for the Government is the anti-lockdown Covid Recovery Group (CRG), whose members will vote on the next set of restrictions. The CRG has been steadily growing in numbers, now standing at around 70 members, according to reports. Depending on how much bigger this figure gets, and what restrictions the Government next wants to impose, it may have to increasingly call on Labour to get the voting numbers.

And it’s not only the idea of a national lockdown that the CRG is opposed to. Its members are also sceptical of softer restrictions; or, at least, they want them to be justified. Mark Harper, CRG chairman, has called some of the previous Covid-19 measures “arbitrary”, and the group is unlikely to ease off the pressure because of a vaccine. Steve Baker, its deputy chairman, has said that “we must find a more sustainable way of leading our lives until a vaccine is rolled out”. As far as the CRG is concerned, days, weeks and months are too long in terms of waiting for Pfizer to come to the rescue.

The group’s main demand is that the Government is more transparent with information on the cost of lockdown. It wants a full-cost benefit analysis of restrictions on a regional basis, and for the Government to publish the models that inform policies – so that members of the public can make up their own mind. In short, the CRG is trying to place the burden of proof onto the Government to explain why it’s imposing any restrictions – as opposed to MPs having to argue for them to come off.

As Harper tells me: “When the Government brings forward its proposals for what follows the lockdown, it’s incumbent on it to show that for every restriction it wants to put in place, the good done by the restriction outweighs the harm, both from a health perspective and an economic perspective.”

Given that December 2 is approaching the Christmas period, the pressure will be all the greater for the Government to explain the rationale for each set of restrictions, as even more closures for shops could signal their end. MPs will also be after more information for how the Government’s mass testing programmes are coming along – one of the main ways it can reopen the economy until the vaccine arrives.

Interestingly, the Government could be about to run into difficulties not so disimilar from the ones Angela Merkel has experienced in Germany. Merkel had wanted to tighten Germany’s restrictions, but failed to win the support of the country’s state leaders. Thus she has had to postpone decision making in this regard. In essence, just as the public support for lockdown might be tiring, so is MPs’.

Either way, the next couple of weeks will be interesting to say the least.

Elsewhere:

Stephen Booth: The Brexit trade talks, the romance and realities of fishing, and its crucial importance for Scotland

29 Oct

Stephen Booth is Head of the Britain in the World Project at Policy Exchange.

UK and EU negotiators are now targeting a mid-November deadline to reach a trade agreement. This would give the European Parliament enough time to consider the treaty and hold a vote on it in the last session of the year, due in the week of December 14 – only two weeks before the Brexit transition period ends.

A fortnight ago, a public row erupted due to the apparent suggestion from EU leaders that further compromises all had to come from the UK side and that this was a precondition for “intensified” negotiations. After Downing Street declared the talks “over”, some on the EU side, including Angela Merkel, the German Chancellor, and Mark Rutte, Dutch Prime Minister, sought to immediately defuse the situation, saying the bloc was also willing to make concessions. Ultimately, it took Michel Barnier’s speech to the European Parliament, in which he said it was his intention to “seek the necessary compromises on both sides”, to get the UK to confirm that talks were back on track.

After these theatrics, the EU does appear to have dropped its insistence that the most difficult areas must be settled before progress can be made on lower hanging fruit. The Financial Times reports that much of the talks this week have been engaged with the technical process of agreeing common legal text in areas where there is already considerable agreement, including many of the rules for trade in goods and services, with a mixture of EU and UK drafts being used to reach a consolidated text.

The fact that very little has leaked out of this week’s round of talks is a positive sign that these negotiations are now serious and, indeed, “intensive”. Simon Coveney, the Irish Foreign Minister, this week stated optimistically that: “We’re likely to get a deal, but it won’t be easy.” Charles Michel, the EU Council President, was more equivocal, noting that the two sides have yet to overcome their differences on “level playing field” guarantees, fishing, and the deal’s enforcement.

As I noted in my previous column, the differences over subsidies seem to be narrowing and fishing is increasingly emerging as the major sticking point.

Fishing’s political symbolism is outsized compared to its economic importance to either side. The industry is not significant across the UK – it makes up only around 0.1 per cent of gross value added. The economic contribution is similar in Spain, Denmark and France, which together account for over half the total EU catch.

On the UK side, we know that the Common Fisheries Policy was long viewed as one of the major inequities of British membership and fishing communities were among the most vocal supporters of Leave in the EU referendum. In 2017, around 35 per cent of fish landed by EU vessels from the north Atlantic came from UK waters. By contrast, only 13 per cent of fish landed by UK vessels came from EU waters.

There is a certain romance that an island nation attaches to the sea-faring industry. But cold, hard political realities also explain the significance of fishing in this negotiation. Although not a major national employer, the industry is of course very important to particular communities – often remote, such as along the west coast of Scotland, in Wales and Northern Ireland, with limited other employment opportunities – and, ultimately, the negotiation is a zero-sum game for both sides. More fishing quota for the UK means less for the EU.

For a Conservative Government with increasing reason to be concerned about the state of the Union, there is obvious political benefit to ensuring a better settlement. According to the Government’s statistics, the UK’s largest and most valuable fish landings are in the north-east of Scotland, where larger trawlers tend to operate. 40 per cent of fishers working on UK boats are on Scottish boats. Should the UK gain extra quota, this region is likely to benefit the most. A Brexit dividend for Scotland would be an important win.

The EU knows that the UK has leverage when it comes to fishing access. A failure to reach a deal would mean the UK was under no obligation to provide access to foreign boats at all. Brussels had therefore wanted a deal on fishing rights settled in July, well before the final horse-trading of end-game negotiations.

Nevertheless, a wider trade deal – if it includes a better quota share – is also in the interests of the UK fishing industry. The UK imports most of the fish British consumers want to eat but exports most of the fish UK vessels catch. The EU is by far the biggest market for UK exports. It should also be noted that the wider fish processing industry is a larger, although less vocal, employer than the catch sector. Failure to reach a trade deal would increase costs for UK exports and the processing industry via new trade barriers.

Brussels’ starting position – described as “maximalist” by Barnier – was essentially that its fishing rights in UK waters should not change after the transition period. The EU has so far turned down the UK’s request to move to a new regime of annual quota negotiations – a model the UK recently agreed with Norway.

A possible compromise is likely to rest on establishing a process under which EU fleets’ catch would be phased down over a number of years. The UK would regain a much greater share of future catch opportunities but EU fishing communities would be assured of their rights over the medium-term. How the 100 or so stocks that are up for discussion might be apportioned could also present opportunities to ensure certain political constituencies are prioritised.

So far, Emmanuel Macron, the French President, has been steadfast in his belief that the EU should stand firm on fishing access, vowing to scupper any Brexit deal that “sacrifices” French fishermen. He is aware of a potential political backlash in coastal and rural areas.

However, despite the rhetoric, reports suggest that in private, at least, the French government is preparing the industry for a compromise. It should be noted that Macron is also effectively negotiating with the rest of the EU about how much of the residual quota France will get in the future.

Given the wider economic and political issues at stake, it still seems unlikely that fishing will be the deal-breaker. Macron is likely to come under increasing pressure from member states most exposed to no deal – Ireland, Belgium, the Netherlands and Germany – to moderate his position. However, it is clear that the political choreography of reaching a deal on this issue is vitally important on both sides of the table.

Germany enters a critical stage – as Europe increasingly converges in its Covid-19 response

15 Oct

With much of the UK media focussing its energies on the Government’s latest Tier 2 and 3 restrictions, it’s easy to think that the country is alone in having to go through such harsh measures. But European countries are, in fact, converging in many ways, from facing the same challenges – to how leaders are reacting to them.

One country whose current situation is not too dissimilar to the UK’s is Germany. It has been better at controlling the virus in a number of respects, thanks to its high quality healthcare, localised response to outbreaks and ability to introduce testing early on in the crisis. Even so, it is not immune to the same problem that this country, France and others have experienced. That is, rising cases with the emergence of colder weather.

In fact, today Germany has seen a record daily increase in cases – reporting 6,638 new infections, according to data from the Robert Koch Institute (the national agency responsible for disease control and prevention). It’s previous record daily increase was 6,294 on March 28. While it should be said that improvements in testing regimes will inevitably lead to more cases being detected (paradoxically making a country’s situation look worse), it’s the rapid uptick that has concerned its government.

What is the answer to this? As with UK politicians, German leaders have issued some strong words to the public, urging them to be sensible. “It is up to us to stop the infections”, Helge Braun, Merkel’s chief of staff, told one broadcaster, adding that the situation “depends on the population”.

Angela Merkel, the chancellor, has warned that there could be over 19,000 new infections per day if the trends continue, and taken strong action to prevent this, meeting with the leaders of Germany’s 16 federal states – who will soon reveal tougher restrictions to slow down the virus.

One of these will be compulsory mask-wearing in crowded spaces when an area reaches 35 per 100,000 cases in people in seven days. There have also been new curfews for bars and restaurants in hotspots for Covid-19, in addition to restrictions on how many people can gather in public and private settings. In Berlin, alcohol can no longer be sold between 11pm and 6am – a similar policy to the one enacted by Nicola Sturgeon recently, who has imposed a two week alcohol ban for pubs and restaurants.

Merkel especially focussed on young people, asking them to stop holding parties together – “in order to have a good life tomorrow or the day after.” In one of the most radical warnings, Markus Söder, the Bavarian state premier, even suggested that Germany could be close to another lockdown.

In better news, Jens Spahn, the health minister, has said that a vaccination drive for Germany was just months away; a far more optimistic assessment than Boris Johnson’s recent admission to Steve Baker, when quizzed in parliament, that “there is a good chance of a vaccine, but it cannot be taken for granted.” The plan in Germany so far is for it to be voluntary, and given to high-risk groups to start with. 

Until then, it looks as though Germany will indefinitely face similar restrictions to the UK, and that of France (where Emmanuel Macron implemented 9pm curfews). As I wrote yesterday for ConservativeHome, there is a tendency to believe that countries are taking radically different approaches, particularly with Sweden – which has become more cautious in recent times. In fact, the evidence is that countries are increasingly unified in their strategies to deal with the pandemic.

Stephen Booth: As the Brexit deadline nears, the UK is strong on fishing rights – but Frost indicates movement on state aid.

15 Oct

Iain Dale: Good luck to Robbie Gibb’s prospective challenger to the BBC and Sky. And to News UK if it has a go, too.

4 Sep

Iain Dale presents the evening show on LBC Radio and the For the Many podcast with Jacqui Smith.

On Wednesday, the German government declared that the Russian opposition leader, Alexei Navalny, had indeed be poisoned, and that the nerve agent used was Novichok.

Predictably the Kremlin denied any involvement whatsoever, thereby taking the West for fools yet again. Novichok appears to have become the poison of choice for the Russian Government’s Federal Security Service (FSB). For an apparently developed country to sanction the use of chemical weapons against its own citizens is both unconscionable, and tells us a lot about the ruthlessness of Valdimir Putin.

It is inconceivable that he doesn’t know it is going on, whether or not he gives the direct orders or not. After Salisbury, he could have read the riot act to his former colleagues in the FSB and said: ‘Never again’. He chose not to – and the poisoning of his main political opponent is the result.

So what should the response be? When he was Foreign Secretary, Boris Johnson did brilliantly to persuade 20 countries to expel more than 130 Russian diplomats. That was fine, but it didn’t go far enough. All western countries should now impose the most severe Magnitsky sanctions possible against all senior members of the FSB and every single member of the Russian cabinet, including Putin himself.

Germany will be key here. Angela Merkel has enjoyed a better relationship with Putin than most western leaders, and Russia and Germany enjoy economic ties which Britain and Russia do not have.

For Germany to take serious measures against the Kremlin may be the jolt that Putin needs if he is to re-evaluate his ‘poison policy’. Or he may respond by threatening to switch off the supply of gas to Western Europe. If you appease people like Putin, they just laugh at you. The time for serious action is now.

– – – – – – – – – –

I’ve enjoyed reading Philip Collins in The Times over the last twelve years. Sadly he’s been let go as a weekly columnist, but by most standards he’s had a good innings.

He fired off a parting shot email which was particularly ill-judged and ungracious. Rather than thank The Times for giving him the space to air his views over twelve years, he complained that he’d been let go in a thirty second conversation.

Galling, yes, but it’s always better to leave with your head held high, even if you think your benefactors have made a huge mistake. Bitterness is never a good look.

All columnists, and radio presenters for that matter, know that as each hour passes, their day of departure looms ever nearer. I’ve been on LBC for eleven years now. I hope when my time comes I conduct myself with due decorum, but also  hope that day is a long way off!

– – – – – – – – – –

It is rumoured that two more news channels may appear on our screens before too long. There’s little doubt that there is growing dissatisfaction with the news coverage provided by Sky and the BBC, but there is a big question-mark over whether the news viewing market is big enough to sustain new entrants. And would a news channel with a centre-right slant be able to garner enough of an audience to make it commercially viable?

GB News (let’s hope that if it gets on air it has a snappier name) is led by Robbie Gibb and an ex-head of Sky Australia. News UK is also rumoured to be planning something similar.

Both are at pains to say their vision does not involve becoming a UK version of Fox News. Would conventional advertisers be flocking to advertise on a right of centre TV channel? They advertise in right of centre newspapers, so there is no reason why not, I suppose, but I suspect they will take some convincing.

Whoever the financial backers of these channels may be will need to have some very deep pockets indeed to get them through the initial few years. Running costs will go into the tens of millions of pounds. I wish both enterprises luck, because competition is always good, and new entrants to a market can help shake the existing channels out of their rank complacency.

I remember that when Stephan Shakespeare, Tim Montgomerie, Donal Blaney and I started 18 Doughty Street TV in 2006 how difficult it was to build an audience. In those days few people watched video, live or not, on their laptops. Smartphones hadn’t then been invented. In retrospect, we were ten years ahead of our time. Such a channel would do really well nowadays, I suspect.

Why the Germans don’t always do it better

4 Sep

Every so often it becomes fashionable to use the understated brilliance and modernity of Germany as a stick with which to beat Britain for holding to absurdly antiquated ways of doing things.

I did it myself a few months ago, in a piece for ConHome suggesting that when the pandemic is over, we will have to look at what the NHS can learn from Germany.

Now John Kampfner has devoted a whole book, Why The Germans Do It Better, to this theme. It is a good title, but also a hostage to fortune. Will the Germans go on doing it better? Nobody knows.

And although the book, which I have not yet had the pleasure of reading, doubtless contains all sorts of prudent qualifications to the bold assertion in the title, it is bound to encourage the kind of Briton who already believes that compared to Germany, the United Kingdom is hopelessly old-fashioned and resistant to change.

I love Germany, and in the 1990s had the pleasure of living for almost six years in Berlin. During that time, I wondered in vain how to write a book about modern Germany which could be read for pleasure as well as edification.

For in those days, and I fear this is still  true, while educated Germans often had an almost perfect grasp of the English language, and a detailed knowledge of British society, the reverse was by no means the case.

In some well-to-do parts of German society, Anglophilia raged almost out of control. They dispatched their children to fee-paying schools in Britain, followed by British universities. Even their dogs seemed to come from Yorkshire.

I hope some German author is at work on a study of this phenomenon, entitled Why The British Do It Better, which can sit next to Kampfner’s volume on my shelf.

But the truth about Britain and Germany is more complicated than such compliments, or exercises in self-denigration, can convey. And although it is worth identifying the things the Germans do well, it would be naive to suggest that simply by copying German methods, we can transplant their successes to British soil.

John Major said in March 1991 that he wanted Britain to be “where it belongs, at the very heart of Europe”. This always seemed, from a geographical point of view, an implausible goal.

Germany is at the heart of Europe, surrounded by about 20 other countries, all of them smaller than Germany. This is an inescapable fact, and offers a powerful reason for developing some system of amicable co-operation with those neighbours, so none of them becomes worried by Germany’s preponderant size.

The United Kingdom is on the edge of Europe. We have fewer neighbours and wider choices. We may make a dreadful mess of those choices: the Union with Scotland is now in grave danger.

But there is not much profit in trying to deny that the choices exist. Yet this is what Major and his successors tried to do. They said it would be mad to adopt any policy other than being at the heart of Europe.

This accusation of madness did not prove a happy way of managing Major’s critics within the Conservative Party, who put up a dogged resistance to his European policy.

In the eyes of the kind of people who will feel themselves in instinctive agreement with Kampfner’s title, this protracted row was an embarrassment.

It showed how backward and barbarous some Tory MPs were. Individual parliamentarians were held up as examples of complete madness. None of the care and sympathy which are nowadays supposed to be extended to the mentally ill were extended to these Conservatives.

There was instead a brutal attempt to cast them and their ideas out of polite society.

Germany did not have an argument like that. Although the German people wished by a clear majority to keep the German mark, German MPs voted on 23rd April 1998 by 575 to 35 in favour of replacing it with the euro, with no fewer than 27 of the “no” votes coming from the PDS, successor to the East German communist party.

Chancellor Helmut Kohl assured German MPs that the euro would make Frankfurt a “very big financial centre”, that Britain would be a member of the new currency within a few years, and that Switzerland would join within ten years.

In the Frankfurter Allgemeine Zeitung, which I rejoiced to read each morning, learned professors of economics argued with anguished pedantry that the new currency could not work. Their opinion was widely shared by German voters, who loved going on holiday in Italy, or at least to the local Italian restaurant, but did not think sharing a currency with the Italians was a good idea, and feared German savers and taxpayers were bound to end up subsidising the weaker members of the euro.

Kohl promised them their fears were groundless, and kept the political class solidly behind the project. He was a power politician of genius, who exploited the fact that the opposition Social Democrats believed more devoutly in his European policy than his own Christian Democrats did.

Nor was he above maintaining his dominance with the use of illegal bank accounts. High ideals and low methods were yoked together, but for a long time only the former got much coverage in the German press.

Perhaps it is a good thing that Kohl succeeded: it is hard to tell, for we have not reached the end of the story.

But it is in some ways a pity that German politicians failed to have the argument among themselves which created such animosity within the Conservative Party.

German public opinion was not prepared, and the assumption took hold that one’s duty, as a member of the political class, is not to rock the boat, and to suppress any details which might create the wrong impression.

There wasn’t, in Bonn, the open parliamentary debate which should have preceded so a momentous an experiment as subsuming the national currency, proud symbol of post-war recovery, within a new, supranational currency, as yet unsupported by a new, supranational state.

Dissent was stifled: something more easily done in a system with party lists. Many Germans saw with indignation the herd mentality that had developed among their representatives.

It has become a commonplace of commentary on foreign affairs that Germany is failing to rise to the great responsibilities which now rest on her shoulders.

Again, one may argue that this is a good thing: that being undramatic is better than being over-dramatic: that all difficult questions should be left in the calm hands of Angela Merkel, who long ago had the ruthlessness to knife Kohl.

But this preference for a quiet life has its drawbacks too. For years, Wirecard was held up as a German success story, a rare example of a national tech champion which could beat the Americans at their own game.

German regulators declined to investigate persistent allegations of irregular accounting and the company frightened into silence anyone who suggested its figures were too good to be true.

Only a year ago, Merkel promoted Wirecard’s efforts to get a licence to operate in China.

The German press failed to expose the Wirecard scandal. That was left to a troublesome newspaper based in London, The Financial Times, which took a courageous, principled, long-term view of the story, and wanted to tell its readers what was actually going on. Those qualities are not only found in Germany.

Stephen Booth: With four months left to get a Brexit deal, state aid is the major stumbling block for the UK and EU.

3 Sep

Stephen Booth is Head of the Britain in the World Project at Policy Exchange.

At this delicate stage, predictions of whether the Brexit negotiations will conclude with a trade agreement or not are bound to be no more than guesswork. With only four months until the end of the Brexit transition period, the chances of a UK-EU trade deal being ready for January 1, 2021 are in fifty-fifty territory.

The EU’s “parallelism” policy – blocking progress in one area as long as there isn’t progress elsewhere – means that Michel Barnier is refusing to discuss British proposals on fishing until the UK moves on other issues, including the most difficult of them all: the EU’s desire to establish a “level playing field” for state aid. It could be argued that Brussels’ insistence on solving the difficult issues first prevents rather than permits progress.

Ultimately, fishing is not likely to be the deal-breaker. The eight EU member states with significant fishing fleets will completely lose access to UK waters if there is no deal at all, so cutting a deal is clearly better than the default, even if it falls well short of the desire for “relative stability” for existing EU quotas.

At the start of the summer there were reasons for optimism about a deal. The EU had signalled a willingness to water down its most ambitious demands on fishing and state aid and the UK had acknowledged the EU’s concerns about the overall structure of the agreement.

However, the mood appears to have turned and the last negotiating round yielded very little, according to the readouts from both sides. This week Jean-Yves Le Drian, the French Foreign Minister, cited the “intransigent and frankly unrealistic attitude” of the UK for the lack of progress. Barnier yesterday gave a speech outlining the continued areas of disagreement. Equally, recent media reports suggest the UK is preparing the ground to walk away from the talks if the stalemate continues much longer.

State aid is the major stumbling block. The impasse would appear to be a bigger problem in theory than in practice. UK orthodoxy has seen past governments refrain from major interventions in the economy. According to the European Commission’s “State aid Scoreboard”, the UK spent state aid equivalent to 0.34 per cent of GDP in 2018, compared to an EU average of 0.76 per cent. Meanwhile, France spent 0.79 per cent, slightly above the EU average, and Germany spent a much larger per cent.

The perception in Brussels is that this UK Government is different. David McAllister, the German MEP who chairs the European Parliament’s Brexit committee and who is close to Angela Merkel, has said the “UK’s interest in subsidising sectors”, such as steel and cars, would have “direct consequences for EU industries and jobs if these goods have ‘duty-free, quota-free’ access to the single market”.

This precise fear of the UK turning to a historically continental strategy of promoting “national champions” may be wide of the mark. Nevertheless, it is clear that some members of this Government view industrial policy and strategic investment as important levers at its disposal.

In this area, the devil will be in the detail. In the post-Covid world, it is difficult to predict what will be required of the state and nimbleness may be critical. Therefore, it is understandable that the UK would not want to find itself bound permanently by treaty into the EU state-aid regime, much of which is “temporarily” suspended in any case due to the pressures of the crisis on national and regional governments.

Little headway appears likely until the UK sets out its blueprint for domestic state subsidy control, which is expected to be later this month. At a minimum, the UK will need to comply with WTO rules, but these fall far short of the requirements of the current EU regime.

WTO rules only apply to goods, while the EU rules apply to both goods and services. The EU rules are prescriptive in what and what is not permitted, whereas, in practice, WTO rules set a high threshold because complainant countries must demonstrate that disputed aid is harmful in its effect.

The EU appears to have walked back from its initial position – clearly unacceptable to the Government – that the UK should continue to be bound by EU state aid rules into the future, with the European Court of Justice (ECJ) having the final say in respect of enforcement. In contrast, the EU’s agreement with Canada simply uses the WTO model as a basis and expands it to services, but there are limited options for enforcement.

A possible compromise would be for the UK to implement domestic legislation, adopting some aspects of the status quo, enforced by an independent UK authority and subject to review by Parliament and the UK courts (not the ECJ). Subject to dispute settlement, set out in the UK-EU trade agreement, the EU (and the UK) would retain the right to adopt countermeasures, such as tariffs, against any state aid deemed to be trade-distorting.

Whether this would be acceptable to the EU remains to be seen. The essential objective from the UK’s perspective is to depart from the EU’s desire to micromanage the UK’s subsidy policy by treaty. However, the UK would need to accept the principle that the EU could deal with the consequences of UK subsidies with countermeasures such as retaliatory tariffs.

A bust up in September or October does not necessarily preclude a deal at the last minute. Weighed against these important, yet technocratic considerations, is the prospect of no agreement at all.

A trade agreement, with no tariffs on UK-EU trade and regulatory cooperation, would better enable the UK to implement the Northern Ireland Protocol in the light-touch way the Government has outlined.

Any disruption attributed to a no deal exit, however transient, would give Keir Starmer ammunition in his continued attack on Government competence. Against this, the Government is in a much stronger position than it was in the autumn of 2019 when renegotiating the Withdrawal Agreement.

Failure would have economic and geopolitical consequences for the EU too. The UK may only be Germany’s seventh largest trade partner, but it ranks second in contributing to Germany’s trade surplus.

It is notable that Tom Tugendhat MP has on this site recently called for the UK to break with EU policy on Iran to adopt an approach closer to the United States. In the event of a breakdown in the trade relationship, Brussels should not be surprised to encounter a more muscularly independent UK in other fields.

We are now approaching the end game. The technical negotiations have probably achieved as much as they can at this stage. It will soon be up to the politicians on both sides of the table to make the big call about whether to make the deal or not.

Matt Kilcoyne: Anti-democratic China is testing the West’s resolve, and it’s CANZUK that has risen to the occasion

11 Aug

Matt Kilcoyne is Deputy Director of the Adam Smith Institute

When I was growing up, I believed that the West had won. Not just won militarily, economically, or even culturally. But philosophically.

The enlightenment values of the United Kingdom, the free market popularised by thinkers in the United States, and the pragmatism of European countries converging after decades spent tearing each other asunder. No more a half-century long battle between communism and capitalism, no more chance of fascism or socialism holding down the liberties of the world’s peoples.

Slowly, but surely, the world had changed. Gradual liberalisation was inevitable. I thought, foolishly, that the empirics of a world made richer, with more choice, happier, freer, more tolerant people, engaged in commerce with others right across the world would be obvious to all.

I had not yet got that old enmities die hard and traditions die harder, or even that institutions really matter. I had misunderstood that, to a great degree, the victory of the liberal world order was one built on universal claims of the rights of men, but predicated on an uneasy realist peace between American, CANZUK (Canada, Australia, New Zealand and the UK), and European ideals.

I had mistaken the peace and prosperity that coincided with the end of the Cold War as a victory of our civilisations – when really other rulers, some far colder and more cruel, were always waiting to stake their claim.

To do so was wrong. Russian expansionism has re-emerged in Ukraine and Georgia and Putin has spent the past decade sabre rattling at Middle Eastern and Baltic states. Erdogan’s Ottomanite expressions in Turkey and his dalliances in Syria and Libya stand out too. And, of course, China – in its outwardly hostile relations to Taiwan, military skirmishes over the border with India, and treaty-defying legislation over Hong Kong.

Each of these states are nations, but I suspect that the leaders of them think of the international order they find themselves in as too limiting of their ambitions. They mean to mould the world around their vision for their own seemingly exceptional civilisations.

I suspect you know this in your heart of hearts. Russia’s consecration of the Main Cathedral of the Russian Armed Forces was egregious in its scale and its pomp. Christ has been co-opted to glorify the victories of the Red Army. Erdogan’s reconversion of the Hagia Sophia to a mosque marks the effective end of the secular republic of Ataturk. China’s placement of party power in Hong Kong, in silencing critics and arresting students for holding flags, shows a commitment to its communist ideology above that of international treaty obligations.

Foreign policy is not something the Adam Smith Institute focuses on too heavily. We prefer the domestic, and learning from the best of the rest around the world. The relations between foreign governments and our own is a fascination of some policy wonks, but we’d far rather ambassadors were left handing out Ferrero Rocher than having any real bearing on the everyday dealings between companies, scholars, friends, and family.

To that end our policies are focused on trying to make life as free as possible for people here, while proposing policy that would open up new opportunities overseas for trade and exchange. Sometimes though, the rest of the world comes knocking and you should not ignore when wolves are at the door.

Adam Smith said in his Lectures on Jurisprudence that “Opulence and Freedom, [are] the two greatest blessings men can possess.” I do not for a second suppose that he mistook the order of his words. People can tolerate lower levels of freedom if they’re rich enough to have choices left. However, there comes a point where a lack of freedom threatens the peace of a place.

In his first book, The Theory of Moral Sentiments, Smith makes the correct observation that “little else is requisite to carry a state to the highest degree of opulence from the lowest barbarism, but peace, easy taxes, and a tolerable administration of justice: all the rest being brought about by the natural course of things.”

I’m afraid to say that Hong Kong’s opulence looks set to diminish. Yesterday the tolerable administration of justice was tested right to breaking point.

The arrest of the founder of Apple Daily, journalist Jimmy Lai, the arrest of ITV News freelancer and British National Wilson Li, young pro-democracy activist Agnes Chow and the likes of Reuters, AP and AFP from a news conference show that individuals are now targets of the state. It shows too that the commitment under Article 4 of the new National Security Law supposedly upholding freedom of the press is not worth the paper it is printed upon.

This is a test of the West’s resolve and our ability to act. But the West is splintered. Macron’s acquiescence to Xi Jingping showed up a coward’s response. The French president is a man of action as his stint in Lebanon shows but no action is forthcoming on China. Merkel decided her little chats with Beijing were worth more than the rights of Chinese people. The EU Commission called the National Security Law deplorable but again did nothing beyond pushing the press release to save face at home.

The CANZUK states though, and the US, have risen to the occasion. Canada, Australia, New Zealand and the United Kingdom joined the USA in condemning moves to shut down free and fair elections in Hong Kong this autumn. Australia and the UK joined Taiwan in offering refuge from those looking to escape communist control of the city.

The universal values that we preached, that we set in the basic law of Hong Kong, have been an inspiration to Hong Kongers that took to the streets. It was the Union Jack and the Stars and Stripes that flew in protestors hands.

Yes the fact of easy geography plays to regional blocs strengths. But our common cause in recent months with CANZUK states on Russia and Chinese aggression has shown the ease with which we, with common language, common political systems, common history, common sense of purpose, translate into a sheer force of fact re-emergence of a global role that has eluded the mandarins in the foreign office for far too long.

Our civilisation needs champions to save it from opponents and challengers abroad, but also nationalists at home. Greater freedoms for us all, and expanded out to include those in our sister countries overseas allow us all to be the champions of it through our deeds. We must defend the gains of globalisation for the whole of the world, while challenging those that seek to usurp the norms that made those gains possible.

Adam Smith was right when he argued that there was a great deal of ruin in a nation. But there might yet be a great deal of good in our civilisation.

At 6-7pm tonight, the Adam Smith Institute is hosting an event titled: In Defence of Globalisation. Click this link to register your place.