Maybe Chamberlain, Maybe Baldwin

The outlines of Theresa May’s response to the Brexit vote could be glimpsed briefly in July. In her one major speech before she entered Downing Street she committed to worker representation on the boards of companies, something that successive Labour government neglected to do. She also talked of the need to improve productivity and to make houses more affordable. She talked about unscrupulous bosses and about insecurity at work. The debt to Labour’s left turn was as obvious as it was unremarked upon.

In the same speech she insisted that “yes, some have found themselves out of work or on lower wages because of low-skilled immigration.” But there were other signs that she had been paying attention to the language that had given Leave its majority and that she was determined to make it her own:

Talk to almost any ordinary member of the public, and the frustration they feel about the loss of control over their day-to-day lives is obvious.

The 52% wanted to take back control, and May wasn’t going to stand in their way.

As she entered Downing Street, there was more on the One Nation theme, and again an emphasis on addressing the needs of those outside the, increasingly hated, “Westminster bubble”:

If you’re from an ordinary working class family, life is much harder than many people in Westminster realise. You have a job but you don’t always have job security. You have your own home, but you worry about paying a mortgage. You can just about manage but you worry about the cost of living and getting your kids into a good school.

If you’re one of those families, if you’re just managing, I want to address you directly.

I know you’re working around the clock, I know you’re doing your best, and I know that sometimes life can be a struggle. The government I lead will be driven not by the interests of the privileged few, but by yours.

After the Conservative Party conference the May approach to government is even clearer. The aim is to combine right-wing populism on immigration with a more interventionist state. Laissez-faire, which is French for letting the City sell everything that isn’t nailed down, will be put back in its box. On Brexit May has made it clear that she will not give up control of immigration in order to trade freely with the EU. Meanwhile, her Home Secretary, Amber Rudd, was giving us the heavy stuff on immigration. Landlords will be in trouble if they rent to illegal immigrants. Firms will have to publish lists of foreign workers. All sorts. And this from someone with at least one foot offshore.

What’s going on here? Is it just a tactical mistake? If the rest of the EU insist that the free movement of capital, labour and goods are indivisible will the markets and pressure from the City push her into line? Nick Pearce has likened May to Joseph Chamberlain, who tried to combine protectionism (“Imperial Preference”) and social reform before the First World War. Chamberlain ran into opposition from the City of London and he never became Prime Minister. As someone who has written about Britain’s interstitial offshore empire it is tempting for me to agree with Pearce. The City – or most of it – wants to be in Europe and May will have to do what she is told. Either this talk about social justice for the native and nativist British is a rhetorical flourish that will join compassionate conservatism and the march of the makers on the bonfire of things that the Money Power doesn’t want, or she will find herself out of a job.

Certainly there are signs that this approach is going to face strong opposition. Amber Rudd has already dropped the idea of publishing lists of foreign workers. Stocks of Marmite are running dangerously low. The pound is falling, as is the appetite for sterling debt. But where else can the City and its allies turn? The whole point of UKIP is to stop free movement, whatever the real world consequences. And while I am sure there are plenty of Labour MPs who would love to return to Blair’s project of combining social liberalism with the liberalisation of the trade in services, the pesky members won’t let them. They could split and join up with the Liberal Democrats, but that doesn’t sound like the sort of thing that successful careerists would contemplate.

May and her people are probably hoping that her approach has more in common with Stanley Baldwin’s successful marriage of Imperial Preference with Conservative domination in the 1930s. In September 1931 a National Government, nominally led by Ramsey Macdonald but run by Lord President of the Council Stanley Baldwin, took Britain off the Gold Standard. A year later the government signed a free trade deal with rest of the Empire and put tariffs on goods from everywhere else. For the rest of the decade the country experienced modest growth and a degree of industrial recovery. The City of London weren’t happy about the dumping of gold or the imposition of tariffs. It was the end of almost a century of free trade and “sound money.” The (previously Labour) Chancellor Philip Snowden was openly baffled when he was informed of the option of leaving the Gold Standard in the new administration. He is said to have admitted that “they didn’t tell us we could do that.” Snowden had thought, like the architects of New Labour, that the regulation of the currency was a matter best left to experts. Baldwin knew that it was the supreme matter of politics. He also knew that the City would have to put up with the move, if the bankers didn’t want an as-yet untamed Labour Party back in Downing Street.

Similarly, perhaps the City of London will have no choice but to accept that the glory days when the offshore empire could operate with all the benefits of full EU membership are over for the time being. The party of the propertied can only remain the natural party of government if it pays close attention to the popular mood. And the people want change. The Brexit vote was the latest sign that something serious is stirring out there in Not-Westminster-Land. But the long howl of UKIP’s rise and the resurgence of the Labour Left made it obvious long before then.

Cameron conceded a referendum in the 2015 Conservative manifesto in order to head off the electoral threat from UKIP. It is now being reimagined as a moment of Neronian carelessness. But, absent his referendum pledge, it isn’t clear that he would have secured an outright majority, however slender. Yes, Cameron was willing to put Britain’s grand strategy of European membership and military-intelligence integration with the US at risk for the sake of narrow electoral calculation. Of course he was. And his successor seems to be working on the assumption that, if the Conservatives concede free movement, working class Toryism in England will defect to UKIP.

Meanwhile, the emergence of a left-wing economic programme under Corbyn-McDonnell spells trouble for the wealthy. Its implementation would spell disaster. For all their faults, those two aren’t kidding around and if they reach Downing Street a Hard Brexit will look like a walk in the park and an ice cream by comparison.

Hence May is combining One Nation rhetoric and talk of an activist, developmental state with opposition to free movement. If this means the City has to tweak its business model, then so be it. Even if it means the offshore empire is over, then that’s the cost of doing business in a country that is still run by and for a dazzlingly narrow set of interests. The Big End of Town sometimes has to take one for the team. And the Conservative Party’s job is to give them the news, keep the process obscure, and harvest the ensuing political capital.

Everyone knows that protectionism is bad, and that money is best looked after by neutral experts (who are also known as bankers), so the 1930s never happened, as far as the national memory is concerned. Similarly, we all know that the Labour Party’s is unelectable and that its ideas are moonshine. Its threat to the Conservative Party therefore doesn’t exist, even though, as a matter of boring old fact, it does. And so what if immigration isn’t really the cause of the problems that face the ordinary working class families of Mays’ political imaginary? They think it is, and the Conservative Party is not about to disenchant people of fantasies that incline them against voting Labour. Indeed, they cannot do so without disowning the evasions and untruths that have dragged public attention away from the collapse of a finance-led economic model.  The parade of welfare scroungers, conniving foreigners and effete left-wing spendthrifts cannot stop. Anthony Barnett is right in this regard, May has no choice but to adopt Dacreism wholesale.

Empire is always something of a confidence trick. It relies on an uneven distribution of knowledge even more than it relies on brute force. If even I can see that London is the world capital of money laundering and tax evasion perhaps this particular twist on the English way of making a killing has had its day. Besides, as any Conservative worth a damn knows, some things are more important than money.  Control of the state, for instance. Great fun in and of itself, and the only really sure way to keep the money you have, and to make even more in the future.

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