WHAT can we expect in leap year 2016? For the UK, the big date is with David Cameron’s increasingly risky in-out referendum on European membership. The word at Westminster is he wants to get this over and done with as quickly as possible, on the grounds that prolonging the agony into 2017 will only favour anti-Europeans. So expect the referendum either in June, or more likely in September. Which means, of course, that campaigning will begin in earnest during the latter stages of the Scottish, Welsh and Northern Ireland elections, scheduled for May 5.
A narrow poll lead for the No side in November has turned into an equally wafer thin lead for the Yes vote in December. This data comes from telephone canvassing. Face-to-face interviews still tend to show a solid lead for staying in. On the other hand, the gap has definitely narrowed in recent weeks in favour of getting out. And the bookies’ odds are currently predicting a 57:43 split in favour of Brexit. If the UK does vote to quit the EU it will be on the back of English votes. All three devolved nations show clear majorities for remaining members.
Recent polling data suggests that up to 75 per cent of Northern Irish voters want to stay in, with 64 per cent of Scots and 55 per cent Welsh voters. Conclusion: a Brexit vote will reopen the constitutional question big time, though not as quickly as many hope. Why? Because voting (once) to leave the EU doesn’t automatically mean it will actually happen.
The EU establishment has a habit of calling multiple referendums until it gets the answer it wants. Back in 2001, the Irish electorate upset the applecart by rejecting the Nice Treaty 54:46. So the powers that be simply called a second referendum the following year – predicting doom to the Irish economy if the voters persisted in their alleged lunacy – and the Nice Treaty was accepted 63:37. (Mind you, the Irish economy still got the doom and gloom.)
If the UK votes for Brexit in the summer it will be by a narrow margin. That will trigger a maximum period of two years (under Article 50 of the Lisbon Treaty) to negotiate the terms of disengagement – during which time the UK stays a memberof the EU. My guess is that the shock impact of a No vote will lead to a new round of talks between Cameron and the big EU states, which could well result in a new ‘package’ of reforms designed to keep Britain in membership. David Cameron could then put these new terms to the electorate in a second referendum.
Yet a narrow Yes win will – in 2016, or in a replay in 2018 – will not bin the question of EU membership. For opposition to membership of the EU in Britain is no longer confined to the populist, Little Englander fringes. A significant section of British finance capital now wants to pursue a new strategic project of positioning the UK (or more accurately, the City of London) as a global ally of rising Asian capitalism, in a new multi-polar world.
This wing of the British ruling class has grown sceptical of America’s domestic introspection – of either the Obama or Trump variety. It is equally disenchanted with the Eurozone’s suicidal plunge into deflation.
Instead, the City has rediscovered a new ‘Great Game’ in Asia, with a free-booting London acting as the potential European financial base for Chinese, Indian and Middle Eastern capital (and capitalists). Which means cutting of ties both with Washington and Brussels.
In this respect, it is interesting reading a new series of ‘global’ histories emerging from the pens of right-wing ideologues.
Daily Mail columnist Michael Burleigh’s racy book Small Wars, Faraway Places reworks the story of the Cold War and de-colonialisation (total dead: 100 million) into a critique of US self-interest and incompetence. Hint: the UK needs an independent foreign policy. Tristram Hunt’s beautifully researched Ten Cities That Made An Empire both exonerates and re-interprets the British Empire as the foundation of modern globalisation. Hunt is a fiercely anti-Corbyn Labour MP. His ‘big idea’ is to link the regeneration of northern UK cities to China’s New Silk Road project. For regeneration read subordination to the Asian-determined supply chain.
Talking of the New Silk Road, the enlarged Panama Canal starts operation in April, allowing the passage of ships two and half times larger than at present. That is supposed to boost trade and growth but the IMF is predicting a 0.6 point drop in global GDP in 2016, measured in market exchange rates. Expect an intensification of the global currency war, with the EU, China and Japan devaluing to try and grab a bigger share of the export pie from America.
However, the world in 2016 teeters on the brink of a new financial meltdown. We live in an era of artificially low interest rates, this month’s (modest) US rise notwithstanding. As a result, investor savings have been suckered into a plethora of high-risk schemes. With deflation gripping the global economy, and eroding profit margins dramatically in 2016, we are about to see a lot of these get-rich schemes go belly up. Barclays is predicting that the default rate for speculative-grade companies – mostly oil and gas firms – will double in 2016.
My guess is that George Osborne’s March budget will necessitate yet another fiscal rewrite – he’s had four in the past 12 months. Any slowing of the UK economy will hit tax receipts leaving the Chancellor with a hole in his austerity projections. Slippery George will doubtless fiddle the Treasury books yet again, but in the corridors at Westminster you can hear Tories MPs muttering about him being “too clever by half”. In fact, many of the new breed of libertarian, anti-EU Tories think Osborne too interventionist.
If the UK votes for Brexit, the Tories will re-align further to the right, meaning Osborne’s chances of Number 10 are toast.
Across the pond, November will see US presidential elections.
The latest polls put Donald Trump 21 points ahead of his nearest Republican rival and Hillary Clinton 16 points ahead of her nearest Democratic contender. In a run-off between Trump and Clinton, the polls are currently tied. The first primary election is in five weeks, in Iowa. What remains startling about the US elections is how utterly detached they are from what is happening in the rest of the world – a sign of America’s declining influence. In this respect, it is interesting how many big US companies are trying to shift their global corporate HQ’s to the low tax haven of London.
Where does all this leave Scotland? The old post-war UK, with its fixation on the ‘special relationship’ with the US and with the EU as its economic cornerstone, is history. Whether or not Brexit comes in 2016, the traditional UK constitutional and international framework is disintegrating under the hammer-blows of globalisation. As far as the British Establishment is concerned, keeping Scotland is a minor chip in this realignment game. But for Scots it is vital we recover our own sovereignty, in order to negotiate with this new world in our own best interests.
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