The importance of trust
One of the qualities which a politician in a democratic
society must possess in abundance is trust. Without it, it is almost impossible to
repeatedly go back to the electorate in order to ask voters for their support.
There does not appear to be much trust around at the present time however. Trust in the British government has recently fallen sharply as dissatisfaction with its handling of the Covid-19 crisis has mounted. But
this is more than about Covid, as evidenced by the recent riots on the streets
of the US.
Trust is the basis of our economic system. It is the foundation
upon which contracts are drawn and on which trade takes place. To put it
even more simply, in the absence of trust many value-generating transactions
would simply not take place. The basis of trust in western democracies is rooted
in governments: They draw up the legal framework upon which our economies
operate and it is therefore important that we continue to have confidence in them.
The basis of that trust began to fray in the wake of the 2008 financial crash
when governments assured their electorate that a return to normality would
occur sooner rather than later. When that did not occur, populist voices began
to make themselves heard in countries as disparate as Greece, Italy, the
Philippines, UK and the United States. Voters stopped believing that the system
was helping them and the perception became entrenched that it was biased in
favour of others, be it the rich, foreigners or those from a different ethnic
background. As a result, the US elected Donald Trump as President and the UK
voted in favour of Brexit as these were solutions which it was promised would look after the interests of voters.
... And how to lose it
But the roots of populism do not run deep. Neither the
Johnson government nor the Trump Administration have a coherent plan of what
they want to do, other than deliver on the populist platforms on which they
were elected. Trump’s America First strategy has resulted in conflict with
China and undermined the institutional framework which has supported the global
economy for the past 70 years. In the UK, the Johnson government continues to
believe it has a duty to deliver a full departure from the EU by the end of
this year, irrespective of the fact that the landscape has changed since the
December election, and irrespective of the economic costs that the current
policy orientation is likely to inflict.
Indeed, based on his past performance Boris Johnson is the least trustworthy occupant of the Prime Minister’s office in modern history (it is one of history’s great ironies that the British electorate trusted Jeremy Corbyn, his opponent in the 2019 general election, even less). Johnson
was a brilliant cheerleader for Brexit but never once has he stopped to
consider its economic consequences. The Covid-19 crisis has called his
judgement further into question. Although Johnson gained considerable personal
sympathy following his brush with the coronavirus, and for a time his polling
ratings surged, the fact that Britain has the highest death rate in Europe has
raised a lot of questions about the government’s handling of the crisis.
We
should reserve judgement until such times as a deeper investigation of the
crisis is conducted but we can draw conclusions from the government’s handling
of the Dominic Cummings affair.
The overwhelming consensus of opinion is that Cummings, who is Johnson’s most
trusted adviser, broke the lockdown rules. One of the more unedifying aspects
of the whole affair was the way in which the Attorney General risked the
independence of her office by aligning with the government. As Murray Hunt from the Bingham Centre for the Rule of Law put it the most important aspect of this issue “is what the episode reveals in general about the mutual dependency of
the rule of law and public trust.”
Impossible to trust the UK government on Brexit
Anybody who was already concerned about the government’s
position on Brexit will not be assuaged by recent events. I have never been
convinced that Brexit is about improving the wellbeing of the British people –
there is, after all, no evidence to support this position. Efforts by the
Johnson government to go so far as proroguing parliament to drive it through
should wake people up to the lengths it is prepared to go to make this
ideological project a reality. If the electorate increasingly distrusts its own
government, it should come as no surprise that EU negotiators are not prepared
to take the Johnson government at its word. The recent spat between the UK’s Sherpa
David Frost and Michel Barnier makes clear that the two sides remain far apart as we move closer to the point
at which the UK will have to make a decision on whether to extend the
transition period.
There is some substance to the UK’s criticism that the EU is
treating the UK differently to other parties seeking to do a trade deal, but it
is disingenuous to claim that the proposals represent anything other than those
outlined in the Political Declaration signed last October (as Barnier hinted
without saying so explicitly). We thus find ourselves returning to the vexed
issue of trust. There is an increasing sense in Brussels (and indeed elsewhere)
that the UK has no intention of reaching a trade agreement with the EU by the
end of this year, despite the fact that the Political Declaration suggests “the Parties envisage having an ambitious
trading relationship on goods on the basis of a Free Trade Agreement, with a
view to facilitating the ease of legitimate trade.” Nor is it prepared to
seek an extension of the Transition Period, which implies that the UK will fall
back to trading on WTO rules at the start of 2021.
As the tide of globalisation ebbs, there can have been no
worse time in the post-1945 period to embark on a trade policy based on WTO rules.
Many economists (including me) have made the point that failure to reach a
trade agreement will impose significant economic costs on the UK. But what has
changed in the interim is that the global economy now faces its deepest
recession of modern times. A rational government would immediately have
declared force majeure and asked for an extension. But the Johnson government
has long since adopted an economically irrational approach to Brexit and I
cannot determine whether its stance represents a crazy bargaining ploy in a
bid to force more concessions from the EU or whether it means what it says
about a no-deal Brexit.
You do not have to be as cynical as this jaded economist to
believe that the government is prepared to hide the costs of a no-deal Brexit
behind the smokescreen of a Covid-induced recession. After all, they say you
should never let a good crisis go to waste. But the actions of this government
over recent months with regard to fudging the rules (the Cummings case) and
blurring the evidence (the selective use of data in reporting the UK Covid-19
outbreak) are consistent with the Albert Einstein view that “whoever is careless with the truth in small
matters cannot be trusted with important matters.”
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