The Month when Project Fear became Project Hysteria

“Only Thing We Have to Fear Is Fear Itself”

For the last two and half years since the EU Referendum result was announced left-leave voters have been subjected to a deluge of insults and accusations on social-media sites as well as the opinion pieces and comments sections of established liberal-left newspapers such as The Guardian and The Independent.

As we enter 2019 nothing has deepened the social and economic divide and convulsed the party more than the EU referendum, where the sheer contempt that centrist and liberal members have for working class leave voters has been laid bare for all to see. Not a day has gone by since the result where I haven’t heard leave voters, myself included, referred to as ignorant, misled or racist in TV news studios, the liberal-left press and social media comments.

This discourse is also bound up with a widespread belief among the centre-left who live in London and the South East of England that the 2016 referendum result is for various reasons illegitimate. While these accusations have effectively been investigated and had no bearing on its outcome they are still constantly re-cycled as legitimate points of debate which are used to try to challenge or obfuscate the process of departure from the European Union as well as undermine the morale of those on the left who voted leave. It’s almost as if any semblance of a left leave argument is suffocated by constant denial and smears, and its supporters defined as ‘Other’.

So, how did we arrive at this situation?

Enlargement of the European Union to 28 member states in the early 2000’s was the catalyst for simmering public discontent for the organisation had already became entrenched in the wake of the game-changing Maastricht Treaty. Yet, pretty much everyone took their eye off the ball regarding New Labour’s deteriorating relationship with its traditional social class base in the regions in the subsequent years that followed. Today, this issue is by no means resolved for the Party.

Last year’s General Election performance by Labour where they increased their vote by 3.4 million compared to the previous vote two years earlier disguised a hard fact; while it won 36 seats in the South of England and performed particularly well in London, it also lost six seats all in ‘leave’ voting constituencies of the North and Midlands.

Labour’s drift toward the ‘metropolitan centre’ is also compounded by the internal restructuring of the Party that took place under New Labour, which severely eroded its ‘workerist’ roots, that were historically bound up with a now emaciated industrial and trade union base (Curran and Gaber, 2018). This, in turn, gave way to a ‘new managerial’ cohort compromised of middle class professionals prescribing ‘third-way’ centrist policies that were supportive of globalisation which culminated in the Blair Governments of the late 1990s and 2000s.

It also set in place a strong perception among its traditional electoral base that the Party was too southern focused, metropolitan and middle class, which was epitomised by Tony Blair’s famous statement that ‘the left have nowhere else to go’ as he triangulated to the centre-right on economic policy. In hindsight, this was to prove disastrous for New Labour’s long-term electoral prospects as the Party embraced globalisation and closer political integration within the European Union, though very few realised this at the time.

The first key moment was the June 2001 General Election win, New Labour’s second, which saw the loss of nearly three million votes as the huge reflationary program promised to the regions failed to materialise beyond anything much more than Enterprise Development Zones with riverside apartments and installation artwork.

Worse, the New Labour years were accompanied by continued deindustrialisation as well as the outsourcing and take-over of British manufacturing companies. Is it any wonder then that the Party’s traditional working class base haemorrhaged before our eyes as many voters (and Councillors) in the regions flocked to the newly formed UKIP.

It’s worth remembering that at this time UKIP was in its pre-Farage, non-racist incarnation when opposition to British adoption of the Euro and a referendum on the Maastricht Treaty were the overriding party issues at stake. However, Gordon Brown adopted an ambiguous position, embodied in his ‘Five Tests’ (sound familiar?) which were used to assess the UK’s readiness to join the Economic and Monetary Union of the European Union (EMU), and so adopt the Euro as its official currency. It was only after Swedish citizens decisively rejected the its adoption in a September 2003 referendum that Blair gave up. He recognised that a UK referendum, which he had earlier promised, would lead to likely defeat and his political humiliation.

‘He said what?’

Another key moment which gave rise to the perception of New Labour as southern, metropolitan and middle class occurred in Rochdale a few days before the 2010 General Election. This was a timely warning unheeded as Gordon Brown was confronted on the issue of immigration by an elderly Labour party supporter and community activist, Gillian Duffy, in front of the full glare of the national media.

Brown fumbled to answer a series of awkward questions from a feisty Mrs Duffy, with technocratic jargon and a series of pre-thought-out sound bites, which led to a protracted enquiry on the local presence of Eastern European citizens and their access to social security benefits. It was the typical kind of question that’s occasionally asked by respondents when out campaigning and meeting the public. Brown responded by emphasising the reciprocal benefit of UK citizens working in EU member states and successfully concluded their exchange.

All seemed fine up until the moment Brown left to join his car to leave. It was apparent that he was still wearing a live Sky News microphone and that the public would be privy to his comments to aides about the exchange with Mrs Duffy:

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Brown: That was a disaster. Well I just … should never have put me in with that woman. Whose idea was that?

Aide: I don’t know, I didn’t see.

Brown: It was Sue [Nye] I think. It was just ridiculous.

Aide: I’m not sure if they [the media] will go with that.

Brown: They will go with that.

Aide: What did she say?

Brown: Oh everything, she was just a sort of bigoted woman. She said she used be Labour. I mean it’s just ridiculous.

After this followed a withering apology on The Jeremy Vine Show on Radio Two. The episode was publicly seen as a huge defining moment that very probably lost (New) Labour the 2010 General Election. However, it revealed something much deeper which many of us, myself included, didn’t realise at that time – a series of hard truths that the Party’s policies on issues such as European Union membership and immigration were way out of kilter with their traditional base of support, working class voters in the peripheral regions of the North, Wales and Midlands.

The tightly controlled hierarchical structures which developed under New Labour (and still persist despite recent genuine attempts at democratic reform) together with its failure to undergo any form of self-analysis or introspection ensured that many of these underlying issues and tensions remained unaddressed when Jeremy Corbyn took over the Labour leadership in September 2015. This position seems completely at odds with the current trend of popular and populist reaction to the globalised neoliberal structures that were set in place from the late 1970s onward (Streeck, 2017: Glassman, 2018).

Indeed, Lord Glassman’s ‘Blue Labour’ was the only coherent oppositional political project to the process of neoliberal globalisation with its focus on the issues of sovereignty, the people and the nation which are all fundamental issues in the debate around Brexit. It can be seen as a critical post–liberal response to New Labour’s managerialism and its favouring of state administration over democratic politics. It developed a critique of New Labour’s liberal market economics, its support for financial capital, its uncritical embrace of globalisation, and its liberal approach to large-scale immigration due to the impact this has on the wages of the lower C2, D and E demographics which make up Labour’s traditional working class base.

Blue Labour, is opposed to the liberal tradition of John Stuart Mill and is critical of its individualism and its excesses, particularly in its utilitarian, identity and market based forms. It is these individualistic forms of liberalism, particularly in mainstream economics and identity politics that predominate in the Party today which place it out of kilter with its traditional working class constituents in the regions.

Sadly, the Blue Labour project, which recognises that we are social and parochial beings with homes and attachments to places, is now marginalised in the Brexit debate. The contemporary left, influenced by a liberal culture, all too often dismisses identities which are bound-up within the local spaces of community.

In the last few weeks of 2018, ‘Project Fear’ gave way to ‘Project Hysteria’ with extraordinary warnings from Mark Carney, the Governor of the Bank of England, regarding the catastrophic economic impact of a ‘no-deal’ (ie. WTO) arrangement. It was accompanied by a barrage of hysterical news reports of an impending breakdown of transport and essential supplies as a frenzy of irrational claims and warnings built up to reach absolute fever pitch.

‘…and the message that comes out is fear, fear, fear!’

The term Project Fear was originally coined by Peter Shore in June 1975 at the EEC Debate in an astounding, powerful speech to the Oxford Union that clearly and decisively set out arguments that the European project (then the European Economic Community) eroded British sovereignty, lacked democratic representation and structure.

Even more presciently, it flagged up the same process of public fear mongering conducted by sections of the media and politicians over the impact of not remaining in the EEC. As with today’s headlines these were based on similarly biased assumptions about increased unemployment, food scarcity, and national decline.

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Today, the official branches of the state such as The Bank of England, HM Treasury and The Foreign and Commonwealth Office, are trapped in exactly the same echo chamber, and competing to provide the most dire warnings of the economic consequences of a British exit from the European Union. They are straining to do this effectively because their projected costs of exit have no basis in economic theory or any empirical findings.

Nobel Laureate and Professor of Economics, Paul Krugman (‘Brexit, Borders and the Bank of England’, in The New York Times 30/11/2018) goes further and argues that officials are making up these alarming figures because they believe that the UK should remain in the EU for non-economic reasons, which they cannot or are unwilling to defend.

All of this hyperbole about impending economic disaster has choked off any possibility for a sensible, reasoned discussion about how to take economic and political advantage of the opportunities opened up by the decision to ‘leave the European Union. The Labour Party’s position of ‘constructive ambiguity’ has only served it so well up to a certain point.

In hindsight it would have been far better for the Party to have set out a more coherent ‘leave’ position than Keir Starmer’s ‘six tests’, especially when Lisbon Treaty Articles (57, 106 and 107) the CETA-EU Deal and The Fourth EU Directives Railways Package pose genuine obstacles to Labour’s nationalisation policies. The same can be said for EU Common Agricultural and Fisheries Policies in terms of their environmental objectives.

Last Thursday (December 6^th) Channel 4 News ran an item from The Port of Blyth, a former mining town which lies a few miles north of my home town where the leave vote was 58% in 2016. It included revealing interviews of local residents shot at work which were followed by a question and answer session on Brexit as part of a live studio audience.

As expected during the vox-pops sequences of employees at work the interviewer Matt Frei over-emphasises the all too familiar impending disaster scenarios we’ve come to recognise in the constant loop of 24 news coverage in the last few weeks. However, the sequences that focus on the local fishermen stand in stark contrast to the news items over-riding negative message as they refer to their vote; ‘We were being heard… there is only ‘leave’ or ‘remain’.

This is also the over-riding message during the studio debate which challenges the program’s narrative. There is opposition to any possibility of a ‘people’s Vote’ as very few of the audience members had changed their mind on their original decision to leave, despite Frei trying to nudge the debate toward his own conclusions. Frei is incredulous that the audience would rather accept a ‘no deal’ scenario than accept a second vote.

He then tries to summarise that the group are uncertain, unsure of what they originally voted for and that they didn’t know what was in their own best interests back in 2016 despite their protestations. Clear social class tensions exist between the responses of those in management positions and their employees. It’s worth noting that while 59% of those in the AB social bracket and 52% in the C1 bracket (the upper and middle class) voted to remain, 62% of those in the C2 bracket (skilled working class) and a staggering 64% of those in the DE bracket (unskilled working class or unemployed) voted to leave. The Labour Party should take note.

In spite of the recent apocalyptic warnings of Project Hysteria the fact is that GDP growth for the third quarter (Q3) of this year returned a promising 0.6% and continued an upward trend from the first quarter. However, the constant attrition of public morale (to paraphrase Shore’s memorable comment from the debate) that we have seen in recent weeks could impact negatively on consumer and business confidence. Britain still has a fragile economy with many long-term structural problems stretching back nearly 40 years, none of which are due to Brexit.

Nonetheless, in the aftermath of the 2016 result the UK’s Fitch and S&P (the credit agencies responsible for giving bundles of financially distressed mortgages low-risk ‘triple A’ ratings) shifted the UK credit rating from AA+ to AA, forecasting an “abrupt slowdown” in growth in the short-term. Rest assured if the vote had gone the other way, businesses would be attributing their failure to invest and create decent well-paid skilled jobs to other sources of uncertainty instead: high levels of domestic debt, the low levels of productivity, or the global effects of China’s economic slowdown.

Elsewhere around the world global trade continues to contract, impacting negatively on annual world growth global growth figures, which effects domestic consumers and exporters alike. Its GDP figures fell from 5.4 per cent in 2010 to 4.2 per cent in 2011, and then 3.1 per cent in 2015 and only 2.9% last year – a near 50% fall inside a decade.

If these current global and UK econometric trends continue, we could actually match average global economic GDP growth by sometime in the middle of 2019. Contrary to popular belief, this is hardly an economy reeling at the prospect of Brexit. In effect gilt prices should have fallen and the yields (interest rates offered to lenders to the UK Government) substantially increased on sales of UK national debt.

In fact the opposite happened. GDP has increased while UK bond prices rose while the yield on 10-year UK government bonds fell below one per cent for the first time. In July this year, interest rates on ‘ultra-long’ dated fifty year UK gilts and bonds fell to near record low interest rates of only 1.6% in the last few months (Allen, K. ‘Low yield gilts show there is room for higher public spending’ The Financial Times (20/6/2018). Contrary to some of the hysterical warnings of economic meltdown it provides a strong indication that holders of the national debt see the UK as a ‘safe bet’ and envisage no serious shocks to future economic performance.

The policies of globalisation which have dominated the last 40 years are clearly breaking down and in the process of disentanglement. Unfortunately, these econometric trends seem to be lost on many Labour Party supporters in London and the South East who seem to be resistant to any notion of disengagement from the European and neoliberal globalisation.

Steve Hall (2017) has argued that a systematic demonisation program promoted across liberal institutions has marginalised any serious discussion of traditional left principles such as class struggle, social justice, economic planning and wider economic participation. We must heed the real message of the Brexit vote: citizens left behind by globalisation and are now clamouring for greater national sovereignty and more protection of jobs and wages.

Political and media management of the debate and the failure to make a sufficient case for leave have pushed Labour into a corner of their own making which could well lead to the Party adopting a ‘remain’ position that goes against the outcome of the 2016 result. A catastrophic loss for the Tories in any up and coming vote on the final deal is their only hope as it might precipitate a ‘no confidence’ vote and, thus, a General Election.

The worst aspect about the recent calls for a referendum rerun or ‘People’s Vote’ (sic) if it should happen will be that the entire political establishment will have made a decision that is contrary to that made by the people in a democratic vote. Brexit has become fundamentally about where power lies in Britain today; Parliament or the voters. Does it lie with the majority that democratically voted to leave the EU in June 2016? Or does it lie with MP’s and the judgement they make about the merits of that decision?

The fact is we will have set a precedent for thinking that the will of a majority of voters is no longer the ultimate expression of legitimate power and that their vote no longer matters. This does not bode well in a whole host of marginalised towns and cities that voted ‘leave’ where many will see it as a slap in the face. You’ve ignored their democratic wish as expressed through the ballot box. It set’s a very dangerous constitutional precedent.

Opposition to membership of the EU does not equate to isolationism. The Westphalian concept of the nation state with its own law-making powers remains the best means of safeguarding the democratic rights and freedoms of its citizens. Such a position does not exclude internationalist cooperation and trade with other nation states. Labour should make the case for it now.

Allen, K. ‘Low yield gilts show there is room for higher public spending’ The Financial Times (20/6/2018) https://www.ft.com/content/7f3a1bf2-73b2-11e8-aa31-31da4279a601

Curran, J. Gaber, I. Culture Wars: The Media and the British Left, London: Routledge, 2018.

Glassman, M. ‘What is Blue Labour: A Response to Harry Pitts and Matt Bolton’, in Blue Labour (4/9/2018) https://www.bluelabour.org/2018/09/04/what-is-blue-labour-a-response-to-harry-pitts-and-matt-bolton/?fbclid=IwAR2hwG_iEk1MAPkq4ztLf3klJJUR75Hv8YJ42RxZXs5Zhuy85WYCup1kowk

Hall, S. The Rise of the Right: English Nationalism and the Transformation of Working Class Politics, London: Polity Press, 2017.

Krugman, P. ‘Brexit, Borders and the Bank of England’, in The New York Times 30/11/2018) https://www.nytimes.com/2018/11/30/opinion/brexit-borders-and-the-bank-of-england-wonkish.html

Streeck, W. ‘Trump and the Trumpists’, in Inference, Vol.3: Issue 1 (April, 2017)

https://www.ipsos.com/ipsos-mori/en-uk/how-britain-voted-2016-eu-referendum