Tonight (Thursday) President Trump comes to Britain on a much-anticipated visit. The political situation in Washington is very different from when Mrs May last visited. In Washington, President Trump appears to have successfully gained control of and tamed the Deep State, while in London the British permanent establishment has shown it still controls the nation’s elected representatives, despite the voters’ clear instructions in the Brexit referendum to leave the EU.
Very few people, in Britain at least, understand the scale of change that President Trump has initiated, tearing up the old settled order. It is an order that America arranged in the wake of WW2. America emerged less damaged than the other combatants from the war in Europe, and she had also bombed Japan into submission. She then took the lead in designing and controlling the new post-war world order, establishing the monetary system with the dollar at its centre, and directing the new institutions that were set up in the wake of Bretton Woods. It gave American banks and multinational corporations an invaluable commercial advantage, and Washington consolidated her political supremacy over the free world.
Britain retreated into heavy socialism following the war, nationalising industries and imposing exchange controls.[i] Britain had left a post-war global banking and commercial vacuum for the Americans to fill. Britain then forced further decline upon herself through mismanagement of her economy and the imposition of crippling personal taxes. The conditions for Anglo-Saxon domination of the free world to move to Washington from London were handed to it on a plate.
Washington grabbed the opportunity with both hands. In 1948, the CIA was instrumental in setting up the American Committee on United Europe (ACUE), run by Allen Welsh Dulles and General William J Donovan. ACUE’s purpose was to fund and encourage groups working for European unity, effectively giving America control over the process of European integration. A year later, NATO was founded (leading lights Generals Eisenhower and Donovan again), whose objective was to lock Germany into an integrated Europe and to keep the Soviets out.
This is the old order President Trump is on a mission to change or destroy. He doesn’t see why America should pay for it any more. He believes seventy years of defence subsidy has turned the Europeans into ungrateful free-loaders, at the cost of American taxpayers. He has no time for European political correctness, which echoes the east and west coast socialistic movements in America.
He sees a new world order emerging, dominated by China, with which he is trying to set future trade relationships to America’s advantage. He thinks he can forge agreements with Russia over the Middle East, in other words work with Russia in partnership rather than as an adversary. So far as the EU is concerned, that institution does not have his respect and support. Nor is he a keen supporter of NATO in its current form, which absorbs some $700bn of American money. Either European nations divvy up a greater share for their own defence, or perhaps NATO folds.
Trump’s whirlwind European tour, with just enough time to meet the Queen at Windsor and perhaps for a few rounds of golf at his golf-courses in Scotland has all Europe in a stir. He started with a two-day NATO meeting in Brussels and immediately admonished Mutti Merkel for not spending enough on NATO, while finding the money to invest in Russia’s Nord Stream II pipeline. For Trump, his meeting with Vladimir Putin in Helsinki at the end of his tour is all about the future, while the EU and NATO are about the past.
It seems almost an aside that he will meet Theresa May tomorrow. Britain’s Prime Minister, at least in President Trump’s eyes, must appear to be weak, because she is unable to stand up to the EU. He has shown he thinks the EU is unfit for purpose and little more than a trade protection club. Mrs May has failed to grasp the Brexit opportunity from the despised European free-loaders. All the evidence suggests that Trump will not go out of his way to support the British establishment’s view on trade, which appears to have emerged victorious at last Friday’s Chequers meeting. Oh, to be a fly on the wall at the meeting between Trump and May, the new and the old orders, Washington and Westminster.
Last week’s meeting at Chequers was handled with a level of disrespect for the opinions of Brexit-supporting ministers that was truly staggering. They were informed before the meeting that if any of them dared to resign over what was about to be proposed, they would lose their ministerial privileges from that moment and would have to summon taxis to get home. Mobile phones and iPads would have to be handed in to Security. All government ministers were instructed to toe the policy line and no variation from it would be tolerated.
It was a stitch-up, and hardly surprising that shortly after the Chequers meeting was over, the plotting began. David Davis was first to go. His negotiating position had been constantly undermined by the Prime Minister and her unelected Europe Advisor, Olly Robbins, who were negotiating over his head. With him went his fellow minister, Steve Baker. Baker, perhaps more than anyone else, had masterminded support for Brexit among Conservative MPs ahead of the Brexit referendum.
The second cabinet minister to go was Boris Johnson. Johnson is important, because he was the public face of Brexit ahead of the referendum. He is popular with grass-roots Conservatives in the constituencies, though perhaps less well established in the parliamentary party, but that may have changed somewhat since he became foreign secretary. He is undoubtedly a shrewd operator, multilingual and consistently underestimated which is valuable in politics. He has excellent communication skills, honed as an editorial journalist.
Importantly, and this is not something the Remainers have, he has a working grasp of free market economics. On 15 September 2017 he published his Brexit vision in the Daily Telegraph. In it he made the following reference:
“What we cannot know – as the great French economist Bastiat observed in the 19th century – is the unseen opportunity cost of the way the UK economic structure has evolved to fit the EU over the last four and a half decades, and the productive ways that it might now evolve.”[ii]
That one reference to Frédéric Bastiat flags up his free market credentials at a time when it is deeply unfashionable for politicians to so admit. Very few of his readers will have cottoned on, but it is there for us to see. It tells us Johnson has read up on and understood his economics in its classical pre-Keynesian form. It gives him, along with Steve Baker and Jacob Rees-Mogg, likely to be the trio leading the debate in favour of Brexit, solid ground from which to work up the Brexit case and expose Remainer fallacies.
Before the referendum campaign, Johnson, very publicly, retreated to his home in London to consider whether to support David Cameron’s Remain campaign. The world waited. It was like a papal conclave, with the media scrum awaiting the result. The subliminal message was that he was seriously considering the issue and would put his political future on the line for it. He was his own man, not a state lacky. It also told us he knew how to focus media attention.
This last Monday, we had a repeat, but foreshortened performance. He retired to his official London residence. He skipped a meeting with foreign ministers, at which he was due to speak. Again, the media camped on his doorstep. But this time, Downing Street announced his resignation first, prompting him to release his resignation letter immediately, rather than let Downing Street release it along with the Prime Minister’s reply, which is the normal practice.
Mrs May’s popularity with conservative party members is now plummeting. Johnson colourfully described her Brexit policy as akin to polishing a turd (as a classicist with fluent Latin, he probably preferred stercus non potest poliri, but a stercus does not communicate as pithily to his colleagues and the world at large). And we had further evidence of his free-market economics when he rudely dismissed the lobbying efforts of the representatives of British business with the eff-word. Put another way, he understands the evils of crony capitalism and will not be bribed, at least in this debate.
So, we can see that following the Chequers meeting last Friday, the Brexiteers have been galvanised to stop the establishment’s Brexit. It is now down to politics. No one in the parliamentary Conservative party, as at the time of writing, is taking the line that Mrs May must resign. So far, the talk is of changing her mind. But we all know that will not happen, because even if she did believe in a proper Brexit, she lacks the will to fight the permanent establishment. It cannot be long before her approach is seen to be a waste of valuable time.
There is a further consideration, which is bound to surface in the coming weeks. Conservative MPs will start thinking about who will lead them into the next general election, due to be held on or before May 2022. The general assumption since the last botched election has always been that Mrs May will only be in office until Brexit is negotiated. But now that Mrs May’s support in the constituencies is evaporating like mid-summer hailstones, the leadership issue is becoming urgent. The many Conservative MPs who are not fully committed to Remain and tend to go with the flow of majority opinion may therefore be persuaded to abandon Mrs May. Their position as MPs is at least as important as their principles, so an alternative to Mrs May better be in place sooner rather than later.
Conservative MPs need to be persuaded of the best course to that end, and this is where the convictions of the Brexiteers should win over people from the statist cause. Every Conservative MP, except for the ingrained statist Remainers, can surely be convinced that the EU is no longer fit for a changed world. Anyone with the slightest grasp of trade issues can see the opportunities that lie beyond Europe. They can be persuaded that the true cost of leaving the EU, which is an average tariff against the UK of 4% on only 7% of its GDP, is not worth paying a £39bn upfront fee to avoid. Surely, they can see that tariffs are a tax on consumers and intermediate producers, which a free Britain can set at zero. MPs will weigh these issues up in their minds and compare them with the deep political hole messianic Remainers have dug for them with the electorate.
Any compromise with the EU will be on worse terms than outlined in the Chequers’ polished stercus and designed to shackle Britain as an unrepresented EU associate. This will permit the EU, for example, to introduce a Tobin Tax on financial transactions in order to cripple the City without British opposition. And as for Northern Ireland, let the EU put up the border while the UK allows free trade. Let the Irish sort out Brussels: it was never Britain’s business anyway.
It is into this politically febrile atmosphere that President Trump will step when he arrives this evening. Tomorrow, he will meet a failing Prime Minister. He’s not permitted to see his buddy, Nigel Farage. It would be interesting to know whether Farage and Trump will have exchanged views on the Brexit situation ahead of the visit. If so, Mrs May’s position will be even more uncomfortable. He is also sure to be discouraged from seeing “my good friend Boris Johnson”.
There can be little doubt the immediate threat to Mrs May’s government in the next few days is President Trump’s outspokenness. But here is a man on a mission to overturn the post-war order. He is unlikely to tolerate being muffled by diplomatic protocol. He doesn’t care what the British establishment thinks. His own voters ahead of the mid-term elections are far more important. For them, he is resetting the American dream into a more insular context. The rest of the world can look after itself, so long as American commercial interests are protected. American voters in his heartlands don’t do subtle, and nor does Trump.
The success or otherwise of President Trump’s new approach will be evidenced later this year, when mid-term elections will probably give the Republicans a landslide in the House of Representatives. Mrs May is very likely to have been removed from office by then.
[i] The Exchange Control Act dated from 1947, but it replaced the exchange control sections of the Emergency Powers (Defence) Act of 1939.
[ii] See https://www.telegraph.co.uk/politics/2017/09/15/boris-johnson-vision-bold-thriving-britain-enabled-brexit/
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