How do you respond to what is happening now, in the wake up Brexit?
This is a tragiccomic farse. You could not get a more chaotic situation. Both political parties are in a deep crisis. This political turmoil is happening against the background of the decision to leave the EU, which itself creates a lot of problems in the financial markets in the UK that are heavily depended on these investments.
You were present at the Labour meeting on Monday, where several members of Corbyn’s shadow cabinet stepped down. What was the atmosphere like?
I cannot say too much about it, but the atmosphere was charged and marked by great divisions. Corbyn lost a no confidence vote by 172 to 40.
That is quite astounding?
Still he refuses to step down. It’s a true crisis of the whole Labour party, that could undermine their future, because Mr Corbyn can continue to hold on to his youthful supporters on the left and occupy the left wing, and Labour could lose a lot of its voters to UKIP in areas in the north and in Wales. It already lost Scotland. This is a huge potentially existential crisis for Labour.
What were the first signs of a crisis of these proportions?
The turning point was the referendum and the lead-up to it, because many people outside of Corbyn’s circles felt he was less enthusiastic about UK staying in the EU. His statements were not exactly ringing of the need to stay. Therefore, it’s possible that he might have made the difference.
So he should have taken a clearer stand on the EU issue?
I wish he had. UK belongs in Europe. I think this is only the beginning, not the end of a long, long process. The leave camp is composed of two groups: On the one hand, you have the radical free-marketers who want to open up to the rest of the world, who want more markets not less. On the other hand, you have the quasi UKIP-type fraction who essentially want to stem the process of change and blame the EU for being where we are, which it in my mind was not responsible for. My view is that the referendum was conducted under such unfortunate circumstances, that I would support a push for a second referendum when the outline of what leave actually means is clear. In the mean time, the main thing is to contain the economic shock. Also, there is now a very worrying upsurge of racist violence and direct antagonism. It looks as though it put poison into the world.
You were one of Tony Blair’s advisors and the ideological architect behind the third way and New Labour. How is that linked to what is happening now?
Well, the third way to me is just a label, and people have abused it. It was an attempt to apply left-centre values in a different way. I would separate my own view from what became blairism. That having been said, a lot of those issues were still there. We have to try to find an alternative way of implementing those values when things have moved on 20 years later. Social democratic parties have gone from being in power in lots of countries, to becoming partly evaporated in countries around the world. And there is a real problem of holding onto the political centre. What you’re getting is a polarisation of politics between left and right, which at its outer extremes is dangerous. That’s why I personally believe Mr Corbyn should stand down. We need a policy whereby Labour can reach Tory voters and traditional working class voters, which are simply not interested in what Corbyn has to say. It’s just not working that way.
It’s not easy to reconcile a person in Blackburn who feel, rightly or wrongly, that his or her town is being invaded by Polish migrants on the one hand, and the traditional labour values of radical intervention in the economy on the other. We need a strong leader who can bridge these different constituencies. Moreover, if there’s going be a Labour prime minister, that person has to do what Blair did and find the third way of today. What we did 20 years ago, we have to do all over again, against the background of huge changes since then. We must develop a political philosophy that sustains the values of inclusiveness, equality, cosmopolitism, against this disturbing background of change. That’s not going to be easy.
The current tendencies go beyond the UK, in what someone calls the crisis of legitimacy?
They certainly do for political parties. What you really need to worry about, is the risk that there will be a replay of the 1930s, with a kind of insipient economic calamity and polarization of left and right, the rise of authoritarianism and the far-right becoming more powerful than the far-left. Those are scenarios which in Europe we must avoid! It does not seem to me that it’s inevitable that we can. So everyone has to work on actively against it across Europe not just here.
There is a widespread view that the EU is a corrupt, distant, elitist and self-minded rule. Should it not be taken more seriously?
There is that. But if you look at the poll data on what happened here, a lot of people were saying that about Westminster seeing is as a remote power centre. One of things that emerges with all this, is that most citizens don’t know very much about the EU. It’s easily portrayed as a monster. But I think the EU helped democracy because it gives us some chance of limiting the impact of these global forces. The EU has been the means of helping overcome the remnants of fascism in Spain, Greece and other countries. Not an anti-democratizing force, it’s the opposite. But it has structural problems around Europe that are very difficult to resolve. It is not satisfactory to have a German-dominated Europe, or to have huge divisions between north and south. But I think feeling politics to be distant is part of the phenomenon I’m describing to you, where a lot of the distance is economic, not just political, because of the power of global complex. It’s easy to blame the EU, but for me EU is one of the few things we’ve got of organising to counter it. If you want to organise to close down tax havens, which I think is crucial, you need collective power. A Europe of fragmented states is never gonna be able to compete in terms of geopolitics with china, the US or India. It would sink. The European project is crucial to stability in the European area. I am not saying that the EU institutions are satisfactory, but I almost don’t dare thinking about the alternative.
What could EU have done differently in addressing all the ones who feel that social democracy and central governments haven’t answered to the needs and desires of the “real people”, the “heartlands”?
One thing you can say, is that when you get a shock, it can have a positive outcome. It can promote positive rethinking around how many of these things are real, how many of them can we actually confront, how we can deal with the fact that citizens often treat the EU as a scapegoat and how we limit the rise of hatred-infused politics above all. After all, EU exists because Europe has a terrible, terrible, terrible history! The only prolonged peace on this continent has been the peace since the EU came into existence.
Former director of the European Central Bank, Jean-Claude Trichet, says that the UK departing the European Union is not dramatic, that it is rather a chance to reinforce the democratic legitimacy of the Union and reinvent what the union can be. Do you agree?
I would distrust anyone who’s too dogmatic about it. If you’re a banker, or even an ex-banker, you’ve got to say reassuring things for the market. It’s very difficult to tell, you just don’t know the true level of this, so I would resist using generalisations. If you say there is no risk, you are at the risk of exposing yourself to even worse problems, such as a new financial crisis. There is real fear for that. A lot of this is new territory. When this could happen, Donald Trump may well become the new president of the United States.
Do you see any ways in which Brexit could be turned into something positive for the UK?
I don’t see it. They’re not going to be able to reconcile the wish to radically control migration and the economic independence of the UK with the single market. There will be an enormous and muddy compromise, followed by a lots of conflicts and confrontations. It’s very easy to be in denial around our independence and taking back control, but you already see how limited sovereignty is in this dependent world. One of the things the leavers want to do, is to radicalise what the UK has always tried to, which is to get the benefits without the commitment. But we’re getting to the end of that. the UK had a pretty good deal fro the best of the EU, only is didn’t go badly or had very high unemployment rates. But it wasn’t enough. The only positive thing I can see is the effect of getting people to think about it.
Do you think Cameron was right having the referendum in the first place?
No. When he first announced it, back in 2013, the logic was to contain the rise of UKIP before the election and to quieten the voices in his own party, where there had been this long-term anti-Europeanism. He shouldn’t have put the interests of his party ahead of the interests of the country. The problems now are far worse than the problems they were meant to resolve. It was a sorry episode.
Is there a risk now of a dissolving of the United Kingdom?
Yes. One of the perversities is that Nigel Farage can sit there in the EU parliament as he did on Tuesday, with a union jack on his desk. And if there’s a serious Brexit, which I doubt, there will no longer be a UK. Almost certainly Northern Ireland and at some point Scotland will claim independence.
Have you experienced something on this scale before, this level of turmoil?
The banking crisis which we haven’t recovered from and which involved all of us was a huge cliff. That resulted in global chaos. Brexit is the result of it, because bankers were bailed out by ordinary people’s savings and money. The banks are now still vulnerable, but there is longer money there to defend them, and it isn’t obvious that the measures are strong enough. It will be much worse if there is another banking crisis on the top of the rest. We need to take countermeasures quickly. It’s a situation of huge risk, and revolutions over the whole world, and we don’t know how to handle them.