WTF: What the F*** Happened and What Happens Next?

TIME: 13:00 – 14:00 – Thursday 8th February 2018

VENUE:  The Henry Jackson Society, Millbank Tower, 21-24 Millbank, London, SW1P 4QP

SPEAKER: Robert Peston.
Author of “WTF: What the F*** Happened and What Happens Next?”
ITV’s Political Editor

CHAIR: Dr Alan Mendoza

Dr Alan Mendoza

Good, right, well thank you all for joining us for this very special event. Where we are of course discussing Robert Peston’s W.T.F. Robert, we all recognise you from TV as ITV’s political editor, and a decade at the BBC beforehand, newspapers before that, magazines, journalist of the year, the awards and accolades keep on coming, but I think it’s fitting to be here to talk about this particular book. Because, well first, the title is a very strong title, isn’t it? W.T.F.

Robert Peston

Where’s the furniture?

Dr Alan Mendoza

When we sent it out to people, we had some objections. One woman said that she is going subscribe from your mailing list. So it’s a strong title. But I can see why might want to provoke. And I think it’s interesting that it bound up with your dad as well, in terms of the first and last chapters obviously focus that. Was it in a sense, a personal sort of testament to him, was the manner of his life a part of what motivated you to do this? Essentially, what are the feelings that you wanted to encapsulate with that kind of title.

Robert Peston

I’ve been a journalist since 83, a stunningly long time, I didn’t want to do anything else, I discovered what a joy it was to make trouble and I’ve never really grown out of it. I’ve been obsessed with not getting things wrong, and I got a big thing wrong. Which is that I didn’t expect people to vote for Brexit. And that’s not because, let’s be clear for a partisan view. Although I think that people if they read the book will be able to work out which side of the book I am on. The reason I didn’t expect people to vote for Brexit is because of the long history, you know I’ve been a business journalist for a long time, done investigations, and I’ve also done politics and after years of watching big votes: elections and referenda, normally the economic argument carries the day. And I believed and continue to believe, not that Brexit will ruin the country. And not that there are no arguments for Brexit, I was very clear during the referendum that I thought there were arguments for Brexit.

But I was the view of and remain of the view that Brexit will make us a bit poorer for quite a large number of years. That’s not to say that in 15-20 years we could reconfigure the economy, we might not grow as fast, or things might not get a bit better again. To be absolutely clear, the economics of it, we can talk about that later if you wish to, but for me it was clear that we were going to be a bit poorer for a number of years and I just assumed that that would carry the day. And it didn’t. OK. And because it didn’t, I was shocked less by the outcome, and more by how I got this big thing, really significantly wrong, and I wanted to understand that. And I wanted to understand the mistake I made. I want to understand why the British voted in a way that I hadn’t expected them to.

Now, having seen the vote for Brexit, I did think well there quite a lot of structural similarities with what’s going on in America. Particularly a sort of white-working class, they call it middle-class over there, equally angry about how they saw the establishment letting them down, and The Democrat party establishment, and so therefore funnily enough I did think that America would vote for Trump, it was less of a surprise. I remember being the U.S. embassy and telling all the officials this, and seeing people just get more and more depressed as the night went on.  But because I saw it as a trend in the rich West for some time, and I wanted to try a make sense of it for myself and if I do that, I might as well for a wider world.

And so that was the origin of the book, it begins with a letter to my late father, and ends with a letter to my late father, is because he was an economist and died in April 2016. So just before this momentous events across the world. And I spent a lot of my formative years talking to him about politics, and therefore it was just natural in a way to try and make sense of what had gone on with a sort of Socratic dialogue of an imagery sort with my late dad, as it were. That was the reason for it. And I also wanted to honour him, you know, he was a lovely man and great dad. And I just felt it was the right way to honour him.

Dr Alan Mendoza

Right, so essentially it was W.T.F. question mark?

Robert Peston

Yeah, it was question mark.

Dr Alan Mendoza

Yeah, so why has this happened… OK, so it’s interesting that you say, for example you saw the arguments for the people who Brexit and all the arguments for those who voted for Trump, etc.

Robert Peston


Dr Alan Mendoza

Do you think the reasons they voted for the these different outcomes, and which of course include other events across the world, perhaps people who voted for Corbyn here for example. Do you think the people or the things they are voting for, can deliver on the grievances they have?

Robert Peston

So that is indeed, the huge question, that this country currently faces. I think the important thing to understand, which I am sure people in this room do, is that the Brexit majority is one of the strangest coalition that this country has ever seen. And what I mean by that, is that is consisted of a core of generally older, wealthier people, not living the cities, living in the countryside, usually owner-occupiers. For whom the sovereignty argument had been massively important for decades. And they would have voted for Brexit pretty much at anytime, since we joined the European Union.

And then there’s another group, and for me this is the more important group, in terms of where we go. About 20 odd percentage points of that vote where poorer people. People in council houses and people in other forms of social housing, in unstable private accommodation. Long-term unemployed, or insecure employment. A majority of poorer people throughout the UK voted for Brexit, there is a, if I had a projector here I could show you, a really striking correlation between, the further up the income ladder to more likely you were to vote for remain, the poorer you were the more likely you were to vote to leave. And for many of those poorer people they were voting to leave because they rightly took the view that for years, certainly since the crash, but I think in my view much longer than that. The mainstream political establishment was not in their interests, it was not working for them. And this was their opportunity to kick the establishment. And say enough is enough.

Now in America, a lot of the people who voted for Trump, the white working-class, we’d call them middle-class actually were Democrat voters who switched to Trump. Actually in this country, there were a lot people who voted Brexit, who simply haven’t voted in donkey’s years. They were just utterly disillusioned with the political system and the political parties and process and this was their opportunity to make a protest.

Now, I do take the view that, on that morning shortly after the referendum. When Theresa May on the door step of Downing St. when she made those rather impressive remarks. She absolutely got it, because at that point, as many of you probably remember, she said, the point of period in office would be to govern for the dispossessed people, what she called the “just about managing”, which thankfully has left our political lexicon. It was a bit of a cliché. But that she was going to govern predominately for the ‘Left Behind’. And at that moment, I did think, crikey, she really does get it. And we will see the hopes and aspirations of those people met, and to use a technical term, we have seen bugger all of that promise delivered on since then. And I think that’s an issue. And I think it’s a big issue of the moment.

And in a sense I think the tragedy of Brexit is, not Brexit, it is that Brexit crowding out government in all other respects. Simply negotiating our exit, so negotiating so much of the emotion and intellectual capability. And so almost no other government business can be done. And of course another problem is that we have a government without a majority. Which also makes it harder to govern, and to do the important radical things, but that I say, for me is the… The things that need fixing in this country, and this is the real point of the book, would need fixing in or out of the European Union. Right? It’s not to say that Brexit is irrelevant, it’s not to say that I have any other than respect for people who want to have serious debates about Brexit, of course I do, but the truth is, what we need to fix would need fixing in or out. And unfortunately, because the enormous amount of resources that just getting out of the European Union will take, those measures to fix this country will be put on hold for a while.

Dr Alan Mendoza

So if I am hearing you correctly, what you are essentially saying is that Brexit has become the lightning rod for a sort of multi-faceted series of discontents, and it got worked out in the system, here and in America through Trump. That’s how it sort of played out. Maybe you can see Corbyn vote is sort of reflective of a part of this in context.

Robert Peston

Well its different people. I think it’s important to see the election of Corbyn through the same prism as disillusionment with the usual suspects. But the people who voted for Corbyn, were not the same people who voted for Brexit to state the obvious. Corbyn currently has a dilemma, about where to go on the European Union. My own view is that he will actually become the anti-Brexit politician, and he is moving in that direction. And later on you might what to talk about how far Labour will go in Brexit. But nonetheless, vast numbers of people who voted for Labour in the last election were discontented Remainers. And quite a lot of people who voted Corbyn in in the first place, because there are the Momentum people, and young people are Remainers. But what they have in common with the working-class who voted for Brexit, is just the sense that they have been abandoned by the established politicians. And that is something I think we will have to take seriously. And the reason we have to take seriously is because for me, and this is the most troubling aspect of where we are. You know you care deeply about democracy here, is that, and I do think, if we don’t listen to those voices, if the political system can’t translate those voices of protest into action then democracy itself gets challenged. That seems to me why the stakes right now are so high, that if you know, those institutions down the road are shown not to be listening then at some point, you get the rise of, you know, demagogues that don’t really care about those institutions down the road.

Dr Alan Mendoza

That’s an interesting point, takes me to an area I wanted to go on. What has happened to our political class? Not just here, but across Europe, across the West essentially, politicians not being able to meet aspirations, seemingly uninterested, business as usual while all these things are going on. What has been going on? And what can we do to fix it?

Robert Peston

It’s very hard. When at the root of so much of that has happened undermined poor people and global trends. Or to use the great cliché, globalization. And absolutely one of the big things I did get wrong. I’ve spent quite a lot of the last twenty years absolutely fascinated by, almost obsessed by, what was going on in China. And I would look at the way this combination of a dictatorship and a form of capitalism was lifting hundreds, hundreds, millions hundreds of people out of poverty. And I just thought that this was amazing, and that it must be good for the world, that people who are literally on the edge of starvation are suddenly living in cities, and living middle-class lives. The transformation of China, don’t know if any of you have been to China, but it is just jaw-dropping what’s been happening. And of course you look across Asia, and parts of Africa, and you see the way the globalization has enrich hundreds, hundreds of millions of people. And you’re just like, OMG globalization is an amazing thing. Brilliant.

But what people like me where not focusing often on was what was happening to the people of Sunderland, or Detroit, or what was happening to the people of the French rustbelt. And I could show you a chart that goes back about 30 years, which shows, you know, there’s a sort of line that goes, that has a bit of hump in the middle, and hump there, and sort of dip there. And the hump in the middle is rising incomes in Asians, what is known as the New Asian Middle Class, right? and hump here is what has happened to the top 1 percent all over the world, the rich have just got richer. And this bit here, the complete flat-lining to those on average and lower incomes in most of the West.
You know to use that phrase that is a joke in Monty Python, but is not a joke in this context, if those people ask what has globalization done for us?… the answer would be fuck all.

The reality is that we didn’t take enough notice of how the hollowing out of entire industries and professions, and trades, was damaging millions of our compatriots. And you know, they weren’t grateful to go and work in call centres, they weren’t grateful to become taxi drivers. They rather, they lamented the loss of a more fulfilling life, and they lamented the fact that there enormous job insecurity. And you know particularly if we were down here. You know, we looked at the booming city of London, and we saw all the growth from one of the world-class industries that we have and we looked at the I.T. cluster in Cambridge and thought this is all fantastic, they are generating all this incremental income. It did for a time fund improvements into our public services, but actually it ignored the fact that, in the end, just because people in the London are paying for slightly better schools and hospitals than Sunderland. Those people aren’t going to be grateful, generally if they feel disappointed with the kind of lives that they are living, and when they have lost confidence that the world is going to get better for them and importantly for their children.

The income gap between the north-east, and you know, incomes London and south-east, are well over a third higher than there are in the north-east. Productivity the only sustainable base for rising incomes, is considerably higher more than a third higher where we are, than it is in the north-east. The wealth gap is even greater. Now, these the conditions for a fracturing nation, not a happy unified country. And, although, the other thing that is important to understand about this is, that although you see this trend in a lot of Western countries, you know these regional differences, they esp. acute in this country. And we are naïve to think that we are in some sense a somehow a more happier, cohesive nation than any other. We are not.

Dr Alan Mendoza

Well, there are so many things in that that we can unpack. But just on that latter point, I think there was a rather charming bit where you suggest that we should undergo I think it was collective therapy as a nation, essentially different parts of our nation, and also people living in different parts of the country we should be more sympathetic about this or less in that, in kind of way. The chapter ends in a rather discordant note, if that doesn’t happen, if we don’t go towards healing of the fractures in our society, not only will we see more discord going forward, but even suggest violence. So I am curious on your feelings on that, that you actually think we are at a very volatile situation. You know as you say we might worse off than some places in Europe, and it could lead into violence.

Robert Peston

Well, look we are all acutely aware, are we? Of the way the discourse of politics, particularly on social media has become that bit more abusive. It is even before I wrote this book, one of the things I was increasingly finding really depressing, was the way in which it had become acceptable to hate. I mean one the really good things I felt about this country, in 1990s and the early years of this century it just felt to me to be much more tolerant place, much more understanding of each other. And much politer. And then suddenly around the time of the crash, and this was due to some of the anger it generated. You know? It suddenly became a refusal to understand each other, the refusal to try and see something from another point of view, just became much more common. Dare I say it, a certainly media acceptable. And I do worry about how our mutual understanding has in a sense eroded, and yes I think this is an issue. I mean am quite old fashioned in my views, which is that although I think there is a lot that can be achieved by talking. And you know one of the reasons why I wrote the book…… So I went to a comprehensive school in Crouch End, in North London, and a part of my slightly, I suppose, I don’t know if its vain or my self-image was that as a journalist, that I had always tried to understand as many people as possible, whether I was reporting on this country or other countries, you know one of the things, that genuinely really upset me about the vote to Brexit was, this is on a purely self-indulgent level, was that if I looked at my close family and my close friends, none of them had voted for Brexit. And so for a moment I thought Christ, for someone who has spent their whole entire life, trying to understand people and the country. I thought Christ I am in the bloody bubble. You know, I am too disconnected from this country. So the point of the book was a bit of personal therapy and professional development, and re-engage with people in general. And I think there is a lot we can all do to try to understand people’s point of view, but to be frank, as I say, I also have quite an old-fashioned view which is that I think that money counts, how the economy operates counts, and you know ultimately, saying that I have a lot of sympathy for people who have no hope for the future of their children is fine, but what those people want is hope for the their children’s future. And that if we don’t have government’s that address, you know, these huge important decisions and challenges of giving people a stake in society. You have a government, one of the things have a found out almost, I hesitate to say laughable but almost laughable, is about some of the speeches at the Tory Party Conference is, you know, you had a number of people who stood up and said “we are the party of capitalism”, “we will get people enthused by capitalism”, and look I’m great fan in capitalism, I’ve got no longer with that as an argument but when you have young people who don’t think they have the faintest chance to accumulate any capital because their isn’t the faintest chance that they will even buy a house, which in this country is the traditional root to obtaining capital, and we aren’t providing them with any form of acquiring capital, why would they think capitalism is the answer. It isn’t surprisingly that they turn to a party that is all about state solutions, if you’re not getting practical solutions from government about how capitalism will actually benefit these young people. In fact these are basically young people who are basically being told that the root to prosperity to accumulate debts that they’ve never going to pay off.

(Audience laughter)

What kind of sensible capitalist thinking is that? So fundamentally, unless you start to give people the practical solutions to really big problems. And I haven’t even began to talk about the industrial revolution that we are living through. Where vast numbers of jobs that we thought are secure, are actually being automated, what that will mean for people having sense of a stake. You know these are massive challenges, and I think we are debating the wrong things in this country.       

Dr Alan Mendoza

But what you have just highlighted in is the point, that this is just the beginning of the era of transformation, not the end of it.

Robert Peston

God, yeah!

Dr Alan Mendoza

And the beginning has led to all this disruption already, where are we going? You look into the realm of the technical revolution, and we haven’t touched on the international events that have been going on (Peston: No).The transformation of the world order, new countries rising to positions of prominence, compared to before, the old realities crumbling around us, these are massive challenges… and like you say we are not talking about them? How do we get to talk about them? Where is the place to talk about them? Because it’s not going to be on social media… You quite rightly call it the empire of emotions. You’ve pointed out that you get silo-ed thought on it. Although we are more connected than ever before, we are not connecting, so how are we going to do this?

Robert Peston

O.K., so, I’m not quite despondent about social media as you are in that sense. I think it’s quite important to talk about social media, I will talk a little about, because I think it really important where we are heading politically and economically.

So one of the things, sorry, I’m just trying to realize there was a thought I wanted to latch onto that I have completely forgotten… I’ll probably come back to me… the……oh yeah…… I talk in terms of the crowding out that Brexit does in terms what goes on over there, it’s also crowding out so much of the debate between us. Like we need to be talking about these things as well. I mean I think the great thing about social media is that it isn’t all about Brexit, it isn’t all about what’s going over there or their obsessions. Actually when you go on social media, there are lots of debates, you know the challenge of robots, or what we need to do to our health service, or what we need to do to our schools. One of the reasons why, during the general election, quite early on, I thought that Labour were going to do a hell of a lot better than what most of what the mainstream pundits were saying. Is because I do spend an unhealthy amount of my life on social media, and what I noticed was that what people were talking about on social media wasn’t Jeremy Corbyn the friend of terrorists, which what we saw on the front pages of mainstream newspapers, but actually what was happening to our schools and hospitals. Which was the debate that Labour was trying to have, and I thought to myself actually this quite interesting. And so I think there is a paradox, and in the media in general. And there is good and bad. So the good, and this isn’t a judgement of the quality of our newspapers, O.K., it is a judgement about the behaviour of our senior politicians. One of the least edifying things I have ever witnessed in my 30 odd years, is our political leaders, of both big parties climbing up the backside of owners and editors. In a hugely unhealthy way.

And I just think that, that is bad for democracy. So let’s not be under any illusion, over many many years, The Sun and the Daily Mail have been hugely powerful both backing Labour on some occasions, in the case of the Sun, and the Mail, once, and indeed the Tories. They have been hugely powerful. And even if explicit tit for tat deals weren’t done. You know, I have been there while party leaders have kowtowed to Rupert Murdoch and various editors and it’s not a nice thing to watch. Whatever you think of those newspapers, that’s not how in my view political leaders should behave.

So one of things that the last election demonstrated because I have never said the barrage of hate directed at any politician of the sort that was directed at Jeremy Corbyn by a number of newspapers, but that it didn’t actually, prevent biggest surge in Labour’s vote since 1945. You know you get this barrage of hate, and still Labour gets 30-40 percent. It’s a curious one. And this isn’t a pro-Labour point at all, it’s just a pro-democracy point, I think that that is probably a good thing. Now that said, it would be a good thing if you could believe that there is a level playing field on social media, and the problem is I don’t believe that. Right. So the problem is that social media can be distorted as much as the mainstream media, and it’s distorted for a number of reasons. Whether you like it or not, you have to work really hard on social media not to find yourselves in a silo.

All of us on Twitter or Facebook tend to follow that we think are interesting, and in truth the people that we find interesting are likely to be the people that reinforce our prejudices. So that isn’t altogether healthy. You know, one of the great things about newspapers which I say in the book. One of the great things about newspapers is the serendipity factor. When you’ve got a newspaper that aggregates lots of different stuff, you will occasionally come across things that really challenges you. On social media we tend to be sent the stuff that slightly reinforces what we believe. But there is another much more fundamental problem with social media. And it is, I don’t know how many of know about a bloke called Robert Mercer, who is this multi-billionaire, there is this amazing hedge-fund, called Renaissance Technology. It’s been one of the most successful hedge-funds of the last 20-odd years. And Renaissance Technology, is what it says on the label, it is a technology company. They have hired the most amazing rocket scientists from all over the world, to develop these algorithms, and these algorithms basically scour global markets for opportunities to automatically direct funds, where there are regarded to be price mismatches. It produced, as a result of having this two brainy people at the top, Mercer and Simons, its produce super-normal returns forever, and made billionaires of the founders. Now, one of them, this bloke Mercer, has directed his energies to making algorithms to scrape the internet for data about all of us. Which then allows adverts and messages, to be targeted at particularly susceptible voters. Right. Not in the case of Vote Leave, but he certainly did a bit of that… you know… he switched right towards the end of the election, and backed with his daughter for Trump. And there is no question that, he so, I wouldn’t say he swung it for Trump, but the kind of things he did on social media helped Trump tremendously.

But in our own case, not with Mercer technology and money, but just because Vote Leave was super smart when it came to social media. Very clever bloke, not everyone loves him in Westminster, but very clever bloke called Dominic Cummings who ran Vote Leave, basically decided that more or less every penny that they raised would go to social media. And it was super smart, and they again, scraped the internet for data about venerable voters. And they did this very clever thing, do you know about their football competition? Because it’s both funny and sort of scary, so during the referendum campaign, he launched, a football competition where he basically said that if anyone could predict the results of all European championship they would win £50 million. And anyone who knows anything about probability will know that the probability of anybody predicting every result very, very, very, very, very, very, very close to zero. Right, it just couldn’t happen. He learnt this marketing trick from a guy called Warren Buffet, who did something very similar with baseball in the States a number of years earlier. And you know that Warren Buffet is the world’s greatest investor, anyway, so he launched this competition, and inevitably because the British love football, lots of people just did it for a laugh. And the only condition in taking part in the competition was that you had to give you mobile phone number, your address, your email address, and scale of one to ten how likely you were to vote for Brexit. Now [inaudible] tell me they managed to acquire this rather precious information on hundreds of thousands of people this way. And it was valuable both terms of marketing, having got these email addresses, they could target these people with precise videos and messages that might woe them, but it was very valuable in the traditional way of marketing.

Once you know which houses to bang on, you know to knock the doors, you save the most enormous of time, and so there foot soldiers were suddenly armed with incredibly valuable information. And it was particularly precious, and this is true of all elections, of course, but given to when the referendum campaigns began, the two sides were roughly neck and neck, all you have to do is move the dial a couple of percentage points, and you’ve achieved a historic outcome. So he was completely rational, so he spent every penny, almost all their money on this stuff, and it was brilliant. Now one of the things that is slightly odd to me is that given that Dominic and his colleagues are mostly Tories it slightly odd that when Theresa May launched her general election campaign, she didn’t employ any… well, she didn’t employ Dominic because he’s a slightly controversial figure, but she didn’t use these tactics. And so for them it was a extraordinary wasted opportunity. In that general election campaign Labour was way better at social media. And that was largely because they have this big large community of young people who are digital natives as it were. So a lot of it is organic, in the nature of their membership and they did one or two very clever things centrally. So it curiously that Labour did rather better at social media.

But in general the point I’m trying to make is that social media playing field isn’t level. And among the things that are important are regulators, that so far behind all of this, and that is a slight concern.

Dr Alan Mendoza

I’ve got one last question, and I’m going to ask it at the end, because I imagine most of you want to ask. I’ll take them in threes, so if you don’t mind giving your names and affiliations you might have. Then he can take a note.

Jonathan Lisby, editor of Brexit Central

Couple of quick points, now you mention Jeremy Corbyn be likely to be the anti-Brexit politician I wondered if you wanted to expand on how ironic this is given that throughout his whole political life he has voted against every European treaty. And actually he would need to be out of the European Union to be able to fulfil a part of his agenda.

But also I wondered if I heard you incorrectly, you said if I’m pretty sure, that Brexit would make us, quote “a bit poorer”, did you not mean the pace of which we grow richer, possibly slightly slower.

Robert Peston

Oh I see what you mean (audience laughter)

Julian Collard

(no political affiliations): a couple of related questions, you drew our attention to the north-south divide, but I wondered whether we can learn any lessons from Germany. We integrated East Germany successfully over the background of coalition government for many years. Whether this is an issue, centrist Labour party members and old nation conservatives could coalesce to form a coherent coalition?


You mention that the challenge of social media is that playing level is not level, and therefore regulation might need to come into play…

Robert Peston

Well, just in the sort of Dr. Strangelove characters, who, you know develop these algorithms that target people with dark messages…


So, the question I had, was that does that not exist already in print media to an extent anyway, and there isn’t necessarily a even playing field even though there are regulation. What we see as social media with the Dr Strangelove characters, is what print media was maybe 100 years ago.

Robert Peston

Ok, so very briefly, I think I’ll start with… yours, really want I am talking about here is transparency when it comes to the activities of political parties. At the moment. The whole, the way that… I could… I think… that fairly easily shortly before a general election campaign to set-up a think-tank and in a way that no one could really see or police. You know using algorithms, get lots of data, on voters that I think that susceptible to a particular point of view or a particular party that I am backing. And I could target messages at them, they might think this was impartial news, they might not realize that… at the moment it’s very very very difficult to stop essentially surrogates for parties, with the knowledge of the parties or without. And getting messages out to distort the election outcomes. I mean the great things about newspapers is that, you know, we can all see what’s in them. And we either love them or hate them. But it’s the lack of transparency that for me is an issue.

So I think you have a very interesting… sorry I’ve forgotten your first name [Julian]… so yes this is something that I’ve been also obsessing over for quite some time, which is of this issue of national missions, right, so Germany, because of its history had this collective effort. For a national mission to integrate East Germany into West Germany, and actually raise living standards, and for a while West Germans made quite a big sacrifice. But it paid off spectacularly well. I slightly feel that one of the things that is really missing from this country at the moment is a post-Brexit mission. One of the things that is deeply dispiriting about the government we have is why isn’t it out there painting a vision of what this country could and should be outside the European Union Now, you could, for example, have a part of that mission rising living standards in poorer parts of this country. You know, that, and I kinda think it should be, why are we focusing on the challenges of Brexit? Rather than, actually developing a huge national plan that would bring us together. So, yeah, I think this is what is missing at the moment.
Yeah, Jonathan, on your point…


Sorry, last point about the coalition,

Robert Peston

Oh, sorry, yes I see. The answer is I think…. I think there is a sort of related point which of course I am delighted to come on to, which is that there are quite a lot of people in centre of politics, some of them elected politicians, some of them just people, who feel unrepresented at the moment, they feel disconnected at the moment from the leaderships of both parties. I think this is probably unsustainable, my own view is that, this is probably a once in a 100 years where we will see a structural realignment, structural re-making of the party political system. I do feel that is where the currents are going, but it’s a bit like… so back in 2006, I went the editor, I went to the BBC’s news editor, and I said there is this terrible bubble in the City of London, and there’s going to be a terrible crash, and we really should be getting more of this on the news. He said, well when is this crash going to happen? I said that, the problem with bubbles is that you never know when they are going to burst. To which he said of course said, well, the story can hold. [Audience laughter]. But the fundamental point, is that when get these dramatic shifts. I am as genuinely confident as I can be that there will be a structural remaking of our parties because of both the economic and political shifts that we are living through, which I think are tectonic. But predicting when we see this realignment is very very hard to do. I suspect it will be within the next few years, but its very difficult to be more precise than that. Sorry, yeah, does that answer your question at all?

So, so Jonathan, two points, yes I speak like an economist. When economists say they are going to be a bit poorer, what we always mean is poorer relative to where we would have been otherwise, right? So of course I don’t think we will be poorer in an absolute sense, but actually, broadly, poorer relative to where we would have been is still poorer. I am afraid to say. Particularly at a time when we are bumping along, before the vote we got back to 2/2.5 percent, now we are back at 1 percent if we are likely. It’s a cost, it’s a price. Particularly at time when we are struggling to fund our public services. To pretend this is a meaningless cost, I mean you and I can probably debate this until the cows from home. But to argue that this is an irrelevant cost is simply just, in my point of view, wrong. And, sorry what was your second point?



Robert Peston

Oh! Corbyn!  On Jeremy, there’s this sort of weird thing happen during general election…. So as you know, I was covering the general election and living and breathing it. And, and for my sins I was a very early person to notice that Jeremy Corbyn was going to become leader of the Labour Party, while at the BBC, during the leadership campaign, I was going out and about, I went along, curious, just take an interest, I was economics editor at the time, but I just took an interest and I made some films about it and followed him around. I could see the extraordinary surge of enthusiasm for him, and I remember going back to the BBC, and saying look this bloke is going to be leader of the Labour Party. And they thought I was completely off my head, but they allowed me the broadcast saying this, as it were. And I remember talking to him at the time, and he didn’t really believe it. You really was the accidental winner and really couldn’t believe. But having become leader he had only one mission which was to take control of the Labour party. I genuinely don’t believe, it was clear in my mind, that he would become Prime Minister, it was the project, you know the mission of the left to see the control of Labour, and that mattered more than seizing control of the country. OK?

Now, something happened during that general election, and it, it matters, you know mid-way through the general election when the polls started to narrow. And you know, I spent some time following him around, and I had noticed that the penny had dropped for him that actually he could become Prime Minister. And as much to his surprise as anyone else’s, he rather liked the idea. [Audience laughter] One of the great things about scenting power is that you then realize there are certain compromises you have to make. You know, the first time… he has never been a politician that has compromised about anything. He has spent the entire career as a protest politician. That’s how he defined himself. But he now sees this opportunity to get into 10 Downing Street. And one of the things that pretty much everyone around him is pointing out to him is that point a made to you earlier that… you know worth reading the British Election Study about this. OK. The British Election Study is completely clear about why Labour did so well, yes people liked Jeremy Corbyn more than they thought they did when they were exposed to him, yes they liked a manifesto that seemed to offer a bit of hope compared to a Tory manifesto that all seemed to be about sacrifice. Even Tories, quite liked privatising the hated railways.  [Correction: nationalising]. I mean amazingly. But the single because biggest factor in Labour’s surge is that voters didn’t believe in their manifesto. The manifesto was very similar to the Tories on Brexit, but actually people didn’t believe where Labour really was. They saw the Tories as the party of hard Brexit, and they saw Labour, wrongly to respect of the manifesto, as the party of a closer relationship with the European Union. And there is literally no question that was the main thing responsible for their surge. And it’s the main reason why since then Labour’s position on the transition, increasing on the customs union, increasing on the Single Market as moved towards a much softer Brexit. And this is my own view here, this is a journey not yet completed, and they will in the next few months all become the party of outright soft Brexit, and they may even be, you know on my programme, three weeks ago, I said to him are you opposed to a second referendum, he said “we are currently…”, no he said “we are opposing a second referendum”. And then I said, it’s interesting that you are using the present tense, will you oppose it if it becomes a serious issue in the next two or three months. And he simply refused to answer the question. And my own view is that, for better or for worse, sooner or later an some point, I’m not it will be the spring or the autumn Labour we will be favour of a second vote on some form, but we will see.

Deedee, from Thinking the Unthinkable:

I was just curious to know, so when writing the book, what you found most challenging in terms of the second half writing about solutions, and what we should do from here, and also what you would have done differently if anything

Robert Peston

In terms of the book?



Anne Mckay:

Liberal democrats have been staunching remain yet millions of people who are favour staying inside the European Union are backing parties that split in the middle. What would your advice be to give to Lib Dems a reboot, and you know give them the support of the voters that we should remain in Europe.


and I am from nowhere important: The chapter were to addressed your dad, and you telling him all these things are wrong. What kinds of patterns do you think he saw that you think you would got right?

Robert Peston

There are certain things in the book… I’m not sure I did enough on the productivity challenge. So I think this was Julian’s point, about the post-Brexit mission, there’s a bit of that in the book that I wish we had done more. I wish I had developed that idea more. I mean the things I talk about in the book are, I do think that when you’ve got such extraordinary sharp divergences regionally. And, and post-2008, when you have governments that feel as they can’t use spending or taxes to correct those economic inequalities. Fiscal policy essentially becomes castrated, and you put all the focus on the central bank which is what we did, and you cut the price of money to nothing. When everything is about monetary policy, in my view you actually have to tailor monetary policy rather more to the regional disparities. So in my own view if you have a housing bubble in London and housing stagnation in the north-east which you did have for quite a long period in the post-2008 period. You know it should have been perfectly possible to put up, a tiny bit interest rates a tiny bit in the north… sorry in the south, and cut them a bit in the north. And you don’t have to do that through benchmark bank rate. Just do it through specialist funding schemes, rather more ambitions than the ones the government, or the Bank of England excuse me, devised. Similarly with business finance, if there are parts of the country, that are starved of low-cost finance you again use the monetary policy to channel lower-cost funds where its right for cost of money to cheap so that’s one thing. Secondly, particularly in a globalized world to shift income around where people and businesses are very mobile we think inevitably. Well I think relying on income taxes, to the extent that we do is inadequate. Indirect taxes, as we all know penalise the poor way more than the wealthier, and therefore, I am somebody who is very much in favour of a shift to wealth taxes. Partly because a lot of our wealth, people like my wealth I regard a windfall, I mean a happen to have a fair amount of equity in the house that I own. I have that equity because I am lucky enough to buy my first property in 1983. When I could buy a place, just across the river from here for next to nothing. And it’s not that I am an investment genius, but if I bought then and then just reinvested and reinvested, eventually you sit on quite a chunk of money. And that isn’t really fair. That’s not a testament to my genius. And so I do take the view that it could be perfectly reasonable for people like me to fund public services whether its social care or hospitals or schools a bit more, via a tax on that accumulated wealth. Now lots of people live in properties, for example, without with much of an income – they just happen to be sitting on these properties and they’ve retired. So the way I’d do such a wealth tax is an I.O.U., you could pay it up front if you wanted to but broadly you wouldn’t have to pay it either until you sold the property or it’d be rolled into the inheritance tax you pay. Either way it’s an absolute cast iron guarantee for the government against which they could borrow at almost zero interest rates because they now the money is coming in. Right, it’s not money you could easily avoid. So that’s another idea in the book.

On the Lib Dems I think it’s very very hard when the stakes for this country feel very high to millions of voters and we have a first past the post voting system, its very very very hard to persuade people to vote for a party like they might like their policies on Europe or their policies on a sort of centrist sort if there isn’t the faintest chance of that party actually influencing the important outcomes and you can see that people who would have normally voted Lib Dem in the last election voted for Labour, and you know many of them would have detested Jeremy Corbyn in terms of his history and in his policies, but if they wanted to shift the dial on Brexit it was pointless voting for the Lib Dems. I do worry under FPTP system how you would get a Lib Dem revival.

And I think you were just asking about what my dad would have, well, I don’t know, the great debates I had with my dad were mostly about Arsenal [audience laughter] and I suspect that biggest things he would have said is that Arsenal should have sacked Wenger a long time ago. [audience laughter]

Dr Alan Mendoza

You’ve obviously sketched out some ideas obviously, and we have do a discussion, debate that we can have. You’ve said we need to have a post-Brexit mission, who is it out there though who in the world of politics that can inspire, perhaps like Emmanuel Macron has done in France, to do that in Britain? Who do you see as the person or people who can do this?

Robert Peston

So it is one of the worrying things at the moment. So Macron seems to be turning into the real deal. What I mean by that is, he has already done some things that most informed, so-called informed commentators have said are impossible – he has changed French labour law in a very significant way without bringing the country to its knees. Which people thought was impossible. So I think we absolutely have to take Macron seriously. I think he is a very very substantial figure. And one of the things that I have will be fascinating over the next year, is that now that it looks as if Merkel is securing her own future. A Merkel-Macron alliance within Europe could be a very powerful alliance that shape things in a very significant way. In this country. So, you know interestingly, a politician who is able to give speeches that get people excited. Is Boris Johnson. He does get people excited. The problem is that there is not a lot of detail behind the rhetoric.

And what you want from politicians which can both, generate the excitement and execute on the detail. And if I look around the place at the moment, I am not seeing a lot of that. And it is. I know people think I am gloomy. I am not on the whole a gloomy person. I am A) someone who has enormous faith in this country, but also have enormous faith in people. You know I think it’s my job to spell out the risks that I think are going on. Which is what journalists have to do. But I am normally confident that we will find a way through these puzzles. The reason I wrote the book was to throw in my half penny worth on what I thought a few solutions could be, and people debate them, and take them seriously then great. If people pick holes in them, equally great, because at least it’s a debate, and at least we are moving towards ideas that sort this country out. The hardest thing for me at the moment is, you know, I’ve been in this game for a long time and the problem is the older you get, the tempted you are to look back at politicians of a bygone age and say they were great then, and shit now. They were giants then, and pygmies now. It’s a natural thing to think the older you get, so I desperately try and aim off all that, but even aiming off its quite hard to be optimistic about the people who are currently in positions of power, and not just our elected politicians. I have also seen the civil service for donkey’s years, I don’t think the civil service is quite up to what it used to be either. So these are, you know we need to regenerate the body politic we need to, you know public service is so important and I think we have degraded public service too much for 20 odd years. So another again great mission we need to have as a country is to, and on my Sunday show, I don’t go into knee-jerk cynical attacks on politicians, I am grateful for when people come on and what to share what they believe in. I want to express a place for them to express. This isn’t to say I am soft on them, or that I don’t challenge them. But I am not as an individual, and we the programme cynical about people who come on the programme. I think they do very hard job in difficult circumstances. We just need more decent people to come in and make what is a sacrifice.




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