- The Chancellor of the Exchequer, Philip Hammond, gave an interview to Le Monde, France’s newspaper of record (the full version costs €2 to access).
- The BBC reported this interview as signalling an abandon by Hammond of his “suggestion that the UK could slash taxes and regulation to undercut its EU rivals after Brexit” (Sarah Montague, introduction to the headlines of The Today Programme, 31 July 2017).
- This is fake news from the BBC. Hammond’s recent remarks to Le Monde do not contradict the statements he made earlier this year on the UK’s approach to Brexit.
- Although Hammond conducted the interview in English, the only record of what he actually said is Le Monde’s translation of his statements into French. To set the record straight, we need to translate his remarks back into English – as well as the BBC’s fake representation of them back into something closer to reality.
Allo Allo, BBC?
This is the account of Hammond’s interview given by the BBC in the headlines of its flagship news programme, Today:
Zeb Soanes: The Chancellor Phillip Hammond has stepped back from a suggestion that the UK could cut taxes and regulation in a bid to undercut EU countries after Brexit. In an interview with the French newspaper Le Monde, he said the government had no plans to make big changes to tax policy – a remark that appeared to be at odds with some of his own comments earlier this year. Here’s our political correspondent, Chris Mason.
Chris Mason: “I often hear it said that the UK is considering participating in unfair competition in regulation and tax after Brexit,” the Chancellor told Le Monde. Well, it was suggested by Phillip Hammond himself, when he was asked in January whether the UK could become a tax haven. In response, he said that while he was optimistic about securing a good trade deal with the European Union, if this didn’t happen “you can be sure we will do whatever we have to do.” But now the Chancellor said he expected the UK to remain a country with a social, economic and cultural model that was recognisably European” (my emphasis).
To understand what the BBC is doing here you need to know what Hammond said in the earlier interview (given to the German Newspaper Die Welt, which, like Le Monde, means “The World”). Here he is (as quoted in the Daily Mail):
The Chancellor said he was optimistic a reciprocal deal on market access could be struck, and he hoped the UK would “remain in the mainstream of European economic and social thinking.” But he added: “If we have no access to the European market, if we are closed off, if Britain were to leave the European Union without an agreement on market access, then we could suffer from economic damage at least in the short-term.”
“In this case, we could be forced to change our economic model and we will have to change our model to regain competitiveness. And you can be sure we will do whatever we have to do” (my emphasis).
In this earlier interview with Die Welt, Hammond is confident the UK can get a trade deal with the EU. It is only “if” the EU were to be too unreasonable to allow such a trade deal to be signed (“in this case”) that the UK would “change its model,” implicitly by cutting taxes and deregulating. The change of model is presented as something Hammond does not expect to do, and will only do “if” forced to by European intransigence.
What the BBC are claiming in their report is that Hammond, in his comments to Le Monde, has “stepped back from” this option – in other words ruled it out. According to the BBC’s report, Hammond will not, under any circumstance, use competitive deregulation to make the UK a more attractive business partner – not even if negotiations were to fail. Not only is Hammond not actively planning, as his base case assumption, to depart from “mainstream economic thinking” (as was already the case in the earlier interview), Soanes says that, in the Le Monde interview, the Chancellor has ruled out even the possibility that the UK “could” ever do so.
La BBC équivoque
There is, however, no small amount of equivocation from the BBC here. Toward the end of the headline report quoted above, after Chris Mason has summarised Hammond’s position in the earlier interview (that of being willing, albeit reluctantly, to compete through deregulation if compelled to by European intransigence over trade talks), he goes on to say “but now” to introduce what he presents as Hammond’s new position. By saying “but now,” Mason presents what Hammond said to Le Monde as somehow contradicting what he said to Die Welt. But reread the two statements and see if there really is any justification for this “but”:
Philip Hammond in Die Welt, quoted in the Mail:
The Chancellor hoped the UK would “remain in the mainstream of European economic and social thinking.”
But now here he is in Le Monde, paraphrased by the BBC:
The Chancellor said he expected the UK to remain a country with a social, economic and cultural model that was recognisably European.
If this was a game of “spot the difference,” you would really struggle to find anything whatsoever to distinguish these two statements from each other. This is in part because, unlike Soanes, Mason is not saying Hammond has ruled anything out. He is sticking to the safer ground of describing what Hammond expects or hopes. But the problem with Mason’s statement is that Hammond’s hopes and expectations haven’t changed at all from one interview to the next – so there is nothing to justify his use of the word “but.”
When you analyse the way the BBC presents news about Brexit it can get very confusing. Nothing Hammond said has changed, yet somehow we’re supposed to think there’s been a u-turn. How does that work?
La concurrence déloyale
Mason opens his headline with a quote from the Le Monde interview in which Hammond repudiates the suggestion that the UK was considering “unfair” tax competition, and immediately goes on to claim that this strategy “was suggested by Phillip Hammond himself.” So Mason’s logic runs something like this:
- Hammond said he was prepared to engage in unfair tax competition in Die Welt
- Hammond later repudiates unfair tax competition in Le Monde
- Ergo Hammond in Le Monde is contradicting what he said earlier in Die Welt
But hang on a minute. Did Hammond really advocate “unfair” competition in his earlier interview with Die Welt? He certainly doesn’t use that specific term in the interview itself. The answer surely therefore depends on how you define the term “unfair competition,” as used by Hammond in his recent interview with Le Monde. It is here that we have to turn to the French term used by Le Monde to translate Hammond’s remark (in English) on this subject, which is “concurrence déloyale,” literally meaning “disloyal competition.” This is the relevant segment of the interview:
As a European I have reasonable French and so am happy to provide my loyal English speaking readers with this translation:
Interviewer: Are you going to play the tax card to ensure your country remains economically attractive?
Hammond: One often hears that London plans to embark on a course of unfair [déloyale] competition in terms of tax rates. That isn’t our plan, nor our vision for the future. The amount of tax we are collecting, relative to GDP, is within the European average, and I think we will stay at that level. Even once we have left the EU, the UK will keep a social, economic and cultural model which will be recognisable as European.
Remember, we don’t have access to the original term used by Hammond, and, moreover, that translation, inevitably, subtly shifts the meaning of what it translates, so that even if you accurately translate the word “déloyale” – used by Le Monde to accurately translate Hammond’s English word into French – back into English, you may not end up with Hammond’s original word (you can use this fact to play fun games with google translate, as brilliantly illustrated by youtubers Smosh).
“Concurrence déloyale” in French has the particular meaning of competitive action which, even if consistent with the letter of the law, violates the spirit of fair competition, and represents a kind of cheating. Dumping products, cutting prices by producing sub-standard goods, forcing your suppliers not to supply a competitor or misleading advertising are all forms of “concurrence déloyale.” The term is therefore one which necessarily involves subjective judgement and grey areas: one man’s “concurrence déloyale” is another’s affordable pricing or informative advertising. If what Hammond said in English really was “unfair competition” then “concurrence déloyale” would be a good translation. More so even than the assumed English original, the French term brings out the fact that what constitutes “unfair tax competition” is a matter of opinion.
This means that the BBC has clearly overstepped the mark. You can “change your economic model to regain competitiveness” and “do whatever you have to do” without cheating or being unfair to anyone. What Hammond says to Le Monde is therefore perfectly consistent with his earlier statement to Die Welt. He has in no way excluded the possibility of competitive deregulation in the event that no trade deal is signed. He has only made the rather bland point that he isn’t going to do so in an “unfair” way.
For Mason to suggest that Hammond had performed a u-turn in his report was poor, but at least it was clearly presented, like any report, as his take on the situation, and he gave the listener enough information to understand how he (Mason) arrived at that (mistaken) interpretation. What is really shocking is that Soanes should make the claim – that the u-turn has taken place – in the headlines themselves, as if it were a plain, undisputed fact, not an interpretation.
The BBC’s Left wing bias appears
The only way the statement in Le Monde could be inconsistent with the statement in Die Welt is if you were to assume that any change whatsoever in your economic model, which reduced your taxes or regulation, would be unfair. In other words, any economic model other than the standard European model is an unfair one. I understand that some people do think this, but they do so from a very particular political, Left wing, viewpoint. The equivalence that Mason posits between Hammond’s earlier discussion of “changing our economic model” and his later reference to “unfair competition” is a definite and quite extreme political position. Most people don’t go around calling for Hong Kong to be blacklisted because of its flexible tax regime. What is Mason going to do next, start a petition demanding a boycott of Singapore? This a great example of how the unconscious Left wing bias in the BBC can accidentally emerge.
The irony is that two EU countries, Ireland and Luxembourg, have openly used taxes as a competitive tool for decades while being part of the EU. Even the much feted Emmanuel Macron is openly courting London bankers with the promise of deregulation in the French economy. The most reasonable inference to draw from Hammond’s comments would be that any deregulation or tax reduction the UK might undertake, in the event that no deal is signed, is a perfectly fair, even European, thing to do. It is telling that the inference drawn by the BBC is diametrically opposite to this one.
Le plan n’a pas changé
Mason might point to the fact that Hammond immediately goes on, after his concurrence déloyale remark, to say that he expects to keep tax to GDP in the UK in line with the European average. Mason might argue that this implies that Hammond is saying that any reduction in UK tax rates would constitute the sort of unfair competition from which he just told Le Monde he was resiling. But this would be gross simplification. Hammond reiterates that it isn’t the UK’s “plan” to go down the path of tax competition. That is because his plan is, as it was before in the Die Welt interview, to strike a trade deal with the EU. Hammond says so much, earlier in the interview:
Interviewer: Is there a majority in the UK for leaving the Single Market?
Hammond: When we leave the European Union (EU) we will also leave the single market. It’s a legal necessity, as it is for the customs union. But most of us want an agreement allowing us to maintain a close trading relationship with the EU, so that goods and services can flow between our economies. That requires the negotiation of a new partnership deal agreeable to both parties. We can’t stay in the Single Market, but it is possible to build a relationship which has many of the characteristics of the Single Market (my emphasis).
What Mason neglects to say in his report is that the governing assumption propounded by Hammond throughout the interview is that he expects the UK to be able sign a trade deal with the EU. As you would expect of the UK’s Chancellor, he is speaking positively ahead of negotiations about the chances of a deal and not saying anything which might suggest he doesn’t expect one to be signed. If such a trade deal is struck, as planned, there will be no need to make any changes to the UK’s economic model, which is exactly what he said to Die Welt. His plan to keep tax rates in line with the European average specifically relates to this planned trade deal scenario. His downplaying of talk of any unfair competition applies to the opposite scenario in which no trade deal is possible. These are two different statements about two very different hypothetical situations.
Hammonde: Remeauneur Immonde
None of this is to deny that Hammond is an establishment, globalist, neocon, little Remoany snake. But that doesn’t mean we should abandon all objectivity when interpreting his comments. All they amount to is an attempt to talk up the possibility of a trade deal and of avoiding an exit on WTO terms. Certainly, his tone in the interview is emollient. But in the unlikely event that the UK is not able to strike a deal with the EU, the response will be decided, in light of those new circumstances, by the government of the day. Hammond doesn’t have the right to rule out a change of economic model at this stage, even if he wanted to.
Yet this is precisely the statement which the BBC puts into Hammond’s mouth. What is most reprehensible in the BBC’s coverage of this interview is the lack of caution and nuance, the sheer rashness of the interpretations made by Soanes, the newsreader, and Mason:
- The reality is simply that Hammond continues to expect to sign a trade deal and not have to resort to any further competitive measures. Soanes jumps from that anodyne remark to the claim that Hammond has ruled out any such measures.
- The reality is simply that Hammond has said he won’t use “unfair competition.” Mason leaps to the assumption that “unfair competition” includes the sort of competitive response Hammond rightly warned Europe about in his interview with Die Welt.
- On the basis of these two heroic assumptions, the BBC manages to turn an interview which is almost a carbon copy of the earlier interview in Die Welt into a spectacular u-turn.
In so doing, the BBC is pushing a pro-Europe and Left wing point of view. It is clearly a failure of objectivity on the BBC’s part. But this report is, above all, a failure of professional standards.