Issue 185: 2019 01 17: Gamble or Gimmick?

17 January 2019

Cunning Gamble or Cynical Gimmick?

Will Macron’s town hall debates placate les gilets jaunes?

By Richard Pooley

photo Robin Boag

Meanwhile, on the other side of La Manche… another embattled leader is trying to take back control of the democratic process and satisfy the contradictory demands of an angry populace.  We all know what has happened in the UK since the people were asked to give an opinion on one subject.  What will happen in France now that President Macron has asked the French to give their opinion on four wide-ranging topics – taxation and spending, the functioning of public services, the environment, and the democratic process and citizenship (including immigration)?  He has not asked them to vote but then the UK’s 2016 EU Referendum was not legally binding: “because of the sovereignty of Parliament, referendums cannot be legally binding in the UK, and are therefore advisory.”  (The EU Referendum Act 2015).  And whilst the question put to the British electorate was clear and simple – Remain or Leave? – the reasons people voted the way they did can be linked to all four of the subjects the French are now being asked to comment on.  The process is different but the same matters are being debated.

Loyal readers may recall that last month I urged Macron to get out from behind his desk in the Élysée Palace, travel the country, meet the gilets jaunes protesters face-to-face and listen to what they had to say  – Macron et les Gilets Jaunes.  I can’t claim that he reads the Shaw Sheet but he clearly listened to someone offering the same advice.  He won’t be spending the next few weeks sitting in hôtels de ville in the remoter parts of France, though I think it would do him and his opinion-ratings a lot of good if he did (for why, read  what I wrote almost exactly two years ago – A Cry Of Anger From The Back Of Beyond).  But he did launch the national consultation in person with a speech to mayors of rural Normandy in Grand Bourgtheroulde, a town which, despite its name, only has 3,500 inhabitants.  For someone from Paris that is remote enough.  He sent a Lettre aux Français last Sunday asking the people to help him create a new “contract for the nation.”  Over the next two months forums will be organised all over France.  Those moderating the discussions will be sent instructions on how to run them but there will be no attempt to censor or control what is discussed.  Five independent auditors will be appointed to make sure there is no attempt by ministers to interfere in the process.  The French are being asked to debate.  No problem there; that is what every French person I know loves to do and, indeed, has been educated to do.  An Elabe poll on Tuesday showed that 40% of French people want to take part.

Crucially though Macron has asked for solutions to be sent to his government.  It’s not enough, he made clear in his New Year speech to the nation, to make demands – e.g. cut taxes.  People must also propose ways to make their demands feasible – e.g. what spending must be cut to allow taxes to be reduced? That will be far harder for anyone to do, especially as the gilets jaunes are united only in their frustration and anger.  They come from across the political spectrum.  One group, for example, has already argued for gay marriage to be banned, a call which has been howled down by many of their yellow-vested colleagues.

Here is the nub of Macron’s problem.  The gilets jaunes’ demands remain inchoate and emotional, their solutions few and crude: he should resign, the wealth tax be reinstated in full, fuel taxes cut.  But even after all the violence and destruction, just under 60% of French people told Elabe pollsters last week that they still support the gilets jaunes (down 10% since December).  Meanwhile Macron’s approval rating, though rising recently from a dismal 20%, is still only 28%.

Macron has to address two fundamental complaints of the gilets jaunes:

  1. You, the urban, globe-trotting elite, are growing richer while the rest of us – especially those living in rural and small-town France – are becoming poorer.
  2. Our hopes and dreams, especially for our children, have been ignored and derided by you for decades.

The first is not true but most French are convinced that it is.  The second is true and that is what Macron is trying to put right with his Grand Debat.  But if he can’t persuade enough French that they are wrong on the first, no amount of consultation will yield the solutions which will produce a more prosperous and contented France.

My article last month pointed out that income tax in France for those on or below average wages is less than in the UK.  Granted, social security rates are far higher that the UK’s national insurance.  But, as I also argued, these higher taxes are more than compensated for by the subsidies which give the French free higher education, cheap child-care, very cheap (and top quality) health care, inexpensive train fares, and very generous pensions.

INSEE, France’s Statistics Institute, recently showed that France has one of the lowest levels of inequality in Europe.  Only in Sweden is the gap between the richest and the poorest narrower.  The gross income of the richest 10% in France is 22 times that of the bottom 10%.  But the net income of the richest French, i.e. after taking into account all direct taxes and benefits, is only 6 times that of the poorest.  Both the Swedes and the French pay high taxes (and both complain endlessly that they do) but only the Swedes, it seems, appreciate that they get so many State-paid benefits as a result.  There is a significant cultural difference between the two peoples which may explain why most French are convinced that their richer compatriots are much richer than they actually are.  Woe betide any rich Swede who flaunts their wealth.  Contrast that with the rich Parisian who is only too keen for you to imagine that their bank account is stuffed with euros.  The subject perhaps of another article.

Reinstating the wealth tax is one of the top demands of the gilets jaunes.  To them and left-wing politicians the abolishing of this tax is proof that Macron is the President of the Rich, a jibe scrawled across many walls in my part of rural south-west France.  Macron has refused to countenance bringing this tax back.  He has argued for years that the French should reward entrepreneurship (see one of my earliest Shaw Sheet articles when he was the Economy Minister under President Hollande – What Does ‘Entrepreneur’ Mean To The French?).  The wealth tax discouraged such wealth creation and the job creation that resulted.  Until last year if you held assets – shares, bonds, property etc – anywhere in the world, totalling more than 1.3 million €, you were liable to pay tax on them every year.  Go one euro over that threshold and you would be taxed on the half million euros up to 1.3 million and then an ever-higher percentage on various bands above 1.3 million.  Macron abolished the tax and introduced a mansion tax which kept the property asset element of the old tax.  The only people who really suffer from this new tax, in fact, are expat Brits who have lived in France for more than five years and own property in the UK the value of which would get you a large chateau in France!

But the gilets jaunes don’t buy Macron’s argument.  Abolishing the wealth tax just made the stinking rich richer still.  Ergo the rest of us are relatively poorer.  Not fair.  Immoral.  Don’t try and tell me that those fat cats in business are going to open a factory with the money the taxman is no longer taking from them.

I am not optimistic that Macron’s town hall meetings will succeed in quelling the gilets jaunes revolt.  I would be more sanguine if Macron didn’t leave it solely to his ministers and civil servants to run the consultation but went out on the road more himself.  And even more so if he were to demonstrate that he understands the grievances that people have.  Show some humility.  Quite literally.  He could start by getting rid of all that gilded pomp that surrounds his desk in the Élysée Palace.  A friend of mine who lives in Le Cannet, above Cannes on the Côte d’Azur, wrote this to me on Monday:

“A small first step [in showing that he understands] could be a reform/reduction of the salaries and financial ‘perks’ of ‘les elus’ [mayors, councillors, deputies etc].  Mme Macron’s expenditures on the Élysée don’t look good.  The message is as much in the ‘appearance’ as in the ‘doing.’

Absolument, mon ami!


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