ONLY CONNECT

New Times, May 1999

Paul Anderson talks to Peter Hain about Welsh devolution and his plea for the left to engage with the Blair government

‘A friend said to me the other day: “You’ve worked your guts out on the referendum campaign and ever since to do yourself out of a job,”‘ says Peter Hain in his room in the Welsh Office in Whitehall. ‘And he was right. The powers that go with my job as a Welsh Office minister will transfer as from 1 July to the new Welsh assembly.’

The MP for Neath is in London only briefly. His main job until 6 May, when Wales votes for the 60-member assembly, is as co-ordinator of Labour’s election campaign in Wales, and it’s a job that does not allow him much time in Westminster.

After the controversy surrounding the choice of Labour’s leader in Wales – Alun Michael, favoured by Tony Blair, beat Rhodri Morgan for the position, but only because several unions backed him with their block votes without balloting their members – Labour’s commanding lead in the opinion polls has slipped alarmingly.

The party is still almost certain to emerge as the biggest party in the assembly, but there is a strong possibility that it will not win an overall majority. The election is using the additional member system of proportional representation, and the latest polls suggest that Plaid Cymru will do better than anyone expected, particularly in the ‘top-up’ seats elected on a regional basis to make the overall result more accurately reflect parties’ shares of the vote.

Hain is sceptical about some of the more extravagant interpretations of the poll data that have appeared in the press. ‘Some of the people being polled think they’re being asked what their second choice is,’ he says. ‘There’s a lot of confusion.’ He dismisses the idea that Michael might fail to win a top-up seat in the Mid and West Wales electoral.

But he is candid about Labour’s task. ‘The party’s gone through a really rough time over the past year. And I think the government has failed to get its message across to its core supporters.’

With this in mind, Labour is concentrating its focus on bread-and-butter issues. ‘ We have to connect the devolution of power with better decisions on schools and jobs and so on.’

Labour’s campaign in Wales has a distinctly more left-wing feel to it than the 1997 general election campaign – which is hardly surprising as Hain has a reputation as one of the most left-wing members of the government.

It is nearly 30 years since he first came to public attention as a South African Young Liberal advocate of direct action against apartheid and more than 20 since he first established himself as a spokesman of the Labour left. But even as recently as 1995, his book Ayes to the Left laid out a ‘libertarian socialist’ strategy for Labour that in many of its key elements – Keynesian expansionism in economics at United Kingdom and European level, interventionism in industrial policy, radical civil libertarianism – was implicitly critical of Tony Blair’s conception of ‘modernisation’.

His latest pamphlet, A Welsh Third Way?, recently published by Tribune, holds back on criticising the government of which he is part. Indeed, it buzzes with enthusiasm, arguing that new Labour is the true inheritor of the libertarian socialist tradition.

Hain dismisses the notion that he wrote it because he had been put under pressure from on high. ‘I simply thought that the Third Way debate needed some positioning in terms of socialist traditions. You can’t write a pamphlet unless it’s been cleared. But it was my idea and I wrote it myself.’

Too many on the left seem unwilling to recognise just how much the Blair government has achieved, he says. ‘On the economy, what’s very striking is that we’ve done what no Labour government has done before: we haven’t blown it in the first two years after hitting an enormous crisis. We’ve enjoyed the confidence of the markets and the City. And yet we are injecting record amounts of spending into health and education and other public service priorities in the next three years.

‘The pitch of the government has been to middle England and to the Daily Mail rather than the Daily Mirror. Yet there is a huge amount of redistribution. The minimum wage, the working families tax credit, the increases in child benefit and the 10p starting rate of income tax, all have attacked poverty and boosted low incomes. I wouldn’t call Gordon Brown a traditional Keynesian chancellor – and he wouldn’t want to accept that label – but people on the left should at least acknowledge that it’s significant that a government of the left has managed to implement some radical economic policies while not being under furious attack in traditional fashion.’

Not that success is confined to the economy. ‘The constitutional agenda – I mean, here we have a supposedly right-wing Labour leader and government about to roll over the House of Lords – fairness at work, the right to roam, they’re considerable achievements.’ The pamphlet, he says, is a plea to the rest of the left to engage. ‘Engaging doesn’t mean sacrificing principles. It means getting into the Realpolitik of the Labour Party and engaging with it. The Labour government is the only show in town. If the left doesn’t get involved, it will have sold the pass. But, with the exception of a few small groups, I don’t feel there’s any serious engagement from the left at all.’

KOSOVO NEEDS WESTERN GROUND TROOPS

Paul Anderson, Tribune column, 30 April 1999

There can be no doubt now that the political leaders of NATO miscalculated badly when they launched their aerial bombardment of the Federal Republic of Yugoslavia more than five weeks ago.

Bill Clinton, Tony Blair et al decided to rely on bombing raids alone to make Slobodan Milosevic stop his military assault on the ethnic Albanian population of Kosovo and accept a NATO-led “implementation force” in the province. So sure were they of the efficacy of air strikes – and so afraid of domestic public opinion if the body bags started coming home – that they even announced that there would be no need to send in ground troops to force Milosevic to concede.

Milosevic, however, having seen NATO’s hand, upped the stakes. Instead of pulling back his forces from Kosovo, he unleashed a ferocious pogrom against the Albanian population of the province. Within a week of the air raids starting, more than half the 1.9 million Albanians in Kosovo had been forced from their homes. What little there was of opposition to Milosevic in Serbia rallied to his side.

In response, NATO increased the scope of its aerial bombardment – and as a result started to kill civilians, including Kosovo Albanians, in significant numbers. The bombardment has now gone on more than 30 days. A substantial part of Serbia’s military capacity and much of its communications infrastructure have been “degraded”. Even the presidential palace has been hit.

Yet still Milosevic has not yielded. His support at home — insofar as it is possible to measure it — has apparently remained solid. Ethnic cleansing has continued unabated in Kosovo. The number of refugees has risen inexorably. Ethnic tensions in the main countries the refugees have fled to, particularly Macedonia and Greece, are at crisis point. Russia, which was from the start opposed to the NATO action, is now so antipathetic that serious commentators are talking about the danger of a new Cold War. Although it is still just about possible to argue that, given a little more time, the air strikes will force Milosevic to back down, it is looking increasingly as if they will not.

So what should happen next? Some on the Left argue that the bombing campaign has been so counter-productive that it should be stopped at once, with the cessation of hostilities to be followed by diplomatic efforts to resolve the crisis.

The proposal has a certain superficial appeal. Diplomacy is generally a better means of pursuing foreign policy than war. If doing something has the opposite effect of that intended, it usually makes sense to stop doing it.

Yet stopping the air offensive and opening talks would amount to conceding victory to Milosevic – and that is unthinkable, not because NATO’s honour is at stake but because a victory for Milosevic would be a victory for ethnic cleansing. Milosevic now has effective control of a depopulated Kosovo, and there is nothing to suggest that he could be talked into giving it up if NATO calls off its bombardment. Indeed, everything suggests that he will not give it up unless he faces the prospect of imminent military defeat. If NATO is serious about standing up to ethnic cleansing, it must prepare to inflict such a defeat.

As has been clear since long before the air offensive began, this means planning to deploy ground troops, if necessary in a combat role. Yet NATO continues to insist that a forcible intervention with ground troops is not an option. Of course, that might just be a sophisticated bluff – but all the indications are that it is not, and that although Tony Blair is now convinced that ground troops might be necessary, Bill Clinton, backed by the German and Italian governments, is unpersuaded.

My hunch is that, eventually, public outrage at the nightly television pictures showing the desperate plight of the Kosovo Albanian refugees will push Clinton into accepting the argument for ground troops. That would hardly be a cause for celebration: ground troops should have been a central part of NATO’s plans since military intervention in Kosovo was first mooted. But for the sake of Kosovo’s Albanians, I hope that he changes his mind sooner rather than later.

BOMBING ALONE IS NOT ENOUGH

Paul Anderson, Tribune column, 2 April 1999

The crucial question in Kosovo is not whether western military intervention is justified but what sort of military intervention could possibly stop Serb pogroms there.

It is becoming increasingly clear that bombing alone will not suffice – indeed, that bombing alone will make matters worse. The NATO bombardment of Serbian military bases has given Serbian terror squads the excuse they wanted to go on the rampage, expelling Kosovars from their homes and killing anyone who resists or gives the impression of being capable of mounting resistance. More bombs will not stop them. Only a massive and immediate deployment of ground troops, which would never get Serb approval, could possibly halt the carnage.

Yet that is precisely what the United States and Britain, the only two powers capable of such a deployment, have ruled out.

The half-respectable reason is military logistics. Kosovo is a mountainous place. The few roads into it go through passes that are easily defended by the JNA, the Yugoslav People’s Army, from the surrounding heights. It would be difficult to invade by land under any circumstances – let alone with thousands of refugees streaming across its borders in the opposite direction. The JNA, so the argument goes, is a potent force that cannot be messed with lightly. In any case NATO does not have tanks suited to the terrain. What’s more, plans do not exist for any deployment of ground troops. The idea was looked at and dismissed as impractical last autumn.

But the more important reason for the rejection of deployment of ground troops is political. The truth is that the logistics are difficult but not impossible. The mountains and narrow roads are as much of an obstacle to the JNA as they are to NATO. The JNA is big, but it is poorly equipped and its morale is low. With its overwhelming air superiority, NATO could, if only the will were there, launch an occupation of Kosovo with airborne troops playing the key role.

That, however, might be a bloody business. It might mean body bags coming home to Detroit, Dagenham and Dusseldorf – and that is why Tony Blair and Bill Clinton have so emphatically ruled it out.

Of course, it is hardly novel for states to attempt to maximise their military clout at the same time as minimising the vulnerability of their combatants. That is the story of military technology over the centuries. But it is remarkable, since the movement against the war in Vietnam, how exclusively the US has adopted a policy of wielding the biggest possible high-tech stick while making its top priority the avoidance of US casualties – a policy that other western states have followed.

Now that the Cold War is over, using the high-tech stick is much more of an option in foreign policy than it was. But it can be used only if the danger to western combatants is minimal, perhaps even eliminated. Bombing is fine; risking the lives of our servicemen is not.

If this is better in some ways than the First World War generals’ casual disregard for the poor bloody infantry, it is also profoundly debilitating. Slobodan Milosevic knows that, if he can survive the bombing, there is not much else up NATO’s sleeve.

As things stand, it appears that Milosevic and his war criminal cronies could cling to power for a very long time. It is possible that “moderate” elements in the JNA will stage a coup against him, but otherwise the prospects of his being overthrown by his compatriots are slim. Serbian civil society has all but ceased to exist: the opposition is in tatters.

All of which makes the rhetoric of Blair and Clinton about finishing off this dreadful dictator look thin at best. I’d like to see the back of Milosevic as much as anyone, and like Blair and Clinton I think that the only way to get rid of him now is to inflict a comprehensive military defeat. But to will the end you have to will the means – and without ground troops the means are not there.

SHROEDER IN CHARGE AS OSKAR QUITS

New Times column, April 1999

It is still too early to say what the implications will be of the forced resignation of German finance minister Oskar Lafontaine last month.

In the days immediately after Lafontaine’s spectacular departure – still not fully explained as New Times went to press – chancellor Gerhard Schroder was at pains to emphasise that the policies of his Social Democrat-Green coalition government would remain the same.

It is just possible that they will. But it is more likely that Lafontaine’s successor as finance minister, Hans Eichel, will take a much more business-friendly approach to tax policy at home and a much less critical line on European macroeconomic policy. And it could be that Lafontaine’s demise is the harbinger of a changed ruling coalition in Germany.

Eichel is outgoing state premier in Hesse, where his SPD-Green coalition government suffered a humiliating electoral defeat in February after a campaign in which the opposition Christian Democrats played the race card against the Bonn government’s plans for liberalising Germany’s citizenship laws.

He does not have Lafontaine’s clout nor his charisma. His reputation is for solid pragmatism rather than flamboyant radicalism. Crucially, unlike Lafontaine, who was SPD chairman and the darling of the party’s rank-and-file, he has no independent power base in the SPD and owes his position solely to Schroder, whose policy disagreements with Lafontaine had been barely concealed for months before their final bust-up.

Lafontaine’s plans to shift the burden of taxation from workers and families to business, with income tax cuts paid for by increased corporate taxes, had business leaders up in arms. So too did his public support for trade union wage demands and his scepticism about the need for greater labour market flexibility and other supply-side measures to make Germany more competitive. On all these issues, Schroder had indicated his sympathy with employers.

To Schroder’s embarrassment, Lafontaine’s attacks on the European Central Bank for its refusal to cut interest rates to boost demand in the depressed euro-zone led to opposition accusations that the finance minister was undermining Germany’s culture of financial stability. Lafontaine caused consternation in the US by demanding exchange rate target zones for the world’s major currencies and upset the British government by calling for rapid tax harmonisation across the EU.

Lafontaine also found himself in hot water with Schroder when he suggested closer co-operation between the SPD and the Party of Democratic Socialism, the former East German communists, and when he semi-publicly criticised the chaotic style of his own government.

But Lafontaine did have significant strengths, even if diplomatic tact was not one of them. His arguments for a demand-led macroeconomic policy at European level were sound, as indeed was his case for tax harmonisation. His departure is a blow to hopes of developing a countervailing force to the ECB’s exclusive concern with low inflation.

In German politics, Lafontaine was crucial to holding the SPD-Green coalition together. Now he is gone, there is a real possibility that it will fragment. Schroder and the Greens have already clashed over nuclear power and citizenship law reform, and last month’s Green party conference was notably cool about the government’s record. The next few weeks could be extremely rocky.

OSKAR’S DEPARTURE IS BAD NEWS

Paul Anderson, Tribune column, 19 March 1999

Last week was a bad one for anyone on the pro-European left in Britain. Oskar Lafontaine, the German Finance Minister who resigned last Thursday, was by no means a straightforward hero. Sometimes, his lack of tact was exasperatingly counterproductive. In particular, his frequent calls for the European Central Bank to reduce its interest rates had the effect of stiffening the ECB’s resolve not to cut rates lest it be seen to be bowing to political pressure. Sometimes, too, he was strangely obsessive. He insistently demanded exchange-rate target zones for the world’s major currencies even though the world’s central bankers already informally operate precisely such a system.

But he was a powerful voice in favour of the expansion of demand by the European Union that the Continent so desperately needs if it is to pull itself out of the recession in which it has wallowed for most of the nineties. Contrary to what some of the more obnoxious “New” Labourites contend, his demise does not mean that European social democracy will now embrace Tony Blair’s unalloyed enthusiasm for toadying to big business with policies of deregulation and fiscal conservatism. The momentum of the swing toward Eurokeynesianism among Continental socialist parties is too great for that – as Blair himself discovered when his speech in praise of the American economy was received so coolly by the Milan congress of the Party of European Socialists earlier this month.

All the same, without Lafontaine it is going to be more difficult to set up the institutions and introduce the policies that Europe needs if it is not to be crucified by the combination of rampant globalisation and the ECB’s monetary conservatism. His departure is a blow for everyone concerned with the only modernising project of the Left worth describing as such – that of weaning European social democracy off the neo-liberalism it adopted in the eighties and creating a democratic federal Europe capable of challenging the hegemony of globally mobile capital. The glee with which New Labour greeted Lafontaine’s resignation was little short of nauseating.

+++

By contrast, this week has provided the pro-European left with the best excuse this year for cracking open the champagne – Monday’s spectacular resignation of all 20 European Commissioners after the publication of a report damning the EU executive for incompetence, indolence and nepotism.

The reason for celebrating is simple: the resignation is a stunning victory for what should eventually become Europe’s federal legislative assembly, the European Parliament, and for the principle of democracy. The report that criticised the Commission was produced by an inquiry set up by the Parliament following the suspension of an official for leaking allegations of corruption. And it was on the insistence of the Parliament in session, with the Party of European Socialists taking the lead, that the Commissioners resigned.

It was an extraordinary assertion of the Parliament’s powers. Never before had it managed to force the resignation of one of the unelected Commissioners – let alone all of them. It is a long time since the Parliament could easily be dismissed as a powerless talking shop: anyone who does so now is an idiot.

The key question now is what role the Parliament plays in choosing a new Commission. The governments of the EU, including the British, are desperate to keep appointment of Commissioners to themselves, and most would be happy to reappoint most of the Commissioners who have resigned, with Commission President Jacques Santer, Edith Cresson and perhaps one or two others offered up for sacrifice.

Such a turnout would be a disgrace. On one hand, the inquiry report makes it clear that the Commissioners as a whole should be held responsible for the shambolic state of their organisation. Replacing only one or two of them would be tantamount to declaring to the public that EU Governments condone incompetence, indolence and nepotism.

On the other hand, for the governments simply to reappoint most of the outgoing Commissioners without consulting the Parliament would be a step backwards as far as democratic accountability is concerned. At the very least, the Parliament should be given the power to veto individual Commissioners – and should threaten to vote no confidence in the whole Commission if it is not.

It would be even better, however, if the Parliament were able to propose candidates, and better still if it elected the Commission itself. There could be no better way of restoring the legitimacy of the Commission than for a new Commission to be chosen by the directly -and freshly – elected representatives of the people after the June European election. Of course, the chance of that happening is extremely small. But dreaming of democracy never did any harm, did it?

AT LAST, THE EURO BATTLE BEGINS

Paul Anderson, Tribune column, 5 March 1999

The campaign for the referendum on British membership of the European single currency has at long last begun in earnest.

Last week, Tony Blair gave his clearest signal yet that he was preparing to take a leading role in the “yes” campaign. This week saw the launch of Lord Owen’s New Europe group, which promises to campaign from a “pro-European” perspective against Britain becoming part of the euro-zone.

Until Blair’s announcement of the government’s plans for preparing for the euro – carefully orchestrated with the support of Kenneth Clarke and Michael Heseltine to maximise embarrassment to William Hague – it was by no means obvious that the Prime Minister was ready to risk the wrath of the Tory press barons by coming out explicitly for British participation in the single currency. Of course, he hasn’t officially changed government policy and could still revert to a position of “wait-and-see”. But the chances of that now appear very slim.

Similarly, until Owen went public with his organisation, backed by Lords Healey and Prior, it was not apparent that the antis would have any serious support from the political centre. Owen, Healey and Prior are heavyweights from the past. But their intervention has undoubtedly changed things. The “no” camp now appears significantly more substantial than did the uneasy alliance between, on one hand, Labour opponents of the single currency (mainly on the left) and, on the other, the Tories and the right-wing press on the other.

As Hugo Young warned in the Guardian this week, however, it would be a mistake to assume that the final battle lines have been drawn.

Young’s argument was that the Tories’ divisions over the euro and the differences between the Owen group and the Tory Eurosceptics could easily cause the “no” camp to implode – and it’s difficult to disagree with that. What intrigues me, however, is the likely impact that the euro referendum campaign will have on the left.

From the early sixties to the mid-eighties, it was almost obligatory for anyone on the left, inside or outside the Labour Party, to be opposed to British membership of what was then called the Common Market. With few exceptions, left-wingers believed that it was a capitalist club with rules that made it impossible for member states to introduce socialist economic policies. Many denounced it as an instrument of the cold war – not least because nearly all the Labour people who backed British membership were enthusiastic Atlanticists who supported American foreign policy at every turn.

It was the left, with Tribune in the vanguard, that led the “no” campaign in the 1975 referendum on British membership. The inclusion of the promise of withdrawal in Labour’s 1983 manifesto was one of the left’s greatest triumphs of the early eighties.

Then, however, the left’s anti-Europe consensus evaporated – almost overnight. There were only intermittent squeals of protest when Neil Kinnock abandoned the policy of withdrawal soon after becoming Labour leader, and only the mildest dissent as the party embraced more and more of the European “project” during the late eighties and early nineties. Today, the anti-European left consists largely of sad old men reliving the heroic defeats of their middle age.

The reasons for the collapse of left anti-Europeanism were simple. After the debacle of Francois Mitterrand’s attempt to reflate the French economy in 1981-83, much of the British left became convinced that control of multinational capital demanded Europe-wide co-ordination of economic policy. With the arrival of Jacques Delors as President of the European Commission, talking of common European social standards as a complement to the single European market, the unions were converted to the European cause. And then came Delors’s plan for a pan-European Keynesian plan to conquer unemployment through public works.

That, of course, was a long time ago – and in the meantime Tony Blair became Labour leader. Ever since then, there has been a truce between the party’s few remaining left Eurosceptics and the majority of left Euro-enthusiasts, based on a justified conviction that Blair is a shamelessly populist authoritarian and a sucker for the worst excesses of Big Mac capitalism.

So far, the truce has held, but my hunch is that the EMU referendum will destroy it. Already we can see the first signs of renewed hostilities. On the left Eurosceptic side, Tribune has signed up with the 1950s-style Stalinists of the Morning Star for what appears to be a kamikaze raid. For the left Euro-enthusiasts, Ken Livingstone has declared that he regrets that the Blair government rejected the option of early entry into EMU.

So before too long, I reckon, we’ll all fall out. Which will be sad – but needs must.

LABOUR EUROPEAN CAMPAIGN UNDER FIRE

Paul Anderson, Red Pepper, March 1999

With only three months to go before Britain’s first proportional representation elections for the European Parliament on 10 June, Labour has barely started planning its campaign – leading to mounting anger among candidates and activists.

‘It’s almost as if the leadership wants the party to be humiliated,’ said one would-be MEP. ‘Millbank has put no effort at all into the Euro-elections. All it’s worried about is the local elections and Scotland and Wales in May.’

At Labour’s joint European and local government conference in Manchester last month, Tony Blair was warmly received when he called for a vigorous party effort in all this spring’s elections. But the show of enthusiasm masked widespread pessimism about Labour’s prospects in the European elections.

The adoption of PR means that Labour will inevitably lose European seats. Even with 50 per cent of the vote, it will take 20 fewer seats than the 62 it won under first-past-the-post in 1994.

What is causing activists most concern, however, is the apparent expectation of Labour headquarters that the Euro-election campaign in England will be able to ‘piggy back’ on the party’s efforts for the local elections a month earlier.

In order to minimise its losses of council seats, Labour is adopting a version of the ‘key seats’ strategy that won it such a handsome Commons majority in May 1997. It is concentrating on retaining the support of affluent former-Tory voters in marginal seats and ignoring its core working-class support in safe seats.

The problem is that the Euro-elections will take place under PR – and every vote counts. Labour could do badly if it fails to mobilise its core support, particularly if, as expected, turnout is low.

Labour’s Euro-campaign is particularly poorly prepared in London, where there are no local elections this year. One reason is that the campaign in the capital has been made the responsibility of Pauline Green MEP, who plays a major role in the European Parliament as leader of the Party of European Socialists and is unwilling to delegate the campaign to anyone else.

Another reason is the preoccupation of the London Labour leadership with preventing Ken Livingstone becoming Labour’s candidate for mayor of London. In the words of a senior party figure, ‘Charles Square [the London Labour headquarters] is working full time on the “stop Ken” campaign. They’ve not even done the basics on the Euro-campaign. I’d not be at all surprised if we lose a seat we could have won to the Greens.’

GORDON BROWN IS NO LEFT-WINGER

Paul Anderson, Red Pepper, February 1999

One of the strangest by-products of the resignation of Peter Mandelson has been the revival of the idea that Gordon Brown is a bit of a leftie – or at least a ‘tax-and-spend’ redistributionist with a penchant for interventionist economic policy.

The Independent had it that the chancellor was in the throes of forging a new interventionist Keynesian alliance with deputy prime minister John Prescott ‘to challenge Mandelson’s “free-market” legacy’. In the New Statesman, Steve Richards suggested that ‘Brown has been following a more radical policy than the pre-election rhetoric implied’, raising ‘considerable sums through taxation’ to spend on schools, hospitals and combating unemployment. The Daily Telegraph grumbled in a leader about Brown presiding over ‘huge rises in public spending and taxation’.

There were even a few soft left MPs who put in a good word for Gordon and made approving noises about a potential Brown-Prescott axis in the cabinet.

If only. Of course, there was a time when Brown was undoubtedly a man of the left. Back in 1975, in his introduction to The Red Paper on Scotland, he advocated ‘the extension of self-management at the workplace’, ‘a planned economy’ and ‘public control of banks, insurance and pension companies . . . without compensation’ . In the first few years after he became an MP in 1983, he was a straight-down-the-line centre-left Tribunite.

Anyone who has seen him on Tribune platforms at Labour conferences knows that he has never lost the knack of turning on the left-wing rhetoric. But since joining the shadow cabinet in 1988, his record has been one of cautious right-wing pragmatism.

In 1988-89, it was Brown, as shadow chief secretary to the Treasury, who played the leading role in eliminating promises of extra public spending from Labour’s policy review documents. In 1989-90, as shadow trade and industry secretary, he ensured that all traces of Bryan Gould’s radical Keynesianism were dumped from Labour’s programme.

From 1992, as shadow chancellor, Brown was the key figure behind the abandonment of Labour’s promise of modest income tax increases to pay for modest increases in child benefit and pensions. Before Black Wednesday in September 1992, he committed Labour to a policy of rejecting devaluation despite the over-valuation of the pound in the exchange rate mechanism of the European Monetary System. After 1994, he ensured that Labour did not argue in favour of European reflationary measures to compensate for the deflationary effects of the Maastricht treaty’s conditions for European economic and monetary union.

As the 1997 general election loomed, Brown was responsible for introducing compulsion to Labour’s ‘welfare-to-work’ plans. And it was he who ruled out any increase in the top or basic rates of income tax and committed Labour to sticking to the Tories’ spending plans for two years.

The chancellor’s left-wing admirers would have us believe that all this was a matter of electoral tactics – that Brown’s caution was intended solely to eliminate hostages to fortune. Deep down inside, they say, he remains an egalitarian social democrat.

Yet as chancellor he has pursued a course entirely consistent with what he said in opposition. He has handed over control of interest rates to a committee of anti-inflation hawks at the Bank of England. He has stuck to the Tories’ spending plans for the first two years, and his planned increases after that (however welcome) are modest. He has left income tax alone and made life more difficult for anyone on benefits. His response to the call from the French and German social democrats for an expansion of demand in the European economy has been bleating about the necessity of flexible labour markets.

Which is not to say that Brown is incompetent or always wrong. It’s simply that he’s an economic policy conservative – just like Labour’s first chancellor of the exchequer, Philip Snowden. Kenneth Clarke would make a more credible standard-bearer for the left.

JUST LIKE OLD TIMES AT THE STATESMAN

Paul Anderson, Tribune column, 14 December 1998

I first thought something was up at the New Statesman when I read Peter Wilby’s media column in last week’s issue. It was an extended argument for not taking circulation figures as the sole criterion for judging the success of a publication. I agreed with it wholeheartedly – but it made me suspect that the Statesman editor was himself presiding over a stagnant or falling circulation and was getting grief from Geoffrey Robinson, the Paymaster General and the magazine’s proprietor. My suspicions increased when I looked at the Audit Bureau of Circulations website and discovered that the most recent audited circulation for the magazine, just under 26,000, was six months out of date.

Then, last Sunday, the Independent on Sunday carried a story on its front page announcing that the Statesman was about to be sold to a consortium led by Robert Harris, the Sunday Times columnist and best-selling author, and Nick Butler, an economist. According to the Sindy, the idea behind the bid was to make the Statesman more Blairite. Both Harris and Butler are good friends of Peter Mandelson, it noted, whereas Robinson is very much in Gordon Brown’s camp.

On Tuesday, the Independent introduced a twist to the tale, claiming that news of Harris’s interest in the Statesman was an old story that had been resuscitated by Brown’s chief spin-doctor, Charlie Whelan, in an attempt to scupper the bid. According to the Indy, the Brown camp is concerned that Robinson might sell to a Blairite in order to curry favour with Blair and save his ministerial career. Harris denied that he would get rid of Wilby, who has been noticeably more critical of the government than his predecessor as editor, Ian Hargreaves.

Politicians who take a keen interest in what goes on at the New Statesman are nothing new. Its founders, Sidney and Beatrice Webb, intervened constantly in editorial decision-making. Dick Crossman edited it (very badly) in 1970-72.

But in recent years, with its circulation well below 30,000 and its losses barely sustainable, the venerable weekly has been particularly vulnerable to meddling by Labour politicians. In 1986, after the resignation of Hugh Stephenson as editor, Neil Kinnock intervened forcefully to ensure that his successor would be John Lloyd and not Anthony Barnett. After Lloyd left, Kinnock tried – unsuccessfully – to prevent the appointment of Stuart Weir, whom he had fired as editor of New Socialist, the Labour Party monthly, for advocating tactical voting. In 1991, a consortium led by the Labour peer Lord McIntosh of Haringey (and including Robert Harris and Peter Mandelson) made a hostile bid to buy the magazine which got nowhere.

Three years ago, it was the opposition of Margaret Hodge and various other New Labour trustees to a (fully underwritten) plan to raise capital by selling shares to readers that forced the magazine into the near-bankruptcy from which it was rescued by Geoffrey Robinson, then an obscure backbencher. Robinson was put up to buying the magazine by Gordon Brown and Tony Blair. And it was Blair’s chief of staff, Jonathan Powell, who first suggested the name of Ian Hargreaves as a replacement for Steve Platt at the Statesman’s helm.

Here I should declare an interest: I was Platt’s deputy; I applied to succeed him; the first thing Hargreaves did when he became editor was fire me; and I don’t like what he did to the magazine editorially or politically. I didn’t exactly hit it off with Robinson either. In the interregnum between Platt and Hargreaves, when I was acting editor (though Robinson told me not to describe myself as such), he grumbled constantly about the content of the magazine. When he interviewed me for the editorship, he seemed more interested in finding out about my sex life than in my ability to do the job. (He’d got it into his head that I was gay – not that there’s anything wrong with that, as Jerry Seinfeld would say.) I particularly remember him asking whether I had “a mistress”. I don’t think he meant as well as the regular squeeze, but I still wish I’d told him to mind his own business. As for his taste in aftershave, well, the less said the better.

But I’m not grinding an axe – honest. I’m more than happy to accept that Robinson has been the ideal hands-off proprietor to both his editors. He has certainly been as generous with the cash as anyone could wish, losing £2 million in his first year as owner. I’ve no reason to disbelieve Wilby when he says that Robinson leaves him to his own devices.

The point, however, is that it doesn’t look that way to most outsiders. The Statesman’s big problem these days – the reason even millions of pounds cannot buy a respectable circulation – is its reputation as a tame New Labour house journal. And it won’t shed it, whatever it publishes, as long as it is owned by friends of Tony, Gordon or Peter. In this respect at least, Robert Harris is no better than Geoffrey Robinson.

LAFONTAINE IS RIGHT ABOUT TAX

New Times, 4 December 1998

I do not think that I am the only person in Britain who reckons Oskar Lafontaine is a good thing, but there have been a few times in the past month when I have wondered.
His remarks about the need for the countries of the European Union to harmonise their tax policies have attracted a quite extraordinary outpouring of venom here – and not just from the anti-European press and the Tories.
That the Sundubbed the German finance minister ‘the most dangerous man in Europe’ was hardly surprising (though the space it allocated to doing it, three pages, certainly was). Nor was there anything new in William Hague’s reiteration of his party’s tired xenophobia.
But they were joined in their synthetic outrage by others of a normally pro-European disposition – most significantly, the chancellor of the exchequer, Gordon Brown, and the prime minister, Tony Blair. “Britain has a veto on tax policy and we will not hesitate to use that if we have to,” declared Brown. “It is by cutting taxes, not raising them, that is the way forward to create jobs.”
In British political terms, it is easy enough to understand why Brown and Blair reacted as they did. They firmly believe that Labour won the 1997 general election because they spent five years assuring the electorate that Labour had ceased to be a party of “tax and spend”. Because tax levels are lower in Britain than everywhere else in the EU apart from Ireland, harmonisation would almost certainly mean an increase in British taxes. So harmonisation is politically unthinkable.
From an economic point of view, the Brown-Blair position is just as easy to grasp. They believe that Britain’s low business taxes and anti-pollution taxes have helped attract inward investment. Harmonisation will reduce Britain’s competitive advantage over its European neighbours.
But this of course is precisely why Lafontaine and nearly everyone else on the continental European centre-left favours harmonisation. To them, Brown and Blair are trying to have their cake and eat it. They want all the advantages of access to the giant affluent EU market – to the extent that they might even sign up for membership of the euro. But they want Britain to undercut continental disincentives to pollute and undercut the continental ‘social wage’. Although they want Britain to benefit from continental infrastructure spending, they don’t want to pay the fair share of the costs.
Worse, if Britain manages to scupper harmonisation, the temptation will grow for other EU governments to emulate its “free rider” position, which in turn could set off a frenzy of competitive tax-cutting that destroyed the capacity of most EU countries to maintain generous welfare states and high infrastructure spending. That would be a betrayal of everything most continental social democrats stand for, and they are quite right to want to stop it.
The spat over harmonisation might turn out to be insignificant. My hunch, however, is that it is a foretaste of a rocky relationship between the British Labour government and the rest of the EU over the next few years.
With the single currency in place from 1 January, the participants in monetary union will have a mass of common problems to solve – and Britain, as a non-participant, will necessarily find itself out of the loop. In these circumstances, it might well be that Brown and Blair will have to threaten use of the British veto to have any influence on EU macroeconomic policy (and not just on taxation). But the more they throw their weight around, the less respect they will command among their partners.