A STEP IN THE RIGHT DIRECTION

New Statesman & Society, leader, 10 December 1993

This week's European summit will see the first exchanges of fire in what promises to be a gruelling battle over the economic and social role of the European Union.

The protagonists are already well entren­ched. On one side are the forces of light – the followers of European Commission president Jacques Delors, whose imaginative white paper on competitiveness, growth and unem­ployment will be discussed in Brussels. De­lors believes that Europe, with 20 million out of work already, is facing ever-increasing unemployment unless there is concerted Eu­rope-wide intervention to create jobs. The white paper, Tackling the Challenges and Moving into the 21st Century, proposes a package of measures for infrastructural investment (in communications  –  both infor­mation technology and transport  – and energy), research and development, and the skills of the workforce. On information tech­nology, Delors suggests EU spending of Ecu20 billion (£15 billion) a year for the rest of the 1990s; on transport and energy, his target is Ecu250 billion (£190 billion) of in­vestment by the end of the century.

Instead of cutting wages and pruning unem­ployment benefits to "price people into jobs", Delors argues for a "European social pact" whereby unions agree that gains from in­creased productivity should be ploughed back into investment. Workers should be given the opportunity of retraining through­out their lives. Meanwhile, new types of enterprise should be created between public and private sectors to develop a new "social economy", producing socially useful non­commercial goods and services (such as inner-city renovation, home helps for the elderly, child-care for working mothers and so on) and creating some three million jobs. 

Ranged against Delors and the intervention­ists are the usual suspects: the British govern­ment and Unice, the European employers' confederation. They believe that the key to

European economic recovery is labour mar­ket deregulation and reduced employment costs. Unice's report, Making Britain More Competitive, published on Tuesday, calls for cuts in employers' social security contribu­tions for young and low-paid workers and relaxation of rules on maximum working hours, minimum wages and making workers redundant. The ideological affinity with the Tory policies that have done such damage in the past 14 years in Britain is striking.

The stark difference between the two ap­proaches to EU economic and social policies makes it almost inconceivable that this week's summit will reach any consensus  –  and, in the short term at least, the predomin­ance of right-wing governments among EU members means that the best that Delors can hope for is a request to put his proposals in more detail. Although he has the backing of the Belgian EU Presidency, the EU's big guns  – Germany, France, Italy and Britain  –  are either worried about the costs of his pro­posals or (in the case of Britain) vehemently opposed on dogmatic grounds.

In the longer run, however, the prospects for something like the Delors plan being put into practice are rather better. To begin with, his proposals are not in fact far removed from what the mainstream European Christian Democratic right would like to do: the reason that German Chancellor Helmut Kohl is cur­rently unenthusiastic about them has less to do with ideology than with the burden of debt with which reunification has saddled his country. An improvement in Germany's economy, expected some  time in the next  18 months, could work wonders for Christian Democrat dithering over the Delors plan, al­though its author might well have retired by then.

Just as important, the political balance in the EU is by no means set in stone. Both Italy and Germany face general elections in the coming year that seem likely, as things currently stand, to result in left-leaning coalitions coming to power.

Last weekend's Italian local elections show that the former-communist Party of the Democratic Left (PDS) is now the only coher­ent national political force: many political commentators reckon that it is set to be the core of the government that takes office after elections likely in the spring. In Ger­many, although the Social Democrats (SPD) are not performing as well as they would like, the popularity of Chancellor Kohl's Christian Democratic Union has plummeted, particu­larly in the east of the country, and there's a possibility of an SPD-CDU "Grand Coalition" taking power next autumn. With both PDS and SPD in government, the laissez-faire la­bour market deregulation approach so beloved of the British Tories would have far less purchase.

Of course, this cannot be taken for granted: expectations of shifts to the left in Europe have all too often been dashed in recent years, and a Franco-British laissez-faire bloc could seriously damage the prospects of the Delors plan even with left-leaning governments in Germany and Italy. Neither should anyone underestimate the widespread fear in the Eu­ropean establishment that, faced with grow­ing competition from the newly industrialising countries of the far east, Eu­rope has no option but to cut wages and employment costs by any means necessary.

But at least there are grounds for cautious optimism. The Delors plan is far from perfect. It falls well short of the sort of counter-cycli­cal Keynesian expansionism that Europe so badly needs, and it does nothing to address the democratic deficit in EU macro-economic policy-making: it is designed to be im­plemented by the unelected Commission after approval in secretive intergovernmental bodies. Nevertheless, it is a crucial first step towards the pan-European pro-growth macro-economic policy that is our only hope of tackling unemployment. As such it deserves all the support the left can give it.

CLARKE'S CONJURING TRICK

New Statesman & Society, 5 December 1993

Is Kenneth Clarke really so clever? Paul Anderson examines the tax-and-cut budget and assesses its likely impact on Britain's economic prospects

It is easy to see why Kenneth Clarke's Tory colleagues and the markets hailed him as a magician after he delivered Britain's first unified budget on Tuesday.

Somehow or other, Clarke managed to pro­duce a package of measures to attack the public sector borrowing requirement, raising taxes and cutting public spending – and yet he did it apparently without either hitting the most sensitive parts of the welfare state or increasing the most noticeable taxes.

On tax, Clarke confirmed the imposition of VAT on fuel, announced by Norman Lament in March, and cut the tax relief on mortgage interest payments even more than Lamont planned (which will bring in an extra £1 bil­lion a year by 1996-97). He put up duties on petrol and cigarettes (worth a total of £2.4 billion a year by 1996-97), promised to raise another £2 billion over three years by clamping down on loopholes (just as shadow chancellor Gordon Brown had been suggest­ing) and introduced new taxes on air travel and on insurance policies (worth another £1 billion a year from 1995-96). And he brought in changes in income tax that will yield just under £2 billion in 1996-97.

But the Chancellor softened the blow of VAT on fuel by announcing a compensation package for pensioners and others on benefits – an inadequate one, perhaps, as the poverty lobby and environmentalists were quick to point out, but enough to take at least some of the sting out of criticism of Lament's original plan.

In similar vein, the reduction in tax relief on mortgage interest (very much in line with Labour thinking, as it happens) will cause little pain at a time when interest rates are as low as they are today; while the increased petrol and tobacco taxes (also very much part of Labour's approach to taxation) can be jus­tified on green and health grounds respec­tively. Clarke's new taxes on air travel and insurance are very cleverly levied on items of once-a-year consumer expenditure (who can remember what last year's holiday cost?).

More important, the income tax hike was done not by increasing rates but by freezing allowances and thresholds, allowing inflation to increase the revenue, a trick learned from Lamont. And, most important of all, Clarke did not extend the base of VAT as almost everyone had expected. Much as the opposi­tion parties fulminate about Clarke's swin­geing tax increases, there is widespread recognition among their members that it could have been an awful lot worse – and that many of Clarke's proposals are very similar to the ones that they would have had to put forward if they were in government.

The story is much the same with the bud­get's spending cuts. The cuts are there all right: in real terms, the "control total" of non-cyclical government spending is set to fall by more than 1 per cent from 1993-94 to 1994-95, with next year's levels reached again only in 1996-97.

Public-sector pay is to be frozen, and there will be major cuts in social security entitle­ments as, first, sickness and invalidity benefits are merged into a new incapacity benefit, and then income support and unem­ployment benefit become job seekers' allow­ance. Defence spending will be cut by more than 10 per cent in real terms by 1996-97, taking it to below 3 per cent of gross domestic product for the first time since 1945; there will be a further move away from student grants to loans; transport spending will be slashed.

But once again the pain is not quite what was expected. The biggest cut is in the con­tingency reserve – down £4 billion on pre­vious projections in the next financial year and only a little less in 1994-95 and 1995-96. In real terms, local authority and health spending are shown unchanged – and educa­tion gets a 5 per cent increase, while the social security budget increases by 2 per cent. Pen­sions, unemployment benefit, income sup­port and child benefit will continue to be inflation-proofed. Clarke even found the cash to introduce a childcare allowance for low-paid working single mothers and to bring in a high-interest savings bond for pensioners.

The upshot is that most of the public spend­ing element of the budget will almost cer­tainly prove difficult for the opposition to attack with conviction. Apart from what ap­pear to be draconian changes in invalidity and unemployment benefits – on which much detail is still missing – there is little for Clarke's opponents to get their teeth into. No one outside the military and the Tory right really believes that defence spending should not be slashed, and Clarke has easy populist arguments for public-sector efficiency to answer the unions' howls of protest on pub­lic-sector pay. On student loans, his point during the budget speech that bus-drivers should not be made to subsidise the education of future lawyers is a taste of things to come. Already, the main refrain of opposition pol­iticians on the spending plans is that more should have been ploughed into education and training and infrastructural projects –  hardly the stuff to set the voters' pulses racing.

Enough, though, of the political cunning of the budget: will it actually work? Clarke said that its purpose was to put public finances in order once and for all, and the key projection in the Red Book that outlines the effects of the budget is the one showing public-sector borrowing steadily falling to zero by 1997-98 (conveniently enough allowing Britain to meet the convergence criteria on public bor­rowing laid down in the sections of the Maas­tricht treaty on European monetary union).

The credibility of this PSBR projection de­pends on what happens to growth: tax revenue will be inadequate to cut into PSBR if growth is low, while social security spend­ing will be difficult to keep under control. The assumption behind Clarke's figures is that the British economy achieves a sustained growth rateof3.5 per cent from 1995 until the end of the century. But such growth rates are, to say the least, highly unlikely, not least because Europe, Britain's largest export market, is deep in recession and unlikely to revive for a couple of years. With more realistic assump­tions of growth at 2.5 per cent, as the Red Book itself admits, the possibilities of reduc­ing the PSBR to zero fade away.

"What the Chancellor needed in this budget was to convince the markets that he had a credible path towards the reduction of the PSBR to zero," says Meghnad Desai, profes­sor of economics at the London School of Economics and a former member of the La­bour front bench Treasury team in the House of Lords. "He has done it quite cleverly. He has disguised the tax increases needed to get the PSBR down, he has made optimistic pro­jections on growth, and he has looted the reserves to balance the books. Clarke has hidden the problems that will come to the fore, he hopes, only after the next election. Watch out for a rush to the polls in 1995 or early 1996!"

Nevertheless, to judge from the reaction of the markets, the scam seems to have worked in the short term at least. The consensus is now that the way is open for the further reductions in interest rates necessary for recovery.

Whether they will be enough on their own is, however, a moot point among left econo­mists. On one hand, there is the traditional Keynesian argument that the problem with the budget is that its mix of spending cuts and tax increases will dampen the overall level of demand in the economy to such an extent that the recovery will inevitably be stillborn.

According to Bryan Gould, writing in New Statesman and Society last week, the PSBR is simply the product of the recession and no particular cause for concern. In similar vein, Jonathan Michie, a fellow of Robinson Col­lege, Cambridge, and the author of several books arguing for a revival of a version of the Alternative Economic Strategy that formed the basis for Labour policy in the 1970s and early 1980s, says: "Cutting expenditure and increasing taxes is the opposite of what is needed to bring the country out of recession. The major worry now is what happens if it does all go wrong. If it does, the running down of the contingency reserves means that the cuts will be even more savage than those already announced."

On the other hand, there is widespread sup­port for the idea that the central focus of the government's economic policy efforts should be a programme for European recovery  –  which was not mentioned by Clarke in his speech. Stuart Holland, one of the architects of the AES in the 1970s who has recently been advising Jacques Delors on his European re­covery programme, argues that Clarke simply missed the point.

"No national recovery is feasible if Europe stays in recession," he says. "In today's inter­nationalised economy, macro-economic pol­icy has to be internationalised. For us, that means that macro-policy has to be European. The only way out is to increase the macro-economic instruments of the European Union, such as the European Investment Fund. The political space is opening up in Europe for European macro-economic policy instruments."

The government's hope is that exports to the US and to booming economies in the developing world – China, Indonesia, the Phillipines,  Mexico – will more than com­pensate for the sluggishness of the European economy until such time as lower German interest rates have laid the basis for European recovery without recourse to an expensive full-blown European recovery programme. It is a big gamble – but it might, just might, come off.

A BUDGET FOR RECOVERY

New Statesman & Society, leader 26 November 1993

Kenneth Clarke's first budget as Chancellor of the Exchequer, to be unveiled next Tuesday, has been the subject of more speculation than any other budget in the past decade. This is partly a matter of the novelty of having a budget in November combined with the autumn state­ment on public spending – but it is also the product of a widespread public feeling that the economy is in a mess, and that what Clarke does next week will determine whether the mess is cleared up or whether it gets worse.

Britain has been in recession for nearly four years now, and signs of recovery are still faint. For all Britain's recent successes in non-EC export markets, there is still a strong possibility that the deepening European re­cession will scupper hopes of a sustained upturn – just ask those Nissan workers now being offered voluntary redundancy because no one in Europe is buying cars.

In any case, if unemployment has peaked, it has only just done so – and it still blights millions of lives. Even those in work suffer its consequences: fear of unemployment is still holding back consumer confidence, and the cost of keeping around three million people on the dole is horrendous. Taking into account benefits and lost tax revenue, each unemployed worker costs the Treasury nearly £9,000 a year, which means that the cost, for example, of keeping the 500,000 unemployed building workers out of work is around £4.5 billion a year.

Meanwhile, everywhere you look there is work to be done: crumbling council blocks, sewers and schools to repair, ancient tube trains and buses to replace, railways and houses to build. The waste of unemployment is obscene and absurd. Britain desperately needs a budget that lays the foundations for a sustained economic recovery.

What is not required is what Clarke seems to be preparing – an assault on public bor­rowing on two fronts, with cuts in state spending and increases in taxation aimed at shaving some £3 billion off the public sector borrow­ing requirement (which is currently running at £50 billion). The fragile nature of the re­covery makes it imperative that the Chancel­lor does nothing to reduce the overall level of demand in the economy: state spending should be kept at current levels or even in­creased, with the overall burden of taxation increased only to fund an expansion of state spending on investment.

In similar vein, any tax or spending changes should on no account be regressive: even leaving aside the persuasive moral and social arguments for a more equal society, pro­gressive redistributive measures have econ­omic benefits. They have a modest reflationary impact because poor people tend to spend money rather than salt it away; and they help the trade balance by putting a block on the tendency of rich people to buy im­ported luxuries, rather than home-produced goods.

Yet all the talk is of Clarke increasing Na­tional Insurance contributions (an income tax that hits the worst-off hardest) and direct taxes on non-luxury items, while reducing benefit entitlements – all of which will harm prospects for recovery.

Some of the measures, both long-term and short-term, that should be taken next week have been elaborated by Gordon Brown and other Labour spokespersons in the past year: tax breaks for industrial investment and for training, a training levy, taxes on speculative share and money market transactions, release of receipts from council house sales to allow new council house building, lease-buying of trains, a windfall tax on privatised utility profits, a stricter regime to prevent tax evas­ion, a redefinition of public borrowing to distinguish borrowing for investment from borrowing for the current account, and so on.

But other measures that are equally applic­able in the current economic climate seem to have been discreetly abandoned by Labour since the shadow budget just before last year's general election. In particular, it dropped plans for a top income tax rate of 50 per cent on those on £40,000 a year and abolition of the ceiling on National Insurance contributions. Both should be re­vived, although both need to be a lot better sold to the electorate than they were last time.

And then there is a whole raft of proposals that never get a look-in these days in Labour's top echelons. The most obvious is abolition of mortgage interest tax relief – essentially a regressive subsidy to affluent home-owners, which is retained by the government only for the most cynical of political reasons. The savings from abolishing MIRAS should be ploughed straight into building houses for those on low incomes.

There are others, too, from wealth taxes, through energy taxes that do not hit the poorest as VAT on domestic fuel will, to disbanding the British Army of the Rhine and using the savings on a massive employment programme. In all these cases, the reason for Labour's lack of enthusiasm has little to do with economics and a lot to do with fear of what the Tory press will say.

Of course, there are limits to what a single medium-sized nation-state can do to conquer unemployment and recession: the experience of France in the early eighties shows that there is little mileage today in the sort of one-nation Keynesianism that used to form the basis of all left-of-centre alternative econ­omic strategies. That is why a programme for recovery in Britain would have to be matched with proposals for a European recovery pro­gramme, initially based on the intergovern­mental framework suggested by Jacques Delors (unceremoniously blocked by the British last week), but ultimately carried out by federal European institutions.

Nevertheless, it remains in the power of the medium-sized nation-state to make a substan­tial difference – and it is a scandal that Clark will deliver a package that does nothing (or worse) for recovery.

CLINTON'S POOR START

New Statesman & Society, leader, 5 November 1993

Bill Clinton was elected a year ago promising to be a president who con­centrated his efforts not on foreign affairs but on changing America for the better. There were some sound political reasons for this: George Bush was widely perceived by voters as having spent too much energy on faraway countries and having ne­glected the domestic front, particularly the economy. But Clinton's ordering of priorities was also a reflection of his own inadequacies: put brutally, he did not, and does not, know very much about the world beyond his own backyard.

So far, his administration's foreign policy has been marked by quite extraordinary in­consistency. On Somalia, where he inherited Bush's ill-advised military intervention, he has veered between backing escalation of US involvement and seeming to want to pull out as soon as possible. On Bosnia, the adminis­tration started off promising military inter­vention and cajoling the reluctant British and French to back its approach – only to end up effectively spurning any role. A similar con­fection of bluster and inaction seems to be the name of the game with Haiti.

The problem is not, however, simply with the spectacular international crises that make it on to the television screens. Clinton has proved just as inept on Cuba, hinting that he might reconsider the blockade and then an­nouncing that it would stay. He has faced both ways on China, attacking its appalling human- rights record and then upgrading US contacts with Beijing. Perhaps more import­ant in the long run, no coherent policy has emerged on relations with Europe or the Pacific Rim countries, on world trade or on nuclear weapons. America has had little or nothing to do with the Israel-PLO peace pro­cess and appears confused about what it wants in the Middle East. Just about the only decisive and effective action by Clinton in the foreign arena was his rapid endorsement of Boris Yeltsin's seizure of power in Russia – and that could all too easily turn out to have been a giant mistake.

The mess is not entirely Clinton's fault: he has been badly advised, particularly by his Secretary of State, Warren Christopher, a veteran of the Carter administration who has plenty of experience, but entirely lacks the vision required to steer the sole superpower in the post-cold war era. Nevertheless, the buck stops with Bill – and he needs to start thinking a lot more clearly about the goals of American foreign policy if his administration is not to go down in the history books as a disaster. What the world needs is a US that is neither isolationist in the traditional sense nor the world's policeman – not a US that one minute seems to want to retreat into its shell and at the next intervenes unilaterally and incompetently in some crisis or another.

At home, the picture for Clinton is differ­ent – but not so different. All the indicators suggest that the American economy is at last making a strong recovery from recession. But it is doubtful whether this has anything to do with "Clintonomics", that familiar mix of austerity budgets, continental free trade and "supply-side'" intervention.

Certainly, the idea of making training the central focus of economic policy, so much admired by the Labour Party here in Britain, looks increasingly threadbare. According to the current issue of the Nation, the New York left weekly, a Labor Department report last month assessing a $200 million-a-year scheme for retraining manufacturing workers who had lost their jobs to foreign competition "concluded that only 19 per cent of the 'retrained' workers found jobs that demanded their new skills and paid at least 80 per cent of their former wages; 20 per cent remained jobless; most of the rest sank into low-wage slots that they occupied for just eight months."

And if retraining doesn't work, isn't the North American Free Trade Agreement simply a mechanism for exporting employment to Mexico? It is no surprise that the administration is currently engaged in the mother of all battles with Congress over NAFTA, with Clinton's political credibility on the line if he loses.

Apart from the economy, Clinton's main domestic policy plank was a promise to re­form America's creaking health and welfare regimes, starting with health. Here too, how­ever, the signs are less than promising. The health package launched by Hillary Clinton in September is unlikely to provide the com­prehensive, accessible service that the country so badly needs, and there are no indications that the welfare reforms now being considered by the administration will do anything other than penalise the poor for the economy's failure to generate jobs.

Clinton's honeymoon with the electorate has been deservedly brief: the defeats suf­fered by the Democrats in New York and elsewhere this week are a taste of worse to come in the mid-term Congressional elec­tions this time next year unless the adminis­tration pulls its socks up – and fast. This side of the Atlantic, those Labour politicians who celebrated Clinton's victory last year with champagne at a swanky London hotel have been remarkably silent about their erstwhile hero. One hopes that the silence does not mean that Britain's Clintonmaniacs are not having second thoughts.

SENSE ABOUT DEFENCE

New Statesman & Society, leader, 22 October 1993

The threat that next month's budget will include large cuts in defence spend­ing – perhaps as much as £1 billion – has brought out the worst in the Tory right.

"If the Chancellor is looking for areas to cut," fulminated Winston Churchill MP in the House of Commons on Monday, "surely it is in the abuse of social security that he should be looking." "Defence spending has already been cut much too far, in order to pay for ludicrous welfare benefits," echoed Lord Wyatt of Weeford in the Times the next day. "Billions go on untaxed child benefits en­joyed by millions of the comfortably off, who would not suffer without them. The scandal of the rising billions spent on invalidity benefit continues. Theft from the NHS costs £500 million a year . .."

Already there are rumblings of a revolt by the Tories' barmy back-bench bastards when the budget comes to the vote, which if it happens will be the most serious challenge to John Major's authority certainly since publication of Margaret Thatcher's memoirs and perhaps since the rebellion over Maastricht.

It is tempting in the circumstances for the opposition parties to sit back and watch the spectacle of the Tories yet again tearing them­selves apart. But the temptation should be resisted. Both Labour and the Liberal Demo­crats need to make it clear how they would do things differently from the government – and that means more than merely calling for a "proper" defence review.

The brutal reality is that the very basis of Britain's defence policy is obsolete. Apart from Northern Ireland, the raison d'etre of the British military since the late 1940s has been to sustain a key element in the deterrence, and if necessary repulsion, of an attack on western Europe by the Soviet Union and its allies. That is why Britain is a member of Nato, why it retains a substantial army and a large airforce in Germany, why it has nuclear missile submarines and a significant navy. It is also why the defence sector is such an important part of the British economy.

It was always arguable whether the actual threat from the Soviet Union justified the scale of the British military: even at the height of the cold war, the left argued that defence policy-makers misunderstood Soviet inten­tions and that the over-emphasis on military preparedness distorted the British economy.

Today, however, the problem is of an en­tirely different order. Put simply, the Soviet threat has ceased to exist with the demise of the Soviet Union. And, however unpleasant Boris Yeltsin or his successors might be, the chances of something comparable re-emerg­ing within the next 20 or 30 years are ex­tremely slim.

Of course, the world of the "new world order" is no more peaceful than the world of the cold war: there are currently some 50 hot wars raging across the globe, one of them, in Bosnia, on the edge of western Europe. There are still roles for the British military in peace­keeping, protecting humanitarian relief ef­forts and, more often than the government thinks, intervening directly to defend democ­racies against aggression.

But such roles require a military that is much smaller and, equally importantly, has a very different shape and very different equip­ment. So far, there has been little progress since the end of the cold war in reducing the size of the armed forces and none whatsoever in changing their structure and hardware to suit the new conditions.

There has been no redefinition of Britain's defence roles: the slimmed down forces are supposed simply to be doing a little less of just what they were doing before. Britain remains committed to retaining nuclear weapons, an army and an airforce in Ger­many, and a navy capable of patrolling most of the North Atlantic Ocean.

The only large procurement project to be cancelled in the past three years has been the embryonic "sub-strategic" tactical air-to-sur­face nuclear missile, pronounced dead by Malcolm Rifkind this week, which only ever became a big deal at the very end of the cold war after the INF treaty outlawed land-based medium-range nuclear weapons in Europe. The government remains committed to such projects as the European Fighter Aircraft and the Challenger 2 tank, which make no sense except as job-creation schemes now that the cold war is over.

Virtually nothing has been done to help with the conversion of military factories to civilian production. Tens of thou­sands of workers in the defence industries have lost their jobs; tens of thousands more face the dole in the next four or five years.

All this makes the Tories vulnerable to at­tack on defence from the left for the first time in years. Yet Labour has had almost nothing to say on defence policy beyond grumbling about "Treasury-led" defence spending cuts, and the Liberal Democrats are not much better. At times, it appears that the op­position would like to restore the govern­ment's cuts.

Part of the problem is, of course, that both parties have their eyes on marginal seats in areas of the south and south-west hit by cuts in defence spending – and indeed a crude un­qualified call for defence spending cuts, as advanced by some on the Labour left, would be not only electoral suicide but wrong. Mil­lions rely on the defence industries for their livelihoods, and they no more deserve to be thrown on to the dole than miners or hospital workers.

But there is every reason to believe that a well-presented case for planned conver­sion of military industries and redefinition of Britain's defence roles could strike a chord even in those parts of the country reliant on defence spending. That the opposition has failed to produce anything approaching a rea­soned alternative to the Tories' shambles on defence is symptomatic of an appalling loss of nerve.

ANTI-RACISTS AT ODDS

New Statesman & Society, 15 October 1993

There are two competing anti-racist demonstrations in London this Saturday, one in Trafalgar Square and one in Welling. Paul Anderson explains why

This weekend, anyone who feels like taking to the streets of London to express outrage at racism in general, or the British National Party in particular, faces a dilemma. Which demo to choose?

In central London on Saturday afternoon, the Anti-Racist Alliance is holding a "Speak Out Against Racism" march, ending with a rally in Trafalgar Square. It is backed by (among others) the TUC, the Labour Party, several national trade unions, the Indian Workers' Association and the Labour Party Black Sections organisation.

At precisely the same time, in south-east London, the Anti-Nazi League and others are running a "Unity" demonstration calling for the closure of the British National Party's headquarters in Welling. Apart from the ANL, it has the backing of the Socialist Workers' Party, Militant Labour, the anti-fascist magazine Searchlight, a plethora of trade union branches and several local anti-fascist and anti-racist groups.

So why the clash of events? Neither the ARA nor the ANL and friends are particularly keen to talk about it, but it comes down to deep divisions over political priorities and strategy.

Both the ANL and ARA emerged just under two years ago as responses to two things: the Tories playing the race card, in the shape of the Asylum Bill, in the run-up to the election; and the increasing incidence of racial attacks, particularly, it seemed, in inner-city areas where the BNP and other far-right groups were active.

The ARA was first off the starting block, launched in November 1991 by a loose coalition of local anti-racist groups and black political activists, many of whom had spent the 1980s campaigning inside the Labour Party for black sections to become part of its federal structure (in the end, they got a Black Social¬ist Society). From the start, it made the focus of its campaigning anti-racism in general, not just anti-fascism, emphasising the importance of black leadership of the anti-racist movement and concentrating its efforts on lobbying Labour and the trade unions.

At the time of its launch, the ARA did not quite have the field to itself. Apart from local initiatives, there were also two others. First, the Campaign Against Racism and Fascism – a survivor of the late-1970s mobilisa¬tion against the National Front – and second, Anti-Fascist Action – set up in 1985 by Searchlight and a handful of small far-left groups, notably Red Action (originally the street-fighting faction of the SWP), Workers Power (a small orthodox Trotskyist sect) and the anarchist group Class War, all with a penchant for picking fights with the far right.

But CARF was tiny, and AFA was widely seen as marginal and sectarian – its first two years had been marked by a bizarre bust-up between Class War and Searchlight, with the latter accusing the former of harbouring fascists in its ranks, and all its major participant organisations were distrusted on the left as headbangers, obsessives or worse.

The ARA had its own millstones round its neck. Many black activists saw the Labour Party Black Sections activists as careerists, and the small Trotskyist group Socialist Action, which was heavily involved behind the scenes in ARA, had made plenty of enemies playing a similar role in the Committee to Stop War in the Gulf in 1990-91.

Searchlight, for its part, denounced elements in the ARA leadership for having links with the anti-Semitic American black separatist Louis Farrakhan (the ARA responded by accusing Searchlight of being interested in nothing but anti-Semitism). All the same, the ARA's initial appeal attracted a wide range of signatories from across the centre and left, and there were high hopes that the ARA could become an open, democratic organisation along the lines of SOS Racisme in France, gathering a majority of British anti-racists under its umbrella.

It was not to be. Within two months of the founding of the ARA, the ANL, originally set up by the SWP in 1977 at the height of the NF's activity in the 1970s but closed down by the party in 1980, was relaunched at a House of Commons press conference.

As was the case first time around, the moving force behind it was the SWP, although it also boasted the support of a handful of Labour MPs and a rather larger group of celebrities. Once again, the ANL made its avowed priority taking an anti-fascist message (now anti-BNP rather than anti-NF) on to the streets.

Unsurprisingly, the ARA was livid at the SWP's decision to relaunch the ANL. "The ANL is an exercise in nostalgia," said the ARA's Narendra Makanji. "These people are living off the glory of a few years in the late 1970s, when we're setting up a long-term challenge to racism in Europe, an anti-racist organisation that will live in the community and in the mainstream of political life."

Ken Livingstone used his column in the Sun to denounce the ANL as an SWP front; black activists in the ARA denounced the relaunch of the ANL as a typical white left attempt to steal the thunder from a black-led initiative.


Searchlight pitched in with an attack on the "politics of deceit being practised by the SWP", accusing the ANL of deliberately exaggerating the danger posed by the BNP.

The ANL replied to its critics that only it had the resources and insight to act as "a wedge between soft racists and the hard right, isolating the fascists", as Julie Waterson, its national organiser, put it.

Attempts to get the combatants together, led by Bernie Grant and other Campaign Group Labour  MPs, failed in mutual recriminations. The stage was set for one of the most vicious bouts of back-biting that the British left has witnessed in several years.

At its ugliest, the row erupted into jostling at anti-BNP and anti-Asylum Bill demonstrations. But, for the most part, it was a battle for hearts and minds – of young blacks, of families bereaved by racist murders, of local council council Labour groups, of students, of trade union branches – with AFA and Militant's anti-racist front organisations, Panther UK and Youth Against Racism in Europe, joining the ARA and ANL in competition for support.

South-east London, already a target for the anti-racist groups because it had suffered a spate of racist attacks (including the murders of two black teenagers, Rolan Adams and Orville Blair, in early 1991), and because the BNP had its headquarters in Welling, soon became the main focus for the rivalry. In February 1992, the Rolan Adams Family Campaign, with the backing of the ARA, called a demonstration against the BNP headquarters: all the various anti-racist and anti¬fascist groups turned up, and spent much of the day squabbling with one another.

Things went quiet for a while after the far right's miserable showing in the general election. But in July, Rohit Duggal, a 16-year-old Asian boy, was murdered by a white gang in Eltham; and in September the BNP took 20 per cent of the vote in a by-election just across the river in the Isle of Dogs.

In November, another demonstration outside the BNP headquarters, this time called by the Duggal family with the backing of AFA, Searchlight and the local Greenwich Action Committee Against Racial Attacks, witnessed another round of bickering – though by now, with AFA and Searchlight moderating the assault on the ANL, it seemed to be a case of the ARA versus the rest.

But the final divorce did not happen until earlier this year, in the wake of the murder of 18-year-old Stephen Lawrence in Eltham in April. On 8 May, 5,000-odd people turned out in Welling to protest against the murder at the behest of Youth Against Racism in Europe and Panther UK – and outside the BNP headquarters the demonstration erupted into violence. Afterwards, Marc Wadsworth of the ARA, which was working closely with the Lawrence family (Searchlight said that it was making them "virtual prisoners") blamed "white Trotskyists" for the trouble.

Since then, it has been downhill all the way. In June, the ARA organised a march in Croydon the very same day that the ANL was holding an anti-fascist festival in Hackney. In September, the Lawrence family publicly disowned the ARA for exploiting Stephen's name, which they said was "too precious to be used in a cynical way". After first welcoming the group's support, they said: "To our dismay we found that the political agendas and rivalries of different organisations began to take over."

Not even the BNP's victory in the Millwall council by-election last month has forced the sides together. For the ARA, now boasting the support of an impressive list of parliamentarians and trade unions, the ANL remains a narrow, white left front organisation. For the ANL, the ARA remains too tied to respectability, and to the self-interest of a few black would-be politicians, to rise to the challenge now posed by the BNP. Just about the only consolation is that it is by no means clear that anything the anti-racists or anti-fascists do has any significant effect on the incidence or potency of racism or fascism.

Quite the most vicious feud in the anti-racist milieu is not between rival organisations but between Searchlight magazine and an independent researcher into the far right, Larry O'Hara. 

For more than a year, Searchlight has attacked O'Hara remorselessly. Last July, it described him as "a political errand boy for Patrick Harrington", the former leader of the National Front; by June this year he had become "a Nazi fellow traveller"; and by August he was "an informant for an agent of the Secret Intelligence Service".

For his part, O'Hara has accused Searchlight of acting as an arm of the secret state, spying on the left as well as the right and running an agent provocateur in the anti-fascist movement.

The evidence against O'Hara is simple enough. In May last year, he wrote an article in Tribune analysing the poor performance of the National Front in the 1992 general election, in the course of which he argued that Patrick Harrington's current outfit, Third Way, had "dropped anti-Semitism and moved away from fascism". Subsequently, in the spook-watchers' magazine Lobster, O'Hara examined Searchlight's account of the career of Steve Brady, a leading figure in the NF, as a link-man for European neo-fascist terrorism and extremist Ulster loyalism, in the course of which he gave credence, on circumstantial grounds, to Brady's own – somewhat less dramatic – account of his activities.

O'Hara is a long-standing critic of Searchlight, arguing that the magazine's blanket use of terms like "Nazi" obscures the complexities of the far-right scene; he also gave offence in some quarters by disputing a claim by Ray Hill, formerly Searchlight's main mole in the far-right, to have foiled a plot to bomb the Notting Hill carnival in 1981. That aside, all that the "Nazi fellow traveller" appears to have done, at least until this spring, is talk to fascists and on occasion believe what they say to him.

In April, however, he and Green Anarchist magazine published a pamphlet, A Lie Too Far, claiming that Searchlight's recent mole in the BNP, Tim Hepple (whose pamphlet, At War With Society, was excerpted by NSS in August), had acted as an agent provocateur in the anarchist movement, feeding (inaccurate) lists of fascists' names and addresses to Class War (in the person of Tim Scargill, later denounced by Searchlight as a fascist) and Green Anarchist. According to O'Hara, the idea was that anyone publishing these lists would become a target for attack by the far right Hepple, he alleged, was acting at the behest of MI5. 

In the light of this, and of a memorandum written by Searchlight editor Gerry Gable in 1977 when he was a reporter for London Weekend Television, which suggested clearly that he was engaged in "trading" information with the security services, O'Hara argued that Searchlight was simply an arm of the state.

(The "Gable memorandum", first brought to light by Duncan Campbell, Bruce Page and Nick Anning in the pages of the New Statesman in 1980, consists of a long report to LWT's head of current affairs and two producers, alleging that Phil Kelly, a left-wing journalist who subsequently became editor of Tribune, was a KGB agent and terrorist)

Now O'Hara's thesis might be a little far-fetched – although Hepple's weird behaviour does need some explanation – but that hardly makes him a "Nazi fellow traveller". So why the hysterical tone of Searchlight's responses to O'Hara?

Part of the answer is no doubt that Searchlight feels that it ought to fight fire with fire: O'Hara's pamphlet A Lie Too Far (which Searchlight claims to be the work of "Nazi counter-intelligence") is, to put it mildly, not the most temperate of works (it is also scruffy, over-written and badly in need of a sub-editor's attentions). There is no doubt either that O'Hara's assault on Searchlight has been lapped up by the far right, which is always amused when its enemies fall out.

But the ferocity of Searchlight's attack seems out of all proportion to the nature of O'Hara's original articles. Is it really such a crime to question Searchlight's assumptions about the nature of the far right?

A HOPE FOR PEACE?

New Statesman & Society, leader, 17 September 1993

The PLO-Israel peace deal signed on Monday in Washington is far from per­fect. It gives very little to the Palesti­nians apart from the hope that it might provide the basis for something better – and it could collapse at any point.

At worst, if opposition to the deal on either side intensifies in the next couple of months, it could fall apart before completion of Israeli military withdrawal from the Gaza Strip and the West Bank city of Jericho, the first step envisaged in the peace plan. Even if it survives until the Palestinians have elected their representative council – scheduled within nine months, despite the fact that the details of the electoral process and its powers have not yet been agreed – it could easily flounder on the questions deliberately left unresolved until the second and third stages of the process, supposed to be agreed within two to five years.

All the most difficult problems between Israel and the Palestinians have yet to be addressed. Both sides want east Jerusalem, illegally occupied by Israel in 1967 and with a largely Palestinian population (although in­creasingly settled by Israelis), and neither has shown the slightest willingness to compromise.

The Palestinians are insistent that all Pales­tinians, including those who no longer live in Israel or the territories seized and occupied in 1967, should have the right to return to Pales­tine; the Israelis disagree, and once again both sides have shown no signs of being prepared to fudge. The Palestinians want the Israeli settlements in the Occupied Territories ulti­mately to come under Palestinian jurisdic­tion; the Israelis refuse to consider any such thing.

Finally, there are apparently irreconcilable differences over what are usually termed "long-term security arrangements" – in other words, whether the Palestinians should be allowed to have armed forces or whether the Israelis alone should have them – and, perhaps most important of all, what sort of autonomous Palestinian entity emerges from the peace process. The Palestinians want their own independent state; the Israelis insist that the Palestinians become part of some confederal arrangement with Jordan. No one has yet come up with a solution that anyone be­lieves acceptable to both parties.

The peace process could break down on any one of these points. And at any stage, it is vulnerable to the actions of rejectionists on either side, with the PLO the only certain casualty if anything goes wrong. The PLO could all too easily prove incapable of polic­ing the Gaza Strip, where it has been steadily losing support to the Islamic fundamentalists of Hamas since the beginning of the Palesti­nian intifada in 1987.

If the PLO cannot stop attacks on Israeli settlements in Gaza or raids on Israel proper by rejectionist guerrillas based in Gaza, the response of Israeli public opinion will kill any thoughts of a long-term settlement. If the PLO suppresses Palestinian rejectionists by force of arms, however, it will lose its remain­ing credibility among the dispossessed in the refugee camps.

On the other hand, if Israel cannot rein in the settlers in the territories, many of whom are committed to defending their dream of Eretz Israel by force of arms, or indeed if the Israeli Labour government falls and is re­placed by a Likud-based coalition hostile to any sort of compromise, Palestinians will see no reason to support the peace process, once again undermining the PLO. Yasser Arafat has embraced an extraordinarily high-risk strategy.

But if euphoria is not in order, there are ways in which the deal marks a significant symbolic breakthrough. For the first time, Israel has recognised that the Palestinians are a nation with the right to self-determination; for the first time, it has accepted that it has to deal with the PLO if any lasting peace is to come about; for the first time it as at least opened the door to the possibility that it might have to give up the territories occupied in 1967.

Simply because the Israel-Palestine conflict has gone on for so long without even a glimmer of hope of a solution, this symbolic breakthrough is extremely welcome. It pro­vides hope where before there was only dead­lock and despair. The agreement might, just might, be what it has been hailed as, the first step on the long road to the lasting settlement of the Israel-Palestine question, which in turn is the only way of securing a lasting peace in the whole of the Middle East.

The task now for the rest of the world is to do everything possible to ensure that the pro­cess does succeed. That means international support for the fledgling autonomous Pales­tinian political and judicial institutions (not least in police training) and, crucially, an influx of aid to develop the economic and social infrastructure of the Occupied Territories, which have been starved of in­vestment for 26 years.

Gaza, in particular, is in a desperate state, with nearly a million Palestinians, three-quarters of them refugees, crammed into a patch of land 25 miles long and seven miles wide. Only a quarter of adult males have a full-time job. If the PLO is not to lose control of the Strip, and it must not if this week's agreement is to have any chance of success, Gaza needs large-scale investment at once.

But political and economic support for the Palestinians is not all that is needed. It is just as important for the world to keep up the pressure on Israel to stick with the timetable currently envisaged and to make the bulk of the concessions in the second and third stages of the negotiations, particularly on Jerusalem, the settlements in the Occupied Territories and independent statehood for Palestine. The Palestinians have made nearly all the compromises so far: a just peace depends on Israel reciprocating.

RELIGION AND EDUCATION

New Statesman & Society, leader, 27 August 1993

Once again, the question of state fund­ing for denominational schools has hit the headlines. The immediate rea­son this time is the government's an­nouncement last week that it would not grant voluntary-aided status to a private Muslim school in Brent, north London.

Baroness Blatch, the Minister of State for Education, said that the Islamia primary school, founded ten years ago by Yusuf Islam, formerly the pop singer Cat Stevens, did not qualify for state funding because there were already more than enough state primary school places in Brent. Muslims re­sponded by denouncing the government for pursuing a blatantly discriminatory pol­icy. If state funding is all right for 2,100 Roman Catholic, 2,000 Anglican, 21 Jewish and four Methodist schools, they argue, why shouldn't Muslim schools get it too?

As just about every quality newspaper has remarked in a leader, the Muslims seem to have a strong case. The government's excuse for refusing state funding is feeble even by its own execrable standards: the Islamia school is heavily over-subscribed, with a 1,000-name waiting list even though it charges more than £1,000 a year fees, and a majority of its 180 pupils live outside Brent. It is, by all accounts, including that of John Patten, the Education Secretary, who visited it earlier in the year, professionally run and regularly inspected, following the National Curriculum to the letter.

More important than the specific case of the Islamia  school, the way that Muslim schools are treated differently from those of other denominations is patently unfair. According to the most reliable estimates, there are in the United Kingdom today 1.8 million adult members of the established Anglican church, 1.9 million Roman Catholics, 1.2 million Presbyterians, 400,000 Methodists and 900,000 members of other Protestant de­nominations. Between 1975 and 1990, total membership of Christian churches declined by 15 per cent. The only Christian churches that have grown are evangelical and charis­matic ones.

During the same period, Islam became a firmly rooted part of British life, as did other religions rare here until the wave of immigra­tion from the Indian sub-continent in the 1960s and 1970s. There are now more than one million adult Muslims in the United Kingdom, 300,000 Hindus and 300,000 Sikhs. It is not inconceivable that, within 25 years, Muslims will outnumber Anglicans in the UK.

But if there is a clear case for treating Mus­lim schools no differently from Anglican, Roman Catholic, Jewish or Methodist schools, that does not necessarily mean that state funding should be extended. It would be just as fair to withdraw it from existing de­nominational schools and to make state edu­cation wholly secular – and there are sound arguments for doing just that.

The most important is based on the simple liberal principle that religious beliefs are es­sentially private, personal matters. The state should ensure that people are not persecuted for their religious beliefs (or indeed for the lack of them) and should intervene to stop religious practices that break the law. But that should be the end of its involvement. Just as it should do nothing to suppress religious belief, it should do nothing to encourage it. Yet, by funding denominational schools, that is precisely what the state is doing.

It is doing it, moreover, in a way that flies in the face of the assumption, universally applied to other spheres of life, that children do not have the experience to make respon­sible decisions, even about personal matters. Sex is barred until the age of 16, voting until 18 – but denominational schools operate on the basis that there is nothing wrong with a person's choice of religion being heavily in­fluenced, if not determined by, teachers before he or she has reached the age of ten.

Broadening the scope of denominational education would also increase racial segre­gation in society as a whole, which in turn would exacerbate racial tensions. As the Commission for Racial Equality used to put it (it has subsequently changed its line): "Sep­arate schools are in conflict with the pluralist principles of 'education for all', as not pro­viding pupils with a common education ex­perience, as absolving schools from the need to adapt to a multi-cultural society and as leading to community polarisation and isola­tion along racial lines."

Unfortunately, such opinions are rarely voiced these days in British politics. Politi­cians of all parties realise that, even though religious observance in Britain has declined inexorably in the past century, there are votes to be had in religion.

For the Conservatives, with little support among ethnic minority Hindus, Muslims and Sikhs, defence of the status quo against calls for the extension of the denominational schools system is a convenient means of pla­ying the race card to white voters, of a piece with being "tough" on "bogus asylum-seekers". For Labour, which once argued for the abolition of denominational schools (against the wishes of members in its north­-western and Scottish Catholic heartlands), promising to extend the system appears at­tractively fair to liberal opinion and goes down very well in key marginal seats in the Midlands and Yorkshire.

Ultimately, however, the problem is not just one of political opportunism. The whole question of state funding for denominational schools arises, in the end, because of the privileges granted Anglicanism as the official religion of the British state. As with so much that is wrong with British life, the only true solution will come when a government dares to give our creaking constitution a radical overhaul.

LABOUR'S ECONOMIC PROBLEM

New Statesman & Society, leader, 20 August 1993

Gordon Brown's speech this week, as he launched the Labour Party con­ference economic policy document, was the clearest indication yet that Labour has decided that its top political priority is to shed its image as a "tax and spend" party.

"Labour is not against wealth, nor will we seek to penalise it," said Brown. "Not only do we not tax for its own sake, we only tax if it increases the opportunities for individuals or for the community as a whole.

"On spending, we recognise that public ser­vices exist for one purpose – to enhance people's opportunities and prosperity. Wher­ever spending has become divorced from this purpose, it is wasteful and inefficient and we should cut it or eliminate it."

Brown's speech was short on detail and, typically, very careful. He did not promise that a Labour government would not put up taxes; he did not even say that Labour would not increase direct taxes. As far as public spending commitments are concerned, "there are none": Labour will not decide how much it wants to spend on what until the Commission on Social Justice, the non-party body set up by John Smith last year, has published its conclusions and the party has reviewed them.

Nevertheless, two things are pretty clear. First, Labour will not be fighting the next general election on anything like last year's shadow budget, with its promises of increases in pensions and child benefits paid for by the abolition of the ceiling on National Insurance contributions and a 50p top rate of tax on earnings above £30,000 a year.

If Labour does go for tax increases, they will generally not be income tax increases; to the extent that they are, they will apply only to the very rich. And, insofar as the tax and welfare systems are used for redistribution, it will be justified less in terms of achieving greater equality of outcomes than of encouraging greater equality of opportunity.

Second, Labour will not be fighting the next election on anything like the platform for Keynesian reflation advanced by Bryan Gould, Peter Main and others on the soft left of the party. For Brown and the Labour leadership, public spending is not a good thing that encourages the growth of demand in the economy: it has to be kept firmly under control and cut where possible.

If Brown's speech left any room for doubt on this point, there is none in the document that it launched. Its familiar analysis of the failure of Britain to invest in industry and training and equally familiar proposals for "supply-side" measures to rectify this failure are accompanied by a straightforward rejec­tion of the idea that Keynesian demand man­agement is the key to turning round the British economy: "Now that we live in an increasingly global economy, care must be taken to ensure that an injection of resources does not simply lead to more imports – and therefore more output in competitor countries – but increases in out­put and jobs here.

"The key stimulus to investment is, of course, the prospect of growing demand. To pretend that supply-side measures alone are sufficient to secure the level of investment that Britain needs is to neglect this basic fact. But to pretend that the management of de­mand alone can sustain high levels of em­ployment over the long term is to misunderstand the current predicament of the British economy, which has an ever worsen­ing deficit despite the longest recession since the war. Without creating extra capacity, ex­panding demand will in due course bring an even worse balance of payments and increas­ing inflation."

Needless to say, the Labour left is less than pleased at what it sees as Brown's kow-tow­ing to the Tories on tax and macroeconomic policy – and they could turn out to be right.

But much of Brown's "new approach" makes sense. On tax, it would be madness for Labour to risk losing another election by promising increased taxes on middle incomes. Even if the possibility is discounted that, by the time of the next election, economic recovery might just have given the Tories enough room to cut income tax, there are plenty of ways of raising indirect taxes, if needs be, without making the tax system more regressive.

More importantly, on macroeconomics, Brown is quite right to dismiss the possibility that plucky little Britain could go it alone with some version of the one-nation Keynesianism that underpinned the Alternative Economic Strategy of the early 1980s. The globalisation and increased mobility of capital really do make it impossible for a medium-sized na­tion-state, even one without a massive bal­ance of payments deficit, significantly to boost demand without dire consequences. The last time it was tried, in France in the early eighties, it failed ignominiously – and there is every reason to believe that Britain in the late nineties would fare even worse.

The problem is that, as things stand, this leaves Labour with nothing more than its supply-side measures to distinguish itself from the government, and training and tax breaks for investment do not add up to an election-winning macroeconomic policy package, however often the mantra is re­peated and however important the skills base and the tax regime are for attracting capital and jobs to Britain.

Just about the only way out is for Labour to go beyond the limits of the nation-state and to look to the European Community as the agent of an alternative macroeconomics that goes beyond the supply-side. Yet the EC merits only the briefest of mentions in Labour's Economic Approach, and then only as a possible forum for co-operation among nation-states. Brown still has his work cut out if he is to offer a convincing alternative.

LABOUR’S UNION ROW: WHAT A LOAD OF RUBBISH!

Tribune leader, 11 June 1993

Labour’s row over its procedures for selecting parliamentary candidates and electing its leadership is deeply de­pressing. The time and energy that have been wasted on this senseless internal bust-up should have been used to develop the coherent political strategy and radical vision that Labour so obviously lacks.

Both sides in the argument have been acting as if something extraordinarily im­portant is at stake. Some claim that the in­troduction of one member one vote would transform Labour’s relationship with the trade unions or perhaps even destroy it. Others argue that Labour’s credibility as a democratic party would be undermined without the immediate introduction of OMOV. Still others give the impression that Labour’s chances in the next election some­how depend on how the row is resolved.

All this is rubbish. Now that all sides have agreed that everyone involved in selections and leadership elections should be balloted, there is no way that any of the op­tions on offer lack democratic legitimacy.

More importantly, the reality is that par­liamentary selections and leadership elec­tions are not particularly crucial in defin­ing the relationship between Labour and the unions. Contrary to the hype on all sides, even simple OMOV, as advocated by John Smith and the so-called modernisers on the National Executive Committee, would make only the smallest of changes to the nature of the party-union link.

Whatever happens, Labour will remain utterly reliant on the trade unions to pay its bills until some government (which will not be Tory) introduces state funding of po­litical parties. Whatever happens, the unions will retain a decisive block vote at Labour Party conference, will keep more than one-third of the seats on the NEC and will still have representation on Con­stituency Labour Party general commit­tees.

Even with OMOV, the Tories would be perfectly   justified    in    saying    that Labour is the party of the trade unions. The current row, in short, is not about whether there is a union link or not: it is about the party’s procedural minutiae. While these are of great interest to Labour politicians, trade union leaders, political commentators and a handful of ordinary members of the party, they are not burning questions for most of the dwindling band of Labour card-carriers, let alone for the vast majority of voters.

For some unfathomable reason, most sane Labour Party members, along with most voters, consider that the credibility of the party’s programme and of its front-bench team matters more than the technicalities of internal party organisa­tion.

From this point of view, one can only de­spair that many senior Labour figures have leaped into the OMOV fray with such rel­ish, displaying an enthusiasm that they have not applied to any other task in the past year.

In the past week, Labour has gone from looking lacklustre and dull to appearing in­sular and introverted, utterly incapable of even the most elementary ordering of polit­ical priorities.

One hates to imagine what it would be like if it actually had some power.

STILL FIGHTING:INTERVIEW WITH BARBARA CASTLE

Tribune, 11 June 1993

The most prominent Labour woman of the twentieth century is still as active as ever. As her memoirs are published, she talks to Paul Anderson

"We're too honourable," says Barbara Castle. "I'd like us to fight a bit more dirtily in the gutter, to counteract the sort of Tory lies that have smeared Labour over the years and made the capture of power almost impossible." Castle is 82 now and has been a peer since retiring as a Manchester MEP in 1989. But she has lost none of the combativeness for which she was famed as a Labour Cabinet Minister in the sixties and seventies. It is clear, however, that she thinks that the party these days could do with a dose of her old fighting spirit.

"I think the Labour Party's problemis psychological," she says. "We haven't got the killer instinct. We should study the Tories' techniques. Their parents didn't send them to public school for nothing. They taught them to rule, to manipulate the facts, to lie. The Tories are brilliant at it. Their approach is: 'Never apologise, always attack.'"

Labour, however, seems to be on the defensive now, even though the government is in an appalling mess. "We are suffering from a surfeit of blandness," she says of Labour's current frontbench team. "I think Robin Cook is the most effective fighter among them. Gordon Brown, Tony Blair and the others, they're all very able but they're too bland for me. The public has an enormous admiration for someone who is prepared to be unpopular."

Castle should know. In her time as a minister in Harold Wilson's governments she spent long spells as a media hate figure, particularly as the employment minister responsible for In Place of Strife, the first Wilson Government's abortive attempt at trade union law reform. In the 17 years since she was fired from the Cabinet by James Callaghan, however, her reputation has been transformed.

Even lifelong Tories now tell her that they respect her for standing up for what she believes, she says.

The last couple of years she has spent writing her memoirs, aptly titled Fighting All the Way, which are published this week. They have already caused much comment in the media for the frankness with which she discusses her personal life, in particular her affair with William Mellor, the journalist who became the first editor of Tribune, in the late thirties. (She also castigates Michael Foot for telling a story that implied that he and she had a dirty weekend in Paris in 1938: they didn't, she says.)

But there is an ulterior motive at work here. "I made the book as racy as I could in order to get people to read the solid stuff," she says with a disarming smile.
And there is plenty of "solid stuff", particularly on the periods before she became a minister and after she was fired (her time in office is covered more fully by her published diaries), including some trenchant remarks on the Labour Party since she left the House of Commons in 1979.

She is a fan of Neil Kinnock, although she reckons that his advisers drummed his passion out of him, and reckons that John Smith is "a man of very good political instincts".

"I like his doubts about proportional representation, for one thing," she says. "I'm so concerned to keep our first past the post system, It gives each elected MP the feeling of status, independence and authority that doesn't exist in Europe."

Nevertheless, the policies that Labour's current leader and his predecessor have foisted on the party leave Castle cold. On the economy, she says, "We have robbed ourselves of some of our best weapons of attack with the orthodox policies that have been followed. We have always tended to attach too much importance to a limited range of orthodox economic indices."

Labour's policy in the run-up to the last election of defending the pound's value in the European exchange rate mechanism was just the latest example of Labour's tendency to economic conservatism, she argues. "We threw away the attack we could have made on the Government over the ERM. That sort of linking of currencies from highly divergent economies in Europe was a recipe for disaster. To tie us into the ERM at that ridiculous value of sterling was madness."

Before the ERM there were other, equally pernicious, orthodoxies that tempted Labour: the Treasury line that was swallowed by Philip Snowdon and Ramsay MacDonald after the great crash of 1929; Wilson's obstinate refusal in the sixties to devalue until forced to; Callaghan's "obsession with inflation".

Now what is needed, she goes on, is a "whole change of approach" to economic policy: "We will not win again until we put ourselves at the head of a movement which makes high employment and good wages its gools. Why should the rights of people to work and a decent standard of living be sacrificed to purely financial goals?

"When we criticise the government's economic policy without that big change in approach, we are frolicking on the margin. Is it not possible for highly advanced industrial economies in the west so to organise and to plan that they create an economic system which does put people to work?

"We've got to go back to winning the voluntary consent of the trade unions in the economic planning that's really going to guarantee the social wage in the form of the health service, a good state education system, a transport system that isn't just a continuous misery. We need an informed alliance with the trade unions and their self-discipline. I've operated a statutory incomes policy and, believe you me, it's diffcult."

Economic policy is not, however, the only area in which Labour's recent performance has not been up to scratch in Castle's eyes. She was a leading anti-Common Market campaigner in the seventies and barely relaxed her antipathy to the European Community as the leader of the British Labour Group in the European Parliament between 1979 and 1985. Unsurprisingly, she is now a fierce critic of the Maastricht treaty. She made a robust speech against the government bill on the treaty in the Lords this week — and she has no time for the Euro-enthusiasm that engulfed Labour in the eighties.

"My position on the pro-Europeanism that has swept the party is not that I want us to withdraw now," she says. "We've got to live with what previous defeats have left us with. But the whole approach of the Maastricht treaty is institutionalised deflation. The conditions for economic and monetary union are purely financial. And the idea that economic and monetary union can be democratically controlled is a mirage."

The European Parliament, she says, is simply too multinational, too big and too unwieldy to keep the EC's executive bodies under control. "I am telling you, laddy, you cannot get democratic control from such a parliament. It's logistically impossible. I still believe that we should fight on the basis of a wider and looser confederation of nation states. Let unity grow from the small but important things that bring people together — exchanges of students, subsidising language lessons, MPs' visits. That is a far cry from imposing from above an economic and financial straitjacket."

HAVING A GO: INTERVIEW WITH CHRISTOPHER HITCHENS

Tribune, 28 May 1993

The journalist and controversialist is back from the US to launch a new book of essays. He talks to Paul Anderson

“We play a game on the left in America,” says Christopher Hitchens. “Which election do you wish that the Republicans rather than the Democrats had actually won?

“Some very daring souls say that if Thomas Dewey had beaten Harry Tru¬man in 1948 there would have been no cold war,” he says. “People can never dare to take it back as far as Franklin Roosevelt. And some of them don’t agree with me that Barry Goldwater should have beaten Lyndon Johnson in 1964 – because then there would have been no Vietnam war.”

Hitchens, in London for the launch of his latest collection of essays, For the Sake of Argument (Verso, £18.95), delights in upsetting received wisdoms, particularly those of the left.

Indeed, he does it for a living. Since leaving Britain for the United States 15 years ago, he has written a column for The Nation, the American weekly that plays much the same role as the New Statesman here, in which he has made a speciality of stirring up as much controversy as he can in pursuit of hypocrisy and cant.

He has done much the same in many other Ameri¬can periodicals and, particularly of late, on television and radio talk shows, becoming something of a minor celebrity.

America, it seems, loves to hate Hitchens’s posh Brit drawl, his alien far-left politics and his ability to shock. Here, we get the articles between hard covers, and late. Some of the stuff in For the Sake of Argument dates back to 1987, although most, including the best of the columns from The Nation, are from 1990-92. Still, late is better than never.

The book includes pieces on an extraordinary range of themes – from P. G. Wodehouse through the delights of “Booze and fags” (written, he claims, “while cold sober”) to the fatwa against Salman Rushdie – and it is all worth reading. But the best bits, undoubtedly, are his commentaries on American politics, especially the no-holds-barred assault on Bill Clinton, which has been almost uninterrupted since the Arkansas governor started running for the Democratic presidential nomination.

“So what is all this garbage about ‘the new paradigm’ of Clinton’s forthright Southern petty-bourgeois thrusting innovative fearless blah blah blah?” he yelled at readers of The Nation in March last year after Clinton had authorised the execu¬tion of a prisoner on death row. “In a test of principle, where even the polls have shown that people do not demand the death penalty, he opted to maintain the foulest traditions and for the meanest purposes. As the pundits keep saying, he is a man to watch.”

It is clear that Hitchens is already well on the way to deciding that last year’s election was one of those that the Democrats should have lost. Clinton is proving precisely the disaster that he thought he would be.

“In the campaign, his only consistent point was to say that he would cut the tax burden insofar as it fell on the ‘middle classes’, whom he refused to define,” he says. “He wanted everyone who heard that message to think it meant them. Now he’s increasing taxes, mainly on the middle-income population, and everyone in the administration is pretending that this isn’t a breach of promise.

“You’re supposed to get points for lying in that way, and you do get them from the opinion poll racket and from the people who write columns in the bourgeois press. But actually it isn’t all that smart because people find you out quite quickly.”

Clinton, he goes on, was an establishment candidate, bankrolled by Wall Street and special-interest lobbies. “The reason substantial sections of the establishment swung to him is that they’re afraid of the underclass. It was the Los Angeles riots that got Clinton elected. His test will be whether he can bring in these people who are very nearly excluded from society.”

So far, the signs are ominous. The reform of the health service that Clinton promised during the campaign has already foundered, as has his at¬tempt to give a boost to the economy.

On foreign policy, “in many areas he’s worse than George Bush”, says Hitchens, quoting the new president’s policies on the Middle East (where Clinton has been much more sympathetic to the Israel lobby than his predecessor), Cuba (where he “campaigned against Bush from the right”) and nuclear testing.

“Whatever you think about Bosnia, it is only possible to say that Clinton has been contemptible. He played with all sorts of solutions, raised expectations and, when anything showed signs of giving the least political difficulty, he dropped it. By any standards, a really low-grade performance.”

The only thing that Clinton is good at, according to Hitchens, is appealing to the myriad of special-interest lobbies that make up so much of what thinks of itself as the American left: “He has manipulated images so that people in the gay movement, the feminist movement, the civil rights movement and the Hispanic lobby feel that privately he’s on their side.”

Hitchens is scathing about this pandering to what he calls “identity politics” – the idea that there is something radical about identifying oneself as a member of a group ‘“oppressed” by dint of sharing such traits as skin colour, gender or sexual preference.

His opposition is not based on a reactionary yearning for a society run by white male heterosexuals: rather, his point is that the growing importance of racial and sexual identities in politics is a symptom of social fragmentation, with no necessarily radical implications. “The left has falsely convinced itself that there are all of these individual emancipations going on, and I think it’s going to be disappointed. What’s missing in all this is any conception of citizenship or comradeship or the common good. And that’s too precious to give up to any special claim.”

Hitchens’s initial journalistic reputation was founded on his coverage of British politics in the seventies, particularly for the New Statesman. He left for the US and The Nation because “the Statesman was going down the karsy very suddenly and very depressingly and there was nowhere else that I wanted to go or would have had me. Everything else looked pretty lousy too: the experience of the Callaghan years, seeing Thatcherism coming. I thought: ‘If I don’t get out now, I never will.’“ Even the left of the late seventies suffered from “extreme crumminess”, and the Labour left was worst of all. “Internal fights on the National Executive Committee don’t make very interesting copy even if you’re interested in it,” he says.

For all this, he retains a keen partisan interest in Britain. He is, of course, no admirer of the contempo¬rary Labour Party. One of the best pieces in For the Sake of Argument is “Neil Kinnock: Defeat Without Honour”, written for The Nation after last year’s British general election, an excoriating assault on Labour’s failed strategy in the late eighties; “Tell us what you want, it wheedled the voters, and we will agree to stand for it. Here are our principles, and if you don’t like them, we’ll change them.”

Hitchens has not changed his mind in the past year. Unsurprisingly, he is particularly hard on the Clintonmania that hit Labour’s upper echelons six months ago. “Clinton’s victory was something to cling to after the humiliation of Kinnock: here’s the new paradigm – apolitical, technocratic, lowest common denominator – and it works!

“Labour has learned absolutely nothing from the defeat of Kinnock. All its leaders think is: ‘Well, we must try harder next time.’“ He remembers John Smith from the seventies as “a talkable-to guy”. But “throughout the whole of the Wilson-Callaghan humiliation I don’t think he gave the whips any trouble at all. He’s a conformist, a complete conformist.

“People always say: ‘Well, what about the alternative?’ That, of course, turns any dolt into a master political strategist, as we saw with the Kinnock team. ‘Consider the alternative’ would be my slogan.”