IS MAJOR FINISHED?

New Statesman & Society leader, 6 May 1995

It would take just 50 Tory MPs to fail to vote for the Prime Minister next Tuesday to make his position untenable

Is John Major finished? We'll find out next Tuesday, when the Tories' vote of confidence in his leader­ship takes place. With a majority in the Commons of only eight, his credibility, already in tatters, will be utterly destroyed even if just 50 Tory MPs fail to vote for him. Any more than that would surely be enough to prompt his immediate resignation and a real leadership election contested by the Tories' heavyweights.

As Ian Aitken argues on page 14, what all the pundits thought last week was a brave gamble by the Prime Min­ister is now looking increasingly like a stupid act of des­peration. This is only partly because of the decision of John Redwood to resign from the cabinet and take on Major in the first round of the leadership contest. Red­wood is, of course, a somewhat more substantial figure than most of the back-bench Europhobes who were being tipped as stalking-horses before he announced his candidacy, and, unlike Norman Lamont, he cannot be easily dismissed as a sour man eager to extract his revenge.

But he is not really a serious challenger for the Tory leadership. He has the charisma of a speak-your-weight machine, and his programme is a mish-mash of discred­ited free-market dogma, xenophobic nationalism and crude authoritarianism – including his backing for the return of the death penalty – that is radically at odds with the mood of the country. His few concessions to the "One Nation" Tory left are superficial and wholly unconvincing. Only a party that had completely taken leave of its senses would consider him less of an electoral liability than Major. Even the Tories are not yet totally barmy.

All the same, Redwood has turned out to be as good a stalking-horse as anyone, and it is by no means unlikely that there will be sufficient votes for him and abstentions next Tuesday to force Major to resign. What then? It is, of course, impossible to tell – and Tory leadership elec­tions have a habit of yielding surprising results. Neither Margaret Thatcher nor Major were favourites for the job when they got it in 1975 and 1990 respectively, and it's quite feasible that 1995 will follow a similar pattern.

Nevertheless, the smart money has to be on Michael Heseltine emerging from the second round as leader.

He can rely on the support of the pro-Europe left of the party, whose other favourite, Kenneth Clarke, is consid­ered too divisive to become leader; and he has wide­spread support among the large swathe of "unpolitical" Tory MPs who are worried about nothing more than the prospect of losing their seats: alone of the obvious candi­dates, he is considered by his party as a vote-winner. He also has the backing of that part of the Europhobe right that has written off the next election and is prepared to put up with Heseltine's Europhilia because it reckons that he can be relied upon to resign as soon as he loses the election. At this point, they believe, Michael Portillo or some other right-winger – perhaps Redwood will be a really credible candidate by then – would be a shoo-in as leader of the opposition.

But enough of speculation. Whatever happens, one thing is certain: the Tory party is now in a state of civil war over its policy towards Europe, and there is no sign that any result next Tuesday, or in the second round if there is one, or in November if Major hangs on severely but not mortally wounded, can possibly provide a resolution. There is no leader who can command the confidence of the whole party, no compromise that can be assured of widespread consent. The best that any leader could hope for would be a ceasefire until the next election – but that, as Major himself has discovered in the past year, is some­thing that the Europhobes will not allow.

All of which makes a fascinating spectator sport for journalists and others obsessed with politics, but it leaves the electorate as a whole completely cold. Most people rightly see the Tories' divisions over Europe as a symp­tom – like sleaze – of political exhaustion. The Tories have, quite simply, been in power too long, and everyone knows it apart from themselves. They might limp along until 1997 under Major or under a new leader – but they cannot regain either their sense of purpose or the sup­port of the electorate that they lost so soon after they lied their way to victory in 1992.

The country does not want the current Tory leader as Prime Minister – and it doesn't want another Tory leader as Prime Minister. If Major really were brave, he would have done the decent thing – and called an imme­diate general election.

TRIBALISM IN POLITICS

New Statesman & Society leader, 23 June 1995

The scandal of Monklands council in Scotland should teach Labour some lessons about the dangers of slavish loyalty to party

THE ARMS SALES SCANDAL

New Statesman & Society leader, 16 June 1995

Michael Heseltine has struck a welcome blow for Lord Justice Scott's inquiry into arms sales to Iraq

"I was not briefed on this contract at any time during my non-executive directorship," Chief Secretary to the Treasury Jonathan Aitken told the House of Commons in March after docu­mentation emerged proving incontrovertibly that BMARC, an arms company of which he was a director, had in the late 19805 sold naval guns to Iran, exporting them via Singapore to get round the government's ban on arms sales to Iran or Iraq. The exercise was code-named "Project Lisi" by the company, and it was dis­cussed at board meetings at which Aitken was present. "Seven years after the event," he said in March, "I have no recollection of ever having heard about Project Lisi or read about it in company reports."

This week, it became clear that, even if Aitken knew nothing, the British intelligence services knew plenty. President of the Board of Trade Michael Heseltine stunned the Commons by announcing that, as early as 1986,  "intelligence was obtained" that Oerlikon, BMARC's Swiss parent company until BMARC was sold to the British firm Astra in 1988, had concluded a con­tract with Iran. "The intelligence picture developed in 1987, when it was revealed that naval guns made by Oer­likon had been offered to Iran by a company in Singa­pore. In July and September 1988, two intelligence reports rounded out the picture by referring to naval guns and ammunition being supplied by Oerlikon through Singapore to Iran."

And yet BMARC continued to be granted permission by the Department of Trade and Industry to export guns to Singapore. The intelligence reports were apparently not passed on to the DTI, and even if they had been it's a moot point whether anyone would have taken any notice. The DTI Export Licensing Department was in the habit of granting military export licences without full documentation. Between 1986 and 1989, said Hesel­tine, 74 per cent of military export licences were granted without all the relevant papers being presented.

Aitken is sticking to the line that he knew nothing about Project Lisi, which, although even less credible than it was in March, is hardly surprising. Whether it saves his skin is another matter entirely. The chief secretary cannot escape the foul stench of dishonesty and graft that clings to him, and both he and his loyal colleagues know that it will not take many more revelations for his political career deservedly to be cut short.

But this is only a small part of the story. Far more important than the impact of Heseltine's statement on the fate of Aitken is its devastating effect on the attempt by several prominent Tories to rubbish Lord Justice Scott's inquiry on the sale of arms to Iraq. The clear impli­cation of Heseltine's announcement that three-quarters of military export licences were granted without proper documentation is that there was a policy in the late 1980s of allowing just about anything to be sold to just about anyone – regardless of formal restrictions either secret or publicised. It is difficult to think of a more effective way of silencing those Tory politicians who have seized on the occasion of a couple of pre-publication leaks of Scott's long-delayed report to bleat about the unfairness of the inquiry procedures and to claim that Scott had exceeded his brief. After Heseltine's statement this week, the problem seems to be that, in concentrating just on Iraq, he has not cast his net widely enough. Indeed, we need nothing short of a full-scale independent public inquiry into the whole of Britain's arms export business.

Of course, Heseltine has his own reasons to give Scott a boost. Alone among senior Tories in the current govern­ment, he has nothing to lose over the arms-to-Iraq affair. Unlike John Major and Douglas Hurd, he cannot have his competence or integrity called into question over his handling of exports to Iraq in the late 1980s: he was out of government at the time. And unlike Kenneth Clarke, he participated only unwillingly in the bodged cover-up of issuing Public Interest Immunity certificates to prevent a fair trial of the defendants in the Matrix-Churchill case.

But even if Heseltine is using the arms sales scandal in his campaign to seize the keys of Number Ten in the autumn, we should be grateful for his intervention. The attempt of the guilty men – notably William Waldegrave and Geoffrey Howe – to cast aspersions on Scott's meth­ods and competence has been shameful. Any blow against their cynicism has to be welcome, even if it is delivered from the basest of motives.

SAFETY FIRST?

New Statesman & Society, 9 June 1995

Contrary to chancellor Kenneth Clarke's claims, there's a world of difference between the Tories and Labour on the big issues of economic policy, shadow chancellor Gordon Brown tells Paul Anderson

Shadow chancellor Cordon Brown is in a happy, bullish mood  – and that, for him, is unusual, at least if you believe the Fleet Street con­sensus. Brown attracts the whole gamut of disapproving adjectives from journal­ists: glum, cagey, humourless, dour, cau­tious, workaholic to the point of driving his staff nuts. He talks in soundbites, they say. He doesn't make jokes. Worst of all, he never mentions his personal life.

A couple of years ago, the caricature seemed cruel but almost apposite. I inter­viewed Brown at length just before Christmas 1992, after the debacle of Britain's withdrawal from the exchange rate mechanism of the European Mone­tary System. Then, he came across as a man besieged in a bunker  – and in many ways he was. Labour's Eurosceptic ten­dency, led by Bryan Gould, had revolted publicly over his backing for British membership of the ERM and his refusal to endorse devaluation: three months after the event and six months into his occupancy of the shadow chancellorship, he still had to be pressed to admit that, if Labour had been elected the previous spring, the new government would have devalued the pound as soon as it took office (albeit within the ERM). Brown wasn't exactly downcast, but he was any­thing but relaxed. If he knew what he wanted, he also knew that it would be a long, friendless struggle to get it  – and he was right. The next year saw Brown sub­jected to near constant attackfrom the left and the unions. In autumn 1993, he just scraped on to Labour's National Execu­tive Committee.

Now, however, as he leans back in his chair in his Westminster office, Brown seems a lot less anxious. He still talks in soundbites  – there's no other politician in Britain today who comes up so consis­tently in conversation with the phrases he uses in his speeches  – but the joins don't show as they once did. He is still just as serious, and he is still just as careful. But he smiles at awkward questions and shrugs off criticism. Gordon Brown, although he'd never admit it publicly, is a man who thinks his time has come.

It's easy to see why. After the trials and tribulations of his first two years as shadow chancellor, things at long last seem to be going his way. Labour is not only well ahead in the opinion polls but has overtaken the Tories in ratings for economic competence. Brown's populist crusade against the excess pay and perks of privatised utility bosses has struck a chord with both his party and the public at large. And, particularly since Tony Blair's victory on Clause Four, left-wing critics of the leadership line on economic policy seem to have melted away. The only people to have had a go at Brown's string of policy speeches in the past few weeks have been newspaper columnists.

"The principal reason for our defeat in 1992 was our failure to convince people on economic policy," says Brown. "No matter what the truth was, we were seen by the public as the party that would tax for its own sake and spend wastefully, we were caricatured as the party that would take the soft option on devaluation and give in to special interests. Since then, we've pursued a strategy that hasn't made me popular with some people at some times. But it's now the Conservatives who are seen as the party that has taxed unfairly and spent wastefully and ineffi­ciently, on unemployment in particular, the party that has devalued and has repre­sented special interests, particularly with the privatised utilities. Labour is now seen as speaking for the public, as the party of economic competence as well as social justice. We've got a clear analysis of the economy, clear prescriptions. They are different from what we were saying 16 years ago. But the world has changed."

There are those who believe that Brown has taken more from the Tories than their reputation for competence, and that the differences between the two parties on the broad questions of policy are now minimal. If his critics in the Labour Party have been quiet of late, their worries were given voice by Chancellor Kenneth Clarke the week before last, when he declared: "I must be the first Chancellor
who has a shadow chancellor who is not criticising what I am doing. Gordon Brown's problem is he thinks what I am doing is working. He has not for some for time opposed anything I have done."  

Brown is contemptuous of the accusation that he has adopted the Tory approach. "We start from a wholly differ­ent analysis from the Conservatives' of what is wrong with the British economy. We believe that it simply doesn't have the capacity to sustain the levels of growth, of living standards, of public services that we want. That's a product of 16 years of a government with a wholly wrong philos­ophy. If the Tories take on our agenda, it's a recognition that the political argument is moving in our direction. But for them to become believers in intervention for industry, skills, training and education will make them look like tourists in a for­eign country with a phrasebook they don't properly understand."

Labour's promise to be "tough on infla­tion, tough on the causes of inflation" does not indicate an acceptance of the Tories' priorities, he insists. "We've got an understanding of the causes of infla­tion and they haven't. The cause of infla­tion is the same as the cause of high levels of unemployment: the limited capacity of the economy. Every time the economy expands, it runs into skills shortages and technology bottlenecks, and the result is inflationary pressures. Labour will be tougher on the causes of inflation than the Conservatives because we under­stand its causes. And it's right that we should be tough. The war against infla­tion is a Labour war. It affects pensioners and those with savings, it damages investment and therefore jobs. The idea that Labour should be less tough on infla­tion is wrong."

Similarly, "the Labour Party is not the party of devaluation: the Conservative Party is. The value of the pound against the Deutschmark has halved since 1979. Britain had to devalue in 1992 because of the Tories' failure. Labour is not the party of the soft option."

This stance is underlined by the com­mitments in the draft of Labour's new macro-economic policy document, A New Economic Future for Britain, which goes to the party's National Policy Com­mission this weekend and, suitably amended, will then be adopted by the Labour conference in the autumn. It states that "Labour's economic objective is to deliver the highest possible level of sustainable growth consistent with low and stable inflation", promising "an inflation target alongside a medium-term target for the trend rate of economic growth". Labour will "eschew short-term, quick-fix, tax-spend-and-borrow solutions": in particular, it will not bor­row to finance consumption and will "keep the ratio of government debt to gross domestic product stable at an appropriate and prudent level".

Brown insists that this does not mean business as usual. The policy document includes the objective of meeting "the 1944 white paper commitment to achieve high and stable levels of employment", he points out, and he is certain that a mixture of supply-side measures to encourage employment growth and a new emphasis on the long term in eco­nomic policy will deliver the goods. The document also explicitly backs moves towards European monetary union.

Brown won't be drawn on the timetable for EMU  – "We've got to wait and see how things develop"  – and rehearses Labour's familiar insistence on tougher pre-EMU convergence criteria and greater political accountability for the European central bank, but he is unashamedly enthusiastic about Europe: "The idea that Britain should distance itself from Europe is simply not credible. We ought to be leaders in Europe." He points proudly to the proposal in the new document for the creation of a "new Euro­pean growth fund that would be explicitly countercyclical, that could run with a sur­plus during a period of recovery and run in deficit if necessary in a recession". If Keynesianism in one country is no longer feasible, it seems that there is still room for it on a continental level.

What's missing in all this, of course, is the detailed tax, spending and borrowing plans that Labour will put before the voters at the next election. The sort of budget measures Labour would intro­duce are familiar from the party's sugges­tions at budget time in the past couple of years: bigger tax breaks for investment and more spending on education and training, paid for by tightening up on tax evasion and introducing a windfall tax on privatised utility profits. But, aware of the problems Labour faced in 1992, when it fought an election in the middle of a recession on policies decided at the height of a boom, Brown won't even promise that his budget proposals from 1994 will find their way into the manifesto.

"It would be irresponsible to make promises two years before an election when we don't know what the economic circumstances will be at the time," he says bluntly." I assure you that we are not going to hide what we're planning to do. But we will make our decisions on spend­ing and taxation and so on at the appropri­ate time." If Brown has reason to be pleased with the way things have turned out so far, it's impossible to avoid the con­clusion that the most difficult part is still to come.

NO UN PULL OUT FROM BOSNIA

New Statesman & Society leader, 2 June 1995

  

The UN must stay in Bosnia – but in the long term the answer to Radovan Karadzic is to let the Bosnian government have the arms to kick him out

The hostage crisis in Serb-occupied Bosnia has been waiting to happen since the very start of the deployment of United Nations forces to escort aid convoys in 1992.

From the beginning, the UN troops have been peace­keepers in a war zone. They have had to rely on the good will of the combatants to go about their business, and the enemies of the Bosnian government  –  initially both Croats and Serbs, since 1994 the Serbs  –  have used this to further their own interests. Aid convoys have been held up and pillaged, UN troops have been messed around and humiliated. It was always likely that, if Bosn­ian government forces started to gain military advantage or it seemed that the international community was plan­ning to intervene on the government side, the Serbs would take a desperate course of action. Which is pre­cisely what has now happened.

In the past few months, the military tide has turned against the Serb aggressors in Bosnia. Radovan Karadzic's brutal Bosnian Serb regime is beginning to crumble both economically and militarily. The Bosnian Serb troops retain the superiority in heavy weapons, which they inherited from the arsenal of the Yugoslav army, and which allowed them to seize 70 per cent of Bosnia in the first place. But that superiority is declining as the gov­ernment finds ways of evading the arms embargo imposed by the UN "on all sides", which came close to crippling Bosnian resistance to Serb expansionism.

To make matters worse, the dictator of Serbia proper, Slobodan Milosevic, decided last year that he had more to gain from the removal of sanctions on Serbia itself than from continuing to back Karadzic's refusal to make even the small territorial concessions demanded by the Con­tact Group plan for carving up Bosnia (to dignify it with the title of "peace plan" would be a travesty) .

Milosevic retains his dream of a Greater Serbia: contrary to what the British Foreign Office and others would have us believe, he has not suddenly changed into a dove and should on no account be encouraged, let alone trusted. But from Karadzic's point of view it appears that he has joined the ranks of the enemies of the "Republica Sprska". Since Milosevic started trying to bully him into accepting the Contact Group plan, Karadzic has felt that the whole world is conspiring against him.

Hence, after Nato aircraft struck last week against Serb military targets in a belated response to continued mur­derous artillery attacks by Karadzic's forces on unpro­tected civilians in Bosnian government enclaves, the Bosnian Serbs upped the ante, seizing hundreds of UN troops as hostages. In response, the Contact Group powers rushed further troops into Bosnia. As NSS went to press, each side was waiting for the other to blink.

The dangers in this stand-off are multiple – but, con­trary to the populist chorus in the Commons on Wednes­day, the greatest of them is not what might happen to the troops being held by Karadzic's forces. Worrying as their predicament is for them and their families, it is less so than the prospects for Sarajevo and the Bosnian govern­ment enclaves in eastern Bosnia if the UN troops are withdrawn. Unless Karadzic is more stupid than he has so far appeared to be, the hostages will come to no harm. The same, however, cannot be said of Sarajevo and the defenceless communities of eastern Bosnia, which will be destroyed by Karadzic's thugs if the UN pulls out. It is essential that the reinforcements sent this week are used to protect the Bosnian enclaves, not to facilitate UN with­drawal from Serb-occupied Bosnia.

But that can only be for the short-term. Critics of the UN deployments are right to argue that the international community cannot go on forever running food and other essential supplies into the besieged towns. Somehow, the sieges must be lifted and the besieged towns allowed to return to a normal peaceful existence.

The question is how. Karadzic and his cronies have this week shown just how naive were all those diplomats, from Lord Carrington on, who thought that the way to secure peace in Bosnia was to divide it on ethnic grounds, with Karadzic controlling the majority of territory. Never has it been clearer that the answer is to give the Bosnian government the tools and let it finish the job. Who cares if it upsets the Russians – it's way past time to lift the arms embargo on the Bosnian government.