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Spies like us

In 1949, George Orwell claimed that the NS was a warren of communists and fellow-travellers. Yet up to the 1950s, it was anything goes; information, disinformation, propaganda black or grey — all in a day’s work for either Queen and country or Mo

It should come as no surprise to those who know about the New Statesman’s history that in the 1940s and 1950s a number of the staff “walked on both sides of the street”. They were reputed to be serving the communist cause while also reporting to the British secret services. In 1949 George Orwell gave the government’s Information Research Department a notorious blacklist of “cryptocommunists and fellow-travellers . . . who should not be trusted as propagandists”.

It included the NS editor, Kingsley Martin, and a future editor, Richard Crossman (although Orwell thought he was “too dishonest to be outright FT”), the revered columnist J B Priestley, Dorothy Woodman (another NS writer, who was Martin’s partner) and the assistant editor Norman Mackenzie, though he was qualified by a question mark.

Yet at the same time, according to Anthony Howard, who edited the NS from 1972-78, the staff’s “FTs” were also reporting to MI6: “The relationship between journalism and the Secret Intelligence Services has always been a grey one. It was probably most closely consummated in the offices of the left-wing New Statesman.”

The most inscrutable “double agent” was another assistant editor, Aylmer Vallance. He turned up at the “Staggers” offices at the outbreak of war in 1939 wearing the uniform of a lieutenant colonel in the War Office; yet he was also about to marry a member of the Communist Party who was close to its general secretary, Harry Pollitt, and others in its leadership. At the end of the war, Lieutenant Colonel Vallance slipped this unsigned editorial into the NSwhile it was at the printers, thereby avoiding the red pencil:

Its foundations [the new world order]  must be based firmly on recognition of the essential unity of the working people of all nations. Their needs and desires – work and security and a “dinner of herbs where love is” – are one and the same. The Captains and the Kings have made, between them, a century of greed, aggression, hatred and blood. They may now depart. (12 May 1945)

George VI and the Chief Captain (Churchill) had just received the ovation of the crowd at Buckingham Palace. Leonard Woolf, who was one of the directors of the NS and editing the paper that week, was furious: “It [the leader] is full of the slants, snides, sneers, and smears which Communists and Fellow Travellers habitually employ as means for building a perfect society,” he wrote.

During most of the war a dual allegiance cannot have mattered much. The enemy was fascism. The policy of the NS was the same as the government’s: to encourage uprisings in the occupied countries so that they might lead to the creation of democratic socialist states after the war. Let us “set Europe ablaze”, Churchill exhorted; hence Martin and Crossman wrote 100,000,000 Allies – If We Choose. Vallance called his son Tito. Basil Davidson (a favourite to succeed Martin as editor in the late 1950s) parachuted in to Yugoslavia to assist the communist partisans.

NS writers doubled up by working clandestinely as propagandists for the Political Warfare Executive. Ritchie Calder, the science correspondent, was a founder of PWE. Crossman, described as “a master of the art of psychological warfare” in the PWE official history, pulled off a coup by persuading Bomber Harris to broadcast on the BBC German Service telling the “enslaved peoples” to sabotage the Nazi transport systems. This was “grey” rather than “black” propaganda – the “big lie”.

A very successful example of the big lie was Soldatensender Calais. It was a fake radio service, purporting to come from German military radio stations in France but in fact broadcast into the Nazi empire from a powerful transmitter hidden on the South Downs. Gracie Fields sang “The Biggest Aspidistra in the World”, and so the transmitter was codenamed Aspidistra. NS writers contributed to Soldatensender Calais, which recorded off-air German domestic programmes, spliced into them highly convincing and destabilising propaganda, and broadcast them back. Information? Disinformation? Propaganda? It was all part of the journalistic stock-in-trade.

The NS had form. The very first editor, Clifford Sharp, had worked secretly for the Foreign Office Political Intelligence Department from 1918-19, writing strongly anti-Bolshevik reports. When these later appeared in the NS the content had changed to a condemnation of counter-revolutionary excesses, because Sharp had decided that the paper needed to move left to catch the postwar mood.

The Second World War was followed by the cold war and it became very nasty from the late 1940s. Dual allegiances to Britain and the Soviet Union were severely tested. Norman Mackenzie was the NS’s expert on communism. When he left for academia in 1962, the editor, John Freeman, wrote:

He has long been our expert on communist affairs on both sides of the Iron Curtain. His interpretation of the Soviet CP since Stalin has proved far more accurate in his prognosis than many of his more publicized rivals in the field.

This was because Mackenzie visited eastern Europe many times in the 1950s; there, his reputation as a “fellow-traveller” smoothed his path while his MI6 contacts led him to inside knowledge. An extraordinary instance of this is the highly confidential information Mackenzie was given on a pedalo at a Bulgarian Black Sea resort late in 1955. Khrushchev had just tipped off the Cominform at a secret meeting in Sofia about the extent of Stalin’s purges, fully four months before he stunned the communist world by revealing them at the notorious 20th Party Congress. Mackenzie’s Bulgarian contact had memorised much of Khrushchev’s disclosures and repeated the content to Mackenzie at their meeting. It was a great scoop – but nobody was interested. Neither MI6 nor the Foreign Office, not even Kingsley Martin, wanted to take any action. When Mackenzie read reports of Khrushchev’s speech the following February he recognised passages word for word.

Mackenzie had been, first, a member of the Marxist socialist Independent Labour Party and then, briefly, a Communist before he joined the Labour Party in 1943. He sometimes wrote for Telepress, a Soviet-backed news agency in Fleet Street. Leonard Woolf once described him as “the most dangerous man in the New Statesman”, which Mackenzie found “rather strange”. At the same time he had a succession of “minders” at MI6 dating from the early 1940s. As the war broke up and eastern Europe fell into the Soviet-occupied zone, so increasingly he travelled into communist Europe on an MI6 ticket, though he received no other payment. His special areas were Romania and Bulgaria.

On one occasion he was caught photographing the outside of a prison camp near Bucharest and was briefly imprisoned before being moved to a hotel, still under arrest.

Here, he heard the mellifluous sounds of David Oistrakh’s violin floating through his window. Soon afterwards he was handed two tickets by the security operatives – one was an air ticket to London, the other a ticket to an Oistrakh concert. Mackenzie said the whole episode was like “a fairy tale” but that can’t be how it appeared then. Many years later he met an old friend at a school reunion who sounded embarrassed: “I’ve been feeling guilty all these years. Didn’t I see you in chains on Bucharest station?”

Mackenzie confessed it was true and added that he had begun to worry when the plane transporting him out of Romania appeared to be heading towards the Soviet Union. “I gather you’re doing useful work in the Balkans,” said Kingsley Martin enigmatically when he returned to the office.

Anthony Howard, who began writing for the NS in 1956, recalled that after one press trip to eastern Europe he noticed a colleague reporting to MI6. “When I raised the matter with him, he got quite shirty and inquired whether I regarded myself as a patriot or not?” The trouble with walking on both sides of the street is that it’s often not clear which direction you’re walking in.

With Mackenzie there can be no doubt. In the spring of 1956, at Martin’s request, he travelled to Budapest to assist a former NS writer and BBC broadcaster, Pál Ignotus, who had just been released from jail following the Khrushchev disclosures. Ignotus had spent the war years in London but had decided to risk a return visit to the land of his birth in 1949, just after Hungary had become a communist state under the severely repressive Mátyás Rákosi.

Aylmer Vallance’s daughter remembers her father urging him not to go back; so did Mackenzie. They were right to do so, because Ignotus was then thrown into prison, tortured and locked in solitary confinement.

There is a coda to this story. On his release, Ignotus married Florence, the woman from the neighbouring cell, with whom he had exchanged months of increasingly romantic “tapping” messages without once seeing her. They decided to remain in Hungary but fled in November 1956 after the Soviet puppet János Kádár betrayed the ideals of the October Revolution.

The next year Mackenzie was one of the first journalists to detect vote-rigging in the Electrical Trades Union which fixed ETU elections for far-left candidates. As Freeman wrote: “It was entirely due to his foresight that the NS became committed to liberate ETU members from the communist caucus.”

Aylmer Vallance was more inscrutable. At the start of the war he was 47. He had joined the intelligence services in 1915, had played the “Great Game” in the Himalayas and had been sacked from the editorship of the News Chronicle over a sex scandal. He had spent many a weekend at a Scottish castle fly fishing, drinking heavily with his house party and then driving back down to London for a Monday editorial meeting. He looked like a Scottish laird and behaved more like a bon vivant than an earnest socialist. Yet he was a consummate journalist who turned out wellinformed copy on finance, fisheries and food, filling any gap at short notice where necessary when a few hundred words were required. He was on the staff of the NS from 1937.

His job at the War Office was to liaise with the press for news management. In this role, in December 1939, he wrote to the BBC and suggested that P G Wodehouse, or “Beachcomber”, should give evening talks to counteract Lord Haw-Haw’s “ingenious” propaganda broadcasts from Hamburg.

Staff on the New Statesman joked that his work at the War Office really was so secret that even he did not know what it was.

So, on which side of the street did Vallance walk? One verdict comes from C H Rolph, who ought to know because he joined the NS and worked as assistant editor with Vallance after 25 years as a serving police officer.

It seems likely enough that [in the 1940s] he was playing a fairly devious game, using the New Statesmanwith the knowledge of the Intelligence Department to plant useful items of pro-Allied propaganda, but also planting, under cover of the two-way prestige this gave him, “fellow-travelling” material about war theatres like Yugoslavia. This was a source of constant friction; and the commonly heard accusation that the New Statesman was a fellow-travelling paper was due not only to Kingsley’s ambivalence about Russia, but also to Aylmer’s stealthy insistence on putting in [to editorials], deliberately too late for censorship or amendment, extreme statements about eastern Europe.

Edward Hyams, who also worked for the NSduring this time and later wrote its official history, considered Vallance a political cynic: “His technical skill and inexhaustible goodwill were not supported by any faith in causes or, indeed, in the destiny of mankind.” Given the chance, Hyams said, Vallance would have turned the NSinto another Canard enchaîné– that is, an investigative journal best known for its satire and jokes. These two views are not contradictory.

Disappointingly, I have only a few circumstantial clues to add. Vallance resigned his army commission in 1945 but kept and used his title of lieutenant colonel until 1954. He travelled behind the Iron Curtain during this time and used Gateway Tours, a travel agency in Highgate, north London, rumoured to be a money-laundering front for MI6. On one occasion when his son, Tito, introduced himself at a London club, the response was: “Not Aylmer’s son? He was a damned fine intelligence agent.”

Nonetheless, while Vallance was working for Telepress, Hugh Gaitskell’s wife, Dora – a White Russian – considered the NS a nest of communist spies and described Vallance arrestingly as “Stalin dressed up as a nun”.

And finally, until the end of the 1940s he was married to Helen (née Gosse). Family scrapbooks show her with Olive Parsons, Eva Reckitt, Bill Rust and other “inner-circle” members of the Communist Party. Extraordinary that she was married to a lieutenant colonel in the intelligence services.

Visited frequently in his last months by John Freeman, Vallance died in 1955. In 1995 Freeman wrote to Tito: “My own friendship with him was close and very rewarding. And yet, looking back 40 years and more, I realise that I never really knew who he was or what he believed in.”

Hugh Purcell’s most recent book is “The Last English Revolutionary: Tom Wintringham” (Sussex Academic Press, £19.95) Read his profile of John Freeman at: newstatesman.com

This article first appeared in the 27 May 2013 issue of the New Statesman, You were the future once

Jeremy Corbyn. Photo: Getty
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Lexit: the EU is a neoliberal project, so let's do something different when we leave it

Brexit affords the British left a historic opportunity for a decisive break with EU market liberalism.

The Brexit vote to leave the European Union has many parents, but "Lexit" – the argument for exiting the EU from the left – remains an orphan. A third of Labour voters backed Leave, but they did so without any significant leadership from the Labour Party. Left-of-centre votes proved decisive in determining the outcome of a referendum that was otherwise framed, shaped, and presented almost exclusively by the right. A proper left discussion of the issues has been, if not entirely absent, then decidedly marginal – part of a more general malaise when it comes to developing left alternatives that has begun to be corrected only recently, under Jeremy Corbyn and John McDonnell.

Ceding Brexit to the right was very nearly the most serious strategic mistake by the British left since the ‘70s. Under successive leaders Labour became so incorporated into the ideology of Europeanism as to preclude any clear-eyed critical analysis of the actually existing EU as a regulatory and trade regime pursuing deep economic integration. The same political journey that carried Labour into its technocratic embrace of the EU also resulted in the abandonment of any form of distinctive economics separate from the orthodoxies of market liberalism.

It’s been astounding to witness so many left-wingers, in meltdown over Brexit, resort to parroting liberal economics. Thus we hear that factor mobility isn’t about labour arbitrage, that public services aren’t under pressure, that we must prioritise foreign direct investment and trade. It’s little wonder Labour became so detached from its base. Such claims do not match the lived experience of ordinary people in regions of the country devastated by deindustrialisation and disinvestment.

Nor should concerns about wage stagnation and bargaining power be met with finger-wagging accusations of racism, as if the manner in which capitalism pits workers against each other hasn’t long been understood. Instead, we should be offering real solutions – including a willingness to rethink capital mobility and trade. This places us in direct conflict with the constitutionalised neoliberalism of the EU.

Only the political savvy of the leadership has enabled Labour to recover from its disastrous positioning post-referendum. Incredibly, what seemed an unbeatable electoral bloc around Theresa May has been deftly prized apart in the course of an extraordinary General Election campaign. To consolidate the political project they have initiated, Corbyn and McDonnell must now follow through with a truly radical economic programme. The place to look for inspiration is precisely the range of instruments and policy options discouraged or outright forbidden by the EU.

A neoliberal project

The fact that right-wing arguments for Leave predominated during the referendum says far more about today’s left than it does about the European Union. There has been a great deal of myth-making concerning the latter –much of it funded, directly or indirectly, by the EU itself.

From its inception, the EU has been a top-down project driven by political and administrative elites, "a protected sphere", in the judgment of the late Peter Mair, "in which policy-making can evade the constraints imposed by representative democracy". To complain about the EU’s "democratic deficit" is to have misunderstood its purpose. The main thrust of European economic policy has been to extend and deepen the market through liberalisation, privatisation, and flexiblisation, subordinating employment and social protection to goals of low inflation, debt reduction, and increased competitiveness.

Prospects for Keynesian reflationary policies, or even for pan-European economic planning – never great – soon gave way to more Hayekian conceptions. Hayek’s original insight, in The Economic Conditions of Interstate Federalism, was that free movement of capital, goods, and labour – a "single market" – among a federation of nations would severely and necessarily restrict the economic policy space available to individual members. Pro-European socialists, whose aim had been to acquire new supranational options for the regulation of capital, found themselves surrendering the tools they already possessed at home. The national road to socialism, or even to social democracy, was closed.

The direction of travel has been singular and unrelenting. To take one example, workers’ rights – a supposed EU strength – are steadily being eroded, as can be seen in landmark judgments by the European Court of Justice (ECJ) in the Viking and Laval cases, among others. In both instances, workers attempting to strike in protest at plans to replace workers from one EU country with lower-wage workers from another, were told their right to strike could not infringe upon the "four freedoms" – free movement of capital, labour, goods, and services – established by the treaties.

More broadly, on trade, financial regulation, state aid, government purchasing, public service delivery, and more, any attempt to create a different kind of economy from inside the EU has largely been forestalled by competition policy or single market regulation.

A new political economy

Given that the UK will soon be escaping the EU, what opportunities might this afford? Three policy directions immediately stand out: public ownership, industrial strategy, and procurement. In each case, EU regulation previously stood in the way of promising left strategies. In each case, the political and economic returns from bold departures from neoliberal orthodoxy after Brexit could be substantial.

While not banned outright by EU law, public ownership is severely discouraged and disadvantaged by it. ECJ interpretation of Article 106 of the Treaty on the Functioning of the European Union (TFEU) has steadily eroded public ownership options. "The ECJ", argues law professor Danny Nicol, "appears to have constructed a one-way street in favour of private-sector provision: nationalised services are prima facie suspect and must be analysed for their necessity". Sure enough, the EU has been a significant driver of privatisation, functioning like a ratchet. It’s much easier for a member state to pursue the liberalisation of sectors than to secure their (re)nationalisation. Article 59 (TFEU) specifically allows the European Council and Parliament to liberalise services. Since the ‘80s, there have been single market programmes in energy, transport, postal services, telecommunications, education, and health.

Britain has long been an extreme outlier on privatisation, responsible for 40 per cent of the total assets privatised across the OECD between 1980 and 1996. Today, however, increasing inequality, poverty, environmental degradation and the general sense of an impoverished public sphere are leading to growing calls for renewed public ownership (albeit in new, more democratic forms). Soon to be free of EU constraints, it’s time to explore an expanded and fundamentally reimagined UK public sector.

Next, Britain’s industrial production has been virtually flat since the late 1990s, with a yawning trade deficit in industrial goods. Any serious industrial strategy to address the structural weaknesses of UK manufacturing will rely on "state aid" – the nurturing of a next generation of companies through grants, interest and tax relief, guarantees, government holdings, and the provision of goods and services on a preferential basis.

Article 107 TFEU allows for state aid only if it is compatible with the internal market and does not distort competition, laying out the specific circumstances in which it could be lawful. Whether or not state aid meets these criteria is at the sole discretion of the Commission – and courts in member states are obligated to enforce the commission’s decisions. The Commission has adopted an approach that considers, among other things, the existence of market failure, the effectiveness of other options, and the impact on the market and competition, thereby allowing state aid only in exceptional circumstances.

For many parts of the UK, the challenges of industrial decline remain starkly present – entire communities are thrown on the scrap heap, with all the associated capital and carbon costs and wasted lives. It’s high time the left returned to the possibilities inherent in a proactive industrial strategy. A true community-sustaining industrial strategy would consist of the deliberate direction of capital to sectors, localities, and regions, so as to balance out market trends and prevent communities from falling into decay, while also ensuring the investment in research and development necessary to maintain a highly productive economy. Policy, in this vision, would function to re-deploy infrastructure, production facilities, and workers left unemployed because of a shutdown or increased automation.

In some cases, this might mean assistance to workers or localities to buy up facilities and keep them running under worker or community ownership. In other cases it might involve re-training workers for new skills and re-fitting facilities. A regional approach might help launch new enterprises that would eventually be spun off as worker or local community-owned firms, supporting the development of strong and vibrant network economies, perhaps on the basis of a Green New Deal. All of this will be possible post-Brexit, under a Corbyn government.

Lastly, there is procurement. Under EU law, explicitly linking public procurement to local entities or social needs is difficult. The ECJ has ruled that, even if there is no specific legislation, procurement activity must "comply with the fundamental rules of the Treaty, in particular the principle of non-discrimination on grounds of nationality". This means that all procurement contracts must be open to all bidders across the EU, and public authorities must advertise contracts widely in other EU countries. In 2004, the European Parliament and Council issued two directives establishing the criteria governing such contracts: "lowest price only" and "most economically advantageous tender".

Unleashed from EU constraints, there are major opportunities for targeting large-scale public procurement to rebuild and transform communities, cities, and regions. The vision behind the celebrated Preston Model of community wealth building – inspired by the work of our own organisation, The Democracy Collaborative, in Cleveland, Ohio – leverages public procurement and the stabilising power of place-based anchor institutions (governments, hospitals, universities) to support rooted, participatory, democratic local economies built around multipliers. In this way, public funds can be made to do "double duty"; anchoring jobs and building community wealth, reversing long-term economic decline. This suggests the viability of a very different economic approach and potential for a winning political coalition, building support for a new socialist economics from the ground up.

With the prospect of a Corbyn government now tantalisingly close, it’s imperative that Labour reconciles its policy objectives in the Brexit negotiations with its plans for a radical economic transformation and redistribution of power and wealth. Only by pursuing strategies capable of re-establishing broad control over the national economy can Labour hope to manage the coming period of pain and dislocation following Brexit. Based on new institutions and approaches and the centrality of ownership and control, democracy, and participation, we should be busy assembling the tools and strategies that will allow departure from the EU to open up new political-economic horizons in Britain and bring about the profound transformation the country so desperately wants and needs.

Joe Guinan is executive director of the Next System Project at The Democracy Collaborative. Thomas M. Hanna is research director at The Democracy Collaborative.

This is an extract from a longer essay which appears in the inaugural edition of the IPPR Progressive Review.

 

 

This article first appeared in the 27 May 2013 issue of the New Statesman, You were the future once