In this week’s New Statesman: Something’s Rotten

Power, corruption and lies: the British establishment in crisis. PLUS: Brian Moore on why abuse victims don't speak out, and a special report on Malala Yousafzai, the girl who defied the Taliban.

For this week’s cover story, the New Statesman reflects on the crisis of British Institutions. From banks to big business to the BBC – are the powerful incapable of holding themselves accountable? Featuring: David Herman on Newsnight and the BBC, George Eaton on Westminster scandals, Jonathan Derbyshire and Alex Hern on big business and tax, David Allen Green on royal privileges, and Peter Lazenby on police corruption at Hillsborough.

 

David Herman: A culture of unreason

The BBC is the latest institution to be marred by scandal and kicks off our Something’s Rotten cover story. But Jimmy Savile aside, former BBC producer David Herman argues there is a greater identity crisis brewing. The BBC no longer knows who it wants to be. “Amid the media frenzy over Newsnight,” he writes, “the bigger questions have been ignored.”

Newsnight and Panorama reflect deeper difficulties at the BBC: falling budgets and declining audience share, on both BBC1 and BBC2. Panorama has responded by dumbing down. Rippon might have put ratings first and gone for the “Jimmy Savile was a paedophile” splash. He didn’t and it looks as if he didn’t for journalistic reasons.

The Panorama investigation into Newsnight’s shelving of the programme on Savile was symptomatic of the problem. It was all heat and very little light. The producers had the heart-rending testimony of several men and women who had been abused as children. However, despite much innuendo, they couldn’t find anyone else, at the BBC, at the Crown Prosecution Service, in Surrey Police, or in any of the named institutions, who could confirm anything. As for the allegation that Rippon had dropped the story because of pressure from above, they found no evidence to back this up.

...This is part of a bigger battle over the future of the BBC. Some say that as audience share plummets, sports rights disappear and the BBC can no longer bid for US hit shows, its only future will be as a kind of glorified Radio 4: news and current affairs programmes and a global brand, with a few bits and pieces in between. No more sport, prestige drama or serious history programmes.

 

Brian Moore: I understand why Savile’s victims didn’t speak out about their abuse

Speaking from his own childhood experience of abuse, former rugby "hardman” Brian Moore condemns the BBC’s failure to properly investigate abuse claims and explains why their failings will only make it harder for victims to come forward.

The issue of child abuse has been hijacked by the press as a way of deflecting from its own nefariousness on phone-hacking and bribing of public officials. Why didn’t the papers act on rumours they now say were very clear and publicly known?

...What is lost in all this is the victims. The accusations are focused on institutions and authority, with the individual cases lost in a running total of victims that the tabloids seem keen to inflate. There are and will be calls for more procedures and schemes and vetting to ensure this never happens again. But it will happen again, and what is not needed is another raft of process-driven, box-ticking certificates of safety.

I and many of Savile’s victims did not tell because we did not think we would be believed. What we victims need is not just an immediate person being sympathetic and taking a statement. We need to know that a proper investigation will be made if we make a complaint; to know that the Crown Prosecution Service will be robust and that every effort will be made to secure a conviction. So harrowing is the telling of our stories that we have to have utmost faith that as much as possible will be done to rectify the wrong and to help us bear the extra stress of an investigation and trial.

 

David Blanchflower: Why unemployment has fallen, and why it will rise again soon

In the Economics Column this week, David Blanchflower tackles the puzzling unemployment variations between the US and the UK, unscrambles the data surrounding the UK’s recent drop in joblessness, and warns it will rise again:

The most unexpected figures recently were the big drops in the UK’s headline unemployment number and rate. However, the way the Office for National Statistics (ONS) reports the numbers – as three-month rolling averages – doesn’t really help us understand what is happening. It turns out that this occurs because of concerns about the variability of sample estimates that arise because the survey from which the numbers are extracted – the labour force survey (LFS) – is underfunded and sample sizes are so small that there is a lot of month-to-month variation

...Something strange appears to be going on. Note that employment fell in the past two months, from a June peak that is likely distorted by the Olympics, as well as by young people who may not enter education in part because of the increase in tuition fees. So the unemployment rate is likely to rise; the Bank of England agents in their October report suggested that there would be “little job creation” in the private sector over the next six months and their past predictions have been reliable.

... I was wrong on the latest figures, to the delight of some my Twitter followers, but I suspect unemployment will rise sharply again and soon.

 

Rafael Behr: Miliband is sneaking up on power without a plan for government

In the Politics Column this week, Rafael Behr takes a close look at Ed’s campaign in opposition, and wonders how long he can continue to offer an “austerity-lite” program without embracing the painful reality of public service on a tighter budget - and the enemies is will make him. He writes:

Ed Miliband has had the freedom to work on his political stance like a wannabe rock star trying out stage moves in the privacy of his bedroom. His statements of intent to contain the deficit are the policy equivalent of air guitar – roughly the right position but not very revealing about what he would do if plugged into instruments of real power. 

...Others are less sanguine, fearing that failure to signal reforming intent – pretending, for example, that the rationing of NHS services is proof of Tory malice towards the health service as if demographic and budget pressures were not also a factor – is dishonest. Voters will smell the deception. Labour could still scrape into power but then hit a wall of public revulsion as misty-eyed promises of change give way to more of the same. It is a scenario that one shadow minister describes as “Labour ending up as the Nick Cleggs of 2015.”

... Serial Tory blunders have afforded Labour space to work out what kind of opposition it wants to be. As well as thanking his luck, Miliband should consider why this has happened. It must be tempting to think that Cameron just happens to be congenitally incompetent. Another explanation is that some of the disarray expresses how hard it is to govern in austerity and how easy it is to make powerful enemies of public servants – nurses, teachers, police officers – when taking their money, pensions and job security away.

Miliband imagines doing things differently. His plan involves promising epoch-defining change to the way society and the economy are structured without divisive talk of winners and losers – the cosy “one nation” revolution. It is a feasible strategy for sneaking up on power but with a hollow mandate. If Miliband forms a government without permission to inflict pain or make enemies, he will quickly find Britain ungovernable.

 

Jason Cowley: On Janan Ganesh’s George Osborne: The Austerity Chancellor

In Books this week, New Statesman editor Jason Cowley finds a biographer almost cripplingly awestruck by his subject. In FT columnist Janan Ganesh’s new biography, Osborne emerges as an “assiduous networker and power-seeker”.

The problem, however, is a lack of healthy skepticism - “Ganesh believes too readily in the myth of Osborne’s strategic ‘genius’ and is too willing to forgive what to some is unforgivable – the way Osborne talked down the economy in the months after the 2010 general election …” He write further:

If the general narrative of Osborne’s rise and embrace of austerity economics is covered well enough, the larger problems of the book are of style and tone. Ganesh writes with comical awe and reverence, for instance, about Rupert Harrison, Osborne’s 33-year-old advi­ser, who was “among the outstanding micro-economists of his generation”. Harrison has a “powerful mind”; his “ambition is cloaked by a magisterial personal style”; he has a “capacious hinterland”. It’s as if Ganesh were describing a latter-day John Maynard Keynes, whose intellect Bertrand Russell once said “was the clearest and sharpest” of anyone he ever encountered.

...Because the book is not a psychological portrait of Osborne and because it fails to convey any convincing sense of its subject’s inner life, it reads mostly as an exercise in nearly-history: a standard, often perfunctory recounting of recent political events, awkwardly written.... The book suffers by way of comparison with Francis Elliott’s and James Hanning’s biography of David Cameron, which over its several editions has broadened and deepened to become a work of merit, at once measured in its judgements, calmly and precisely written and authoritative. Ganesh’s judgements are too often swooning and overheated.

 

ELSEWHERE IN THE MAGAZINE:

 

Kevin Maguire: Clegg talks double dutch

In Commons Confidential, the Daily Mirror’s Kevin Maguire writes on “Eurofanatic” Nick Clegg and other Parliamentary gossip:

Mistrust is deepening between the Europhobic David Cameron and the Eurofanatic Nick Clegg. I hear Downing Street insisted that a No 10 minder attend a meeting in the Deputy Prime Minister’s Cabinet Office lair with Herman Van Rompuy of the European Council. Van Rompuy is that elusive creature, a near-famous Belgian. Clegg is even rarer – a polyglot Brit. The Lib Dem internationalist has five languages: French, German, Spanish, Dutch and Tory. Irritated at No 10’s snooping, Clever Cloggs conducted the entire session in Dutch, so the PM’s cloth-eared spy was left fuming in the corner, listening but not understanding a double-Dutch conversation.

Samira Shackle: The girl who played with fire

A special report from Pakistan on the shooting of the teenage rights activist Malala Yousafzai: Samira Shackle describes how the Taliban attack has sparked a wave of protest and speaks to women's rights activists who have defied violence and the threat of murder. But, she asks, are these women being let down by their own government's ambivalent attitude to Islamic extremism?

And introducing: A new regular comic from Tom Humberstone

Award winning comic artist and illustrator Tom Humberstone joins the New Statesman this week. His topical comic strip “In the Frame” will be a regular feature in Observations.

 

In the Critics:

In the Critics this week, Richard Mabey writes his last seasonal diary of the year. “Mid-autumn … has a special frisson on the Norfolk Broads,” Mabey observes. “The reeds begin to bleach and reflect the sunsets … The last migrants leaving for Africa cross with the first arriving from the tundra, the swallow flying under the goose.”

In Books, NS editor Jason Cowley reviews Jana Ganesh’s biography of George Obsborne. Sarah Churchwell is put off by the sentimental uplift of AM Homes’s novel May We Be Forgiven; Yo Zushi finds much more nourishment in David Byrne’s How Music Works; Leo Robson reviews Tom Wolfe’s new novel Back to Blood; William Skidelsky contests Steven Poole’s attack on “foodism” in You Aren’t What You Eat; and Beatles biographer Hunter Davies recalls the moment John Lennon called his book’s carefully cultivated image “bullshit”, and admits perhaps he didn’t told the whole truth.

Elsewhere in the Critics: Ryan Gilbey on Sam Mendes’s Bond film Skyfall; Rachel Cooke, for better or worse, calls Lena Dunham’s Girls “like nothing you’ve ever seen before”; Antonia Quirke listens to Simon Callow’s wine-tasting on Classic FM; and Alexandra Coghlan watches a screening of the multimedia installation Decasia, performed with a live score, at the Southbank Centre.

And in Real Meals, Will Self contemplated the “gravy and hard biscuits” diet of the American south-west, as immortalized by John Steinbeck’s The Grapes of Wrath.

 

Purchase this week's issue of the New Statesman on newstands today, or online at www.newstatesman.com/subscribe

 

Charlotte Simmonds is a writer and blogger living in London. She was formerly an editorial assistant at the New Statesman. You can follow her on Twitter @thesmallgalleon.

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Aid in whose interest?

The government appears to be raiding the aid budget to subsidise big business and the security state.

In March 1988, Scottish aristocrat and Defence Minister to Margaret Thatcher, George Younger visited was part of a controversial offer of £200m of the UK aid budget in exchange for Malaysia signing a £1bn arms deal.

The government promised public money to subsidise UK construction giant Balfour Beatty to build a hydroelectric dam named Pergau in Malaysia’s mountainous north east.

Malaysia’s national utility, the World Bank and auditors at the Overseas Development Administration, the UK aid ministry, questioned the human development value of the project for the middle-income country, finding its costs to be “markedly uneconomic" compared to other options then available.

But these warnings were summarily dismissed.

Thatcher, who I believe saw aid not as a vehicle for eradicating poverty but as a means to advance Britain's commercial and geostrategic interests, wanted the arms deal.

In Malaysia, Prime Minister Mahathir Mohamad wanted an infrastructure project in Kelantan state, which was held by a rival party, which he wanted to wrest votes from.

But the National Audit Office soon got wind of the deal and parliamentary committees started to ask awkward questions of those involved.

The press published dozens of articles and the Pergau scandal was born.

Newspapers soon unearthed other white elephant development  projects resulting from the tying of aid to private British interests that did little for reducing poverty but were a boon for the contractors involved.

The Permanent Secretary to the ODA (Overseas Development Administration, now Dfid – the Department for International Development), Tim Lankester, said that Pergau was “unequivocally a bad buy”, “an abuse of the aid system” and “not a sound development project”.

The World Development Movement (renamed Global Justice Now) won a judicial review in 1994 against the government in the High Court which ruled the payment of aid “for unsound development purposes” illegal.

The Tories reacted, not by untying aid from UK vested interests, but by slashing the aid budget as punishment for the bad press – it seems that Thatcher saw little use for aid that could not be used to subsidise private interests.

Labour came to power in 1997 with an agenda to reform how Britain did development. It established a better-funded and politically-stronger aid department, the Department for International Development (DFID), with a seat in cabinet.

It scrapped the Aid and Trade Provision, the official mechanism by which aid was used to subsidise British company contracts, and in 2001 untied aid from UK commercial interests. The International Development Act of 2002 for the first time legally committed the UK to spending aid only on poverty reduction.

But since the Conservatives won a clear majority in last year’s general election, the government has been wilfully unlearning the lessons of Pergau.

Out of the hobbling coalition with the Liberal Democrats, Prime Minister David Cameron and Chancellor George Osborne have unpicked Labour’s reforms by effectively retying aid to the interests of the private sector and its perceived security interests.

They appear to have deprioritised poverty reduction as the principal purpose of the aid budget. “There is a real risk of the budget being recaptured by commercial interests as it was in the 1980s,” Sir Tim Lankester told me recently. “[International Development Secretary] Justine Greening has been making sure British commercial interests get more and more of the cake.

“What’s remarkable these days is the huge contracts going to the big consultancies to advise government and manage projects – The Adam Smith Internationals. The Crown Agents and others.”

November’s aid strategy “tackling global challenges in the national interest”, written largely by the Treasury rather than by Dfid, announced that aid would be a tool to “strengthen UK trade and investment opportunities around the world”.

The retying of aid spend is sold in the strategy in the same way the Conservatives sell austerity and privatisation at home.

Using the language of “prosperity” and “economic opportunity” (“inequality” was not mentioned once in the 22-page document), the government spins the dubious argument that communities in the world’s poorest nations share the interests of both UK business and the UK security state.

This “what’s good for us is good for you” aid strategy’s promotion of the UK interest over those of the poor grossly undermines the government’s legal duty under the International Development Act.

The aid strategy leaves it to the concurrently published National Security Strategy to enumerate what these imaginative interests are: to “protect our people”, to “project our global influence” and to “promote our prosperity”.

To achieve these ends, the government has allotted half of the aid budget to conflict-hit states, which are expected to be the states Britain has helped destabilise in recent years: Afghanistan, Iraq, Libya Syria and Yemen.

The government also successfully lobbied the OECD to widen the official definition of “Official Development Assistance” (aid) to include military spend on counter-terrorism and expand the use of aid subsidies for private – and inevitably British – projects in the developing world.

Over the course of this Parliament, the Tories will triple to around £5bn the amount of aid to be spent outside of Dfid. The main beneficiaries of this diversion of aid are the Ministry of Defence (MoD), the foreign office (FCO) and the business department (BIS). These departments are considerably less transparent than Dfid and, according to the National Audit office, spend most of their aid on middle income countries, rather than low-income countries.

This slide towards using aid to subsidise British business and as a slush fund top up its military and security budgets means that development projects devoted to public health, education and countering the agricultural and ecological destruction wrought by climate change, will suffer.

***

Take the growing spend by Dfid on private consultants and accountancy firms.

Under the Tory austerity programme Dfid’s staff has been slashed, which means there is less public capacity to allocate, monitor aid projects.

To compensate for this under capacity the government has farmed out the aid budget in bigger and bigger parcels to private contractors and accountancy firms to do the work for a profit.

Dfid spends some £1.4bn directly through private contractors and several times more than that through its payments to multilateral development banks that recycle British aid back through the private sector.

In 2014, Dfid said 90 per cent of its contracts are awarded to British companies, strange for a department that claims to have untied aid. Almost no contracts are signed directly with NGOs or contractors in the Global South.

In 2014 alone, it spent £90m through a single private consultancy, Adam Smith International (ASI), which that year declared £14m in profits, a profit that doubled in two years on the back of Dfid and British taxpayers.

ASI, which was spun off from the neoliberal think tank Adam Smith Institute, is in the business of privatising public works in the Global South from Nigeria to Afghanistan and deregulating the Nigerian economy under its “Business Environment” stream of Dfid’s £180m Growth and Empowerment in States scheme.

In 2014, Dfid spent £42.9m on the services of one accountancy firm alone (PwC), in spite of its part in the LuxLeaks tax avoidance scandal. It is this tacitly sanctioned flight of wealth that costs poor nations (non-OECD) three times more each year in tax avoidance to tax havens than they receive in aid from rich nations (OECD) according to the OECD itself.

Contrary to the public perception, aid is for the most part not “given” to poor countries. At present, only 0.2 per cent of the world’s humanitarian aid goes directly to local and national non-government agencies and civil society organisations. This is despite a consensus that these groups are the most effective engines for development.

The increasing use of private contractors and large bilateral financial institutions to get aid out of the door constitutes nothing less than a capture of the aid budget by corporate interests, which also advise the government on where to direct future aid flows.

Under this government, aid has become less a tool for development but a rent for a veritable industry that concentrates the knowledge, skills and finance in the companies and institutions of rich nations.

***

Take the amount of British aid that subsidises the fossil fuel industry and therefore promotes global warming, which affects the poor considerably more than the rich because they lack the resources to adapt.

The effects of climate change are already biting. The rising frequency of drought on the world’s semi-arid regions of the world, including the Middle East constitutes, to borrow a term from Professor Rob Nixon, a “slow violence” enacted by industrialised nations on the poor.

Our refusal to take commensurate action on climate change means that water stress is rising across the world, which impairs development and has even been linked to conflict in Nigeria and Syria.

In April, I visited Somaliland, which is experiencing the worst drought in living memory along with the rest of east and southern Africa. Agriculture has collapsed, the animals are dying and migration is rising fast.

Many of these climate refugees are washing up on the shores of Italy and Greece. Survivors in are being sent back to Turkey because there is no international protection available to a subsistence farmer without water or a parent who cannot afford to feed their children.

In 2009, the UK pledged at the G20 to phase out inefficient fossil fuel subsidies but instead it has been using public funds to increase them, according to the Overseas Development Institute.

Using aid money to give the fossil fuel industry a leg up and imperil us all to the onslaught of global warming entrenches inequality and hampers sustainable development.

***

Last year the EU signed a €1.8bn aid package with the governments of 20 African nations, including Eritrea, a totalitarian state financed by slave labour, to keep Eritreans in their country and to accept planes filled with their citizens who are denied asylum in Europe.

Clearly, this aid money is being spent principally the interests of the donors and not the world’s poor.

But aside from using aid to forcibly return people at risk of human rights abuses, this aid holds development back in other ways. Migration is the biggest driver of development because economic migrants from poor countries who work in rich countries back remittances that amount to three times the international aid spend.

“Migrants are the original agents of development,” William Lacy Swing, director of the International Organization for Migration, told the World Humanitarian Summit in May.

In effect we are spending public money legally allocated for reducing poverty on keeping the world’s poor mired in it.

***

Take the UK’s “preventing violent extremism” agenda – borrowed, of course, from the Americans – under whose banner projects can be now funded with UK aid.

Britain’s successful lobbying of the OECD – in opposition to other large donor states, including Sweden – to include some counter-terrorism military spend in the definition of aid is of deep concern.

The OECD already allowed for the provision of aid to prevent conflict and promote peace but this new extremist lens, as opposed to the purely conflict lens, allows the aid spend to become politicised.

After all, governments across the world call their political enemies “extremists” or “terrorists”, but the term is rarely ascribed to governments themselves, even when they brutalise their populations.

The government seems ready to exploit to this change, having set up its new £1bn aid-funded Conflict Stability and Security Fund (rising to £1.3bn in 2020), of which 90p of every pound is spent by the FCO and the MoD.

The stage has been set for Britain’s security state to raid the aid budget to pursue the ill-conceived and expensive military strategy du jour.

The government’s agenda to spend aid in conflict-hit and fragile states on counter-terrorism projects has a bad precedent. The US development agency USAID spent billions in post-2001 Afghanistan, which was embezzled or spirited out of the country.

Even worse, the aid was destabilising. “Instead of rescuing the [political] transition process, aid contributed to its failings,” said the NGO Saferworld in a report this year on the lessons learned from the American state-building strategy in Afghanistan. “Large aid volumes overwhelmed local absorptive capacity and sustained a rentier state . . . The influx of aid funds and the competition over the illegal economy strengthened predatory and opportunistic elites that the US and its allies tried to reform.”

The British government risks falling into the American trap of using counter-terrorism aid to remake conflict-hit fragile states into democracies.

The Independent Commission for Aid Impact (ICAI), the government’s own aid watchdog, has criticized the government’s failure to learn lessons from the past, adding that its security initiatives are “naïve” and perform “poorly” in terms of both effectiveness and value for money.

***

In another dangerous case of aid not being used in the interests of development, the Tories are using it to establish private healthcare and education across the Global South.

Publically provided, free and universal health and education of the type we enjoy in Britain should be pursued across the Global South because it reduces inequality and strengthens democratic accountability.

Private provision of these services in the words of turns these basic needs into commodities whose price variable and unaffordable to poor and marginalised sections of society.

In Britain we should be internationalising the principle of free-at-the-point-of-use health and education, a privilege hard fought for by a generation of Labour politicians interested in social justice and the condition of the poor.

Instead, Dfid’s Education Position Paper calls for “developing new partnerships across the public-private spectrum” and commits Dfid to promoting low-cost private schools “in at least four countries”.

Its flagship education programme of the Department of International Development, in partnership with Coca Cola and PwC, is the £355m Girl’s Education Challenge, which rolls out private education across 18 countries, including 15 African nations.

In signing up to last year’s Sustainable Development Goals last year, Britain committed to “achieve universal health coverage”, which is directly undermined by a development agenda which favours fees.

***

The privatisation of our aid budget alongside its entrapment by enormous multilateral financial institutions is symptomatic of the wider erosion neoliberalism is enacting on the British – and global – economy.

In 2016, aid should be about empowering the losers of neoliberalism across the Global South to cut poverty and reduce inequality. This means placing more emphasis on working directly with the poor, colonised and, more-often, the women of the Global South.

Aid should not be spent on the five and often six figure salaries of the global financial elite, nor should it be tied to Britain’s commercial interests to provide public subsidy for private interests. If we wish to subsidise our private sector, that’s fine, but should do it using export credit and not disguise it as aid.

I can already hear the outcry from development experts that spending money at the grassroots is harder to track and the shrill headlines that taxpayers’ money is being wasted on bee-keepers in Kyrgyzstan or on a Somali radio drama that gave tips to illegal immigrants (all real headlines from the Murdoch press).

But I would accept more “waste” by employing more Dfid civil servants to monitor a greater number of smaller grassroots aid projects on a trial-and-error basis than I would accept the other now ubiquitous form of waste that we do not call waste: the subsidising poverty barons, who enrich themselves off the aid ‘industry’.

This is not a particularly radical agenda. Aid under Labour’s Clare Short, Dfid’s first head, targeted the grassroots and there is a growing consensus among the establishment that we must return to this model to make development more effective and give poor people ownership over projects rather than imposing them from above.

More power and capital needs to go into the hands of grassroots groups.

We must recall the lessons of Pergau and redesign our aid system so that it is not captured by industry or distant elites for their own profitability but a means by which the poor can bring about transformative social change for themselves. 

Diane Abbott is Labour MP for Hackney North and Stoke Newington, and shadow secretary of state for international development.