In this week's magazine | A storm is coming

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19-25 February 2016 Issue
A storm is coming

Cover Story: The storm is coming.
Felix Martin
: The world economy is close to breaking point. Can anyone stop another crash?

Ken Livingstone on plans in Labour’s National Executive Committee to end party MPs’ monopoly of leadership elections – plus his hopes that “obnoxious” Osborne will be the next Tory leader, and his semi-retired life as a house husband.

Charles Grant: Why Brexit would be bad for the whole world.

Jim Murphy: The US primaries are compelling . . . but for breathtaking campaign chutzpah look to the SNP in Scotland.

Laurie Penny: Why the rest of the world should get a vote in the most expensive reality TV show on Earth – the US election.

George Eaton: How Labour’s turmoil is fuelling the Tories’ growing opinion-poll lead.

Helen Lewis: The left might need to think again about Michael Gove.

Hunter Davies: What my late wife taught me about football.



Cover story: Felix Martin on the rising economic storm.

Tensions in the global economy are near breaking point. In this week’s cover story, Felix Martin warns that the looming turmoil in stock markets, interest rates and currencies will affect us all:

When does a stock-market slide become a crash? And when does a financial crash spark an economic crisis? At the end of last year, few investors were giving much thought to such nice distinctions. Less than two months in to 2016, with the leading global equity indices having dropped between 10 and 25 per cent at their worst, these questions are on everyone’s lips.

The turmoil in the equity markets should not really come as a surprise: the warning signs have been there for some time. Haggard veterans returning from other financial fronts – oil and metals exchanges; the emerging markets, including China; corporate bond funds – have been reporting heavy losses and instances of extreme volatility for more than 18 months.

[. . .]

The past few weeks have been nerve-shredding for those who work on the financial markets. They should prepare for more of the same – and those who have nothing to do with the trading of stocks, bonds and currencies should ready themselves, too.

If it is belief in the power of loose monetary policy that has kept bond yields low and equity prices high, we should prepare for spikes in interest rates and stock-market crashes – with painful ramifications for companies and households that need to finance their activity. If it is confidence in the power of central banks to manipulate the value of their currencies that has bolstered the dollar and depressed the euro and the yen, then we should expect dramatic re-evaluations of these exchange rates, with inevitably disruptive consequences for global trade.


Red Ken’s curtain call: Anoosh Chakelian meets Ken Livingstone.

Although Ken Livingstone might claim to be a semi-retired house husband, the NS’s Anoosh Chakelian finds he is “building a last-minute legacy: a future for Labour defined by the politics of his past”. Most notably, the former London mayor reveals to Chakelian that in his capacity as a member of Labour’s National Executive Committee (NEC) he hopes to push through plans to end Labour MPs’ monopoly over choosing the party’s leadership candidates:

When I ask him if a Corbynite candidate could make the ballot under the current system – which requires a nomination by 15 per cent of MPs – Livingstone smiles. “I think you can rely on Labour’s NEC to resolve that issue.” He says that the NEC will “almost certainly” try to change the current process at its autumn conference this year. “The idea of Labour
MPs having a veto over who stands is nonsense,” he said. “The Labour Party before Blair was a genuinely open, democratic one. Jeremy’s bringing that back.”

He adds: “Jeremy is genuinely a democrat, unlike the New Labour regime, which was more like North Korea, internally.” Livingstone would like to revive the old process, in which candidates needed just one MP to propose them and another to second. He goes further: “Why not allow councillors to do it?”

Chakelian points out that the plan will petrify moderate MPs, who already fear being purged. In response, Livingstone warns:

“The only area where I disagree with Jeremy and John [McDonnell, the shadow chancellor] is I do think we should have automatic reselection all the time. Those Labour MPs were there during a Labour regime that never reversed Thatcher’s anti-union laws, never gave people the stronger work rights that we had in the past – yet they demand them for themselves. It’s wrong.”

The former mayor of London suggests that continuing austerity will prove an advantage for Labour at the next election:

“People are really struggling. If we’re really lucky, things will just continue to be painful . . . That’s the potential. If we can convince people there’s a better way, we’ll win.”

Livingstone believes the identity of the next Tory leader might also help Labour to victory in 2020:

“I’m hoping Osborne, because he’s the most obnoxious snob in British politics. That’d be good. The contrast between George Osborne and Jeremy Corbyn, who is actually a nicer and more regular guy, is exactly what we want.”

Now aged 70 and having just published a memoir, Being Red, Livingstone says these days he is primarily a “house husband”: “I’ve got to get the kids to school, walk the dog, do the shopping and be ready for when they come home.” But with the rise of Jeremy Corbyn he has also found himself propelled back into the limelight:

“I’m not looking for a job,” he insists, when I visit him at home in north-west London [. . .] But the slippers are deceptive. He tells me that his life has gone from people asking “if he’s Boris Johnson” or “that ancient wizard from Game of Thrones” to a stream of media appearances. “Suddenly it’s all whammo! Back!”

Read the interview in full on


Charles Grant: Why Brexit would be bad for the whole world.

In an essay for this week’s issue, Charles Grant, the director of the Centre for European Reform, explains why British membership of the European Union matters so much to the world:

One should not pretend that the EU is always a useful or effective diplomatic actor. It has consistently failed to contribute much of value to the Middle East peace process, partly because its own members disagree about how to deal with Israel and Palestine. Nevertheless, many people are unaware of the crucial and positive role that the EU has played in resolving some other major diplomatic conundrums in recent years.

Although many words have been devoted to the impact of Brexit on the British economy, little has been written about its impact on the EU itself or, indeed, on the wider world. The UK’s departure would undoubtedly weaken the EU by energising Eurosceptics across the continent. When it comes to economic policy, the British are the biggest champions of extending the single market, negotiating trade agreements and cutting red tape. Without the British, these causes would suffer. So would co-operation on justice and home affairs, where, despite their opt-outs, the British have been extremely influential – say, in leading co-operation on counterterrorism and in providing the current head of Europol.

The EU’s defence policy has been unspectacular but useful since Tony Blair and Jacques Chirac invented it in 1998: it has run 32 peacekeeping, rule-of-law and humanitarian missions on three continents. The EU would lack credibility in defence without the participation of one of the EU’s two serious military powers (France being the other). EU foreign policy would also carry much less weight, because Britain has contributed a global perspective and deep expertise in some critical areas, including the five instances mentioned above.


Jim Murphy: The SNP’s plan for the May election is to be the insurgency against its own incumbency.

The NS columnist and former leader of the Scottish Labour Party, Jim Murphy, finds he is mesmerised by the US presidential primaries, but suggests that if it is truly “breathtaking, eye-watering campaign chutzpah you’re after – then look to Scotland”:

In this May’s elections the SNP plans to be the insurgency against its own incumbency. The party will travel the country carrying an anti-austerity message of convenience in utter repudiation of its eight-year-long vapour trail in government of doing so little to support the poor.

Until May last year, I represented one of the richest constituencies in Scotland. It was next door to the area I grew up in. The two constituencies were separated by a single open field but divided by a nine-year gap in life expectancy. Every big city has these contrasts of poverty cheek-by-jowl with prosperity. I’m not standing for the US presidency, so I’ll spare you all the true but schmaltzy stories of how I slept in the bottom drawer as my brother slept two drawers above me.

[. . .]

In recent times, the SNP has been a strange mix of electoral hegemony and policy timidity. It has voted against extending the Living Wage to more cleaners, caterers and carers while blocking Scottish Labour’s plans to ban rip-off rent rises. It has set income tax at the same level as George Osborne and forced councils to set council tax lower than Osborne has. The promise of the “democratic intellect” of unfettered educational fairness is now in jeopardy. Scotland has the lowest level of bursaries in western Europe and is the only nation of the UK where poorer students will borrow more than richer ones.

All the while, the SNP plans to spend ten times more on a climate-busting tax cut for airlines than it would on a poverty-challenging plan to close the gap between the richest and the rest in schools. A party that is driven by a ferocious loathing of the constitutional status quo seems intensely relaxed about the economic situation.


George Eaton: How Labour’s turmoil is fuelling the Tories’ growing opinion-poll lead.

The NS’s political editor, George Eaton, notes that although the government is facing battles on numerous fronts (an unpopular dispute with junior doctors, a slowing economy and a cabinet divided over EU membership), the Conservatives’ opinion-poll lead has widened rather than narrowed. Conversely, Labour trails the Tories by an average of 10 points. Eaton points out that “at no point in the post-1945 era has it performed so poorly in opposition”:

These are unhappy times inside the Parliamentary Labour Party. After one recent meeting, a former shadow cabinet minister told me of his contempt for Andy Burnham and others who were “collaborating” with and “propping up” the Labour leader. Those who chose not to serve on the front bench increasingly argue that [Jeremy] Corbyn must be given the space to succeed or fail on his own terms.

For many members, that he has made Labour an anti-austerity party is success enough. Yet there is as yet no evidence that the electorate shares this view. Though its affection for the Conservatives has little grown, it is defaulting towards them in the absence of an attractive opposition. The EU referendum, financial tumult and a new Tory leader could all change the landscape in unforeseen ways. But if there is hope for Labour, it does not lie in the polls.


Helen Lewis: Why the left might need to think again about Michael Gove.

After presenting the latest edition of Radio 4’s Week in Westminster, the NS deputy editor, Helen Lewis, is forced to concede (with a certain queasiness) that Michael Gove has made an impressive start as Justice Secretary. Might liberals need to think again about the Honourable Member for Surrey Heath?

. . . I invited Frances Crook of the Howard League for Penal Reform on to talk about Michael Gove’s tenure as Justice Secretary. How was the man who every teacher I know fumed about faring in his new role? Had he called lawyers “the blob” yet? Instead, her assessment surprised me. Crook was . . . well, glowing. And, looking at Gove’s record since taking over from Chris Grayling last summer, I understand why.

So far, Gove has scrapped the courts charge – levied on criminals on top of fines, compensation for victims and legal fees – which penalised those who pleaded not guilty. He argued successfully that the Ministry of Justice should not supply £5.9m of “training-needs analysis” to the Saudi government, despite Foreign Secretary Philip Hammond’s portentous warnings about our supply of intelligence drying up. And at the end of January, he ditched Grayling’s legal aid reforms, which were as unpopular as they were sketchily drawn up, citing the 90 legal challenges mounted against them.

Right now, I can’t imagine that Gove is the most popular minister with his colleagues, but for any liberal, these decisions are hugely important. We shouldn’t be tacitly condoning the human rights abuses of the Saudi judicial system. The legal aid changes would have caused enormous misery among those on low incomes by restricting their access to justice. The courts charge was demanding money from people who didn’t have it. It wasn’t an effective deterrent, and it made rehabilitation harder.

Frances Crook told me she now has a simple challenge for Michael Gove – cut the prison population. She wants the numbers to return to where they were when Margaret Thatcher left office; that is, half the current figure of 85,000. It will cost the government less, and will reduce the terrible statistic of one suicide in prison every four days. It’s a hell of a challenge, but if he manages it . . . The left might have to think again about Michael Gove. That would be quite a turnaround, given he was once so unpopular with Labour voters that the party deliberately used to put photos of him standing next to other cabinet ministers on its mailouts, to taint them by association. I suspect for the next few months that role will be filled by Jeremy Hunt.


Laurie Penny: Why the rest of the world should get a vote in the most expensive reality TV show on Earth – the US election.

The NS associate editor Laurie Penny is glued to coverage of the US election in spite of herself:

We’re only halfway through, and I’m already sick of the US presidential race. As reality television goes, it’s a hackneyed format. The narrative is childish and simplistic. And if I want to watch a bunch of interchangeable thuggish white men and the occasional token minority making terrifying pronouncements to a pounding rock soundtrack, I’ll stick on a Tarantino film.

American commentators often point out that the whole two-year, multibillion-dollar pageant is a great way to distract the entire US electorate from the real-life daily process of democracy. Imagine how the rest of us feel. We’re not even allowed to vote and help decide which candidate gets to go home with all those fabulous prizes, which include a free plane and the largest military arsenal the world has ever known. What can I say? It’s America. They have high expectations. In Britain, whoever Rupert Murdoch picks is usually just excited to meet the Queen.


Hunter Davies: What my late wife taught me about football.

The NS’s football commentator and longest-running columnist, Hunter Davies, offers a tribute to his wife, and recalls her feeling for the beautiful game:

Margaret has just died, on 8 February, aged 77. After 55 years of marriage, I would say she had become a football fan. Not in the sense of going to games, watching on TV, but following it, knowing the main characters, the dramas.

I did drag her to a few Spurs games when we first came to London, saying it would be sociologically interesting. Had sociology been invented in 1960? I think they were still working on the terminology.

[. . .]

Margaret did not go much after that first year in London. Not with three children, house to clean, useless husband to cook for, and in any spare time writing novels on the kitchen table. She used to maintain that when our son Jake and I came back from White Hart Lane she could tell by how we came through the front door whether Spurs had won. I’d then tell her every detail of the game, whether she asked or not.

In some ways she was more knowledgeable about sport than I was. In the Indie and the Guardian, she always read all the interviews with sportsmen and women, the human-interest ones, rather than the purely sporting. So she always knew how many children John Terry had, or Steven Gerrard, their names and sexes.



Sasha Abramsky: Why the Republican Party should split.

Kevin Maguire’s Commons Confidential: Zac Goldsmith’s rhetorical fireworks and Nicholas “Fatty” Soames’s diet.

Sophie McBain: Are electronic devices destroying
our internal memory?

Peter Wilby on Rupert Murdoch and the rise and fall of his old newspaper – the Independent.

Ryan Gilbey: The Oscars are blighted by racism and bad decisions.
So, is it time to kill them off?

John Sutherland finds Joan Bakewell and Diana Athill
flourishing in old age.

Michael Prodger scans posing, pastiche and performing for
the camera at Tate Modern.

Ed Smith: Leicester City have revived the Premier League by reconnecting with sport’s origins in play.

For more press information, please contact Anya Matthews: / 020 7936 4029 / 07815 634 396

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