The Electoral Commission might have cleared Michael Ashcroft, the billionaire deputy chairman of the Conservative Party, of wrongdoing but serious questions remain about his baleful influence on politics in Britain. How can it be right that a man who does not pay tax in this country – who takes advantage of his non-dom status to avoid paying tax on his enormous foreign earnings – can try to exert, through his huge donations to one political party, such an influence on the government of the United Kingdom?

Lord Ashcroft was forced – finally – to confirm what many on the left had suspected for years: that, as a non-dom, he enjoys a tax status which enables him to avoid British taxes on his overseas income and gains. His non-dom status may well have saved him more than £100 million in British taxes– enough to pay for 50,000 hip replacements or 3,500 nurses or to build 20 new schools.

Over the past 15 years, Lord Ashcroft is understood to have handed over more than £10 million to the Conservative Party. That money is being used, mainly, to target Labour marginal constituencies to try to secure a Tory victory at the general election. Some £5,137,785 of this cash has been donated through Bearwood Corporate Services, a limited company registered in the UK and with some trade here – but, curiously, with insufficient profits to be in a position to make donations on such a huge scale. So let’s shed a little light on the dark corner of the donations made through Bearwood to the Conservative Party.

One of the key ideas of the Political Parties, Elections and Referendums Act 2000 (PPERA) was to ban foreign donations, which was also part of the Labour Party’s 1997 manifesto. In July 1997, the then Conservative leader also announced that no foreign donations would, in future, be accepted by his party. The PPERA requires all donations to be made by “permissible donors”. These include an individual registered to vote in this country – appearing on the electoral register – a trade union, a building society, a limited liability partnership, a friendly, industrial or provident society, and a company. To be a permissible donor, a company must be registered under the Companies Act, incorporated in Britain or another European Union state and be carrying on business in this country.

We know that Bearwood is registered in the UK and its annual accounts are filed at Companies House. Bearwood describes its main business as “merger broking” and, more recently, “supply of management services”. Its ultimate owner is Stargate Holdings, a company registered in secretive Belize and controlled by Michael Ashcroft. Local laws do not require companies to publish accounts, provide names of shareholders, beneficial owners or even directors.

Until 2000, Bearwood published a full set of accounts, including a directors’ report and a profit and loss account. These accounts required the company to provide details of significant political donations. The introduction of the PPERA coincided with a decision by the directors of Bearwood to claim “small company exemptions” available under the Companies Act. So, in subsequent years, the company published abbreviated rather than full accounts. These abbreviated accounts do not need to include the full balance sheet, the profit and loss account or the directors’ report. More importantly, political donations do not need to be disclosed. Political donations made by Bearwood were not voluntarily disclosed by the company. Rather, they were brought to public attention by the Electoral Commission’s decision to publish the names of all donors to political parties.

The donations to the Tories were routed through Bearwood using complex corporate structures. The diagram this page shows the route of some of the money paid out.

The donors chose share issue as the vehicle for transferring cash. The trail for the transaction begins with Stargate buying shares in Astraporta, which uses that money to buy shares in Bearwood Holdings, which then uses that money to buy shares in Bearwood Corporate Services. In turn, Bearwood hands it over to the Conservative Party and its associations. This helps to obscure the source of money.

The amounts paid for shares have no economic rationale. Stargate paid £2 million to Astraporta on October 28 2005, with each share priced at £1. On March 29 2006, this is followed by another payment of £4 million – this time 5,206,977 shares are bought at £0.7682 each. As the diagram shows, most of this £6 million then travels down to Bearwood Corporate Services. The calculation seems designed to secure the desired amounts for onward transmission rather than anything else.

Astraporta, Bearwood Holdings and Bearwood Corporate Services are all registered in the UK and each is designed to meet the small company threshold of the Companies Act to ensure they do not have to publish a full set of accounts. Astraporta and Bearwood Holdings did not trade with third parties. The periodic squelching of corporate structures obfuscates the trail of money and makes tracing cash difficult. Both companies went into liquidation in March 2009.  Subsequently, different routes have been used to pour money into BCS.

The most recently available accounts of Bearwood Corporate Services, for the period to September 30 2008, show the company sitting on a cash pile of £6,708,647 – in effect, a war chest for the general election. This cash is unconnected with its trade. The company does not have sufficient profits to make the donations. Since the financial year ended on March 31 2005, Bearwood Corporate Services has been making losses. It also made losses during the financial years ended on March 31 2000, 2001 and 2002. On September 30 2008, its accumulated losses stood at £3,928,665.

The company may have some trade with external parties, but this is not evident from its accounts because it does not publish its profit and loss account.

Some of the Bearwood transactions are with other companies controlled by Lord Ashcroft and may have helped to boost profits and thus keep losses at a lower level. For instance, the 2008 annual accounts of BB Holdings, another company controlled by Lord Ashcroft, say that: “During the year, the group utilised the consultancy services of Bearwood Services, a UK company in which Lord Ashcroft has an interest. The aggregate fees paid to Bearwood by the company for the year ended March 31 2008 amounted to $0.9 million (2007 – $0.4 million).” The same company’s 2009 accounts show another $0.3 million paid to Bearwood for its services.

To reiterate: Bearwood does not have sufficient profits to cover the donations. The donations are the prime causes of its losses.

The ownership of Bearwood Corporate Services is wrapped up in complex corporate structures. If someone asks who owns Bearwood Corporate Services, the legally correct answer is Bearwood Holdings. Who owns that? The answer is Astraporta. And who owns that? Stargate. Through these procedures, the identity of Lord Ashcroft is concealed and his name does not appear on any publicly available legal document. To get to the people behind the legal façade, we need to lift the “veil of incorporation” and that is not easy because Belize law guarantees secrecy. Fortunately, Lord Ashcroft has left clues.

In his autobiography, Dirty Politics, Dirty Times: My Fight with Wapping and New Labour, he refers to long-time employee Lyn Austen: “Sadly, Lyn had the temerity to retire, even though he is six months younger than I am. But right up until his retirement, he was running a business for me called Bearwood Corporate Services which, at that time, specialised in merger broking.” This is a tacit acknowledgement that Lord Ashcroft controlled or exercised significant influence on Bearwood.

The accounts of BB Holdings refer to Bearwood as a company in which “Lord Ashcroft has an interest”. On March 14 2008, a filing with the London Stock Exchange by Impellam Group plc, another company in the Ashcroft empire, stated that Manco Investment Limited and Velvet Heights are companies controlled by Lord Ashcroft. These are wholly-owned subsidiaries of Bearwood Corporate Services. If Lord Ashcroft controls the subsidiaries, then he must also control the parent company.

Southtown Limited is one of Bearwood Corporate Services’ directors. Northtown acts as its secretary. Both companies are registered in the British Virgin Islands. Company secretaries are responsible for administration and compliance with the legal requirements. Company directors direct the company, make policies and are responsible for the day-to-day operations. However, companies are just a nexus of contracts. The actual decisions are made by the people dominating them. Could these companies be connected to Lord Ashcroft? The British Virgin Islands do not hold any information about the owners and directors of Northtown and Southtown. But, once again, some clues are provided by Ashcroft himself.

In 2005, Carlisle Holdings Limited, based in the United States and part of the Ashcroft empire, filed statutory information with the Securities Exchange Commission. This stated that Northtown and Southtown are 100 per cent-owned subsidiaries of Carlisle Holdings. Who controls Carlisle? The same filing states that Lord Ashcroft was the majority shareholder and adds that Ashcroft has been “executive chairman of CHL since 1987 and chief executive officer since 2001” and “retains the power to elect all of its directors and to determine the outcome of any action requiring shareholder approval”. Ashcroft was in a position to control Northtown and Southtown, which held key positions at Bearwood.

In late 2005, the corporate structure of Carlisle Holdings was changed. Northtown and Southtown became subsidiaries of Belize Corporate Services, which in turn is controlled by the Belize Bank, which is controlled by Lord Ashcroft. All trails lead to Ashcroft, but the Electoral Commission does not seem to have done its homework and has fudged the issues about the control and direction of donations through Bearwood.

This paper chase could have been avoided if Ashcroft had listed Bearwood as one of his companies in the House of Lords members’ register of interests. Ashcroft amended the register on March 1, just before the publication of the Electoral Commission’s report, to disclose that he owns a controlling stake in Bearwood Corporate Services. Did the Conservative Party really not notice this omission?

Last week, the Electoral Commission gave a green light to the donations passed via Bearwood to the Conservative Party. Yet the report raises many other questions.

The Commission has no powers to subpoena witnesses and documents and relies on goodwill, which is apparently in short supply. It invited Conservative Party staff to attend interviews on a voluntary basis, but they did not agree to these requests. Its powers do not extend to companies and individuals making the donations. The Commission requested sight of relevant documents relating to the control, ownership and provision of funding for Bearwood, but was told that Ashcroft did not have any such documents in his possession and that many had been destroyed.

In the absence of co-operation and information, the Commission could have said it could not reach a decision, but instead it cleared the donations. Some will wonder if this is satisfactory.

The Commission could have sought information from the accountancy firm BDO Stoy Hayward, whose address in Southampton continues to be central to Lord Ashcroft’s affairs. Interestingly, the firm’s London office audits the accounts published by Conservative Party Central Office. Records at Companies House show the same Southampton address is also the address for Astraporta, Bearwood Holdings and Bearwood Corporate Services. Northtown and Southtown are registered in the British Virgin Islands, but the Southampton address is provided as their UK address. Any properly planned and executed audit would inquire into the control, ownership and financial flows of Bearwood and audit files should contain copies of important documents. There is no evidence that the Electoral Commission requested any information from BDO Stoy Hayward.

The fact that Bearwood is registered in this country and carries on some trade here seems to be sufficient to enable the company to pay millions of pounds in political donations even though these monies do not originate in the UK. The Commission says there is no requirement in the PPERA that the funds a company donates to a political party must be generated from its own trading. Does that mean any rich non-dom can now emulate Bearwood and move their millions from abroad to influence a British election? Isn’t that representation without taxation?

The Electoral Commission could have been guided by the report in 1998 by the Standards in Public Life Committee, chaired by Lord Neill of Bladen, which paved the way for the PPERA. This said: “We have brought within the definition of permissible source all companies incorporated in the United Kingdom. This, as we have said, would include a UK subsidiary of a foreign company. It is possible to imagine that a foreign corporation wishing to evade the underlying purpose of the provisions which we advocate might cause to be brought into being a UK subsidiary, the sole function of which would be to receive money from the foreign corporation and then channel it to the political party of its choice. This would clearly be an abuse of the system and could be met by provisions designed to ensure that, in the case of a donation from a UK subsidiary of a foreign company, that subsidiary was carrying on a genuine business within the United Kingdom and was generating income here sufficient to fund any donation made to a UK political party.”

Nobel laureate Joseph Stiglitz has made radical proposals for global economic reform - but has been ignored

The worldwide economic crisis and its human consequences are a direct result of the free-market model of globalisation that has been pursued by the World Trade Organisation, World Bank and International Monetary Fund, as well as the rich

countries’ governments that control them. Multinational corporations have seen their profits rise astronomically, thanks to the new freedoms they have won under this system of globalisation. Ordinary people have seen their livelihoods lost or threatened, along with planned cuts in public services. Hundreds of millions of human beings have been condemned to poverty.

But the crisis provided a unique opportunity for change. The United Nations has made efforts to create an inclusive and far-reaching response. At a summit last June, the UN attempted to bring all 192 countries together to take fair and effective decisions on the future of the world economy. A commission, chaired by Nobel laureate Joseph Stiglitz, devised a series of radical proposals for global economic reform. Sadly, the British Government and those of other wealthy nations sought to weaken and then downplay the UN response to the crisis. British Prime Minister Gordon Brown did not even go to the UN summit, preferring instead to attend the elite club of the G8 in Italy the following month.

Rather than building a just economic architecture in response to the meltdown, the financial crisis has been seized on by rich countries as a desperate excuse to revive the failed global institutions of the IMF, World Bank and WTO.

In talks about the crisis, the G20 made clear its intention to conclude the WTO’s Doha round of world trade talks by the end of 2010.  The poorest countries would suffer considerable losses as a result of the proposed agreement. The deal currently on the table would mostly benefit the world’s richest countries, as well as certain export sectors in powerful developing nations. Countries in sub-Saharan Africa look set to lose out, as do other states, such as Bangladesh, that would see their existing trade preferences eroded.

However, while the wealthy nations continue to promote the WTO, the fact is that its future as a credible institution is hanging in the balance and there are growing calls for the talks to be abandoned altogether. When the WTO ministerial conference was held in Geneva in December last year, the WTO secretariat was at pains to downplay its significance. The organisation is close to sliding into irrelevance.

This is not the first time the WTO has failed to take its agenda forward. Talks have collapsed again and again. While the European Union and the United States have pressed developing countries to open their industrial and services sectors to foreign imports – at the same time refusing to reduce their own agricultural subsidies in real terms – developing countries have banded together to fight off the worst EU and American aggression.

The voices opposing the deal are gathering strength. The international trade union movement has called on all the WTO’s member governments not to sign the deal currently on the table, in view of its potential devastating impact on their industrial and manufacturing sectors.

Finance specialists are also urging the immediate suspension of the WTO’s financial services negotiations. These talks aim to further liberalise and deregulate financial markets, despite the fact that such liberalisation is widely agreed to have been a primary cause of the present crisis.

The international farmers’ movement has called for a complete end to the WTO’s agricultural negotiations, which threaten

rural development and the livelihoods of small-scale farmers throughout the world.

However, faced with the repeated collapse of the Doha round, the EU has turned to bilateral trade agreements – with easier opportunities to bully trading partners – in order to obtain increased market access for European companies.

In 2006, the EU adopted a new trade strategy, “Global Europe – competing in the world”. This is explicitly designed to meet the interests of European companies, prising open new markets for their exports, securing unrestricted access to the natural resources of the developing world and eliminating local laws that block corporate expansion. The EU aims to use its new generation of bilateral trade deals to open up new areas of emerging economies, despite the fact that developing countries at the WTO specifically rejected this expansion of trade rules into new areas.

If we are ever to address the global crises before it is too late, we will have to harness the creativity, energy and political power of ordinary people. That cannot mean more free-market ideology, consumption and competition. It must mean inclusive democracy, with oversight by civil society and participation and co-operation by everyone. We still have time to tackle the widening gulf between global politics and the needs of people and planet – but it is fast running out.

Creative Commons photo: Katie Brady

Was I the only football fan to be bored by the John Terry affair? Or did anyone else find it all slightly tedious and difficult to get worked up about, especially when it came to whether he should remain as the England captain? Of course, you have to feel sorry for his wife, who has had to suffer the public indignation of being splattered across the tabloid – and most of the quality – press. I can’t say that I particularly like Terry and I’m certainly not a Chelsea fan, but the hysteria of the past few weeks seems to have let slip football’s real story.

The football scandal that should be splashed across every front page is about the financially parlous state of the national game and its appalling lack of regulation. On one day alone recently, three football clubs – Portsmouth, Cardiff City and Southend United – were in the High Court facing HM Revenue and Customs. Portsmouth was there owing £7.4 million in unpaid VAT and another £4.7 million in unpaid PAYE and National Insurance, plus it has substantial debts pressing elsewhere. The club has now gone into administration, has been docked nine points as a consequence, faces almost certain relegation and possibly worse to come.

Cardiff City faced an unpaid £2.7 million bill, having only just paid off a £15 million debt to its previous owner, while Southend’s debt to the Revenue was £200,000. Unsurprisingly, they all wanted our sympathy, pleading on behalf of their employees, fans, and local communities. Maybe they should have thought about all that before recklessly chucking their money around.

And let’s not forget whose money this is. It’s owed to the Treasury – that is, you and me. It’s money that should be going to finance our schools, hospitals, police and so forth.

All three clubs were given a stay of execution, although Portsmouth may well be history before too long.

If only these court hearings were an isolated tale of woe. Sadly, they are not. Virtually every club in the land is saddled with crippling debts, while there are other clubs, owned by offshore companies, dubious businessmen and some whose ownership remains a total mystery.

Take my own club, Liverpool, owned by two Americans, George Gillett and Tom Hicks. When they bought the club in 2007, the assumption was that they had dug deep into their Texan pockets. By chance, it was later discovered that they had actually purchased the club through a leveraged deal. In other words, they had borrowed money on the basis of the value of the club and its future profits. The result is that Liverpool is now in debt to the tune of £237 million and is paying out £40 million a year in interest payments. The Royal Bank of Scotland, the club’s biggest lender, has now told the owners that they have to find £100 million by July – otherwise they will not renegotiate their loan deal. Unfortunately, Liverpool was not their only sports franchise financed this way and, swamped by the international financial crisis, the two Americans are now all but broke. What happens next is anyone’s guess.

It’s much the same picture at Manchester United, where the Glazer family, also from the United States, set up a similar deal that has saddled the club with debts of around

£716 million. Just how long that situation is sustainable is again uncertain. The total debts of Manchester United and Liverpool alone exceed those of Germany’s entire Bundesliga.

All this started with Roman Abramovich and his billions. Before Abramovich, the situation was just about manageable. However, once the Russian oligarch started throwing his roubles at Chelsea, others felt it necessary to follow suit if they wanted to keep up any kind of footballing challenge. And now we have Manchester City, with another sugar daddy prepared to throw money at a venture that can never make money.

Football is not an investment. It’s an unregulated jungle, rivalled only by the banks and financial institutions for its carefree, boom-or-bust attitude. This is cloud cuckoo land capitalism at its worst. Even the Americans regulate their sport with wage caps and a draft transfer policy. Some of this could not work in football, but it can’t be beyond the intelligence of someone to come up with solutions. Unfortunately, it seems to be beyond the intelligence of those in football who anyhow do their damndest to avoid any semblance of regulation and transparency.

And what about the fans in all this, who pay out hundreds of pounds every season to follow their favourites through ticket prices or television subscriptions? Shouldn’t they have a say in the way their clubs are run?

The solution to this unfettered market is not simple. Wage caps and maximum transfer fees would have to be implemented in a business notorious for its under-the-table payments, offshore bank accounts and general lack of transparency. And it would need to be implemented globally. Sentiment has to stop. Club chairmen need to start acting responsibly and stop handing out blank cheques. Who knows – one day the TV money might stop as well.

The economy may have gone pear-shaped, but football carries on as if nothing has happened, stacking up debts, paying out even higher transfer fees and more lucrative salaries. Someone, somewhere needs to take action and, if the footballing authorities won’t, then perhaps politicians should take a lead. How about a manifesto commitment to sort out football’s lunacy?

Mervyn Jones was born in London on February 27 1922. His father, Ernest Jones, was a psychoanalyst and disciple of Sigmund Freud who launched the International Journal of Psycho-Analysis. Ernest and his wife Katerina helped Freud get out of Nazi-controlled Vienna in 1938. Mervyn joined the Young Communist League and read voraciously, especially the titles supplied each month by the Left Book Club. He turned down a place at Queen’s College, Oxford, and left with his mother for the United States in August 1939. He enrolled at New York University, where he sat enraptured and inspired by the lectures of his hero, WH Auden, before returning to Britain in 1942. He joined the Communist Party and then the British Army, serving as a second lieutenant in an anti-tank artillery regiment. He took part in the D-Day landings but was captured by the Germans in Holland and sent to a prisoner of war camp in the Rhineland.

Mervyn married Jeanne Urquhart, who was also a communist, in 1948, but became disenchanted with the party. He left the CP in 1951 and, although he continued to write for the Daily Worker, stood as a Labour Party candidate in the safe Conservative seat of Chichester in 1955.

His first novel, No Time To Be Young, was published in 1952. Three years later, after being vetoed by the security services for a job with the Central Office of Information, he joined Tribune, reporting on everything from party conferences to rock ’n’ roll. He became assistant editor, helping Michael Foot write Guilty Men in the aftermath of the Suez crisis, and also wrote articles for the New Reasoner, the anti-Soviet leftist journal founded by EP Thompson, and short stories for Homes & Gardens. From 1966 to 1968, he was assistant editor of the New Statesman.

He published 22 well-regarded novels – including John and Mary (1966), which was turned into a film with a script by John Mortimer; Holding On (1973), which was turned into a television serial; and Strangers (1974), his personal favourite, about a pacifist whose refusal to fight in the Second World War alienates him from his family – but he was, as his friend Geoffrey Goodman says, “far better known as a fine journalist, and the biographer of Michael Foot, than the talented novelist he always craved to be”.

He turned down jobs at The Observer and Daily Express, preferring to work as a freelance reporter which left him time to write prose fiction. His non-fiction work includes Big Two (1962), a comparative study of America and Russia; Two Ears of Corn (1965), about the work of Oxfam; A Radical Life: The Biography of Megan Lloyd George (1991) and The Amazing Victorian: A Life of George Meredith (1999).

“When I was young, I was certain that the world would be socialist by 1950 at the latest,” he wrote in Chances: An Autobiography. “Now it’s 1987, I am no longer young and I’m left wondering what went wrong.”

Jeanne died in 1990. Mervyn is survived by their son and two daughters.

Chris McLaughlin

Michael started as the wunderkind of the left – a role formally launched at the 1945 general election as Labour MP for Plymouth Devonport, his home base, where he remained until 1955. He had tried to enter Parliament before, contesting Monmouth at the 1935 election campaign. He was then 22, just down from Oxford where he was an active Liberal. Yet even then he was shifting toward socialism.

The Monmouth campaign produced a meeting that was to transform Michael’s entire life. Stafford Cripps introduced him to Aneurin Bevan, then only 37 and not long the Member for Ebbw Vale.  It was the combination of Cripps and Bevan, founders of Tribune in January 1937, which brought Michael to journalism and Parliament. He had already spent nine months working in a Liverpool shipping office in a job found for him by the Cripps’ family, who were old friends of his parents.

It was the Liverpool experience that finally converted him to socialism, as Foot recalled later: “I first joined the Labour Party in Liverpool, because of what I saw of the poverty, the unemployment and the endless infamies committed on the inhabitants of the back streets of that city.” Joining Tribune in 1937, Foot was soon appointed assistant editor  and also started work on a range of books about his political and literary heroes, including Charles James Fox, Jonathan Swift, William Hazlitt, Tom Paine, Lord Byron and HG Wells.

Bevan introduced his young friend to Lord Beaverbrook, proprietor of Express Newspapers which then included the London Evening Standard. The great mogul of Fleet Street became fascinated by the young Foot – and he with Beaverbrook. There developed an extraordinary friendship which lasted until Beaverbrook’s death in 1964.

The Evening Standard was then edited by Frank Owen, who employed Michael as a feature writer, before the two joined forces to write their classic account of pre-war appeasement, Guilty Men, published in 1940. Then, in 1942, and still only 29,  Michael was appointed editor of the Evening Standard by Beaverbrook, where he remained until 1944.

Elected in the 1945 Labour landslide, Michael sat throughout that Parliament on the backbenches. His oratory, inevitably fashioned on Bevan, soon cast its own spell over the House of Commons. His was the radical voice warning Clement Attlee’s Government to beware of the perils of retreating from the purity of the socialist gospel.  Michael’s fire turned on Ernest Bevin, the Foreign Secretary, because of his anti-Soviet and pro-American stance. Michael demanded more nationalisation and still greater help for working people. What he refrained from saying in the Commons, he wrote in the columns of Tribune – of which he became editor in 1948. So it went on until Bevan’s 1951 resignation from the Government, after which Nye and Michael were again singing from the same hymn sheet.

Even so, during those nine turbulent years until Bevan’s death in July 1960, Michael was frequently a tortured soul. At the 1955 general election, he lost his Plymouth seat. The political climate in the Labour Party was tense and bitter, with recriminations against the Bevanites who were conducting a nationwide campaign critical of official party policies. Hugh Gaitskell had taken over the leadership, inheriting a party riven with dissent – notably on defence. Foot stood beside Bevan throughout those years, never wavering.

It was also a period when some of Foot’s most illustrious work was published, including an updated Guilty Men in 1957. The Pen and the Sword, a superb account of Jonathan Swift and the power of the press, also published in 1957 is arguably one of his best books. In 1959, he again contested Plymouth Devonport but failed to regain the seat for which he always retained a special affection – coupled with a life-long support for Plymouth Argyle FC.

By far the most devastating blow to Michael came at the 1957 Labour conference when his idol, Nye Bevan, refused to support unilateral nuclear disarmament – the cause to which Foot committed himself from the inception of CND. Bevan’s famous 1957 Labour conference speech in which, as Shadow Foreign Secretary, he refused to enter “the conference chamber naked” (without the bomb) was a savage blow to Foot. It came close to destroying their friendship.

The temperature inside the editorial board at Tribune – where Nye and Jennie Lee sat with Michael – frequently touched boiling point. Michael insisted on the paper’s right to reflect his views, as well as those of Bevan. At one point, the conflict became so feverish that Jennie Lee wanted to close the paper down, but Bevan vetoed that. Even so, whenever the two met, it almost always ended in turbulence.

The 1959 general election brought all this to a head. Bevan was already a sick man, although few realised how ill he was. He was due to speak for Foot in Plymouth, but was compelled to cancel the arrangement on doctor’s orders. Within weeks of the election, Bevan was in hospital, diagnosed with cancer from which he died in July 1960. At the end of that year, Foot was selected as Bevan’s successor. Michael held the Ebbw Vale seat, renamed Blaenau Gwent, until he retired from Parliament in 1992.

It was in those 32 years representing Bevan’s old seat that the image of Foot the rebel was transformed into Foot the statesman. He became a reluctant and a sadly unsuccessful Labour leader. Here was the one-time bête noire of Labour governments finally ending as Leader of the House to James Callaghan. Before that, he had served under Harold Wilson as Employment Secretary.

Earlier, in the decade from 1960 to 1970, the scene was very different. The rebel continued to storm the ramparts of Labour officialdom. Foot emerged very much in the mantle of Bevan as leader of the left. From the backbenches, he was outstandingly the most effective critic of the 1964-1970  Government – especially over its prices and incomes policy and, in foreign policy, against the Vietnam War. Some of Foot’s greatest parliamentary speeches were delivered in that decade when he was at the peak of his oratorical splendour. MPs of all parties crowded into the Chamber to hear him.

Foot rejected several attempts by Harold Wilson to tempt him into office. In 1964, Foot’s political ally and CND marching companion, Frank Cousins – then in the Cabinet as Minister of Technology – wanted Foot as his parliamentary secretary. But Michael would not be seduced, even by his closest political friend. Yet, when Wilson lost the 1970 general election and the Tories returned to office under Edward Heath, there came a significant shift in the Foot story. At the age of 57, he accepted his first official position in Labour’s hierarchy after being elected to the Shadow Cabinet. Wilson appointed him spokesman on fuel and power. The rebel was in the process of change.

Throughout his married life, Michael was enchanted, inspired, and sustained by his glowing partnership with Jill Craigie. They met during the 1945 election campaign in Plymouth, where she was filming a documentary on the rebirth of the city. They married in October 1949. Jill, stunningly attractive, had been twice previously married, with a daughter, Julie Hamilton, from her first marriage. In that difficult decade after Nye’s death through to 1970, Jill’s support sustained him amid some terrible moments.  In October 1963, Michael and Jill were driving back from his Ebbw Vale constituency when their car was involved in a fearful collision with a lorry. Both were severely injured. Michael was thrown across the road and Jill pinned under the truck with her hand crushed – an injury never fully repaired. Michael was out of action for months and Jill gave up her film work career. Miraculously, they survived and Michael struggled slowly back into political life.

He started writing again. The first volume of his magnum opus biography of Aneurin Bevan had already been published in 1962. But it was 1973 before the second volume was published – to be hailed as one of the century’s finest political biographies.

One year later, he made his first entry into Cabinet, as Secretary of State for Employment in Wilson’s government of February 1974. His views had not changed, but life’s experiences had mellowed the rebellious impetus. Wilson persuaded him that he had a constructive role to play inside a Labour Government rather than attacking from outside.

His two years as Employment Minister were immensely constructive. He re-established the links between Downing Street and the trade unions, which led to the Social Contract – a package of pay restraint and extension of trade union rights that was unique. With TUC help, he formed ACAS, the conciliation service; he set up the Health and Safety Executive to increase workers’ protection. Inside the Cabinet, Foot became known as the “Minister for the Trade Unions” – meant as a sneer but not far removed from the truth.

When Wilson resigned the premiership in March 1976, Foot stood for the vacancy against Anthony Crosland, Tony Benn, Denis Healey, Roy Jenkins and Jim Callaghan. He was defeated after a third ballot. Even so, he was only 39 votes behind Callaghan, who became Labour leader and Prime Minister. In April 1976, Callaghan appointed Foot Lord President of the Council and Leader of the House of Commons. Effectively, he was Callaghan’s deputy – a role formalised in October that year when Foot was elected deputy leader of the Labour Party in a straight fight with Shirley Williams.

None of these additional roles curbed either his writing or other external interests—notably a long association with India and especially the Nehru family, including Nehru’s daughter Indira Gandhi whom he again visited in 1977, when she was Prime Minister. On his return from that trip, he was struck down with a virus. His consultant told him to rest or he would lose sight in that left eye—advice he ignored.

That same year, when the International Monetary Fund pressured Chancellor Healey into major reductions in public spending, Foot led a mixed group of the left within Cabinet in revolt against the cuts, while Tony Crosland did the same with his own group of followers. This combination threatened to destroy the Callaghan government – then surviving on a tiny parliamentary majority. But, in the end, both Foot and Crosland chose to support Callaghan and Healey out of loyalty.

Even so, the Callaghan government was tottering. Although Foot played a crucial role in winning Liberal support in trying to prolong the Government, the end was inevitable. It came at the general election of May 1979, when Margaret Thatcher was voted in as Britain’s first woman Prime Minister.

When Callaghan resigned the party leadership after the 1980 Labour conference, Michael was persuaded to stand by a group of union leaders. He was deeply reluctant and had no illusions about the enormous challenge. Thatcher was well ensconced and Foot, then 67, was half blind and physically tired – although intellectually still astonishingly vigorous.  At the outset, Jill was uncertain, but then accepted Michael’s conviction that he must stand to help save the party. In the first round, Denis Healey led with 112 votes against Michael’s 83, trailed by John Silkin (38) and Peter Shore (32). In a second ballot, Foot defeated Healey by 139 votes to 129.

That result simply added to the internal bitterness. Those on the right of the party suggested that some of Michael’s votes came from those who wanted to see Labour disintegrate, believing that, under Foot, the party would break up. The formation of the Social Democratic Party in 1981 under the “Gang of Four” gave weight to that cynical theory.

When Michael led Labour into the June 1983 general election, hardly anyone was surprised when Thatcher, triumphant after the Falklands War, won a huge majority. Labour’s vote collapsed to its lowest since 1935. Foot’s rout was mocked by most of the media who taunted his weakness – taunts which, at the 1983 Labour conference, brought from Michael a passionate denunciation of his old trade, the press. His bitterness and fury then found expression in a brilliant new book, Another Heart and Other Pulses (1984).

He resigned the party leadership in the summer of 1983 to pave the way for one of his disciples, Neil Kinnock, who succeeded him in October that year.  Michael fought the 1987 general election, but resigned the seat before the 1992 election. He returned to his old love, writing. He wrote essays for Tribune, book reviews for his old paper, the Evening Standard, and yet more outstanding books.  The hand was never still, the mind never wholly at rest, even when he could scarcely walk or see out of his remaining, partly functioning eye. Jill died in 1999 just before they were about to celebrate their 50th wedding anniversary. Michael spent the rest of his few remaining years seeking to ensure an appropriate biography of his beloved wife. Mervyn Jones wrote a fine one of him, published in 1994.

No finer epitaph for Michael Foot can improve on the words of Byron:

“And I will war, at least in words (and – should

My chance so happen – deeds) with all who war

With thought.”

Exclusive in this Friday’s Tribune: Neil Kinnock and Gordon Brown offer their tributes to Michael Foot

European finance ministers have agreed that they should try to prevent any deepening of the financial crisis as it affects Greece and threatens to engulf a number of European Union countries.

The terms of the rescue and its extent are unclear. But what is apparent is that Greek workers will not be enjoying a bailout of any kind. Along with the lowest paid and those dependent on public services, Greek workers will bear the brunt of the “adjustment process” – through wage and welfare cuts, pension reductions, an increased retirement age and other austerity measures. The sticking point seems to be that Greece is being pressed by the European Central Bank and leading EU nations to go even further in the austerity stakes than has already been announced At the same time, the left-of-centre Pasok government is facing mass demonstrations and strikes, which have encouraged further resistance to the cutbacks.

It is interesting to note who is not being targeted. Greece has one of the lowest tax takes in the eurozone. In the 15 years to 2006, Greece’s total general government revenues as a percentage of gross domestic product were 37.9 per cent, compared with an average rate across the euro area of 45.3 per cent. This low level of taxation was, in the Greek case, the source of longstanding deficits which were hidden from a gullible EU inspectorate (Eurostat) over a number of years.

Taxation in Greece has long been a burden borne mainly by the poor. Meanwhile, Greek shipping magnates and others among the super-rich are registered as “non-domiciles” in Britain and consequently do not pay tax anywhere.

Greece is not in the firing line because it has been far more affected by a severe recession than other countries. Nor is its banking sector more blighted than anywhere else. The latest estimates from Eurostat lowered Greek GDP down by 2 per cent in 2009. However, this compares with minus 4 per cent for the euro area and minus 4.1 per cent for the EU as a whole

At the same time, Greece has committed funds to its banking sector equivalent to 11.4 per cent of GDP, compared with 31.2 per cent for the EU average.

The cause of the turmoil in Greece is the high level of government debt, which existed long before the current crisis, combined with a sharply rising deficit.  Greek government debt as a percentage of GDP has been hovering close to 100 per cent of GDP in all the years of this century. The EU forecasts that this will rise to 125 per cent of GDP. Greek bond yields were already rising, but were pushed much higher by the decision of the European Central Bank in effect to remove Greek government bonds from the list of assets it would hold at the end of this year.

A reversal of that announcement would, on its own, transform the attitude to Greek government debt, but none has been forthcoming. Likewise, a genuine transformation of the tax system in Greece, as well as a rigorous clampdown on tax evasion by the wealthy, would have a dramatic impact on the deficit.

Instead, it seems as if the European institutions are intent on acting as a quasi-International Monetary Fund, with any support conditional on a deepening of current austerity measures. This is no more likely to be successful in Greece than it has been in Ireland, where deficit projections continue to rise.

As elsewhere, the rise in the Greek deficit is caused by a slump in taxation receipts, which have fallen by 8.1 per cent in 2009 and are forecast to fall by more than 10 per cent in 2010. This hole in government finances is itself caused by plummeting levels of investment.

The recession in investment began a year earlier, in 2008. Levels of investment have already fallen in total by 22.5 per cent, with further falls expected this year. By contrast, the recession-related rise in government spending over the same two years has been just 3.5 per cent.

There is no logic in supporting spending cuts to close the deficit. Higher spending was not the cause of the deficit, lower tax receipts are. Worse, since tax evasion is endemic among Greek businesses and the rich, cutting the income of the one section of society that does pay tax – the poor and salaried workers – will only reduce taxation revenues further.

The austerity measures foisted on Greece stand in sharp contrast to the reflationary measures adopted across nearly the entire eurozone and led by Germany. German reflation has amounted to 4 per cent of GDP. The measures could have been better targeted. But despite a stagnant fourth economic quarter, forecasts for Germany’s growth and its deficit are both on an improving trend.

So the question is: why is a reflationary recipe that clearly works for “core” Europe deemed unsuitable for Greece? Why can government investment work for Germany, France, Belgium and so on, but is ruled out for Greece?

The answer may lie elsewhere, in the countries of eastern Europe. There, a number of countries had been hoping to benefit from further EU enlargement, which now seems postponed. Prior to enlargement, the EU demanded continual reform of the eastern European economies – including further privatisations, liberalisation of the labour markets and a reduction of social spending.

The privatisations facilitated the arrival of Western European and American telecommunications, agribusiness and other companies, but above all banks and financial firms. The drive to lower wages and social spending allowed a cheapening of labour – to be exploited by Western firms – and led to widespread emigration. The removal of local producers expanded the market for Western goods.

This sounds like the package of “reform measures” to be demanded of Greece in return for any loans. Greece may soon find that, while all members of the EU are equal, some are more equal than others.

Michael Burke is a former senior international economist with Citibank. This article is adapted from a piece that first appeared on socialisteconomicbulletin.blogspot.com

My father – I am 77 years old and he was 45 in the year I was born – lived and worked in a world long gone. Like six generations before him, who spent their working lives in the service of the East India Company or the government of India, he went east as a teenager.

Within weeks of graduating from Sandhurst in 1906, he was on a boat, commissioned into the Staffordshire Regiment – two years military service being a pre-requisite to becoming a junior government of India district officer. And nothing was more important to the pursuance of his career than to master – or at least become proficient in – basic Urdu and the dialects of the areas to which he would be designated after his statutory regimental service.

Like many other usually impecunious young sons of the Raj, he had it drummed into him that, in order to get promotion, he had to develop an understanding of and empathy with native customs. His mother’s father, Judge Gibbs, had been an acceptable vice-chancellor of the University of Bombay.

Posted in 1910 to Gilgit and in 1912 to the North-West Frontier, my father’s job was to deal with the local leaders, some of whom were undoubtedly minor warlords. He used to reminisce to me that it would not have occurred to him to start bringing up any business matter with Kashmiris or Pashtun in the first half hour of a meeting until he had exhaustively discussed the health of their children, followed by other members of the family, then the well being of their animals and finally responded to their polite enquiries about his own family.

The truth is that the British national interest – the existence of a buffer Afghan state between Russia and the jewel in Victoria’s crown, the Indian empire, was well served. The disastrous Afghan wars were all brought about by impatient military commanders, sent out from England and ignorant of the local people.

Tribune readers may well be saying to themselves: “For pity’s sake, you are describing the situation as it was a century ago.” Well, not quite. Older readers may remember Ron Brown, the Labour MP for Leith from 1979 to 1992, nicknamed “Afghan Ron” by waspish MPs. Yes, I know he was ridiculed for some goings-on concerning knickers in the House of Commons showers. But the fact was that Ron Brown visited Afghanistan on several occasions and talked with actual Afghans. I used to take him seriously in the House. He would tell us that the Pashtun had not changed in hundreds of years, and did not want outsiders, other than their “guests”, to whom they were immensely hospitable.

It was not only the likes of my dad who were acceptable to them. In the first part of George Wigg’s memoirs, detailing his time as an NCO in the Indian Army in the inter-war years, it becomes clear how many of the NCOs and other ranks of the military had a grasp of the local language and customs.

Now how many of the unfortunate young men of the Royal Anglian Regiment, the Grenadier Guards, the Royal Military Police, the Parachute Regiment, or any other unit carried through Wootton Bassett, had a smattering of the local language? Few, if any.

My dad and his colleagues would be aghast at the wishful thinking of Gordon Brown, General Richard Dannatt and anyone else who supposes that there can be a satisfactory long-term outcome to military action in south-west Asia. Social change is not going to come out of the barrel of a gun. On the contrary, guns and ill-directed American bombs are recruiting sergeants for the Taliban.

It is not as if Tony Blair and Gordon Brown were not warned. I was only one of a number of Labour MPs who spoke up as soon as the sending of troops was contemplated. “Why did he imagine”, I asked Blair at Prime Minister’s Questions and in private, that the US/UK would succeed, when 100,000 Russians, with contiguous borders, and easier supply lines, had failed?”

I added: “Did he not know of that Russian general, on exiting Kabul, who had sighed: “Give me one Afghan on a donkey, rather than four Russians on a tank.”

Blair’s answer was a sheepish – and complacent: “We are different from the Russians”.

In the 1980s, I was a member of a Labour Party delegation on a week’s visit to the United Nations. A meeting was arranged for me by Sir Anthony Parsons, Britain’s ambassador to the UN, with his Russian counterpart, Oleg Tryanovsky, and the Russian ambassador to Washington, Anatoly Dobrynin. That convinced me of the folly of military intervention. “You will fail, as we Soviets failed”, they said with absolute certainty.

Back to my dad. From 1932 until 1937, he represented the British Government in Bahrain. In this capacity, he had a lot to do with Yemenis, as I did, too, to a lesser extent over the years from 1962 to 2005 in the House of Commons. I am filled with foreboding. I fear for any military intervention on a famously gifted and clever people, whose ancestors were the silversmiths of Asia. Ill-prepared Brits and blustering GIs would create a situation in Yemen no less dire than that in Iraq and Afghanistan.

Tam Dalyell was Labour MP for West Lothian from 1962-1983 and Linlithgow from 1983-2005

In one of his most perceptive observations on the nature of political life, Aneurin Bevan famously declared: “You cannot bring forward the future – and then impose it”.

In many ways, that was the cardinal error of Soviet communism. Everything had to be imposed – the present along with the future.

Yet Bevan went further in also warning his contemporaries that they would remain an impotent force without a vision of the future and being prepared to argue and fight for that future. He recognised more than most that effective radical politics have always been concerned with bringing forward the future, without which all vision would wither into superficial posturing and platitudes.

What is obvious about modern political life – and not confined to Britain – is the absence of such vision across the entire political spectrum. Even where it exists, there has been little zeal to work for it. The left once prided itself in having the capacity and the will to take a commanding role in “the vision thing”. No longer. For too long, the left has shared a confusion and a moral limpness along with the rest of the political scene about how to bring forward the future.

It is true there are now some credible signs emerging from various quarters of the left – notably from the Compass think-tank and backbench Labour MPs such as Jon Cruddas, along with the remarkable revival of radicalism from the veteran Roy Hattersley who was the first significant senior Labour voice to effectively identify Tony Blair’s continuation with a Thatcherite agenda. That is where we are today, as we approach a crucial moment for British politics with a Labour Government in office struggling to escape the Blair heritage, although still limited by that inheritance, with a Prime Minister under siege facing an electorate deeply disillusioned with all politics and politicians.

A range of opinion polls – even if dubious – have repeatedly demonstrated an immense public confusion about what needs to be done or how to do it. Across the voting landscape is that debilitating, if inaccurate, mumble: “They’re all the same”. So the commanding question is this: can the modest revival in ‘“the vision thing” help to save Gordon Brown’s Government from a predicted disaster in May? I believe it could—provided he has the courage to warn the British people what a return to Tory rule would really involve and to expose David Cameron’s claims that the Conservative Party is now a reformed political animal. It isn’t. Let no one anywhere in Britain be under any illusions about the Conservative Party having discarded its historic political genes. It remains a creature of unregulated market priorities.

Never mind claims that the Tories are no longer the Thatcherites of the 1980s. The essential motivations of Thatcherism are endemic. The Conservative Party is locked by its history as the party of the privileged. To the real Conservative, inequality is not simply a phrase —it is the essential ingredient which drives a market-based competitive society. That was Margaret Thatcher’s unapologetic ethos. She had the courage and the honesty of those convictions. Contemporary Tories shelter behind an ideology of disguise.

Remember Thatcher’s decade? Remember the near irrevocable damage her agenda inflicted on the social fabric of Britain? Remember the destruction of industry after industry, with the reduction by at least 10 per cent in our manufacturing base? It was the construction, not of a new Britain, as she claimed, but of a nation torn apart by an obsession to plant fresh seeds of greed from which our society, like others, still suffer a deadly poison? Remember all that? If you are too young to remember, then let me point out that this was the birth of the financial crisis we have experienced in the past two years; the birth of de-regulation of the City banking slickers who have now been bailed out by the taxpayers – you and me.

Ah yes, the Thatcher period. My critics will argue that it is pointless peddling back to all that history; young people today aren’t interested. I don’t believe that. The calculated destruction of coal mining and the mining communities, the effective end of British steel making and shipbuilding, the gradual erosion of our industrial base as skilled along with semi skilled workers and their families were brushed aside and their environment left to rot – helping to create a generation of youngsters vulnerable to drugs and crime as social services were thinned down. Remember all that?

Today’s 20-somethings and even 30-somethings are part of that legacy, even if the myths now tend to cover the truth. Because so little modern history is taught in our state school system there is a huge aura of ignorance about all this heritage – about the destruction of Britain’s manufacturing base and the glorification of the financial expertise of the City of London with its arrogant commitment to the productivity of self-interest and inequality. All of this laid the basis for our recent financial collapse – a collapse, never forget, that could well have meant an economic disaster with mass unemployment if Gordon Brown’s Labour Government had not used taxpayers’ money to rescue the country. I do not accept that today’s young voters are unconcerned about all this; they are part of the heritage even if not as aware of it as they should be.

Yet the current Conservative Party under David Cameron still has the chutzpah to blame Labour for what they described as our “broken society”. Who broke it? Not the trade unions, not the Labour Party. It can all be traced back to that Thatcher decade of the 1980s. That was when Clement Attlee’s political settlement of 1945 was abandoned.

In reminding Tribune readers of that period, I do not excuse the policies of Tony Blair’s Government after Labour’s 1997 landslide triumph. Sadly, it was that Labour Government which continued the Thatcher policy of schmoozing the City financial and banking mafia while allowing our industrial and manufacturing base to slide still further downhill, leaving it open to foreign predators – notably in the car industry. This economic strategy – let’s be frank about this – has also contributed to the financial collapse of the past two years.

Now we are at the political crossroads. An immense opportunity exists to recognise the damage that has been done by this idolatry of the market, even by so-called social democrats. The vision for a re-elected Labour administration will be to re-construct a fair society. As Roy Hattersley wrote recently: “The more equal society will only be brought about by positive government action”. He went on: “The collision of freedoms in an unregulated society always ends with a victory for the rich over the poor. Social democratic governments intervene to alter the balance of power. If that is called class war, there can be no doubt who started it”.

Perhaps even more important than Hattersley’s comment is the policy and attitude reversal by Peter Mandelson, who now argues for a state-sponsored revival in Britain’s manufacturing base. It is an extraordinary commentary on the failure of the Blair years when Mandelson himself aligned with a “new” Labour Cabinet obsessed with City financial wealth. Mandelson now proclaims: “I’m unashamedly talking about the re-industrialisation of the British economy”.

He actually used the slogan “industrial activism” – precisely the same argument used by the trade union movement throughout the Blair years, but then ignored.

It is an argument, properly delivered across the nation with guarantees replacing idle promises, which can transform the coming election campaign and reduce the Tory case to impotent posturing. Beyond doubt, that is Gordon Brown’s great opportunity.

Gordon Brown doesn’t quite put it as succinctly as Barack Obama. He doesn’t share the American leader’s rhetorical style. The passion may be less demonstrative, but it is there all the same when asked if he really thinks Labour can win the 2010 general election. Yes we can, is the message, and while it takes him more words than that to spell out the reasoning, there is no doubt he believes it.

It is the day after the screening of the Piers Morgan party political broadcast on behalf of the Gordon Brown party, family and soul. The day British troops launch the coalition forces’ Operation Moshtarak against the Taliban and the day at least 20 civilians become its first casualties.

Brown is heading back by train from a regional visit to Suffolk where he has been visiting a base where troops are in helicopter training,  before dispatch to Afghanistan and to a SureStart centre, one of those the Tories would close if they win the election.

As the City of London skyline appears, with the iconic Gherkin raising an insolent finger to the world on behalf of the banking community, Brown is anxious to talk about his new plan to take on the bankers, and save the world for a second time, although he doesn’t quite put it like that.

He is a late convert to the need for a “Robin Hood” tax, along the lines of the Tobin tax which would place a levy, or a series of levies ranging from 0.05 per cent to 0.005 percent on share trading, currency speculation, derivatives and other more exotic practices. Later in the week, Brown is to take the lead at an international conference of “progressive countries” in support of an attempt to implement the scheme globally.

“What this crisis has shown is that if you do not have global supervision, national regulation by itself is not enough. You’ve got to have global rules for the game, you’ve got to have overall global co-ordination. If you are in a global economy, a national supervisory regime cannot be enough so you’ve got to look at the rules under which financial institutions operate globally and one of those rules is that the banks, the financial institutions, make a proper contribution to society. Lots of banks have able to choose to avoid tax, to move to tax and regulatory havens and now that we are starting to close that down it is possible then to have a global financial levy which global financial institutions would pay as their contribution towards the risks that they potentially impose on society but also on the earnings that they have.

“We are proposing a global financial tax, a big reform of the global economic system. We have a plan for growth and jobs that would reduce unemployment in Europe and around the world. Britain is, as we led the way in restructuring the banking system in 2008, now leading the way with other countries in trying to forge a new international economic system. We have got to make sure that we deal with the problems that exist in the financial system and make sure that the relationship between the risks people place and the rewards they receive is properly aligned.”

According to the Governor of the Bank of England, the British economy is “not out of the woods” yet. Is Brown confident that Britain will not be back in recession before the next election?

“The important thing is not to wreck the recovery and that’s the big point of difference between us and the Conservatives on economic policy. They are so wedded to the old ideology that they would cut away the stimulus now and have cuts in 2010 and the evidence is that public investment has been absolutely crucial to taking the country out of recession and that if it was all withdrawn then there is a danger of this fragile international recovery being undermined. So my message is, don’t wreck the recovery and the one thing that could really wreck the recovery is Tory policies that would withdraw the support.”

But cuts would still come under a Labour government, just later. Why should the less well-off public service workers pay with job losses and salary cuts for the sins of those who created the mess and are still giving themselves huge bonuses?

“The Tories want to cut now. Every international advice is that we should maintain the fiscal stimulus until we are absolutely sure of recovery, but at some point we’ve got to implement a deficit reduction plan. We’ve set out plans to halve the deficit over the next four years. Much of that will be achieved by growth itself, some of it will be achieved by tax changes and some of it by public expenditure changes. I was not afraid to say, in 1997-98 as Chancellor, I had to restrain public expenditure. The 2006 expenditure review cut the budgets of seven departments. We will do what is necessary to make sure that the deficit is reduced by half over the next four years.

“I have tried with Alistair Darling over the last two years to ensure that we maintain public expenditure and public services and at the same time we have helped the economy by ensuring thousands of people given help to get back to work, hundreds of thousands of businesses being given help with cash flow and people being protected against the sort of mortgage repossessions we saw in the 1990s. So we, the Labour Government, made the decision to protect people against recession in a way that no other government has done in Britain and in a way that was quite different from the 1980s and 1990s. We accepted that it was right at that stage to raise the deficit but that once the recovery has happened it is right also to deal with the deficit. We will protect frontline services and I think we have already shown that schools and policing budgets will rise but the important thing to realise is that it is possible to make economies in other areas and it is possible while the whole economy keeps rising.”

The suggestion that Trident would be a more prudent expenditure cut gets short shrift. Britain is ready to cut its nuclear arsenal but only part of a multi-lateral agreement, achieving non-proliferation is more likely from a position of nuclear strength: “ Our aim is to reduce the number of weapons the nuclear states have while at the same time persuading non-nuclear states not to acquire nuclear weapons.”

On the day that David Cameron embraced the concept of co-operatives, what will the Government do to encourage more mutualisation, especially in the banking sector?

“I think the banking system needs more entrants and we do what we can to encourage people to enter it. We have a proposal to use the Post Office as a banking system and to ensure that people can save more effectively through the Post Office. We want to see the equivalent of a savings institution for individuals, what is effectively a bank for innovation, a new investment fund for innovation and better services in banking for small business and if we need to do that with the public sector more involved we will do that.”

What needs to be done before we can say mission completed in Afghanistan?

“We are in Afghanistan because we want to keep the streets of Britain safe. I know that some people doubt this connection, but I’ve got to remind people that three-quarters of the terrorist plots we’ve had to deal with on a major basis have started in Pakistan-Afghanistan and if the Taliban were to get control back in Afghanistan and if al Qaida were to have the freedom to roam across Afghanistan there would be a greater danger and that’s what most other countries think as well so it’s a 43-nation coalition.

“What we’ve got to do is to help the Afghans themselves run their own country free of the Taliban. Now, we know there is no popular support for the Taliban but we also know that we’ve got to strengthen the Afghan security forces and the Afghan civil institutions, including local government and therefore the issue for me is training up the Afghan forces, police, ensuring that there is local provincial district governors and that there is local government that is working. And once we’ve trained the Afghan forces then we can gradually bring down the number of British coalition forces.”

And the timeline?

“There is no timeline. What there is, is a proposal that we start handing over control district by district, province by province, starting in 2010 and what we also propose is that by 2011 Afghan forces will be at a total level of about 300,000, police and army and that will be far bigger than the coalition forces so gradually the other forces can be reduced.”

Aren’t the security services pulling the wool over the Government’s eyes over torture or did ministers know about MI5 complicity?

“I oppose torture and cannot condone any situation in which it is used. Where there have been questions asked we have rightly been asked for them to be investigated. We are about to publish new guidelines for the security services to make it absolutely clear what their responsibilities in this area are. But we should not ignore the fact that Britain has strong and effective security services which have served us with distinction over many years.”

What about closer oversight by the House of Commons?

“I have always thought that the Intelligence and Security Committee should have a stronger role in relation to the House of Commons and I did actually create, after I took up this job, new procedures for it to act. I think we can always consider going further. I’ve got to listen to what’s being said by them and by other people as well. I want to proceed on a consensual basis.”

It is “absolute nonsense”, he says, to suggest that there are any Cabinet rifts over the election strategy.

“You have got to go for the widest coalition possible, renewing the coalition that won us the 1997 and 2005 elections. Our strategy is core values not core votes. Core values are what we believe in, why we act, prosperity and justice for all. It is the Conservative Party that are betraying the middle classes, they are refusing to give people the support they need, they are going to take away the child trust fund from potentially millions of people, they are going to take away the child tax credit from more than a million middle-class families, they are refusing to support education to 18 which is the key to opportunity for millions of teenagers in this country and their families, they are refusing to support SureStart, other than for the “tragic” disadvantaged 20 per cent and are refusing to make them universal. In all these areas the Tories are hurting middle  Britain.

“We are going to build a fairer future for all the people of this country. The Tory theory has been proven to be wrong. They have been exposed as a party that is clinging on to the orthodoxies of the 1930s when it is clear that laissez-faire just leaves people behind.”

Why have you converted to the alternative vote now?

“I think the events of the last year, the MPs’ expenses, has changed a lot for me. I never knew that MPs were in this position. I think people were genuinely shocked by some of the revelations and I think we have got to prove that as a political system we are more accountable to the people of the country. And I think what we can do is give people the choice as to whether they want their MP to be elected with the majority of the votes of their constituents.”

How does the expenses scandal lead to AV?

“You’ve got to change more than the processes of drawing up expenses forms. You’ve got to show people that you are ready to listen more and to make Parliament more accountable. One way to make Parliament more accountable is, first of all, to give people more choice over the way the system works, so that’s why there is a referendum, and secondly, to put a proposal to ensure that every MP who is elected will not have 20 or 30 per cent of the votes cast as has been true in the past and will have more than 50 per cent.”

Brown delivers a short display of exasperation at the possibility of working with the Liberal Democrats on a policy-by-policy arrangement in a hung Parliament.

“Look, I’ve just got to tell you that we as a Labour Party are going all out for victory and we will fight every inch of the way to secure

as many seats as possible and to secure a majority, so we are not contemplating any other scenarios.”

And does he think he can do it?

“I’m not complacent. I believe we have made huge advances in the last few months in exposing the Conservative Party, but also in showing that Labour is the party of strong ideas about the future. It is the Labour Party that has been leading all the debates. The Tory Party are the first opposition party to have run out of ideas even before there is an election, even before they have written their manifesto.

“But I don’t want people to wake up six months from now and find their services have been cut under the Conservatives. I don’t want to see a Britain where all the advances we have made together over the last 12 years by investing in our public services have been swept away, that is the danger and I think people are starting to ask questions about the Conservative Party and starting to see through them.

“At then end of the day politics is about judgement and the Tory Party under [David Cameron’s] leadership wants to present itself as middle-of-the-road and centrist and pro-poor and pro-public services, but whenever the challenge is made about what they would do they reveal themselves as totally unreconstructed. So the problem the Tories have is that there is a huge difference between how they want to appear and what they actually believe. There is a difference between the brand which they portray and the beliefs which they hold. They are essentially an unreconstructed party and they are just posing as new. When people look into it in greater depth, they find it is the same old Tories.”

And if that leadership deal wasn’t done at Granita’s after all, where was it done?

“I’m not going to talk about that anymore.”

Not even in the book? “What book? I’ve absolutely no interest in that, I’m just getting on with the job.”

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It’s 19 below zero centigrade outside as I write from Canada’s capital, Ottawa, much colder than when I arrived several days ago. The subsequent drop in temperature more or less coincided with what should have been a resumption of Parliament.

Canadian MPs have had their own big freeze following Prime Minister Stephen Harper’s decision over the Christmas holidays – when nobody was presumed to be looking – to “prorogue” or suspend Parliament until March 3.

This means 36 government bills, including several anti-crime schemes dear to Harper’s Conservatives, will die. All will have to be restarted on resumption.

He claims he needs to focus on the economy, coming up with solutions to the Budget deficit, and to provide Canadians with time and space to watch the Winter Olympics, being held in Canada this month, without any disconcerting political yah-boo among MPs.

His critics are more sceptical, citing the Tories’ wish to avoid a parliamentary committee’s scrutiny of claims the government knew of the torture of Afghan detainees handed over by Canadian forces.

The delay has also enabled him to appoint five party supporters to Canada’s upper house, the Senate, giving the Tories control of Senate committees that had previously been holding up legislation.

This appalling disdain for democracy has even found opponents in Britain. The Economist accused the Canadian PM of being anti-democratic and acting in “naked self-interest”. This sent a frisson through the Canadian commentariat, recalling that the magazine’s nickname for former Liberal Prime Minister Paul Martin – “Mr Dithers” – stuck and he developed a reputation for indecisiveness.

Harper’s gamble is risky as he leads a minority government. But divided opposition parties fear another election and fed-up voters who’ve been subjected to three inconclusive elections in the last five years.

Moreover, the Liberals lack direction. Fourteen years in power have left them bankrupt of ideas and with a hollowed out membership. They fear the voters haven’t had long enough to forget the final years of arrogance and complacency.

All this should find resonance in Britain. The long Liberal rule, during which they tackled a big deficit and boosted funding for public services, featured internecine wars between supporters of a thrice-successful Prime Minister (Jean Chrétien) and a jealous Finance Minister (Paul Martin). The only difference here being Chrétien kept Canada out of the Iraq war.

When Martin ultimately succeeded, he lived up to the Economist’s sobriquet and lost first the Liberals’ majority in 2005 and then outright power in 2006 to Harper’s Tories.

The change in the political landscape is more profound than many realise, according to political commentator Chantal Hébert, who in a recent lecture said it was the Tories who were making all the intellectual running. They would disguise their “small state” agenda through the recession. On the key welfare agenda, they would wait until health subsidy agreements with the provinces end, avoiding the blame for the spending cuts.

This week marks the anniversary of Harper’s first challenge to democracy, when he persuaded the Governor General – the Queen’s representative and Canada’s de facto head of state – to grant suspension to avoid a no-confidence vote over his handling of the recession. The opposition coalition broke up during the recess and the Tories reversed their “do-nothing” policy with the financial stimulus package opposition parties had rallied around.

Liberal leader Stéphane Dion was dumped in favour of Michael Ignatieff, known

in Britain as a media intellectual, but in reality a right-winger whose lack of experience

is showing in his response to Harper’s manoeuvrings.

This prorogue has again galvanised the Liberals and the left-wing New Democrats into singing from the same hymn sheet, accusing the Tories of trying to cover up

the Afghan issue and running away from Canadians’ concerns over jobs and the economy.

Meanwhile, Harper is a beneficiary of the Haiti disaster. Canadians have characteristically given generously to the relief funds – in part as recognition of the large Haitian immigrant population living in French-speaking Quebec.

The Prime Minister is being credited with overseeing a relatively effective relief effort, but some suggest he is trying to maintain the support of Michaëlle Jean, the Governor General, who is Haitian by birth.

Harper has also been trying to strut on the world stage with ideas for a new role for the G8 – just when it’s lost its status to the G20 – in supporting health programmes in the developing world. Whether this sudden interest in international action does him any good remains to be seen. People traditionally don’t vote on foreign reputations.

Perhaps he’s got it right and they’ll be more interested in the Winter Olympics. However, it may all backfire if heavily-favoured Team Canada fails to win gold in hockey. Honour in the national sport is almost a matter of life-and-death for many.

If disappointed Canadians revert their gaze to politics, they may not like what they see. Then Harper, in attempting to govern without Parliament, will well and truly have scored an own goal.