[A-List] New Labour as the triumph of Cold War liberalism: the case of John Smith

["Keaney Michael" <Michael.Keaney@xxxxxx>]

In my occasional musings on the political trajectory of the British Labour Party and the various efforts of secret state agents/agencies to co-opt, subvert or simply smash the labour movement I have highlighted the role of the Gaitskellites and their subsequent evolution into the Blairite Third Wayers we know and don't love. In parallel with the Thatcher-led orchestrated assault upon the labour movement with the full might of the British state during the 1980s, Neil Kinnock and his assembled team, many of whom were former "communists" and other fellow travellers who went on to become associated with John Birt at London Weekend Television (Peter Mandelson, David Aaronovitch) and/or Robert Maxwell (Joe Haines, Alistair Campbell, Charles Clarke), set about "cleansing" the Labour Party of its troublesome left wing and remodelling it in terms more palatable to the "mainstream", itself drifting ever rightward. This process was itself complex and overdetermined by a lot of infighting between factions and personalities, as various personalities and groups sought to claim a spot of pristine political territory, opportunistically moving from "hard left" (i.e., Bennite or Militant) to "centre left", Tribunite left, or "soft left" (David Blunkett's miraculous transformation springs to mind). Of course others never associated with "the left" (Jack Straw,
Tony Blair) were brought in to assist in the process. Given the
electoral reliance upon Scottish MPs, however, key figures north of
Berwick were able to punch above their weight, hence the rise to
prominence of Gordon Brown and Robin Cook. When Kinnock resigned the
leadership in 1992 following his surprise election defeat, he was
replaced by the eminently capable John Smith, whose stern "bank manager"
appearance was deemed sufficiently telegenic (the question of Labour's
economic "competence" was still very much in vogue then).

Smith dismantled Kinnock's team (Mandelson and Clarke foremost) and
installed an ascendant Scottish mafia, benefiting Brown, Donald Dewar
and various others. He also ended the left-right rancour within the
party by deliberately reaching out to the left in various conciliatory
ways designed to show that the Kinnock-led witch-hunts and hostility
were in the past. When the obligatory pulp biography was published on
his ascendancy to the leadership, he sent a signed copy to his former
ministerial boss at the Department of Energy, Tony Benn, inscribing it
to "my mentor". Despite his apparently consistent support of active UK
membership of the European Union (something which appeared to be
definitively rightwing in the 1970s according to a prevailing view
within the Labour Party and elsewhere on the left), Smith was seen as
someone who could unite the party because of his respect for its
traditions. This extended to his first party conference as leader, where
the closing finale was accompanied by a traditional colliery band.
Former leader Jim Callaghan was moved to remark that he could not
remember a more "friendly" conference than the 1992 one.

When Smith died in 1994, unexpectedly of a heart attack, Brown was
primed to move into position and take his place. Of course, as we now
know, he agreed to stand aside for Blair, allegedly on the
"understanding" that Blair would move aside after a certain period of
time. Meanwhile Blair set about reinstalling Kinnock's old team with a
vengeance, rehabilitating Clarke and Mandelson and using Kinnock's
former press secretary, Patricia Hewitt, to establish ties with Andersen
Consulting, who provided much of New Labour's policy schedule after a
remarkable seminar for Labour Party frontbenchers conducted in the
autumn of 1996 at Templeton College, Oxford, at which Andersen people
"showed" the budding new rulers why initiatives like public private
partnerships were eminently sensible, among other aspects of governing
that the cabinet-in-waiting apparently needed to be taught, being so
inexperienced in government. (We could ask, of course, where Andersen
Consulting's experience of government came from.)

It seemed that the Smith interregnum was the last chance for a different
kind of Labour government. Instead, the Kinnock-led, state-sponsored
remake/remodel project was relaunched and reinvigorated by Blair et al.
Then, a few weeks ago, while reading the latest issue of "Lobster"
magazine, I came across a little snippet concerning the appointment of
Smith's widow, "Lady Smith of Gilmorehill", to the board of Hakluyt, a
private spy outfit run by ex-MI6 types that has been mentioned here
previously.

See http://lists.econ.utah.edu/pipermail/a-list/2002-February/017704.html
http://lists.econ.utah.edu/pipermail/a-list/2002-February/017707.html

With only a passing reference to "Lady" Smith's current job, I did a bit
of searching on the net and found this piece, showing just how behind
the times I am...


Masters of the great game turn to business

Globalisation and cross-border mergers are increasing demand for Hakluyt's
brand of intelligence, says Stephen Overell
Financial Times: 23 Mar 2000

Five years after leaving MI6, Christopher James is still involved in "the
great game", still savouring the whiff of romance and still at the centre of
a global web. Former spies are supposed to retire into oblivion, carrying
their secret cargo of knowledge to the grave. Not him.  "The idea was to do
for industry what we had done for the government," he says. "In the services
you get to understand a great deal about the people who make things work. I
felt what we provided might have some commercial value. You could say it was
intuition about the ending of the cold war." 

Mr James, who served in the Special Air Service before MI6, founded Hakluyt
& Company in April 1995 along with Christopher Wilkins, a former Welsh
Guards officer and businessman. Pronounced "Hacklet", the company is named
after the geographer and cleric Richard Hakluyt (1552-1616) who introduced
the globe into schools. 

Mike Reynolds, an ex-MI6 colleague, and Jeremy Connell, a former diplomat
and business development manager for a law firm, became directors in 1995.
Michael Maclay, a former journalist, diplomat and special adviser to Douglas
Hurd, former foreign secretary, and Carl Bildt, UN high representative in
Bosnia, joined in 1997. Mr Wilkins retired in 1996.  So far Hakluyt has
provided intelligence for 26 FTSE 100 companies and has a growing number of
US and European clients. Operating by word of mouth, the company sells
information of a singular and sensitive kind. Mr James describes what they
produce as "the truth".

"The chairman of a company may be under immense pressure from senior
managers to approve a contract, but a voice in the back of his head tells
him something is not quite right. That is where we come in. We give focused,
timely intelligence - we fill in the gaps." Mr Maclay adds: "We are there to
answer specific questions - what the real agenda is, who is in whose pocket
and what is the role of certain people." 

Mr Maclay gives an example of an assignment. In 1997 a British company was
tempted by a lucrative joint venture in the former Soviet Union when
strategic mineral resources were privatised in an obscure republic. The
slick Russian frontmen turned out to be ex-KGB agents with direct links to
an international drugs cartel laundering money in the Caribbean. The company
was advised to pull out. 

Raising a china teacup at Hakluyt's West End offices, Mr James, managing
director, reflects: "It would not be Hakluyt if there was no whiff of
romance about it."  It might be thought that Mr James' quondam masters would
have been uneasy about former staff going corporate. Sir David Spedding,
then head of MI6, wished him luck with his venture - as he does with
everyone who leaves the service, says Mr James. "Once you're in, you're in.
And once you're out, you're out. There are absolutely no ties." He is sure
MI6 is not interested in Hakluyt's activities. "They have far more important
things to worry about." 

Support has come from a roll-call of establishment grandees - a clue to the
contacts Hakluyt can muster. Former foreign secretary Malcolm Rifkind was
supportive of the project; so too was Ian Lang, former secretary of state at
the Department of Trade and Industry. Earl Jellicoe, president of the SAS
Association, provided early encouragement, as did the late Brigadier Sir
Fitzroy Maclean, Winston Churchill's personal envoy to Marshall Tito during
the second world war. The current DTI "likes the idea", according to Mr
James. 

The Hakluyt Foundation, the company's equivalent of a board, contains more
eminent names. There is Sir Peter Holmes, the foundation's president and
former chairman of Royal Dutch Shell Group; Sir Brian Cubbon, former
permanent under-secretary of state at the Home Office; Sir Peter Cazalet,
chairman of the company and the foundation, former deputy chairman of BP and
member of the top salaries review board; Sir William Purves, former chairman
of HSBC; Lord Inge, former chief of defence staff; Lord Trotman, former
chairman and chief executive of Ford and a director of the New York Stock
Exchange and Baroness Smith of Gilmorehill, widow of John Smith, former
Labour party leader. Special adviser is Lord Renwick, chairman of Robert
Fleming, the investment bank. 

To cap all these connections, Hakluyt has formed a strategic agreement with
Henry Kissinger (see below). The former US secretary of state, guru of
realpolitik, Nobel peace prizewinner and darling of the lecture circuit runs
his own strategic consultancy, Kissinger Associates. Mr Kissinger's company
will facilitate top-level introductions for Hakluyt and both will refer
clients and co-operate on individual projects. It is almost a privatised
version of "the special relationship".  "Mr Kissinger is a statesman who has
been at the very heart of American politics. I am extremely flattered," says
Mr James. 

The Hakluyt Foundation has a vital role. In the words of Mr James, it
provides "reassurance we are not just a tearaway bunch of ex-government
officials". It ensures Hakluyt abides by a code of practice, which has an
absolute ban on doing anything illegal, any dirty tricks. Asked if this
might disappoint some clients, Mr James is firm: "We just don't do it." 

Nor does Hakluyt operate by tip-fees for information. Mr Maclay adds: "We
talk to the high-ups, not the hard-ups." Hakluyt, like the services, regards
paid-for information as less reliable than information given freely.  The
company has over 100 "associates" on its books - some based in London,
others at stations worldwide, formed by personal contacts, whose judgement
the directors trust absolutely. They might be investigative journalists,
diplomats' wives, senior business people, former diplomats or consultants.
They are "intuitive, determined, highly intelligent" and have intimate
knowledge of the country in which they operate. Associates are free to turn
down assignments and are expected to use their judgement about dangerous
situations. 

When Hakluyt receives an assignment, it calls up to five associates back to
London to be briefed and then "deploys" them. The work essentially involves
"talking to the right people. It's all about people, following up contacts,"
says Mr James. Each associate is given different questions and works
independently. The associates might well come back with contradictory
information. When this happens, the directors make a careful judgement of
the material in London before submitting a final report. "We can't just say:
'On the one hand, and on the other', we have to give answers," says Mr
Maclay. The key, says Mr James, is teamwork and the careful management of
internal and external networks. 

Hakluyt pays "good professional rates" - although some associates "prefer a
case of claret", according to Mr James. The company will not disclose its
rates for clients. Given the nature of the work, fees are "not
insubstantial", but vary widely: "Not as much as a top law firm," says Mr
Maclay. Much of Hakluyt's work has been concentrated in the former Soviet
Union and China, but the company has carried out jobs in 57 countries,
including Indonesia, India, Latin America, Korea, the Middle East and,
lately, in Europe. 

Hakluyt concedes it is a product of the times. Globalisation and the rise in
cross-border mergers have led to a growing demand for accurate and
well-sourced information, says Mr James. Privatisations worldwide and
resulting joint ventures form its core business.  Organisations need
"someone to refine a complicated world into answers," says Mr Maclay.
Hakluyt has been helped by the management trend of outsourcing: "In the old
days, companies would have had someone who would know the situation in a
particular market, but they have outsourced so many requirements." 

So what is the significance of the name? In 1582 Richard Hakluyt argued for
the colonisation of north America as a base for discovering the Orient.
Centuries later it was said of him: "He is the silent man, seated in the
dark corner, who is content to listen and remember".   Is Hakluyt attempting
to recapture a fading imperial grandeur? "When we set up, it was to help
British companies stay ahead of the competition," says Mr James. "We now
have international clients, but there is still something in staying ahead of
the game, of expansion in our message."

-----

So, "Lady" Smith's appointment is at least 30 months old, if not older.
Why would the widow of an ex-Labour Party leader be getting involved in
this sort of outfit? Perhaps the first question should concern how we
are to make sense of John Smith in the light of all this.

Smith studied at Glasgow University alongside Donald Dewar and "Lord"
Derry Irvine, the current Lord Chancellor (perhaps the most peculiar
feature of the UK constitution, in which the head of the judiciary is a
political appointment with a seat in the legislature -- who needs
separation of powers?). Elizabeth Smith also studied there, along with
Meta Ramsay. Both fluent Russian speakers, Elizabeth married John and
raised a family (apparently) while Meta went off to the "diplomatic
service" and had a distinguished career furthering Her Majesty's
Government's interests in the Nordic states, for which she has received
recent recognition...


Finns honour spying game's Scottish peer
Lady Ramsay stays tight-lipped on M16

MICHAEL SETTLE
The Herald, 29 May 2002

BARONESS Ramsay of Cartvale, born in Glasgow and once said to be in the
running to become head of MI6, will tomorrow become a commander of the Order
of the White Rose of Finland, one of the country's highest honours.

The Labour peer, a confidante of the late Donald Dewar and John Smith, will
receive the decoration at the London home of Pertti Salolainen, the Finnish
ambassador, who recommended it in recognition of her "diplomatic service in
promoting good relations between Finland and Britain".

Lady Ramsay, 65, was in the diplomatic service in Finland, based in
Helsinki, from 1980 to 1985 during the cold war before its superpower
neighbour, the Soviet Union, began to break up.

"I'm delighted and very honoured as anybody would be," she said last night.
I still have links with Finland and have lots of good Finnish friends."

A spokesman for the Finnish embassy stressed that the Order of the White
Rose was "seldom given".

He added: "She is receiving it because of her long contact with Finland and
her promotion of good relations between our two countries."

Of her role as an MI6 spy, Lady Ramsay said: "I was a member of the
diplomatic service. It's what my CV says and has to say. I can't pass
comment."

Asked about press reports that she was in the running in the early 1990s to
be head of MI6, she replied: "I don't believe everything I read in the
newspapers."

The Labour peer is the daughter of a pattern-maker and a shop saleswoman.
The then Meta Ramsay grew up in the Langside area and was educated at
Battlefield Primary School, Hutchesons' Girls' Grammar School and Glasgow
University, where she befriended Mr Dewar and Mr Smith.

She became the first woman president of both the university's students'
representative council and the Scottish Union of Students.

Later, she was the first woman to serve in the political secretariat of the
worldwide international organisation of national unions of students.

Before joining the Foreign Office, where she worked for 22 years serving in
Stockholm as well as Helsinki, she studied at the graduate institute of
international studies in Geneva.

A career diplomat, she left the Foreign Office in 1991 to devote her
energies to helping Mr Smith as his foreign policy adviser until his
untimely death in 1994.

She was then appointed special adviser to Jack Cunningham, the then shadow
trade and industry secretary.

She became a peer in 1996 and after Labour's general election victory a year
later was made a government whip. She was a front-bench spokeswoman in the
Lords on culture, health and finally Scotland until the 2001 general
election.

Her hobbies include opera, ballet and the theatre.

----

It's quite remarkable how open about these matters those involved in and those writing about intelligence activities are these days. Perhaps the
lack of Cold War paranoia helps, but it's a measure of the confidence
(however mistaken) of the players that their decisions and worldviews
require so little justification, even when made so public (especially
so, given the fanatical secrecy that has traditionally clothed the
British state). Anyway, Mrs Smith and Ms Ramsay maintained close links
while John pursued his career in the Labour Party, marking himself out
as pro-European, being involved in the European Movement, one of the
many vehicles for particular US geostrategic interests that were funded
by the CIA. Smith's profile in the 1975 EEC membership referendum was
low-key by comparison to others. However, he rose up the ministerial
ranks under Wilson and Callaghan, eventually replacing the rightwing
Edmund Dell as Secretary of State for Trade in 1978 (Dell was a founder
member of the SDP). By the time Smith became Labour Party leader it was
noted that he was the only member of the "shadow Cabinet" that had had
Cabinet experience.

Unlike many others of a similar political disposition Smith did not
leave to join the SDP in 1981, preferring to remain in the Labour Party
and build upon his earlier achievements. Holding a succession of
frontbench positions, he was a good, stolid performer. I remember in
1986, Granada TV ran a studio debate on the unfolding Westland scandal,
at which a succession of Labour Party heavyweights failed, convincingly,
to score any points whatsoever against Thatcher (most notably John
Prescott and "Dr" Jack Cunningham), but the relatively junior Smith drew
blood against government spokesmen. Ultimately, of course, Kinnock
allowed Thatcher off the hook in the parliamentary debate before which,
we now know, she was prepared to resign, having anticipated a ruthless
dissection. Instead Kinnock fell on his sword and she was allowed to
continue unrestrained for another 4 years.

Meanwhile Smith continued to rise, eventually assuming the position of
Shadow Chancellor. Together with Gordon Brown, Smith launched what was
called the "prawn cocktail" offensive, in which senior Labour Party
figures courted City of London types over breakfasts, trying to reassure
them that Labour's economic management skills were far more assured than
in 1979. These efforts had some success. The Financial Times became a
convert to Labour in 1992, when John Major narrowly defeated Kinnock,
who promptly resigned as Labour leader.

So, what to make of all this? There is no doubt that Smith would have
been a more traditionalist Labour prime minister than Tony Blair. But,
so would almost anyone. Smith, like his protege Brown (who clothed
himself in the Smith legacy in the manner of Stalin's "Foundations of
Leninism" farrago), understood the party machinery and the need to
cultivate links across factions. Thus Brown, whilst faithfully
implementing New Labour policies with a zeal to match that of Tony, has
retained his tight control of the Scottish Labour party machine in the
same way that his Treasury exercises control over other spending
departments of government (itself quite ironic given the younger Brown's
railings against Treasury rules). Blair is quite disconnected from the
party personally, relying on others in the "Millbank Tendency" to
enforce discipline (hence the bungled London mayoral election, Welsh
assembly leadership election, etc., etc.). This makes Blair at once
vulnerable and unassailable. Smith would have been much more personally
involved in the party. Perhaps this, of course, would have been
outdated, given the rise of authoritarian statism and the simultaneous
emergence of a "state party" whose leader must somehow transcend party
in order to be successful, in the manner of a divine right monarch.
Smith was of a vastly different era.

But, given his past connections and career trajectory, it is most likely
that a Smith-led government would have travelled along the same road as
Blair, if not quite so far (e.g., fanatical implementation of PPPs).
It's also probable that he would have been far less slavishly pro-US in
public, and more unequivocally pro-EU, since he did not suffer from the
periodic indecision that seems to afflict Blair. He was also an
instinctive believer in redistribution in accordance with the
old-fashioned social democracy espoused by the likes of Roy Hattersley.
But it seems that we must conclude that the rise of John Smith and his
entourage was the fruit of a coalition of interests involving, at
various times, if not throughout, the CIA, in the various efforts of
transatlantic capital to engineer a British integration into Western
Europe. As we know, that goal has been superseded by the
inter-imperialist rivalry regularly manifested in the news (trade wars,
unease over Iraq, etc.), and British interests are much more clearly
focused on Europe than before. No doubt "Lady" Smith will be assisting
the pursuit of those interests eastward, as EU expansion and the natural
resource wealth of the former Soviet Union become more pressing issues.

Michael Keaney