Seumas Milne's Blog, page 16

Britain's wars fuel terror. Denying it only feeds Islamophobia | Seumas Milne

Those who send British troops to shed blood in the Muslim world must share the blame for atrocities like Woolwich

Eight years on, nothing has been learned. In the week since a British soldier was horrifically stabbed to death by London jihadists on the streets of Woolwich, it's July 2005 all over again. David Cameron immediately rushed to set up a task force and vowed to ban "hate clerics". Now the home secretary wants to outlaw "nonviolent extremist" organisations, censor broadcasters and websites and revive plans to put the whole country's phone and web records under surveillance.

"Kneejerk" barely does it justice. As for the impact on Muslims, the backlash has if anything been worse than in 2005, when 52 Londoners were killed by suicide bombers. As the police and a BBC reporter described the alleged killers as of "Muslim appearance" (in other words, non-white), Islamophobic attacks spiked across the country. In the first five days 10 mosques were attacked, culminating in a triple petrol bombing in Grimsby.

As politicians and the media congratulated themselves that Britain was "calmly carrying on as usual", it won't have felt like that to the Muslim woman who had her veil ripped off and was knocked unconscious in Bolton. Nor, presumably, to the family of 75-year-old Mohammed Saleem, stabbed to death in Birmingham in what had all the hallmarks of an Islamophobic attack last month – or, for that matter, the nearly two-thirds of the population who think there will be a "clash of civilisations" between white Britons and Muslims, up 9% since the Woolwich atrocity.

One key change since 2005 is the rise of the violently anti-Muslim English Defence League, given a new lease of life by Woolwich. More than 40% of Islamophobic incidents recorded by the Muslim organisation Faith Matters last year were linked to the EDL or other far-right groups. "It makes me feel I don't belong here", one Muslim community leader quotes his teenage son as telling him this week.

But almost nobody in public life mentions the war. The reason cited by the alleged Woolwich killers – the role of British troops in Afghanistan, Iraq and the war on terror – has been mostly brushed aside as unseemly to discuss. Echoing his predecessors, the prime minister insisted the Woolwich killing was "an attack on the British way of life". London mayor Boris Johnson declared there could be "no question" of blaming British foreign policy or "what British troops do in operations abroad".

Instead, the problem is once again said to be "Islamism", regardless of the string of democratic Islamist governments elected from Turkey to Tunisia. Or the focus is on the "mistakes" of MI5, as if any amount of spooking could detect the determination of an enraged takfiri killer to exact revenge with kitchen knives and meat cleavers. Whatever the focus, even to mention the western wars that drive these attacks is deemed to justify them.

That is, of course, absurd. Targeting a soldier who fought in Afghanistan might not be terrorism in the sense of an indiscriminate attack on civilians. But the random butchery of an unarmed man far from the conflict by disconnected individuals who have nonviolent political alternatives is clearly unjustifiable in any significant religious or political tradition.

The fact that the US declared the war on terror to be a war without national borders and routinely targets unarmed or unidentified victims has fatally blurred those boundaries. The grisly, intimate killing of Lee Rigby was the absolute antithesis of high technology drone attacks. But both embody the degradation of the human spirit.

There can be no surprise, however, that such attacks take place. It's not just opponents of the war on terror who predicted from the start that it would fuel terrorism not fight it. The intelligence services on both sides of the Atlantic did the same. The perpetrators of one attack after another, from London 2005 to Boston 2013, say they're carrying them out in retaliation for the vastly larger scale US and British killing in the Muslim world.

It's true that all kinds of personal factors and experiences help create the mentality to carry out such attacks. But as Abdul Haqq Baker – head of the south London "counter-radicalisation" outfit Street – puts it, the tipping point that has turned people to violence has been shown again and again to be episodes in the war on terror.

There is already some evidence that torture of one of the Woolwich suspects in Kenya – after which MI5 tried to recruit him – may have been such a catalyst. Azad Ali, a Muslim community activist who has advised the Metropolitan police, says there has been a pattern of official abuse of British Muslim activists in Arab countries, apparently using British-supplied intelligence, who are then pressed to work for the British security services when they return home.

What is indisputable is that there were no jihadist attacks in Britain before 9/11, itself claimed as a response to US support for Arab dictatorships, Israeli occupation and murderous sanctions on Iraq. Wars supposedly fought to keep Britain safe have been shown to do the exact opposite.

Given the bloodshed, torture, mass incarceration and destruction that US-British occupation has inflicted on Afghanistan and Iraq, and the civilian slaughter inflicted in the drone war from Pakistan to Yemen, the only surprise is that there haven't been more terror attacks.

Three years ago WikiLeaks gave a glimpse of the routine killing of Afghan civilians by British troops – as did the jailing for 18 months of a grenadier guardsman for stabbing an Afghan boy who asked him for chocolate. Now Britain is preparing to supply weapons directly to the Islamist-dominated rebels in Syria. But at home ministers want to use their "Prevent strategy" to freeze out still further nonviolent Islamist groups that have been most effective at isolating those drawn to violence.

Denial of the role of US-British wars, occupations and interventions in the Muslim world in fuelling terror attacks at home helps to get politicians off the hook. But it also plays into the hands of those blaming multiculturalism and migration, feeding racism and Islamophobia in the process. The wars should be ended because they are wrong and a failure – but also because they fuel terrorism and divide communities.

Those who carried out last week's killing are of course responsible for what they did. But those who have sent British troops to wage war in the Arab and Muslim world for more than a decade must share culpability.

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A Tory-led exit from Europe would unleash a carnival of reaction | Seumas Milne

The nationalist right has long set the agenda. Labour should back a referendum and make the progressive case for change

For a generation now the Tories have shown a heroic instinct for self-immolation over Europe. Whatever deal or concession is made, it can be relied on not to last. In January, David Cameron was supposed to have shot Ukip's fox and bought off his restive backbenchers with the promise of an in-out EU referendum by 2017.

But a fortnight ago the rightwing anti-Brussels populists took a quarter of the vote in local elections, and now Downing Street is in disarray as Tory cabinet ministers prepare to abstain on a critical referendum amendment to their government programme put down by their own backbenchers.

The prime minister has rushed to produce a bill to set the referendum commitment in legal stone – though it stands no chance of being passed. Cameron even had to call in support for his negotiate-first-vote-later line from the US president to shore up his position.

In the end it will be Ed Miliband, however, who digs him out of his latest hole. Instead of abstaining and sending Cameron to humiliating defeat at the hands of his own party, Labour MPs have been told to oppose the Tory referendum amendment – for fear of giving ground to the demand for a popular vote.

The Tory backbenchers, who are out for Cameron's scalp, will be back. As two former Conservative chancellors have come out in favour of leaving the EU, and cabinet ministers Michael Gove and Philip Hammond have said they'd vote no if there were a referendum now, Tory pressure for withdrawal has gone critical. It's the bandwagon for the small-state, anti-immigrant UK Independence party – running at 18% and taking lumps out of the Tory vote – that's made the difference, of course.

A good part of Ukip's bubble is as much a xenophobic expression of powerlessness and falling living standards as it is of opposition to the EU, which is well down most voters' priority lists. In a sense, the rise of a rightwing nationalist party only brings Britain into line with the continental norm and has coincided this month with a drop in support for EU withdrawal from 51% to 43%.

But public opinion remains overwhelmingly in favour of a referendum. And, as elsewhere in Europe, the only reason the political elite continues to resist giving people a vote on such a fundamental and changed constitutional relationship is because it fears it may not get the right result.

That's clearly an unsustainable anti-democratic nonsense, which will poison the political water until it's corrected. Unlike in other parts of Europe, where opposition to the EU or its policies has straddled the political spectrum, in Britain it has been dominated since the late 80s by the fake patriots of the Tory right and their cheerleading press. While claiming to champion national and democratic sovereignty against an unaccountable Europe, they're more than happy to swallow subordination to the United States and the City of London. So if Cameron and the Tories are able to monopolise the campaign to change the EU relationship, it's clear what the negotiation will be all about.

Top of the list will be protection of the financial interests that crashed the British economy, along with the ditching of some of the things most British people actually like about the EU, such as working hours and employment protection, and guaranteed holidays.

Cameron hopes to claim victory with some retrograde opt-outs and thus back a yes vote. That would be bad enough, but a successful Tory-led campaign to pull out of the EU would risk unleashing a carnival of reaction, anti-migrant hysteria, more attacks on social rights, and a further lurch to the right.

What has been almost entirely missing from the mainstream British public debate has been the progressive case for fundamental change that has been central to the struggle over the EU and its treaties in mainland Europe. In the 1975 referendum, the left case against the then common market was that it was a cold war customs union against the developing world that would block socialist reforms. But the modern EU has gone much further, giving a failed neoliberal model of capitalism the force of treaty, entrenching deregulation and privatisation and enforcing corporate power over employment rights.

Claims that the single market would boost growth have proved groundless. But the EU's profoundly undemocratic and dysfunctional structures have been brutally exposed by the eurozone crisis and the devastation wreaked by Troika-imposed austerity.

The fallout from that crisis means the EU will in any case have to be restructured. Given those circumstances and the Tory commitment, it would be both wrong in principle and politically foolish for Labour not to back a referendum.

Miliband worries that a referendum would dominate a Labour government's agenda. But denying the voters a say would make it less likely Labour would be elected in the first place. The Labour leader has already argued for "comprehensive" EU reform, including of restrictions on state aid and intervention. In office, he would need to go a lot further in using the leverage of restructuring to negotiate change, in alliance with others across Europe. But a progressive package of demands should also shift the shape of a subsequent referendum.

What would be fatal would be to allow the nationalist right to continue to dictate the EU agenda and wrap itself in the mantle of democratic legitimacy. The terms of debate have to change – for the sake of both Britain and Europe.

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The west and its allies cynically bleed Syria to weaken Iran | Seumas Milne

If western politicians were really interested in saving lives, they would use their leverage to negotiate a settlement

If anyone had doubts that Syria's gruesome civil war is already spinning into a wider Middle East conflict, the events of the past few days should have laid them to rest. Most ominous was Israel's string of aerial attacks on Syrian military installations near Damascus, reportedly killing more than 100.

The bombing raids, unprovoked and illegal, were of course immediately supported by the US and British governments. Since Israel has illegally occupied Syria's Golan Heights for 46 years, perhaps the legitimacy of a few more air raids hardly merited serious consideration.

But it's only necessary to consider what the western reaction would have been if Syria, let alone Iran, had launched such an attack on Israel – or one of the Arab regimes currently arming the Syrian rebels – to realise how little these positions have to do with international legality, equity or rights of self-defence.

Israeli officials have let it be known that the attacks, launched from Lebanese airspace, were aimed at stockpiles of Iranian missiles bound for Hezbollah, the Lebanese Shia resistance movement and governing party. They were not, it was said, intended as an intervention in Syria's civil war – but as a warning to Iran and protection against Hezbollah attacks in a future conflict.

That's not how it seemed to the Syrian rebel fighters on the ground, filmed greeting the attacks with cries of "Allahu akbar", unaware of who had actually carried them out. By bombing the Syrian army, which has recently made advances in some rebel-held areas, Israel is clearly intervening in the war.

The raids follow the public declaration by Hezbollah's Hassan Nasrallah last week that his fighters are supporting government forces inside Syria – which are also backed by Iran, Russia and China. It is Syria's role as the pivot of Iranian influence across the Middle East that has turned the Syrian war into a potential regional conflagration.

Having hedged its bets, Israel has now started to make clear it regards the prospect of Islamist and jihadist groups taking over from the Assad regime as less threatening than the existing "Syria-Iran-Hezbollah axis", as the Israeli defence ministry official Amos Gilad put it recently.

That has coincided with talk of creating an Israeli buffer zone inside Syria, while Israeli officials have been pushing claims that the Syrian regime has used chemical weapons. Since Obama declared that the use of chemical weapons would cross a "red line", allegations of their use have become a crucial weapon for those demanding increased western intervention, in a bizarre echo of the discredited orchestration of the invasion of Iraq a decade ago.

That effort came unstuck this week when the UN investigator Carla Del Ponte reported that there were "strong concrete suspicions" that Syrian rebels had themselves used the nerve gas sarin. The claim was hurriedly downplayed by the US, though the rebel camp clearly has an interest in drawing in greater western intervention, in a way the regime does not.

The fact is intervention has long been a central dimension of the war. The regime forces are backed by Syria's old allies in Russia and Iran. Funding and military support for the rebels come from the US, Britain, France and their regional allies: Turkey, Saudi Arabia, the UAE, Qatar and Jordan.

Airlifts of arms to the Syrian rebels, co-ordinated by the CIA, have increased sharply in recent months to become what one former US official calls a "cataract of weaponry". British and American forces are training rebel fighters in Jordan. The worth of US aid to the Syrian opposition has doubled to $250m, while the EU has now lifted its oil embargo to allow exports from rebel-held areas.

The result of foreign intervention has of course been to escalate the conflict. Now pressure is building on the Obama administration to go further and supply weapons directly. Among those pushing for more intervention is David Cameron – anxious to ingratiate himself with the Gulf dictators – who has been pressing for the EU arms embargo to be lifted.

The intention is to build up the west's favoured groups and weaken the role of jihadists who have taken centre stage as the war has gone on. They include Jabhat al-Nusra, which now controls swaths of rebel-held territory and has declared allegiance to al-Qaida.

The irony of the US and other western governments – let alone Israel – once again making common cause with al-Qaida, after a decade of a "war on terror" aimed at destroying it, is one factor holding Obama back. So is the risk of being drawn into all-out war (publicly raised by Britain's chief of the defence staff); the hostility of American public opinion (mirrored in Britain and the Arab world); and the aftermath of intervention in Libya, where militias have been besieging government offices demanding the ousting of western-backed Gaddafi-era leaders.

The reality is that what began in Syria more than two years ago as a brutally repressed popular uprising has long since morphed into a vicious sectarian war, manipulated by outside forces to change the regional balance of power and already dangerously spilling over into neighbouring Lebanon and Iraq.

The consequences for Syria have been multiple massacres, ethnic cleansing, torture, a humanitarian crisis and the risk of the country's breakup. The longer the war, the greater the danger of a Yugoslavian-style fragmentation into sectarian and ethnic enclaves.

The Assad regime bears responsibility for that, of course. But so do those who have funded and fuelled the war, bleeding Syria and weakening the Arab world in the process. The demand by Cameron and other western politicians to increase the flow of arms is reckless and cynical.

The result will certainly be to ratchet up the death toll and spread the war. If they were genuinely interested in saving lives – instead of neutralising Syria to undermine Iran – western leaders would be using their leverage with the rebels' regional sponsors to negotiate a political settlement that would allow Syrians to determine their own future.

That would be difficult enough to achieve and enforce on the ground. But an internationally and regionally backed deal now looks the only way to bring the war to an end. In which case, increased intervention is really about improving the west's bargaining hand, at a cost of yet more Syrian suffering – and yet another backlash to come

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Ed Miliband will fail if he locks himself into Tory austerity | Seumas Milne

Falling living standards make Labour favourite to win the next election. It needs policies to match the scale of the crisis

Without an early economic turnaround or a Labour implosion, Ed Miliband is likely to be the next prime minister. Nick Clegg's announcement this week that he would be ready to serve in a Miliband-led government is a sure sign David Cameron's coalition buddies have come to the same conclusion.

For all the talk about the softness of Labour's eight-point poll lead and the public's lack of enthusiasm for its leader, the underlying reasons aren't hard to find. Whether or not growth picks up from the current IMF forecast of 0.7% for the year, real wages and living standards have long been the key to British elections.

No governing party has won an election on the back of falling real wages since the 1970s, as Labour found to its cost in 1979 and 2010. And no party has lost office when real wages for the majority were rising, with the single exception of John Major's defeat in 1997 – though that followed the humiliation of Black Wednesday and 18 Tory years in power. On current projections, average real wages will have fallen a drastic 10% by the end of this parliament.

Of course it's perfectly possible that a pre-election uptick, Labour mistakes and the burden of its record, or public pessimism that any government can turn the economy round could change that calculus. But, as elsewhere in crisis-ridden Europe, the scale of the coalition's economic failure and fall in voters' living standards clearly favours the opposition.

Which is why the heat has now been turned up on the Labour leader, inside and outside his party. The stakes are far higher now a Miliband-led government no longer looks a remote possibility. It started with Tony Blair and a gaggle of New Labour grandees.

Miliband must not "tack left on tax and spending", they declared, but instead cleave to the tried and tested formulas of the 1990s. Meanwhile, anonymous "senior Labour figures" complained that Miliband was soft on welfare claimants and that union-backed candidates were being picked for next year's European elections.

The Labour leader politely rebuffed his predecessor, saying the party had to change and "learn from its mistakes". But when Len McCluskey – leader of Britain's biggest union, Unite, and fresh from re-election with 144,000 votes – warned Miliband he would go down to defeat if he allowed himself to be "seduced" by Blairites and opted for "austerity-lite", the Labour leader's response was ferocious.

McCluskey's comments were "represensible" and "disloyal", Miliband said. That was followed by another panicky denunciation of the leftwing Respect MP George Galloway as "awful" after it emerged the two had met privately – and of union speculation about a European-style general strike against cuts as a "terrible idea".

It's scarcely surprising that the Labour leader tiptoes round his Blairite critics, backed as they are by the media and corporate establishment, and lashes out at leaders of Labour-affiliated unions, ludicrously portrayed as puppet masters. And McCluskey unwisely named the shadow cabinet's Blairite seducers, which will make it more difficult for Miliband to move them in any future reshuffle.

But McCluskey is very far from alone in fearing Labour risks being too timid in the face of a historic crisis – and failing to offer a credible alternative to voters now taking the full brunt of its impact.

As the GMB union leader Paul Kenny puts it: "New Labour won't win again. They need to drop any suggestion that all we'll do is cut a bit slower than the Tories. It's all about jobs and spending power." And Labour's backbench revolt in March over benefit sanctions on unemployed people refusing private "workfare" schemes shows that kind of concern is well represented among the party's MPs as well.

Labour leaders' sensitivity over a rupture with Tory austerity was on display this week when Miliband tried to avoid saying his plans for a VAT cut would initially be paid for by increased borrowing. That was later corrected. But it was a foretaste of the pitfalls around the far more important decision over Labour's cuts and spending plans after 2015. The crunch will come over whether – and how far – Labour is prepared to break with the coalition's austerity programme for the next parliament, when cuts are planned to be the most savage. The Tories want to lure Labour into signing up for the same medicine – or a mildly watered down variant – as they did in the far more benign economic environment of 1997.

If Miliband and Ed Balls (who still defends the 1997 decision to stick to Tory spending limits) fall into that trap, it would be a disaster – both for Labour's election prospects and the chances of rebuilding an economy that delivers for the heavily squeezed majority. Balls recently slapped down a suggestion that Labour would outspend the Tories, saying the decision would be taken nearer the election.

But the principle of whether Labour should tie itself to the coalition's overall spending plan, rather than the detailed figures, clearly shouldn't be left to a handful of the party's leaders in the febrile runup to a general election. If Labour is going to have any chance of driving economic recovery after 2015, it cannot allow itself to be locked into a failed Tory austerity programme.

Miliband is right to argue that there has to be a break with the failed "free market" economic model of the past 30 years. But unless that rhetoric is turned into policies that match the scale of the crisis, both before and after the election, it risks laying the ground for political failure. Pressure needs to be applied now by those who want to see real change.

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Shaker Aamer and the dirty secrets of the war on terror | Seumas Milne

The scandal of Britain's last Guantánamo inmate encapsulates the barbarity of a mutating conflict without end

More than four years after Barack Obama pledged to close the US internment camp at Guantánamo, over half its 166 inmates are on hunger strike, 16 are being violently force fed, and soldiers last week used rubber bullets against "non-compliant" prisoners. Guantánamo, along with Abu Ghraib, long ago became a symbol of the lawless brutality of George Bush's war on terror.

Set up on US-occupied Cuban territory, it was filled with supposed "enemy combatants" seized in post-invasion Afghanistan, the vast majority of whom were then held without charge or trial, brutalised and tortured. That was all supposed to have come to an end after Obama's election.

But instead of shutting this monstrosity, the camp is being rebuilt. Congress has played a central role in keeping Guantánamo open. But the president only tried to move it to Illinois, not end the scandal of indefinite detention without trial. And he's personally blocked the release of dozens of prisoners, even when they've been cleared.

That's at the heart of why the detainees are striking. Among them is Shaker Aamer, a Saudi-born British resident held without charge for 11 years, much of it in solitary confinement. As with half of the rest of the prisoners, the US authorities now accept that there is no case against him, and he was cleared for release six years ago.

Aamer hasn't seen his family since 2001, and has never met his 11-year-old son, Faris. He has refused food for 71 days, and his case is due to be debated tomorrow in parliament in response to a petition of over 100,000 names. But it now turns out that, uniquely among the prisoners, Aamer has been cleared for release to only one country: Saudi Arabia.

Despite the British government's claims to be lobbying for his return to London, the evidence suggests neither London nor Washington wants anything of the kind. As Aamer's lawyer, Clive Stafford Smith, puts it: "The sole reason to send Shaker to Saudi Arabia is to have him silenced, most likely by sentencing him to a long imprisonment after a sham trial."

The reason is not hard to find. Soon after he was seized, Aamer says he was assaulted and tortured (into falsely confessing links to al-Qaida) by US officials at Bagram air base in Afghanistan in the presence of MI6 officers – abuse that continued at Guantánamo. Even more dangerously, he was also present, along with British intelligence agents, when Ibn al-Sheikh al-Libi was tortured at Bagram into alleging that Saddam Hussein was training al-Qaida terrorists – bogus claims Bush and Colin Powell used to justify the invasion of Iraq.

The Metropolitan police has now opened three new investigations into UK intelligence collusion with torture and "rendition", including Aamer's case. That's on top of MI6's role in the kidnapping of Libyan dissidents and their families in 2004, for which the government has already paid out over £2m in compensation.

Earlier this month Scotland Yard detectives interviewed Aamer in Guantánamo. No wonder the British government is so keen to force through secret court hearings in "national security" cases through its justice and security bill – or that it has struggled to convince the courts that the Salafist cleric Abu Qatada, regularly detained without charge for years, would not be at risk of torture if packed off to a police state such as Jordan.

The scale of torture, kidnapping and detention without trial unleashed by the US government after 9/11 is, as the US Constitution Project report found last week, "indisputable". And at every stage it's been backed and emulated by its closest allies. At least 54 states, including Britain and 24 others in Europe, took part in the CIA's secret "extraordinary rendition" programme, it's now emerged. And British forces have carried out plenty of beatings and torture in Afghanistan and Iraq themselves, either on their own or in cahoots with US and local forces, as multiple reports and inquiries have now made clear.

It's hardly surprising in the wake of such a saga that western claims to be the champions of human rights and humanitarian intervention are treated with derision across much of the world. But as its dirty secrets are seeping out, the war on terror itself has already mutated.

Obama hasn't closed Guantánamo or held those who authorised these barbarities to account. But US torture camps and boots on the ground are on the way out. Their place has been taken by air and proxy campaigns, such as in Libya and Syria, and drone wars that have already killed thousands in Pakistan, Yemen and Somalia – but are more popular at home.

We don't yet know the motivations of the two men accused of carrying out last week's atrocity in Boston, which killed three people and seriously injured many more. But we do know that 61 were killed the same day in bomb attacks in Iraq that were blamed on al-Qaida, brought to the country by the US-British invasion. And 16 were killed in Pakistan the following day in a suicide attack claimed by the Pakistani Taliban, which mushroomed as a result of the invasion of Afghanistan.

What is certain is that so long as the US and its allies intervene, occupy and wage war across the Arab and Muslim world – whether directly or by proxy, with daisy cutters or drones – such outrages will continue. It's the logic of a war of terror without end.

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It's time to bury not just Thatcher – but Thatcherism | Seumas Milne

She didn't save Britain or turn the economy round. We need to break with her failed model to escape its baleful consequences

They have only themselves to blame. Protests were always likely at any official sendoff for the most socially destructive prime minister in modern British history. But by turning Margaret Thatcher's funeral into a state-funded Tory jamboree, puffed up with pomp and bombast, David Cameron and his acolytes have made them a certainty – and fuelled a political backlash into the bargain.

As the bishop of Grantham, Thatcher's home town, put it, spending £10m of public money to "glorify" her legacy in the month benefits are slashed and tax cuts handed to the rich is "asking for trouble". What's planned today isn't a national commemoration, but a military-backed party spectacle.

It's a state funeral in all but name, laid on for none of the last seven prime ministers. Nothing of the kind has been seen since the death of Winston Churchill, who really did unite the country for a time against the mortal threat from Nazi Germany. Thatcher did the opposite, of course, though every effort will be made today to milk her short but bloody colonial conflict in the south Atlantic for all its jingoistic worth.

It's hardly a surprise that 60% of the population oppose the public subsidy, or that Buckingham Palace is alarmed at the funeral's regal dimensions. Now the decision to silence Big Ben has tipped the whole saga into the realm of offensive absurdity.

There's been much talk about a need for dignity and respect. But the prospect of the leader of a class war government being treated like a respected head of state is itself an insult to the half of Britain that recoils from her memory and the millions of people whose communities were devastated by her policies.

From the moment the former prime minister died there has been a determined drive by the Tories and their media allies to rewrite history and rehabilitate a deeply damaged brand. For a few days of fawning wall-to-wall coverage it seemed like that might be working, as happened in the US after Ronald Reagan's death in 2004.

But a week on, it's clear the revisionists have overplayed their hand. Anger and revulsion keep bursting into the open. Simply raising her record reminds people of the price paid for unrelenting deregulation, privatisation and tax handouts to the rich; why she was so unpopular across Britain when she was in power; and the striking similarity with what's being done by today's Tory-led coalition.

So there's been no polling bounce for Cameron, even as he claimed that Thatcher "saved our country". And while people recognise her strength, polls show clear opposition to many of her flagship policies, including privatisation (only a quarter think it's delivered a better service). Most don't believe she "put the 'Great' back into Great Britain" at all, her economic policies are seen to have done "more harm than good", and her legacy is regarded as one of division and inequality.

Which is what the facts show. Far from saving Britain, Thatcher's government delivered rampant inequality, social breakdown, disastrous financial deregulation, pulverising deindustrialisation and mass unemployment. A North Sea oil bonanza was frittered away on tax cuts for the wealthy and a swollen benefits bill as public services were run down, child poverty escalated and social mobility ground to a halt.

But for all that, her apologists insist, Thatcher did what was necessary to turn Britain's economy round. But she didn't. Growth during the 1980s, at 2.4%, was exactly the same as during the turbulent 1970s and lower again in the post-Thatcher 1990s, at 2.2% — while in the corporatist 1960s it averaged over 3%.

And despite claims of a Thatcher "productivity miracle", productivity growth was also higher in the 60s (and it's gone into reverse under Cameron). What her government did do was redistribute growth from the poor to the rich, driving up profits and slashing employees' share of national income through her assault on trade unions. That's why it felt like a boom in better-off Britain, as the top rate of tax was more than halved, while real incomes fell for the poorest 40% in her first decade in power.

You only have to rehearse what Thatcher's government unleashed a generation ago to recognise the continuity with what's been happening ever since: first under John Major, then under New Labour, and now under Cameron: privatisation, liberalisation, low taxes for the wealthy and rising inequality. Thatcher was Britain's first woman prime minister, but her policies hit women hardest, just as Cameron's are doing today, while Tony Blair says he saw his job as "to build on some of the things she had done rather than reverse them".

But Thatcherism was only an early variant (following her friend General Pinochet, the Chilean dictator) of what became the neoliberal capitalism adopted or imposed across the world for the next generation. And it's that model which imploded in the crash of 2008. As even the free-market Economist conceded last week, while demanding "more Thatcherism, not less", her reforms could be said to have "sowed the seeds" of the current crisis.

Like other true believers, the magazine's editors fret that the pendulum is now swinging away from the neoliberal model. So does Blair, who remains locked in the politics of the boom years and whose comfort zone remains attacking his own party. So he's launched a coded assault on Labour's leader, Ed Miliband, for supposedly thinking a crisis caused by under-regulated markets will lead to a shift to the left.

There's certainly no automatic basis for such a shift. As history shows, the right can also take advantage of economic breakdowns – and often has. But more than 20 years after Thatcher was forced out of office, the evidence is that most British people remain stubbornly resistant to her individualistic small-state philosophy, believing for example that it's the government's job to redistribute income across the spectrum and guarantee a decent minimum income for all.

And crucially, the economic model that underpinned the policies of Thatcher and her successors is broken. As the Labour frontbencher Jon Trickett argued this week, we need a "rupture" with the "existing economic settlement" – the Thatcher settlement. That's the challenge of the politics of our time, not only in Britain. As we remember blighted lives and communities today, it's time not just to bury Thatcher, but Thatcherism itself.

Twitter: @SeumasMilne

• The article was amended on 17 April. It originally stated "real incomes fell by 40% for the poorest", as a result of an error in the editing process.

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Tunisia and Egypt need the Arab revolutions to spread | Seumas Milne

Conflict over religion and identity risks diverting attention from the battle for social justice and national independence

From the first eruption of the Arab revolutions in Tunisia, it was clear that powerful forces would do everything possible to make sure they were brought to heel, or failed. Those included domestic interests which had lost out from the overthrow of the old regimes, Gulf states that feared the contagion would spread to their shores and western powers that had lost strategic clients – and didn't like the idea of losing any more.

So after Tunisia and Egypt had fallen in quick succession, later uprisings were hijacked, as in Libya, or crushed, as in Bahrain, while sectarian toxins were pumped throughout the region, escalating the bloodshed in Syria in particular, and cash was poured into destabilising or co-opting the post-revolutionary states.

It seemed only Tunisia was small and homogenous enough to be spared a full-scale counter-revolutionary onslaught, its newly elected Islamist leaders pluralist enough to lead a successful democratisation and offer a progressive model for the rest of the region.

That was until the assassination of the leftist leader Chokri Belaïd in February brought to a head a rising tide of conflict between secular groups and Islamists (punctuated with a few violent incidents involving extreme Salafists). Whoever ordered the killing, which provoked large-scale protests, riots and demands for the dissolution of parliament and the overthrow of the government, was clearly out to destabilise the country.

Two months on, and Tunis has just hosted tens of thousands of international activists for the World Social Forum, first launched in Brazil 12 years ago to challenge corporate globalisation, with the aim of supporting radical change in North Africa and across the world.

For all the reports of insecurity, they found a city now strikingly calm and unthreatening, with Salafist fundamentalists thin on the ground and vibrant networks of social movements, trade unionism and protest campaigns. But the crisis of unemployment and poverty that sparked the Tunisian uprising is now worse than in 2010, and corruption in the police and bureaucracy remains dire.

Meanwhile, politics has become increasingly polarised around a dysfunctional standoff over religion and secularism: between the centrist Islamist Ennahda party – which was the main target for violent repression under Ben Ali's dictatorship and won the 2011 elections – and opposition parties, both right and left, which accuse Ennahda of seeking to introduce a theocratic state by the back door.

If it's a fight about the protection of women's and civil rights, that's essential. But what makes the conflict often seem contrived is that Ennahda has long been committed to coalition with secular parties and women's rights (the Ennahda deputy speaker of parliament, Meherzia Labidi, describes herself as a feminist, for instance), rejected attempts to introduce sharia and a reference to the "complementary" roles of men and women into the constitution, and insists there is no conflict between Islam and secularism.

Kacem Ataya, from the influential UGTT trade union organisation, blames the Islamists for the schism and says social pressure has been the key to the defence of civic rights. Mustapha Ben Jafar, secular speaker of the constitutional assembly, thinks the opposition's determination to go into "campaign mode" as soon as they were defeated is the source of the polarisation.

Either way, there's a danger that, as in Egypt (where the divisions are deeper), politics gets diverted into US-style culture wars about religion and identity – at the expense of the battle for social and economic justice and national sovereignty. It's a conflict that suits forces that backed the old regimes (in Tunisia grouped around the main opposition party, "Call of Tunis") and leads to paradoxical alliances. Both Saudi Arabia and the UAE, dictatorships with an Islamic veneer, support elements of the liberal and secular opposition in Egypt and Tunisia because they fear what the example of democratic Islamist governments might mean for the future of their own regimes.

But it doesn't suit the majority of Egyptians or Tunisians. It was, after all, the impact of Europe's crisis on a Tunisian economy stripped naked by the dictatorship's neoliberal reforms that triggered the revolution – and its central demands for dignity, jobs and economic justice.

Two years on, the government has started to reverse the explosive rise in unemployment – officially now about 17% – and shift spending to the poorer regions. But it has yet to break with the IMF-endorsed policies inherited from the former regime. Ennahda leaders talk about a "social economy" somewhere between free-market capitalism and socialism, but details are sketchy and pressure is now growing to cut food and fuel subsidies and resume privatisation.

That clearly won't meet the aspirations of the disinherited youth who spearheaded Tunisia's or Egypt's revolutions. In current circumstances that needs a move in the direction taken by progressive governments in Latin America, such as Ecuador's, which have already turned their back on a failed economic model, expanded the tax base, slashed poverty, renegotiated multinational contracts and used publicly-owned banks and enterprises to drive the development of the economy.

Instead, the European Union is demanding that Tunisia liberalise its banking system – the very process of financial deregulation that led to the crash of 2008 – while new IMF and European loans risk locking Tunisia and Egypt into policies that will make recovery more difficult.

Tunisia's government is nevertheless trying to diversify trade and investment away from dependence on crisis-blighted Europe and the dominant former colonial power of France. As the new prime minister Ali Laarayedh puts it: "revolutions strengthen national independence". In January, officials confirm, the Tunisian government refused France overflight rights for its UAE-financed military intervention in Mali – certainly not something the former dictator would have done.

How far the Arab revolutions will go – and whether they deliver to their people or lapse back into western clientalism – evidently isn't settled. It will depend on social pressure at home, but also whether they reach the western-backed autocracies now trying to control the process. But one thing is clear: the further democratisation spreads, the greater the chance the Arabs can take control of their own future.

Twitter: @SeumasMilne

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Tunisian government has no hidden agendas, says new prime minister

Ali Laarayedh tells the Guardian Islamist-led coalition wants to 'govern through consensus during a very tense transition period'
• Seumas Milne: Tunisia and Egypt need the Arab revolutions to spread

There will be no Islamisation of post-revolutionary Tunisia and the Islamist-led government has no hidden agendas or intention to monopolise power, the country's new prime minister has told the Guardian.

Ali Laarayedh, a torture victim of the former dictatorship who spent 13 years in solitary confinement, was speaking in the wake of the social upheaval in Tunisia that followed the assassination of leftist leader Chokri Belaid in February.

That led to the resignation of the former prime minister and the replacement of three important ministers from the Islamist Ennahda party with technocrats. Ennahda, which has governed in coalition with two small secular parties since winning the 2011 elections, has been blamed by the opposition for Belaid's murder.

That killing was an "attack on the revolution and the country", Laarayedh said. "This is a very sensitive transition period – these are compromises we've made to calm the situation which is very tense. We want to govern through consensus."

Tunisia has been regarded as a model for the region of democratisation and more progressive Islamism since the overthrow of the dictatorship of Ben Ali two years ago triggered uprisings across the Arab world. But polarisation between Ennahda and the secularist opposition, including elements of the former regime, has grown as the finalisation of a new constitution has been delayed and political and social tensions have deepened.

According to Laarayedh, the split in the country is between "the forces of the revolution and those who oppose it and are afraid of democracy" because of the threat to their interests and loss of power, rather than a conflict about ideology.

The government has been under attack for failing to protect the security of opposition groups, including from Islamist activists, and delays in reforming a corrupt and heavy-handed police force. Opponents of the ruling coalition have also accused Ennahda of wanting to insert sharia law into the new constitution, though that has been ruled out.

Four extreme Salafists have been arrested for Belaid's murder, but the ringleader is believed to have escaped to Algeria. "The investigation is not yet concluded so we still don't have a final result as to who was behind it and their real aims," Laarayedh said. Interior minister at the time of the murder, Laarayedh has promised to respond to pressure to crack down on violent jihadists.

But speaking in a former palace of Tunisia's one-time Ottoman rulers, he added that Salafism included non-violent as well as violent trends. "We have no partnership with them and have a different view of society, religion, citizenship, women's rights and elections. The state guarantees the freedom of all to exercise their beliefs peacefully, but if they force their views on others, it will act against them within the law."

The issue has been inflamed since the French military intervention in Mali, which the government criticised. Senior official sources confirmed that the government refused French requests to open its airspace for the intervention, unlike Algeria.

"Wars are easy to start, but bringing them to an end is much more difficult," Laarayedh said. "We don't support intervention in other people's affairs and we don't accept others to intervene in ours. Revolutions, wherever they happen, strengthen national independence and sovereignty," he said.

The prime minister rejected opposition criticism that the government has failed to confront the crisis of unemployment and poverty which triggered the 2010-11 uprising or break with the dictatorship's IMF-favoured economic policies. The government backed a social economic model closest to the Scandinavian countries, Laarayedh said, arguing that in the US and Britain there had been "freedom and growth but problems with social equality", while socialist economies had "growth and social justice, but problems with freedom".

He also insisted that "no conditions have been imposed" on Tunisia in negotiations with the IMF for a standby loan facility, which is close to agreement. He said his government was trying to diversify economic relationships from its reliance on France and the crisis-blighted EU to other parts of the world, including China, Turkey, Latin America and Japan.

Laarayedh's transformation from political prisoner to government minister was dramatic. "My appointment at the head of the interior ministry proved that a real revolution had taken place, as I was one of its victims. But in my job as interior minister I disregarded what happened to me personally." He was sentenced to death, tortured and spent 14 years in prison, 13 of them in solitary confinement, for his political activism with the Ennahda movement, which was violently repressed under the Ben Ali dictatorship. Laarayedh's wife, Wided Lagha, was sexually abused by interior ministry officials.

The key to surviving years of solitary confinement, he said, had been "to stand back and analyse every small thing that happens to you – rather than just accept the situation and allow your mental capacities to be degraded. Without perseverance you risk losing your mind."

Comment, page 31

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Europe's flesheaters now threaten to devour us all | Seumas Milne

Cyprus risks deepening the eurozone crisis as austerity is failing across the continent. Resistance will have to get stronger

Europe's flesheaters are back. The claim that the worst of the eurozone crisis is behind us now looks foolish. The deal forced on Cyprus by the German-led Troika at the weekend isn't a bailout: it will effectively destroy the island's economy. Instead of getting a grip on its grossly inflated banks, it will impose a brutal credit contraction, combined with sweeping cuts and privatisations, wiping out perhaps a quarter of Cyprus's national income. Ordinary Cypriots, not Russian oligarchs, will pay the price.

Of course Cypriot politicians are to blame for having allowed the country to be turned into an adjunct of a bloated financial sector and a refuge for hot Russian money. But what tipped the divided island over wasn't foreign investors' sharp practices, but the impact of Europe's wider crisis on its banks: in particular, their exposure to devastated Greece, currently also in the Troika's tender care.

Some have hailed the fact the raid was carried out on Cypriot bank deposits over €100,000, rather than the public purse. At last the rich and those responsible for private banking failures are being made to cough up, it's been said. Which would have been a good thing. But it's savers, not bankers or shareholders, who are taking the 40% hit. And many of the targeted depositors, such as pensioners, are scarcely rich – or are small businesses which will now go bust.

The Cypriot government should instead have learned from Iceland: taken over the banks, isolated the bad loans, protected deposits, imposed losses on the wealthy, and used a publicly owned banking sector to rebuild the domestic economy. That would have offered its citizens a better future, almost certainly outside the eurozone. But it would have also encroached on private capital's privileges and clearly couldn't be tolerated. Instead, in classic EU style, Cypriots have been given no say, while German MPs vote on the deal. Meanwhile, Cyprus's banks are still closed and capital controls will start to erode the euro as a genuine single currency. As the Greek economist Costas Lapavitsas argues, Cyprus has "reactivated" the European banking crisis.

Not that it had been resolved. Only last month the Dutch government was forced to nationalise the Netherlands' fourth biggest bank, SNS Reaal, partly because of its over-exposure to losses in Spain. But since the European Central Bank president Mario Draghi pledged last year to do "what it takes" to save the euro, market fever had subsided.

Now the Troika's decision to help itself to Cypriot savings has paved the way for a new contagion. In the short term that may be contained because of the island's minuscule proportion of eurozone output. But the move has demolished confidence in bank deposits – a point rammed home by the Dutch finance minister's blundering signal that the deal had set a precedent. That could easily turn into bank runs in states likely to need new bailouts, as investors move cash to safer locations. Given the spectacular failure of austerity across the continent to overcome the crisis, rather than deepen it as output shrinks and debts mount, more such breakdowns are clearly on the cards.

The eurozone has now become a zombie zone. And any further deterioration can only deepen Britain's own crisis. Whatever the focus of the meltdown in each country – banking in Cyprus, property in Spain – all flow from the same crisis that erupted in 2007-8 out of a deregulated profit-hunting credit boom across the western world and has delivered a prolonged depression. In the eurozone, the impact of that systemic failure is made worse by a lop-sided one-size-fits-all currency straitjacket that was always going to come apart under pressure. In Britain, the power and weight of the City of London are a particular block on sustainable recovery.

But across Europe, people are being held to ransom by banks, bondholders and corporations determined to ensure that it's not they who bear the costs of the crisis they created – and politicians who regard it as their job to oblige them. So even though Britain is facing the threat of a triple-dip recession, George Osborne last week ploughed on with a regressive austerity programme that is manifestly failing in its own terms but offers lucrative corporate opportunities in the spaces opened up by the rolling back of the state.

Next week some of the Cameron coalition's most brutal cuts will kick in – including the deeply unpopular bedroom tax – just as anyone earning over a million pounds a year gets an annual tax cut of at least £42,295, and local councils face the loss of a third of their budgets by 2015. Resistance to death-spiral economics is hardening across Europe, but so is political polarisation. Alexis Tsipras, leader of Greece's radical left party, currently leading in the polls, compares the situation to prewar Weimar Germany. Cameron is not the only leader using anxieties over migration to deflect anger at the impact of his own policies.

In Britain, public opinion has long balked at the government's cuts programme and is now increasingly opposed to attacks on welfare. That mood was reflected in last week's rebellion by 44 Labour MPs against their leaders' decision not to oppose retrospective legislation imposing benefit sanctions on unemployed people refusing private "workfare" schemes. Today unions and community groups launched a national "people's assembly" to mobilise against austerity. One way or another, resistance has to get stronger – or they'll devour us all.

Twitter: @SeumasMilne

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Budget 2013: our panel's verdict | The panel

Following George Osborne's budget speech, our columnists give their views

Aditya Chakrabortty: 'A budget designed for the Conservative voter'

You can trace a historical trajectory to George Osborne's budget speeches. Briefly, it goes: Summer 2010, fiscal pain now, economic gain later; Spring 2011, a call for a March of the Makers, with policies designed to rebalance Britain away from the City and towards other industries.

And then you get this one. The chancellor can no longer promise a turnaround before the next election: public sector debt is now forecast to keep rising as a proportion of GDP all the way till 2016. What he offered instead was a budget that manages economic decline in terms designed to appeal to the Conservative voter. So there's now even more state money going towards helping people on and up the housing ladder – on top of all the Bank of England billions to boost lending that have instead gone into cheaper mortgages. Another push down on fuel prices. And a raid on public-sector pay and pensions, in order to fund cheaper childcare for working families.

None of these measures cost a huge amount: given the penny Osborne's just taken off a pint, it might even be called small beer (sorry). But put together, they carry faint echoes of the 80s. Thatcher's Right to Buy is now Cameron's Even Righter to Buy. The March of the Makers is now Aspiration Nation, and the rhetoric about making Britain more productive has been replaced with a return to that age-old British obsession with the property market. Rebalancing is dead; long live the old, busted economic model.

Now, add all that to the Office for Budget Responsibility's projection that by 2015 real wages will be 9% below where they were in 2009. So, indebted Britons are being encouraged by the chancellor to take on more debt, despite the fact that they're getting poorer. Anyone else see a problem with that?

Seumas Milne: 'It's a package that clearly won't work'

By any objective measure, George Osborne has just 'fessed up to failure on a gargantuan scale. Growth forecasts halved for the year. Borrowing and the deficit up – £121bn to £123.2bn – once special factors stripped out. Debt target missed by an extra year. Living standards and real wages set to fall for the rest of the parliament. Even in the coalition's own terms, this is an economic disaster.

But people know that already. So the man who can't appear in public without catcalls and booing tried to change the subject with a dash of Thatcherite populism: a penny off a pint and frozen fuel duty, cuts to employer's national insurance contributions and, more significantly, mortgage guarantees and loans for newbuild homes and low deposits.

But like the rest of the budget – with yet another cut in corporation tax to 20% – the impact will be heavily regressive and skewed to benefit the well-off and corporate Britain (along with other choice Tory wheezes, such as shale gas subsidies). All in time for next month's tax cuts for the richest.

But just as crucially for the government and the country's future, it's a package that clearly won't work – if work means kickstart a stagnant economy. The boost to capital spending is too small, and paid for by other cuts, to make the difference. The real cut in public sector pay has been extended once again.

Even the over-optimistic Office for Budget Responsibility is estimating the budget's growth effect at only a pitiful 0.1%. Featherbedding the corporate sector and the wealthy won't deliver recovery, let alone share the burden of failure. This is a budget for continued depression.

Ellie Mae O'Hagan: 'Osborne is insulting people with tokenistic offerings'

You can really see where George Osborne is heading with this budget. He's knocking money off beer, he's talking about home ownership, he's lowering fuel duty. In short he's attempting to appeal to what he thinks ordinary people want, which is bound to fail as Osborne – the millionaire son of a baronet who hangs out with old Etonians – has no idea what ordinary people want.

Meanwhile the OBR's Robert Chote says it has revised down forecasts for UK salaries. That's what people will feel. Who cares that beer is marginally cheaper if you can't afford to go to the pub? Osborne is insulting people if he thinks they won't grasp the reality of the budget because he's peppered it with a few tokenistic offerings. I saw nothing in this budget to address falling wages, a decline in living standards, a rise in poverty, and the loss of so many public services that people rely on (like all the A&E wards that are being closed). I can't believe this government doesn't realise that life is getting harder for most people in this country, as it's all over the news all the time. I can only conclude that, as long as their extravagant lifestyles continue, they don't care.

Andrew Gimson: 'Osborne is reminiscent of Gordon Brown'

It is all very well for the chancellor to boast about the 1.25m new jobs created in the private sector. His backbenchers yearn to be given jobs in the public sector – as future ministers. But their best hope remains a Tory victory in the general election in 2015. So for them, the central question about this budget is whether or not it makes an overall Conservative majority at the next general election more likely, after which they would be able to dispense with the Liberal Democrats' services.

But there was little in George Osborne's speech to encourage the Tories to believe it will mark a change in their electoral fortunes. The one thing that the chancellor had been very good at was keeping expectations low. It was generally accepted on the Tory benches, and elsewhere, that Osborne had "no room for manoeuvre".

The chancellor instead tried to make a virtue of sticking to his course. But his self-righteous anger is becoming reminiscent of Gordon Brown. There were a few sweeteners to try to cheer people up. Osborne cancelled the fuel duty increase, took "a penny off the pint" and promised to reduce taxes on the poor and on business.

He also tried to cheer us up by using the word "aspiration" over and over again. In Osborne's mouth, this became a way of promising "jam tomorrow" without using the word "tomorrow". He proposes to "energise the aspirations of the British people". But has he energised the aspirations of his own backbenchers? Their glum demeanour suggested that he has not.

John Harris: 'This budget highlighted a crafty, populist sensibility'

"Political message of budget – squeeze spending to cut taxes. Fuel duty frozen, alcohol duty escalator scrapped, beer down, tax allowance up," tweeted the BBC's Nick Robinson, in between marvelling at the early release of its contents in the Evening Standard. And fair play to George Osborne: what with the (eventual) move on childcare expenses, and that new, bold-looking help-to-buy scheme, the headline measures in this budget highlighted a crafty, populist sensibility that was sorely lacking from last year's fiasco.

That said, Ed Miliband's bravura demolition of the government spoke a few home truths. "Millions paying more, so the millionaires can pay less", was an easy, but effective, line. Obviously, incomes continue to flatline while the cost of living is rising, something the opposition can use to potent effect. But there is a danger in the current terms of debate: at the moment Labour is too fond of stating the blindingly obvious rather than promising any kind of convincing alternative – and in the public mind, one side's statistics, slightly platitudinous rhetoric and hotchpotch of measures may very well collide with the other side's equivalent, leaving most people stone cold.

We all know what gets Osborne out of bed: a quintessentially neoliberal fixation with supply-side economics; indifference to the economy's iniquitous basic structures; and the apparent belief that the cuts can go on, regardless. Labour needs a coherent, policy-rich vision of something entirely different. The clock is ticking: 2015 is much nearer than some people would like to think.

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