Andy Beckett's Blog, page 30

Britannia Unchained: the rise of the new Tory right

A group of Conservative MPs are trying to seize the political agenda with some of the most rightwing ideas the party has seen in decades – and many are taking them seriously

'The talented and hard-working have nothing to fear," says Dominic Raab, Conservative MP for Esher and Walton, with just the faintest hint of menace. It is an airless, lazy day in mid-August. The House of Commons cafe is half-deserted. But Raab, firm-jawed, slightly gaunt and a rising star of the Tory right, is spending the parliamentary recess in the traditional manner of ambitious politicians: using the Westminster news vacuum to attract attention to himself and his ideas.

Wearing jeans, the 38-year-old backbencher is talking – warily – about transforming the British workplace. He thinks current employment law offers "excessive protections" to workers. "People who are coasting – it should be easier to let them go, to give the unemployed a chance. It is a delicate balancing act, but it should be decided in favour of the latter."

Last Friday, a leaked fragment from a book co-written by Raab and four other Conservative MPs, Britannia Unchained: Global Lessons for Growth and Prosperity, due to be published next month, appeared in the London Evening Standard. The passage, red meat for phone-ins and columnists ever since, argued less politely for an improvement in our national work ethic: "The British are among the worst idlers in the world. We work among the lowest hours, we retire early and our productivity is poor. Whereas Indian children aspire to be doctors or businessmen, the British are more interested in football and pop music."

Further detailed revelations about the book remain forbidden by a pre-publication embargo. But having read it, I can safely say that Britannia Unchained has a brevity, pace and scope that elevates it a little above the usual pre-party-conference polemics. "Britain is at a crossroads which will define our place in the world for generations," begins one of its publisher's sales pitches. "From our economy, to our education system, to social mobility and social justice, we must learn the rules of the 21st century, or we face an inevitable slide into mediocrity."

When I speak to Raab again after the Evening Standard extract, he says it gave "a skewed and inaccurate reflection of what is in the book". Yet over the last year he and his co-authors, all of them members of a new Conservative parliamentary faction called the Free Enterprise Group, have made little secret of the harsh medicine they believe Britain needs to take. Last year, for example, Raab wrote a paper for the Centre for Policy Studies (CPS) – since the birth of Thatcherism one of the radical right's fiercest thinktanks – urging that "the definition of fair dismissal should be widened ... to encompass inadequate performance ... [This] would help employers get the best from their staff." The paper also argued for exempting small businesses from paying the minimum wage for under-21s, the already less-than-lavish hourly sum of between £3.68 and £4.98.

Raab has been an MP barely two years. Before winning a huge majority of 18,593 in one of the wealthiest seats in the country, he studied law at Oxford and Cambridge, practised in the City of London, and worked at the Foreign & Commonwealth Office. He only joined the Conservative party in 2005, after the worst of its modern slump was over. Yet during our interview, it steadily becomes clearer that his confidence derives from more than this assured personal trajectory. There is also his belief that the radical right's time is coming. "I'm a big Thatcher fan," he says, dropping his guard a little as the interview approaches its end. "The coalition has done a lot of good incremental work, on the deficit and so on. Do I think we need a more decisive shift to build on what the coalition has done? The answer is a definite yes."

It may come as a surprise to those who already consider the coalition a tough government, with its hairshirt rhetoric and seemingly endless spending cuts, but a growing number of Tory backbenchers, business figures, commentators and thinkers feel that the coalition – and by implication, other austerity governments across the west – is not nearly tough enough. Since 2011, as the British economy has slumped, this energetic but largely unnoticed political alliance, somewhere between a lobby group and a proper movement, has begun to show its strength.

Since last autumn there has been the smouldering controversy about the Beecroft Report, a government-commissioned review of employment law by the powerful venture capitalist and Tory donor Adrian Beecroft. His recommendations, even more wide-ranging than Raab's – including the loosening of regulations covering the employment of children – have so far proved too contentious to be adopted by the increasingly fragile coalition. But they have become close to a sacred cause for the administration's proliferating critics in the rightwing press. Sometimes the demands for bolder government are frank: "Come on Dave, be brave," [paywall] urged the Sunday Times in May. "A bonfire of regulation was promised, but few businesses report any relaxation in red tape." Sometimes the demands are more oblique: last month, a series of Daily Telegraph articles themed as "Britain Unleashed" mixed essays on the virtues of unfettered capitalism with admiring references to other countries – usually Asian – where supposedly more red-blooded free markets operate.

In January, the chief executive of Britain's biggest insurer Prudential, Tidjane Thiam, told the annual gathering of the global elite at Davos that across Europe, "the minimum wage is a machine to destroy jobs." Speaking at the South Bank Centre in London the following week, the far-sighted BBC economics journalist and author Paul Mason interpreted Thiam's remarks as a sign of an emerging "more radical version of neoliberalism, where we're basically, finally, told: 'The race to the bottom, to be like China, is on, and we're all going to do it. So your wages will meet the Chinese somewhere, and so will your social conditions ... abolish minimum wages, abolish social protection." In the audience, which had gathered to hear Mason talk about the leftwing, street-politics response to the economic crisis, not a formidable new rightwing one as well, there were a few seconds of uncomfortable silence.

"The European economic and welfare model – I think it's over," says Mark Littlewood, director of the Institute of Economic Affairs (IEA), like the CPS a veteran British free-market thinktank reinvigorated by current possibilities. He favours cutting state spending in Britain by over a third, and leaving citizens with a "basic safety net". Yet he finds the coalition far too cautious. "There has been an incredibly modest reduction in public spending. It's as if the coalition have arrived at the scene of a road accident: they've urgently applied a tourniquet to the bleeding patient, but that's it. There's no rehabilitation programme to make the patient leaner, meaner, fitter." In part, he blames Tory fears about their party becoming "retoxified": "I've argued at the top levels of government, 'Scrap the minimum wage.' But then there's a sharp intake of breath. Anything that looks like a return to the Dickensian workhouse raises hackles. But I don't want people working in sweatshops at 5p an hour. You should sell abolishing the minimum wage in positive terms, as providing young people with a first step on the jobs ladder, as a 'jobs for all' scheme."

Tim Montgomerie, editor of the influential Tory website Conservative Home, says the coalition has placed itself in the worst of both worlds, "talking tough but not acting tough". Also, until late 2008, well into the financial crisis, the Tories supported increases in public spending over deficit reduction; then they abruptly reversed their position. Montgomerie argues that this opportunistic radicalism is not respected by voters, hence the government's poor poll ratings. Like Littlewood and others, he favours a more authentically bold approach, a "rescue plan for the country" involving much deeper spending cuts, a loosening of the planning system and reduced employee protections.

"It's a pretty depressing time for the Conservative party," says Montgomerie, "but the thing that gives me hope is the [parliamentary] class of 2010, and all the groups they've formed. Of those groups, the Free Enterprise Group is the group. They're quite spiky in their opinions, but well respected by the Conservative leadership. They are George Osborne's favourites. He has spoken to them. In some ways, it helps him to have them, so he can say, 'I'm not the [government's rightwing] outrider.'" In June, a cover story on the group in the Tory house magazine the Spectator announced, "Not since the late 1970s has there been a group of Tories thinking so hard, with such freedom, about the future of their country."

Founded in October 2011, the group lists 38 supporting MPs on its website. The membership is youngish, more female and less white than the Conservative parliamentary party as a whole. It includes many of the new MPs currently identified by Tory-watchers as potential party leaders, including Raab, Kwasi Kwarteng, Priti Patel and Elizabeth Truss. The fact that David Cameron leads a coalition rather than a Conservative administration has given the group a rare freedom to criticise government policy and suggest alternatives. Sometimes these are less fearsome than you might expect – Raab likes the French healthcare system; Truss admires the German economy – but often the foreign models cited are Asian, and the underlying message for Britons is relentless: raw capitalism is the only game in town, and you need to start working much harder. "We can all graft," says Raab.

The group do not expect this revolution to happen overnight. Last year, Raab and his co-authors published a predecessor to Britannia Unchained for a smaller publisher, titled After the Coalition: A Conservative Agenda for Britain. "The last 30 years of public debate in Britain has been dominated by leftwing thinking," the introduction rather startlingly declared, as if the transformative 18 years of the Thatcher and Major governments had never happened. On the new radical right, there is sometimes a reluctance to compare the changes envisaged for Britain to Thatcherism: partly, you suspect, because the supposed need for these changes implies that her rightwing project, to a degree, failed; and partly because she was just so divisive. "Raab and the Free Enterprise Group are a million miles away from Norman Tebbit in the way they present their arguments," says Littlewood.

Yet he and the others may have to wait longer than the next general election before implementing their vision of what you could call "austerity max". A Tory majority in 2015 looks increasingly unlikely, let alone one big enough to sustain a truly iconoclastic government. And would ever more radical policies really revive the party's sagging popularity? Labour leftwingers were derided in the early 80s for making exactly that argument. History proved their critics at least partly right. Also, Montgomerie acknowledges, all the coalition's austerity rhetoric since 2010 means that "Toughness is a harder sell now [for the Tory radicals]. The government has already played the 'tough' card."

Public opinion has turned flintier in recent years on welfare spending. But such a mood swing often occurs at the end of Labour administrations and the beginning of Conservative ones, and often reverses, into distaste at an "uncaring" government, once the British right has been in power for a few years. The popular mandate for the coalition's broader spending cuts, if it ever truly existed, has already crumbled. And on tax and capitalism in general, public opinion is, if anything, moving leftwards, as tax cheats and feckless bankers solidify into popular demons. Littlewood admits, "There isn't yet a readiness from the British public to say, 'We've got to go back to the [rightwing] drawing board.'"

In radical right circles, it is strikingly common to hear comparisons between Cameron's government and that of his Tory predecessor Edward Heath: narrowly elected in 1970, briefly tough before a chaos of U-turns, replaced in 1974 by an often equally beleaguered Labour administration – before the right's big moment finally arrived in 1979, with Thatcher's election. If history repeats, which it rarely does exactly, we should expect the Unchaining of Britannia to commence in 2019.

In the meantime, after half a decade, already, of widespread pay freezes and anxiety, and with Labour under Ed Miliband quietly accepting that they will next hold power in hard times too – "There is a new world out there," the much-tipped young Labour backbencher Stella Creasy recently told this paper, "in the next [government] spending review absolutely everything should be on the table" – the toughening-up of Britain is arguably well underway.

Are we a nation of idlers? I'm not sure we were completely complacent even during the fat years of the 90s. Here is Tony Blair at the 1999 Labour conference: "All around us the challenge of change ... technological revolution ... global finance and communications ... These forces ... wait for no one and no nation." Perhaps it is the fate of all old nations to be told to pull their socks up by politicians.

ConservativesEmployment lawEconomic policyMinimum wageEconomicsTim MontgomerieBeecroft reportAndy Beckett
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A New Kind of Bleak by Owen Hatherley – review

Andy Beckett takes a melancholy tour of our bankrupt urban scene

Over the past four years, as shut-down shops and crass new towers have filled our cities, Owen Hatherley has busily constructed a cult reputation as the angry young man of British architecture criticism. His leftwing politics, quick put-downs and, perhaps above all, the sense that he speaks for a rarely represented generation that has not benefitted from gentrification, the property ladder and the other urban booms of the last 30 years, make his books fierce and original.

They are also sad. This sometimes exhausting travelogue is a loose sequel to 2010's A Guide to the New Ruins of Great Britain, which was an unforgiving examination of the glassy, brittle buildings of the Thatcher and Blair eras and also a defence of, and lament for, the postwar concrete landscape they replaced. A similar melancholy fills A New Kind of Bleak. Gazing at the beached whale exterior of Preston's sweeping 60s bus station, celebrated by some but long threatened with demolition, Hatherley writes: "It's the very model of a civic building - taking something everyday and ennobling it." Yet inside, he acknowledges, "the original signage battles with recent tat, a good scrub is overdue, and the clocks have stopped."

Since 2010, the recession has given many of his beloved municipal structures a stay of execution. Except in the ever shinier city-state of central London, their replacement by malls and "luxury" flats has almost halted. From Bradford to Edinburgh, British cities have great holes in the ground where tacky 21st-century buildings were supposed to be. This leaves Hatherley feeling mildly relieved and vindicated, but also with a tricky subject this time round: "an interregnum, a time in which the new has not yet been born". The coalition "have not created a specifically new space; nothing has been built in the new Enterprise Zones, few Free Schools have been planned, no Localist housing schemes are on the drawing board."

His solution is to criss-cross the country even more energetically than in this book's predecessor. With a politically pointed preference for public transport and walking, he visits the winners of the British urban economy since the 70s, places still prosperous and confident-seeming despite the current slump – Brighton and Oxford, Aberdeen and Edinburgh – and the losers – Middlesbrough, the Welsh valleys, parts of the west midlands. Noting the wasteland and lack of recent buildings in the centre of Walsall, he writes mordantly: "The boom clearly hasn't reached this far, although the crash most certainly has."

Nearby in West Bromwich he assesses a lonely monument to the Blair-era belief that single, spectacular buildings could spark vaguely defined regeneration. The Public, "a gigantic, purple Big Shed" designed by the then fashionable architect and city visionary Will Alsop as an all-encompassing local arts venue, briefly went into administration before it even opened in 2006. "Opulently overstuffed" with garish, childish decorative details, The Public seemed a likely folly even in less austere times. Nowadays, concludes Hatherley, "it's hard to suppress the urge to vandalism."

Yet elsewhere he does find a few buildings for which to be grateful to New Labour. In Barking in east London, he notes "robust" recent terraced houses by some less famous architects whom he describes as "sober brick austerity types". Elsewhere, he praises designs for being "serious" or "careful", for their "severity". The built environment he prefers is brooding, craggy, proletarian, industrial, unapologetically northern – even the end-of-the-road nuclear submarine-building town of Barrow-in-Furness – rather than southern, suburban, aspirational, faux-Mediterranean.

Hatherley grew up in Southampton and lives in London, so there may be a touch of the hair-shirt to his tastes. But one of his many strengths as a critic is an ability to express ambivalence – a welcome surprise given the certainties of his politics. In Barrow, he finds the vast submarine factory both horrifying and "genuinely astonishing, a Death Star clad in corrugated metal … the size of several towerblocks stacked end-to-end". The book climaxes with an exhilarating exploration of the City of London, which reluctantly acknowledges that its profit-graph spikes and plunges are probably modern Britain's best piece of large-scale urban design. Yet he never relaxes his conviction that this architecture is, as he puts it, "the exterior decoration of evil".

Not every chapter here is as successful. A long and digressive introduction contains sections of polemic and political generalisation that suggest a rising, multi-tasking writer stretching his opinions a little too thinly. And elsewhere, for all Hatherley's invigorating depth of historical reference, there are occasions when his travelogue feels too impressionistic. A generally approving inspection of Edinburgh concentrates on the stony magnificence of the wealthy city centre, and only fleetingly mentions the fact that most of the poor live on distant council estates. Given Hatherley's authority on the latter (for one thing, he grew up on one), his verdict on this shabbier outer Edinburgh would have been worth having.

There are also tantalisingly brief treatments here of recent, often highly political disruptions to the British urban landscape: last summer's riots, last year's student marches and occupations, the Occupy encampments. From flaming barricades to police kettles, all these generated their own, temporary architecture; so has the recession itself, with its emptied-out high streets, and the remaking of city centres, for good or ill, that they suggest. But it is not a prospect that Hatherley explores.

Such omissions may well be rectified in future volumes. In the meantime, there are more than enough fresh insights and images here to be getting on with. The best, most thought-provoking passage of all is a series of interviews with members of Building Design Partnership [BDP], long-established modernist architects who once called themselves socialists and were among his heroes. Meeting one of the firm's key postwar figures, now very old, "I ask about Preston Bus Station [which BDP designed] … He points out that he has been lobbying and preparing plans for its replacement with a shopping mall."

Architects can change the world, Hatherley's early writing often excitedly and excitingly declared. This book suggests that more often the world changes them.

• Andy Beckett's When the Lights Went Out is published by Faber.

ArchitectureArt and designSocietyAndy Beckett
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Falklands 30 years on: oil dream could end days of squid and subsidy

Margaret Thatcher asked a Labour peer how to maintain islands after the war. The answer: state aid

Falklanders love to give visitors history lessons. A favourite is that the 1982 war with Argentina, for all its horrors, brought attention to their previously neglected archipelago. A social and economic revolution has followed.

The capital Port Stanley, where four-fifths of the islands' swelling population of 3,000 now lives, has been transformed from a huddled, melancholy imperial backwater to a sprawling, even slightly brash regional hub. A few older Stanley residents still wear blazers, as if to a 1950s golf club. But most local men favour fleeces, mirror sunglasses and goatee beards - the confident, outdoorsy uniform of the prosperous white southern hemisphere.

"This is a much more entrepreneurial society than it used to be," says Keith Padgett, chief executive of the Falkland Islands government. "We've been pretty well insulated from the world's [recent] economic decline. Last year we [the government] had a £16m surplus."

That this long boom has occurred since the liberation of the islands by Margaret Thatcher's government ought to add an economic gloss to her narrow military triumph. The truth is a little more complicated. For she is less consistently revered here than another pivotal figure in the Falklands' recent history. His template for the boom, four decades old but still being followed, derived from the economic philosophy she supposedly discredited: the state-directed capitalism of mid-70s Britain.

Lord Shackleton, who died in 1994, was the son of the Antarctic explorer Ernest. He was a postwar Labour MP, then an influential peer and minister, yet he retained his father's fascination with the south Atlantic. In 1975, he visited the Falklands for Harold Wilson's government to conduct an economic survey. As a tiny, remote British possession over-reliant on sheep farming, the islands' worsening struggles had intermittently concerned Whitehall for decades. With a small team of British experts, Shackleton spent weeks criss-crossing the Falklands, ultimately meeting "the majority of the population".

Terence McPhee, then a teenager, was one of them. "He struck me as being very shrewd," McPhee remembers. Shackleton interpreted his remit widely – "He asked me and my friends what we thought about Argentina" – and drew harsh conclusions. In Stanley and the countryside, or Camp, he found high divorce rates, too few women, and too much drinking; farm labourers with a dependence on their employers that was almost feudal; stingy and worn-out public amenities; and a crippling lack of career opportunities or enterprise.

His solution was state investment: "The enlargement of government, both in its role and capability, is essential." He recommended building more roads, and a much bigger school and airport; government assistance for tenant farmers who wanted to buy their land; investigating whether there were oil and gas resources offshore; and creating a fishing zone around the islands. Funding for all this should come largely from London. By the time his report was published, in 1976, the British government was in a mid-70s financial crisis, and only a few of his more minor recommendations were implemented. Then came the war. Even while British troops were still fighting for the mountains above Stanley, Shackleton was asked by Thatcher to urgently update his report, as a blueprint for the Falklands' postwar reconstruction.

He stuck closely to his original recommendations, and, this time, Whitehall found the money to implement them. In Britain at least, amid the euphoria at the defeat of Argentina, the strangeness of the Shackleton-Thatcher alliance was barely noted. Even today, the public sector pervades the islands in a way that feels faintly utopian to any leftish visitor from state-shrinking Britain. Falkland Islands government Land Rovers are everywhere. Stanley's largest buildings are a school and hospital, built since the war. Prescriptions are free. Patients needing complex operations can get government-funded flights to Chile.

The government pays for Falklanders to study at university in Britain. Stanley Services, a ubiquitous company that offers everything from car hire to wine imports to the town's only petrol station, is part government-owned. There is a Falkland Islands Development Corporation, "to do riskier things than business would", as general manager Marc Boucher puts it. Everywhere there is the modernised infrastructure that Shackleton called for: roads, runways, wind turbines. In Camp, says Sukey Cameron, the government's representative in London, "a lot of those roads are virtually people's personal driveways".

This almost Scandinavian level of state provision has not required Scandinavian taxation. There is no council tax or VAT, no tax on petrol or diesel, and income tax is substantially lower than in Britain, with the first £12,000 of earnings tax-free and a top rate of only 26%.

How, with social democracy seemingly in global retreat, has the Falklands managed to install it so cheaply? One answer is the war, and the special treatment that has followed, such as Britain paying the islands' defence costs, currently over £60m a year. This works out at more than £20,000 per Falklander – almost twice the level of all public spending per Briton. Another answer can be found on the waterfront at the boomtown end of Stanley, on a rusty floating dock built by the army in the 80s. Here, a maze of converted shipping containers like something from a Mad Max film houses the offices of the Falklands fisheries department. John Barton, a quiet, precise man in a pale purple shirt, is its director. "The fishing industry has been the driving force for the postwar Falklands," he says. "There are probably more people working on the fishing vessels as we speak than in the whole civilian population."

Since 1986, when a fishing zone was established, based roughly on the 200-mile wartime exclusion zone around the islands, the Falklands government has sold fishing licences to boats from Spain and the far east. This trade has generated between a quarter and three-quarters of the government's entire annual revenue. The turbulent, chilly waters are rich, especially with squid. "If you eat a calamari anywhere in southern Europe, 50% chance it's a Falklands calamari," says Barton. "Falklands politicians come along to us and say, 'Surely, if we want to Tarmac this road, you can just sell another 10 squid licences?' " But fishing is a delicate business. In recent years, squid catches have been far lower than in the 80s and 90s. Climate change may be partly responsible: squid are sensitive to sea temperature. So, probably, are the islands' deteriorating relations with Argentina. Many of the squid swim through Argentinian waters on their way to the Falklands, and since 2005 Argentina has refused to work with the islands to conserve stocks.

With fishing in likely slow decline, most hopes for long-term prosperity now rest on oil. In the 70s the surrounding seabed was found to be a potentially oil-bearing sedimentary basin. In the 90s, exploration licences were sold, some oil was found, but then the oil price collapsed. Now, the price is high again, exploration has resumed and many expect a working Falklands oilfield this decade. "There are strong winds and high seas, but fewer extremes of either than in the North Sea," says Stephen Luxton, the Falklands' director of mineral resources. A floating production and storage vessel could be anchored above the seabed, he says, and oil tankers could fill up there, without the need for a refinery in the Falklands or on the south American mainland. Last week, Argentina promised legal action against any participating firms, but Luxton says that commercial and geographical realities – a Falklands oilfield could function without anyone crossing Argentinian territorial waters – will limit this threat's effectiveness.

The resulting taxes and royalties would bring the Falklands government revenues in the "low hundreds of millions a year without much difficulty". The government's entire annual income is currently £40m. Luxton grew up on a farm on the island of west Falkland, traditionally the sleepiest part of the archipelago. His department is still housed in a bungalow. With oil, he says, "the Falklands way of life will change".

Some older islanders are unsettled by how much it already has since 1982. Before the war, says Nancy Poole, a farmer in her 50s, "it was a lovely place to live, if you weren't hugely ambitious. The whole population was the same: earned similar, did similar. There are extremely rich people now, and there are people trying to live on 10k a year."

Crime is still minimal, but in Stanley some drivers no longer leave their car keys in the ignition. In Camp, people no longer travel to dances in boisterous convoys, ready to tow each other out of the peat bogs, but drive to them alone along the new roads – when they go at all. From a distance, the old Camp settlements still look much as they always have, defiant clusters of wooden buildings on lonely coves and hilltops, but up closer, many houses have been abandoned. The wool price is currently high, but, as elsewhere, farming employs steadily fewer people, and the population drift is towards Stanley. There, a new Falklands society is emerging: only half of its members native-born, the rest a multinational, often transient mix dominated by Britons on temporary contracts, and hundreds of immigrants from Chile and the poorer British Atlantic territory of St Helena. There is Spanish chatter in the streets, and a non-white face behind almost every cash till. Racist mutterings and complaints about foreigners getting the best jobs can be heard in some old Falklands households. Yet generally the new order seems welcome and functioning. At Deano's, one of the rowdiest of Stanley's many utilitarian pubs, the Saturday night disco is crammed with local lads with cans of lager and gelled hair, St Helenans in hip-hop gear, and confident Chilean girls dancing. The groups mix fairly unselfconsciously. On a quieter night, I ask one of the bar staff, a young St Helenan, how the locals treat him. "OK," he says. "As long as you know whose territory you're on."

In 1982, when British troops liberated them, teenage Falklanders were still wearing mid-70s flares. Nowadays they dress and talk just like their British peers. The internet is a great unifier, even if it does cost £100 a month here.

Meat, locally reared, is one of the few Falklands bargains. Lamb chops are 30p each. Stanley residents like British or American comfort food in large portions, and do not walk much, faced with the town's hills and headwinds. New arrivals talk about "the Falklands stone": the weight you gain in your first year. At the hospital, the obesity brought by prosperity is an increasing concern.

How best to digest the likely oil money preoccupies the Falklands government. Luxton predicts further infrastructure, such as a proper Stanley quayside for tourists, who come ashore from Antarctic cruise ships in increasing numbers, but find a town centre fronted by elderly storage sheds belonging to the Falkland Islands Company, a general trading business and landowner in the islands since 1851. Yet a tiny population, even a growing one with rising expectations, can only absorb so much public spending. After that, oil revenues will most likely be invested in a sovereign wealth fund. The Shetland Islands, another lucky British archipelago, has had one since North Sea oil was found nearby in the 70s, and Falklands officials have become regular Shetland visitors. Some Britons, enduring austerity at home, and aware the Falklands owe their continued existence to British defence spending, may find a glut of oil revenue in the islands hard to stomach. The more sensitive Falklands politicians understand this. Legislature member Mike Summers says the islands should pay for their own defence "once the needs of locals have been met", and perhaps even "contribute to healthcare and schools in the UK". The Falklands subsidising Britain, rather than vice versa, would be a fittingly odd twist to an erratic relationship.

In Britain, it is traditional to see overseas territories such as the Falklands and Gibraltar as fading imperial relics. Maybe that attitude is out of date. Loaded with historical and political significance, visually dramatic, often indulged by visiting journalists, they can have more clout than a poor inner-city constituency. Even the continuing tensions with Argentina may, in some ways, work to the Falklands' advantage. "A row, while unsettling for some here, is an unexpected bonus otherwise: we can get our story out there," says the governor, Nigel Haywood.

Less formal than past governors but just as assured, he sits in the stately drawing room of Government House in Stanley. In the attached conservatory, "the most southerly significant vine in the world", as he describes it, is heavy with fat red grapes. Hothoused by Britain, the improbable south Atlantic implant that is the Falklands may have many years left.

Falkland IslandsAmericasArgentinaMargaret ThatcherAndy Beckett
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I was there for Prince William's Falkland's walkabout

During his Falklands tour of duty, Prince William has been doing some gentle sightseeing in Port Stanley, where our reporter bumped into him

At the time, it probably seemed a good idea for Prince William to perk up his controversial, determinedly reclusive RAF posting in the Falklands by doing a little light shopping and sightseeing in the capital, Port Stanley, late on Saturday morning. Stanley (population 2,500) is often a sleepy place at the weekend. It was half-term. The sun, for once, was shining. And most importantly, perhaps, there were unlikely to be many of the journalists around who have converged here as the 30th anniversary of the Falklands war has approached and Britain and Argentina have refought the conflict rhetorically. The weekly civilian flight leaves early on Saturday afternoons; by the time William walked into the Capstan gift shop on the waterfront, the media were supposed to be at the airport.

But your reporter was still in town buying last-minute presents. As I rushed into the shop to grab Falklands fudge and fluffy penguins, there he was. Tall and slightly gawky, in a bright blue Lyle & Scott jumper, jeans and stained trainers, and holding a half-full Capstan carrier bag, he stood in one of the aisles like some protected species of giraffe, discreetly ringed by half a dozen other browsers with a watchful air and military haircuts.

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Falklands tensions serve all parties - except the Falklanders

Argentina's spat with Britain over the Falklands benefits politicians and military officers, but not the islanders themselves

When Argentina invaded the Falklands in April 1982, it came as a shock to most of Whitehall. With communications to the islands disrupted, for several excruciating hours Margaret Thatcher's government, then not known for its competence, was unable to confirm if the islands had actually been captured.

Thirty years on, tensions between Britain and Argentina over the islands have been building up much more steadily, publicly and self-consciously.

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From hung parliament to age of uncertainty

After Gordon Brown's resignation and with all three main parties in coalition talks, has the hung parliament ushered in an era of profound social and environmental turmoil?

Six days ago, in another political era, I was in Montgomeryshire in Wales waiting for David Cameron. It was the last day of the campaign, mild and still, and outside a photogenic primary school in a soft valley, a cluster of Conservative volunteers had assembled with "Vote For Change" placards. I got talking to one of them, a middle-aged businessman who seemed unusually frank for a party worker.

He began by predicting that his party would win the election with a tiny, weak majority. Then his ruddy open face turned even graver. "We're living in a public sector bubble in Britain," he said, "and someone's got to prick it. Unfortunately it's the Conservatives. There's a real danger that we'll be very unpopular. Out canvassing, I've just had someone on the doorstep shouting at me about what Maggie Thatcher did to the country in 1980."

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The New Old World by Perry Anderson | Book review

Andy Beckett is impressed by a study of the European Union's past, present and future

This is a hugely ambitious and panoramic political book, of a sort rarely attempted in our era of quick leader ­biographies and reheated histories of the second world war. Perry Anderson's stated subject is the past, present and future of the European Union; but his restless chapters keep roaming beyond this already vast territory to trace out a broader history of Europe, taking in everything from architecture under Mussolini to the decline of the Ottoman empire.

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Guido Fawkes: The blogger who knows the power of gossip

Andy Beckett meets the rightwing mischief-maker whose 'tittle tattle' is feared by cabinet ministers

For a decade starting in the early 90s, every July a young Irishman with a reckless side used to head for Pamplona. He and friends would take part in the Spanish city's famous Running of the Bulls. As he got older and stouter, the Irishman kept ahead of the bulls by running steadily less, of the course.

By 2002, when he was 35, "I used to wait in the town square about halfway along the track and run from there," he remembers. "That year, the cannon goes off for the start. I carry on chatting to a nervous boy from Essex. I tell him, 'Just wait until we see the bulls.' Suddenly he pelts. Next thing I know, I wake up in an ambulance."

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Can Sarah Brown rescue Labour?

She has transformed from a near-silent political wife to arguably the most admired and powerful woman in Britain – and a truly modern public figure. How did she do it? And can her extraordinary reinvention help save the Labour party?

Two long years ago, Gordon Brown stood at a microphone stand in front of 10 Downing Street as a brand-new prime minister, and spoke to the crush of cameras with a clarity and force – "This will be a new government with new priorities" – rarely heard since. An awkward distance to his right, and slightly behind him on the otherwise empty tarmac, stood a less composed-looking figure.

During the four minutes that her husband's speech lasted, Sarah Brown pushed her hair away from her face three times as the wind kept blowing it into her eyes. She kept her hands tightly clasped across her stomach. She looked rigidly off to one side. Being the prime minister's spouse is one of the more thankless jobs in British politics: the previous incum-bent, Cherie Blair, like Sarah Brown a successful professional involved in good causes, had gone from admired role model to object of ridicule and fury. On that first day outside Downing Street, Sarah Brown did not seem to be relishing her new position.

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