Michael White's Blog, page 51

Data debate stirs up spooks, pinkos and Julians

MPs finally get round to a debate on NSA and GCHQ spying – but the answers were even vaguer than the questions

Now that the presidents of France, Brazil and the United States have all joined the chancellor of Germany and whistleblower Edward Snowden in seeking proper public debate on the data-mining reach of Anglo-American security services, British MPs moved on Thursday to play catch-up on accountability. Not very many MPs and not much catching up, but it was definitely progress.

It was not a party political debate, not left versus right, spooks vs traitors, or even brains versus brawn, though critics of GCHQ and the NSA could probably muster more GCSEs and PhDs on Thursday than the muscular "Spying is what spies do" spooks lobby, several of whom have "interesting" CVs.

But pinkos and red-blooded types alike were suddenly agreed that assorted bits of opaque legislation – the kind that license James Bond to data-mine – are in need of review and updating. That's progress, too. Nonetheless, a debate like this attracts conspiracy theorists from all sides, so Tory Julian Lewis and Labour's Michael Meacher were both present. Indeed, a suspiciously high number of those taking part – three – were called Julian, the sort of detail that gets GCHQ computers very excited. They were on different sides though, so there is probably no plot. Shame.

What happened? Well, those MPs who felt that Snowden and the Guardian did a public service by revealing the scale of Prism and Tempora and their data-mining capacities wanted to know why parliament's intelligence and security committee (ISC) hadn't blown its own little whistle. Had ISC even known about such hi-tech innovations, asked Julian Huppert (Lib Dem), Tom Watson (Lab) and Tory (libertarian tendency) Dominic Raab, the cross-party trio who initiated the debate?

Labour ISC trusty George Howarth implied that the ISC hadn't – indeed, had only examined the issue after the Guardian's exposé in June, which he deemed legitimate but "unwise". His chairman, Sir Malcolm Rifkind, was more magnificently pompous, as befits an ex-foreign secretary. He couldn't say either way because it was classified! The Julians laughed cruelly. No need to reform the ISC, we've done it already, said Sir Malc in an irony-free passage.

The Huppertites had problems too. Whenever one of them asserted that the Snowden leaks had not undermined western security, one of the spook types asked: how could they be sure? And what crimes exactly had the GCHQ/NSA crowd actually committed, because such accusation upsets law-abiding souls in Cheltenham, asked Lib Dem Martin Horwood? He happens to be GCHQ's MP (Mum and Dad both worked there), and is therefore as much in favour of mining data as Dennis Skinner is coal.

Answers were vague, but no more than when the question was flipped: how could the other side know the legality of what GCHQ gets up to? And why had the wicked Guardian not been charged? Much more to the point, asked the Greens' Caroline Lucas, wasn't the real leaker an NSA that allows 850,000 staff to download state secrets?

As the debate in ancient Westminster Hall wound on and the libertarians (security must not undermine basic freedoms) proved the better-briefed side, the spook faction got a bit dirty, as is their patriotic duty. What about Richard Gott, the public school Trot who had to resign from the Guardian after being exposed for taking KGB hospitality? And surely Angela Merkel must be faking outrage about being hacked considering that then chancellor and leftie Willy Brandt's office was penetrated by communist spies in the 70s?

The spooks stopped short of saying that goateed Dr Huppert bore a suspicious resemblance to Trotsky and demanding DNA tests. But Adam Holloway asked leftie David Winnick if he'd think Snowden a traitor if a British city was nuked by terrorists (duh?). And Julian Smith managed to suggest that Guardian revelations about Tor and the dark web would help arms dealers and paedophiles.

Tor is so secret that it's all over the internet.

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Politics Weekly podcast: HS2, workfare and Russell Brand's revolution

Government plans for a north-south high-speed rail network have come under further scrutiny this week with fears that vital cross-party support for the scheme is ebbing away. In June the government revised the estimated cost of building the link between London and the north of England from £32.7bn to £42.6bn. This week transport secretary Patrick McLoughlin said that the project will be far more difficult if Labour does not "make up its mind" on the issue.

Joining Tom Clark for this week's podcast: columnists Anne Perkins and Michael White; plus reporter Shiv Malik.

Also this week: the government's 'workfare' programmes suffer another setback in the courts.

Plus: does Russell Brand speak for a disillusioned generation of non-voters?

Leave your thoughts below.

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Osborne and Hague cheer arrival of Baron Finkelstein of Pinner

Michael White sees red ermine-trimmed cloak transform Times columnist into cross between Sir Gawain and Ron Weasley

George Osborne took time off from ruining the economy on Thursday. William Hague briefly desisted from ruining abroad to join him in the gilded House of Lords. For 15 minutes or so chancellor and foreign secretary, together with other Tory micro-grandees, crouched on the steps of the throne like deferential garden gnomes hoping for a scrofula cure. Yet Her Maj was nowhere to be seen.

What could have prompted these important people to give the economy and abroad a breathing space by joining this mass cringe? Possibly the formal elevation to the peerage of the Welsh Lib Dem president, Christine Humphreys. As the new Baroness Humphreys of Llanrwst in the county of Conwy, she pluckily took the oath in both English and Welsh, a hanging offence in the good old days.

Possibly not. By the time Lady H shook hands with the Lords Speaker and was politely cheered into the club the micro-grandees had all disappeared for a celebratory G&T. No, the big event which drew the micro-crowd was the arrival into the upper house of Baron Finkelstein of Pinner in the county of Middlesex. The micro-nobs presence was a sign of changing times.

The London suburb of Pinner has been a hamlet since at least 1231, even longer than chancellor Osborne's Irish baronetcy, whereas Daniel William Finkelstein Esquire OBE was just a smart jobbing hack (politics and football) until Thursday, albeit one with form as a party apparatchik and speech-writer. Danny to the rough trade, a Tory columnist on the oligarch-owned Times, appeared in a red, ermine-trimmed cloak. Magic! No longer bald and slightly podgy, he was transformed into a cross between Sir Gawain and Ron Weasley.

A soberly-dressed official called the Silver Cocktail Olive in Waiting (I made that one up) preceded Baron Weasley. As one of his sponsors, Lord Seb Coe, brought up the rear along with the Garter King of Arms (I didn't make that up), dressed in a quartered gold coat which would have looked wonderful emerging from a pop tent at Glastonbury. Silver Cocktail Twizzler did most of the talking.

It seems that some of Baron Danny's football columns (surely not the ones which were hyper-loyal to the party?) impressed the Queen because she called him "right trusty and well-beloved" before offering him a berth in the best care home in Europe and, a novel twist on the Dilnot Report on social care, up to £300 a day just for turning up, no questions asked by Atos.

What's more Silver went on to promise Dan "all the rights, privileges, pre-eminences, immunities and advantages" which go with becoming Baron Dan. These are not what they were when Pinner was young and free beer and cudgels, plus the pick of the local peasant girls, were standard practice, but they are still worth signing on for. In a firm and ringing Pinner-ish voice the new Lord Finko duly swore, just in case Cocktail Olive changed his mind.

Peers dutifully cheered and the Osborne-Hague crew scarpered. It meant they missed Lord Soley's question on the post-Leveson royal charter, a closely followed tussle because most lords are old enough to have been turned over by the Daily Beast at least once. For them the effect of the word "Leveson" achieves what Viagra does for ordinary pensioners.

The house was crowded with faded aristos, assorted Tory and Labour hard men, gentle Lib Dems and a dead ringer for Clem Attlee (his Tory grandson). Deputed to fob off angry peers, the government's mild frontman, Lord Gardiner, didn't sound like a man who could menace a the skin on a rice pudding, let alone a tabloid editor.

But Labour's Lord Alan ("You're fired") Sugar crackled with barely suppressed rage. "Levinson" (sic) had been a complete waste of time and the only reliable facts in the Daily Mail were "the price and the date on the front page", the old brute growled. Sugar wants proper TV-style regulation and he wants it now.

Faced with this under-nuanced position, Lord Gardiner muttered something about the need for a responsible free press which commands public confidence (and sells a few copies too, surely?). "I am afraid I disagree with you in spirit," he ventured timidly.

Paul Dacre will not sleep a wink.

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John Major: a closet leftie after all?

Energy profits tax plea was vintage Major, but it's hard to square 'passionate conservatism' bit with what happened under Mrs T

John Major knew what he was doing on Tuesday when he urged David Cameron's government to impose an excess profits tax on the major energy firms to fund emergency help for Britain's "silent have-nots" this winter if the companies don't curb their unjustified price rises. Famously loyal to his party and sparing in his interventions, Major did it on purpose as a constructive contribution to an urgent debate at a Westminster press gallery lunch packed with reporters. Outside, he repeated his message for the TV crews. Are you listening in No 10?

John Who? Yes, that one. Sir John Major, former Tory prime minister in Margaret Thatcher's wake from 1990 to 1997, still evidently sore about Tony Blair's landslide win which ended his career – bad policies brilliantly packaged, the opposite of his own, Major conceded – but carefully supportive of the Etonian Cameron on most important policies again today.

It was the top news point of an impassioned appeal to political elites not to forget the respectable poor who work hard, pay their way in insecure work and do not make a fuss, the class from which Brixton's Major sprung. That amounted to a radical critique of the new unequal Britain which the Thatcher government (1979-90) consciously strived to create in the name of free markets and his own did too little (he explicitly admitted) to mitigate.

Odd, but there could be no doubting his sincerity. After being patronised in his teens Major has always been fiercely anti-socialist and became chairman of Lambeth housing committee is his youthful banking years. But – as he said again on Tuesday – he despises the caricature which paints all Tories as hard-hearted champions of the rich.

He believes in "compassionate conservatism" and I believe him, though it's hard to square with what actually happened under his late patron, Mrs T.

The speech prompted the Daily Mirror to call him "Red John" – an energy windfall tax would get him dropped from the shadow cabinet, quipped the paper's Kevin Maguire – and the Sun to complain sourly that Major's proposal had handed Labour a propaganda coup. No, replied Sir John (much abused by the Sun in his time), all he had done was to acknowledge that "whichever Miliband it is" (It's Ed, someone called out) had his heart in the right place, but not his brains.

Vintage Major in its way. When he was running for the party leadership against Michael Heseltine in 1990 his campaign ally, David Mellor, took me aside to try and persuade me that "John is the leftwing candidate". How could this be when Thatcher had endorsed him, I mused, refusing to take the bait. But in a real sense Mellor was right.

In Tuesday's speech Major ducked a few tricky issues. Leveson? The press and government's rival charters are not far apart and a concession that keeps powerful ex-editors off key committees might be enough to clinch a deal. Europe? Federalism is "as dead as Jacob Marley" from A Christmas Carol. The "Quit Europe" brigade – Tory as well as Ukip – are engaged in a fantasy belief that a Britain that leaves the EU will get trade benefits at no cost.

Asked about an independent Scotland he said much the same. He favours Cameron's renegotation, says many EU leaders are moving Britain's way but believes it would be utter folly for "Brave Little Blighty" to go it alone. Parties which obsess on Europe, not on bread-and-butter issues, end up winning only the core vote. Hint, hint.

So he wants a "yes" to Cameron (Labour will back a referendum before polling day, he predicts) and a "no" to Alex Salmond. He wants a reform of Britain's parliamentary boundaries, a scandal that gave him a 21-seat majority (30 Tory MPs among them who were "unsound " on most issues) with 31% of the electorate in 1992 and Tony Blair huge majorities. In 2010 Gordon Brown got 29% and 259 seats. He also wants a low cap on large corporate and individual gifts to party funds. It's not corrupt, but looks corrupt. Even state funding is better than that, says Major.

But the main thrust was poverty and the dwindling ability of law-abiding poor people – as he once was – to better themselves in a globalised world where the gap between rich and poor is more sharply defined. The respectable poor "struggle to get on with their lives, struggle to hang on to their jobs," they do not make a fuss. He called them "the silent have-nots" who don't go on demos or make a fuss.

Hence the plea for ministers to intervene if energy firms don't see that 9-10% price hikes at a time when their costs are rising at around 4% is "unacceptable" to Sir John and many others. Tories believe in capitalism but they should be there to protect "people, not institutions", he insisted, and should act when markets fail. Hence the emergency tax to fund extra winter fuel payments if they are needed.

At the end of the session (as the resident oldie I get to ask the last question) I asked Major how he squared his bleak assessment of so many lives – high-rise blocks, lifts that don't work and graffiti – with the ambition of Thatcher's government in 1979 to create a more unequal society? Wasn't poverty and the bankers crash of 2008 the inevitable consequence? By time he got to answer he'd forgotten the question. Smart fellow.

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Political trick or good PR? A short guide to the art of pre-briefing

Nick Clegg's attack on the Tories' free schools policy is a classic case of the pre-brief – a trail of a speech that has actually yet to take place

Say what you like about Nick Clegg (don't all shout at once) but, after three years of hard graft, the deputy PM has completed his first degree in coalition studies and embarked on his master's. No longer soaking wet behind the ears, he craftily parades Lib Dem policy differences with his Tory partners. He duffed up Michael Gove again at the weekend, attacking the education secretary's beloved free schools policy.

Except that he didn't. What Clegg's bagmen actually did was to trail a speech not due to be delivered until Thursday. Why? Partly to generate interest and controversy and frame the argument on his own terms before the Daily Beast moves to distort it and Newsnight follows its lead. Partly because a Clegg speech always risks being crowded out by something more important on the day, so Clegg's team must grab what attention it can.

It's called pre-briefing and it's been around for ever ("Mark Antony to make coded attack on 'honourable' Brutus"), particularly since the tech-led, multi-media 80s combined with Thatcherite deregulation to force politicians to fight for a hearing in a crowded press and 24/7 online market place.

Margaret Thatcher's media manager, Bernard Ingham, was a pre-briefer, as were John Major's spinners. So were Tony Benn's bagfolk at the giddy heights of Bennery. But media-savvy Alastair Campbell took it to new lengths for Tony Blair (he once ensured Blair's speech would include the concept that City investment "is sexy", to get a mention in the priapic tabloids), in competition with Gordon Brown's feral operatives, such as like Charlie Whelan.

Whelan boasted he could orchestrate three days of headlines for a single Gordon Brown speech by selectively leaking juicy bits that would appeal to different paper's prejudices. Wily Charlie was a babe in arms compared with Damian McBride, who has confesses to brutal pre-briefing tactics to favoured hacks in Power Trip, his new memoirs.

In the wrong hands, pre-briefing is a dodgy practice open to abuse. All three – Campbell, Whelan and McBride, along with Tory Andy Coulson – became a story themselves and had to go. Those who live by pre-briefing can also die by it.

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GCHQ: Chris Huhne is asking the right question | Michael White

Huhne is on to something when he asks which ministers signed off GCHQ's Tempora programme in 2006-08

I spent the weekend with an old British friend, now resident in the US and well-versed in the world of espionage, spy-swaps and the inherent duplicity of secretive intelligence services the world over. He reinforced my view that, whatever doubts many of us had about the WikiLeaks affair or Julian Assange, Edward Snowden's data-mining revelations are of major importance to democratic debate.

No wonder then that Chris Huhne returns to the attack in today's Guardian on the triple failure of the press, parliament and the law to address the real issue that Snowden's disclosure highlights, the unaccountable accretion of sensational eavesdropping technology by the NSA and GCHQ.

I can't agree with the disgraced Lib Dem ex-cabinet minister when he calls this development the most catastrophic power-grab in British peacetime history. That strikes me as much hyperbole as the security establishment's counter-claim that Snowden's treachery is the worst in postwar British history, worse than Burgess, Maclean and Blunt at the height of the cold war, when 25,000 nuclear missiles pointed our way.

The lackey press ("45 minutes to an Iraqi missile launch on Britain", anyone?) pumped that nonsense up into "the worst leak in western history". So it's worth recalling that Huhne is a journalist by trade too, albeit an economics journalist, the modern equivalent of the religious affairs correspondent. Exaggeration is what the hacks do in all branches of the business.

But he's on to something in his article when he asks which cabinet ministers signed off on GCHQ's Tempora programme in 2006-08. Margaret Beckett under Tony Blair? David Miliband, her successor as foreign secretary under Gordon Brown? Good question and a change of elected regime is always a good moment for the permanent government to pull a flanker on untried ministers – to win political cover and pass the buck if things go wrong, as they sometimes do.

I think I have an answer to his question. But first, the context. It wasn't hard to see why Chris Huhne was cross with Whitehall two Mondays ago about the failure to tell the coalition cabinet in which he served the scale and nature of GCHQ's data-mining operations.

Huhne's indignation was clearly fuelled by the call he says he got from a senior official reminding the former energy secretary that he should not use his new Guardian column to reveal "privileged information" acquired in office. The ex-MP – whose fall from power to prison was classic hubris – retaliated by examining something he was NOT told about instead.

After going through some of Edward Snowden's cache of NSA/GCHQ files last month, the novelist John Lanchester wrote long and well in the Guardian – read this important essay here if you missed it – about why it is important that the British public, sleeping soundly when it should be concentrating, must debate how much information we should allow the state to extract from us and file in the name of security – and upon what terms of accountability.

Harry Evans, one of Fleet Street's greatest postwar editors in the heyday of the Sunday Times under Roy Thomson's benign ownership, says much the same in today's paper.

That is correct. But it is a world away from the practical business of running a coalition government in an age of 24/7 media. Which is why David Cameron may not have told colleagues all he knew.

Cabinets are important institutions whose collective role and shared responsibility is diminished at our peril if we do so in favour of rule of a quasi-president – one with presidential powers but little constitutional constraint, let alone by a shadowy cabal of key ministers and faceless civil servants.

Collective decision-making matters (it reduces mistakes by testing policy) but it's painful. That eternal battle goes on in committees, in quiet corridors but also on TV, where ministers and officials are grilled by MPs and Paxman-folk alike. Ditto the courts, as Huhne writes today. It's just more visible now – except when it isn't.

When the Labour backbencher and future founder of the NHS, Aneurin Bevan, constantly challenged Churchill in his prime as Britain's warlord between 1940-45 he made himself an unpopular nuisance. But Nye's instinct was sound.

In 1951 Bevan helped bring down the Labour government over its new chancellor's preference for war rearmament in Korea funded by NHS prescription charges. He was wrong about the NHS charges but right about the defence budget, as Churchill later acknowledged when he cut it.

In the intervening years Clem Attlee had decided that Britain must build its own atomic bomb in order to remain one of the war-time "big three" powers. He and his intimates, chiefly Ernie Bevin, trade union hero turned cold war foreign secretary, kept the secret to themselves. Why? Cabinets are leaky; there would have been a row of the kind that later fuelled the Campaign for Nuclear Disarmament (CND), the passionate if self-absorbed crusade to rid the world of nukes by setting a good unilateral example.

CND was way past its prime in the late 1970s when Jim Callaghan – like Attlee a Labour PM with wartime military service – again decided not to tell his cabinet of the decision to upgrade the warhead on Britain's US-bought Polaris nuclear missile system, the Chevaline programme which was revealed by the incoming Thatcher government in a Commons statement by Francis Pym, defence secretary.

I was present. The idea had been to ensure that at least one missile would still be able to penetrate Moscow's improved anti-ballistic missile defences and do the job of destroying the city. That's what deterrent theory was about. Those were the days!

This isn't a straight left-right cultural issue, though governments of the left tend to have more politicians with a commitment to openness, not to mention messianic self-aggrandisement, which can be harnessed to the openness agenda.

It's not as if Chris Huhne himself has always been frank about political or even personal matters. But Tory governments are instinctively more amenable to "reasons of state" arguments, more worldly you might say.

Even so Margaret Thatcher had her secrets, too sensitive to risk a leak. They all do and are entitled to have them, though they will all have to be justified in the end – or not.

How many of Anthony Eden's cabinet colleagues knew of his secret collusion with France and Israel – cooked up at Sevres outside Paris in 1956 – to seize the Suez canal back from Egyptian nationalisation via a collusive invasion? Not many. It cost him his health and job – and was all his own fault. As Churchill said of his fragile successor, I would never have dared do it, but having done it, I would not have dared stop. Eden stopped.

So the prime question I asked myself two weeks ago is the one Huhne pointedly asks today: how much did the security apparatus, GCHQ, M15 and M16, tell David Cameron – and before him all PMs as far back as John Major – about the new surveillance technologies which effortlessly outstripped all capacity to place them under legal control and constraint? And who signed off on whatever it was they were told.

It's not that what they did was criminal; there were probably good reasons at the time. Good reasons, too, why the Brown or Blair cabinet was not informed, nor Clem Attlee's. The dangers of a leak from an inexperienced cabinet in 2010, full of tension and Lib Dems, is obvious. You can see why they didn't do it, rightly or not.

But now that it's out – most things come out in the end – we need to know who knew what so that the routine claims since Snowden broke cover that Tempora and its kind are properly accountable can be exposed for the self-serving deceits they probably are.

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Alan Milburn wants to squeeze the better-off pensioners. And he's right

The Saga holiday generation will be alarmed, but there really is no justification for giving old dukes a free bus pass

Prince Charles has just given a speech in defence of embattled pensioners, minutes after Alan Milburn, the former Labour minister turned coalition social mobility champion, said lucky old folk had suffered least from the burdens of recession. Can they both be right? They can.

Milburn is right to say that the jobless young and the working poor – the people "who do all the right things, stand on their own feet, strivers, not skivers" – are most hard-hit by stagnant or falling wages and rising costs. As Patrick Wintour points out in his account of the social mobility commission's latest report, those too poor to pay income tax (though not National Insurance contributions) will even lose out on the coalition's plan for tax-free child care vouchers – for which the PM's £150,000 income might qualify him.

It's not all bad news, as Andy Sparrow's summary of the commission's findings confirm. But the young jobless and working poor need more help and pension incomes might be the source of some revenue, Milburn suggests. It prompted a "don't punish pensioners" response from Nick Clegg in the Telegraph, though Clegg is actually still on Milburn's side. Pensioner lobby groups, ferocious despite their grey hairs, are pardonably confused.

Pensioners, so the argument runs (it's backed by the prestigious Institute for Fiscal Studies), have seen their state pensions relatively well-protected and all their other paybacks – winter fuel allowance, free TV licence, the bus pass etc – left intact. But the awkward fact is that in the unequal Britain Lady Thatcher strived to create, the poverty gap within the pensionable age group is as big as it is on other age groups. Some pensioners are very badly off, but not all.

Talking of which, Charlie Windsor, who turns 65 himself on 14 November (as does Not-Sir Paul Dacre, combative editor of the Daily Mail), makes the simple but legitimate point that short-termism in the City, the quick-buck, takeover-and-bonus culture of recent years, fails to address the long-term needs of the millions who entrust their savings to the institutions – not to mention those of the economy.

Put another way, we need more money to be invested in infrastructure such as rail and energy supply (where the Chinese are stepping into the nuclear option for us) as well as in social housing, as pension funds do in countries like Canada and Germany. In all three options the revenue stream and assets secure the investment, where not already underpinned (nuclear and wind) by the state and taxpayers.

Financial engineering of the kind City lawyers and accountants love isn't so easily drawn to the long term, boring even, when fees and bonuses are to be found elsewhere. There's an upside to the restless ways of Anglo-American capitalism – "name me one major French business started in the past 30 years?" someone asked me sharply the other day – but the damage done by the downside has been more visible since the bankers crashed the car in 2008.

You'll have to do better if "your grandchildren, and mine for that matter" (what does the prince know that we don't?) are not to face a miserable future, Charlie added. He didn't mention the demographic timebomb – the "graph of doom" as some councils call the rising numbers of elderly in need of costly care and the falling number of working taxpayers to fund it.

To anyone reading the money pages of the newspapers – they are a favourite among us oldsters – it is hardly news in the here-and-now that the relative protection given to state pension increases and other age-related benefits are offset by the side effects of the bankers' crash on occupational pensions (not to mention prices that have a habit of exceeding official RPI/CPI indexes, which have themselves been tweaked).

Higher retirement ages, especially for women; higher pension contributions for less certain benefits – the damaging strike at the Grangemouth oil refinery on the Forth is partly about the management's wish to end the current defined benefits pension scheme enjoyed by ever fewer in the private sector. It's an unhappy story, at least financially. That's before we even look at the squeeze on council care budgets.

That gloom is offset by the fact that many older people are much healthier into old age and have the money to enjoy themselves at varying levels – including that long-delayed divorce, it must be added. Pensioner divorce rates have risen sharply, another short-cut to poverty for some. It's worth adding that those with sort-of-secure public sector pensions, large or small, remain relatively lucky too – and that not all realise how tough it is for many of their private sector counterparts whose pensions depend on market rates.

And that's the point where Alan Milburn – raised by a single mum on a Newcastle council estate but now prosperous – will have annoyed Telegraph readers and pensioner lobbies. Doesn't he realise, they mutter, that because of the central bankers' (correct) strategy to keep battered economies afloat by e-printing billions to purchase debt, interest rates are so low that a £100,000 pension pot generates below £6,000 a year compared with £15,000 in the early 90s?

And when recovery is judged solid enough that e-printing (quantitative easing or QE) finally ends, no one knows for certain what impact that will have on inflation – always a hazard for savers and those on fixed incomes. So it may not be surprising that, according to the Mail on Thursday, one in three over 50s feel they suffer age discrimination. I'm sure that's subjectively true, but teenagers must feel the same – and with greater justification in our materialistic age, so much uncertainty amid plenty.

The awkward fact remains that western society's baby boomer generation – those born between 1946 and 1964 – has been exceptionally lucky. No wars or depressions like its parents endured, just rising educational and job opportunity that floated so many into unimagined prosperity, secured into old age for a minority. No tech revolution and Asian economic miracle to make so many jobs disappear either. No student tuition fees for degrees of doubtful utility (Malcolm Gladwell's new book stirs that controversy too).

So Milburn is right to look to pensioners for a further contribution and Clegg is right to say "don't clobber them all" because not all OAPs can afford Saga holidays and then expect the state to look after them in their dotage. You can find a sharp Lords debate on care eligibility – launched by brainy Labour peer Lord Lipsey – here. It will cheer or alarm you according to circumstance.

It doesn't change the fact that elderly dukes with large cold homes shouldn't get the winter fuel allowance, nor their free TV licence. Their should be an income cut-off point as there now is for child benefit. Logic and social fairness suggest the same should go for the pensioner's bus pass, alas. The dukes will miss it. So will I. Prince Charles may travel by limo to save the environment, but I bet Camilla (66) uses hers.

Social mobilityPovertySocial exclusionPensionsLiberal-Conservative coalitionConservativesLiberal DemocratsAlan MilburnMichael White
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George Osborne should show a spot of humility in China

The chancellor says Britain and China are two ancient civilisations, but that isn't likely to be how his hosts see it

In a well-meaning attempt to make British voters regard China as more than "a sweatshop on the Pearl river", George Osborne reminded his Radio 4 audience on Monday that "Britain and China are two very ancient civilisations". Er, no, chancellor, that's not how your hosts during your five-day bridge-repairing visit to the People's Republic will be thinking about it at all.

Leaving aside the demotic and faintly patronising tone of Osborne's on-air interviews, the awkward fact is that Qin (pronounced Chin) Shi Huangdi, who united the six previously "warring states" to become first emperor of China – an imperial structure which survived until 1912 – ruled from 221 to 207BC. At that time Celtic Britain was still a foggy offshore island which left cultural fragile artefacts of great beauty, but no record of its civilisation.

We need not hang our heads too low, though a spot of serious humility would not go amiss. The Chinese elite remain intrigued by what the foggy little island (copyright Vladimir Putin?) went on to achieve in its heyday. And China's own future is uncertain, according to many experts – the question is hotly disputed – on economic, environmental and political grounds.

As a well-read friend of mine put it over supper only last night: "Rich Chinese don't seem to think much of China's future. They're all trying to emigrate." But whether triumph or disaster looms for 21st-century China – global primacy and political pluralism or smog, polluted water and political disorder – it may be bad for the rest of us. "When China catches a cold we all get pneumonia," as someone has yet to say.

In its scale and durability only Rome can match China among western empires – though plenty rose and fell, not least Persia, another truly ancient empire whose residual pride we and the Americans constantly fail to appreciate in proper historical context. Pre-imperial Rome was still fighting the Carthaginian general Hannibal (247-182BC) for dominance of the western Mediterranean when Shi Huangdi united China. The Chinese are still united by Mandarin, as we no longer are by Latin.

So Osborne is on the right track but still with a long way to go. Thirty years ago, when Deng Xiaoping was opening up China – to make it the superpower it is close to becoming once more – Margaret Thatcher patronised the Chinese on a trip to Beijing, not far from parks where European "no dogs or Chinese" signs from the "century of humiliation" still rankle in official memory.

As every schoolboy doesn't know, there's lot more like that (the British-enforced opium trade into China created to correct a previously one-sided trade balance for one thing) which makes China's irritation at something like David Cameron's meeting with the Dalai Lama or routine Foreign Office lectures on human rights understandable, albeit wrong.

The real worry is that too many Brits are still behaving towards China as the imperial court did towards the sweaty pink-faced European merchants who turned up in ever-increasing numbers from the 16th century: what need do we have of these people? They may have invented gunpowder, paper and so much more when we were barely literate, but in the 19th century the Chinese elite learned the hard way.

As British manufacturing struggles to survive at the high end and middle-class futures look as shaky as the working-class present is uncertain, is it our turn to learn hard lessons?

It's not just the handbag trade, alarming though it is to grasp that tabloid immigration panics – not entirely wrong, but shooting at the wrong targets – have so restricted UK visa access for Chinese business folk and tourists that Paris is cleaning up on luxury goods at London's expense. A super-priority fast-track visa is one gift the chancellor has taken to his hosts this week. Chinese tourists are now global No 1; they spent $102bn worldwide in 2012 and the UK did not get enough of it.

Handbags are pretty trivial compared with the prospect that the China General Nuclear Power Group may take a 49% stake in the latest nuclear plant finally being authorised for Hinkley Point in Somerset. The implications of that are pretty startling in terms of technology, investment flows and the capacity to keep British lights on. There are plenty such stories now.

We cannot fund our own infrastructure investments from our own resources – since too much of what we earn collectively is being spent on private consumption or public services – so we must find the money, if we can, from foreigners, even the once-derided Chinese. Given the way the US economy and public finances have been managed in recent decades – kept afloat by cheap Asian goods and borrowed Asian savings – the greater shame is Washington's, whose similar dependance is both tragic and a scandal.

The interesting fact is that, unlike the Russians who have never lost a sense of inferiority and whose state is less ancient than even ours, the Chinese never lost their sense that the Middle Kingdom of China is still the centre of our world, despite the ceding of global dominance to those pushy and aggressive Europeans after about 1500.

For us the good news is that – though the French and Germans are much better dug in – British exports have been rising sharply in China and a succession of ministers and business bigwigs, like those travelling with Osborne, regularly fly to Beijing (whenever they can get a flight from crowded Heathrow). Boris Johnson, himself a popular British export, is there to outshine his Tory rival this week, as tireless blogger Andy Sparrow explains here.

What we don't want to see is the kind of caper Damian McBride reports in Power Trip, his eye-popping memoirs (Biteback, £20), of spinning for Gordon Brown. In 2006 the new shadow chancellor, one George Osborne, went to Japan where he told the travelling press that he wanted Britain to build a new high-speed magnetic levitating train.

It should have been a good scoop for the FT. But McBride, who sometimes took time off from attacking the Blairites to undermine the Tories, got to hear about it. A genius at online research, he rapidly dug up enough stories of mag-lev accidents, fires and underperformance to kill the story.

All in a day's work for Damian, but a touch short-sighted in the longer view. The Japanese won't have liked it, nor will the Chinese if something like that happens this week. Open and accountable politics and a combative media are a good thing. The Chinese corruption cases show Beijing is "having a conversation with itself" about governance, the chancellor optimistically opined on Monday.

But cheap headline-grabbing for party advantage and no regard to the long-term interests of Britain is another thing the ancient civilisation of the east does not need to learn from us. Down with British short-termism! Fortunately the Chinese have a long-established habit of taking the long view.

George OsborneChinaForeign policyAsia PacificMichael White
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Ed Miliband and Diane Abbott: better to keep your enemies close?

In sacking Diane Abbott, has Ed Miliband confused disloyalty with dissent? After all, history shows it's better to keep an outspoken critic close rather than push them to the margins

When Ed Miliband decided this week to sack Diane Abbott as shadow public health minister, he must have given passing thought to the advice once offered by an American master of political powerbroking. In 1971, President Lyndon Johnson said of a dangerous rival: "It's probably better to have him inside the tent pissing out than outside the tent pissing in."

It is a perennial dilemma for leaders when confronting or evading rivals. Do you have them where you can see them – "hug them close", as Abraham Lincoln famously did when he appointed to his cabinet all three of the men who felt they would have made a better Republican candidate in 1860 (they were wrong). Or do you drive them to the margins, or even exile or murder them, as Stalin did to Trotsky and so many others?

Lincoln's crafty embrace was emulated by Barack Obama in making Hillary Clinton his secretary of state in 2009 (it worked). Margaret Thatcher made the same calculation over Tory "wets" such as Jim Prior and Ian Gilmour in 1979, though she gently purged them when she felt stronger – as Churchill did the Men of Munich in the years after 1940.

Yet dissent, edging into outright disloyalty, must be part of the process of change in any organisation. Shakespeare noted that "if treason prosper none dare call it treason". Worldly French diplomat Charles Maurice de Talleyrand-Périgord made the same point more bluntly: "treason is a matter of dates." Style is a factor, too. In democracies it is sometimes safe to plot openly as long as the declared agenda is policy, not personal ambition. Though a defeated leadership rival, David Davis just passes this test: he quit Cameron's shadow cabinet on sincerely held libertarian grounds.

But there are always risks. When Michael Portillo installed those extra phone lines in readiness to challenge John Major – but then hesitated – he lost doubly, just as David Miliband's hesitation damaged him when urged to face down Gordon Brown in 2009: willing to wound but afraid to strike. That is an old story, too, as Prince Hamlet learned the hard way.

Back in 1971, LBJ had been talking about J Edgar Hoover, founder director of the FBI, whose ruthless campaign against all perceived forms of dissent had made him more a subverter of the US constitution than its shield. Politicians of all stripes – none better than Martin Luther King – knew what Hoover's files might contain to damage or destroy them and he survived in post until his death in 1972 at the age of 77. Only then did his excesses emerge.

Abbott – the MP for Hackney North and Stoke Newington since 1987, and the first black woman elected to parliament – is not quite in Hoover's league, let alone a public figure who operates in the shadow. Quite the reverse. As a leftwing backbencher, she was a natural rebel, a civil libertarian, keen to vote against ID cards and overreaching counter-terror methods, but also against the Iraq war and Trident missile renewal.

When Abbott ran for Labour leader after Brown's resignation in 2010 – the only woman and ethnic minority face among four white men – her nominators included David Miliband. She lost but was given her first frontbench role in recognition of the vivacity and diversity she had brought to an otherwise vanilla contest. An accomplished media performer, Abbott continued to make waves and was ticked off by Ed Miliband last year for a tweet accusing white people of using "divide and rule" tactics from the colonial era.

Now she is outside the tent the Labour leader can expect to hear even more from TV's Diane as she exploits her new freedom and media status as a Miliband martyr. Aides were not rushing yesterday to explain exactly why he had sacked her. But the risks are obvious. Did he mistake noisy dissent, for instance against his economic policies, for disloyalty – a common error in boardrooms, football dressing rooms and families far removed from politics?

Damian McBride's new memoir sets out the parameters, and he regularly exceeded them as Brown's spin doctor. Yes, there were policy disagreements between Blairites and Brownites (McBride makes them sound more fundamental than proved to be the case after Brown's succession), but this was basically a personality-driven power struggle.

Brown felt Blair was a lightweight, a chancer who should fulfil his alleged promise to stand down before the 2005 election. Blair knew the brooding Scot would struggle to connect with voters. Most chancellors fight with No 10 over the direction and detail of policy. But this went far deeper: a love-hate relationship in which Blair gave Brown too much power and found himself unable to claw it back.

Dissent or disloyalty? Disloyalty, on a huge scale, shockingly detailed by McBride who had long since persuaded himself that Brown was "a political genius" for whom any obstacle to power must be subverted and removed, often in collusion with the Tory press. There was fault on both sides, which hobbled a reforming agenda, but Brown's Nixonian insecurity was the most potent element.

With Thatcher it was quite different, but damaging in its own way. When she ousted Ted Heath in 1975 after his second election defeat, he embarked on the Great Sulk, but was too damaged ever to be a threat to her. Yet the consensual, Keynsian, pro-European wing of her party barely bothered to hide its disdain for her free-market policies, which they predicted would bring ruin.

In varying degrees Jim Prior, Norman St John-Stevas, Peter Walker (who never made it personal and survived), Francis Pym and even gallant Lord Carrington (who recently denied ever calling her "a fucking stupid, petit-bourgeois woman", as claimed in Charles Moore's recent biography), criticised her regime in the company of fellow MPs and eager political reporters. Even her deputy Willie Whitelaw ("every PM needs a Willie," she said), once muttered that "she thinks she's got a hotline to the Almighty. She hasn't."

Unsurprisingly for those days, their comments sometimes smacked both of snobbery and sexism. Starting in 1981 with Gilmour and Stevas (who teasingly called her "the Blessed Margaret" and the "Leaderene"), she purged them and installed the loyal Tebbits and Ridleys. Michael Heseltine stormed out of cabinet in 1986 and proceeded to attack her in full view – dissent that was disloyal but legitimate because it was rooted in policy differences, openly and carefully expressed. Hezza's speech on the party conference fringe became a setpiece of quasi-coded criticism, like Brown's annual speeches as chancellor ("Labour is best when we are LABOUR").

Heseltine always insisted he could "foresee no circumstances" in which he would challenge for the leadership, a handily evasive formula vindicated when plodding Geoffrey Howe, once a loyal Thatcher ally, now increasingly a dissenter, resigned and delivered a brilliant 20-minute assassination speech. No one could have foreseen that.

Thatcher thought she could save herself by meeting with cabinet colleagues one by one. It was Thatcherites such as Peter Lilley who upset her most by telling her she would lose. Disloyalty or realism? It remains a hard call but the "illegitimate" way Thatcher was forced out poisoned her party in ways that linger on. Now it was her turn to be disloyal to John Major – and she was.

Ken Clarke, who had waited until 1987 to get the cabinet seat his talents deserved, made no bones of his opposition to her rule. When, later, the Thatcherite rebels were in open revolt and Major was struggling to assert himself over Europe, Clarke would say: "Any enemy of John Major's is an enemy of mine." Straightforward talk that appealed to voters, but not to his party. Like Labour's Denis Healey and the cerebral Iain Macleod, Clarke thus became another great leader Britain never had.

When, in 1963, an ailing Harold Macmillan was forced out over the Profumo scandal, Macleod and Enoch Powell simply declined to serve under Sir Alec Douglas Home, whom party chiefs (no ballots then) preferred to "Rab" Butler, who refused to fight for the crown. Loyal? Cowardly? Indecisive? Butler had been one of those Munich Tories who denounced Churchill as "a half-breed American adventurer" in May 1940 and muttered silkily against the Suez-doomed Anthony Eden ("the best prime minister we've got") in the 50s. For all his talents the character question always dogged him. Macmillan, who had been all for invading Suez until it went wrong, became the first to pull the plug on the adventure. Disloyal? Perhaps, but also decisive. He got No 10 as his reward.

With an election now looming, Miliband must calculate that even Abbott will not rock the boat too hard. Taking away the party whip from rebels is a high-risk option, that failed Major in 1995 and damaged Labour in the 50s when leftwing Bevanite disdain for Hugh Gaitskell, Attlee's successor as leader, was such that they repeatedly reinforced party splits – and lost three elections. David Cameron has used the tactic sparingly: his mouthy "posh boy" critic Nadine Dorries lost it for six months after running off to do I'm a Celebrity ... in Australia. But Dorries can push her luck, knowing that Ukip's Nigel Farage would welcome her defection.

There was no celebrity TV in 1970 when the ex-Bevanite Harold Wilson was trying for a third election win and the plotters were on the Labour right. Figures such as Roy Jenkins and George Brown were personally contemptuous of their wily leader, though it was Jim Callaghan's open challenge in resisting Barbara Castle's trade union reforms that may have contributed more to Labour's defeat.

Callaghan succeeded Wilson in 1976, but reaped the whirlwind of union militancy. Too weak to dismiss Tony Benn for persistent disloyalty from inside cabinet – "Tony thinks this" chat spun by aides to reporters – he could only sideline him. Bennery continued its destructive course until Neil Kinnock got a grip on discipline in the mid-80s, midway through four successive defeats.

Labour rebels tempted to defy the Blair/Brown regime after 1997 only had to look across the chamber at Eurosceptic Tory mayhem to (sometimes) draw back. That may be Cameron's ace today. With self-declared leadership hopefuls such as Adam Afriyie trying to force an early EU referendum, No 10 can afford to play him long with no need to utter hollow threats.

Rebels are usually safer out in the open where everyone can see and judge them, even if they are within the party tent – and still pissing inside.

Ed MilibandDiane AbbottTony BlairGordon BrownMargaret ThatcherJohn MajorMichael White
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Are Tories in danger of getting complacent about Ukip?

Conservatives seem confident the Ukip insurgency is faltering, but Lord Ashcroft fears otherwise

In the bars and corridors of the Conservative conference in Manchester this week ministers and MPs persuade each other that David Cameron has united the party over Europe and can win back Tory defectors to the rampant Ukip insurgency by confronting them with a binary choice: do you want Ed or Dave in No 10?

"Ukip will peak next year if it hasn't peaked already," predicts one minister who has lost around 100 of his 700 Midlands constituency members to Nigel Farage's ranks. "We're in the right place on our referendum proposals. Angela Merkel wants to help us and both Labour and the Lib Dems are opposed," says another. "People will come back to us in 2015. The Ukip vote will fall away," confirms a burly minister on the Tory right. "We're united on Europe as we have not been for 25 years," says a highbrow MP.

But are they all complacent? The rapturous reception given to Ukip's leader on the conference fringe – where he spurned Tory warnings that splitting their vote would let Ed Miliband in – suggest they may be. So do ambiguous feelings among delegates about the coalition's record. "As a party we've got to stop bashing Ukip and take an adult view. The better Ukip does the worse it will be for us," says Lee Sanders, 28, a delegate from Enfield.

Activists seem wary of Farage's renewed talk of locally negotiated Tory-Ukip pacts. But Lord Ashcroft's in-depth polling confirms that "come home to the Tories" appeals are wide of the mark for disaffected voters. Many were never Tories in the first place.

Ashcroft certainly fears complacency. The billionaire ex-Tory treasurer, who is pouring money into private polling, keeps telling Cameron and his staff that Europe isn't the prime reason why people switch to Ukip. No single policy is, though immigration is No 1 and leaving the EU will solve it, so focus groups tell him. "It may be wrong, I'm told that all the time. But it's what people think. It drives their votes," he told the Guardian.

Ashcroft's findings suggest that dislike of the main Westminster parties and a feeling that Ukip speaks for "people like me" – nostalgic for a less change-driven world and scornful of "trendy nonsense" from London – are major factors. Ukip's appeal is outlook-driven, not rooted in policy. Gay marriage or immigrants driving down wages or getting benefits are as likely to be mentioned as Europe. As such it's "the party of easy answers v the party of tough choices", he explains.

As in 2010, the Ashcroft response is to focus money and energy on "marginal votes in marginal seats", with national polling merely mood music against which a series of local contests will be fought through face-to-face voter contact. Labour is now saying the same thing and the Lib Dems have always known it.

So does Ukip. As he struggles to turn Ukip from a single-issue campaign into a real political party, "Farage is guided by the Lib Dem campaign playbook of the early 90s, building his base through local elections", says one Tory Ukip-watcher.

Ashcroft was marginals supremo (and banker) in 2010, but holds no official position now. He would like Cameron to use next week's reshuffle to drop all Tory ministers in the party's 40/40 marginal seats bracket – 40 target seats to take, 40 to hold – so they can concentrate on saving them. As a Foreign Office minister even Mark Simmonds, MP for deeply Eurosceptic and rural Boston and Skegness, is seen by some colleagues as vulnerable to a disruptive Ukip-driven split, despite the 14.5% swing it would take for Labour to unseat him.

It is part of Cameron's nightmare, though it could be shared by Miliband and Nick Clegg if Ukip does not fall back to 3% as it did when defectors faced the binary choice in 2010. The more "sod the lot of you" alienation pushes Ukip into double figures, the more it hurts them too.

Farage, who held a 2012 party conference in Skegness, where eastern European migrant workers are unpopular, has long harboured Westminster ambitions. At a packed meeting outside the conference security fence on Monday – where many of the 250-strong audience had come straight from George Osborne's big speech – he went further than predicting victory over the Tories in next summer's Euro-elections.

Currently outpolling the Liberal Democrats in the 2015 general election stakes, he pointed to Ukip's appeal to northern Labour voters – as shown in the South Shields byelection – as well as to ex-Tories and Lib Dems at the Eastleigh contest in the south. Ukip came second in both. Voting Tory is pointless when voters can't trust Cameron to honour his "cast-iron" promise of a referendum. "The only way to guarantee it is for Ukip to hold the balance of power" at Westminster, he claims. Fantasy talk, reply Tory loyalists. You've been saying that for years, he counters.

Outside Farage's fringe meeting is William Robinson, a retired family businessman of 79 from Newark, who voted yes to Europe in 1979 but got fed up with trade bureaucracy and paperwork. He left the Tories for Ukip, came back again and now isn't sure. Half his age, Charles Dodman stood as a Ukip candidate in 2010, winning 4% of the vote in safe Tory Eddisbury. "We can't rely on cast-iron Dave for the referendum," he says.

A Wiltshire Tory activist, Selaine Saxby, meanwhile, is loyal: "If people want a sensible position on Europe the Conservatives are the only choice. Protest votes don't work."

A party pollster is not so sure. "Trust us and don't panic is the hardest message to sell to activists. They don't trust us and they do panic."

ConservativesUK Independence party (Ukip)General election 2015Conservative conference 2013Conservative conferenceLord AshcroftMichael White
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