Russia racing to knock out Ukraine

This is Iain Martin’s weekly newsletter, exclusively for Reaction subscribers. 

In the depths of the Russian winter, the War turned and the invading forces found themselves overrun. Only a few weeks before the Germans had been within sight of Moscow. Now, in December 1941 in sub-zero temperatures on the Eastern front, the Sixth Panzer Division reported a strength of just 350 riflemen and no tanks. “There were no reserves. All leave was cancelled,” write Brendan Simms and Charlie Laderman in Hitler’s American Gamble: Pearl Harbour and the German March to Global War.

“The catastrophe is at the door,” a German officer wrote at the time to his wife. It was a deserved punishment, he said, for Nazi crimes. The Soviet Union’s counter-attack was bolstered greatly by weaponry delivered by Britain, much of it secured through the Lend Lease programme of US military aid.

Hitler’s American Gamble is a phenomenal read, illuminating the brief period between the attack by Japan and Hitler’s decision to join in with his own declaration of war against the US. It was not clear the German dictator needed to join the Japanese, or whether America’s leaders, with a strong isolationist element in Congress, would decide to stick to war on one front and fight only in the Pacific rather than Europe. Luckily, Hitler opted to fight the US, to take on the capitalist machine, bringing down on his head the might of America.

One of Simms and Laderman’s themes is the centrality of industrial production in war and the decisive role of American and Allied industry in defeating aggression. War is in part about manufacturing.

And so it is proving, again, in Ukraine.

The headlines this weekend tell of a Russian victory in the salt-mining town of Soledar, in Donbas. Ukrainian officials say hellish fighting is ongoing and claim to have inflicted many Russian casualties. Mercenaries and Russian conscripts have been thrown into the battle.

Reports suggest the Kremlin views Soledar as a warm up for the resumption of a more ambitious campaign, and a fresh assault on Kyiv in the next few months, trying to knock Ukraine out of the war before the tanks and heavy weapons the West is promising to send arrive. This week, Putin appointed Valery Gerasimov, Russia’s chief of the general staff, as overall commander of the war, demoting “General Armageddon” Sergei Surovikin.

Jens Stoltenberg, NATO Secretary General, identified the danger. This week he urged Ukraine’s allies to send more military aid, and heavy weapons, fast.  

Putin is in such a hurry because long-term Russia is in a mess, as it tries to manufacture sufficient supplies and ammunition to keep its murderous campaign going through this year and beyond.

The US Defence Secretary Lloyd Austin claimed last month that the Russians could sustain fully serviceable rocket and tube-fired weapons only until this spring. The Economist quipped at the time that many Russian shells are probably older than the conscripts firing them. The Russian government promised last autumn to speed up production of state of the art weapons. It is not clear a gangster economy, hooked on oil and gas exports rather than high-end manufacturing or services, can make the switch.

The countries supporting Ukraine will face questions too, when inventories are cleaned out during the desperate fighting in the next few months. There will be a public debate in the West. Is enough being done to ensure supplies to Ukraine can be maintained and also replenished at home?

There is some positive movement. Europe is good at high-end manufacturing when it gets going. Elisabeth Gosselin-Malo, an Italian defence and security analyst, published a report this week in Shephard, the defence industry publication, explaining the latest developments as European countries look to restock.

The Czechoslovak Group, artillery shell manufacturers, is doubling production. The Czech Republic is recruiting thousands of Ukrainian workers to increase manufacturing speed and capacity. The Norwegian firm Nammo is seeking to increase output by perhaps as much as ten times.

The UK Ministry of Defence has added £500-600 million for replenishment, says Gosselin-Malo. And French, Romanian and German firms are expanding production.

This year will be defined in part by this race for supplies. If Ukraine can hold out, and even make its own advances, then Russia will find itself trapped by history, stuck in a new version of an old story. Although wars in the industrial age are not won by production clout alone, without it defeat looms in the end.

Economy not so bad after all

How nice to start the year with some moderately good economic news, albeit from a low base. According to the latest Office for National Statistics data, the UK economy grew by 0.1%  in November. Yes, that’s 0.1%. Don’t party too hard.

It’s encouraging, though. Many of the forecasts were too gloomy and it appears Britain may avoid having been in recession in the second half of last year. Looking ahead, gas prices are well below where they were expected to be and that’s pushing inflation down. A mild winter means European gas storage is well-stocked. It will finish the winter more than 50% full, it seems. The nightmare was that it would be impossible to refill, with Russian gas no longer flowing. Instead, preparing properly for next winter should be feasible.

This means there’s a decent chance Europe, even the UK, avoids recession in 2023.

The outcome of the economic crisis in China as it struggles to exit lockdown is going to be key. A China roaring back from Covid would be hungry for even more natural resources – oil, commodities, all the raw materials that fuel its manufacturing. That competition for supplies and resources would give global inflation another kick this year. Central banks would, presumably, have to go higher on interest rates, and a recession would be deeper. If we all get a break from China, maybe not.

Right now, China is struggling with the economic effects of its chaotic reopening. A study by Peking University in Beijing published last week estimates 64% of the Chinese population have the virus. Hospitals are clogged and manufacturers are hit.

Chinese exports were down 9.9% in December year on year, according to the Chinese government’s own statistics. There is reduced consumer demand in Europe and the US, thanks to higher interest rates and the cost of living crisis. We’re buying less stuff, which is probably an overdue development anyway. The FT reports Chinese exports to the EU were down 20% in the last year, a striking figure.

More good news, from Sweden

A cheering development in the Arctic, where the Swedes announced this week they have discovered on their territory the largest single deposit of rare earths. I love this story.

Rare earths are in numerous gizmos and new-fangled production processes, in computers, batteries, cars and trains, he said, sounding like a BBC Tomorrow’s World presenter from 1973.

More than 95% of rare earths used in Europe in 2021 came from China. One million tonnes have now been found in the far north of Sweden.

Jan Mostrom, boss of LKAB, the mining company, warned there will now have to be all manner of environmental risk evaluations. The process could take 10-15 years. If so, that is absolutely hopeless. As Mostrom said, regulators and the government will have to speed it up dramatically. It’s a geopolitical must. Not only does the find reduce European dependence on China. These rare earths are the stuff needed for the so-called green transition. If the greens now try to hold up the green transition on environmental grounds that would just be silly. 

National ill health service

It’s a new year, so fresh start and all that. I watched BBC Question Time, the shouty panel show, and something interesting happened. There were questions on the crisis in the NHS and the audience, to the confusion of several of the panellists, didn’t applaud the “clap lines” when expected. Anna Soubry, the anti-Brexit former Tory MP, is a classic Question Time performer. Confident, full of beans, she finished one of her defences of the NHS with a flourish. Silence from the audience.

Usually, it’s predictable how this debate runs. There’s nothing an audience in Britain hates more than a panelist criticising our sainted model of health care, so no-one dares.

The Nigel Lawson description of the NHS as the closest thing the English (and the Scottish, Welsh and Northern Irish too) have to an organised religion is quoted so often because it was astute and perfectly observed. We pray at the altar of nationalised medicine. The service is the envy of the world, we are told traditionally, although it isn’t and no country has copied this way of providing care. It is common in Britain to describe those who work in healthcare as angels and heroes, as though they are cartoon superhero characters. Do other countries do this outside an emergency such as a pandemic?

The NHS is neither as bad as its worst critics claim nor as good as its biggest fans suggest. It sits somewhere in or just above the middle. We get, as a former minister of health reminds me, quite a lot of care for a top end of middling amount of money. The system has advantages, including purchasing power at scale and a vast database. It is also far too large and chaotic, no matter how hard some of the staff work. In addition, the population is ageing and the country has cocked up its social care provision, creating human misery and endless backlogs.

A wickedly draconian lockdown in Covid is a factor too. Lock up the population for the best part of two years? People in their 50s, 60s and 70s stayed home. Many of us put on weight and sat about, staying away from GPs to “protect the NHS”. Tragically, now there are the heart attacks, strokes and more that follow, all on top of a system that cannot discharge properly into a broken social care system. 

The quizzical response of the Question Time audience was revealing. People look genuinely worried that the ambulance and Accident and Emergency services are so overloaded they have become death traps. Yet spending and staffing is up, a lot in the case of the latter, and it only seems to mean more vacancies. The puzzled audience looked keen to hear more than the usual platitudes and clap-lines.  

Could there be a gap in the market for politicians to start telling the truth that this system needs reform and improved productivity?

Labour’s Wes Streeting, shadow health secretary, appears to have worked this out. He is proposing reform and is happy to risk the ire of doctors’ trade unions when he defends patients and taxpayers. Look out. This could catch on.

Women being abolished

Sam Smith, the singer, not the Yorkshire brewer, said in 2021 that what with him feeling non-binary there should no longer be separate male and female categories in the Brit music awards. The organisers did as he demanded and went “gender neutral” for this year. No more men and women.

The nominations were unveiled this week. And what do you know? In the gender neutral artist of the year category there are no female solo performers. There is anger, quite a bit of it from right-on media outlets that usually look sympathetically on fashionable demands such as those made by Smith.

Has the penny started to drop finally? Abolish the woman category, scrap distinct spaces for recognising the existence of women, and what happens is the men trample in. Women lose out.

Perhaps I’m being too optimistic, but it feels as though this argument is starting to turn in favour of women and away from social justice warrior madness. The backlash against the Brit awards is emblematic of a wider unease. The movement to abolish women’s spaces looks like old misogyny dressed up.

What I’m Reading

Finally getting round to finishing the thrilling Enemies Within: Communists, the Cambridge Spies and the Making of Modern Britain by Richard Davenport-Hines. He’s the author of Titanic Lives: Migrants and Millionaires, Conmen and Crew (a personal favourite I dip into several times a year, usually around the time of the anniversary of the sinking.)

In Enemies Within, Davenport-Hines makes the case that the bungled busting of the Cambridge spy-ring in the 1950s is one of the roots of Brexit. Hold on, don’t laugh. The spy scandals shook faith in authority after the Second World War, fostering a popular suspicion of educational advantage and British elite claims of expertise. As he says, this was the territory mined in 2016 by Brexiteers.