Sunak tells London Defence Conference Putin has miscalculated

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

Tuesday morning, and I’m waiting with Principal Shitij Kapur of King’s College London, for Rishi Sunak to arrive for the London Defence Conference. We’re outside Bush House and the motorcade is about to sweep in. The Prime Minister had been asked to attend a few months ago. I’m reflecting that there was some scepticism when the organisers said the UK government had been invited to be represented at a very senior level. The London Defence Conference is a relatively new, annual event, after all.

But Sunak agreed to take part. It involved being interviewed by me on stage.

We talked about Putin and Ukraine and the realignment underway:

“It’s a great miscalculation Putin has made. Far from fragmenting alliances, it has strengthened them… Just look at the support from Germany and Japan, and the changes to NATO with Sweden and Finland joining. European countries are now spending more on defence, which is also a good thing.”

Isn’t there a tension between the need to protect European security and the desire to play a part in the US-led alliance combating the rise of China?

Sunak thinks not: “Ukraine has shown that security is indivisible between the Euro-Atlantic theatre and the Pacific theatre. We are all fighting for a rules-based order, and values that are universal which we all believe are worth fighting for.”

He also paid tribute to Ukraine: “While everybody is talking about the upcoming counter-offensive, the reality is that what Ukraine has done for the past year is a counter offensive. They have captured a large chunk of territory initially seized from them. They have held all ground this winter, they’ve also managed to rebuild their energy grid and prepare for the upcoming counter-offensive. Just to get to this point is incredible… and that they have every chance of success.”

Why did the PM take part in LDC 2023? He understood, I think, that London is perfectly placed to host such a gathering. It is a great capital with a deep reservoir of knowledge and connections due to its history and geographical position. If not London, why not?

The conference was created by the team at Reaction and is in partnership with King’s College London School of Security Studies.

Labour’s John Healey, shadow Secretary of State, who also took part, clearly understands what we are establishing.

President Duda of Poland travelled to deliver a keynote address. Sweden’s defence minister Pal Jonson was in conversation. And an array of experts featured in our panel discussions hosted by Lord Hague, Lord Mandelson, Professor John Bew, Deborah Haynes of Sky News and Adam Boulton of Reaction.

So now we have the London Defence Conference, the annual, international gathering on defence, security and geopolitics taking place in the heart of our capital city. It is unusual in bringing together policymakers, academia, industry and media, meeting at a great university.

You can read about it all on the King’s College London site.

Day one is here.

Day two is here.

Save the date for next year. London Defence Conference 2024 takes place 21-22 May.

It was suggested later by a couple of my fellow hacks that I should have quizzed Rishi Sunak about the Suella Braverman speeding ticket revelations. I found the Braverman speeding farce completely baffling and not much of a story in the grand scheme of things when the Ukrainians are preparing the next phase of their offensive against the Russian tyrant, China is on the rise, and there’s AI.

I must be getting old, but when I saw several excellent broadcast journalists ask Sunak about Braverman and speeding in the press conference at the G7 my heart sank. The harm done by social media to British journalism in under twenty years is now obvious. In the olden days, early this century, the pack following a PM was focused primarily on what was happening at the summit and the implications for national and international affairs. Of course, if a major domestic row of genuine importance broke out then the hacks would try to get a response, but a farce about speeding tickets wouldn’t have counted. Newsdesks couldn’t even contact reporters at a summit with the same ease as now. The reporters got on with finding out what happened at the summit and explaining what it might mean.

Now, the news flow has changed. Back in London we’re in a constant social media whirl. We all do it. There is a desperate need and prodding to get minor breaks or advances on rolling rows, many of them inconsequential, so that the web can be fed updates by the hour, by the minute.

It leads to some established hacks at an international forum asking whether Braverman tried to dodge some aspect of a punishment for speeding.

I thought about asking Sunak why he, rightly, expressed annoyance at the G7 with Chris Mason for going in on speeding tickets, but thought that would only make the whole digital doom-loop and post-modern farce of the modern media cycle worse. So instead, rightly or wrongly, I stuck to Ukraine, China, global realignment, defence spending and the debate about the UK’s role in the world.

Inflation nation

Lord King, the former governor of the Bank of England, put it well when he was asked last October by Laura Kuenssberg on her Sunday morning show why inflation was rampant in the British economy.

King said the following:

“Well I think all central banks in the West interestingly made the same mistake, and during Covid when the economy was actually contracting because of lockdown, central banks decided it was a good time to print a lot of money. That was a mistake that led to inflation, we had too much money chasing too few goods and the result was inflation. That was predictable, it was predicted and it happened.”

It is interesting how reluctant policymakers are to hear this. When an economist such as Tim Congdon warned that resorting to Quantitative Easing during the pandemic would create too much money chasing too few goods (during a supply shock resulting from the pandemic) he was dismissed as a right wing economist who shouldn’t be listened to. Turns out he was right.

Reaction subscribers were warned early. One of our writers, the non-monetarist economist Douglas McWilliams of the CEBR, predicted inflation and has been vindicated.

What comes next? Not only are the falls in energy prices (for now, unless next winter is worse) going to help. The money supply numbers, showing a steep fall, suggest inflation itself will fall sharply by the autumn. That seems logical, but UK inflation is stubbornly high at 8.7%, the highest in the G7 and perhaps it is becoming embedded.

The biggest danger now is that, having got inflation wrong on the way in, the discombobulated Bank of England, now over does it on the way out, hiking rates too far and inducing recession that will hurt business and hit tax revenues just when the UK, badly needing money for defence, the NHS, education, infrastructure and everything else you can name, can least afford it.

The Chancellor said this week that he would be content with a recession as tackling inflation is the priority. I know what he means but it seems unwise. It’s easy to see this as a brave rerun of the early 1980s fight against inflation when central banks hiked rates and induced mass unemployment. The circumstances are distinct this time, though. After financial crisis, pandemic and war, the economic and political settlement is creaking. In the next few years we need some growth, business confidence, increased investment, a more sensible energy policy and productivity gains, rather than a recession.

Who is Nicola Sturgeon now?

The former and increasingly disgraced First Minister of Scotland undertook one of her favourite activities this week. Appearing at book festivals is Sturgeon’s big thing. It sends a message: look, she’s a reader. She’ll cite contemporary novels, often terrible contemporary novels which is the largest category of contemporary novels.

Non-fiction history and economics rarely get a look in on the Sturgeon reading list, which may help explain why she made such a terrible job of running Scotland’s public services and economic policy during her nine year tenure. She isn’t interested in much beyond breaking up Britain and appearing at book festivals.

In classic style, during her appearance in Glasgow at this week’s “Aye Write” festival (see what they did there?) Sturgeon had a pop at a political rival. Interviewed by an impressionist (a comedian, not a painter) she said that when Boris Johnson appointed Alister Jack as Secretary of State for Scotland she was baffled: “I hadn’t met him before. I literally had no idea who he was,” she said. “I just thought: Who are you?”

Chortle, chortle.

Well, who is Alister Jack? At least he’s still, for now, in office as Secretary of State for Scotland. Unlike Nicola Sturgeon, who is out of office having failed as First Minister. She is now at the centre of a police inquiry and her husband has been interviewed by the cops about allegations of money missing from Scottish National Party funds. Sturgeon’s hopes of a big international posting lie in ruins. Alister Jack is having the last laugh.

What I’m reading

Linda Yueh’s new book on financial disasters, one of my favourite historical subjects. I’m reviewing The Great Crashes: Lessons from Global Meltdowns and How to Prevent Them. Half way through and enjoying it so far.

What I’m watching

Being a Bill Nighy sceptic it was with some reluctance that I agreed to watch Living, the latest film featuring the laconic British actor. He plays an over-worked local authority official employed at County Hall in post-War London. The stiff character is lonely and struggling to communicate with his colleagues and with his son and his son’s pushy wife.

Oh dear, here we go again, I thought in the first few minutes. It’s the usual cliche. Our predecessors, the people of an earlier era, my grandparents and parents generation, would be portrayed as one dimensional, emotionally stunted victims of the patriarchy, empire and food rationing.

In standard contemporary descriptions of that period everyone in the South East of England in the 1950s was permanently unhappy and uptight, penned in by social anxiety, heartless disregard for human feeling and the relentless tyranny of commuting. And then the film reveals itself as something far more complex and affecting. Spoiler alert – Nighy’s uptight lead character is diagnosed with a terminal disease and he decides to try living in the time he has left.

The decade – the 1950s – is presented in a fair and balanced manner. It was an exciting, optimistic and colourful time. Music pulsed. The return of prosperity meant a little luxury became possible again for an expanding part of the population. People dressed sharp. They were sharp-witted too. Of course they were – they’d been through and survived the worst conflict yet dreamt up by mankind. It was also the decade captured so well in Simon Raven’s novels, a time of petty bureaucracy and spivs on the make, but we can hardly be smug and superior about that considering how much of both there is today. Nighy’s performance in this film is flawless. If you haven’t seen it, take the time and watch Living.