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Lord Robertson celebrated his 80th birthday last weekend. I assume the former NATO Secretary General spent it on his beloved Islay, the beautiful Scottish island that is, among its other claims to fame, home to nine whisky distilleries.

When I first visited Islay in 1994, having answered the phone randomly at the right moment on the business desk of the Sunday Times Scotland in Glasgow, and answered in the affirmative when asked if the whisky correspondent was available to join a trip to the island a few weeks hence, it was my first whisky experience. Flying in to the tiny airport, the traveller sees the name of Lagavulin spelled out on the walls of the building. A group of us hacks toured the distillery at nearby Laphroaig distillery and, introduced to the distinctive, smoky, peaty taste of Islay whisky, I fell in love, through that unusual route, with Scotch.

For the first few months, then a foolish 23, I threw myself with too much intensity into experiencing high-quality whisky. Be careful, my father said kindly, to treat it with respect; only when you have had a night of too much whisky will you realise why it has a dark reputation. Having found out the hard way he was right, ever since a dram has been something taken occasionally and sparingly.

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I was invited to deliver the defence lecture at Newcastle University ten days ago, as part of their public lecture series. As my theme I took the “end of history” period in the 1990s and the way in which the rupture that has taken place since then requires us to transform our thinking about how the world works and the role that should be played by Britain and its allies.

I’m reproducing the lecture here (free to read) with the permission of Dr Martin Farr, who is a leading figure in the field of contemporary history. I have edited it down a little but I hope the essence of the message is clear - the world has changed, there is no room for future Budgets in which defence is not a priority and barely merits a mention, and we need to get our act together, fast.

This weekend, I was in Munich for a dinner connected to the Munich Security Conference. Along the way I was writing the next paid newsletter for loyal subscribers which should land in the next few days. Thank you for your patience.

Eight weeks today it is the London Defence Conference, the fourth edition of the gathering of allies and friends. Our theme for LDC 2026 is Readiness, with a big question implicit in that title: Are we ready?

Here’s the text of my speech from Newcastle.

Thank you for that generous introduction. It is a pleasure and an honour to be here, in one of my favourite cities, and to be invited to speak at a great educational institution by one of the nation’s finest academics in his field - Dr Martin Farr.

In this defence lecture my aim is to examine the arc of history since the end of the Cold War; to chart the effect of the post-Cold War ideology on weakening our defences; to examine the current threat picture and offer some thoughts on how we should think carefully about what comes next.

First, a disclaimer, or an advisory warning. Looking at the news and at the state of the world it is easy to be discouraged. Doing what I do, as director of the London Defence Conference, I am often asked - are we headed for war? Is it inevitable? How bad will it be if or when it happens?

The point here is not to instigate or provoke conflict. This is not about seeking war, which we know looking at history is best avoided whenever possible.

This is about avoiding war, if we can. With the world having become more dangerous, this is about strengthening our defences to create deterrence. To signal to potential adversaries that we have the wherewithal and capabilities to respond as a nation, with our allies, and in doing so to change the risk calculation.

And if deterrence does not work and our adversaries are intent on conflict at any cost? In that unhappy situation by rearming we will give ourselves the best shot at defending our way of life and repelling our adversaries.

This concept is something which was very widely understood across society in the 19th and 20th centuries, until relatively recently. But something changed since the end of the Cold War. What was it?

Understanding contemporary history and applying its lessons is the best place to start our search for an explanation.

Francis Fukuyama’s lost world

We begin in 1989, when a US State department policy adviser, Francis Fukuyama, wrote a paper in which, observing the implosion of the Soviet Union, he claimed that humanity had arrived not only at “the passing of a particular period of post-war history, but the end of history as such: That is, the end-point of mankind’s ideological evolution and the universalization of Western liberal democracy as the final form of human government”.

Three years later, after the formal dissolution of the Soviet Union, he expanded his thesis into a famous and bestselling book, “The End of History and the Last Man.” Fukuyama’s claim was that, with the triumph of liberal democracy over Communism, the Western model had evolved to a peak in human achievement. It could become the dominant form of governance globally. In fairness to Fukuyama, a great scholar, there were many nuances in his thesis that were little reported. And much later - in a defining essay - he deserves credit for being among the first to understand and explain in a clear sighted way the character of the Chinese regime under President Xi.

Nevertheless, his proclamation in the early 1990s of “the end of History”, in an age addicted to soundbites, provided an irresistible catch phrase for academics, politicians and the media.

It is difficult to explain, particularly to younger colleagues, just how much of an impact was made by the end of history theory when it arrived. Media was very different in the early 1990s. Everyone read newspapers and they dominated the debate, setting the terms of reference, and communicating the latest and most accessible academic and strategic thinking. On current affairs discussion programmes on television the end of history and associated thinking were pored over and the politicians of the time took their cue.

Obviously, it was immensely good and cheering news that for us voters lifted the air of paranoia which had permeated politics during the late Cold War. The nuclear nightmare faded.

For the Conservatives in Britain at the time it was an affirmation because the West’s victory in the Cold War was partly Margaret Thatcher’s victory. The Soviet economic system had collapsed under the weight of its own contradictions and the pressure of US defence spending. Deterrence and strong defence had worked, as Thatcher said they would.

For the parties of the centre left who sought a return to power - in the US the Democrats and in Britain Labour - the end of history was also an opportunity. With the Soviet Union defeated, defence would cost less and there would be more for other forms of social spending. Plus the Republicans and Conservatives would be deprived of one of their main campaign messages (the left is too soft on defence) that had worked well throughout the 1980s.

Back then, the end of history concept suited almost everyone. Unfortunately, as we now know, it turned out to be an extravagant indulgence in hubris.

A superficially plausible theory encouraged us to take a holiday from history and to forget that hard power is an essential component of grand strategy, national policy and successful alliances.

Nor was the concept philosophically consistent. The term “the end of History” was not invented by Fukuyama, but by Hegel, the precursor of Marx. The notion that history is evolutionary and has a beginning, a middle and an end was a core Marxist concept. So, in proclaiming that history had ended, Fukuyama was accepting a basic premise of the ideology on whose grave he was dancing.

Nor was Fukuyama’s claim consistent with historical circumstances even at the time he was writing. The Soviet Union, with a population of 290 million, had collapsed; but China, with a population of 1.16 billion, remained Communist.

At the time the dominant assumption, of course, was that as China liberalised its economy and grew - fast - it would automatically come closer to liberal democracy, to our system, becoming a market economy and more democratic and thus posing us no strategic threat.

In the 1990s at the dawn of the end of history it could also have been noted, too, that although the full emergence of radical Islamist militancy lay a decade ahead, there were plenty of warning signs in the late 1980s, particularly in Britain.

Weighed against post-1991 historical experience and current reality, the complacent “They all lived happily ever after” imposition of liberal democracy on a world, the greater half of whose population either rejected or were indifferent to the concept, now seems extravagantly naive. The “happy ending” delusion was abruptly exploded on 11 September 2001, with the terrorist attack on the Trade Center in New York and America’s subsequent wars.

Add to that the Russian Federation’s return to autocracy and the invasion of Ukraine, China’s exponential increase in economic and military power, the continuing pressure from militant Islamism, the weakness of Europe, the culture wars creating fissures throughout Western society and Trump-led America’s disengagement from former geopolitical commitments. In that context, the vision of a universal liberal democracy bringing peace and prosperity to every corner of the planet, on a permanent basis, seems less visionary than hallucinatory.

The Great Western Delusion: “the 1990s peace dividend’’

Maintaining Western defences at a level to deter Soviet aggression during the Cold War had put a strain on the finances of NATO member states and other nations with security concerns. The ending of the Cold War, therefore, brought a collective sigh of relief from countries that believed they were now at liberty to devote more of their national budgets to projects such as infrastructure, investment and welfare.

The term “The Peace Dividend” was coined by U.S. President George H W Bush and the outgoing UK Prime Minister Margaret Thatcher to describe this opportunity for a new allocation of government expenditure.

Although the notion of the “peace dividend” now seems naive, even delusional, at the time it was an understandable reaction to a post-Cold War situation, and as I mentioned earlier we should not underplay the psychologically liberating sensation of relief at what was believed to be the removal of the threat of nuclear annihilation. When the Soviet Union dissolved, the newly sovereign state of Ukraine unilaterally renounced its nuclear weapons; the newly created Russian Federation did not.

The lure of the peace dividend was strongest in Western Europe. In 1989, the average NATO member state’s expenditure on defence was 4% of GDP; by 2014, the year of Russia’s annexation of the Crimea, that figure had fallen to 1.4%. Such drastic reductions meant not only that European NATO members were no longer increasing their defence capacities, they were also running down their armaments and equipment, sometimes on an extravagant scale.

Some countries abolished conscription, though others were more cautious and robust. Most robust was hardheaded and sensible Finland, a close neighbour of Russia with experience of aggression from its eastern neighbour. It not only retained conscription, it also took advantage of Western thinking to buy Leopard tanks from the Netherlands, which ran down its tank force. Yet even Finland reduced its defence budget to below the 2% of GDP level in the post-Cold War years.

Overall, during the 30 years following the collapse of the Soviet Union, the “peace dividend” channelled an estimated total of €4.2 trillion to non-defence spending across Europe.

Britain embraces the peace dividend

The United Kingdom was no laggard in recalibrating public spending away from defence to other objects. The trajectory of British defence spending declined from almost 8% of GDP in the mid-1950s to 4% by 1980 (still in the Cold War era), heading towards 3% in 1990 as the Soviet Union was defeated.

Britain’s experience was unusual among the European allies in that after 2001 it not only answered the NATO call in Afghanistan, but it also joined the US war in Iraq to remove Saddam Hussein. Perhaps it was that experience - the terrible human cost abroad combined with the shock of the financial crisis at home reducing the funds available - that meant after 2010 we the public were reluctant to do more on defence. We wanted more spent on our welfare rather than more spent on war-fighting capability, which had failed in Iraq.

Today our defence spending stands at about 2.5%, four years after Russia’s full-scale invasion of Ukraine. Within that is roughly 0.7% of GDP for the nuclear enterprise, providing Britain’s deterrent which is operationally independent but closely connected to the US in logistical terms.

Remember the broader context. Spending on the NHS soared from 3% of GDP in the mid-1950s rising to more than 7% in the 2000s as expectations and medical progress made their impact.

During the pandemic, spending on the NHS hit over 10% of GDP, 12% of GDP in total for healthcare including private provision, and has fallen back a little since. Then there is welfare - taking in pensions and all benefits. That is is equivalent to another 10.6% of GDP or 23.6% of the total amount the government spends.

In context, today, Britain’s total welfare budget for 2025-2026 is estimated at £334bn, while the defence budget amounts to £62.2bn. That is just £14bn more spent on defence than was spent in 2014-2015, when Russia annexed the Crimea.

At the NATO summit last July, Britain was among those committing to 5% of GDP on defence after pressure from President Trump. That is 5% made up of 3.5% on core defence spending and another 1.5% on resilience.

Britain was chief among those making the commitment to the Americans. We await news on how it will happen. The government wants to increase defence spending to 3% in the next parliament, which means sometime between 2029 and 2034, meaning we may not hit 3% properly for perhaps eight years, a period as long as the Second World War, plus two years.

Mind you, speaking of the next parliament, if events at Westminster continue on their current trajectory, the next election and the next Parliament could be a lot closer than 2029. Who knows what the next few weeks will bring.

The imperative to increase defence spending fast should be obvious

There is a clear danger to Britain’s security in failing to maintain credible defences to deter the two main potential aggressors: Russia and China.

But there is a more immediate challenge from another quarter: the development of United States policy. The US has been urging Britain and its other European allies for the past 10 years and more to increase defence spending, instead of relying on the American armed forces – and ultimately the American taxpayer – to supply an unending guarantee of security, while Britain and EU states devote expenditure instead to social projects.

The language may be undiplomatic in ways that we Europeans find distasteful, on Greenland, for example; but the Americans are right to warn NATO members that we must step up.

Indeed, history shows us the American focus on this is not new. As far back as the late 1950s, President Eisenhower asked privately when Europe would be able to take care of itself so America could “go home”. In the 1960s his successor JFK asked similar frustrated questions about NATO commitments.

The good news is that as some - some - European defence budgets demonstrate, a decade of warnings from Trump is galvanising key states in Europe.

Poland - increasingly the essential European nation - is on track to spend 4.8% of GDP on defence this year. Germany is increasing its spending dramatically - up from 86 billion euros last year to 108 billion euro this year.

Still, it may not be enough. Not everyone is increasing spending as fast as the Poles and a future US administration may decide to go further and draw down forces from Europe. As it stands, the European pillar of NATO is heavily dependent on US capabilities - in terms of heavy lift, the ability to move troops around fast, and in intelligence and targeting.

Now, in the second Trump term, that deep and still smouldering American resentment with Europe is aggravated by a radical recalibration of American security policy away from Europe, and towards the Indo-Pacific theatre. Most of all there is a focus on a re-energised Monroe Doctrine impelling the United States to defend the homeland and reassert its influence in its neighbourhood in central and South America. In this climate, NATO has inevitably fallen down the list of American defence priorities.

Marco Rubio, U.S. Secretary of State, is the latest major player to express the administration’s frustration with the conduct of its European allies. Appearing before the Senate foreign relations committee earlier this year, the Secretary of State said that NATO needed to be reimagined. “The reason why it has to be reimagined is not because its purpose is reimagined,” he said, “its capabilities have to be reimagined.” He denounced rich European nations for channelling money into social programmes, instead of increasing defence spending, because they thought the United States would come to their defence in a time of need.

“Security guarantees basically involve the deployment of a handful of European troops, primarily French and UK, and then a U.S. backstop,” he claimed. He stated that some European states’ proposal to put troops into a post-war Ukraine in the event of a future peace plan was “irrelevant without the U.S. backstop”. The degree of disillusionment being voiced by the US Secretary of State suggests that America will - rightly - want more than vague promises of 5% by the middle of the next decade.

We have seen the impact of our underspending. The former defence secretary Ben Wallace said that governments of both parties - both parties, he stressed - had hollowed out our armed forces. Now, the holiday from history is over and they must be replenished.

But what is it all for? What and where are the threats?

The threat environment

It is incumbent on those of us who think that there is a great danger ahead to pause for a moment and with humility acknowledge the risk of war hysteria. Especially after a period of 15 years and more when our leadership class has got this so wrong, and when there is an obvious need to rearm, it is important to consider history and in doing so strive to keep our heads. It is important we get the balance right between caution and action.

In Niall Ferguson’s classic account of the First World War - the Pity of War - there is a defining passage describing and analysing the rush to war. The historians among you will be familiar with the arguments. Was it inevitable once the railway timetables got going and the men and machinery were moved into position? Or was it the disastrous system of alliances?

Ultimately, it appears Britain most feared the rise of Russia in the late 19th century. No country was industrialising at the same scale and at such speed. Britain chose alliances with Russia and France because longterm it feared Russia more than Germany. Thus helping to create the conditions for the miscalculations of the July 1914 crisis and the calamitous war that followed.

Then there is the role of stupidity and the climate created by the Kaiser and others. And the role of ultra-patriotic mindless jingoism here and elsewhere.

In the end it came down to the flawed judgments of human beings operating without the benefit of hindsight.

The lesson today is to try to define threats as calmly and realistically as we can. There the period 2001-2003 comes to mind, when post 9/11 an understandable hysteria took hold. Legitimate concerns over weapons of mass destruction, ending up in the hands of rogue states or Islamist terrorists bent on Armageddon, became distorted and disastrous judgment calls were made. Like many people at the time, I was in favour of the invasion.

Today, Russia is weakened from its failed illegal war in Ukraine where it has lost 1.2m men either killed, wounded or missing in action. Although it has built a war economy, the rearmament being undertaken fast by the Poles and the Baltic States and Nordics means that any invading army would meet resistance. Some strategists conclude the Russians would be unlikely to get very far, given the manner in which they have been held back in Ukraine.

Against that, those who are bullish should recognise that even future incursions by Russia into other parts of Europe, that are subsequently beaten back, would still be very costly in terms of the human toll and the damage done to our economies and infrastructure.

Beyond that what we face is a rolling threat over decades combining the risk of incursions, grey zone hybrid warfare, sabotage, and drone and hypersonic warfare, running through northern Europe but likely originating in the High North, by a Russia backed by China.

Indeed, perhaps the most significant feature of the Ukraine war - aside from the technological acceleration in warfare - is that China has emerged as the main supporter of Russia, a development that would have been thought implausible even a decade ago.

Their alliance means we’re faced with a classic danger that will be familiar to admirers of the work of the great Halford Mackinder, the father of geopolitics. For Mackinder it was all about the “heartland,” the Eurasian landmass - control that, control the world and its shipping routes and the flow of trade and ideas.

At the heart of our challenge is the alliance between two giant countries sitting at the heart of that Eurasian landmass - Russia and its much bigger brother China.

The central strategic challenge: China

China, the aspiring global hegemon, is the challenge that every other nation on the planet must make provision to contain. Nothing could more discredit the “end of history” delusion than the current reality that 1.4 billion Chinese live under totalitarian rule, 35 years after the collapse of the Soviet Union.

In a groundbreaking essay for the American Interest published in 2020, Fukuyama put it well when he said: “To understand how the United States and other Western countries should deal with China in the coming years, we need to understand what kind of society we are dealing with.”

Our hope during the “end of history” era was that China - having moved from totalitarianism under Mao to authoritarianism under his successors, with markets liberalised to a degree - would next become more politically liberal. Evolving, from totalitarianism, to authoritarianism, to the Western liberalism of the end of history period.

It didn’t happen. It took the West a while to realise it, and some in our political system still cannot grasp it, but XI represented a move back to totalitarianism, only this time the party has technology sufficient to exert complete control that was beyond even Mao’s grasp.

As Fukuyama put it from an American perspective: “What Americans need to keep in mind is that their enemy and rival right now is not China, but a Chinese Communist Party that has shifted into high-totalitarian mode. We are not dealing with the China of the 1990s or even the 2000s, but a completely different animal that represents a clear challenge to our democratic values. We need to hold it at bay until some point in the future when it returns to being a more normal authoritarian country, or indeed is on its way to being a liberal country. That will not necessarily eliminate the challenge that China represents; a more liberal China could easily be more nationalistic. But it will nonetheless be easier to deal with in many ways.”

In Xi Jinping’s China, we are facing a totalitarian power structure based on the attempted brainwashing of its subjects, even if Xi’s ideology is a more banal Chinese nationalism rather than Mao’s crazed, violent radicalism. Still, in Chinese Communist ideology, contemporary China is living through “The New Era”. That term is an abbreviation of “Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era”. This derives from the Chinese Communist Party’s formal History Resolution of 2021, the most recent of only three passed since 1949, which canonised, in secular terms, the five paramount leaders of the People’s Republic, beginning with Mao Zedong and ending with Xi Jinping, whose era began in 2012.

This placed Xi on the same level as Mao, giving him extreme authority, for which the way had already been paved by the abolition of limits on a presidential term in 2018. The expectation is that Xi will lead China to new heights of global power, a trajectory that must surely include the reincorporation of Taiwan into the Chinese state at some point, destabilising the Indo-Pacific.

Despite what we are told, China is not a great economic opportunity for us. China is an economic opportunity for China as it seeks to become the dominant civilisation. It is not going to open its markets any further to outsiders and it is not a major mainstream investor in the British economy, and will not become one. The Chinese Communist Party’s goal is to become the dominant exporter of everything, for ever.

China has pursued such goals with great tenacity and skill, first by converting itself into the workshop of the world through its vast supply of cheap labour, promoting the de-industrialisation of the West in the process, while pursuing its own de facto colonialist projects through its Belt and Road initiative. But that project has had mixed results, with some African nations rejecting Beijing’s interventions amid growing mistrust.

Most seriously, China is facing a major demographic crisis that partly may reflect a global population slump, but must surely also be a consequence of China’s disastrous one-child policy. Since male children were preferred to female under that social engineering experiment, there is a huge disparity between the young female and male populations, leaving hundreds of millions of young men unable to find a wife or to cultivate the domesticity that accompanies marriage.

A discontented urban population of male youths is a destabilising factor in society and even a potential threat to the regime. Last year, China’s population fell for the fourth consecutive year. UN estimates suggest the population will fall to 1.2 billion by 2050, bringing all the problems associated with an ageing demography.

But, for the West, the most urgent priority is to assess the military potential of the People’s Liberation Army. On paper it is formidable. China’s regular army is 2,035,000 strong, with 510,000 reservists and a further 500,000 personnel categorised as paramilitary. Unlike the Russian forces, however, it has not been blooded and is lacking in war experience. More sinister than that, from Xi’s point of view, is the deep-seated corruption that reportedly pervades the PLA.

Its Rocket Forces, for example, were found two years ago to have constructed missiles made of too heavy a material for effective launching and some missiles were filled with water instead of fuel. Of the corruption in the PLA, a former CIA analyst commented: “In its scope and scale, it’s breathtaking.” An earlier Chinese leader Deng Xiaoping had encouraged the PLA to engage in commercial activities. That led to widespread corrupt operations, including running dance troupes and high-end hotels. Even Xi, despite his recent purge of the military, is believed privately to acknowledge that the vast network of corruption within the PLA is too deep-seated to be eliminated.

Nevertheless, the only commander to survive Xi’s recent purge of the Central Military Commission (CMC) was Zhang Shenmin, the anti-corruption watchdog. At the same time, it is likely that Xi’s purge had less to do with uprooting corrupt practices than with assuming even closer control of the PLA. Between now and the next party congress, he can pack the CMC with his own choices.

What should we do?

Plainly, the burden of responding on China falls mainly to the US. The drawing away from Europe, and the understandable insistence that Europe should be able to handle most of its own conventional (and perhaps more) defence, compels us to rethink.

There is some good news on that front.

We are not starting from scratch in Europe when we have NATO, which is still the bedrock of Western defence.

The key fact Western policymakers need to bear in mind is that, for Britain and Europe, it is the most realistic current vehicle for collective security is NATO.

Throughout the tensions of the Cold War (including several accidental near misses at nuclear conflict) it maintained Western security competently and effectively. It has proved its worth. It is not obsolescent or struggling, except insofar as some member states lack financial commitment to the alliance. It is unlikely that even America’s current pivot eastwards would have led the White House to consider NATO membership dispensable, had it not been preceded by a decade and more of some member states defaulting on their obligations.

While the threat of withdrawal of the American defence umbrella makes it necessary for Britain and the EU to ramp up provision for their own defence, in the first instance this should be executed in the context of a reinvigorated NATO.

The European pillar of NATO exists as a concept and it is perfectly plausible that non-US members of NATO could do more to replace American capability as it reduces deployments - it will take time though.

Elsewhere, vague political talk, by politicians who have spent their careers ignoring defence, of an EU army as an alternative security guarantee is delusory. It would take many years to devise such a project and the rivalry and disharmony that accompanies such initiatives, mean an EU army is not a realistic defence prospect.

It may be canvassed under alluring soundbites about “standing on our own feet”, “coming out from under the shadow of America”, etc, but it would lack the strategic capabilities that only the superpower America can supply, as well as the magnified deterrence power of a US presence.

Remember, European nations have a too often unconnected variety of weaponry that defies reduction to integrated coherence. It is a Holy Roman Empire of nation-based defence procurement that already poses problems in the context of NATO, problems that would become insuperable in the context of fabricating a putative European army.

Bureaucracy and regulation would further impede the creation of a putative EU army. Britain would be largely excluded and exploited, allowed only to participate in weapons procurement, with large costs for market access, and without taking part in the decision-making processes.

But there is more good news - NATO is modernising.

The organisation is seriously addressing improvements in its capabilities. Its eastern-flank multinational battle groups are being enlarged to brigade level. Additionally, in a return to Cold War strategy, certain national forces are being assigned to secure specific geographical regions. While such measures are important primarily for the defence of Europe, they are also calculated to reassure Washington. The recently published US National Defense Strategy confirms that America remains committed to providing critical support to Europe, though on a more limited scale than before.

That leaves it to Britain and European NATO members to make up the deficit, which they are perfectly able to do if there is the political will, thus securing the future of NATO and the American security commitment, solely at the price of increasing their defence spending to 5% of GDP, a reasonable expectation.

Frontline nations such as Poland, Finland, Sweden and the Baltic States are becoming NATO’s spearhead. They are moving into a high state of military readiness and can become the core force on NATO’s eastern flank. In one likely scenario, they could create densely fortified land frontiers, defended by extensive minefields and a ‘drone cordon sanitaire’, reinforced by large artillery and missile concentrations. NATO thinking is flexible, but focused and creative, significantly informed by observation and analysis of developments in the Ukraine war, where the Ukrainians have impressively pioneered pragmatic and imaginative responses to challenges created by a more heavily armed invader.

Britain’s role and the need for hard power

The first and most obvious conclusion from the developments I have described - a multi-decade challenge flowing from a resentful, revanchist Russia backed by a totalitarian China seeking dominion - is that we have to change the way we think. Not only do defence and national security need to take up a much larger share of our attention and spending. Regenerated manufacturing, much cheaper energy (the core requirement for economic expansion) and much bigger defence industrial capacity are going to be needed.

We need to rearm and reorientate our politics so that more of our leadership class becomes familiar once again with the need to think in terms of grand strategy, security and alliances rooted in hard power rather than rhetoric.

In essence, and this cuts across all political parties, our entire political economy, statecraft and mindset somehow needs rethinking.

In the era since the end of history was declared most of our leaders forgot the indispensability of hard power, and most voters were happy not to think about it either.

That means us getting our act together fast and the UK Treasury being forced to follow through on pledges made by the Defence Secretary John Healey to fulfil the commitments signed up to at the NATO summit in 2025 - namely getting to 5%. At the heart of it we have to rebuild our defence industrial base, as must the rest of Europe, alongside consolidating and modernising the European pillar of NATO.

But there are also other highly useful alliances that overlap. That includes the Joint Expeditionary Force, established by Britain with nine other members, it forms an embryonic Northern Alliance defending the Baltic and the High North, stretching into the Arctic.

The links with Australia, through the AUKUS partnership and beyond, are strong and growing. And Japan will be an increasingly essential ally.

The myth is that we can consider this in European isolation, because we are a middle power. In reality, as Mackinder showed - it is all connected. The High North connects to the Arctic, where China has an interest. The Indo-Pacific begins only 120 miles from the Med, at the foot of the Suez Canal.

It is in our interests for the sea lanes that carry trade to stay open and not be controlled by the autocrats. Ditto with the global financial system. In alliance with other democracies, Britain has a vital role to play.

In playing our part we will only be taken seriously by the United States and by our other allies if as a society we take our defence more seriously and invest. And we will only be able to deter the autocrats if we take our defence more seriously.

Our defences have been neglected and run down for too long by governments of all the main parties. If we cannot see what Ukraine means, that it changes everything, we do not deserve to survive as a democracy. Freedom is the one amenity that is never free. If it means tightening our belts, trimming our welfare budget and making other fiscal sacrifices, that is the price to be paid for retaining the sovereign liberty won by the endurance of two world wars and countless other conflicts.

History has not ended. A competent defence and security system - true hard power - is the sole guarantee that we will continue to help shape history, rather than ending up as its victims.

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It’s obviously not as earth shatteringly consequential as the Mayor of Greater Manchester Andy Burnham being barred last month from standing in an upcoming Westminster by-election, but even up against the supposedly epoch defining scandal of Burnham having his career plans disturbed, the recent purge of the Chinese military leadership was a significant event.

Although it is not on a par with the cosmic injustice meted out to Burham, who was told he could not stand in a contest which might have allowed him back into the Commons from where he could challenge and topple Keir Starmer and become Prime Minister, China’s military purge is nonetheless important, though clearly not as important as the disruption of Burnham’s career.

For those of you living abroad, or for other reasons not familiar with the work of Burnham, or familiar with his work but immune to his charms, Labour is up against it in a by-election being held in Gorton and Denton on 26 February. Burnham, a former cabinet minister, wanted to stand and Starmer and last month Labour’s ruling National Executive Committee said no.

For days on end the saga led the news bulletins in Britain and Burnham received incredible amounts of analysis. Meanwhile, in China, Xi Jinping removed Zhang Youxia, China’s top general, and another senior military commander, Gen Liu Zhenli. Of seven members of the CMC, the Central Military Commission which oversees the armed forces, five members have been investigated or vanished. Of the two left in post, one is, obviously, China’s leader Xi Jinping.

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This is my newsletter where I write on politics, geopolitics, economics and culture. If you are a paying subscriber, thank you. There is a lot of writing out there, too much probably, and I hope this is useful in terms of navigating what’s going on. If you are on the free version and would like to receive more than a taste of it - more than a few paragraphs - you can upgrade to paid.

Well, that’s the end of that it was nice while it lasted. The West, I mean. The announcement that Britain and seven NATO allies from northern Europe will face 10% US tariffs, rising to 25%, for defending the right of Greenland and Denmark to self-determination, surely spells the end of any viable Western alliance.

Or does it?

Already there is intense diplomatic activity underway in the aftermath of the threats made by President Trump. Mark Rutte, the NATO Secretary General, said on social media on Sunday afternoon that he has spoken to POTUS and looks forward to speaking to him again about all this at Davos, where Trump is travelling to make a presumably hard-hitting speech later this month at the globalised festival of delusion.

It would not be surprising if the northern European countries threatened with increased tariffs attempt to deescalate in the days ahead in the hope someone in Washington persuades the President that he really cannot go around invading NATO allies. What seems to have irked Trump was the news of small deployments by other NATO nations to Greenland on a reconnaissance mission after he demanded ownership of Greenland. Let’s see, though, what Trump says next. At the time of writing, on Sunday evening, he has been quiet on social media. That could change any minute.

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Happy New Year! I hope subscribers had a relaxing break over the festive period. After travelling and then tuning out for two weeks, and reading a lot of books along the way, I’m back with this first post of the year on the implications of President Trump’s move on Venezuela. Thank you for being a subscriber to this newsletter - especially to paying subscribers. If you receive only a taste of it and want to upgrade to paid, where you have full access to read, then it is easy to do. There will be more from me at the weekend.

The first thing to say is that the US has always taken an elastic view of niceties when it comes to intervening in Latin America and the wider Western hemisphere. Teddy Roosevelt was notoriously robust on the question of America’s right to police its own backyard, to such an extent that he even participated in the “rough rider” expedition to Cuba in 1898 which freed the country from Spanish overlordship. Cuba became independent, albeit within America’s sphere of interest until the disastrous Cuban Marxist revolution of 1959. Go back further and large chunks of what is today the US were acquired after the war with Mexico ended in the treaty of 1848. California and New Mexico became part of the US and more land was added - though the Americans paid - in 1854 with the Gadsden Purchase. All this is relatively recent and consistent with the American view that the territorial integrity and security of the nation created 250 years ago this year trumps all other considerations. During the Cold War, under presidents of both parties, this manifested itself in repeated operations both covert and public to ensure that there were in place governments and regimes who wouldn’t threaten American interests. The naive US decision since the end of the Cold War to abandon any serious interest in the region helped facilitate Venezuela’s slide from prosperity into a Marxist narco hell-hole, and fuelled the migration crisis at America’s border.

Even so, even by the standards of American history, the decision to extract Maduro from a military base in Venezuela on Saturday morning and transport him to a prison in New York was audacious.

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This is my newsletter on politics, geopolitics and culture. If you are a paying subscriber, it is much appreciated and thank you. If you want to receive all of this newsletter - which is the only place I write - you can upgrade to paid. To all subscribers, I wish you the best for the festive season.

During the opening ceremony of the Beijing Olympics in 2008 a bunch of us journalists were standing in the Telegraph newsroom watching the slightly sinister scenes being beamed in on television from China.

The Telegraph had - and still has - what at the time was described as a “state of the art” hub and spoke office layout, designed to be ahead of the curve in the bright, glorious digital future which was said to be coming our way. In reality the new office was mainly hype-driven media marketing drivel, because hub and spoke only meant there was a large round table in the middle of the vast newsroom surrounded by giant television screens on tall poles, and from there rows of desks containing the hard-pressed and rightly cynical hacks. The Telegraph was owned by the infamous Barclay Brothers whose over-leveraged business empire would more than a decade later go splat against the wall when interest rates went up.

The newsroom had been the trading floor of Salomon in the 1980s and Michael Lewis, author of Liar’s Poker and many more books since about assorted disasters, worked there when it was the largest trading floor in Europe, before it became a newspaper office.

I’ve probably told versions of this story before, about the Telegraph and the Olympics in China, and apologies if it is familiar to regular readers. After more than ten years of this newsletter appearing in various formats and outlets, it would be unsurprising if there wasn’t occasional repetition.

The reason that scene - the Beijing Olympics opening ceremony on 8 August 2008 - comes to mind from time to time is that nearly two decades later it symbolises what with hindsight can be seen as a pivoting moment. China was on the rise and we in the West were about to be on the slide, though we didn’t know it yet. Our financial crisis had started the year before in 2007 and a month after the Olympics it would explode into the worst peacetime shock perhaps since 1929 and certainly since the twin oil crises of the 1970s.

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In Oliver Moody’s must-read recent book on the Baltic, there is a succinct account of what it has meant for the Estonians to have Russia as an occupier and then a neighbour.

To put what Soviet subjugation meant in a purely economic context, at the end of the 1930s average incomes and life expectancy had been almost the same in Finland and Estonia. By the end of the Cold War, he writes, Finns were eight times richer and lived on average four years longer.

All that on top of a Soviet era drive to extradite and eliminate Estonian professionals and intellectuals, rewrite history along Communist lines, and turn the country into a vassal of Russia.

Russia’s other neighbours have all had pretty similar experiences. Germany was twice the rampager too. It is Russia, though, that is today led by an anti-democratic autocrat who is seeking to wipe out and subsume a European country - Ukraine - and seeking to widen Russia’s European orbit.

This is the context in which the last few days of peace talks should be considered. While the “realists” - and some friends of Ukraine - may well be right in saying that this conflict was always going to end or be paused with a negotiated settlement of this kind, it is still deeply disturbing to watch. Once again, a brave people find that when all the Allied rhetoric and bold speeches fade away, international diplomacy imposes its cold logic and a squalid deal freezes the conflict and stops the killing - for now.

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For years, more than three decades even, I have been engaged in conversations in the pub or over dinner with my friend Gerald Warner about the relative merits of the novels of Anthony Powell and Evelyn Waugh, with a side order of the work of Simon Raven. Which is better - the Dance to the Music of Time series or Waugh’s Sword of Honour trilogy? Sword of Honour in my view.

Surely someone with as much insight as Gerald into those great works should by now have written his own series of novels evoking lost history?

Well, I bring good news. Gerald Warner has written that novel and the first in a six part series has just been published by Marble Hill Publishing.

You can buy A Fateful Promise direct from the publishers here.

(Post and packaging is free.)

It is a magnificent literary achievement.

A Fateful Promise is the first of six. Books two, three and four are complete and ready to publish. Book five is almost there, and then book six will complete the series.

Gerald will be known to many of you from his writing in outlets including Reaction. Even when I disagree with him on some aspect of politics he is a master prose stylist.

Unfortunately, Gerald had a fall in the week of publication and has been in hospital, which interrupted his promotional efforts. More happily, a subsequent hip operation was a success.

I’m sure it will speed Gerald’s recovery if you buy a copy of his book.

The book has had the most fantastic reception already.

Andrew Roberts described it as: “Elegiac, evocative and beautifully written… A remarkable debut of a series that will undoubtedly be a landmark literary achievement.”

Julian Fellowes called it "an enthralling picture of a lost tribe... who had to keep faith in themselves, because nobody else cared. I found this book both informative and moving."

Lady Antonia Fraser said: “I have just finished The Kinsella Chronicles Book One - can't wait to read Book Two!”

Alexander McCall Smith said: “In A Fateful Promise Gerald Warner gives us the first volume in what promises to be a wonderful saga. His account of life in an Irish castle intrigues and entertains.”

This is my weekly newsletter for subscribers. If you are a paying subscriber, thank you. If you are not, it would be great if you can consider upgrading. That way you get the whole newsletter rather than just a glimpse. If you are a new subscriber, welcome. I’m thinking on how the format of this newsletter should evolve. At the heart of it, though, is me writing at length, probably too long, on what is going on and what I think it means, plus book recommendations and random observations from life. All feedback, well most feedback, welcome.

It is the morning after the next general election and Nigel Farage is standing on the steps of Number 10, fresh from having visited the King who asked him to form a government. Farage, looking tired round the eyes but elated and beaming that famous grin, echoes the phrasing chosen by his hero Margaret Thatcher when she stood on the steps in 1979.

“Where there are illegal immigrants, let there be no illegal immigrants,” says the new Prime Minister. "Where there are human rights judges, let there be no human rights judges. Where there is a House of Lords packed with Labour and Tory cronies, let there be a House of Lords packed with my friends. Only joking! We’re going to abolish the whole rotten thing. And now, The People’s work begins. Vive le common sense revolution. In the words of my friend President Trump, beginning his third term in the White House, Britain is back, baby. We are so back.”

Actually, hold on, let’s stop that here. This is making me - and possibly you - feel slightly queasy.

I was planning to write one of those futurology pieces. In my youth as a political editor, an editor would sometimes ask me to do this. To imagine what lay ahead if the unimaginable happened and, say, Labour’s devolution plans went wrong and the SNP’s Alex Salmond became First Minister of Scotland. Like that was ever going to happen.

But in the case of Farage and Reform, the future is rushing in fast. His insurgent party is consistently ahead in the opinion polls and public anger is mounting over the inability of the British state, or any of the main parties, to get a grip on illegal migration and mass migration more broadly.

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Not that long ago, when it was a very nice place to visit, Britain's two major parties used Bournemouth's convention centre for their autumn party conferences, where activists gather with the leadership, business, lobby groups and political hacks.

Off we would toddle to the south coast town, which was several cuts above gritty Blackpool or grimy central Brighton, the locations favoured traditionally by Labour and the Tories. Bournemouth is a British seaside town so, of course, it surely had a seedier underbelly in the late 1990s. Yet for the most part, this town was English gentility and lower middle class manners in action, right down to there being a whiff of Basil and Sybil about some of the hotels. As a political editor, I once stayed in a conference hotel there that made Fawlty Towers look like the Ritz.

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Last week the University of Cambridge awarded eight honorary degrees. As the University put it on social media, these are “distinguished individuals from the world of arts, music, sc…

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There’s an old phrase - the dog who caught the car - that is less familiar and different to the dog that didn’t bark, but better. It came to mind the other day observing Nigel Farage at a summer media party in London.

What does the phrase - the dog who caught the car - mean? As is the fashion now, in the search of information I ran it through Google which produced yet another of those AI generated overviews that is ushering in the final destruction of the news business as we know it. More of which later.

Google AI says: “The dog who chases cars has no idea how to interact with one if it were actually caught. The phrase highlights the importance of considering the implications of achieving a goal beyond just the initial desire.”

Nigel Farage, leader of the insurgent Reform party, out in front in the opinion polls with the old established parties on the run, is the dog who caught the car. Having spent many years merrily chasing and barking at the British political establishment he has overtaken them. Now he looks perplexed about what to do next.

With the opinion polls regularly putting Farage’s Reform party in the lead, and Reform marmalising the old parties in local elections, for the first time it is possible they could end up as the largest party in the House of Commons at some point. On some projections, in an election Reform would win an overall majority and Farage would enter Number 10 to form an administration.

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Almost 17 years after British taxpayers rescued what had briefly and disastrously become the biggest bank in the world, the UK government has announced it will finally sell off its remaining shareholding in NatWest Group, the successor to RBS. In 2008 and 2009 ministers spent a total of £45bn acquiring an 84% stake in the bank, because they feared its collapse would cause a chain reaction, destroy the financial system and devastate the British economy. Now, the bomb has been defused and the bank will return to full private sector ownership.

Having spent several years of my life so deeply immersed in the RBS story, for a book on the crisis published in 2013, barely a month goes by now when someone doesn’t ask me about RBS and the consequences of the financial crisis.

My response is usually that the impact of the disaster was much bigger and more enduring than we realised at the time. The illusion and comfort of the rescue, necessary but having long term unintended consequences, gave the British a false sense that this was an emergency that had been dealt with successfully. Disaster averted.

Fortunately, a great depression was avoided. Unfortunately, choosing to spread it out we underwent a slow, great repression that has lasted many years.

In a paper published last year the Institute for Fiscal Studies assessed the decade and a half of low UK growth and dire productivity that followed 2008:

“On a per person basis, economic growth has been slower than in the US, the EU27 and Germany in that time. The slowdown has been particularly stark given that the UK economy, and its productivity, were growing quite quickly prior to 2008. While employment growth has been strong, average earnings growth has been dreadful - for which read almost non-existent. Gross Domestic Product per head is today nearly £11,000 lower than it would have been had pre crisis trends continued.”

People feel poorer because relatively many of them are, and they don’t like it. They blame the old political parties for this and are tempted to try something new and populist as a desperate last resort.

Even worse, the financial crisis knackered our financial system, for a time breaking the basic capitalist transmission mechanism by which credit is generated and investment functions to fund innovation, improvement and future prosperity.

My view is it also contributed to the high immigration orthodoxy with the Treasury pursuing ever higher immigration. The only way the UK’s troubled post-GFC economy could get any growth at all, it was and is said by the Treasury, is to import lots of people. This argument had been building in British policy making circles pre-crisis. Until 2004, net migration ran at manageable levels. In 1997 it was only 48,000 according to the Migration Observatory. In 2004 it hit 268,000. These numbers became the new normal, with immigration bumping around a bit and hitting 331,000 in 2015.

All the while, officials said there is no other way. Quite a bit of it is students, they pointed out, though we’re not good at tracking who comes, stays or leaves. Anyway, we’re not growing much and productivity is terrible after the financial crisis, they said, so imagine how much worse it would be if we didn’t ship in a lot of people. Enter, Boris Johnson post-Brexit and the controls really came off. Net migration hits 970,000, we think, though it could be more, in 2023.

And here we are. Nigel Farage and the rise of Reform are the result.

Weirdly, we rarely talk about the deep political crisis we are going through in Britain today as being directly rooted in the financial crisis, its aftermath and the profound identity crisis it caused. Brexit gets all the attention when it was an economic blip, a rounding error, in comparison to the impact of 2008.

The financial crisis is the ground zero of contemporary politics, so it is worth continuing to study and think about it.

There’s a play being premiered this summer at the Dundee Rep and Edinburgh Festival called Make it Happen. Nothing to do with me, I should add, it is a National Theatre of Scotland collaboration between the leading playwright James Graham and Brian Cox of Succession fame. It will be interesting to see where they land with the story. The focus of the play is said to be on Goodwin’s misappropriation or misunderstanding of the theories of the great economist Adam Smith. Fine, but will the outsize role of Scottish nationalism and expansionist patriotism run riot, as happened in the real RBS story, also get proper attention? Let’s see.

My book, Making it Happen: Fred Goodwin, RBS and the Men Who Blew Up the British Economy, is still available and still dividing opinion, although at the time the response was largely positive from irate taxpayers who wanted explanations for what happened.

I wrote the book as an irate taxpayer myself, as someone who wanted to try to understand what had happened after having gone into the 2008 crisis thinking I had a decent grasp of economic concepts and realising half way through that I didn’t understand the crisis and most of the people involved didn’t understand it either.

Several broadcasters asked me to go on air late last week to talk about the financial crisis and why it has taken so long for the government to get to the point when it can sell the rest of its shares in the bank.

If I had got round to going on, I would have said that my view hasn’t changed too much in the 12 years since the book was published, other than in one regard.

I still believe Fred Goodwin (the former CEO of RBS who expanded the bank too fast) got a lot of the blame and only deserved some of it. He didn’t operate alone. The board, senior management, institutional investors, regulators and politicians failed too. Foolishly, he made himself an easy scapegoat for more widespread failures.

Gordon Brown, the Chancellor at the time, didn’t cause the crisis, but his hubristic policies in the run-up helped make the UK particularly vulnerable to a global financial disaster. The GFC hits Britain hardest of all the major economies because we went all in on financialisation, a process that did not start with Brown. It started under the governments led by Margaret Thatcher. Brown then accelerated it and the over-extended and over-leveraged banks became far too big relative to the rest of the economy.

To give a proper sense of the scale of what was created pre-crisis, as finance expanded in the boom years and politicians enjoyed the benefits of growth and of spending the resulting tax receipts on vote-winning largesse, I always return to the Bank of England graph from 2010 sent to me by the economist Richard Davies.

In 1990, the total combined balance sheets (total assets) of Britain’s clearing banks reached a sum equivalent to 75% of UK GDP that year.

In 2000, the total combined balance sheets (total assets) of Britain’s clearing banks hit a sum equivalent to 143% of UK GDP that year.

By 2010, the total combined balance sheets (total assets) of Britain’s clearing banks were a sum equivalent to 450% of UK GDP that year.

That’s why the blow-up when it came was so consequential. When the banks failed, the impact was so large it punched a huge hole in the British economy. The effect on the public finances was equivalent to a national war and when our economic performance might have recovered, with the Brexit fight out of the way, Covid hit and the British taxpayer was clobbered again.

What I missed at the time about the financial crisis - or one thing I missed, I’m sure there were others - was how damaging the political chain reaction would be.

Stop the boats or Nigel Farage will be unstoppable

This weekend the plan had been to write something on Nigel Farage, the leader of Reform, committing his first major strategic error since his insurgent party started to rise in the polls. Labour and Keir Starmer are behind Reform in the polls and concentrating their attacks on Farage to the extent that they cannot stop mentioning him. Reform has even issued social media posts asking why Starmer is obsessed with their leader.

It was an amusing line from Reform, but much less amusing were Farage’s new economic plans which are reckless to the point of being terrifying. Welfare benefits will go up while the tax threshold will be raised to £20,000 and paid for by, er, eliminating waste on the model implemented so successfully by Elon Musk’s DOGE in Washington. So great has Musk’s success been as a waste buster that he is leaving with a black eye to go back to his business, having saved perhaps 2-3% of the mooted $2 trillion that was promised.

The holes in Farage’s tax and spending sums are so large - £80bn in year one, perhaps much higher - that it makes me wonder who he is going to hire as Chancellor if he becomes Prime Minister. Fred Goodwin? Actually, that is unfair to Goodwin.

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For as long as I can remember it has been a fixed point in my worldview that one of Britain’s greatest advantages since the Second World War has been its two party Westminster system. Yes, of course, in the literal sense there are more than two parties in operation. The Liberal Democrats, the heirs to the old Liberal party, are always with us, although their numbers in parliament fluctuate. They have 72 MPs today, yet got only eight as recently as at the 2015 general election and eleven in 2019. In Scotland there are lots of parties, not least the Scottish National Party that has run Scotland - spectacularly badly - for 18 years now. And in Northern Ireland too there are yet more parties.

By the two party system I mean that when it comes down to it at a Westminster general election it is widely understood that the outcome and the ultimate choice of party and Prime Minister is between the leader of the Labour party or the leader of the Conservative party. They have both tended to be broad church parties, but with each embodying a certain contrasting view of human nature, of the role of the state and of economic incentives.

Unfashionable as it may be to say it, this two party duopoly has served us rather well, given the alternatives. At times of crisis they acted as shock absorbers, big enough to soak up populist discontent and adapt and reinvent themselves repeatedly.

Reform devotees will howl at the notion that the old parties have done anything like an okay job. If you are a Reform ultra and think the rot set in when the death penalty was abolished or see everything through the prism of national betrayal, I’m not going to convince you that the system actually got us through in surprisingly decent shape. In Monty Python “What did the Romans ever do for us?” terms the two party system did quite a bit for us. It could have been worse, is what I mean, given the circumstances thrown up by the 20th century.

Look at the backdrop. Remember that during a disastrous First World War, Britain lost its role as the number one global financial capital and became a debtor rather than a creditor nation. In the Second World War, a conflict which Britain sought to avoid, the country all but bankrupted itself to defeat tyranny and in the process was made humiliatingly dependent on the US, which imposed harsh terms.

At Suez, where Britain was broadly right and the US administration was wrong, an American president piled on more humiliation. There was a complex and painful dismantling of our empire and a series of financial scrapes at home. That we came through it and still produced the Beatles and the Rolling Stones, and much else along the way, is cause for pride. Unfortunately, the trade unions went wild to the extent it is surprising the place was still standing by 1979. After this difficult run of experiences, Britain was reinvented several times more in the 1980s and 1990s, with some mixed results and many positives.

So that was the Tory v Labour two party system.

That was the the two party system. Why talk about it in the past tense? Well, if the opinion polls are correct, and the atmospherics, anecdote, vibes and political weather forecasts all suggest they are, then the next general election will not be a contest between the Labour leader and the Tory leader, but instead it will be a fight to the electoral death between Keir Starmer and Nigel Farage.

That is certainly Labour’s working assumption. Everything Keir Starmer is doing, guided by his chief of staff Morgan McSweeney, is underpinned by the assumption they are mainly fighting Farage. That is why Starmer has gone much tougher on his rhetoric on immigration and integration, although let’s see on the results. Reform could eat Labour alive and the Labour leadership, unlike many of its MPs, seems to see the danger.

The Prime Minister is also making robust speeches on defence and national resilience, not least at the London Defence Conference where I’ve been preoccupied for the last few weeks.

In part, Number 10 is pursuing this approach because they want it to be so, because if they are right then they get their old rivals the Tories diminished as a third party and they are then up against Reform with the right of centre vote split. Margaret Thatcher won her second and third majorities in 1983 and 1987 party because of a similar dynamic, with the centre left then split between Labour and the Liberal-SDP Alliance.

There is more to it than that, though. In Number 10 they are rightly and genuinely worried about the rise of Nigel Farage and Reform. The voters are so furious that there is a scenario in which the next Brexit-style shock event is a Reform majority in 2028 or 2029, or at least Reform becoming the largest party with traditional Labour and Tory voters defecting to Farage on the basis that it couldn’t get much worse. Though believe me, it could get a lot worse, especially if Reform arrives in government with a fiscally incontinent plan to slash taxes and not control spending. That’s the way to a Sterling crisis in the first week of a Farage premiership.

Pollsters warn that Reform may slip as there are several “vibe shifts” - or changes of mood - possible before the next general election. I wonder, though.

Barring some kind of implosion of Reform (and there is no sign of it yet) the outline or the contours of the next election are already visible as Starmer v Farage.

Labour and Reform have a shared interest in presenting the general election contest in three or four years time as being between their two parties. Labour because it wants the centre-right split and Reform because it wants to stress the Tories are finished and Reform have become the contenders.

For the first time, I have started to think that this means we may be witnessing the eclipse of the Tory party and its proper disappearance as one side of that two party set-up.

This happened in France, where the French conservatives were smashed and replaced by the insurgent right. Now French conservatives have no-one to vote for. Obviously, in the US the Republican party was taken over by populists. It happens, and there is nothing preordained about the UK Conservative party’s survival or status as a challenger for Number 10, even if it has endured for centuries.

None of this is directly the fault of Kemi Badenoch, the incumbent Tory leader landed in an impossible situation after the Conservatives failed in office on immigration in particular. Changing leaders again would not make any difference and they do not have a better option even if they wanted to try. If anything switching to one of the alternatives would make it worse, and holding a leadership contest would only confirm the public’s view that the Tories are self-indulgent and addicted to regicide. There is instead an air of quiet despair hanging over the party.

The Tory party is capable of reinvention and recovery, naturally, when it has done it many times before. In 1997 it was fashionable to say they would never govern again, and they did win eventually. Even after the Brexit chaos, Boris Johnson won a thumping majority of 80 as recently as 2019.

This time it looks really tough. They have a rival to their right, they are being carved out and it is difficult to see what they can do about it that will make a meaningful difference, other than praying for Farage to screw up.

I’m not sure people will like the death of the old duopoly or the new Labour v Reform dispensation much once they get it. With its simplistic saloon bar solutions, Reform is set up to fail in office if it gets there. If Reform does win in some way, outright or at the head of a coalition, it will quickly find that governing is hard. Its policies as they stand are superficial at best and moronic at worst. In particular, their hilarious new tax policy of massive tax cuts and hoping for the best makes Liz Truss look like a patient and prudent economic genius.

If the Conservative party does slip away, declining into becoming the Lib Dems of the right on forty or fifty seats, the country will go into the difficult decades ahead without a moderate centre-right option for government. Not a sensible idea.

London Defence Conference 2025

A lot has happened since the last edition of this newsletter. Apologies, for more than a fortnight I was completely immersed in the London Defence Conference, assisted by the brilliant team that put on LDC 2025. On 8-9 May, discussing this year’s theme Alliances, we hosted a delegation of sixteen members of the US Congress, 600 delegates, an array of international expert speakers, sponsors, supporters, media partners Times Radio and Politico, a wide range of SMEs, the UK defence secretary and, on the morning of VE Day, the Prime Minister.

The LDC team also put on dinner for 160 guests that night at the Royal Hospital Chelsea to commemorate and celebrate the achievements of those who saved us from tyranny. The toast to “peace and freedom in Europe” was given by Rupert Soames, the grandson of Sir Winston Churchill. Then Lord Robertson, former NATO Secretary General and author of the upcoming UK Strategic Defence Review, spoke movingly after dinner about VE Day and today's threats. Across two days at the conference there were speeches galore and so much smart thinking to digest.

Planning for LDC 2026 has already begun.

Why Trump 2.0 happened

Flying back from Sweden on Friday - where I was out in the wilds giving a speech at a business conference - the plan had been to write a chunky and sophisticated item on Donald Trump. Among friends in the US one of the major topics right now is an anguished debate on why Trump 2.0 happened at all. I have a theory.

Anyway, before I could get down to writing it up, Trump popped up posting on social media about Taylor Swift and Bruce Springsteen with a couple of those posts of his that make you think: my goodness, what’s the point in trying to analyse this?

“Has anyone noticed that, since I said ‘I HATE TAYLOR SWIFT,’ she’s no longer HOT?” - said the President of the United States on Friday afternoon.

On his trip to the Middle East he had gone all in on the Gulf states, isolated Israel and made a consequential and interesting foreign poli

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The cover of the Economist this week features a close-up of the face of Nigel Farage, the leader of Britain’s populist Reform party. He is, the cover line declares, the man Britain cannot ignore. As the Economist puts it, Farage’s arrival in the House of Commons at last year’s general election and the rise of his insurgent party means a new, more volatile era in British politics is coming.

What, again? The last eleven years, from the bitter Scottish independence referendum, through Brexit, Boris and the pandemic have hardly been sedate. The Economist is right, though. What is happening with Reform suggests we are moving into an even more volatile era.

Farage and his colleagues are seeking to turn their insurgent movement into a proper party with organisational heft and the machinery to win elections and make him Prime Minister. Get this right and they could emerge as the largest party at the next general election, likely only three years away in 2028, given the need for incumbent large majority governments in the UK to go early lest they be accused of clinging on.

On Thursday, Reform faces the next big test of its organisational abilities both with the local elections and the Runcorn and Helsby by-election in the north of west of England where it hopes to overturn a Labour majority of 14,696.

If Reform cannot win this by-election it has a problem. The by-election is only taking place because the now former Labour MP punched a constituent, repeatedly, and had to resign. Meanwhile, Labour is down in the polls nationally and the economy is misfiring. Voters are even grumpier than usual and the by-election provides them with a chance to kick the government. Fail here and Farage will face gleeful media scrutiny.

So Reform is likely to win. If it is accompanied with breakthroughs in local government and a poor Tory showing on Thursday it will be presented as setting up the next general election as a fight between the incumbent Labour party and the populist Reform. The chatter against the Tory leader Kemi Badenoch has already got going, though the party has no credible alternative leader. A senior Tory MP told me last week he would leave the party if Robert Jenrick replaced Badenoch. Note also that Badenoch had a much more impressive appearance at PMQs last week, as someone with a consistent record on the transgender disaster berating Sir Keir Starmer for flip-flopping.

For Labour, it is all about Reform right now. Already, Farage’s rise has forced Labour and its leader to change their approach. The Prime Minister’s strategist Morgan McSweeney has moved to toughen up Labour rhetoric and policy on welfare and immigration. The fight in the so-called Red Wall with Reform will be brutal. Simultaneously, Labour is exposed on its left flank to the Greens and independent Islamist candidates. The centrist Lib Dems are also rising in the prosperous Home Counties and beyond. If this persists, the conditions exist for a smash up of a general election in which no major party breaks 30% of the vote, or perhaps even 25% of the vote, and Farage becomes Prime Minister on a wave of destroy the establishment feeling at the head of a coalition, possibly with the depleted Conservatives.

That is the Reform hope, although three years is a long time and there is a world out there presenting a problem on the horizon for Farage and other European populists.

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This is Iain Martin’s weekly newsletter for subscribers.

There is a skill modern British Prime Ministers need above all else if they want to stay in post and accomplish anything which endures. Yes, of course, they have to be a hard worker, because the job is relentless, and they must also be ruthless when it comes to dealing with their enemies and their friends too. They need one eye for internal party management and another for communication with the country. Beliefs, determination and a coherent world view help, and the very best usually have all this and more. But it is never enough if they lack the key thing, the defining characteristic.

It is this. A successful Prime Minister has to be capable of learning, at speed, and becoming better at it as they go. The greats develop and improve, until usually after five, six or seven years or so in office the process runs its course and the public or their colleagues turn on them and it is over. Before that, if they enjoy some luck, the Prime Minister who can learn and improve has a shot at doing something meaningful.

Does Sir Keir Starmer have it? We are about to find out.

Margaret Thatcher obviously had it, in spades. Indeed, in opposition she was obsessed by self-improvement and hungry for new ideas, new pamphlets and better ways to communicate. Time and again in her pomp in office she developed and adapted. In foreign policy she became a category A stateswoman despite having had no academic or ministerial training for it.

Thatcher had it until 1986, when she narrowly survived the Westland scandal and in the aftermath perhaps began to feel untouchable. After her 1987 election result she began going backwards and her strength became a counter productive rigidity. Hubris was followed by nemesis.

Did Tony Blair have it? Historians will be debating this for… oh, probably not that long, because although the Blair era seemed historically very significant at the time, it only seemed that way because it was shiny and exciting, if you were a fan, and vulgar and appalling if you were not a fan.

The constitutional vandalism of the period - the lawyerfication of everything - was historically very significant, of course, because it was at odds with our previous system of law and constitutional evolution developed since at least the Reformation.

This central element of the late 1990s legal revolution will take a while to undo or repair, although that will probably have to wait for the next iteration of the British state. Whether it comes via a splintering of Labour, or a government with Reform as the largest party or more likely a coalition partner for someone, or a Tory recovery, I suspect we are heading for an administration that will rip up judicial activism and move beyond the ECHR.

That aside, as it becomes more distant the Blair era looks increasingly like a mere mid-point in the journey between post-Cold War globalisation and its end - now. The period now ending started in the late 1980s when the Soviet Union creaked and China tentatively opened up. Today, we are moving back from an open world to a dangerously closed world, or a (dread word) multipolarity of competing spheres of interest.

Even the open, global monetary system we depend on, in Britain in particular, may go. After 1973 and the end of the US run post-War Bretton Woods system, it became all about opening up capital flows so money could pour across borders. Technology sped up the process at a dizzying pace. Now, it appears, Trump’s advisers have a plan to put the barriers back up. Capital flowing into the US may be heavily taxed for the privilege. Again, so much of what we thought we knew, what seemed solid, is being evaporated as history turns.

Incidentally, I do not mean to dismiss Blair, although there will be readers who do just that. He clearly did learn and develop, most notably when it came to markets and the power of choice. Having begun with little to no understanding of these great forces, he adapted on a “what works” basis and became a great advocate of liberalisation in education and through the academies programme the instigator of a remarkable improvement in the lives of millions of pupils that was continued by ministers in the coalition . Blair’s ability to learn, to challenge his prior assumptions and to develop had a practical benefit.

Theresa May did not have it.

Most obviously, and ridiculously, Liz Truss did not have it either. In office, her brain was incapable of developing beyond a cartoon level understanding of the 1980s leading her to think that if Thatcher was strong and Truss played strong then she would be like Thatcher. Er, no. In the gamble of the emergency budget in 2022 her lack of historical curiosity combined with her wildness of character to produce a mad experiment - Reaganism without the dollar. The US President in the 1980s could broadly do as he liked on spending and taxation because he had the dollar, the world’s reserve currency, and the markets would suck it up. Alas, this was Britain in the 2020s and the markets were under no compulsion to cooperate.

Rapidly, it became clear Liz Truss did not have it.

Does Sir Keir Starmer have it?

Until the inauguration of Donald Trump, it looked like the answer was no, not really, or at least not enough. The Prime Minister appeared to be an enigma, a ghostly figure who had got to the highest office almost by accident.

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Thank you for being a subscriber to Reaction, and a warm welcome to those of you who have signed up in the last week. I hope you are enjoying the evening briefing from my colleague Caitlin. This weekly newsletter for paying subscribers is the only place to read me now and if you upgrade to paid you know you are also supporting independent journalism and the work of our team. Thanks again - Iain Martin.

The wartime slogan Keep Calm and Carry On became such a commonplace sight in Britain more than a decade ago that it seemed as though it had become, tongue in cheek, glib and knowing, the national mission statement. The wartime public information poster carrying the slogan was everywhere for a while - on mugs and tea towels, on clothing, reprinted posters, or bowdlerised and adapted as a “meme” for birthday cards.

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After that, what is there left to say? The scenes in the Oval Office on Friday were so scandalous and dispiriting that it has been, in the responses in Europe, as if a floodgate has been opened. European leader after European leader has issued righteous statements praising President Zelensky and promising continued support to the embattled Ukrainian government. In social media posts there has been a great outpouring of disgust from Europeans at the ritual humiliation forced on Zelensky, although remember it is not universal. Note how quiet are Nigel Farage and the populists, who broadly share Trump’s analysis of Ukraine and his great-power, might- is-right dynamics. On the internut, sorry internet, you’ll find plenty of this from a minority, in Britain at least, saying Zelensky had it coming. The heart sinks to read it.

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