The Third Man: Life at the Heart of New Labour

THE THIRD MAN

Life at the Heart of New Labour

PETER MANDELSON

Copyright

HarperPress

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Published by HarperPress in 2010

Copyright © Peter Mandelson 2010

The author asserts the moral right to be identified as the author of this work

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Source ISBN: 9780007395286

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Version: 2016-09-29

To my parents, Mary and Tony,who gave me my values and thebest upbringing anyone couldwish for

Contents

Cover

Title Page

Copyright

Dedication

List of Illustrations

Introduction

1. ‘Can You Help Me?’

2. Born into Labour

3. A Brilliant Defeat

4. The Three Musketeers

Photographic Insert

5. An Impossible Choice

6. Being Peter

Photographic Insert

7. Being Fired

8. Fighting, Not Quitting

9. Back in the Shadows

10. Trading Places

Photographic Insert

11. Comeback Kid

12. The End of New Labour?

Epilogue

Index

Acknowledgements

About the Author

About the Publisher

List of Illustrations

My maternal grandfather, Herbert Morrison, at the May Day parade in Hyde Park, 1939. (© Popperfoto/Getty Images)

My father and mother with my paternal grandfather, Norman Mandelson.

The budding young spin-doctor? On the phone, next to my father.

At Hendon County Grammar school.

With my mother and brother Miles at the Aldermaston anti-nuclear march in the 1960s.

With Gershom Nyaranga, Rural Dean of Musoma, Tanzania, 1972.

In my bedroom study in Princes Street, Oxford, 1976.

The Weekend World team at LWT. (© ITV/Rex Features)

Admiring the red roses with Tony Blair at the Labour Party conference in Blackpool, 1990. (© John Voos/The Independent)

Keeping a watchful eye on the platform at the same conference with Julie Hall and Philip Gould. (© John Voos/The Independent)

With Neil Kinnock in Clapham, south London, July 1990. (© Peter Macdiarmid/Getty Images)

The Labour candidate for Hartlepool in the 1992 general election. (© Trevor Humphries/Financial Times)

At the dedication of a bench to the memory of my father, Hampstead Garden Suburb, 1991. (© Nigel Sutton)

Fielding calls from the press on an early portable phone in my beloved home at Foy, Herefordshire. (© Paul Felix/Rex Features)

Key members of the shadow cabinet economic team, 1992. (© John Stillwell / PA Archive/Press Association Images)

With a group of school children in Hartlepool.

With guest speaker Mo Mowlam and friends at a constituency summer barbeque in Hartlepool.

With Prince Charles at a reception in St James’s Palace.

Planning the 1997 general election campaign with Margaret Beckett, Alastair Campbell, Tony Blair and Gordon Brown. (© Tom Stoddart/Getty Images)

New Labour’s kings of spin: with Alastair and David Hill prior to our 1997 election manifesto launch. (© Fiona Hanson/PA Archive/Press Association Images)

A new dawn: the election victory party at the Royal Festival Hall on the morning of 2 May 1997. (© Brian Harris/Rex Features)

Minister without Portfolio: outside the Cabinet Office on my first day at work.

At the Millennium Dome site with Chris Smith, Michael Heseltine, Tony Blair and John Prescott. (© John Stillwell/PA Archive/Press Association Images)

John Prescott in conversation with his mate ‘Peter’. (© Ben Curtis/ PA Archive/Press Association Images)

Relaxing in the company of Sabrina Guinness and Mick Jagger.

With Bobby and Jack on the steps of Hillsborough Castle.

At Stormont with Tony and Bill Clinton, December 2000.

The Queen visits Hillsborough. Housekeeper Olywn McCarthy keeps hold of Bobby.

Making my resignation statement outside Number 10 after leaving the government for the second time, January 2001. (© Alastair Grant/AP/Press Association Images)

With Tony in Hartlepool, September 2001. This was the first time we had been photographed together since my second resignation. (© Owen Humphreys/PA Wire/Press Association Images)

Supporting the campaign for justice for the families of the victims of the Omagh bombing, 2000. (© Topfoto.co.uk)

With my constituency agent, Steve Wallace, in Hartlepool.

Anxiously awaiting the result at the Hartlepool count on the night of the 2001 general election. (© Carl Rutherford/PA Archive/Press Association Images)

Jubilation with my supporters after my victory is announced. (© Ian Hodgson/Reuters/Corbis)

At the Progressive Governance Conference in London, 2003 with President Lula of Brazil, Tony and President Thabo Mbeki of South Africa.

With Tony at the EU–China political summit in the Great Hall of the People in Beijing. (© Kirsty Wigglesworth/AP/Press Association Images)

Arriving at the WTO talks in Geneva, July 2008. (© Fabrice Coffrini/AFP/Getty Images)

Irish farmers protesting in Dublin against the proposed WTO deal. (© Collins Photo Agency, Dublin)

‘Cashmering my way into Number 10’ on my return to government for the third time, October 2008. (© Fiona Hanson/PA Wire/Press Association Images)

At the Cabinet table with Alan Johnson, David Miliband, Alistair Darling, Douglas Alexander and Ed Balls. (© Anthony Devlin/AP/ Press Association Images)

Gordon and I see the funny side during a question-and-answer session with local business people in Kent on 21 October, shortly after I rejoined the government. (© Gareth Fuller/PA Wire/Press Association Images)

Resplendent in my robes on the occasion of my introduction to the House of Lords, with Roger Liddle. (© Gary Lee/Photoshot)

On a return visit to Brussels, with the President of the European Commission, José Manuel Barroso.

In a military aircraft during my visit to Iraq, April 2009. (© Peter Nicholls/The Times)

Comeback kid: delivering my speech to the Labour Party conference, September 2009. (© Mirrorpix)

The Mirror headline the next day summed up the mood of delegates in the hall. (© Mirrorpix)

Dancing with Hannah Rita-Mackenzie in the Blackpool Tower Ballroom during the general election campaign, April 2010. (© Graeme Robertson/Guardian News & Media Ltd 2010)

On our final day in Downing Street with Douglas Alexander, Alastair, Gordon and Ed Balls. (© Martin Argles/Guardian News & Media Ltd. 2010)

Introduction

This may seem an odd admission from someone who once embodied New Labour’s reputation for spin and control freakery, but almost everything about this book is different from what I had imagined it would be.

Alongside Tony Blair and Gordon Brown, I helped to found the modernising project that became New Labour, and to win the party an unprecedented three terms in government. I was not just a witness to, but a participant in, the highs and the lows of those years. In the early days of our modernising project, journalists dubbed us ‘The Three Musketeers’, and the remarkable bond that linked Tony, Gordon and me was at the heart of all that we achieved, and failed to achieve.

When I decided to call this book The Third Man, it was not out of feigned modesty. No matter how influential each of us was, at different times and in different circumstances, in the creation and achievements of New Labour, there is an obvious distinction between us. Tony, and then Gordon, became leader of our party and Prime Minister of our country. By contrast, through much of our time in government, my influence was exercised largely behind the scenes, sometimes even in the shadows – another reason why the title’s echo of Graham Greene’s story of post-war Vienna seemed appropriate.

I first met Tony and Gordon in 1985, when I started work as Labour’s youthful campaign director at the party headquarters in Walworth Road and they were recently-elected MPs. I have a clear recollection of when I first brought the three of us together as a team. I was looking ahead to the coming general election in 1987, and had already identified both of them as very gifted politicians – they shared an appetite for hard work, a deftness for identifying political opportunities, and an ability to communicate with an electorate that was still very sceptical about Labour. Above all, they were attuned to voters’ feelings rather than simply to what our activist base wanted to hear. The role I had in mind for them was to work with me to develop campaign grenades for us to lob at the Tories when the election was called.

The two of them needed little encouragement. In the coming months we prepared our lines of attack, and when the election starting pistol was fired, I scheduled a press conference to enable them to release the first salvo. It turned out to be both the first and the last such occasion. Chaired by the sometimes acerbic but media-savvy frontbencher Gerald Kaufman, the event was organised so that Gordon would launch the initial attack on the Tories, before Tony stepped in to finish them off. Instead, he came close to finishing off his own political career almost before it had begun. Momentarily departing from the prepared script, he described Mrs Thatcher as ‘unhinged’. The journalists’ ears pricked up at the sound of the Prime Minister, then at the height of her powers, apparently being described as deranged or worse. To his credit, Tony’s antennae, even then, were in full working order. He quickly spotted the danger, and glanced at me from the platform with a pained expression that I was to become very familiar with in the years to come. It was ITN’s super-sharp political editor at the time, Michael Brunson, who leapt on the gaffe. ‘That’s a good line to lead the Ten with,’ he said, smiling, to me when I went over to the press pack to see what story they were likely to report. I managed to get Tony off the hook, telling Michael firmly that ‘unhinged’ did not mean mad, that it was Mrs Thatcher’s policies that Tony was describing, not her mental state, and that anyway, it would not be fair to embarrass a newcomer who was sure to be going places, and was therefore someone Michael would want to befriend.

This was the sort of incident that helped establish my reputation as Britain’s original ‘spin doctor’, someone who could ‘fix’ the news, or write the next day’s headlines. The Conservatives feared me, and inside the Labour Party some revered me, while others loathed me, depending on their political standpoint. It was no secret which side of the modernising argument I was on. Unfortunately, transforming the Labour Party would prove an altogether much harder and lengthier process than squaring hard-nosed political journalists, but at least from that time the identities of those who would lead the modernising pack began to be established.

From the outset, I knew that much of this book would centre on the defining relationships of my political life, with Tony Blair and Gordon Brown. As I wrote, and relived my life in the Labour Party, I found myself recalling some of the despair I occasionally felt during the 1980s: the lurking, ever-present thought that our party might never form a government again, and the sheer hunger and drive this instilled in me to ensure that it did not happen.

I found that same hunger in Tony and Gordon, the two people who gave me most hope in those wilderness years that Labour’s best days might yet be ahead of it. It was not a hunger for office for its own sake, but for a modernised Labour Party that would build a more humane, tolerant and socially just country than the one we were living in during the 1980s and early 1990s.

The three of us became like brothers. The force of our personalities, and the desire for change that we shared with the team of political professionals we built together – people like Philip Gould and Alastair Campbell – would help to take us back into government and keep us there for a longer period than any in Labour’s history. We transformed our party’s attitudes to the economy, to markets, to state ownership, to defence, to business, to the trade unions, to tax and spending, to public service reform, and to individual rights and responsibilities. In doing so, we defined New Labour, and reconnected the party with the broad mainstream of modern Britain.

In government, this modernising project helped create the fairer, more generous, more open-minded Britain that will be our legacy. We have a record that I am proud of. Our public infrastructure – the essential services we all rely on – was rebuilt: the days of winter crises and longer waiting times in our National Health Service, and the crumbling school buildings that we inherited on coming into office, now seem like something from another era. Faster treatment for serious diseases such as cancer has saved lives, and the NHS is more patient-focused than at any time since its birth. Our unprecedented investment in schools and universities was combined with far-reaching reform to widen educational opportunity at every level, in particular during the crucial early years. We irreversibly improved attitudes to the work–family balance, acted successfully to bring about peace in Northern Ireland, significantly reduced crime, increased support for families with children, and promoted more tolerant attitudes on race, gender and sexuality. All of these achievements were possible only because of the project to which Tony, Gordon and I dedicated our political lives: fundamental change to the Labour Party.

In writing this book, I knew there would be no way to avoid describing the occasional soap-opera aspects of our relationship. I am conscious that my diaries and contemporaneous notes, on which this account is based, have focused disproportionately on the frustrations, arguments and disagreements we had, rather than on those areas on which we did agree and which, as a government, were the basis of our long-term achievements. Inevitably with such a close-knit group of strong personalities, there were family feuds, tensions and differences of opinion – sometimes of epic proportions, sometimes, in retrospect, far too petty. These were magnified and fed by the burgeoning twenty-four-hour news culture, the development of which accelerated during our time in office. But more often than not, particularly in the earlier years, the tensions between us were a source of strength for New Labour. And in the end, through all the strains, we held together – unlike Thatcher, Howe and Lawson, unlike the SDP’s Gang of Four, and even, going back further, the Labour trio of Crosland, Jenkins and Healey.

If any of us had reason to split from the others and break up the team, it was me. I became the meat in the sandwich in the struggle that developed between the other two. My falling-out with Gordon after John Smith’s death, when Tony rather than Gordon became party leader, would lead to my exclusion from government for lengthy periods, blighting my ministerial career. Yet I remained close to Tony, and I finally made up with Gordon.

Whatever my other failings, I am a loyal person, and I rate loyalty above all other qualities. There were many times in my political life when it would have been simpler for me either to keep my head down, or to change sides at an opportune moment. It would have been advantageous for me to desert Tony when he was battling for survival against Gordon’s drive to accelerate his departure and succeed him as Prime Minister. And I would have been applauded by many in my party if, later on, I had deserted Gordon when it was clear that he could not win re-election. Perhaps it is a fault to cling too dogmatically to an idea or a policy, but not, in my view, to a person to whom you have made a commitment.

The reason I did not waver in my support for Tony is that I believed in him, his political outlook and his skills as a leader. The more pressure he came under, the more steadfast I became, overcoming my feelings that at times he had let me down. Tony was not perfect. Notwithstanding the steel he showed towards me, he did not always enforce his will sufficiently with others to get the policy changes he wanted. But his personal conviction, and sense of right and wrong, were unflagging. He had great leadership qualities, and it was always impressive to see how he would manage to defeat his opponents more often than not by means of intelligent planning and calculation, rather than employing less subtle tactics.

The reasons I came back to Gordon in late 2008, rejoining the government even though I was enjoying my life and my fulfilling job as the EU’s Trade Commissioner, were that he needed me – always a nice feeling to have – and that I wanted to serve the country I love. I felt that I could make a difference when the financial crisis struck, and I strongly supported the policies Gordon was pursuing. I know that, later on, some people in the party felt that by bolstering Gordon’s position and keeping him in place, I contributed to our electoral defeat. One reason I did not take action was partly selfish: I did not want to be accused of ‘treachery’ all over again. But also, I was never convinced, so near the election and in the absence of an obvious consensual alternative, that a change of leadership could have been easily, bloodlessly or quickly achieved, or that having three different Prime Ministers in a single Parliament would have been an electoral asset. And I never gave up the hope that Gordon would be rewarded at the polls for his efforts in preventing a painful economic recession from turning into something far worse.

One of the things for which I have attracted criticism from the media is my circle of friends. I admit that I am drawn to individualists, to people whose achievements and strong personalities make them interesting company. I am more interested in what people do and think than their ideologies, and I judge them by their character, by their personal qualities, rather than by how they are perceived. There is no escaping the fact that people who are successful in politics, business, journalism, fashion or the arts give off energy, have thought-provoking insights and attract dynamic company around them. I enjoy this, and have a wide range of friends and acquaintances, mostly outside politics. I make no apology for that. I am a restless soul.

As I began writing this book during my final period in Brussels, I was uncertain about how much personal and political detail I should, or could, include. New Labour was, after all, still in power, and I was keen to avoid anything that might harm or embarrass the government, or Gordon or Tony. Or, frankly, myself. But the book I have written turned out to be neither trimmed nor self-censored. For one thing, I recognised that doing so would have made it not only less truthful, but also less rounded and less compelling. My time in Brussels changed the tone and the breadth of the book I have written. Away from the pressure-cooker of Westminster, I was able to establish a new distance from the events of which I had been a part. I also became more relaxed personally, more self-confident politically, and much less interested in the spin and the message-control which, for both good and ill, had defined my early years as a Labour moderniser.

The result is that I have ended up by writing what I believe to be a frank and truthful account of my political life. Unlike those in politics who appear able to go with the flow, I am not a neutral figure. I do not remember a moment when I have not been fighting for something or against something, or simply fighting back against the tumult engulfing me. While I am capable of changing my views, I am rarely without a view. Ever since I entered politics, I have stood for certain principles, and I have had a particular political outlook. I am on the centre-left, but I have always been open to fresh ways of implementing the progressive values I hold. The more involved I became in writing this account, the more I realised that I am anything but a mere fence-sitting chronicler of New Labour, or of the characters and relationships at its core.

The main sense, though, in which the book has turned out differently from what I had anticipated has less to do with my own choices or judgements than with what Harold Macmillan famously described as the determining force in politics: ‘Events, dear boy, events.’ As I began writing in earnest, I felt oddly liberated by no longer being directly part of the story I was setting out to tell. Tony had left office. Gordon was in Number 10. I was in Brussels, out of front-line British politics altogether. But then, suddenly and astonishingly, events took an unexpected turn. Not only did I find myself returning as a participant, rather than an observer. Once again I was at the heart of the story.

1

‘Can You Help Me?’

The most fateful four hours of my political life were also the most surreal. They began on the afternoon of the first Thursday of October 2008, across a tray of sandwiches, yoghurt and slightly overripe bananas, with Gordon Brown in 10 Downing Street. They culminated in my return to the heart of government, at the behest of a Prime Minister who for much of the previous decade had denounced and denigrated me.

Our first quiet step towards reconciliation, the rekindling of a deep if damaged friendship, came seven months earlier and two hundred miles away. It was a crisp late-February morning in Brussels, my base as European Trade Commissioner since I had left front-line British politics in 2004. Gordon was on his first full-dress visit to the European Commission as Prime Minister. Before making his way to the imposing, glass-fronted headquarters of the Commission on the Schuman roundabout, he had arranged for us to talk briefly in the office of our permanent representative to the EU, Kim Darroch, down the road. It would be the first time Gordon and I had met since his truculent takeover from Tony Blair in Downing Street the year before. I was intrigued, expectant. And apprehensive. From the moment in 1994 when Tony had emerged as the irresistibly obvious choice to succeed John Smith as Labour Party leader, Gordon had convinced himself that I had schemed behind his back to deny him the job. As he surely must have recognised, that was unfair, and untrue. Yet in more recent years, as he and his allies waged their insurgency against Tony, he had come to view me as Tony’s staunchest defender and as a siren voice of alarm over how and where he was likely to lead New Labour.