Gordon Brown: Prime Minister

At 7.30 p.m. everyone in Brown’s office watched the television pictures of the chancellor emerging into the spotlights, brushing his hair, and confessing defeat. Britain, he announced, was withdrawing from the ERM and devaluing. In a surreal exercise, the viewers in Brown’s office darted between the television and the window, gazing down at Lamont in the distance to reassure themselves that the television pictures were reality.

After Lamont’s announcement came to its abrupt conclusion, the atmosphere in the office was ‘on a knife edge’, recalled one of those present. All eyes swivelled towards Brown and then away. His shock was palpable. He had made a fundamental mistake, and he was terrified. This was the most testing moment of his political career. His refusal to seek the nomination in Hamilton or to contest the party leadership were failures of courage, but were not life-threatening. This crisis endangered his entire future. At that moment he was due to lead the attack against the Tories for a policy he himself supported, and simultaneously he was under attack from the left wing of his own party for ideological folly. No one was certain whether he would cope with the explosion of emotion. Under pressure, the ashen-faced Brown’s behaviour was extraordinary. Some eyewitnesses say they observed the neurotic pessimism of the son of the manse. Others witnessing the brooding volcano in that untidy office would mention the inherent self-destruct button of the Scottish character.

But Brown did not self-destruct. He reasserted his self-control, the tension eased, and he began designing a strategy for his survival. Driven by his hatred for the Tories and his searing ambition to become party leader, he contrived a convincingly venomous denial of the past. ‘We have to fight to avoid going down with the government,’ was the common sentiment. His first decision was to reject an invitation to appear on that evening’s Newsnight. He knew he would have to answer the charge that if Labour had won the election they would have been hit by the same crisis, and would have reacted identically to the Tories. The party, Brown decided, had to avoid self-flagellation and pontificating about the ‘current mess’. Instead, he would offer soundbites damning the government.

As he faced the news cameras he propped a piece of paper in front of his eyes bearing the words, unseen by the viewers: ‘Huge chasm’. His identical soundbites, emphasising this ‘huge chasm’ between the government and Labour, blamed everything on the Tories, and suggested that Labour had never endorsed the disastrous policy. ‘We demanded interest cuts,’ he repeated endlessly, although that was not a solution to the crisis. ‘The government failed to listen to our warnings … The Tories are the party of devaluation … The Tories cannot be trusted on the economy.’ The government’s humiliation was transformed into a Labour success. ‘I say to Norman Lamont: spend your energies pursuing the useful job of creating jobs for others rather than the futile goal of clinging to your own.’ Of John Major he said: ‘The recession started when he became Treasury secretary, worsened when he became chancellor and intensified when he took over as prime minister. Every time he changed jobs, thousands lost theirs.’ Stubbornly, he repeated his rehearsed phrases and ignored supplementary questions. He may have turned the facts upside down, but the public was unconcerned. Their spleen was directed at the Tories. Labour’s support for the policy was forgotten. Brown’s calculated indifference to the truth did not impress the party cadres. The left, disgruntled by his modernisation agenda, was whispering against the now isolated shadow chancellor.

Two weeks later, Brown arrived at the 1992 party conference in Blackpool. The criticism had not relented. The opinion polls showed that Labour was still not trusted by voters on the economy. His fear had plunged him into a deep, black mood. He was convinced that Robin Cook and John Prescott were conspiring to expel him from the front bench, and that he was fighting for survival. Reconciling Brown with Cook, complained fellow shadow cabinet member Frank Dobson, the spokesman for employment, had become ‘a lost cause’. Brown’s grudges exploded in private but were concealed from the public. As he toured the corridors at the conference hall he repeatedly told delegates he encountered, ‘There is no way that Labour could have kept its credibility if I’d come out in favour of devaluation.’ Because he had resisted the devaluation chorus, he continued, Labour had been immunised from blame for the collapse of the pound. The Tories, he said, should be cast as the party of devaluation. Repeatedly he told his critics to blame the Tories for ‘betraying Europe’, twisting the responsibility for the ERM crisis away from the real culprits, the Germans and the EU Commission who had refused to support Britain. His conference speech was an old-fashioned tirade: ‘The City of London is Britain’s biggest casino, and the winners are celebrating over £500 million won by cocky young men betting on a certainty.’ He demanded curbs on currency speculators (whom he had earlier predicted would be controlled by the ERM) and advocated ‘managed exchange rates’ as ‘absolutely necessary’. The contradictions were glaring, but that was irrelevant. Despite his faltering popularity, he was again first in that year’s elections for the shadow cabinet, with 165 votes.

Brown returned to London determined not to waver. Preoccupied by a zealous conviction of his virtue, he became impenetrable and impregnable to the doubters. He was dubbed a political glacier, but he pursued his duty. ‘I must come up with some big ideas,’ he told friends. In 1906, 1945 and 1974, Labour had reinvented itself. In 1992 the party again required a huge intellectual effort if it was to win credibility. Those pessimists preaching that Labour’s support could not break through the 35 per cent barrier, or that the party had a declining base, were ignored. His tactics had provided breathing space and an inspiration for a new crusade. He immersed himself in rewriting Labour’s policies to make the party electable, in a style his supporters called ‘radical populist’. His latest political journey was calculated to convince electors that Labour was abandoning the economic policies on which it had fought the previous election.

Brown was resolved that Labour would never again pledge to raise taxes in an election campaign, but that was only the beginning. The image of Labour as the party of inflation, high spending and begging from the IMF had to be eradicated. No future Labour government, he decided, could finance failing industries or restore unlimited powers to the trade unions. He would pledge support for full employment, but refuse to support higher taxation or restore the earnings link to state pensions. He began speaking about the importance of developing Labour’s response to the new shibboleths: globalisation, the financial markets and the ‘knowledge economy’. Relying on competition in the market rather than imposing state controls, he slowly recognised, gave people greater opportunities; knowledge rather than capital had become the key to wealth, and he listened to those saying that the poor would be enriched by learning new skills rather than by the imposition of state control over wealth. The new gospel would present the party as a modernising agent for the economy, society and the constitution. Much of Thatcherism, Brown acknowledged, was irreversible.

His reward was more unpopularity. Senior colleagues including John Prescott, David Blunkett, Jack Straw, Robin Cook and Michael Meacher regarded his ‘radical populism’ as ‘nauseating’. Brown, they believed, was ‘harbouring dangerously revisionist, pro-establishment ambitions for the party’. Although they did not share Bryan Gould’s violent characterisation of him as a more fanatical monetarist than the Tories, they objected to any abandonment of socialism. Brown rebutted their criticisms. In the fashion of an evangelist, he behaved like the leader possessed of the truth and commanding his flock to follow. But to assuage his critics, he began perfecting the art of addressing different audiences with different messages. To please the left, he promoted himself as a true socialist. ‘Labour,’ he wrote in Tribune, ‘rejects the notion that a free-market approach to currency markets will bring lasting benefits to the British economy … Never again must speculators control the policy of government. Action must now be taken to strengthen European co-operation to diminish the power and role of speculators.’ Simultaneously, he was reinforcing loyalties among those friends who loathed the Tribunites. Supported by Blair and Mandelson, he confronted his critics. Robin Cook, the health spokesman, had predicted, ‘Labour will never govern again unless it adopts proportional representation.’ Cook was brushed aside by Brown with open scorn. Bryan Gould was damned as ‘dangerous and reckless’. John Prescott was derided for criticising the modernisers’ attempts to expunge the image of ‘a party of the poor and the past’ and to broaden Labour’s appeal to the middle classes. Seemingly uninvolved in the steamy rows was John Smith. The party leader disliked any dilution of Labour’s old ideologies. Just ‘one more heave’, he believed, would expel the Tories. Brown, Blair and Mandelson sought another route.

A possible way forward was revealed at a conference at Ditchley Park between the ‘modernisers’ and US presidential candidate Bill Clinton’s advisers. Although he disliked Thatcher’s indifference to social justice, Brown was impressed by Clinton’s equal antagonism towards the idle poor and the idle rich. Everyone without a good excuse, said Clinton, should work. ‘We want to offer a hand up, not a handout,’ was his memorable piety. The growing success of Clinton’s presidential campaign, thanks partly to his economic proposals, reinforced Brown’s commitment to abandon Labour’s traditional philosophy of universal benefits. Changing Labour’s gods, he calculated, could only be done piecemeal, accompanied by pledges zealously to help the working poor and the underclasses. To stem the inevitable criticism that he was adopting Thatcherite policies, he planned successive diversions to restate his socialist credentials. He would criticise the very class whose support he was seeking – the capitalists who on the eve of the election he had condemned as ‘doing well out of the recession’ – and praise the performance of the Scandinavians, Germans and Japanese, although he knew comparatively little of their true economic predicament. Working up to fifteen hours a day, he analysed the party’s weaknesses and concluded that its salvation required not just new ideas, but a new vocabulary describing a new party. Just as Margaret Thatcher had recruited Keith Joseph, Nicholas Ridley, Nigel Lawson and other intellectuals from the Chicago School to bury memories of the Heath government under new policies, Gordon Brown began, with Blair and Mandelson, to search for catalysts of a new party. For his personal quest, he needed new advisers.

His office had been reorganised under Sue Nye, an aggressive chain-smoker, formerly employed by Neil Kinnock, famous for asking ‘Have you got a mint?’ to disguise her habit. Although she might have been tainted by her association with the notorious pre-election rally at Sheffield, Nye was trusted as loyal, hard working and ruthless. Like Jessica Mitford, she decided by just a glance whether someone was acceptable or to be excluded. Her reasons for freezing out a person could be inscrutable, but her phrase ‘If you’re outside the family, you’re radioactive’ appealed to a man cultivating the authority of the clan chief.

Within the citadel, Brown needed a soulmate. His enquiries suggested that Ed Balls, a twenty-five-year-old Oxford graduate employed as a leader writer at the Financial Times, would be ideal. The Nottingham-born Balls, Brown heard, was a loyal Labour supporter but was disillusioned with John Smith. He had studied at Harvard under Larry Summers and Robert Reich, both advisers to Bill Clinton, and was sparkling with ideas about monetarism, how to avoid boom and bust, never rejoining the ERM, giving independence to the Bank of England and revolutionising Britain’s economy. Brown cold-called Balls to arrange a meeting. He was impressed. Balls’s intellect and their mutual admiration of America helped to form an immediate bond. In an exchange of letters, they agreed that Labour’s future success depended on winning the electorate’s trust in the party’s economic competence. Most importantly, Balls was prepared to undertake the grind to produce the fine economic detail that was beyond Brown’s experience. The association with Balls and his future wife, Yvette Cooper, would change Brown’s life.

In January 1993 Brown and Blair flew to Washington. Ed Balls had reinforced Brown’s attraction to Bill Clinton’s ideas, especially after Clinton’s election victory the previous November. With Balls and Jonathan Powell, a diplomat at the British embassy, they listened to Larry Summers and Robert Reich explain Clinton’s seduction of the American middle classes away from the Republicans, and his welfare-to-work programme. In a newspaper article after their return, Blair wrote enthusiastically about the exciting change in Washington. He praised the new vitality in the United States, and hailed the thousands of young people coming to Washington to build a new era. ‘The Democrats’ campaign was brilliantly planned,’ Blair wrote. Labour, he suggested, should copy Clinton’s policy, stressing ‘the importance of individual opportunity; of community strengths’.

Brown also returned inspired to seize the middle ground from the Tories. He was attracted to Clinton’s core proposition that governments had responsibilities to the whole community. That was not a new idea. Since 1988, Brown and others had discussed it with Clinton’s staff. The Democrats’ genius was their packaging. Labour, Brown felt, should avoid outrightly campaigning for egalitarianism. Rather than preaching ‘total equality’, the party should pledge ‘equality of opportunity for all’, with the assurance that ‘everyone can fulfil his or her potential’. The new slogans would offer choice and social change. The critical promise would be to reduce unemployment in a ‘partnership economy’ without increasing taxes.

To position Labour as the party of low taxation, Brown developed new catchphrases despite the protests of the left: ‘We do not tax for its own sake’; ‘We do not spend for its own sake’; and ‘We are not against wealth’. Simultaneously, he began to harp on the government’s tax increases – albeit only 1 per cent since 1979 – which contradicted the Conservative election pledge to lower taxation. The Tories were crudely classified as liars: ‘Either these ministers were incompetent on a scale which beggars belief, or … they set out to deceive the people of Britain on a massive and unprecedented scale.’ The gauntlet was thrown down: ‘There is no one left for this government to betray. They have no credibility. The electorate will never trust them again.’ Endless repetition, Brown hoped, would produce rewards.

A journey to the Far East in 1993 reinforced his conviction to discard other Labour sacred cows. Britain, he realised, could not compete with China on the cost of production, but only on the quality of the products. To beat the Pacific Rim required a skilled British workforce. ‘Capital’, demonised over the previous century by socialists, was a worthless target, he decided. The buzz words of his new Labour creed were ‘human capital’ and ‘knowledge corporations’. ‘Their lessons must be applied here,’ he wrote in countless newspaper articles about innovation in the Far East, developing the idea that ‘the value of labour can be enhanced as the key to economic prosperity’.

To spread the message from his office in London, or over the weekend from his home in Edinburgh, he sought to dictate the news agenda with interviews and press releases, urging Peter Mandelson to hunt for every possible appearance on radio and television to place him in the spotlight. He preached the homily that ‘in the modern economy we will earn by what we learn’, and recommended that ‘the system of personal taxation and benefits should favour those who upgrade their skills’. To improve those skills he proposed a University for Industry, bringing together universities, industry and broadcasters and using satellite communications to disseminate and constantly upgrade information.

The powerhouse for this change was to be the Treasury. ‘I see the Treasury,’ Brown wrote, ‘as a department of national economic reconstruction to deal with the short-term problem of unemployment and the long-term national economic decline.’ Revealing his own abandonment of socialism as a figleaf to give false comfort to the middle class, he ridiculed the Tories for relying on the free market and individual opportunity rather than government intervention to finance industry. ‘I see the public sector as the engine of growth out of recession,’ he wrote, re-emphasising his true beliefs. He spoke of levying a windfall tax on the excess profits of the privatised utilities – copying the Tories’ windfall tax on banks – to finance a ‘New Deal’ on employment and, with another reminiscent whiff of Harold Wilson, he attacked the major banks for increasing their dividends.

This potpourri of socialism and Clintonism irritated John Smith. The leader disliked the modernisers’ policies, and he ostracised Mandelson. Smith was not surprised when John Edmonds, the GMB union leader, called him personally to protest about Brown and Blair’s visit to America. ‘They’re getting too much publicity,’ complained Edmonds. ‘This Project is mischief-making and about personal ambition.’ Although a decade later Edmonds would acknowledge ‘a lack of imagination among the trade unions in the early 1990s’, he was gratified in 1993 by Smith’s rejection of the modernisers’ proposals for the next election campaign. Smith supported large government spending, and disliked Brown’s refusal to commit Labour to use the proceeds from council house sales for more building. In meetings of the shadow cabinet, the leader remained silent when Brown’s proposed windfall tax was criticised for being too small. ‘We cannot meet those expectations,’ Brown told Frank Dobson. Smith overruled Brown for being ‘too conservative’.

In contrast, during their arguments, while Murray Elder, Smith’s chief of staff, sat silently in the background, Smith growled, ‘You’re going too fast.’ In private, Brown raged about Smith’s unwillingness to support the modernisers while encouraging the traditional left. While in public Brown praised John Smith’s ‘egalitarianism’ and ‘concern for justice’, emphasising Smith’s concern as a Christian socialist for Labour’s moral purpose, he detested Smith’s blinkeredness. Smith ignored the Tories’ private polls which showed that Labour was still regarded as ‘dishonest and incoherent’, and on the side of losers. Relying on the lowest common denominator for electoral appeal, Smith was sure, would prove successful. ‘The Tories are destroying themselves,’ he observed about the government’s bitter battles over Europe. ‘Labour can sleep-walk to victory.’

Brown found that his frustrating battle with John Smith to change Labour was losing him friends and allies. Visitors to his office reported that his Horatio-on-the-bridge act on the shadow spending ministers was causing him anguish. ‘Gordon is torn and depressed about the irreconcilables,’ John Monks observed. Trade union leaders whom Brown regarded as friends – Rodney Bickerstaffe, Bill Morris and John Monks – were surprised during their private meetings that the man casting himself as the future ‘iron chancellor’ forgot to smile while brusquely refusing to advocate higher public spending funded by higher taxes and borrowing. Brown’s image was affecting his credibility. ‘Gordon,’ said one, ‘is really not interested in people; he’s only interested in people as economic agents, the ants in the anthill, and he wants ants to have a nice anthill.’ The alienated Labourites did not disagree with Norman Lamont’s successor as chancellor Kenneth Clarke when he jibed that Brown’s regurgitation of lists, strategies, statistics and predictions of doom were self-defeating. ‘He has as much policy content as the average telephone directory,’ mocked Clarke languidly across the floor of the Commons, ‘and if I may say so – it is a modest claim given the competition it faced – I thought the best parts of the hon. gentleman’s speech came when he was quoting me.’ Brown scowled. The dispenser of ridicule hated receiving similar treatment. Even John Smith’s agreement to relaunch Labour on 9 February 1993 as the party of the individual and to abandon any commitment to renationalisation brought only temporary relief.

Brown’s misfortune was that changing Labour’s economic policy to attract the middle classes was more difficult than Tony Blair’s task, as shadow home secretary, of altering the party’s social policies. While Brown chased every news bulletin, Blair, also helped by Mandelson, concentrated on making limited appearances with ‘warm and chatty’ preludes to reflective answers suggesting the moral high ground. Blair’s insistence on accepting interviews only on his own terms, and resistance to giving instant reactions to please the media’s agenda, gave his rarer interviews a cachet, and gracefully neutralised his opponents.

Brown had become weary. A visit to Newbury in early 1993 to campaign in the by-election caused by the death of its sitting Tory MP, John Major’s adviser Judith Chaplin, revealed the perils for self-publicists. The previously safe Tory seat was vulnerable. Norman Lamont had committed atrocious gaffes, not least his statement that high unemployment was ‘a price well worth paying’ to reduce inflation. The Tory candidate was an unappealing PR consultant. The seat should have been an easy trophy, but Brown’s performance in front of the television cameras at Vodafone’s headquarters, which were in the constituency, was unproductive. Confidently, he told journalists about the area’s high unemployment. ‘Rubbish,’ exclaimed Chris Gent, Vodafone’s managing director. ‘Our company has grown by 25 per cent in the last year.’ The Liberal Democrats won the by-election.

In March 1993 the London Evening Standard reported that while Brown was regarded with respect, Tony Blair was the frontrunner to succeed Smith. Brown was furious. On one occasion when Mark Seddon, the genial editor of Tribune, was interviewing Brown in his office, a member of Brown’s staff announced, ‘Tony’s gone ahead without you,’ referring to a meeting the two were to attend. Brown exploded, breaking a pencil in his fury.

The hostility towards Brown among his fellow MPs was growing. His monotone hectoring was criticised as all too revealing of an unworldly, unmarried forty-one-year-old mystified about the real world. His constant appearance in an identical uniform – blue suit, white shirt and red tie – regardless of the context bewildered those who judged people by such things. Brown’s reputation was not helped by a story of a car journey through countryside when he allegedly said to his companion, ‘Look, those cows have had their foals.’ His new critics delighted in carping that he was ‘a townie who didn’t know where his fish and chips came from’. Others recited an eyewitness’s account of Blair mentioning to Brown that he had once seen Marc Bolan perform. ‘Where is he now?’ asked Brown, preoccupied with drafting a statement. ‘Dead,’ replied Blair. Brown carried on writing, oblivious to the answer.

In fact he had become oblivious to everything other than his own truths. Like a man possessed, he steamrollered rather than reasoned with critics. Among his victims was Peter Hain, an ambitious left-winger brought up in South Africa whose circuitous route to the Labour Party via student protest, the Liberals and election as Tribune’s secretary baffled many. Unwilling to accept Brown’s economic prescription for an election victory, Hain wrote a pamphlet for the Tribune Group arguing for huge public spending, the abandonment of euromonetarism and a return to full socialism. Labour, Hain complained, had never previously attacked the Tories for increasing taxes, yet Brown was appealing to richer voters by promising to lower direct taxation. ‘Gordon has done a brilliant job in exposing Tory tax hikes,’ said Hain, ‘but voters need to be convinced that Labour can manage the economy more effectively. The modernisers have told us what we’re against but not what we’re for.’ Hain did not grasp that the shadow chancellor had not abandoned socialism in favour of Thatcherism other than as an election ploy. He espoused measured concealment to defeat the Conservatives. Neutralising Hain should have been effortless, but Brown’s methods compounded his predicament. Angry about its attack on himself, he sought to prevent Hain’s pamphlet’s publication. Hain was summoned to Brown’s office and lambasted for thirty minutes. ‘We believe markets must work in the public interest,’ he was lectured. Brown did not understand markets and his list of do-gooding schemes – the University for Industry, a Global Environmental Task Force for young people – and his belief in ‘the community and independence’ did not impress Hain, who insisted that the publication of the pamphlet would go ahead. Convinced that even a single dissenting voice would damage the party, Brown tried to persuade other Tribune members to stop Hain, but without success. Next he sought Mandelson’s help, warning about the pamphlet’s potentially dire consequences. He failed again. With Robin Cook’s support, Hain published his pamphlet. No one noticed its appearance. Brown began to lobby against Hain’s re-election as Tribune’s secretary.