Gordon Brown: Prime Minister

Outside Edinburgh, few were aware of ‘Dramcarling’, Brown’s new double-fronted red-brick house in North Queensferry, set on a hill above the road with a garden rolling down towards the Firth of Forth and with a view of Edinburgh Castle on a clear day. He had after many years found his dream. The house epitomised his love of Scotland – its poetry and scenery. The interior reflected another trait, having been neither redecorated nor refurnished. The dirty sofas from the shambolic top floor of his Edwardian house in Marchmont Road were dropped into the rooms overlooking the garden, and a familiar pile of books, government reports and newspapers began accumulating across the floors, around the battered typewriters and discarded word processors, towards the ramshackle kitchen. The man without taste hated domesticity.

During the decade Brown knew Marion Caldwell, his attitude towards women and relationships aroused bewilderment. Although he spent holidays with Caldwell in America, she remained in her own home in Edinburgh. He regularly disappeared for substantial periods, arriving at her doorstep when it suited him and failing to excuse himself if he was absent. Relationships with women in Brown’s life tended to be one-way affairs. Nurturing them was unimportant; affection was only perfunctorily acknowledged and reciprocated. Caldwell was among those women who were fascinated by his magnetism – the Alpha Male – and who pandered to his demand for immediate attention whenever requested. He happily allowed her to develop her career in Scotland. She was welcomed to the North Queensferry house at weekends, to sit quietly while he wrote endless articles, speeches and pamphlets. On Saturday nights he often refused to go out, preferring to watch Match of the Day. He expected Caldwell demurely to enjoy his pleasures, grateful that she was unable to visit London during the week. Sharing a flat in Kennington with his brother Andrew, he liked partying among high-achieving Scots in London. Although some have described a blissful romance with Caldwell in Scotland, Brown was interested in other women in the south. Some witnessed him pursuing Maya Even, a pretty Canadian presenter of the BBC’s Money Programme, while others recall him considering forging a relationship with Anna Ford after a dinner party at her home in Chiswick. The discretion of witnesses and the absence of chitchat protected Brown, who was classed by one Conservative newspaper as ‘single, reticent, good humoured and charming’.

Divergence of opinion about a politician’s character is not unusual, but in Brown’s case it became particularly pertinent as he and John Smith reached a Rubicon. Economics, they agreed, had become a more serious business in politics. In any future election manifesto, Labour would need to provide statistics to establish its financial responsibility and to substantiate its challenge to Thatcherite orthodoxy. Any promises would require proof of proper costing. ‘Competence’ was the buzz word both bandied. To expunge the memory of Harold Wilson’s devaluation of sterling in November 1967 and the humiliation of Denis Healey begging for help from the International Monetary Fund in October 1976, it was best, they agreed, to support Britain’s entry into the Exchange Rate Mechanism. Labour’s support for the ERM would convince the electorate of the party’s commitment to non-inflationary policies. Smith and Brown approached Neil Kinnock for his support. Kinnock, who was equally worried about Labour’s image as irresponsible economic managers, was persuaded by the other two that the party needed to become conventional about spending and inflation, and against devaluation. Supporting the ERM, he was told, would prove Labour’s responsibility. At the same time, the party should also abandon its undertaking to withdraw from the European Union and even pledge to revalue the pound if the Tories devalued.

During those weeks, Brown did not ask himself how he, an anti-monetarist, could support the identical policy as Nigel Lawson, a monetarist. The more important conundrum was preventing new divisions in his own party. Inevitably, there would be arguments and casualties. Once Kinnock had committed Labour to Europe, the anti-Europeans would fight back, especially Bryan Gould, the aspiring left-wing leader of the party who was still promoting renationalisation and devaluation. The only solution to Gould’s opposition, Brown and Smith might have agreed with Samuel Brittan of the Financial Times, was to ‘put him on a slow boat to China’. Brown’s method was more subtle. By stealth, Gould’s influence was to be obliterated.

At the shadow cabinet meeting on 16 November 1989, John Smith described his proposed embracing of the ERM. By not joining, Brown added, Britain’s prosperity had been damaged. As predicted, Gould protested, outrightly opposing a policy switch. Kinnock did not respond. ‘It’s like fighting a marshmallow,’ Gould realised. ‘No one is willing to take me on.’ At the end of that day Gould blamed Mandelson for his humiliation, but in retrospect he understood his mistake. Gordon Brown, not Mandelson, had been planning his downfall, but Brown’s opposition had been so ‘subterranean’ that Gould had wrongly identified his enemy. He was being sidelined by Brown on the grounds of personal dislike and political disagreement. Lacking a powerbase within the party, Gould could not outwit a machine politician with fifteen years’ experience in Scotland of settling grudges without overtly plunging the dagger. ‘I’m being destroyed by stealth,’ Gould complained. ‘I’ve never been confronted with the reasons for my demotion.’

Brown misunderstood the ERM. At a subsequent meeting of the Parliamentary Labour Party (PLP) to discuss the system, he told MPs that by linking the value of sterling to that of other currencies, Britain would be applying socialist planning to the economy rather than relying on market forces. In crude terms, he was convinced that the ERM would disarm, even punish speculators. ‘We can fight speculators if we join the ERM,’ he told the PLP, revealing his ignorance of the mysteries of markets. He failed to understand that speculators profit from fixed exchange rates, and that membership of the ERM would prevent Britain from unilaterally changing its interest rates. ‘This is the economics of the madhouse,’ thought Gould as he listened to Brown’s arguments. Brown and Smith, he realised, genuinely believed that the ERM was ‘a new magical device which would insulate their decisions about the currency against reality’. Brown was deluded that a handful of central bankers could beat the money markets.

To improve his understanding of economics and improve his relationship with the media, Brown recruited three advisers – Geoff Mulgan, Ed Richards and Neal Lawson. Mulgan, the senior adviser, had already established a relationship with Bill Clinton’s staff in order to learn how Labour might change its image and policies to appeal to the middle classes. Richards and Lawson were young and inexperienced, but satisfied Brown’s need for help both to mount a sustained attack against Thatcherism and to promote himself within the party.

Margaret Thatcher’s encouragement of greed, according to Brown, had splintered British society. In a seminal article published in the Guardian on 21 September 1990, he expounded his loathing for ‘an ageing leader’ who sounded too old to care and who was, like Mao, determined to stay on at any price. His accusations were harsh. The result of her ‘dream of unrelieved competition to produce improvement’, Brown wrote, accompanied by the ‘nightmare of any support by the state’, had been that ‘the rich have done better, the poor worse’. He railed against Thatcher’s ‘unfettered market’, her ‘promoting self-improvement of the poor’ and the ‘weaning [of the poor] from welfare’. He attacked the proposed privatisation of prisons, air traffic control and London Transport as sinful, cursed by ‘the enthusiasms of an extremist tendency too young to care’. The Thatcherites’ pretensions and wild assertions were, he wrote, merely a smokescreen to ‘promote self-indulgence among the very rich’.

In a similar vein he toured Labour associations, occasionally helped by Douglas Alexander, a young Scottish lawyer crafting his speeches, damning the ‘markets [which] cannot educate’ and urging investment in British technology to fill the country’s ‘innovation gap’ and ‘training gap’. His campaign was not universally applauded by his colleagues. He was accused of being an effective critic, delivering coruscating diatribes against Thatcherism, but providing few new ideas for a cure. He spoke fluently, full of certainties, simultaneously as a moderniser and a traditionalist, but seemed uncertain about the consequences of his proposals. His reputation rested on his industry, but the party’s intellectuals wanted a heavyweight, left-wing analysis of Thatcherism. They questioned whether Brown was merely a Labour loyalist, promising the creation of ‘economic powerhouses’ to create jobs and an end of unemployment, or an original thinker. His journalistic, broad-brush approach to politics, rarely arguing about socialist philosophy, was proof for his critics of frivolity. ‘He has a moral revulsion against the government,’ wrote Paul Addison, ‘but you felt he would only offer a more decent form of Thatcherism in its place. It’s no longer really a socialist solution.’

Brown hated any criticism, and these attacks were particularly serious. His reaction was noticeable. The formerly witty, approachable man was gradually assuming the posture of a burdened statesman. To prove his suitability for power and to protect himself from making mistakes, he adopted a new gravitas in order to help establish Labour’s reputation for competence. Journalists travelling with him noticed how his good humour evaporated when a camera appeared, and despite his friendship with an interviewer, a sheet of plate glass would suddenly seem to separate the two. Anxious to micro-manage his appearances, Brown adopted a habit of robotic repetition. One memorable example of his repeated attempts to manipulate the agenda occurred during an interview with David Frost. In reply to an enquiry, Brown said, ‘That isn’t the question.’ Frost retorted, ‘Yes it is, because I just asked it.’ The mystery for his new audience was whether Gordon Brown would emerge as an undisputed leader thanks to some hitherto unseen magic, or whether the enigma merely masked blandness.

His opportunity to disarm the cynics came on 5 October 1990, the last day of the Labour Party conference in Blackpool. After many bitter arguments, Margaret Thatcher had reluctantly announced that Britain would join the ERM, at the rate of £1 for DM 2.95. Critics immediately predicted disaster, believing that the pound was overvalued. The prime minister was beleaguered. By contrast, Smith and Brown appeared serene. Labour’s lead in the polls had soared to double figures, and the party leadership, convinced of the country’s weariness with Thatcher, believed that electoral victory was inevitable. The question was whether Labour would support the government’s application to join the ERM at the high exchange rate. Most people were unaware that a year earlier, John Smith had quietly announced his support. At 4 p.m. on the last day of the conference, Roy Hattersley called Smith. ‘What’s our policy on ERM?’ he asked. ‘No alternative but to support the government,’ said Smith.

Five years earlier the party, including Blair and Brown, had supported a policy of withdrawal from the European Union. Brown had played a significant part in transforming Labour into a more electable party, as had Blair. Charles Clarke, Neil Kinnock’s chief of staff, had asked John Monks, then deputy general secretary of the TUC, to meet the two MPs as examples of the party’s encouraging future prospects. In Monks’s opinion, Blair had proven his abilities in 1988 by astutely negotiating an agreement with the unions to acknowledge that the new Conservative laws ending the closed shop (which compelled workers to belong to a union) would not be revoked by a Labour government. That success had, in Monks’s opinion, catapulted Blair up to Brown’s level.

Although the two were close, their differences were marked. Blair took a metropolitan view of politics, eager to lobby for the support of the rich and to criticise the trade unions. By comparison, Brown refused to attack the trade unions, and remained antagonistic towards capitalism. The similarity between the two was that both felt ‘modernisation’ was necessary to win an election. While Brown’s journey had been a struggle through a mass of research and intellectual reasoning, Blair acted largely by instinct. One marked difference was in their attitude towards John Smith. Brown was committed to his mentor, but in Blair’s opinion Smith was tainted by his toleration of cronyism and corruption among local party activists employed by the council in his Monklands constituency. Similarly, Blair had little confidence in Kinnock. By the end of 1990, Brown’s mood about the party’s leadership was edging closer to Blair’s. The countdown to the test of his character began on 28 November 1990. The outcome would depend upon his courage.

Eight days after failing to win sufficient votes in the first ballot of Conservative MPs in a leadership vote brought about by Michael Heseltine’s challenge following Geoffrey Howe’s devastating resignation speech, Margaret Thatcher resigned as prime minister. John Major’s election as the new leader revived the Tories’ fortunes in the opinion polls. Labour fell 5 per cent behind the Conservatives. Overnight, Brown’s unease about Labour’s election chances increased. The task of persuading the electorate of Labour’s financial competence fell to him and John Smith. Smith proposed launching an offensive in the City, which had been rapidly denuded of Tory grandees following ‘Big Bang’, which transformed not only the City but Britain as a whole.

Over the next two years, Smith and Brown frequently visited financial institutions in a ‘prawn cocktail circuit’ in an attempt to attract supporters. They were successful among the American, Australian and continental bankers who lacked tribal prejudice against old Labour. But British stalwarts like Lord King, Rocco Forte, Lord Delfont, Stanley Kalms, Alan Sugar and Clive Thompson were incontrovertibly grateful to Thatcher’s revolution. Few were convinced that Smith and Brown actually liked the City’s denizens, or understood the complexities of bank capital. Brown appeared not to have lost his conviction that ministers and civil servants could manage industry better than the entrepreneurs. His references to the Guinness and Barlow Clowes scandals cast him as a mudslinger, unaware that the development of the City as the world’s third-largest trading centre would destroy the amateurs he loathed.

Brown was scathing about such criticism. Honesty, he said, was more important than undeserved wealth. His ‘vision for the new world’ to replace the Tories’ ‘bleak, gigantic marketplace of self-seekers, each in lonely competition with each other’ was ‘a community of opportunity’. The rottenness of Thatcherism was epitomised by the appointment of fourteen former Conservative ministers as directors of companies they had helped to privatise. Those appointments suggested more than greed. ‘Privatisation,’ Brown said tersely about the new millionaires, ‘began with selling the family silver. It is now ending in the farce of golden parachutes for departing cabinet ministers.’ The recipients of ‘jobs for the boys’ included Norman Fowler, the former transport minister who joined National Freight, a company privatised by his department; Norman Tebbit, the ex-industry secretary who became a director of the newly privatised British Telecom; Peter Walker, formerly energy secretary and now a director of British Gas; and Lord Young, another former industry secretary who, after overseeing the privatisation of Cable and Wireless, was appointed a director of the company.

Those apparent conflicts of interest were to Brown as repellent as the huge profits earned by the newly privatised utilities and the unprecedented pay increases which their directors awarded themselves. His cure was a reaffirmation of the virtues of public ownership, a national investment bank, legislation to ban ‘unjustified rises in company directors’ pay’ and a ban on ‘huge perks’. Labour insiders including Charles Clarke noticed Brown’s cautious retreat from ‘modernisation’ as he once again opposed the privatisation of state monopolies. Nothing was said, however, because his attacks helped bring John Major’s honeymoon to a quick end. Electors voiced their disenchantment about perceived corruption, the faltering economy and bickering ministers. Major, who irritably described Brown as ‘a master of the personal insult’ and ‘a dismal Jimmy, always jumping onto bad news and ignoring anything good’, appeared vulnerable.

Rattling the prime minister emboldened Brown. He had won a reputation as a serial embarrassment to the government by regularly revealing confidential information supplied by disgruntled civil servants; his latest had exposed the government’s refusal to increase consumers’ rights against the privatised utilities. By spring 1991 he consistently appeared the outstanding member of the shadow cabinet, ranking among Labour’s giants. The perceptive interpreted his speeches as reflecting his serious disenchantment with the party’s leadership. To Kinnock’s irritation, he was mentioned as the leader-in-waiting. Dissatisfaction was particularly prevalent among Scottish MPs fearful of a fourth election defeat.

Although the opinion polls had swung back in Labour’s favour, a weariness was infecting the party, and there was uncertainty about whether Kinnock could win an election victory. With Blair’s encouragement, his personal assistant Anji Hunter and Peter Mandelson were touring Labour constituencies to identify kindred spirits who supported radical change despite intimidation and threats of deselection. The roots of the New Labour project, forging a brotherhood of survivors before the outbreak of renewed conflagration, started just one year before a general election which Kinnock anticipated winning. The birth of this magic circle, born from despair and cemented by bonds of close friendship, was gradual. In Mandelson’s version, he was uncertain whether Labour could ever win an election with a Celtic leader. Over lunch with a sympathetic journalist in 1991, shortly after his selection as the parliamentary candidate for Hartlepool, Mandelson mused, ‘It’s time we had an English leader.’ He was already veering towards Blair. ‘People listening to the BBC’s broadcasts of Blair’s speeches,’ continued Mandelson, ‘say here is the next leader of the Labour Party.’ He would later deny having turned away from Brown so early.

Brown was more concerned by the substance than the image. Despite his visits to the City, John Smith favoured the old-style socialist command economy rather than an equal partnership between the government and capitalists. Brown’s conversations at his regular dinners with Doug Henderson, Martin O’Neill and Nick Brown revolved around replacing Smith’s obsolescent ideology with a new agenda. ‘You’re promising things you can’t deliver,’ O’Neill told Brown. ‘It’s the same trap as the seventies.’ Usually, Brown did not comment. Despite the Glasgow versus Edinburgh friction, he shared the same Christian socialist values as Smith. Both favoured community values rather than satisfying the aspirations of the enfranchised ex-working classes. Like Smith’s, Brown’s world revolved around Scotland’s party machine and the plight of Kirkcaldy and similar Scottish communities – uneconomic coalmines, decrepit linoleum factories and Harold Wilson’s failed investments in technology – and what he called ‘the causes of poverty which are unemployment and a welfare state that isn’t working’.

To avoid criticism from the trade unions, Brown resisted questioning Smith’s agenda even among friends, although he knew he would have to break away from that view. During 1991 he confided to Peter Mandelson that Smith would be unsuitable as chancellor if Labour won the 1992 election. Smith, he believed, was too dogmatic and simplistic on economic matters. Mandelson and Brown agreed that electoral success depended upon committing the party to as little as possible. Contrived obfuscation was the ideal strategy. The obstacles were Smith, who was antagonistic towards such tactics, and Kinnock, who was reluctant to endorse Brown’s proposals to prove Labour’s economic competence.

The disputes between the three – Kinnock, Smith and Brown – Kinnock complained, were loud and long. They agreed not to revoke the Conservatives’ trade union legislation or to advocate a return to 83 per cent tax rates; but they were firmly committed to the redistribution of wealth. Would it be inviting electoral suicide, they wondered, to mention tax increases and a commitment to full employment in the manifesto? Watching John Smith ploddingly composing the tax plans for the shadow budget depressed Brown. Despite his sparkling performances in the House of Commons, Smith lacked originality. The more he insisted that the manifesto would pledge to levy ‘fair taxes’, the angrier Brown became. Smith spoke of ‘one more heave’ to prevent a fourth Tory victory, a term condemned by Brown as self-revealingly crude and destined to end in a similar fiasco to 1987. Brown believed that only he foresaw the imminent disaster. He alone was certain of the proper route to victory. In response, Smith castigated him for offering no new ideas.

Quietly, Brown began consulting trade unionists, key party activists and sympathetic MPs about the possibility of an alternative to Smith as party leader if Labour was defeated at the general election. He calculated the permutations to see whether he might beat Smith, or at least achieve a sufficient vote to mark his future inheritance. The more Smith insisted on the manifesto overtly pledging higher taxes, the more resolutely Brown sought out dissidents. His unhappiness climaxed during one stormy meeting. Kinnock had agreed with Smith to pledge tax increases in the manifesto. Brown disagreed vociferously, and questioned Smith’s principles. Did Smith actually understand economics? Brown found his bonhomie irritating, and suspected his regular attendance at church was deceptive. Brown’s dislike of what he saw as the bigotry of western Scotland – the area of John Smith, John Reid and Helen Liddell – swelled. In the back of his mind lurked new doubts about Smith’s tolerance of corruption in his local party. The murkiness in Monklands seemed to reflect Smith’s self-limiting terms of reference towards house prices, wages and human motives. All his attitudes were shaped by his experience in Scotland. His caricature of middle England was the expensive, eccentric neighbourhood of Hampstead in north-west London, and he did not understand the real middle England’s reaction to the prospect of higher taxation. Nor did Kinnock. As for John Reid, Brown was disdainful of a man he characterised as an untrustworthy, indiscreet, alcoholic thug.

Despite his disparagement of John Smith’s insularity, Brown himself was uneasy with England’s growing multi-culturalism. His integrity, grittiness and clannishness – the essence of his Scottishness – were familiar characteristics in the English shires, but not across the urban sprawls. Proud of his background, he felt only contempt for the criticism of him by London’s media classes and those Labour MPs who disliked his refusal to peel away his Scottish skin. Like Smith, Brown knew little about middle England’s mood beyond the windows of the northbound express train from King’s Cross to Scotland on Friday nights. Neither man had much affection for England’s neat villages, picturesque market towns and manicured countryside. To Brown London was a workplace, not a cultural home. He was rarely seen in the capital’s theatres or concert halls, in contrast to his attendances at the Usher Hall in Edinburgh. Scots, he was happy to remind others, are an internal people, well known to each other but distant from outsiders.

The gap between the two cultures irritated Mo Mowlam, Brown’s deputy as shadow DTI spokesman. In 1991 he criticised her slapdash approach and coarseness, sparking her dislike of the northern cabal around him. After one dinner in an Indian restaurant with Brown, Henry McLeish, Nigel Griffiths, Doug Henderson and Nick Brown, she told friends the experience was so appalling that she believed Brown was unfit to become the party’s leader. His companions were hardly impressive praetorian guards. Unlike Winston Churchill, Brown did not like dominating first-rate minds. The esprit de corps his loyalists engendered magnified his character traits.