Politics
An earthquake strikes new Labour
Published 01 January 1999
Peter Mandelson was one of the few ministers who instinctively knew Blair's mind. His loss exposes the government's fragility, argues Steve Richards
We are still living through the Twelve Days of Christmas, aren't we? Soon, once the new year has passed and the last festive song has been sung, children will return to their schools, the illusion of Santa Claus a distant memory, adults will return to their mundane routines and, come the early, spell-breaking days of January, Peter Mandelson will be back at his desk at the Department for Trade and Industry. Won't he?
The Christmas festivities which followed so immediately and incongruously after the real-life resignation of Peter Mandelson made the latter seem part of the midwinter fantasy. I still have to pinch myself as the partying heads towards the new year. Truly, a political earthquake has taken place.
Mandelson's departure is one of those rare political events with consequences and significance beyond the immediate drama. I write as someone who believes that much political reporting suffers from an excess of frenzy. Yet Mandelson's departure seems a momentous story now and will still be seen as significant many years ahead.
Partly the significance is down to the timing of the departure: it is so damned early in the government's life. Prime ministers need soulmates, especially at a stage when the direction of an administration is still evolving uncertainly. The sudden removal of Mandelson from Blair's orbit is the equivalent of Margaret Thatcher losing a Geoffrey Howe (she needed him early on; he was as much responsible for economic policy as she was) and a Norman Tebbit rolled into one. Imagine how different the Thatcher governments would have been without them at the heart of activity.
Indeed, it is more significant in this government's case. Thatcher had a pretty clear idea where she was going from the start. Although she was far more pragmatic than the term "Thatcherism" conveniently (for her) implied, her objectives were easy to read: cut taxes, or rather income tax, reduce the power of trade unions and local government and so on. New Labour is only starting to define itself and in openly elevating pragmatism above ideology will always be navigating a course which is harder to define.
Mandelson was one of the few instinctive new Labourites, meaning he thought in a way that mirrored Tony Blair very closely. Most cabinet ministers live uneasily, trying to calculate what Blair would expect them to do. Mandelson had no need of such second-guessing; he knew after a moment's reflection. How many cabinet ministers, for example, would have known instinctively what to do with the Post Office in a way which would please their master? Many of them would have thought: "Help! Should I privatise it because that is what Tony Blair really believes should happen? But then I would be crucified by the party. What about the status quo? Well, that would reassure the Treasury for the time being because they make big money from the publicly owned Post Office." Mandelson easily navigated what he and Blair see as a third way, but in doing so demonstrated again that new Labour is still heavily dependent on those who invented it. These are very few in number.
New Labour remains a fragile project without deep roots, so when the founders fall out the government is shaken to its foundations. (Remember how the SDP collapsed when its leaders quarrelled.) In previous Labour governments there were also great animosities, but the significance was diminished because so many other forces came into play, from the influence of trade unionists to the party conference. This is not to advocate a return to the ridiculously excessive and often undemocratic forms of accountability which existed before Labour's internal reforms. But internal checks and balances can also act as a buffer when courtiers fall out. Sometimes, being held to account between elections can actually help senior ministers. With a huge Commons majority, a docile cabinet and subservient party, I see no checks and balances except the media, of which more later.
The relationship between Blair and Gordon Brown, or rather that between the Treasury and No 10, has become a dangerous faultline of the government, even though it is often hard to determine what the cause of the faultline really is. At times it takes surreal turns. Geoffrey Robinson, for example, was billed as part of the Brown camp and yet his latest offence in the eyes of the media was to lend money to Mandelson, a "friend for 20 years", who was enemy number one in the Chancellor's court. Along the same lines, I read every now and again that the New Statesman is part of the Brown camp because it is owned by Robinson. Yet Robinson has been a model proprietor. He has not interfered on a single occasion and appointed several independent journalists two and a half years ago knowing he would have resignations on his hands if he ever did interfere. Even when his own policies have been criticised in the NS, such as the plans for the London Underground, or when the paper has made front-page news with stories that embarrassed the government, he has never intervened.
The wider theory as to why the faultline is hard to pin down is that all can be explained by the relatively trivial hostility of the courtiers. Behind the cacophony of scheming voices we are reassured that "Tony and Gordon are still the best of friends". Well, why don't they tell their own friends in the respective camps to shut up, then? The answer, I fear, is that this genuine and strong political friendship is under strain. Nor is the simplistic explanation that "Gordon wants to be leader" the cause. Of course he wants to be leader. There is nothing wrong with that. Harold Wilson used to run cabinets stuffed full of ministers who wanted to be leader. Brown knows that the success of the new Labour project, not its failure, still represents his best chance of becoming leader.
No, the tensions are to do with policy differences (or perceived differences) between the Blair and Brown camps, and they are all the more dangerous for that. Since the election, Brown has been following a more radical policy than the pre-election rhetoric implied. The Iron Chancellor has raised considerable sums through taxation. Schools, hospitals and the unemployed will benefit in the coming year. With great political shrewdness he recognised that income tax had become politically untouchable, at least for the time being, and therefore turned the decision not to raise it into a pre-election crusade. But the repudiation of Labour's "tax and spend" tradition was, for him, at least partly tactical. I am beginning to think that Blair may have believed in it as a matter of unswerving principle. At various moments Treasury insiders have spoken privately of the need for taxation by stealth (through levies on pension funds, for example, or changes in national insurance) not because they fear upsetting middle England, but because they want to get the policy through Downing Street. Blair has spoken privately for years about his view that taxation would continue to fall and said as much in an Independent interview in September.
Is this an example of Blair the Gladstonian liberal versus Brown the social democrat? The reason I pose it as a question rather than an assertion is that Blair, too, has gloried in the additional money being spent on education and health. "Why don't you ask me about the additional resources we're putting into schools and hospitals?" he asked Eddie Mair during his BBC interview on Sunday. Blair knows the money must come from somewhere. Even so, a good open discussion about the longer-term aims of new Labour between the only creators still in the cabinet would be a healthier reaction to the Mandelson departure than the sacking of Charlie Whelan, Brown's press adviser, who is a symptom of the tensions between Downing Street and the Treasury, rather than the cause.
As for Mandelson himself, his resignation is a personal tragedy. What is more, like most flawed tragic figures he sensed his downfall was inevitable. Two weeks before his departure I went to see him at the DTI ostensibly to discuss his various looming policy announcements. They were hardly mentioned. Instead he glided into the office, in melancholic mood, and asked right away how I thought he was doing. I mumbled something about the DTI being a dream job for him with his interests in Europe and so on. He looked up and said, "Yes, I know it's a dream job, but will they ever let me do it?" He meant the media, still taunting him at that point for his trip to Rio. Perhaps he was trying to discover whether I knew if Paul Routledge, the Mirror journalist who is writing an unauthorised biography, was capable of delivering a fatal hammer blow. Whatever the motives, I came away with a curious dual impression of someone excited by the details of policy-making but fearful of where the media would attack next. When I said I was pleased that he had stepped up the case for the single currency, he replied: "Yes, but every time I do that there's an attack on Gay Mandelson in the Sun. There's a correlation between the two, you know." How richly ironic that the supposed media manipulator was made so vulnerable by the media, when all he wanted to do was prove himself as a minister. He was starting to do that when the media finished him off.
And we should be under no illusion that it was the media which sealed his fate. For 24 hours after the news of the loan broke, Downing Street was expressing total confidence in Robinson and Mandelson. It was only the following morning when the Sun in particular delivered its verdict that Mandelson should go that the decision was finally taken. Similarly with Robinson, who was pursued by endless expensive journalistic investigations which uncovered very little. Previous wealthy Labour ministers would not have survived in such a climate, either.
Yet on this the departing ministers deserve little sympathy. This is a government which has declared that the message is part of the policy-making process. For once, the Tories have understood one of the lessons of this grim story. If a government lives by the headlines, it risks dying by them as well.
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