Why Brown got cross with Straw

There has been a minor, but illuminating, spat between three senior ministers. The exchanges involve Tony Blair and Gordon Brown - with Jack Straw, rather than Peter Mandelson, this time completing the menage a trois.

Nobody will be surprised at Brown's involvement. When there is a pitch brawl involving Manchester United players, you can be sure that their captain, and Footballer of the Year, Roy Keane, will have played a part. When there is tension in Whitehall, Brown is usually involved one way or another. His role in this particular skirmish tells us more about his approach to the euro than did his predictable fury when Mandelson, trespassing on his carefully guarded terrain, observed - correctly - that Britain outside the single currency could do little "to protect industry against destabilising swings in the value of sterling".

The ministerial tensions relate to a highly sensitive question: who should control the wording of any referendum on the euro? The government plans to set up an electoral commission to supervise the conduct of elections and referendums. But the government's original proposals gave the commission no powers over the wording of UK-wide referendums (a Scottish referendum would be a different matter). This would be for parliament (or, in effect, the government) alone to decide. Some of Labour's supporters, as well as the Conservatives, cried foul.

The bill to set up the commission comes under the aegis of the Home Secretary. When bills are published, Straw likes to play Scrooge, offering no concessions at all. When they are going through parliament, he becomes Santa Claus, taking a peculiar delight in making concessions, though the gifts often look more glistening than they are. Sure enough, when this bill reached the Lords, Straw dreamt up a concession in response to a Tory amendment proposing that the commission alone should have the power to compose the question asked in a UK referendum.

Straw's idea was that the commission should judge the "intelligibility" of the question. In other words, it would have a say, but a limited one. The government could ask: "With Britain losing thousands of jobs a day, should we enter the single currency?" The question is biased, but perfectly intelligible. Memos whirled around Whitehall, as they do when bills are being amended. Most ministers, even the Prime Minister, made no comment. But the Chancellor, his finger in every pie, read the memo with some alarm. Brown made clear to Straw that he was unhappy with the proposed concession. He wanted the government to decide the question on the single currency without interference from an outside body.

The great strategist in the Treasury, we must assume, thought that the government had enough of a mountain to climb on the euro, without creating further obstacles for itself.

Slightly taken aback, Straw had no option but to raise the issue with Blair. There was a brief exchange along the following lines:

Blair: An "intelligibility clause"? Sounds OK to me. What's the problem?

Straw: Gordon's the problem.

(Long Pause.)

Blair: Tell him I think it's fine.

The concession is now likely to be included in the bill.

I relate this mini-row in some detail because it sheds light on the Chancellor's long-term thinking. He has 1,000 things to do each day of the week. If he had, in his own mind, all but ruled out an early referendum on a single currency, would he be quite so bothered about who retained what powers over its wording? There has been much talk since Mandelson's intervention about how Brown has become increasingly sceptical about the euro. In reality, I think, his fury had more to do with tactics and resentment at anyone straying on to his patch. Mandelson particularly annoys him, but Brown still gets pretty worked up when Robin Cook says anything on the euro, even though the subject is surely part of the Foreign Secretary's domain.

Certainly, some of the Chancellor's close friends are deeply sceptical about the prospects of Britain joining the euro. One even offered me a bet that the government would not enter in the second term. Others are more circumspect. They argue that the role of the European Central Bank requires clearer definition and express concern about the quality of the current batch of European finance ministers. These points are on top of the familiar, and genuine, concerns about convergence. But when I ask whether such a daunting list of obstacles could be removed by early in the next parliament, they tell me it is quite possible.

I suspect Brown regards the euro in much the same way as he did the old battle over "tax and spend", which he began as shadow chancellor all those years ago in 1992: every damned word has to be carefully weighed, every move considered months, and sometimes years, in advance. Eight years on, a Labour government is trusted to spend public money. On the euro, Brown has embarked on another long haul.

In a way that has been underestimated, the government is staying the course on Europe. After three years in power, most of its predecessors had tired of all the endless meetings and manoeuvrings in European capitals. If anything, Blair has become more determined to be a leading player. Harold Wilson, Margaret Thatcher and John Major had similar aspirations, but for different reasons became disillusioned. Even Edward Heath's zeal was not tested for as long as Blair's has been.

Blair, Brown, Mandelson and co have a mountain to climb on the euro, bigger than the one marked "tax and spend". But I will place a bet with Brown's friend: that they will attempt to reach the peak in the second term.

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Is anyone prepared to solve the NHS funding crisis?

As long as the political taboo on raising taxes endures, the service will be in financial peril. 

It has long been clear that the NHS is in financial ill-health. But today's figures, conveniently delayed until after the Conservative conference, are still stunningly bad. The service ran a deficit of £930m between April and June (greater than the £820m recorded for the whole of the 2014/15 financial year) and is on course for a shortfall of at least £2bn this year - its worst position for a generation. 

Though often described as having been shielded from austerity, owing to its ring-fenced budget, the NHS is enduring the toughest spending settlement in its history. Since 1950, health spending has grown at an average annual rate of 4 per cent, but over the last parliament it rose by just 0.5 per cent. An ageing population, rising treatment costs and the social care crisis all mean that the NHS has to run merely to stand still. The Tories have pledged to provide £10bn more for the service but this still leaves £20bn of efficiency savings required. 

Speculation is now turning to whether George Osborne will provide an emergency injection of funds in the Autumn Statement on 25 November. But the long-term question is whether anyone is prepared to offer a sustainable solution to the crisis. Health experts argue that only a rise in general taxation (income tax, VAT, national insurance), patient charges or a hypothecated "health tax" will secure the future of a universal, high-quality service. But the political taboo against increasing taxes on all but the richest means no politician has ventured into this territory. Shadow health secretary Heidi Alexander has today called for the government to "find money urgently to get through the coming winter months". But the bigger question is whether, under Jeremy Corbyn, Labour is prepared to go beyond sticking-plaster solutions. 

George Eaton is political editor of the New Statesman.