Brown and Portillo bide their time

Gordon Brown wants to be the leader of his party. I have no doubt of that. Similarly, I can write with absolute certainty that Michael Portillo would one day like to lead the Conservatives. The Chancellor and his shadow share a burden. It is not the burden of unfulfilled ambition, although that must be draining at times. It is the burden of knowing that everyone else knows how ambitious they are.

Every word and act of Brown's, every declaration by Portillo, tends to be viewed through a distorting prism. Both are seen to be manoeuvring at all times for the top prize. There is a theory doing the rounds at Westminster; I have heard ministers expound it at length: "Brown's pretending to be a Eurosceptic as part of his leadership bid." There is another theory, held by some close to William Hague: "Portillo thinks his leadership chances will be more credible if he keeps a low profile in the run-up to the election."

Yet Portillo has done more to help the cause of William Hague than any other Conservative politician, including Hague himself. Portillo's persistence behind the scenes to get the preposterous tax guarantee rewritten has paid off. The proposal has become slightly more credible. The Conservatives still have to explain how they will pay for their spending commitments, which are being made on a daily, almost hourly, basis. But they have an answer, now, to how they would act in a recession. They would not close down all the schools and hospitals to pay for a tax cut after all. For Hague, this is an embarrassing U-turn, but nowhere near as embarrassing as sticking with a policy that would have fallen apart in an election campaign.

Senior Labour tacticians were pretending to be pleased about the U-turn. "This shows how Tony has exposed Hague's weaknesses as a leader." Yes, it does. But Hague has responded quickly enough by papering over a crack. There are still plenty of cracks on the surface, but Portillo's victory over the tax guarantee was precisely what the Blairite inner court had feared. Some of Portillo's recently acquired pragmatism has been injected into Hague's frenzied populism. The return to a modest form of economic literacy, the acceptance of the minimum wage and the independence of the Bank of England have all been much more significant manoeuvres than recent headline- grabbing statements from Hague, which do not amount to very much.

So why is Portillo lending Hague a helping hand? He could so easily have said to Hague that he would support the vote- losing tax guarantee and make a virtue of his reluctant loyalty amid the debris of another Labour landslide in a year's time.

No doubt he acted with one eye on the leadership. He is becoming the great hope for Tory centrists, as well as for some of those on the right. "Portillo's our man," the pro-euro Tories say, more out of desperation than conviction. They say it nonetheless. But Portillo is not driven solely by personal ambition. Politicians are complex beasts. He is part of the Tory team. He wants to do his bit.

Gordon Brown is also doing his bit - more than his bit, according to some of his colleagues. "We don't mind Tony being our boss, but we resent having two bosses," protests an adviser to a senior minister. He is not alone in resenting the dominance of the Chancellor. "Tony's got to do something about it. His relationship with Brown is the Achilles heel of this government," commented another ministerial aide.

If Brown were fighting a continuous leadership campaign, this would not be the way to go about it. To the fury of some ministers, he has flexed his muscles in the public spending round, but I suspect he has flexed them to good cause. We shall know the details on Tuesday 18 July, when he makes his statement on public spending. It will be the most important statement of this parliament.

Accusations of Machiavellian manoeuvring are usually laid at Brown's door when it comes to interpreting his attitude to the euro. He must be up to something, mustn't he? Well, he is up to something, but it does not relate to any future leadership ambitions. This is what he is up to.

Having declared that there will be a review of the economic conditions, Brown has to appear even-handed. If he spent the next year saying how wonderful the single currency was, it would undermine his review. The instigator of the review would be widely perceived to have decided on its outcome in advance. There is also a matter of "substance", to use the fashionable word of the moment. It is possible that, early in the next par- liament, economic convergence will still not have taken place.

Brown is on a precarious journey similar to the one marked "tax and spend". When he first became shadow chancellor, his colleagues seethed as he banned them from saying anything that implied a spending commitment. Even so, on Tuesday (better late than never), Brown will be announcing a significant spending programme. He tends to get there in the end, and I believe he intends to get us into the single currency in the end.

In an NS interview just after the election, Brown reflected that his early years as shadow chancellor had made him unpopular with his colleagues. He underestimated how long it would take them to come round to stringent approach to public spending, implying that this cost him the leadership in 1994. He is still doing what he believes to be right, even if he continues to infuriate his colleagues.

At the moment, he faces no obvious rivals, although David Blunkett is a figure to be reckoned with. Apart from Portillo, who sparkles in the shadow cabinet?

The Chancellor and his shadow can do what they believe to be right, confident that, at some stage, they will be able to seize, or inherit, the crown.

This article first appeared in the 17 July 2000 issue of the New Statesman, Special Report - Lost souls in the city in the sky

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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.