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25 September 2000

Whistling among the wreckage

That was the week the roof fell in. With the Tories ahead in the polls, should ministers now panic?

By Jackie Ashley

The mood in government is very odd. It is as if a huge bomb has gone off in Whitehall, demolishing half the walls and leaving ministers wandering about with blackened faces and shredded trousers – but they have decided to pretend not to notice. It is business as usual. So they pad through the smoke and charred wood, smiling and nodding and calling for papers.

The opinion polls showing the Tories in the lead for the first time since Black Wednesday eight years ago, the images of the fuel chaos and the jitteriness of drivers this week are the political equivalent of that bomb. It is hard to imagine a more dramatic or decisive warning to a democratic government that things have gone wrong. Yet within an alarmingly short time, the public face of government is insisting that nothing really needs to be done. The important thing is not to panic.

It is in the Treasury that the anti- panickers are mainly based. Gordon Brown’s post-wedding party, where he looked dashing and glamorous and made a witty speech, was a great display of “face”. There was the cream of new Labour at play: just one big happy family, rivalries forgotten. Even Peter Mandelson had been sent an invitation, although, happily, he was in America at the time. It was very much “Don’t mention the war”. But as the champagne flowed and tongues were loosened, political colleagues started to mutter their dissent. One prominent minister put it like this: “Were I not a minister, I would describe Gordon’s hard line on fuel taxes as a disastrous mistake.”

But still the Treasury team was in denial. The great taxpayers’ revolt? No, it never really happened. It was all just a few loonies.

In fact, the Treasury position is easy to understand, and makes a lot of sense. First, if you start to unscramble the complicated mass of indirect taxes just because of the fuel revolt, it isn’t long before you have to tear up your three-year spending plans, too. The comprehensive spending review was for many people, not only Gordon Brown, a vindication of the lean Tory-spending-plan years; you could almost say, the whole point of this Labour government. To backtrack now, in order to appease the fuel lobby, would indeed look like panic. It would also dispel the impression – so valiantly fought for – of competence and make it far harder for ministers to draw the fault line between new Labour and “one nation” Conservatism.

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The challenge over indirect taxes is a direct challenge to the whole new Labour project. With their opportunistic offer to cut duty, the Tories’ bandwagon may be running on cheap, high-octane diesel. But it is heading for a nasty crash when voters start asking serious questions about the spending cuts that must come with it. And even if the Chancellor could square a substantial one-off cut in fuel duty with his spending plans – impossible, says the Treasury – who knows whether another jump in world oil prices, or greed from the oil companies, might not add the cut straight back on again? That would leave the government in the worst of all worlds, having been humiliated, having lost a great source of revenue, but without having made a shred of difference to the motorist or haulier.

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The logic is strong. So why, then, are a number of Brown’s Cabinet colleagues hissing with fury that something must be done? Partly because the demands for a U-turn on indirect taxes are also demands for the cutting down to size of the Chancellor himself. Brown is hugely powerful in Whitehall, almost the Prime Minister for Domestic Affairs, and he has generated much hostility among the other ministers squeezed out of the core of government. They say that he has grown too big, and too deaf to reasonable demands for flexibility. He pushed fuel taxes just a little too high for a little too long, and changed direction just a little too late. This is his crisis, and he should pay the penalty.

Brown’s people fight back with impressive energy. First, other ministers may be complaining now, but they were nowhere to be seen when the fuel tax issue was bubbling earlier in the year. They were quite happy to take the fruits of Brown’s ingenuity for their own departments at the time. Second, if new Labour has a progressive programme at all, it is thanks to Brown, indirect taxes and the comprehensive spending review. He may be mighty, but he is mighty for a purpose. On fuel taxes, he has stood firm against a big alliance, which probably takes in three-quarters of the Cabinet, including the Prime Minister. And it isn’t as if he won the fight. So far, there has hardly been a fight. People bitch about the Chancellor, but they don’t take him on.

The left might well be tempted to cheer. After all, almost everyone in government agrees that many leaders of the fuel protest were right-wing, anti-Labour types, union-busting hauliers, anti-European small businessmen and fox-hunting shire Tories. This is the uprising of Daily Mail man and white van man, the people who hate Tony Blair and resent Labour’s victory. Standing up to them is essential to protect Gordon Brown’s spending review, and therefore the party’s claim to any progressive purpose.

Yet the Blairite ministers find this all deeply unsettling, and they, too, have a point. For one thing, the huge numbers of Middle British voters who are telling pollsters that they won’t back Labour now, and don’t trust the party to protect their prosperity, cannot be mainly small-time truck drivers with offensive tattoos, and hare-coursing Midlands Tories. Statistically, many of them must be the swing voters who came over to new Labour in 1997 and may not stick in 2001. Their grievances run wider and deeper than just the price of fuel – although fuel proved the combustible stuff that ignited the anti-government flames. These people, who grew up wrapped in the warm safety of the postwar consensus, have been shaken to the very foundations of their suburban semis by the prospect of shortages. Up until now, they have woken every day to the sure knowledge that their local Tesco would give them a choice between Hovis granary or Sunblest white. Suddenly, nothing seems certain. Moreover, the critics fume, Brown’s macho stand and refusal to display any flexibility will be read by the public as confirmation of William Hague’s increasingly effective line that “this government doesn’t listen”. Or as one minister put it to me: “Well, the government does. We all do. It’s just that Gordon doesn’t.”

No one with a grain of political sense denies that the choice facing the government now is appallingly hard. If it throws out a few baubles to the most militant protest groups – more tax concessions for road hauliers and farmers is the latest idea – it will disappoint the party, which rightly sees them as the hard-core enemy, while doing nothing to appease the public. But if it does anything substantial on fuel taxes for the majority, then its carefully constructed spending plans are knocked sideways. Another couple of protests like this, and it won’t be only the Tories with a £16bn spending gap. The current mood of whistling among the wreckage is really a mix of shock and bravado. Ministers see the sudden re-emergence of genuinely optimistic Tories, cheered on by the press, as a frightening sign. Andrew Rawnsley’s book Servants of the People, which reopened the Bernie Ecclestone affair, contained several stories familiar to people around the government – with some vivid and hotly contested detail. But there was a message sent out in how ministers reacted to it. No 10 made a fierce textual counterattack on the “lies” charge against Tony Blair. The lack of any serious bid to undermine Rawnsley himself may be explained by how many people in Blair’s office had themselves co-operated with him. Indeed, with Downing Street believing that he was writing a “serious book” (that is to say, one we’ll like) he was given access to the Prime Minister, too. But what about Gordon Brown, who came under more extreme attack, including a call for his resignation from Michael Portillo? For the first part of the crucial day, it was almost as if he was being left to swing in the wind, however briefly. Where was the quick covering fire from other ministers, who had been quaffing his champagne the night before?

So what can be done? When it’s under such huge pressure, the government hangs together or it hangs separately. If this is a government with a proper sense of self-preservation, the Cabinet will have to start to mean something again. Everyone, from Gordon Brown to his most vociferous private critics, will have to settle down around that table, admit there is a real political problem over fuel taxes and have a serious, non-finger-pointing debate about what to do. That would be a start.

A gentler, “we feel your pain” language and a slightly more humble demeanour would help, too. Quite why ministers think voters only admire “tough” governments, rather than ones that can occasionally admit they got it wrong, is a puzzle. This was a government that came in saying it would apologise for its mistakes, but suddenly “sorry” seems to be the hardest word, whether it’s the Dome, the London elections or anything else. And why not give a much clearer indication of cuts in fuel duties if the oil price does not rise in, say six months’ time? That might help ministers keep face and satisfy the public mood. Why buy off the blackmailers, the farmers and militant truckers, at the expense of the Middle British, whose votes by the million you actually need?

The poll crash may be no more than a warning signal, or it may be the first sign of a larger change in the public mood. But if the government decides it doesn’t really matter – that it’s all froth – then it certainly will matter, and the Tories’ few days of leading in the polls become something more solid. Tony Blair’s huge majority and the failure of William Hague to make an impact may have led ministers to forget the prime rule of politics: the electorate cannot be out of step. Only ministers can be out of step.

The writer is political editor of the New Statesman