Gordon Brown should have learnt from the traumas of the previous decade-and-a-half that a good relationship between prime minister and chancellor is essential to the smooth running of government. His preoccupation with getting Tony Blair’s job held back the Government and could have destroyed the whole New Labour project. So much more could have been achieved if he had not seen everything through the prism of how it would affect his eventual leadership prospects.
So it was pretty astonishing that, having finally secured the leadership of his party and the keys to Number 10, he allowed his relationship with the man he appointed chancellor – his old friend Alistair Darling (the two were regular visitors to each other’s homes for years) – to deteriorate to a point where it almost certainly damaged his own prospects of winning in 2010. I have learnt that his behaviour left Darling so upset that when the last internal attempt to remove Brown came in January 2010, he did not move to help him. Neither did Tony Blair, who told Peter Mandelson, then at the Prime Minister’s right hand, to stay neutral when Geoff Hoon and Patricia Hewitt launched a last attempt to oust Brown.
Brown survived that threat, as he had before, but it was a closer call than anyone realized at the time. Many ministers believe that Brown had become so reliant personally on Ed Balls during his years at the Treasury that he had always been his first choice as chancellor. But Balls got the job he wanted, schools secretary, when Brown took over from Blair.
Darling believed that Labour’s credibility on the economy could only be maintained if it showed it was serious about tackling the deficit. Brown, obsessed with his strategy of marking out dividing lines with the Tories, wanted to offer the country an alternative based on growth and not cuts.
The episode that set back their partnership more than any other came at the end of August 2008, when Darling gave an interview to a Guardian feature writer warning that economic conditions ‘were arguably the worst they’ve been in sixty years’. He also raised eyebrows by warning that the voters were ‘pissed off’ with Labour. It all contrasted with the more positive message Brown was trying to put out about the resilience of the UK economy. Some in Downing Street accused Darling of taking his eye off the ball. In fact his ‘sixty years’ remark was deliberate and he had said the same thing to The Times a couple of weeks earlier.
The interview appeared on a Saturday. I was officially off-duty on the Sunday but the calls started coming in early that morning, so I rang the news desk and told them that I would be handling the Darling row. In a story that caused fury in the Darling camp – not with me, I trust – I wrote that Darling’s future was in question after Whitehall insiders said that he could be involved in an imminent reshuffle and that the interview might well have harmed his position. And, very unusually, I was told that Darling’s assertions in clarifying interviews over the weekend that Government personnel changes were unlikely were ‘wrong’. There was to be a reshuffle the next month, as it turned out. Darling could hardly have said anything different; to suggest otherwise would have put questions over his own position and sent the markets spinning.
The Treasury – my old friend Catherine Macleod, a journalist, was working as a special adviser for Darling at the time, and I spoke to her several times then and in coming days – was convinced that my story had come direct from Brown or someone very close to him. As ever I stayed mum about my sources, although the story had referred to ‘Whitehall insiders’ and unnamed Cabinet ministers, so they had something to go on, but not much, as they speculated. Catherine’s Whitehall intelligence network was formidable, so it would not surprise me if she managed to work it all out.
Darling survived the October reshuffle, but by the following summer, Brown again wanted to shift him out of the Treasury, a move that was ultimately made impossible by the instability caused by the unexpected resignation of James Purnell. Brown had wanted to put Ed Balls into the job.
In the late autumn of 2008, the world and UK economic crises ironically gave Brown a breather from his domestic political problems. The collapse of Lehman Brothers in September 2008 almost brought down the world’s financial system. The US Government allowed it to go bankrupt, killing the notion that international banks were too big to fail. The previous year the UK Government had nationalized the ailing Northern Rock bank after failing to find a buyer.
When Lehman went down, it meant that no bank was safe and Western governments were forced to inject vast sums of capital into their financial institutions to prevent them from collapsing. Whitehall was in permanent crisis mode and Darling and Brown agreed billions should be pumped into Royal Bank of Scotland, Lloyds TSB and HBOS in one of the country’s biggest ever nationalizations.
The G20 summit of the world’s top twenty economic powers was due to meet in London in the spring of 2009 and Brown and his team devoted most of their time to preparing the ground for it. In a sense, it was Brown back in the environment where he was most happy, persuading leaders to go along with financial deals, on the details of which he had made himself an expert. Barack Obama arrived for his first big international occasion at the summit in the London Docklands, and Brown was in his element as he and fellow leaders put together what was hailed as a $1.1trn boost to the world economy.
All leaders – particularly Brown, Obama and Nicolas Sarkozy, the French President – heralded a successful outcome. The boost was completed by a $6 billion sale of IMF gold reserves to help the poorest countries. The measures were announced alongside a far-reaching clean-up of the banking system, including what Brown described as the ‘start of the end’ of tax havens, an issue that threatened at one stage to hold up an agreement.
The next day, Brown won plaudits for the massive amount of personal effort he had invested in the efforts to reach a deal. But that and his early success after becoming prime minister in 2007 were the high points of his premiership, and from now on, as Mandelson was to describe in his memoirs The Third Man, it was all downhill towards the end.
No one knew more about the Blair–Brown relationship than Mandelson because he was very much part of it, and his book, published shortly after the 2010 election and the establishment of the coalition, was full of new material. Because The Times was serializing it, we were much involved in the promotion of the book. At a packed Times+ meeting at the Royal Northern College of Music in Manchester, I interviewed him and took questions from the audience about its contents. I had known him for twenty-five years or more, but I was struck by his professionalism in preparing for the event and by his surprising touch of nerves before going on stage.
The book’s contents were explosive. On the second day of our serialization, I wrote a front-page story based on Mandelson’s quotes from a string of ministers, including himself, acknowledging at various times that victory was impossible under Brown. I said that, despite a series of failed plots, he had painted a picture of a Cabinet that was unwilling or afraid to strike. Harriet Harman had proposed basing the 2010 election campaign around ‘three Fs’ at a meeting before Christmas – future, family and fairness. In response, Douglas Alexander, Mandelson himself and Darling had suggested three Fs of their own: Futile, Finished, F****d.
Mandelson revealed that Brown was so desperate at one stage that he had proposed saying before the election that he would only stay for one more year to secure the recovery. But Brown and the Treasury were in constant conflict. He refused efforts to force him to use the word ‘cuts’, apart from when he employed it once, reluctantly, in a TUC speech. He vetoed a proposal from Darling to put up VAT to help attack the deficit. And then Darling opposed a proposal from Brown to rule out VAT rises during the next parliament. Darling told Mandelson before Christmas: ‘We’re going to lose.’
In an interview with The Times, Mandelson said ministers never acted against Brown because he had been involved in taking momentous decisions on the financial crisis and it would have been wrong for Labour to put electoral calculation before the country and the economy.
Mandelson threw a protective shield around Brown after he was brought back and was a key factor in stabilizing him after Purnell’s resignation. As I explained, Purnell knew that David Miliband would not follow him out of the Government, but Mandelson telephoned others because, as he said in his book, a Blairite putsch was not the way to go.
I have learnt, however, that neither he nor Tony Blair was minded to act so quickly when the last move against Brown happened in January 2010, when the Blairites Hoon and Hewitt suddenly urged a secret leadership ballot. It was a desperate move just five months before the general election and it followed a series of anguished Christmas discussions among Cabinet ministers, at which several agreed Brown was leading Labour to certain defeat.
Hoon and Hewitt wrote to Labour MPs saying the party was ‘deeply divided’ and the issue must be sorted out ‘once and for all’. They said the continued ‘uncertainty’ was ‘damaging our ability to set out our strong case to the electorate’ and only a secret ballot of all Labour MPs would resolve the issue. They wrote: ‘There is a risk otherwise that the persistent background briefing and grumbling could continue up to and possibly through the election campaign.’
While Darling was not involved in the Christmas discussions, he had been aware of what was going on behind the scenes. The chancellor was not in a good mood, angry at some of the briefing between the Pre-Budget Report in December and the Commons recess, and had hardly spoken to Brown. Regarding the PBR, he was convinced that he had to show that Labour was serious about the debt because, as things were, the markets, the press and the country did not believe it was. While he and the Treasury had tried to present the PBR as the first step in a concerted attempt to get to grips with the deficit, some ministers – presumably with Brown’s backing – boasted about increases in their budgets, distorting the political and economic message Darling was trying to sell. I understand that he and Brown barely saw each other between the PBR and the Christmas recess. Had he been getting on better with a man who had been his friend for decades, Darling would probably have tipped him off about the trouble brewing.
I can reveal that Michael Dugher, who was then Brown’s political press spokesman but had been Hoon’s special adviser, had warned the Prime Minister’s closest confidants that he should expect trouble from Hoon, who was deeply disillusioned with Brown. The two had not got on well when Hoon served as Brown’s chief whip when he became prime minister in 2007. Hoon stood down in the 2009 reshuffle but believed he had a promise from Brown that he would back him to be the EU’s first high representative for foreign affairs when that post was decided later in the year.
In the event, Brown was felt neither to have pushed hard for Hoon nor for Mandelson, who would also have liked the job. Brown got a British figure in the post but went along at a Brussels summit in November with the choice of other European leaders of Cathy (Baroness) Ashton. It was an outcome that left neither Hoon nor Mandelson happy.
Brown did nothing to act on the warnings about Hoon. When Hoon and Hewitt made their move, they felt they had reason to believe others would follow. Tony Blair knew of the plot, but Hoon and Hewitt had hoped colleagues would take this very last chance to oust Brown and put in a last-minute substitute – and again Alan Johnson was the favoured choice – to fight the election.
It never got that far. No one else had the stomach for the fight. Hoon later told friends he had ‘gone over the top into the hail of gunfire’ only to look back over his shoulder and see everyone else was sitting in the trenches. Meanwhile, Mandelson’s relations with Brown had deteriorated because – among other things – of the Prime Minister’s refusal to face up to the need for a tougher austerity line. Mandelson found out about the Hoon–Hewitt move on the day in a conversation with Blair, who had picked up on rumours that something was about to happen.
I understand that, given the critical situation the party was in, Blair suggested to Mandelson that unlike in May 2009 he should stay neutral. Mandelson has told me: ‘I did stay my hand for a few hours.’ Various ministers went in to see Brown. As Mandelson recorded in his book, Alistair Darling was in no mood to hand him a revolver, and neither Harriet Harman nor Jack Straw, who also went in, raised the leadership issue. I have been told that Darling told Brown in their meeting that he felt he should have warned him that trouble was afoot because of the unhappiness within the Cabinet. However, the latest and potentially most serious coup was over.
Had Darling, Straw and Harman joined Hoon and Hewitt, Brown would probably have fallen. But the prevailing view was that the election was just too close and the spectacle of Labour holding a leadership election in the weeks before polling day would have meant a deserved pasting from the electorate. Others believe that even then, Labour would have gained from dropping Brown, who had become toxic with the voters. But it was all over. Labour had again shown its sentimentality – compared to the ruthlessness of the Tories – about its leaders. Only one had ever been forced out against his will – and he, Blair, was the most successful of all.
What all that shows, of course, is that Blair never really could bring himself to try to finish Brown off, until it was way too late. It backs up Mandelson’s view that Blair was always far too obsessed with buying Brown off than building up a potential successor who could beat him when the time came. Blair hoped that Charles Clarke, the former home secretary, would stand against Brown in 2007, but only as a way of bringing David Miliband into the fight. As Mandelson explained, Miliband was wary of being seen as the Blairite candidate in a tribal showdown with Brown, and after some consideration over Easter that year ditched the idea and backed Brown.
Mandelson provided a first-hand account of what happened after the 2010 election resulted in a hung parliament and Nick Clegg, leader of the Liberal Democrats, negotiated with Labour and the Conservatives. He told how Clegg ended Brown’s lingering hopes of clinging on by telling him to his face that he had to go as the price of a coalition deal, and that Blair had also told him it would be seen as an outrage if he tried to stay on.
After some delay Brown finally accepted that, told Clegg that a new leader would be in place by October, and then announced as much in a dramatic statement in front of Number 10. It was Brown’s last stab at keeping Labour in power, admittedly under someone else. But talks between Clegg and Labour fell apart. After saying the deal was ‘knackered’, Clegg rang Brown again to try to keep Labour in the race to get more out of the Tories.
But Brown had had enough and, in any case, Mandelson – presentation man to the last – did not want him to leave Number 10 in the dark. ‘That was not the image I wanted for his leave-taking,’ he said. As Clegg protested, Brown told him: ‘The public have run out of patience and so have I. You have to make a decision. I have made mine. It is final. I am going to the Palace. Goodbye.’
One of the most astonishing political careers of modern times had ended – as Enoch Powell said they all do – in failure.