So if thousands of people tried to withdraw their savings and deposits from one particular bank at the same time, the only way that bank could cope is if other banks agreed to lend it money to help it through, and that would depend on their assessment of whether its book of mortgages, loans and overdrafts represented sound investments. ‘Yeah,’ the actress said, ‘I’ve seen it. Bedford Falls. Yeah, yeah.’
‘But what happens in that film,’ I said, ‘if people see the panic going on at George’s Building and Loan and think “I’d better get my money out of Potter’s bank as well”, you end up with a domino effect of all the banks being under pressure, all of them having dodgy investments and not being able to turn to each other for help.’ Having understood it all, she got a bit serious and said as soon as she got back to London, she’d be withdrawing all her savings.
Over a 48-hour period on that Monday and Tuesday, Gordon and Shriti worked relentlessly over the phones and in frantic meetings to agree the final details of a UK facility to underwrite the finances of every major British bank, and to drive through an internationally coordinated intervention by central banks to try and restore market confidence.
I’d hear Gordon calling up senior world leaders who were in a state of denial and panic, and telling them what the situation was and what they had to do, in terms which weren’t that different from mine with the actress. I’d hear Shriti telling some ‘home truths’ to the heads of banks and their senior advisers: ‘Do you want to be in a job by the weekend or not? Because let me tell you, if we don’t get this sorted, none of us are going to be in a job for much longer.’
On the Tuesday evening, with all the announcements due the next morning, I was in Gordon’s office. He looked ravaged by the intensity of the work, running on a massive overdose of caffeine, and his mind was clearly racing. There were monumental dangers in what we were about to do, and he knew it.
Firstly, by intervening in such a dramatic way in the operation of the British financial system – enabling many of the banks to part-nationalise themselves in order to survive – he was telling the British people and the stock market: ‘We’ve got a massive problem’, and trusting that their reaction wouldn’t simply be to panic and start a run on every bank and its shares.
Second, it would be clear to everyone that this intervention was officially the government throwing the kitchen sink at the problem – there was nothing tentative about it. If the markets didn’t buy it, and it was deemed a failure, the perception would be that nothing could actually work to stem the crisis – the only human response to which would be: ‘Sell! Sell! Sell!’
Third, while there was coordinated central bank intervention planned for the morning, Gordon hadn’t at this stage persuaded other world leaders that they needed simultaneously to announce their own bank rescue packages – they all wanted to see how Gordon got on first. But that itself risked panic and markets tumbling around the world if people saw the scale of the problem in Britain and realised it was probably the same in their countries.
And then there was the fourth danger, and the third thing Gordon said that ever shocked me. He closed the door, sat on the couch and said in almost a whisper:
‘We’ve just got to get ourselves ready in case it goes wrong tomorrow. And I mean really wrong. Even if there’s a panic in another country, people will see it on the TVs, and they’ll start panicking here. It’s got to be given a chance to work.’
I said: ‘But people will give it a chance … they’ll listen to Peston and Jeff Randall and these guys in the morning, and if they say this is the solution, people will give it time, and if the Footsie’s up, we should be OK.’
‘You don’t understand,’ he said sternly. ‘This is people’s money. And your human instinct says: Peston may be right for everyone else, but I need to get my hands on my money. It’s just like the fuel stuff all those years ago – it’s totally irrational but people just panic.’
He went on: ‘If the banks are shutting their doors, and the cashpoints aren’t working, and people go to Tesco and their cards aren’t being accepted, the whole thing will just explode. If you can’t buy food or petrol or medicine for your kids, people will just start breaking the windows and helping themselves. And as soon as people see that on TV, that’s the end, because everyone will think that’s OK now, that’s just what we all have to do. It’ll be anarchy.
‘That’s what could happen tomorrow. I’m serious, I’m serious. And we just need to think how far we’re prepared to go. We can suspend the stock exchange, but that’s not going to help. We’d have to think: do we have curfews, do we put the army on the streets, how do we get order back? I’d have to resign but I couldn’t go if there was just carnage out there, someone would have to be in charge.’
Shriti came in ranting about Barclays Bank, and the moment passed. Gordon concluded: ‘Just be thinking about it. Think about the media side. Those guys will have to realise what a responsibility they have. They can’t do what they did over the fuel stuff and stoke it all up. They’ve got to realise they go down as well if the whole thing collapses.’
It was extraordinary to see Gordon so totally seized by the danger of what he was about to do, but equally convinced that if decisive action wasn’t taken immediately, it would get harder and harder to resolve the crisis. This was the only chance to avert his worst fears of a total meltdown in the financial system of the Western world, and the resulting collapse of social order.
That was a great leader and a great mind at work, and I would not hesitate in putting his and Shriti’s actions that week up with those of President Kennedy and his advisers during the Cuban Missile Crisis. When Gordon was ridiculed a couple of months later in the House of Commons for inadvertently saying: ‘We not only saved the world’, I looked at Cameron and Osborne collapsing in mocking laughter, and just thought: ‘You pygmies. You have no idea.’
Of course, having indeed saved the world by giving every other country a template for how to rescue their banking systems and leading the global coordination of fiscal and monetary stimulus over that period, Gordon was ultimately left frustrated at not being able to finish the job from 2010 onwards.
He had the chance when, thanks to the Dominique Strauss-Kahn scandal the following year, the position of Managing Director of the IMF became vacant. Even in normal times, that job would have been made for Gordon. It would effectively have been like a return to his heyday at the Treasury: a couple of annual set pieces, with an ongoing delivery and monitoring function in between times.
But in the circumstances of a world with an insecure recovery still facing massive economic risks, the IMF actively needed the global leadership he’d demonstrated over the 2008–10 period. That is why Presidents Obama and Sarkozy and Chancellor Merkel not only supported his candidacy, but clearly wanted him back in that leadership role.
The decision by David Cameron and George Osborne not to nominate him for the position – meaning his candidacy could not even be considered – was extraordinarily partisan, but also tremendously short-sighted.
Firstly, from a narrow political point of view, having Gordon run the IMF would have effectively neutralised the organisation’s influence on the 2015 election. Any criticism in the IMF’s reports on the UK economy could simply have been dismissed by Osborne with a ‘What do you expect?’ shrug. As it is, the IMF’s verdict on his economic policies remains an important and influential one.
More importantly, from an economic standpoint, you can guarantee that if Gordon had been put in charge of the IMF in 2011, he would have spent every waking moment since trying to engineer a coordinated soft landing for China, India, Brazil and other emerging economies, along with collective action by the G7 nations to deal with the impact on their exports and bond markets.
Just as in 2008, he would be trying to stop a potential world recession turning into a global socio-political meltdown, even more so given the militarist and revolutionary leanings of many of the emerging market economies at risk. And just
as in 2008, he would not be putting off that necessary action to another day and allowing the potential scale of the collapse in those emerging economies to grow ever larger.
There are few people in the world who would grasp the danger of that situation, and be able to both plan and deliver the alternative. Gordon Brown is one, and if David Cameron and George Osborne end up having to deal with the fallout for Britain from a disorderly crash in the emerging economies – as opposed to a coordinated soft landing – then their refusal to allow Gordon to take the IMF job will look foolish as well as petty.
Nevertheless, even if he would regard it as a job only half complete, Gordon can be rightly proud of the way he rose to the challenge in 2008 and 2009, and stopped a very bad economic situation becoming unimaginably worse, both in Britain and around the world. It was the biggest test he faced in his long career and he passed with flying colours.
Sometimes the recognition of that came from surprising quarters. Only a few weeks before I was sacked, I was in his office and he said excitedly: ‘Have you seen this letter I’ve had from Duffy?’ The Welsh singer had recently won Best Pop Vocal Album at the 2009 Grammys, been nominated for two others, and had received a very personal letter of congratulations from Gordon, as had all the other British Grammy winners.
He read her hand-written response out to me, saying: ‘I was completely blown away when your letter arrived and it gave me a lot of strength and encouragement.’ She talked about what she’d had to give up and go through to make it in the music business, and she said: ‘Your letter made me feel that my sacrifices and struggles have been worthwhile.’
He read out the last section with a faltering voice: ‘As for the difficult times we face at present as a country, my grandmother used to say that “Rough Seas Make Good Sailors”, so as we pull together and raise our masts, the storm will pass.’
He looked up at me with a tear in his eye, and said: ‘Isn’t that amazing? Isn’t that lovely?’
Then with a great guffaw, he read her PS – ‘Pushing my luck, but since you are the Prime Minister, Ranelagh Gardens in Fulham could really do with some recycling bins.’
WALK THROUGH
THE STORM
49
THE DARKER ARTS
People tell you things. When you do the job I did, in the way that I did, you become some diabolical inversion of a priest in the confessional box; told about other people’s sins precisely in the hope that you’ll expose them to the world.
Labour, Conservative or Liberal Democrat; ministers, MPs or advisers; if they’d ever shared their secrets with colleagues in Westminster, the chances were I ended up being told about them by someone they’d confided in, who was not the friend they thought.
Drug use; spousal abuse; secret alcoholism; extra-marital affairs; clandestine visits to seedy saunas and brothels; a bizarre and varied range of what the newspapers would call ‘unnatural sex acts’. And then dozens of instances of individuals, almost always men, deemed not safe to be left alone with junior officials late in the evening; the bullies, harassers and gropers.
The people passing on such information had myriad motives: journalists would often just want to swap gossip or find a home for a good story that they couldn’t get in their papers; ambitious MPs or political advisers would want to destroy their rivals for a job in government or a seat in Parliament without getting their own hands dirty; and some individuals would just be so outraged by a colleague’s behaviour, they’d want to see them get their comeuppance.
I estimate that I did nothing with 95 per cent of the stories I was told – except write them down for potential future reference, either because I wasn’t sure they were true, because they couldn’t be proven or, in some cases, because they related to people I knew personally and I felt what they were being accused of was totally out of character, even if true.
And occasionally, I’d be instinctively cautious about how information had been obtained, even long before we all knew about phone and email hacking.
I was once called up by a friend from my school days, who started reading me a series of eye-wateringly graphic messages which had apparently been exchanged between a very prominent Tory backbench MP and a young lover. I asked the obvious question: ‘How the hell have you got these?’ ‘Mate of mine’s a mini-cab driver. His fare fucked off without paying but left a phone in the back, so he was going to sell the phone instead, but he had a look first and this was what was on it.’
At which point, I started singing ‘La la la’ very loudly, shouted that there was a very bad line, I’d heard barely anything he’d said, and I was going into a meeting for the next year. I remain totally baffled how anyone in political communications or media can ever have the opposite instinct and get embroiled in anything that is obviously illegal, no matter how good the story is.
So there were some very bad stories I was told which ended up on the front pages of tabloid newspapers, there were a lot more bad stories I was told but never did anything with, and then there was a third category: stories that were nothing to do with me, but for which I was blamed because I was known to have form in this area.
Talk to Alan Milburn and he is convinced that I had a role in spreading rumours about his private life that accompanied his resignation from the Cabinet in 2003, when I was still working in VAT policy. Talk to David Miliband and – to my huge irritation – he apparently blames me for stories in October 2007 leaking his adoption of a second child from the United States and suggesting that he was infertile. Talk to Mark Clarke, former Tory candidate, and – until I persuaded him otherwise – he said he knew for a fact that I’d been behind some kiss-and-tell exposé from an ex-girlfriend.
And there’s an uncomfortable truth here. If a journalist has ever written something embarrassing about a politician’s private life, it’s very difficult for the pair of them to re-establish a normal relationship because the politician is always left wondering: ‘How did they find that out?’, and of course the journalist is never in a position to tell them.
So much like the police asking a bang-to-rights serial burglar if he’d mind coughing to a few other unsolved cases to help clear the books, I know there were some journalists who used my sudden notoriety as an excuse to explain away the sourcing of particular stories, protecting the real source in the process: ‘Well of course it was McBride, I could never say so before, but where else do you think it was from?’
And I’ve only myself to blame for that, given I had form for briefing scurrilous stories about sexual shenanigans. Not that I was particularly sex obsessed, but frankly – in politics – there’s a lot of it about.
Politics isn’t showbusiness for ugly people. They’re exactly the same. Showbusiness – like politics, business and the media – is mostly full of ordinary-looking people whose position or fame gives them the ability to play way out of their league when it comes to sexual relationships, often with much more junior colleagues. At best, that’s because some people find their power genuinely attractive; at worst, it’s because that power makes it difficult to say no.
One way or another, it makes Westminster about as seedy and sex driven as Hollywood, and often more so, especially for those MPs who use the demands of spending their weekdays in London away from their family as an excuse to live a double life, or react to their weekends at party conference or their ‘fact-finding’ trips overseas like teenagers on a night out in Newcastle.
I spent one Thursday evening in 2008 in a West End bar with a large group of Labour MPs. As the dining tables at the back were cleared to make a dance floor, we were joined by a handful of young, beautiful eastern European women in tiny dresses, accompanied by one well-heeled man, who – having bought them all drinks – looked rather too happy as they then ignored him and spread out around the room, each finding an MP or two to dance alongside.
A few of the MPs knew better, made their excuses and went elsewhere. But it was left to me to wander around the rest, many of whom I hardly knew, and say: ‘Watc
h out, I think these girls are on the clock. Anyone could be watching this and taking pictures.’ After I received two invitations to go fuck myself and one paranoid demand to know whether I’d taken any pictures myself, I gave up and left them to it.
It’s only fair to say that some senior women I met in politics were equally reckless and predatory when it came to sex, and I was far from a saint myself in the long period between breaking up with Penny and starting up with Balshen, but – for the most part – what I saw constantly in Westminster was men in their forties and fifties trying to co-opt junior staff in their twenties or thirties.
Indeed, when I started seeing Balshen, she felt obliged to tell me that there was one Cabinet minister who made her uncomfortable because of an incident when he entered a lift. She asked: ‘Going down?’, and he responded: ‘Now there’s a thought.’ He was almost thirty years her senior.
Even in No. 10, that culture persisted. One Sunday morning, a junior member of staff called me in distress to say that a special adviser colleague had followed up a row with her on the usual Saturday night press call by sending her abusive text messages about her supposed lack of nous. After she calmed him down, his response was to send first suggestive then downright troubling text messages, culminating in one saying: ‘I’m watching you through your window and I’m about to come in. What do you want me to do to you once I’m inside?’
When she told me, I wanted to tear his head off. But she begged me not to do anything about it, because – with good reason – she felt that, in those situations and in that Westminster environment, it’s the junior woman who complains who usually ends up losing her job, her prospects and her friends, and the senior man who gets tapped on the wrist with one hand and patted on the back with the other. Time and again, that was true.
Power Trip Page 40