The price was to leave Brown with his powerbase, where he ran what was both a government within a government and an Opposition within a government. Officials watched the Treasury become ‘an enormous empire’,99 an octopus with tentacles which gripped every other department. Crucially, Brown won an early second-term battle to keep control of the Public Service Agreements, which placed every spending minister under the thumb of the Chancellor by making them subject to detailed targets written in the Treasury. Under Brown, the Treasury not only interfered in the spending decisions of other departments, but second-guessed policy development as well. Clare Short’s international development budget doubled under his patronage. She had reason to be grateful to Brown, but even then chafed under his control. ‘The Treasury was extending its remit through the targets going right into the heart of all departments.’ The ‘enormous control of lots and lots of detail’ gave it ‘all the power, day-to-day power’.100
Brown reinvented the role of the Treasury. By contracting out monetary policy to the Bank of England, ‘he created a lot of spare time’, which freed him to pursue his policy and personal ambitions.101 Subjects that excited him – such as welfare reform, employment and poverty – received enormous attention. Ministers in areas which did not engage him, such as financial regulation, barely saw him. Ruth Kelly, a young and able junior minister put in charge of the City, was labelled a Brownite by the media simply because she worked at the Treasury. In fact, the City minister had one ten-minute interview with Brown a fortnight after her appointment and then did not have another one-to-one conversation with him for two years.102 Sir John Gieve, a senior official at the Treasury, observes that it was remade in its master’s image. ‘The Treasury was extremely powerful in some spheres’ where Brown was ‘very engaged and clear in his own mind what he wanted to do’. It was ‘a non-player’ in areas that didn’t interest him.103
The Treasury was historically the referee of spending by other departments. Brown’s introduction of tax credits, which came to cost the equivalent of 4p to 5p on the standard rate of income tax, turned him into ‘the largest spending department in Whitehall’.104 This meant that there was no-one to invigilate his spending, which was notorious for its waste and incompetence in the administration of tax credits. The Chancellor traditionally took charge of the macro-economy while the Chief Treasury Secretary conducted the detailed spending negotiations. ‘Public spending was done completely differently with Gordon Brown as Chancellor,’ observes one senior mandarin. ‘Gordon drained the post of Chief Secretary of any function and took over spending.’105 This further augmented his power over the rest of the Cabinet.
Chancellors often have difficult relationships with their colleagues, but the fear and loathing for Brown was unusually sharp because of his secretive decision-making and bone-crunching style of negotiation. There were ‘humdinger’ rows with David Blunkett, a short-tempered and stubborn man himself. On his own account, Blunkett was so infuriated on one occasion that it came to ‘near fisticuffs’ when he grabbed the Chief Treasury Secretary by the lapels.106
Brown’s explanation to himself for his unpopularity with colleagues was to blame his role rather than his personality. ‘There are tough decisions you’ve got to make,’ he told me. ‘You’ve got to tell people no. You’ve got to show that you can control public expenditure. That requires tough leadership.’107
Brown had ‘a very cynical view of mankind and his colleagues’, thought Andrew Turnbull, and was ‘Stalinist in his ruthlessness’ in the way he dealt with the Cabinet. He would not allow them ‘any serious discussion about priorities’ and operated on the principle that ‘they will get what I decide.’108 He was also compulsive about stealing the glory for any Government achievements. Civil servants like John Gieve observed him ‘pull announcements into the Budget rather than letting other ministers announce them’.109
The Budget and the autumn Pre-Budget Report were the big, biennial opportunities for Brown to shape the direction of New Labour, define its message in his terms and remind everyone why he was such a dominant figure. He used his spending announcements in November 2001 to assert his overlordship of the domestic scene. As usual, the spending ministers had been given little or no advance notice of his intentions. ‘The Treasury had two tricks,’ noted Estelle Morris, the Education Secretary. ‘One was announcing things very late. The other was telling you one day that you’ve got the money and three days later telling you the conditions which come with the money.’110 When someone called Brown ‘a colossus’ in the hearing of Alastair Campbell, he pulled a face: ‘Yeah, an out-of-control colossus.’111 One member of the Cabinet protested that Blair had allowed Brown to become ‘rampant’.112
Alan Milburn, the Health Secretary, boiled over when Brown, with no consultation beforehand, announced his own review of the NHS113 and made critical remarks about the health service’s performance. Milburn complained to Blair that Brown ‘saw it as his right to trample on everyone else’s territory’. Blair, who had so often been trampled on himself, sympathised.114
Brown’s own officials were shocked by how contemptuously he treated the Prime Minister. Sir Steve Robson was a senior Treasury civil servant who rated Brown as ‘a far-sighted, thoughtful guy’. Even this admirer relates that ‘There were times when Gordon would take an opposing view simply to bugger up Blair. Arguments would go on and on and on.’115
This had a paralysing effect on Whitehall. ‘I had Permanent Secretaries wanting decisions and we couldn’t give them because Blair and Brown were in a row,’ says Richard Wilson. ‘Issues stacked up like aircraft over Heathrow.’116
Money is power in Whitehall. So is information. Brown exploited the Treasury’s control of both to dominate the rest of the Cabinet and outmanoeuvre his titular senior in Number 10. One tactic was simply to refuse to tell Blair what would be in Budgets. Stephen Wall had been an official under Margaret Thatcher and John Major, both of whom had difficult relationships with Chancellors. Yet he ‘could not recall a time when there was such a relationship of non-communication between a Prime Minister and a Chancellor. Number 10 had the greatest difficulties until quite soon before the Budget statement getting the Treasury to cough up the details of what the Chancellor had in mind. It was a constant battle.’117 When Brown was refusing to divulge his plans, Blair was reduced, and in front of witnesses, to pleading: ‘Give us a hint, Gordon.’118
A senior aide to the Prime Minister once confided: ‘We are lucky if he tells us what will be in the Budget forty-eight hours beforehand.’119 Sometimes he did not even give that much notice. On one occasion, notorious in Whitehall, Brown would not let Blair see the Budget until six o’clock in the evening on the day before, by which time it was already at the printers.120 When Brown was proving particularly obstructive before another Budget, Blair asked John Prescott to join them for a meeting. The Deputy Prime Minister told the Chancellor that he was being utterly unreasonable. ‘For Christ’s sake, Gordon, he’s the fucking Prime Minister – you’ve got to tell him what’s in the Budget,’ said Prescott.121 It did no good.
On the account of Geoffrey Robinson, Brown starved Number 10 of information because he ‘thought it would get leaked everywhere and it probably would have done’.122 Yet Brown and his team leaked when it suited them. Blair and his advisers resorted to scouring the newspapers for stories planted by the Treasury to find out what was going on across the road. Andrew Turnbull, the Treasury’s most senior mandarin and later Cabinet Secretary, is in no doubt that Brown ‘used the denial of information as an instrument of power’.123 Gus O’Donnell took over as Permanent Secretary at the Treasury in 2002. He felt highly uncomfortable and tried to encourage Brown to be less difficult about Budgets – to little effect.124
There was a code in Whitehall for outbreaks between the neighbours of Downing Street. They became known as ‘the TB-GBs’.125 The power struggle was exacerbated by clashing perspectives. Blair wanted to fight wars. Brown gave every impression that he hated giving money to t
he armed forces. Blair believed that public anxiety about crime had to be acknowledged and addressed. Brown thought Labour could never own law and order as an issue and ‘the more you talk about crime the more you build up the problem.’126 Blair wanted to concentrate spending on health and education rather than Brown’s redistributionist and complex system of tax credits. The Prime Minister sat in the Commons watching the Chancellor deliver one Budget speech and was astonished to hear Brown announce extra billions for his pet tax credits when he had denied money for Blair’s priorities on the grounds that they couldn’t be afforded. Blair turned to Alistair Darling and whispered: ‘He told me there was no money.’127 Brown’s ‘stealth taxes’ often seemed as much intended to sneak them past his next-door neighbour as to mask them from the public. The Chancellor’s predilection for over-inflating how much he was truly spending was not just designed to win himself good headlines. It was also about gulling the Prime Minister.
In the view of Sir Stephen Wall, Brown’s behaviour was ‘outrageous and fundamentally disloyal. But ultimately the Prime Minister has only one sanction and that sanction is dismissal. If the Prime Minister isn’t prepared to exercise that sanction, the Chancellor has the whiphand.’128
By early 2002, Blair was psyching himself up to have a showdown only for a personal tragedy to intervene when Gordon and Sarah Brown lost their baby daughter, Jennifer. Grieving Chancellor and sympathetic Prime Minister were warm to each other at the funeral, reminding Blair ‘of the days when they had been genuinely close’.129 But their rivalry still cast a shadow even at the funeral of a baby. Blair was astounded to see that Brown had invited a lot of journalists to the funeral, among them Paul Dacre, the editor of the Daily Mail, the newspaper unmatched in the virulence of its attacks on the Prime Minister.
The relationship descended to a worse place when the Browns returned from mourning their lost child to Downing Street. The Blairs lived in the flat above Number 11. They would leave little Leo’s pram parked outside the flat door, where it was visible to the Browns. ‘Tony and Cherie are so cruel to me,’ Brown complained to friends. He was genuinely convinced that they were using the pram to deliberately remind him that the Blairs had what was tragically taken from him and Sarah. They were perhaps insensitive, but outside Brown’s paranoid imagination there is no evidence that they meant to be malevolent. He nursed this grievance for years. Brown would continue to rage about the Blairs’ ‘cruel treatment’ of him and his wife, bringing it up with one minister a full five years later.130
This unstable diarchy had two warring courts. ‘There was a real atmosphere of lack of trust,’ says Sir Stephen Wall. ‘You would hear that for people in the Treasury even to have contact with Downing Street was regarded as a kind of kiss of death for their careers.’131
In the words of Sir Richard Wilson: ‘Number 10 was obsessed with Gordon Brown. They talked about Gordon Brown more than anything else.’132 The Treasury was reciprocally fixated with Number 10. ‘There was a sense of righteousness’ in the Brown camp, says one of his inner circle. ‘We genuinely believed that Gordon would be a better Prime Minister.’133
His civil servants noted that Brown ‘relied on a small cell’ of advisers.134 By far the most influential was Ed Balls, a graduate of Oxford and a Kennedy Scholar at Harvard who was effectively the Treasury’s chief executive. Though little known to the public at this stage, he was hugely powerful behind the scenes. Balls was only in his twenties when he played a critical role in the rewriting of Labour’s entire economic policy, and was instrumental in persuading Brown of the case for Bank of England independence. He had struggled to conquer a childhood stammer, from which perhaps flowed his determination to present a relentlessly assertive face to the world. Balls was more capable of being decisive than his boss or anyone else around the Chancellor and often made decisions for Brown. Observing them interacting, some in Brown’s inner circle occasionally even wondered who was truly the master and who the servant. ‘Ed’s control over Gordon is the most extraordinary thing I’ve witnessed,’ says another close Brown aide of many years. ‘He had this ability to bend Gordon to his will.’135 As much as Brown, if not more so, Balls regarded politics as a perpetual trial of strength and conducted relations with Number 10 in that belligerent spirit. Says another member of Brown’s team: ‘Ed’s whole analysis was that it was a war, a raw battle for power.’136
Jonathan Powell, who barely exchanged a civil word with Brown for all the time they were in government together, thought Balls was ‘a perfectly nice bloke’ when he worked for the Financial Times, but turned ‘very unpleasant’ in the employment of Brown. ‘Gordon had a very strong field of gravity. People became infected by his paranoia.’137
Many of the battles were conducted through off-the-record briefings to the media, much of that masterminded by Balls. Ed Miliband, another aide to Brown but a gentler soul than his namesake, told friends that ‘Ed’s attitude is that it’s like a coup – you get control of the television stations and newspapers first.’138
Charlie Whelan, Brown’s first spin doctor, was forced to resign in the first term when he and his ad hominem methods became over-exposed. He was still a presence in the background and an influence. ‘Charlie set the bar. You prove your loyalty by your brutality. There’s a part of Gordon that likes that.’139
One of his successors was Ian Austin, a former regional press officer for the Labour Party. One Number 10 official who knew Austin then as a decent bloke and saw his transformation into an aggressive Brown soldier concluded: ‘Working for Gordon did something to people.’140 A later recruit to the propaganda operation was Damian McBride, who ultimately became Brown’s most notorious spinner. A Cambridge graduate, he was a career civil servant at HM Customs & Excise before he turned into a notably brutal partisan for the Chancellor. ‘The people around Brown were pretty ruthless,’ noted a senior mandarin.141
Any Cabinet minister who crossed the Chancellor or who was regarded as a potential threat was in peril of being attacked by Brown’s hit squad. In the words of one of Blair’s most senior aides: ‘Gordon had this King Herod strategy of killing off at birth anyone who might be a rival for the succession.’142
They would also turn on their own. Michael Wills, the Labour MP for Swindon, was a long-standing friend and ally of Brown. He nevertheless became the target of press attacks when he fell out with Ed Balls. It was Balls who was viewed with most suspicion inside Number 10. ‘He was regarded as the chief stormtrooper of the Brownite shock troops,’ says a member of the Cabinet.143 Jonathan Powell believed that Balls ‘egged on’ Brown to attack Blair because of his frustration that his own ambitions were impeded. Balls, an undoubtedly clever man, rarely deigned to mask his view that Blair was an intellectual lightweight. ‘Tony would be speaking at a meeting and Ed would sit behind Gordon whispering in his ear. He had complete contempt for Tony. He would just lay into Tony at meetings.’144
In the words of one of the Chancellor’s inner circle, ‘Ed was always trying to bring our day closer.’145 On the account of another, Brown’s relentless demands for Blair to give a handover date were partly driven by Balls, who would ‘guilt trip’ Brown about his failure to force out their rival. ‘Why are you being so weak?’ Balls would taunt Brown. ‘Gordon would be cowed and feel he was letting us down by not fighting harder to get it.’146
It was during this long period of nursing his grievances and tending his wrath that the dark sides of Brown’s character became entrenched: the bunker mentality, the faction boss methods of operating, the brutal conduct towards colleagues. The struggle for supremacy also brought out the worst in the Prime Minister’s entourage and the cynically manipulative side of Blair’s personality. He tried to contain Brown by employing psychological games. The stick was to rattle the Chancellor by encouraging other ministers and the media to believe that rivals were being built up to challenge Brown’s status as the heir apparent. The carrot was to string him along with quasi-promises about handover dates. As early as 1999,
on a believable account from the Chancellor’s side, Blair had told Brown he would only want to fight two elections.147 He made constant suggestions to that effect to try to induce Brown to be less difficult. In February 2002, Blair was accompanied on a tour of west Africa by Clare Short. Despite their many and often manifest differences, they got on in a funny sort of way. During a meal on the plane, Blair indicated that he still regarded Brown as his natural successor and would be more likely to hand over early if only the Chancellor would be more co-operative. Blair was determined to get Britain into the European single currency at this stage. Looking around the plane to ensure that they weren’t being overheard and speaking as if confiding ‘a big secret’, Blair suggested that Brown’s assistance in fulfilling his euro ambition would hasten the transition.
As she got up to go back to her seat, Short asked if he wanted her to convey this message to Brown. ‘I do, I do,’ said Blair. On her return to Britain, she did just that over a lunch with Brown at the Treasury. ‘You’re not the only one,’ said Brown. ‘Two other people have brought me this message from Tony.’ He went on: ‘You can’t arrange politics like this. And, anyway, he doesn’t keep his word.’148
There was some creative product of the struggle. Matthew Taylor was one Number 10 official who believed that ‘the policy outcome was often improved’ by the ferocity of the arguments between the two sides.149 The overall effect, though, was debilitating. Neil Kinnock, watching the rift between the two men who had been his protégés, regretted that ‘the grand opera of the personal relationship succeeded in obscuring achievements and preoccupying the energies and imaginations of far too many people, including people in government who inevitably started to move towards alignment with one side or the other.’150
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