Sir Andrew Turnbull, the Cabinet Secretary, noted: ‘Gordon never thought well of the grander universities. He had a view that you shouldn’t give these people lots more money until they’d reformed themselves.’40 He unleashed a visceral attack on Oxford University three years earlier for refusing a place to Laura Spence, a state school pupil.41 Blair, by contrast, was ‘pretty contemptuous of class politics’.42
Brown argued: ‘There’s got to be an alternative.’ ‘All right,’ replied Blair. ‘What alternative?’43 Brown didn’t have one. He wanted a review, similar to the Wanless exercise that he used to pave the way for raising tax to produce more funds for the NHS. Change should wait until after the next election. After all the difficulties with the health legislation, he contended they should not risk another confrontation with a large slice of the Labour Party. ‘Gordon was not articulating an alternative agenda – he was in blocking mode.’44
Blair was not having that. ‘I’ve never understood this “you do one thing or you do another” argument,’ he told me. ‘You do what is right.’45 He was already stalked by the fear that time was running out on him to leave lasting domestic reforms. He saw Brown’s opposition as driven by posturing and positioning, not by any real conviction that the fees were wrong. Treasury civil servants tended to agree with the Prime Minister. ‘It seemed a sensible reform,’ says one of Brown’s most senior officials. ‘Gordon was digging in against it and it wasn’t clear why apart from the fact that it was Tony’s idea. From a Treasury point of view, it was quite hard to see why we were opposing this.’46
The first Cabinet minister caught in the middle of their argument was Estelle Morris, the Education Secretary. She was under intense pressure from Number 10 to swallow her own concerns about top-up fees and countervailing pressure from the Treasury to resist. In the words of Morris, there was deadlock.
‘It froze, nothing happened. During those long months when I had on my desk lots of options as to the way forward and I had my own views, I thought I can’t resolve this until they resolve it between them.’47
Suddenly, in the last week of October 2002, Morris quit the Cabinet. She was engulfed in a controversy about A-level standards and was fraying under media intrusion into her private life. In a refreshing and uniquely candid admission, she said she did not feel up to being a Cabinet minister.
While expressing public disappointment, Blair was privately glad of the opportunity to replace her with a more robustly constructed minister who also happened to have a well-developed and reciprocated dislike for Gordon Brown. To take on the Chancellor, Blair gave education to a formidable bruiser of his own, Charles Clarke. Built like a bull elephant and sometimes displaying the temperament of one, Clarke had a thick skin grown as a senior aide to Neil Kinnock during the battles of the eighties. The son of a distinguished civil servant, he had read mathematics at Cambridge. Unlike Morris, he was not a man troubled by many anxieties about his own abilities. Unlike many members of the Cabinet, he did not feel intellectually or politically intimidated by Brown.
Clarke was initially attracted by the alternative idea of a graduate tax. On arrival at the department, he ordered papers on various schemes from his civil servants. Within eight weeks, he concluded a graduate tax would not work and came round to top-up fees as the best way of dealing with university finances.48
Provocatively, Brown wrote a letter to the Cabinet arguing that fees would reduce the number of less affluent students going to university. This was reminiscent of his pre-emptive attack on Milburn and foundation hospitals. Charles Clarke remembers: ‘What he’d do is he’d go along, go along, go along and when it came to the point he’d then blast out a very, very full and very, very technically correct document at enormous length, which he wouldn’t have shared with any of us at any point before.’49
This time, though, he would lose. Clarke intensively lobbied his colleagues and Blair squared off Prescott.
In mid-January 2003, Prescott refereed the bout when Brown and Clarke slugged it out at a Cabinet committee meeting. For once, the Chancellor was floored in an internal battle. Not having any alternative to propose himself, he could not prevail in his opposition to fees. He was left arguing for the status quo which no-one else thought sustainable. Civil servants believed it was a seminal moment.50 ‘It was the first time that he had been comprehensively defeated in an area of domestic policy,’ says Turnbull. ‘When he couldn’t win, it became a question of trying to corral it.’51
Charles Clarke was more amused than frightened by Brown when the Chancellor launched a final fusillade of objections on the very day that the White Paper, already back from the printers, was going to be unveiled to MPs. ‘I had a 25-page letter from Gordon coming through our fax machine the morning I was making the statement to the House with a whole string of changes which he thought were necessary at this very last minute.’52
Clarke ignored them. The White Paper was published on 22 January 2003. It unveiled the plan to allow universities to charge tuition fees of up to £3,000 a year from 2006. The current upfront annual fee of £1,100 was abolished. Graduates would repay loans at a rate of 9 per cent of any income earned over £15,000 a year.
This detonated an explosion of protest from students and ignited opposition amongst many Labour MPs. There were a lot of former teachers and lecturers in the party. The Chief Whip, Hilary Armstrong, warned Blair that education stirred high emotions because ‘it goes to their guts rather than their intellect.’53 One of the rebels’ arguments was that they were being more faithful to Labour’s manifesto commitments than the Government. Just before the 2001 election, the then Education Secretary, David Blunkett, preempted debate by categorically ruling out the introduction of top-up fees. Stupidly, given that his mind was already moving in that direction, Blair allowed the manifesto to include a pledge that ‘we will not introduce top-up fees and will legislate to prevent them.’54 It was one of the best examples of Blair failing to think strategically about his second term and then paying a price during it. The Government tried to shimmy around the manifesto pledge by saying that the fees would not be paid until after the next election so technically they were sort of not breaking the promise. That sounded like sophistry. At a time when Blair already had a very bad reputation for ‘trust’, the accusation that he was breaking a manifesto promise was one of the most potent arguments in the arsenal of his opponents.
No fewer than 160 Labour MPs signed a motion opposing the policy, more than enough to defeat Blair. Some of the parliamentary rebels belonged to the same cohort who voted against the Iraq war. Others had been loyally supportive then, but were no longer prepared to be so now. Some wanted to punish the Prime Minister for dragooning them into supporting a war that had gone so badly wrong. Others had developed a visceral loathing which was either ideological or personal or both and craved to eject him from Number 10.
Revolt was now in Labour’s bloodstream, another legacy of the war. Among those most prominent in the rebellion were some well-known acolytes of the Chancellor, including George Mudie and Nick Brown, no relation to the Chancellor but so close to him that he might well have been. The former Chief Whip was now whipping a revolt. One Blair loyalist noted acerbically that it was ‘the first time I’d ever known Nick Brown take an interest in education’.55 This left Number 10 convinced that the Chancellor himself was ‘absolutely dominant in terms of organising the opposition’ to the Prime Minister, a remarkable state of affairs.56
Charles Clarke was his combative and bullish self in making the argument. A more emollient approach was taken by his deputy, the Universities Minister, Alan Johnson. A former postman who had not enjoyed the benefit of a higher education, he was an effective frontman for a difficult cause. It was hard to suggest that a man brought up by his sister in a council flat was an enemy of the less advantaged. He made a persuasive advocate of the argument that it was reasonable to expect well-off graduates to make a bigger financial contribution to the cost of their education. They were a soft-cop,
hard-cop routine. Johnson liked to joke: ‘It’s a charm offensive. I do the charm and Charles does the offensive.’57
The scale of the Labour revolt forced the Government to concede a lot to appease the concerns of the rebels. The very poorest students were exempted from the fees. There was a guarantee that they could not be increased above £3,000 until 2010. There were also promises of reviews into the impact on less affluent families.
This made some wonder whether it was worth all the turmoil. The issue gave a cause to Charles Kennedy and his Liberal Democrats. Fees would cost Labour both votes and seats at the next election. Against that, there was no question that the issue of university financing had to be addressed. It was an equitable solution to ask graduates, who could generally look forward to earning more than other citizens, to pay when the alternative was for them to be subsidised by poorer taxpayers who had not enjoyed the benefit of higher education. The Conservatives later came to regret and ditch Michael Howard’s opportunistic stand against fees. They embraced them. That made it very likely that this was a Blair reform which would endure.
In the last week of January 2004, his survival was put to an especially severe test. The crucial vote on tuition fees was set for Tuesday, 27 January. The next day, Lord Hutton was scheduled to finally announce his verdict. Into forty-eight frenzied hours were compressed the two great issues of Blair’s second term: the war in Iraq and the battle for public service reform. He had staked his personal authority on both. A damning verdict from Hutton or a defeat on fees could be a fatal blow.
Blair was in one of his ‘taxi driver’ moods about the Labour rebels. If the Labour Party did not have the will and discipline to support him on this, he said to his aides, they were not worth leading any more.58 He was telling people that he would rather resign as Prime Minister than accept defeat over top-up fees. Some of his senior staff took this seriously enough to be nervous that he might well quit.
At the Monday morning strategy meeting at Number 10, Jonathan Powell asked where they were in terms of voting numbers. Sally Morgan replied that they couldn’t be sure because they didn’t know whether the Chancellor would instruct his supporters to vote for or against. Other members of the senior staff listening to this exchange were flabbergasted. Says Sir Stephen Wall: ‘I remember thinking: This is a very, very extraordinary situation when the Prime Minister does not know whether he can carry a crucial piece of legislation because he doesn’t know whether his Chancellor of the Exchequer is going to support the Government or not.’59
It was indeed an extraordinary situation that the Chancellor was threatening to torpedo the Prime Minister’s legislative flagship. There were two schools of opinion within Number 10 about the Chancellor. ‘There were those who thought Gordon wanted to seize the opportunity to cause Tony to fall. Then there was a more sophisticated camp who took the view that Gordon was not seeking to use one single event to bring down Tony because that risked toppling the whole edifice. What he was doing was death by, maybe not a thousand cuts, but a dozen cuts. That camp saw this as another one of those.’60
Shortly before the vote, Brown called his most trusted advisers together for a breakfast at the Treasury. The Eds Balls and Miliband, Sue Nye and Spencer Livermore debated with him whether ‘we push this all the way or do we back off?’61 Brown concluded that they should back off, partly because ‘the destabilisation of Blair had already been effective’ and partly for fear of the consequences of bringing the roof in.62 At Number 10, they believed that ‘Gordon became scared at the last minute that he’d be known as the person who defeated it.’63 That would arouse the anger of powerful forces, not least Rupert Murdoch’s newspapers.
He also had the promise from Blair of a handover in the summer of 2004, though Brown remained suspicious that ‘Tony will never go.’ In the weeks since the Prescott dinner, he repeatedly asked Blair: ‘Why aren’t we discussing how we are going to do this?’ Blair responded: ‘I’ve said what I’ve said. You know where I am. You’ve got to work with me.’64
Passing the loyalty test set by Blair was an additional incentive for Brown to call off the dogs. He started to lean on his supporters to reverse their opposition to the fees. Shortly before the vote, he called George Mudie and Nick Brown over to his flat in Great Peter Street to try to persuade them to end their rebellion. He argued ‘for all the usual complicated Gordon reasons’ that they should now support the Government.65 One of those arguments was that he would not be able to impose discipline on the Labour Party as Prime Minister if his people had led a major revolt.
Brown’s camp made a highly contentious claim that he had talked round forty potential rebels and so made the crucial difference. That persuaded The Times that ‘The Chancellor has shown that he is the only man who can save the Prime Minister in his hour of need.’66 That interpretation – portraying a drowning Blair clutching a lifeline from Brown – was hateful to the Prime Minister and his people. As Stephen Wall puts it, they had got to ‘a stage where people inside Number 10 felt they couldn’t govern with Gordon Brown, but they couldn’t govern without him either’.67
He failed to persuade Mudie to end his rebellion, but he did get Nick Brown to switch sides, an important signal to the Chancellor’s supporters on the backbenches about what they were expected to do.
The vote was still ‘genuinely knife edge’68 and the atmosphere inside Number 10 ‘febrile’.69 At lunchtime on Tuesday, the Chief Whip told Blair she feared that they were still in high peril of defeat.70 Blair was not someone ‘who usually shows agitation, but he was like a cat on a hot tin roof in the last few hours’.71
Potential rebels were brought to him in his office at the Commons as the clock ticked down to the vote. Clarke was forced to make further last-minute concessions from the dispatch box. ‘Hell’s bells, it couldn’t have been closer,’ observed one Cabinet minister.72 A member of Blair’s senior staff thought ‘a few votes the other way would have spelled the end of his premiership.’73
MPs voted at seven that evening. There were whoops from the Opposition benches and gasps from the Labour side when the tellers for each side marched up to the Mace, faced the Speaker and revealed that the Government had won only by the narrowest margin and would have lost if the Opposition had got its full numbers in. ‘The ayes to the right: 316!’ cried one teller. ‘The noes to the left: 311!’ cried the other teller. A Prime Minister elected by a landslide had been reduced to a majority that could be counted on one hand. Brown stuck up five fingers and thrust them into Blair’s face.
The Prime Minister shrugged. A win was a win, after all. He left his seat on the frontbench, slipped behind the Speaker’s chair, walked into the ministerial corridor and turned into his Commons office for a victory drink. A few hours earlier, he had learnt something else which put him in a mood to celebrate.
14. Too Good to be True
Tony Blair came into the Cabinet Room and asked: ‘What’s the verdict?’ While he had been in the Commons frantically lobbying Labour MPs over tuition fees, his senior aides were poring over the Hutton report, a task to which they had devoted themselves from the minute it was delivered to Number 10 at midday. The Prime Minister was greeted with a set of grim faces, those of David Hill, Tom Kelly, Sally Morgan, Jonathan Powell and Godric Smith. Blair frowned, sensing that there was something not quite right about their reaction. ‘We had a joke with him. When he came in, we all looked down. He got wind of it quite quickly.’1 The aides started to break into smiles. ‘It’s very positive for us,’ said Powell. ‘It’s almost too good to be true.’2
The death of David Kelly had hung like a shroud over Blair for six months. ‘There was a sense that we couldn’t do anything else until we had got past Hutton.’3
The 740-page report was delivered to Number 10 by secure courier at noon on Tuesday, 27 January, allowing Downing Street twenty-four hours to prepare its lines before the judge’s verdict was made public. Once they’d got the report, the aides separated into groups and spread out around the gover
nment buildings in Downing Street. Some of the team sat at the conference table in David Hill’s office at Number 12. Others went to the Cabinet Room or the private office adjacent to the Prime Minister’s den. Each aide was armed with two highlighter pens: a yellow pen to score findings that were favourable to the Government, a pink one to mark passages that were hostile.
As they scoured the report, the team in Hill’s office started to look at each other ‘in complete disbelief’.4 Their copies were soon covered in lots of positive yellow and almost no negative pink. The verdict from Hutton was more favourable than they had imagined even in their most wildly optimistic moments.
The teams gathered together in the Cabinet Room at three that afternoon to share their findings. There was a brief palpitation when Jonathan Powell produced his copy of the report to reveal that it was glowing with negative pink. That little panic subsided when the others realised that the Chief of Staff had muddled his colours. ‘That was typical of Jonathan,’ remarks another member of the team. ‘Jonathan has a big brain, but he was never much good with practical things like that.’5
Hutton pronounced Number 10 innocent of manipulating or falsifying the intelligence. The judge was unsympathetic to Kelly, criticised the scientist for talking to journalists and suggested that he deserved no protection once he had been exposed. There was only the mildest criticism, which was directed at the Ministry of Defence rather than Number 10, for the way in which Kelly was handled by his superiors. There was ‘euphoria’ in Number 10. ‘If he’d come down on the other side, God knows what would have happened.’6
The End of the Party Page 35