The End of the Party
Page 92
There was a healthy probability that the London summit would be seen in years to come as a double watershed. The reckless era of untrammelled finance capitalism, which had broadly begun with the election of Ronald Reagan in 1980, was officially pronounced over by the world’s most senior leaders in April 2009. The summit’s other claim to historic significance was that it marked a formal recognition of the shift in the balance of economic power between nations. The G8 clique of rich Western states was supplanted in the hierarchy of international summitry by the G20, a bigger, broader and more global governance in which Brazil, China, India and the other rising economies were properly seated at the top table of international decision-making.
It was also a showcase for the positive characteristics of Gordon Brown as a leader. He had been in his element. ‘Gordon was born for this moment,’ Justin Forsyth observed to a fellow official at Number 10.86 Sarkozy, despite his differences with Brown, praised him for playing ‘a very, very excellent role’. Even David Cameron was privately heard to say that Brown ‘looks good’ doing global economic summitry.87
It cost nearly £20 million, consumed 84,000 hours of police time and devoured weeks of Downing Street’s attention and energy. That was all well spent for Gordon Brown. He palpably enjoyed being Chancellor of the World. He looked much more comfortable in that part than he ever did when he was Prime Minister of Britain. Global Chancellor played to his strengths, fed his self-confidence, garnered approving headlines and won the applause of his international peer group. The missing ingredient was making it relevant to voters. At his news conference, Brown was dazzlingly in command of the detail when explaining items like the significance of the Special Drawing Rights of the IMF. What he struggled to communicate clearly was why it mattered to the livelihoods of people in Birmingham, Bristol or Bury. Malloch-Brown thought it ‘one of the finest days of his premiership’ but laments that his friend in Number 10 could not make a ‘fluent connection’ with why it was important to Britain and ‘struggled to demonstrate why this international stuff mattered back home to the voter’.88 He sounded like a man who had spent so long thinking in trillions that he had forgotten how to speak in pounds and pence. Philip Gould, veteran reader of the mind of the voter, regretted: ‘It did not scratch the consciousness of the public.’89
It was nevertheless an extremely good two days – probably the most personally satisfying forty-eight hours of his premiership – for Gordon Brown. It was a risky coup to persuade such a pageant of leaders to convene in London. Failure would have been his failure; success was his success. His pre-summit shuttling and phone diplomacy equipped him with a comprehensive understanding of the negotiating positions and bottom lines of his counterparts. By most accounts, he was an effective chairman. One admiring historian remarked: ‘His force of character and political capital ensured an unprecedented turnout and successful outcome. Can one honestly imagine Obama, Sarkozy, Merkel or Hu Jintao answering the call from David Cameron?’90
The next morning, Brown was rewarded with his most sparkling reviews in the British press for at least six months. ‘The London United’, proclaimed The Times on its front page and headlined its leader comment: ‘Summit of Achievement’.91 ‘The fight back starts here’, declared the Daily Telegraph, which commended ‘some sensible measures’ to ‘rescue the world from depression’.92 The Financial Times believed: ‘The world is better for having held this summit. The possibility of dangerous contagion is lower and useful progress has been made across a range of issues.’93
The international press was also generally admiring, though it distributed the praise differently. The Washington Post hailed the G20 as ‘a rare summit of substance’ and gave most of the credit to a successful debut on the world stage by Barack Obama.94 The hero of the day for much of the French press was their President with Le Monde claiming victory for the campaign to make ‘a world less Anglo-Saxon’.95 Readers of the Chinese press were under the impression that Dr Hu was the go-to guy at the G20.96
Downing Street didn’t mind that. Most of the home media had given the Prime Minister at least two cheers for the G20 and some were awarding him the full three huzzahs. As the leaders flew out of London, the protestors dispersed, the world’s journalists decamped, and the security was dismantled, Gordon Brown returned to Number 10 on Thursday evening sounding more cheerful than he had for a long time. Over celebratory drinks with his team, he told them: ‘We’ve achieved more on financial reform in ten weeks than I managed in ten years.’97 But he did not stay with them long to savour the achievements. ‘He suddenly looked absolutely shattered. It was as if all the tiredness of the last three months had caught up with him at once.’98
On the drive back from the Docklands, he had asked Mark Malloch-Brown to sit in the back of the Daimler with him. The minister effused: ‘Gordon, this is a corner turned.’ The Prime Minister nodded and then grew pensive: ‘You watch. There’ll be plenty of stuff domestically ahead.’99
37. Chamber of Horrors
‘Gents’ was the salutation with which Damian McBride began his infamous e-mail to Derek Draper, a former sorcerer’s apprentice to Peter Mandelson who had asked the Prime Minister’s spinner to supply gossip for a scurrilous website venture. McBride had ‘taken the hit’ for the Cabinet revolt against Brown’s methods the previous autumn and had been ‘very down’ since he was pushed into a role with a lower profile.1 During the G20, he was given the relatively trivial duty of briefing the media, on behalf of Sarah Brown, who still held a candle for the spin doctor, about the activities of the leaders’ spouses. Now he was ‘under-employed’ at Downing Street,2 the devil had made work for an idle spinner. In the e-mails, McBride outlined a plan to attack senior Tories by spreading libellous inventions about them and their families, including one smear that David Cameron suffered from ‘an embarrassing illness’ and another that the wife of a senior Tory had mental health problems.3
The e-mails were acquired by Paul Staines, a right-wing libertarian who blogged under the pseudonym Guido Fawkes. This Fawkes lit the fuse with perfect timing. He detonated this political dirty bomb on the Easter bank holiday weekend. In a stroke, it blew away all the momentum that the G20 had generated for Brown.
The Prime Minister was up in Fife. McBride rang Brown on Saturday morning when reports started to appear that a scandal was brewing. He later said that ‘it was as bad as telling my dad. He was just so angry and just so let down that he could barely speak to me.’4 Yet it was not until that afternoon, when it became clear that they were failing in an attempt to shrug away the e-mails as no more than a juvenile misdemeanour, that McBride’s resignation was announced. The Prime Minister was initially resistant to letting him go.5
The Tories howled with outrage about the smears while being privately delighted at the damage this did to Brown’s claims to be guided by a ‘moral compass’. The media went into sanctimonious mode with some newspapers condemning McBride for supplying stories they had themselves run. Then the Prime Minister got out his trademark thick black marker pen to write letters of regret to his spin doctor’s intended targets and disavow any knowledge of his activities.
The attempt to create distance from McBride by portraying him as a rogue agent was not credible. McBride had been Brown’s chief propagandist for six years. He was also extremely tight with Ed Balls, closer some thought than he was to the Prime Minister. Balls, knowing that he would be spattered by association, raged at his friend: ‘I can’t believe you have been so fucking stupid.’6
The more scrupulous members of Brown’s staff had long been horrified by what they saw of McBride at work. His modus operandi was to offer ‘trades’ to journalists who boosted Brown or killed stories that Number 10 didn’t want published.7 Brown had ignored repeated warnings, from Gus O’Donnell, from Jeremy Heywood, from senior colleagues in the Cabinet, to get rid of him. McBride was not a lone wolf; he was one razor-toothed but sloppy dog in the Brown pack with a licence from the Prime Minister.
The e-mails
were an extreme example of the macho and nasty tactics that had been employed on Brown’s behalf by members of his cabal for many years. McBride operated in the dark side of Downing Street which was an expression of the dark side of Brown’s personality. Ministers had long spoken of a ‘good Gordon’ – the high-minded man with ambitions to change the world – and a ‘bad Brown’ who surrounded himself with thuggish acolytes who used the press to carry out punishment beatings and character assassinations of colleagues who crossed or threatened their master. Entirely untrue rumours were spread that James Purnell, the Work and Pensions Secretary, was gay.8 Alistair Darling had been continually briefed against. They would eat their own: Douglas Alexander was made the scapegoat for the election that never was. The spin-assassins were not ashamed of their reputation; they revelled in it. By eerily exquisite timing, Armando Iannucci was about to release In the Loop, a satirical film about spinners based on his television series The Thick of It. The leading character was a brutal, foul-mouthed, mendacious, psychopathic spin doctor from hell called Malcolm Tucker. Remarkably, Iannucci was given permission to film inside Downing Street. When Peter Capaldi, the actor who played the part, arrived on set ‘all the real Malcolm Tuckers brought their cameras because they were quite excited.’9 The villain was, to them, a hero.
In the aftermath of the exposure of the e-mails, a long history of dirty tricks came to light. Steve Richards, the highly respected commentator of the Independent who was broadly sympathetic to Brown, revealed that a TV presenter was about to interview a Cabinet minister when McBride texted him with the message: ‘Ask him about his drinking problem.’10
Ed Miliband, one of the Prime Minister’s closest allies in the Cabinet, was put up to defend Brown on Newsnight, but he had to concede that the episode was ‘incredibly damaging’ and did not try to deny that the McBride e-mails had sunk to ‘new depths’.11
The terrible headlines generated by Smeargate were prolonged by Brown’s characteristically constipated attitude towards making a proper public apology. He was in a ‘foul, foul mood’ for days after he was forced to relinquish McBride.12 Douglas Alexander told a friend: ‘The problem is that Gordon is trying to explain himself to the Reverend Brown.’13 Peter Mandelson had to plead with Brown ‘to use the “s” word’.14 Only after six days of invisibility did the Prime Minister finally bring himself to say that he was ‘sorry about what happened’. Speaking at the Govan shipyard before a Cabinet awayday in Glasgow, he claimed: ‘I was horrified, I was shocked and I was very angry indeed.’15
Rumours swirled that McBride was still lurking in the background. Peter Mandelson became so anxious that he eventually confronted the Prime Minister. ‘Have you exchanged any e-mails with him?’ Mandelson demanded to know. Brown swore: ‘Absolutely not.’16
The McBride Affair was an appetiser before the blow-out feast of scandal that was about to be served up that spring. A High Court judgement the previous year had finally quashed attempts by MPs to prevent exposure of their expenses claims, a conspiracy to keep them hidden in which both Labour and the Tories were complicit. The Commons was forced to agree that it would publish in July, but some were already beginning to leak. The first to be hit was Jacqui Smith, the Home Secretary, when it was revealed in February that she claimed £116,000 in expenses by designating her sister’s terrace house in south London as her ‘main home’ rather than the house in the West Midlands she shared with her husband and children.17 Outrage was followed by humiliation when it was next revealed that her expense claims had included porn films watched by her husband and an 89p bath plug.18 Her credibility never recovered. Tony McNulty, the Employment Minister, was exposed for claiming over £60,000 for the house in which his parents lived which was just eight miles from his main home. His ministerial career would soon be over too.19
Brown was doubly panicked. He was alarmed by what was going to be uncovered when the Commons published every MP’s claim. Even in the heavily censored form planned by the authorities, he knew it would be horribly embarrassing. His pollsters were also warning him that voters would probably vent their anger most intensely at the Government. In an attempt to take the initiative, on Tuesday, 21 April, he finalised a quickly cobbled together proposal to reform parliamentary expenses and recorded a three-minute monologue announcing the package which was then uploaded on to YouTube. Brown was hoping to copy Barack Obama’s successful exploitation of on-line communication. He was influenced by David Muir, the Director of Strategy at Downing Street, who had recently hired two of Obama’s campaign strategists, Joel Benenson and Peter Brodnitz. They urged Brown to use YouTube as a way of bypassing the mainstream media and showing he was in touch with the digital age.20 It was not bad advice in principle, but they forgot that the medium can only ever be as good as the messenger and his message. Ridicule greeted Brown’s performance on YouTube in which he manically grinned and grimaced like a contestant in a gurning competition. ‘Just too horrible to watch,’ shuddered the Labour MP Gordon Prentice.21 The number of hostile posts grew so great that Number 10 was forced to disable its site’s comment section.
The YouTube recording was made in a hurry on his return from abroad just before he went into Cabinet, because he hoped to grab the credit for the proposals Harriet Harman was shortly going to announce to the Commons. ‘It was a complete cock-up,’ says one of his senior staff. ‘Someone should have checked it and seen that it was no good. No-one did.’22 This was a further demonstration that Brown nearly always made himself less popular when he strained to be a populist. The YouTube howler was the woeful performance of a man trying to play a part that he did not enjoy and could never master. Only after he had made the disastrous recording announcing his reform plan did Brown go into Cabinet to inform his colleagues.23 Nor had he bothered to consult senior MPs, nor the Opposition leaders, nor Sir Christopher Kelly, the chairman of the Committee on Standards in Public Life, who was aggravated that Brown was pre-empting an inquiry he had started at the Prime Minister’s request. There was instant hostility to Brown’s idea that the second-home allowance should be replaced by paying £150 a day to MPs for attending Westminster. MPs objected to ‘clocking in’; the media and the public were scandalised by the notion of giving a bonus to politicians for turning up to do jobs for which they were already paid.
One member of the Cabinet was relieved that Brown was so preoccupied with the McBride Affair and the uproar over expenses. In advance of the Budget, Brown had again been leaning on Alistair Darling to spend money that the Treasury did not have. ‘Alistair was saying no. Gordon was saying gimme, gimme, gimme.’24 Relations between the two men had sunk to a new nadir. Brown railed to his inner circle that Darling was incapable of thinking politically and had been captured by cautious officials at the Treasury. The Chancellor did indeed agree with his officials that the Prime Minister wanted to be reckless with the public finances. During one confrontation over the Budget, Darling said he was not going to give in to Brown’s spending demands and be remembered by history as a disastrous Labour Chancellor. ‘You’re not going to make me Philip Snowden,’ Darling said to Brown.25
As the Budget approached, Brown was distracted. ‘The problems in his own backyard meant that Gordon couldn’t interfere as much,’ says one pleased Treasury official.26 Brown nevertheless made two crucial interventions. The previous December, Darling announced a new 45 per cent income tax rate for higher earners. It was Brown who suggested that this should be lifted to 50 per cent for those earning £150,000 or more. Treasury officials cautioned that about two thirds of those in the bracket would probably find a way of avoiding the top rate.27 Brown was not interested in that argument. He was calculating that it would distract from the horrendous borrowing figures and hoped to snare the Tories into opposing the new top rate so he could cast them as the friends of the rich. Darling did not put up much of a fight. Neither did Peter Mandelson. On his account, he was ‘not entirely comfortable, but certainly accepted it and signed up for it. There was no alternative.’28 Mandelso
n was lobbying for extra funding for his department and didn’t see how he could simultaneously argue for more spending and against any tax rises. Darling and his officials were more resistant, but gave some ground, when Brown also put them under pressure to massage upwards the growth figures.29
On Wednesday, 22 April, the Chancellor rose to deliver the Budget. It confirmed that borrowing was rising to a peacetime record and that the recession would very likely be the most severe since the Second World War. Even on the rosy assumptions about future growth read out by the Chancellor, the Government would not balance its books until 2018. His figures suggested that the country faced spending reductions and tax rises for many years ahead, putting the final punctuation mark on the feel-good era. Darling had barely finished before both the numbers and the politics were under attack. The International Monetary Fund, City analysts and the Labour-dominated Treasury select committee all declared the growth projections to be wildly optimistic.30 The Institute for Fiscal Studies estimated that there was a £45 billion hole in the Budget arithmetic.
The shocking size of the deficit and the substantial tax increases on higher earners produced another rash of headlines and commentaries calling this the last rites for New Labour. The new 50p rate broke the signature pledge, made at three elections in a row, not to touch income tax. They had slyly bent and sometimes flagrantly bust other promises over the years, but the pledge not to touch income tax had been treated as inviolate – until now. Superficially, this polled well. Most voters agreed that the wealthiest ought to take more of the pain of the recession. Yet it was also a symbolic retreat from the original New Labour prospectus. They were back to where they were before Tony Blair successfully won over aspirational voters. Labour was again the party that jacked up income tax. The Blairites, who had kept quiet for several months, broke cover. Stephen Byers predicted that Labour would live to ‘regret for many years to come’ the betrayal of the tax pledge. He attacked a ‘cynical’ piece of ‘political positioning’ which didn’t even work because the Tories were not so stupid as to say that they would make a priority of reversing the 50p rate. ‘If it was an elephant trap, it was so large and well signposted that even the most myopic old tusker would have little trouble avoiding it.’31