by Sugar, Alan
It was nice to receive the call and to be thought of in such a way. Gordon and I went back over ten years, to when he first took on the role of Chancellor of the Exchequer. It was he who asked me to embark on my trips around the country, talking to universities, colleges and businesses. Every year during National Enterprise Week (around November), I’d be called to attend all the seminars and sessions. More recently, I had also agreed with Ed Balls, the Education Secretary, that I would embark upon an advertising campaign to promote apprenticeships. As well as making some television adverts, I’d have to go on a roadshow, talking to potential employers about the benefits of apprenticeships.
The Business Council meetings were very interesting, though quite formal. Gordon Brown and the Chancellor would share data on the current economic climate, welcoming any input from its members. Little did anyone know that Gordon had walked straight into a hornets’ nest when he became PM. The world was about to explode financially.
I’d seen, in the real estate business, the madness that existed in the markets between about 2004 and 2007. Assets were being sold for ridiculous amounts of money. The tradition of conservative lending from banks had gone out the window and now they were dishing out money with no regard for the value of assets they were funding. It was all well and good lending Fred the butcher £50,000, but the banks viewed their margin on that type of transaction as peanuts. What they wanted to do was lend billions, so they could make 2–3 per cent on that sort of money. Following such a strategy meant they took amazing risks with some strange characters. A whole new wave of so-called entrepreneurs came to fame in the marketplace and were labelled multi-millionaires, or even billionaires, when in fact they didn’t have two bob to rub together. All they had was a good and fast mouth and a bank eager to lend them money.
The American market was racing away in the same fashion. The bubble had to burst, and burst it did in the fourth quarter of 2008, the so-called credit-crunch crisis. The Americans had been selling what they called ‘junk sub-prime loans’ between banks. Trouble was, the banks weren’t able to pay each other. Many UK banks had bought the sub-prime rubbish from the Americans and got themselves into big trouble paying up.
Like the rest of the UK, I woke up one morning to see on TV that the bank Northern Rock was in trouble. Rumours were rife in the market that they were near insolvency and people were starting to queue outside the branches to get their money out. It was the nightmare all banks dread. The whole banking system rests on the use of depositors’ money to invest elsewhere. Therefore, hypothetically, if every depositor demanded their money back on one particular day, they’d never be able to get it. And this was the scenario being played out at Northern Rock.
I remember turning to Ann and saying, ‘This is a disaster! You have no idea what this means. If this bank is allowed to go down and ordinary people lose money, the next thing you’ll see is long queues outside Barclays and Lloyds. And if that sort of panic breaks out, the whole banking world will collapse and the ramifications will be unspeakable.’
The government stepped in and propped up Northern Rock and tried to calm the situation, but the people still queued. The crisis was not helped by the media, who gave no support to the government – if anything, they were responsible for instilling more panic in the public. Finally, the Chancellor announced that the government was taking over Northern Rock, which meant, in simple terms, that ordinary people’s money was secure. Still some thickos in the media were casting uncertainty on this move, and still some people queued. This only stopped when the government reiterated, for the umpteenth time, that investors’ money was secure. Eventually, the penny dropped and the public realised that if anything, the best place to put their money now was Northern Rock. In fact, after a while, they had to stop taking deposits, as everyone was running back to them.
It soon became clear that all the banks were in trouble. Lloyds, who had been my bankers for over forty-five years, decided to acquire HBOS and, in doing so, they bought a can of worms that nearly brought them down. This resulted in the government having to bail them out, as well as RBS.
Gordon Brown was getting so much stick it was unbelievable. The media were blaming him for the disaster. As events unfolded, companies were also collapsing, one by one. The famous Woolworths went into administration, as banks started to recall the loans they’d made to them and others. There were mass redundancies and a general negative feeling in the air. It was recession on a scale we hadn’t seen before. Real estate assets started to drop in value. This resulted in all the Champagne Charlies and so-called billionaires walking away, leaving the banks with huge debts and a nightmare to clean up.
When the dust settled after the bomb had dropped, it seemed obvious that the problems had started in America and that, basically, the greed of bankers lay behind the mess. Despite this, as far as everyone in Britain was concerned, Gordon was to blame. I was a bit frustrated for him. His swift action to save Northern Rock and inject money into the other banks to avert a disaster was not recognised by Joe Public. They had no idea what life would have been like had there been a full-blown run on the banks.
I decided to write some articles in the national newspapers in support of what Gordon had done, trying to spell it out in simple terms. I also pointed out that, uncharacteristically, the leader of the opposition, David Cameron, seemed very quiet on the matter, as if he knew Gordon had done the right thing. I put this quite plainly in my articles and invited Mr Cameron to speak up and tell everyone how he would have played it differently.
Baroness Shriti Vadera had been one of Gordon’s advisers for at least ten years while he was Chancellor and she was still by his side now he was PM. She sent me an email passing on thanks for my support and said that my explanation of matters in the media was such that it was really understandable to the man in the street. She called me a few days later to ask me to come in and have a chat with her and Gordon.
During my forty-five years in business, I’ve had the opportunity to meet the last four prime ministers, and when I say meet them, I mean meet them – I don’t mean going to some bum-rush at Downing Street with hundreds of other people; I mean talk to them seriously about important issues. I’m not so naïve that I can’t see that, in some cases, these politicians have their own agendas and will use people like me to help them. But give me a bit of credit when I say that, based on what I’ve seen over the years, Gordon is one of the most sincere and well-meaning people I’ve met. Now that is my opinion, and everyone is entitled to an opinion. I consider myself an experienced person in life. You have read that I’m quite sceptical when it comes to some of the characters I’ve encountered, but I decided, rightly or wrongly, to give Gordon my backing. I had known him for ten years and had no axe to grind. I wasn’t after a knighthood, as I already had one. There was nothing in it for me.
The country as a whole had got used to a showman in Blair, one very much modelled on American politicians. He was a good mouthpiece, a good actor and orator. Gordon, however, was criticised for being dull and indecisive. People had forgotten the history of British politics, which is full of past prime ministers who were deemed to be rather cautious, formal and stuffy people – and were none the worse for it!
When I sat down with Shriti and Gordon, I told them he needed to fight back a bit and not stand for all the criticism. He should tell people that he’s a serious thinker, not an actor. Spell it out and don’t dodge the issue. I spoke to him as I would a friend or business colleague and I gave him my advice, for what it was worth, without holding back. I think Gordon appreciated that, as most people speaking to the Prime Minster tend to be far more subtle.
I went on to talk to Gordon and Shriti many times after that. I once agreed to interview Gordon for a series of video clips to try to put to him what most people were thinking and give him the chance to express himself to the public in a way they’d not seen before. We made five different films, each about six minutes long. They came out quite well and were published on the S
un’s website. You can still see them today on Amshold’s YouTube channel at www.youtube.com/amshold
Funnily enough, Piers Morgan, who by now had become a real TV celebrity, copied my idea and interviewed Gordon in one of his chat shows. I called Piers and jibed him over this, saying I’d be watching carefully to check he didn’t infringe my copyright, as once again he was learning from the master. Piers, of course, ignored my goading. He said, ‘The difference is, your one went out on the internet – mine will be viewed by millions.’ In fact, the BBC and ITV turned down the chance of transmitting my clips, as they saw them as being too much of a party political broadcast. Funny how they changed their minds and let Piers do it, though.
On some occasions, I was asked to get to the Business Council meetings a little earlier or stay behind to have further discussions with Gordon. He was concerned the recession was really hurting the small- to medium-sized enterprises (SMEs) and wanted some ideas. Most of the people on the Business Council ran giant firms. With the exception of Richard Branson and myself, none of them had seen all sides of business. Richard and I had both started as small one-man bands, grew into SMEs and then into huge organisations. Obviously, the other members of the Business Council were well able to advise Gordon on issues concerning large businesses, but who better to give advice on how to help small businesses? Gordon recognised that I’d been there and done it.
*
It was mid-May 2009 and I was in Spain visiting the town of Ronda, having driven up there with Ann to check out a possible new cycle route. While we were having a coffee in the town, my phone rang. It was Gordon Brown, asking whether I could pop into Number 10 the next day, to talk about stepping up my input in assisting SMEs and promoting enterprise to the young. He said that, due to the economic climate, he needed additional advisory skills and wanted to draw me into the camp in a more serious and formal manner.
‘Well, Gordon, I’d like to help,’ I said, ‘but right now I’m up a mountain in Spain, checking out a cycle route. I won’t be back till next Monday, so it will have to wait until then.’
‘Oh, okay, no problem, Alan. Sorry to bother you. Give my regards to Ann. I’ll see you next week – my people will arrange a meeting.’
The following Tuesday, I went to Downing Street to see what Gordon had in mind. My car rolled up at the main gates and, after the usual security checks, I was driven to the front entrance of Number 10.
I have visited Downing Street many times, but never take it for granted – it’s a rather special place, particularly the Cabinet Room. On this occasion, I was directed up the staircase and past all the portraits of past prime ministers. Despite being a pilot and good at navigation, I still get lost in the maze of rooms in this building. We met in a rather grand, albeit quite small, anteroom which oozed history. Shriti and Gordon were sitting by a small table waiting for me. They both looked as though they’d been up all night. At the time, I didn’t realise the PM was working on Cabinet reshuffle decisions – I now appreciate how these deliberations took their toll. I enquired as to their welfare, particularly Shriti’s, and asked, Are you okay? You look shattered.’
‘Yes, no problem, we’ve just had a lot to do,’ said Shriti.
We got down to business. Gordon wanted to discuss the possibility of me formally joining the government to assist in matters dealing with enterprise and small businesses. He asked if I’d consider taking a role at the DBIS (Department of Business, Innovation and Skills), once known as the DTI and, before that, the Department of Trade.
‘Gordon, I’d love to help, but I know that when people like Lord Sainsbury took up government roles, they had to distance themselves from their businesses, placing all their business interests in a blind trust. I would have the same problem. And on top of that, as you know, I’m involved in The Apprentice, which is actually on air now. It would be impossible for me, at such short notice, to arrange for my business and TV interests to be reorganised to avoid a conflict of interests.’
I continued, ‘Frankly, Gordon, I’m not ready to give up business. I’m eager for my companies to remain profitable and take advice from me. Therefore, with respect, I’d have to turn down any offer of a ministerial position. No matter how prestigious it might sound, it would be impractical.’
Like all good politicians, my words seemed to go straight over his head and he continued to talk about wanting me to be a Minister of Enterprise and enter the House of Lords. Had I accepted, it would have meant representing the government, answering questions on business and enterprise. The questions and answers side of things didn’t bother me at all, but I reiterated that it really was impossible for me to accept.
‘Gordon, I don’t want you to think I’m letting you down in any way – I will do anything to help – but you have to recognise it would be impossible for me to accept a ministerial position.’
‘Okay, Alan. Look, please go away and give it some further thought. Talk some more to Shriti tomorrow.’
The following week, on 4 June, I met with Shriti and Gordon again. It was the day Gordon was going to announce his new Cabinet. I’d received a call from Gordon’s office saying I shouldn’t enter Downing Street by the main gates because the press were around and it would cause speculation – instead, I should use the back entrance. I couldn’t care less which entrance I used. In fact, I suggested I come by taxi and just walk in the normal way. However, they insisted I come in the back way. This was a little naïve, I thought. They should have known by now that the press are very resourceful and would have people covering the back entrance. Whatever, I was pretty sure they’d find out quickly if anything was going on.
This time, the meeting was in the garden off the Cabinet Room. It was funny to see all the kids’ toys there, but it’s where the PM lives with his family during the week, so why should it be any different from any normal home with kids? Gordon kept going on about me being a minister and I reiterated that I couldn’t do it. He finally settled on appointing me as a government adviser, an Enterprise Tsar or Enterprise Champion – and at the same time he wanted me to join the House of Lords and take the Labour whip. Appointment to the House of Lords would be no problem as far as conflict of interests was concerned and to be an adviser without any ministerial powers would certainly be acceptable, so I agreed to accept the position.
We discussed the finer details of the advisory role, but never any details on the ramifications of taking the whip or me being a Labour peer. We talked about the way the advisory role would be explained and I was told my appointment would be made public the day after the new Cabinet was announced, to avoid any confusion with the Cabinet reshuffle.
As I drove away from the rear of Number 10, I received a call from a Financial Times journalist asking me what I’d been doing there. The call came no more than two minutes after I had walked out the door! I was a bit short with the journalist and told him it was none of his business. He started firing questions at me such as, ‘Are you going to be a minister? Are you going to be part of Gordon’s new Cabinet reshuffle?’
I told him again, ‘With respect, it’s none of your business,’ and just hung up the phone. That day, there were some comments on Sky TV about me being at Downing Street, as one of their cameras had been positioned at the rear of Number 10 and had filmed me walking back to my car and being driven away.
That evening, I told Ann what had happened and that there was a possibility that I might be made a lord. She had to keep it confidential. I joked with her, ‘Of course, this won’t mean much to you because when I became Sir Alan you became Lady Ann. And, I’m afraid to say, even if I do become Lord Sugar, you’ll still be Lady Ann.’
She was very excited. It must have been a proud moment for her – after all, she’d known me since she was sixteen and she’d watched me over the past forty-odd years as I worked my way up the ladder through Amstrad and Spurs, then became a knight – and now there was the prospect of me being a lord! But, as it was just a proposal, we kind of parked the notion until it was f
ormalised.
The next day, the papers speculated that there would be an announcement involving me in the new government reshuffle. Daniel called and said, ‘What’s all this about you becoming a lord? Is it true?’
‘Well, I think it’s most probably going to happen.’
He congratulated me on what a great honour and achievement it was.
The day the announcement was due, Friday 5 June, was the day I’d put aside in my diary for filming The Apprentice: You’re Hired!, a show introduced by Adrian Chiles which featured the two finalists for series five – Yasmina Siadatan and Kate Walsh. I’d also arranged to meet Simon Cowell for lunch.
I turned up at the offices of Talkback Thames around ten in the morning and started to discuss our plans for the day with the production people. It’s always a difficult moment when the losing finalist has to turn up again and be filmed in the You’re Hired! programme. Traditionally, I’ve always taken time to speak to both the winner and the runner-up, just to put them at ease before their first experience of being on a live show in front of an audience. As you can imagine, the runner-up, Kate, was feeling a bit despondent. She needed a bit of personal attention to help her feel comfortable about performing later in the day.
At around half past ten, all hell broke loose. I had imagined the announcement of my new position would be one of those routine stories, just another small detail largely ignored by the media. Not so! First of all, my BlackBerry started pinging every few seconds (I received around 150 emails and texts that day) and my phone was ringing constantly, with friends and relatives congratulating me on my appointment, journalists wanting to discuss the new position, TV companies asking whether they could interview me, all that stuff.