Authors: Tom Bower
Blair never challenged his health minister, not least because, other than replacing competition by co-operation, his ‘master plan’ was to rely on doctors to make decisions based on needs rather than finance. So he nodded through Milburn’s changes.
‘They’re well meaning,’ he later told Mandelson about Dobson and Milburn, ‘but they’re scratching the surface.’
‘Why did you appoint Frank?’ Mandelson asked.
‘I didn’t exactly have a choice,’ Blair replied unconvincingly.
Mandelson would blame ‘naivety and nervousness of government’ for Blair’s vacillation. Equally baffled by Dobson’s appointment, Charles Clarke, Neil Kinnock’s former chief of staff and a junior education minister since 1998, mentioned an organic weakness: ‘Blair’s real delinquency was that he wasn’t interested in finding the right people to do the job – civil servants or ministers. He was a bad judge of people.’ The result, Langlands concluded, was that ‘Dobson spent a lot of time patrolling the borders instead of crossing them.’
The ‘implosion’ of the NHS, in Milburn’s expression, hit just before Christmas 1998. Blair had shared Dobson’s expectation that the government could trust the hospitals to use the extra millions of pounds to reduce waiting lists. Instead, the lists grew for the second year in succession by another 100,000 people to 1.3 million. In public Dobson blamed the Conservatives, but in private he complained that the manifesto pledge had been a ‘crazy’ confection by Peter Hyman, Blair’s
speechwriter. The reality was a shortage of beds and nurses, and the sick abandoned on trolleys in corridors. Then Britain was struck by a flu epidemic. One hundred thousand people were going down with the bug every week. ‘Chaos in the NHS’, blazed the headlines. Labour had boasted that the NHS was the envy of the world, yet in France, where about 300,000 people were falling sick weekly, GPs coped without a hitch.
Blair was baffled. France’s success could be explained by the country spending more on health, so that one doctor was employed for 344 people compared to 625 people per doctor in Britain. But that did not explain why 30,000 Britons died prematurely every year because of negligence by hospitals, or why annually 100,000 patients became seriously ill from infections caught in British hospitals, of whom an estimated 5,000 died.
Blair had hit an ideological wall. Only the state could be trusted to manage the NHS, he believed, but he did not know why the state was failing. Like Gordon Brown, he trusted NHS employees to dedicate themselves to serving those in need but, beyond spending yet more money, both men ruled out any dilution of the NHS’s monopoly. So, Blair concluded, the fault must be Dobson’s after all.
He was urged by his Downing Street advisers to tell Dobson that his department was failing. An appointment was arranged. As usual, Blair looked at himself in the mirror before seeing Dobson. His habits rarely altered, and the meeting followed a familiar pattern: the minister came, Blair circled around the topic, and then he bid him farewell.
‘You failed to challenge him,’ Powell exclaimed.
‘Yes, I did,’ replied Blair. ‘The guy knows that I want change.’
Those around the PM could conclude only that their boss was in an odd state of mind, or even caught up in a fantasy. In his own briefing notes before the meeting, Dobson had been told by officials at No. 10 that ‘The prime minister is particularly interested in the private sector.’ He now returned to his department to report, ‘Well, he didn’t raise it with me and I didn’t raise it with him.’
The persistent media criticism persuaded Blair to consider the ideas of Julian Le Grand, a leftish professor of social policy at the London School of Economics who, unusually, advocated ‘market socialism’. Since 1994, Le Grand had occasionally talked with Blair about the use of competition to achieve social ends. ‘You can’t expect hospitals to reform on their own,’ he had told him. ‘The NHS staff serve their own interests ahead of their patients’. Change comes with pressure. Carrots and sticks are needed.’ In the contest between pragmatists and purists, Le Grand believed, patients should be encouraged to choose their doctors, using taxpayers’ money to buy treatment either from the NHS or from private hospitals. ‘Choice’, he had emphasised, ‘will encourage the NHS to deliver what the users want, or they will go elsewhere. Even the helpless want choice and quality.’ Inferior hospitals with less money would be shamed into improving.
Blair was unconvinced. He remained certain of the selflessness of NHS staff. More importantly, choice was a Tory concept. He could not foresee that a series of academic studies would demonstrate how choice and competition between hospitals raised standards.
The trouble was, his core beliefs were not borne out by the facts. ‘Blair didn’t know what he wanted,’ Wilson realised. Since there was no Cabinet committee focused on the NHS and the full Cabinet was not allowed to discuss the subject, Blair protected himself not only from criticism, but also from any constructive discussion.
‘No one complained,’ recalled culture minister Chris Smith, ‘because no one knew anything different.’
During thirty-minute Cabinet meetings, Dobson said nothing. Bullying his minister was inconceivable for Blair. ‘Tony didn’t complain about anything,’ Dobson would report to his department.
In theory, there was an arrangement in place to deal with the situation. Before the election, David Simon, the chairman of BP, had been asked to become a trade minister. Simon also had an unannounced role in which he was to advise on how to manage a government – the art of building a team, creating a culture that sought to set objectives, conduct
meetings and review results. He encouraged Blair to hold all-day summits at Chequers to discuss ‘goals’ with civil servants, ministers and outside consultants. An away-day at Chequers in early September 1998 matched that prescription. Blair stressed modernisation with fairness, while Brown emphasised productivity, skills, education, tax credits and the global economy.
Shortly after, Simon realised that Blair was not listening to him. The prime minister’s apathy over organisation and management was incurable. He relied almost solely on instinct and his ultra-loyalist team. None of those brothers-in-arms was tempted to advise that what worked in opposition was too crude for government. Blair, they realised, knew no other way of working. Discussions amid the formality of a Cabinet were uncongenial to a communicator who enjoyed coming to a decision after several conversations and a night’s sleep, after which he would emerge with not only a policy, but also the required sales pitch.
The consequences of Blair’s disorderliness erupted just before Christmas. His approval of Geoffrey Robinson’s continued presence in the government not only challenged his own reputation, but also annoyed the Brownites who enjoyed Robinson’s hospitality. Perversely, they had become outraged that, while their paymaster was tainted, Blair had allowed Mandelson to rise ever higher in the government’s pecking order. Fuelled by Brown’s antagonism towards Blair and their own hatred of Mandelson, Paul Routledge, a
Daily Mirror
journalist sympathetic to Brown, and Charlie Whelan set about poisoning the minister’s reputation. They possessed a signed agreement from 1996 recording a £373,000 loan from Robinson to Mandelson for the purchase of a house in Notting Hill Gate. Mandelson had not declared that loan to Michael Scholar at the DTI, although he knew that Scholar’s department was investigating Robinson’s offshore trust. He had concealed a conflict of interest. Routledge planned to reveal the loan, without realising that Robinson was at that moment facing his own crisis: he had failed to declare in the Commons register of interests his receipt of £200,000 from Robert Maxwell.
Blair already knew some of the story. After the summer break, Michael Wills, a newly elected MP, had told Charlie Falconer, a lawyer and close friend of Blair’s, about Robinson’s loan. Falconer had a duty to tell the prime minister. Blair also knew that the DTI had commissioned a new investigation into Robinson’s relationship with Maxwell. Still Mandelson held off telling Scholar. In November, Blair again ignored demands for Robinson’s resignation and once more defended the paymaster in the Commons. Simultaneously, Mandelson resisted David Heathcoat-Amory’s demand for a robust investigation of thirteen examples of Robinson’s ‘wilful disregard’ of the law. Blair’s fate depended upon Brown’s caprice. To deflect pressure from Robinson, he could order Mandelson’s destruction, or he could tiptoe away and hope the temple would remain standing.
The imbroglio intensified after Blair was told that Ron Davies, the Welsh secretary, had been robbed by a male prostitute on Clapham Common. His instant resignation was praised in the media as ‘the coming of age of the Blair government’ – without their realising that Blair had concealed from the outset that Davies had been lying to the police about the circumstances of the incident. In the ensuing discussion about gays in politics, journalist Matthew Parris declared on BBC TV that Mandelson was gay. Days later, Nick Brown, the new minister of agriculture, was accused by the
News of the World
of paying £100 to rent boys in order to be kicked around a room, and admitted his sexuality. A ‘gay mafia’, blared the
Sun
, was running the country. Next, Westminster gossipers blessed ‘statesman-like’ Mandelson and mentioned him as Blair’s heir apparent. In a rush of mad fury, Routledge was let off his leash. On 17 December, Mandelson heard that Robinson’s secret loan to him would be exposed within four days. ‘A sort of mutually assured destruction,’ was his description of the Brownite plot that now spread across Westminster.
‘Why didn’t you tell me about the loan?’ Scholar asked Mandelson, with genuine sorrow.
‘Because it is confidential,’ came the reply. ‘It’s not an interest or an asset but a loan.’
Scholar laughed at the absurdity of Mandelson’s interpretation of the rules.
In Downing Street, Blair ‘exploded’. He was in the midst of a bombing campaign in Iraq, his first military engagement, and his own cover-up of Robinson’s dishonesty had come back to haunt him. Restless newspaper editors urged journalists to investigate other allegations of Labour sleaze and cronyism. Blair asked Richard Wilson for his opinion. The Cabinet secretary replied that the loan was undoubtedly a conflict of interest and Mandelson should have declared it.
‘I can’t see what the problem is,’ Mandelson told Blair. ‘You and Alastair are overreacting.’
Blair agreed. He urged Mandelson to brazen out the storm and quickly repay the loan, ignoring the minister’s failure to register a benefit in the Commons – the same sleazy sin he had hounded Tory MPs over. ‘The prime minister does not consider it a hanging offence,’ Campbell said on Blair’s behalf. Both overlooked the journalists’ lust for vengeance against Mandelson for his undisguised disdain towards them over the years.
‘A wall-to-wall disaster area,’ admitted Campbell after five days of unremitting hostility.
‘Scandal is an absolute nightmare in politics,’ Blair would write. ‘It was a political assassination to destroy Peter and damage me.’
On 23 December, Blair decided that Robinson, Whelan and Mandelson would all have to go. ‘I blame myself,’ he admitted. ‘We should have got rid of Geoffrey earlier.’ This time he telephoned Robinson in person.
‘The PM’, Robinson later wrote, ‘did not convey any sense that he blamed me for what happened. Rather he was annoyed and dismayed about the press reaction to the private arrangement.’
Blair next rang Mandelson. There’s been deception, he said. Resign, learn from your mistake and you can return. Mandelson cried. The arch-manipulator, renowned as a bully, was surprised that Blair, who owed him so much, could be so ruthless. And he blamed Campbell, his rival, for seizing an opportunity ‘to see my wings clipped’.
Disappointed at seeing such a talented minister reduced to jelly after just 150 days, Scholar urged Mandelson to stay.
‘I must protect the honour of my grandfather,’ replied Mandelson, referring to Herbert Morrison, a leading figure in Clement Attlee’s government.
That day, Blair attempted to minimise what the media saw as ‘the corruption of cronies’. ‘It was a silly thing to do,’ he said, ‘but there was nothing illegal about it … This is nothing more than a moment of madness.’ Mandelson was presented as an honourable man whose misfortune was to become a casualty of appearances.
The Tory criticism of a ‘cancer at the heart of government’ was mocked by Blair, but in
The Times
Libby Purves saw the end of ‘this sweet, sticky web of mutual admiration’ among a coterie of politicians, PR men, journalists and tycoons. The powerful magic of the New Labour family was wrecked. Most damaged was Blair’s relationship with Brown. ‘Thereafter,’ wrote Mandelson, ‘everything achieved in government was forged in combat.’
He was consoled by a note from Cherie Blair after a dinner at Chequers. ‘I have no doubt’, she wrote, ‘that you have been the victim of a vicious and selfish campaign. My only consolation is that I believe that a person who causes evil to another will in the end suffer his returns.’
For the Tories, the sight of Labour’s halo turning into a noose was a godsend. ‘It’s a government without any principles,’ said Michael Howard on Radio 4, highlighting the fact that it had taken Blair six days to ditch his friend. ‘They’re obsessed with newspaper headlines.’ Mandelson, the king of spin, had been brought down by the same public outcry against sleaze that he had ruthlessly deployed against John Major’s government. The victor was Campbell. His indispensability in Downing Street was sealed.
Blair was determined to regain the initiative. ‘This must be the year of delivery,’ he told Richard Wilson after returning in January 1999 from a Christmas break in the Seychelles and a ragged official visit to South Africa. ‘Once the taps are turned on, things will happen.’ More
money, he believed, would switch the public’s attention from sleaze. Every department was urged to announce new spending, especially for the NHS. The government had already increased its budget by £5 billion a year and was due to add another £4 billion the following year.
Yet the waiting lists continued to grow. Philip Gould’s focus groups were criticising the government for failing to deliver any improvements. ‘They had no idea about anything we had done,’ noted Campbell, fearful of Labour losing the next general election. Blair was puzzled why, despite spending so much more than in 1997, there seemed to be so little to show for it. ‘Modernise or die’ became his battle cry.