Authors: Tom Bower
Fundamental changes were needed. Blair and Milburn’s dilemma was that they lacked an acceptable solution. Like all party loyalists, both had ridiculed the six years of John Major’s government, when Ken Clarke had challenged those very same vested interests. Their mockery bequeathed vacuity. Harping on about ‘modernisation’, ‘reform’ and ‘New Labour’ as the route to a better NHS was meaningless. ‘We didn’t have the same sort of prior intellectual ferment to build on,’ admitted Powell in a backhanded compliment to Thatcherites. ‘To a large degree we had to make up our philosophy as we went along.’ Their struggles led to Labour politicians being ridiculed. Rory Bremner’s parody on his weekly television shows of Blair as an empty vessel buffeted by Brown and under Campbell’s control was too close to the truth.
‘Gothic quadrangles were his territory,’ observed Andrew Turnbull. ‘Oxford, the Inns of Court, Parliament. As a small-organisation man, he completely misunderstood that one man cannot run the government machine. He needed systems and specialists.’
New Labour’s skill was to discover what the electorate wanted and promise to deliver it. Blair was still struggling to discover how to move from shadow to substance. He explained his failure to Milburn as him being ‘terrified of the past’. The crowds cheering him as he drove from Islington to Downing Street on 2 May 1997 were crying out for maximum change, yet while his rhetoric matched their aspirations, his paralysed government was providing the minimum.
Ferocious arguments finally cajoled Brown into opening the purse strings. At the same time, Milburn persuaded Simon Stevens, by then Blair’s health adviser in Downing Street, to rethink the NHS before spending the extra billions. ‘There can be no parameters,’ he told his senior officials. In his opinion, most of his department’s staff were inflexibly resistant to change. In too many meetings he listened to officials reciting numbers proving that targets had been missed, but he still feared that new policies would destroy the essence of Nye Bevan’s
1948 dream. ‘I need to mount a coup against the department,’ Milburn decided. He recruited six advisers to staff a new strategy unit led by Chris Ham, a senior civil servant, and Stevens. His starting point was radical: the NHS was too big to succeed. ‘I took a blank sheet of paper,’ he would later say, ‘and the new NHS plan wrote itself.’
To Blair’s frustration, while Milburn sat composing, Brown established his own review of the NHS’s future. To counter that challenge, Blair asked Richard Branson, a favoured supporter, to investigate. Virgin would report that the NHS was badly managed, offered abysmal patient care and should use the private sector. Although none of this could have surprised him, Blair was unsure about the suggestions. More money, he remained convinced, was the answer, and that was now due.
To Blair’s relief, Brown finally agreed to announce in his Budget speech on 21 March that the government would spend £63.5 billion on the NHS in 2003/4, nearly double the amount spent in 1997. Downing Street buzzed with genuine excitement at the commitment. At the last moment, Milburn’s office invited the leaders of England’s health professions to watch Brown in the House of Commons. Among those telephoned that morning was George Alberti. ‘I’m at my investiture at Buckingham Palace,’ he replied. ‘I’ll come over afterwards.’
Brown delivered a virtuoso performance. Billions of pounds were promised as the reward for ‘prudence with a purpose’, a winning slogan that pushed the Tories further to the right. Like the other NHS leaders looking down from the Commons gallery, Alberti was thrilled. ‘It’s the opportunity of a lifetime,’ he told Milburn, as they walked along Whitehall to celebrate with a cream tea in the minister’s office.
Later, to cap their euphoria, they crossed the road to meet Blair. ‘I’ll be in charge,’ Blair told his visitors, before repeating the mantra, ‘This is real money’ – unlike, he implied, the triple counting and other phoney cash announced in the past. In exchange, he wanted all NHS staff to commit to significant changes that would cure the list of woes.
‘What you’re saying is, no more excuses,’ said Alberti.
Blair nodded. The changes, he speculated, could be driven by
contracting private providers, setting targets to monitor performance and paying incentives. But, he insisted, all those present would be expected to sign their agreement to reform on the document he flourished.
Blair’s reassurances were undermined by Milburn. In his haste to change the NHS, the minister argued with several officials, including Alan Langlands, who resigned. Neil McKay, his temporary successor, was ‘disappointed’ by Langlands’s departure. The NHS’s performance, he told Milburn at their next monthly meeting, was ‘getting worse’, not better. Julian Le Grand added to Milburn’s grief. The NHS, said the professor, had experienced decentralisation, recentralisation, internal markets and inquiries by management consultants, but none had cured poor-quality care by staff and unnecessarily long waiting times. ‘The only clear explanation’, said Le Grand, ‘is that more money is not the only answer.’
Nor was the spin. In the days since the Budget, Jeremy Heywood, Blair’s high-flying principal private secretary, had scrutinised the small print of the Treasury’s Red Book, the bible of the Budget, and discovered more examples of Brown’s exaggerated claims. An ITV programme had revealed how the chancellor had double counted the number of new nurses. Rather than admitting shame on Brown’s behalf, Alastair Campbell complained that the revelation was ‘all part of an effort to poison the well of debate and make it look like we couldn’t be trusted’.
The issue, Blair agreed, was indeed trust. Why, he wondered, did the public distrust the government about the NHS? In his mind, the answer was New Labour’s image. Instead of the party appearing classless and representing everyone, Brown was championing the poor against the middle class. He had, for instance, made a catastrophic attack against Oxford elitism based on the university’s rejection of the comprehensive-educated Laura Spence, who had applied to study medicine at Magdalen College. Not only were Brown’s facts about Spence wrong, but his tirade also echoed provincial old Labour’s hatred of excellence. By championing the poor, overtaxing the middle class and
deriding those who aspired to be wealthier, the resentful Scotsman was dividing the nation.
On the eve of the election, Blair feared that, in a conservative country, Labour was portraying itself as anti-family, anti-tax cuts and anti-strong defence, while being weak on crime and promoting all rights and no responsibilities. The idealism of that sunny morning on 2 May 1997 had been dented by derision, isolation and a lust for laudatory headlines. That was electoral folly. Burying the Tories for ever depended on New Labour being all-inclusive and sticking to the centre.
Brown believed the opposite. Endlessly tinkering with taxes, he planned to continue raising billions of pounds to spend on welfare. ‘Community, not individualism,’ was his slogan to entrap the nation in universal dependence on the welfare state. That, in his eyes, would secure permanent electoral support. He had even signed up with Europe’s left-wing politicians to integrate the continent’s economy according to socialist principles. However, his passion for ‘community’ did not extend to Blair and Robin Cook. For personal reasons, and to set himself apart from their support for Britain joining the euro, he loathed them both. In that poisonous atmosphere, on 23 March the three politicians flew on three separate planes to the EU summit in Lisbon, destined to sign a treaty to end Europe’s stagnation and endorse a ten-year plan to make the community ‘the most competitive and dynamic knowledge-based economy in the world’. The political leaders’ optimism was infectious.
Blair returned to London determined to resolve his dispute with Brown and decide the fate of the NHS. In his lexicon, that required a speech to redefine New Labour as a ‘radical’ political movement advancing ‘new, modern patriotism’, and to present a threatening image of Tory Britain. Ken Livingstone’s overwhelming victory in the London mayoral contest – an embarrassment for Blair – and other bad results in the local government elections in May made a ‘mission message’ relaunch vital. The ideal moment appeared to be an address to 10,000 members of the Women’s Institute in Wembley Arena, fixed for 7 June,
fortuitously close to the birth on 20 May of Leo, the Blairs’ fourth child. The prime minister’s appearance was billed as a major event – an opportunity to spell out his philosophy of ‘equal worth, responsibility, community’, and his ambition to soothe the anxious middle class by renewing old values. He had been warned to steer clear of politics. That message was forgotten.
The result was torturous. Blair’s audience wanted to hear about Leo, not Labour. His polemic was interrupted by jeering and slow handclaps. Deflated, the ‘strong’ leader hurried from the hall, a loser with a bloody nose. Over the following days, he felt isolated – then furious about a note from Philip Gould saying that ‘he wasn’t believed’ because ‘he is pandering, lacking conviction, unable to hold a position for more than a few weeks and lacking the guts to be able to tough it out. He is all things to all men, he’s all spin, TB has not delivered. He is out of touch.’
Recriminations, loathing, humiliation and more poison were shared between Blair, Brown and Mandelson. Matthew Taylor, the director of IPPA, a left-wing think tank, wrote, ‘Yes, Labour’s love affair with the electorate is definitely over,’ but that it could be saved by refining its message and dropping ‘naked gesture politics’. Blair responded by announcing that delinquent teenagers should be marched by the police to a cashpoint to pay an instant fine. Six days later, his drunk son Euan was arrested in Leicester Square after celebrating the end of his exams. Cherie was enjoying a subsidised holiday in Portugal as the guest of John Holmes, the British ambassador who became a friend of the Blairs while serving in Downing Street. Cherie’s critics noted that she had been visiting America while Euan was sitting his exams. Parental delinquency plus cronyism: nothing was working.
Battered, Blair called a press conference. ‘I feel fine,’ he smiled, before being humiliated by Campbell’s decision to admit the BBC into Downing Street. Michael Cockerell’s film portrayed Blair as an out-of-touch prime minister without a credible voice, especially among his own MPs. Later, in a memorandum to his inner circle headed ‘Touchstone Issues’, Blair lamented that he was ‘out of touch with gut
British instincts’ and ordered that he should be ‘personally associated with the action taken to remedy the problem’.
One of the key complaints highlighted by Gould was that Labour ‘were too late with the NHS’. Milburn offered some relief. On 11 July, he and Simon Stevens completed their draft NHS Plan 2000. Three years after ravaging their inheritance, Milburn quietly restored the scheme set out by Stephen Dorrell in 1996 to devolve health services to a hundred primary care centres. Even Dorrell’s language was resuscitated. The scorn heaped on John Major’s government had blinded Blair to its achievements. Labour supporters would be shocked by Milburn’s mention of ‘choice’ and ‘competition’, but after the disastrous winter and the indignity suffered by Robert Winston’s mother, the politician had reconsidered the Tories’ ideas.
‘The existing system is unsustainable,’ he told Blair. Finding the answer had required endless conversations. Among the experts were Don Berwick, an academic, and Alain Enthoven, an American health expert who had advised Margaret Thatcher to introduce the internal market. Over the following months, Milburn had been persuaded that choice would help the poor to get the same treatment as the middle classes. The private sector would be contracted to reduce waiting times and challenge the NHS staff and trade unions. In targeting cancer, Milburn realised, the lack of money to buy better equipment was only part of the reason for the NHS’s poor record. Another was the doctors’ failure to recognise many illnesses’ symptoms early enough. The errors were due not to a lack of money but to the profession being resistant to studying developments in other countries. The NHS’s inflexibility would be best challenged by the state subcontracting some services to private doctors. All the care provided by the service would be free, but the NHS would cease being the monopoly provider. That was Milburn’s wish list for the future but it was impolitic to include it in his draft plan. Rather, the headlines would be dominated by the pledge to rebuild a hundred hospitals and recruit an additional 9,500 doctors and 20,000 nurses.
‘What do you think, Peter?’ Blair asked Mandelson after reading out parts of the draft.
‘It has the appearance of an untidy washing line,’ replied Mandelson, putting aside his BlackBerry.
‘Right,’ said Blair, ‘there’s still work to do.’
Introducing private treatment centres into the NHS along with competition and ‘patient choice’ was unacceptable to most Labour supporters, not least the 1.3 million employees of the NHS. To blame those staff for the service ranking among Europe’s worst, Blair knew, risked jeopardising over 2 million votes. He directed that the White Paper should be rewritten to explain that in France ‘choice’ had proved to be ‘wasteful’.
He read the revised draft with unusual care while flying to a summit meeting in Japan on 19 July. Combining command, control and partnership with passing mention of ‘choice and competition’ riddled the White Paper with confusion. Milburn had satisfied Blair’s demand for headlines of ‘reform’ and ‘modernisation’, but how much could the prime minister accept?
Blair’s annotated copy, faxed back to London, revealed his indecision. He could not digest the idea of a private company providing a public service. Accordingly, a patient’s ‘choice’ would be limited to selecting a GP, the time of an appointment and the food offered in hospital. Providing real choice was beyond his prerogative, as was any ‘partnership’. Whitehall would still control everything. To enforce better standards, new modernisation action teams would scour the NHS to subject hospitals to more regulation, more targets and more inspection.
On 27 July 2000, Blair presented the plan to the Commons. To defuse any criticism that the Labour Party was embracing the market, he condemned the Tories’ internal market system as ‘a weak lever for improvement’. He spoke of wanting to ‘redesign the NHS around the patient’ but, as Milburn said, without noting the Orwellian irony, ‘devolving power depends on command and control from Whitehall’.