Authors: Tom Bower
Blaming officials was understandable, but it did not solve Blair’s isolation. Brown denied his taxes were to blame and absented himself, wondering whether there would be an opportunity to seize the leadership. Prescott, an excitable liability during a crisis, stayed in Hull. Straw listed problems but offered no immediate solutions. ‘He’s hopeless,’ Blair told a Cabinet colleague. ‘He’s like fighting blancmange.’ Yet it was Straw, together with Blair, who over the next few days pulled the levers to persuade the police, oil companies and trade unions to end the dispute. Finally, with the country on the precipice, Brown agreed to abandon the tax increase. The blockades were lifted.
Blair declared victory. ‘Why’, he asked David Omand, ‘can’t all government be as successful as settling this crisis?’
‘Because, Prime Minister,’ replied Omand, ‘during the fuel crisis we were all on the same side, working together. Your government doesn’t have a common objective. Your government is split in two: between yourself and Brown.’
In reply, Blair held an ‘off-site’ of Cabinet ministers and their permanent secretaries at the Commonwealth Club near Whitehall to discuss how to run the government as successfully in normal times as it was run during the emergency. ‘He wants to be saved in the same way,’ thought Omand.
To disprove his officials, Blair dispatched an emissary to the MoD. ‘The prime minister wants 5,000 drivers permanently trained so this cannot happen again.’
‘That’s impossible.’
‘But the PM wants it,’ the official insisted.
‘No,’ he was told.
Historically, Britain’s energy policies were always created after a crisis. The aftershock of the fuel blockade was compounded four months later by energy blackouts in California. Electricity supplies in the Golden State were provided in a competitive market similar to Britain’s.
In the Enron era, Blair and others still assumed there was an irrefutable benefit that came from replacing the monopoly of the nationalised utilities with dynamic competition, but the Californian crisis showed that markets could fail. Overnight, the assumptions on which Britain’s energy policy had been based since 1982 were undermined.
In the name of an open market, Blair had allowed the purchase of many of the country’s power stations by state-owned German, French and Spanish companies. Those takeovers had terminated any chance of new British businesses challenging the foreign monopolies, and this, combined with the blackouts in California, reinforced the warnings by a few experts that reliance on the market was failing to protect the security of Britain’s energy supplies.
With neither interest nor urgency, Blair approved the chore of reviewing Britain’s vulnerability to blackouts. Since he had no confidence in the DTI, the review was handed to Downing Street’s policy unit. Those assigned to the task were not scrutinised for their expertise or prejudice. His expectations were low.
In 2000, Blair was in the midst of yet another argument with Richard Wilson. ‘I want change,’ he repeatedly told his senior civil servant. The Home Office, he complained, was failing to meet targets to reduce crime. Wilson told Blair that his problem was that he had never managed anything.
‘I managed the Labour Party,’ said Blair stoutly.
‘You didn’t manage them. You led them,’ replied Wilson.
The chill aggravated the division between the two men. Wilson’s attempt to appease Blair with proposed reforms, written in business jargon, about targets, performance-related pay, benchmarks, minority quotas and ‘appraisals with 360-degree feedback procedures’ had not impressed his ‘client’. The prime minister did not seek his advice. Instead, he commissioned John Birt to deliver some ‘blue-sky thinking’ about Jack Straw’s department.
‘Unleashed by Number 10,’ Straw would write, ‘[Birt] began to interfere in the Home Office’s work for no good reason so far as I could see, and even less understanding.’ In reply to Blair’s conviction that Straw ‘had been captured by the department’, Straw thought Birt’s arrival proved that Downing Street had ‘been captured by the fairies’. Birt presented his conclusions to Blair, Straw and David Omand, illustrated by eighty slides. At the end of his presentation there was silence.
‘No one had thought what we were meant to do with Birt’s results,’ Omand later recalled. ‘There was no vision. And there was no money to
effect change. Blair never understood what went on outside his office.’
Blair broke the silence by expressing frustration that Birt had not presented a clear set of levers to pull. He was equally annoyed with Straw and Omand, whose reputations were tainted for predicting that crime rates would rise. ‘If the economy is doing badly,’ said Omand, ‘there’ll be more burglaries. If it’s doing well, they’ll steal laptops.’ To his surprise, ‘Blair lost his cool because either way he was losing.’ Both minister and department head had failed to present him with an initiative or good results to publicise. His solution was to insert five anti-crime bills into the Queen’s Speech.
Blair was also frustrated because ‘nothing’ had been done to reduce the number of bogus asylum-seekers. He blamed Mike O’Brien, the junior immigration minister, for lacking an instinctive interest in the problem. Some would judge that harsh, but just what Blair meant could be seen by his choice of Barbara Roche, a north London MP, as O’Brien’s replacement. In common with so many of his appointments, Blair did not discuss immigration with Roche. Straw was also unaware that Roche was the daughter of a Jewish émigré family brought up in London’s East End and had entrenched opinions. His brief instruction to her about bogus asylum-seekers was, ‘Deport them.’ Immigration was still not a priority for either Straw or Blair.
In her first conversation with a senior IND official, Roche was candid: ‘I think that the asylum-seekers should be allowed to stay in Britain. Removal takes too long, and it’s emotional.’ She also dismissed Straw’s vouchers as ‘not dignified’. Every asylum-seeker, she believed, should receive full benefits. Thanks to a threatened rebellion by over a hundred Labour MPs, the benefits were 50 per cent higher than Straw had proposed. Roche also openly criticised IND staff as being uniformly white males. ‘I was angry that it was all bound up in race,’ she would say. ‘It was polarised and unpleasant. The immigration policies were racist. The atmosphere was toxic.’ She wanted to see black faces in Croydon. ‘I know our asylum policy,’ she told IND head Stephen Boys-Smith, ‘but what’s our immigration policy? I cannot understand
why I cannot say that immigration is a good thing. I want a progressive, non-racist immigration policy.’
Roche shared her frustration with Sarah Spencer, an academic who specialised in the subject. For years, Spencer had been a lonely voice urging the Labour Party to treat immigration as a benefit to the country. ‘Legal migration’, the softly spoken woman told Roche, ‘is a good thing.’ Like Spencer, Roche believed that keeping the number of migrants down was ‘misguided’ because ‘immigration and multiculturalism brought positive good’. British cities, they agreed, should enjoy large non-European communities.
Asylum-seekers, Spencer told Straw, were not benefits-hogging fraudsters but people in need of protection. Even the use of the word ‘bogus’, she said, created a negative feeling. Straw’s vouchers, she believed, exposed the government’s intention to use enforced destitution as an unjustified deterrence. ‘The old approach’, she told Straw, ‘of simply keeping people out is no longer tenable.’ Straw rejected her criticisms, but Roche’s objections, he realised, were different. To avoid alienating the party, he did not openly contradict her, although he did not grasp the direction in which she and Spencer were heading.
In the midst of celebrating ‘Cool Britannia’ in the Dome, Spencer stood among Labour’s progressives, who embraced their own brand of modernisation. They disdained white Britain’s glorification of British history and identity. British society could be transformed, she hoped, by relaxing the Home Office’s immigration controls. Roche offered Spencer the chance to realise that ambition and fortuitously discovered a kindred spirit in Boys-Smith. ‘It was clear that Roche wanted more immigrants to come to Britain,’ he recalled. ‘She didn’t see her job as controlling entry into Britain, but by looking at the wider picture “in a holistic way” she wanted us to see the benefit of a multicultural society.’
Boys-Smith agreed with Roche that Britain should welcome more foreigners in what he called ‘managed migration’. Introducing such a dramatic change should not be too difficult, he thought, because the government’s policy was half-baked. Blair and Straw discussed asylum
but never immigration, meaning that more migrants were entering Britain than was being formally acknowledged in Whitehall. A policy vacuum existed because Blair refused to create a Cabinet committee dedicated to the topic, and nor would he appoint a Downing Street adviser who specialised in immigration.
That omission, suggested Roche, was the opportunity to ‘signal a change’. On Spencer’s advice, she pondered transforming bogus asylum-seekers into legally admissible citizens. Over the following months, she sketched out a speech outlining the advantages of immigration and reducing controls, and portraying asylum-seekers in a positive light as skilled labour. She intentionally avoided giving any numbers, and did not discuss her speech with Straw: ‘He wasn’t interested. And nor was Blair.’
During her two visits to No. 10 for presentations about entry into Britain, Roche found Blair impatient. As usual, he did not mention immigration. Instead, he complained about the increasing number of asylum-seekers and the slow rate of removals. ‘He didn’t understand the process and wasn’t interested in the detail,’ recalled Roche. ‘All he wanted to hear was the good news, and in his terms there was none. He was shallow. He had no grasp of immigration policy. There was no policy.’ Liz Lloyd, Blair’s special adviser, confirmed that he was interested only in responding to public anger and reducing the number of asylum-seekers to minimise media criticism. He demanded the removal of ‘30,000 failed applicants’ in 2000, out of the 90,000 who had applied over the previous year. In 1999, only 7,645 had been removed. Blair’s target was unattainable.
Straw seemed to be similarly irritated by Blair’s lack of focus. ‘The man’s a lawyer, surely he understands the problems?’ Roche commented after they left Downing Street. Straw did not reply. Every person and institution had a limit of nervous energy. Blair, Straw knew, was interested in crime, prisons and the aftermath of the Metropolitan Police’s inadequate investigation into the racist murder of black teenager Stephen Lawrence – not immigration. Ed Owen, Straw’s special
adviser, sympathised with the home secretary’s dilemma, one he shared with other ‘progressives’. Even the mere mention of an immigration policy was castigated as an unsavoury association with the prejudices of the racist Tories. Resolving the quandary fell to Spencer.
The academic had been asked by Jonathan Portes, an economist in the Cabinet Office, to write a paper for the Policy and Innovation Unit advocating an increase in migration. ‘I was saying the kind of things that they wanted to hear,’ recalled Spencer. Both she and Portes emboldened their cause by naming Blair as the authority who commissioned their report. To impress the prime minister, both relied on Labour’s favoured ‘evidence-based policies’ to show the benefits of economic migration. Naturally, they were attracted to evidence that matched their argument. That suited Andrew Turnbull, the Treasury’s permanent secretary. Labour, he knew, believed in the ‘globalisation package’, which meant welcoming people, capital, goods and investment into Britain.
An early draft of Portes’s own paper, ‘Migration: An Economic and Social Analysis’, was given to Roche to help her write her speech. In his report, Portes emphasised the economic benefits of migration unreservedly. Migrants, he wrote, were not a burden on the public purse but increased the government’s income through taxation. He focused on French entrepreneurs setting up high-tech ventures and earning jackpot salaries. ‘It would be counter-productive to constrain the growth of migration,’ he recommended, because the British economy would grow by an additional £2.6 billion in 1999/2000.
Although his report was to be published in 2001, Portes based his arguments on statistics collected in 1997, the year Michael Howard’s Act had reduced migration markedly. Without fear of contradiction, he wrote that most migrants were white – omitting the 510,000 immigrants who arrived from the Indian subcontinent during the first three years of Blair’s government.
In the same manner, he downplayed any adverse consequences of immigration. With Spencer’s support, he asserted that ‘in theory’ there was no ‘evidence’ that migrants would ‘increase the pressure on housing,
transport … and health services’. On the contrary, he praised migrant children for bringing ‘greater diversity into UK schools’ and assured Blair that migrants had not caused any overcrowding in London – which was true in 1997. ‘There is little evidence’, he wrote, ‘that native workers are harmed.’ He added, ‘Migrants will have no effect on the job prospects of natives.’ Nine years later, a report by the Migration Advisory Committee found that twenty-three British workers had been displaced for every hundred foreign-born workers employed in the country.
Portes’s enthusiasm was reinforced by his relying entirely on pro-immigration groups for information. He failed to consult Migration Watch, a group critical of unrestricted migration that, he assumed, supported the entry of white Christians but not Muslims. Although the government clearly could not discriminate on the basis of colour, it could distinguish between migrants by country of origin. Purposefully, Portes avoided the word ‘integration’, which offended the Labour progressives’ embrace of multiculturalism. Instead, he advocated that migrants should be helped to become a ‘cohesive’ part of society. He ignored any damaging consequences to British life by not mentioning the reluctance of the growing Muslim and Hindu communities to integrate. His solution to reducing isolation was for a race equality grant scheme to distribute money that would help ‘connect communities’.
Spencer admitted later, ‘There was no policy for integration. We just believed the migrants would integrate.’ Her assumption that the British would unquestioningly accept hundreds of thousands of migrants was underpinned by the BBC’s general categorisation of critics of immigration as racist, which had censored a public debate, thus concealing any problems. Accordingly, Portes’s assurance that the number of migrants entering Britain could be ‘totally controlled’ appeared incontrovertible.
Numbers, Portes knew, were critical. He relied on Spencer’s ‘evidence’ to predict that net migration of non-EU nationals into Britain would rise from 100,000 in 1997 to 170,000 in 2004. He and Spencer were wrong. In 2004, 500,000 migrants entered. No fewer than 370,000
stayed – 200,000 more than Spencer had predicted. The cumulative effect over five years was that there were a million more migrants than Portes had anticipated.
Portes’s report was ideal material for Roche, who also drew on her previous job as a junior minister at the DTI. Employers had frequently complained about red tape preventing their recruitment of skilled foreign workers, despite the dearth of equivalent British labour. To overcome that bottleneck, Roche argued that Britain should ‘modernise the work permit system’. Instead of migrants posing as asylum-seekers, they could enter Britain legally with permits. By then, the number of such permits had already risen from 25,000 in 1997 to 40,000.
In drafting her speech, Roche avoided the phrase ‘asylum-seekers’. Migrants were described as ‘entrepreneurs, the scientists, the high-technology specialists who make the global economy tick’. She also avoided setting target figures, which, she said, would be a ‘foolish’ mistake. Once her script was completed, she asked Andy Neather, a speechwriter for Blair, to give her text ‘a gloss’.
It was a memorable experience for Neather: ‘I remember coming away from some discussions with the clear sense that the policy was intended, even if this wasn’t its main purpose, to rub the Right’s nose in diversity and render their arguments out of date.’ Later, in an interview, Neather also allegedly disclosed that Blair supported migration as it would increase electoral support for Labour. He would later claim to have been misquoted.
Next, Roche showed her speech to Straw. Over the previous months, the two had argued. Straw wanted more deportations, but Roche had refused and nothing was resolved. She found Straw’s manner ‘hard to read’. When offered her draft speech, he said nothing. Roche suspected that Straw was keeping his head down to avoid being labelled in the argument, a conclusion he did not later deny. Straw’s silence did not surprise IND officials. The minister, they had noticed, was also avoiding any discussion about the accession of eight countries, including Poland, into the EU. In Boys-Smith’s opinion, Straw left them leaderless.
Finally, the speech was sent to No. 10 for approval. Roche was uncertain whether she would receive Blair’s support. While the prime minister did believe that Britain needed skilled migrants, he also blamed ‘liberal’ judges and ‘out-of-date’ civil servants for not accelerating the deportations of bogus asylum-seekers. Roche’s own experience suggested that, despite media reports, Blair was still not entirely focused on the surge. She was mistaken. He was principally worried about the electoral risk but, unknown to her, Gordon Brown had warned him, ‘Don’t mention immigration, it’s a Tory issue and should be ignored.’ Accordingly, her draft elicited no comment from Downing Street. But David Blunkett and Charles Falconer, having spotted that Roche was using ‘economic migrants’ as an apparent smokescreen for increasing immigration, did suggest that Portes’s report should be modified. Falconer was more forthright: Roche’s speech should not be delivered. His advice was ignored. The silence from Downing Street encouraged the pro-immigration lobby to believe that Blair endorsed the chancellor’s and the Treasury’s argument about the economic advantages of increased migration.