Whatever it Takes: The Real Story of Gordon Brown and New Labour. Steve Richards
possible, Britain had stayed in the ERM.
Brown’s expedient doggedness in the late summer and early autumn was not especially dignified and carried its own risks. His stance was the first example of another Brownite phenomenon, bold caution. Brown had been bold because he had taken the risk of alienating a significant section of his party that wanted a realignment of the pound or withdrawal from the ERM on opportunistic or ideological grounds.
One of the persistent allegations against Brown was that he was pathetically afraid of taking on his party, an odd claim, seeing that there was nearly always some section of his party raging against him. Influential members of the shadow cabinet fumed in private and some trade union leaders did so publicly. Smith was not thrilled either at Brown’s unyielding stance. Brown also lost the chance of having an easy hit against the suddenly fragile Conservative government. He stuck to his course.
It was during this period, the late summer of 1992, that significant internal criticism against Brown became part of the permanent background noise in politics. Shadow cabinet members in particular, already far from thrilled at being told that they could not say anything that implied a spending proposal, found catharsis in private conversations with journalists and each other. After the Labour conference in 1992 one of the party’s rising stars, Mo Mowlam, said to a group of journalists: ‘Sell shares in Gordon. He’s blown it.’ That was three months after Brown had been made shadow chancellor. Mowlam was far from being the most hostile of his colleagues.
But while his willingness to challenge his colleagues’ more superficial calculations showed signs of political courage, Brown had been cautious as well. He had adopted the stance for reasons of fear rather than conviction, a terror of being associated with devaluation. On this occasion his bold caution proved to be highly fruitful. Very quickly Brown was able to exploit the Conservatives’ discomfiture as he developed his overriding pragmatic idea, that Labour must make the public battle one of competence rather than ideology.
This is when his embryonic public narrative merged with the immediate political crisis. In an emergency debate in the Commons shortly after the ERM debacle, Brown began his campaign to reverse the normal battle lines over which party could be trusted, the familiar divide that had destroyed Labour in the recent general election:
The Conservatives ran a general election campaign on the slogan ‘You Can’t Trust Labour’ and has now shown its complacently unworthy of trust. The party that has already been for years the party of unemployment and of poverty is now the party of devaluation … Ministers who continued to hold responsibilities now cannot command respect. They may hold office for five years, but after five months have lost the authority to govern. They have failed the country and will never be trusted again.
Brown had begun the task of turning politics on its head. Trust! Trust! Trust! At the Labour conference in his first speech as shadow chancellor he adopted the same theme: ‘They said you can’t trust Labour. Let every billboard around the country tell the truth: you can never trust the Tories.’
In 2007 on becoming Prime Minister Brown looked back to 1992 and resolved again to restore trust in Labour after Iraq, the non-existent weapons of mass destruction and perceptions of spin. He was nowhere near as nimble as he had been in this early episode.
In November he launched Labour’s Campaign for Recovery, in which he delicately dumped the proposals and the thinking behind the shadow budget, an audacious move, as his new leader, John Smith, had famously presented it and still stood by most of the policies that had been rejected by voters.
When Brown moved boldly he always looked for cover, whether from Thatcher, a banker or a business leader. On this occasion he used the ongoing economic crisis for protection, announcing that in the light of the recession: ‘We are not proposing to raise tax and national insurance at this stage’ – two propositions in the shadow budget dropped. While Smith looked on with a supportive wariness, he had begun the difficult process of wiping the slate clean.
At the same time Brown had hit upon a popular tax, raising the prospect vaguely of a one-off tax on the privatized utilities, the booming monopolies that were making profits so high that many voters and parts of the media were demanding a punitive response. At this point he had not done the detailed work, but the idea was another example of Brown being ahead of the game. Putting up income tax had, it seemed, become a fatal vote loser for Labour. But what if there were popular taxes to raise revenue? One element of the party’s conundrum would be partially solved.
Cathartic and emphatic messages about ‘tax and spend’ were Brown’s main priority as he sought to reassure voters that the party could be trusted. In his first year as shadow chancellor his speeches were peppered with these sound bites:
‘We will only spend what we can afford to spend.’
‘We do not tax for its own sake.’
‘We don’t spend for its own sake.’
He sprayed the phrases around like bullets from a gun. The following year he fleshed out some more detail, declaring that Labour was not against wealth and would scrap its plan for a new 50 per cent inheritance tax. In August he outlined what he called the new economic agenda. As part of it he declared he would contemplate cutting taxes and had dropped specific spending plans. He stated that: ‘From now on Labour believes in creating the necessary wealth to fund the social benefits we demand.’ Such statements were cited to prove that Brown had become a Thatcherite by 1992. Look more closely and he was still demanding social benefits and had announced a new tax. But he was clearing the ground.
Brown was so gripped by the need to convey a reassuring message that he was furious when Smith announced suddenly in the middle of his largely lethargic campaign to introduce one member one vote for leadership elections in 1993 that Labour would introduce a minimum wage. In mutually supportive discussions with his close allies Tony Blair and Peter Mandelson, Brown fumed: ‘We haven’t prepared the ground … business leaders will turn against us … we shouldn’t have made the announcement like this …’
Brown was always obsessed with clearing the ground, but what policies to put in place once he had pulled up the weeds? To some extent the answer to that question came in the autumn of 1993, when Brown appointed Ed Balls as his main adviser.
The shadow chancellor was not a trained economist. He was a politician to fingertips and understood from a political perspective what he wanted to achieve. The 28-year-old Balls was already a substantial economist, having studied economics at Oxford and Harvard, where he had worked closely with Bill Clinton’s Treasury Secretary, Larry Summers. When they met, Balls was a leader writer on the Financial Times and a committed Labour supporter. The highly political Brown and the innovative, fresh-thinking, left-of-centre economist were close to being a perfect match. At their best the two of them were a creative force that swept all before them. At their worst they could work each other up into a paranoid fury as they pursued factionalized political strategies that often rebounded on them.
Balls taught Brown about economics, fleshing out the shadow chancellor’s political ideas. Brown gave Balls some shrewd lessons on the art of politics, even if he also exposed him to some more destructive ones as well.
Balls had started to work informally for Brown from September 1992 after the trauma of the ERM crisis. As a leader writer for the Financial Times, often he did not have to be in the office until midday, so he would go in to see Brown at Westminster in the mornings. They had met at various gatherings, parties and conferences, but it was only after September 1992 that Balls was a regular visitor. Typically of Brown, sometimes he would be intensely demanding, making contact with Balls four times a day. Then the young journalist would hear nothing for weeks. Nonetheless when they did meet, Brown showed a willingness to listen and engage that defied the caricature of defiant, arrogantly introverted aloofness. Balls told Brown for example that he had been wrong to support the government’s membership of the ERM, not for tactical reasons but in terms of economic policy. Balls had felt that the ERM had been a straitjacket that stifled the economy. In a pamphlet for the Fabians written shortly after Britain’s exit, he argued that the economy had to be in much more robust shape before a British government could rejoin the ERM. Challenging a fair amount of Labour orthodoxy, he called