Gordon Brown: Prime Minister

The disputes between the three – Kinnock, Smith and Brown – Kinnock complained, were loud and long. They agreed not to revoke the Conservatives’ trade union legislation or to advocate a return to 83 per cent tax rates; but they were firmly committed to the redistribution of wealth. Would it be inviting electoral suicide, they wondered, to mention tax increases and a commitment to full employment in the manifesto? Watching John Smith ploddingly composing the tax plans for the shadow budget depressed Brown. Despite his sparkling performances in the House of Commons, Smith lacked originality. The more he insisted that the manifesto would pledge to levy ‘fair taxes’, the angrier Brown became. Smith spoke of ‘one more heave’ to prevent a fourth Tory victory, a term condemned by Brown as self-revealingly crude and destined to end in a similar fiasco to 1987. Brown believed that only he foresaw the imminent disaster. He alone was certain of the proper route to victory. In response, Smith castigated him for offering no new ideas.

Quietly, Brown began consulting trade unionists, key party activists and sympathetic MPs about the possibility of an alternative to Smith as party leader if Labour was defeated at the general election. He calculated the permutations to see whether he might beat Smith, or at least achieve a sufficient vote to mark his future inheritance. The more Smith insisted on the manifesto overtly pledging higher taxes, the more resolutely Brown sought out dissidents. His unhappiness climaxed during one stormy meeting. Kinnock had agreed with Smith to pledge tax increases in the manifesto. Brown disagreed vociferously, and questioned Smith’s principles. Did Smith actually understand economics? Brown found his bonhomie irritating, and suspected his regular attendance at church was deceptive. Brown’s dislike of what he saw as the bigotry of western Scotland – the area of John Smith, John Reid and Helen Liddell – swelled. In the back of his mind lurked new doubts about Smith’s tolerance of corruption in his local party. The murkiness in Monklands seemed to reflect Smith’s self-limiting terms of reference towards house prices, wages and human motives. All his attitudes were shaped by his experience in Scotland. His caricature of middle England was the expensive, eccentric neighbourhood of Hampstead in north-west London, and he did not understand the real middle England’s reaction to the prospect of higher taxation. Nor did Kinnock. As for John Reid, Brown was disdainful of a man he characterised as an untrustworthy, indiscreet, alcoholic thug.

Despite his disparagement of John Smith’s insularity, Brown himself was uneasy with England’s growing multi-culturalism. His integrity, grittiness and clannishness – the essence of his Scottishness – were familiar characteristics in the English shires, but not across the urban sprawls. Proud of his background, he felt only contempt for the criticism of him by London’s media classes and those Labour MPs who disliked his refusal to peel away his Scottish skin. Like Smith, Brown knew little about middle England’s mood beyond the windows of the northbound express train from King’s Cross to Scotland on Friday nights. Neither man had much affection for England’s neat villages, picturesque market towns and manicured countryside. To Brown London was a workplace, not a cultural home. He was rarely seen in the capital’s theatres or concert halls, in contrast to his attendances at the Usher Hall in Edinburgh. Scots, he was happy to remind others, are an internal people, well known to each other but distant from outsiders.

The gap between the two cultures irritated Mo Mowlam, Brown’s deputy as shadow DTI spokesman. In 1991 he criticised her slapdash approach and coarseness, sparking her dislike of the northern cabal around him. After one dinner in an Indian restaurant with Brown, Henry McLeish, Nigel Griffiths, Doug Henderson and Nick Brown, she told friends the experience was so appalling that she believed Brown was unfit to become the party’s leader. His companions were hardly impressive praetorian guards. Unlike Winston Churchill, Brown did not like dominating first-rate minds. The esprit de corps his loyalists engendered magnified his character traits.

In a rare attempt to humanise his image and attract support, he agreed to co-operate with Fiona Millar, a young Labour supporter employed by the Sunday Express, on a newspaper profile. The overt reason was Brown’s candidacy to be the party’s next leader. Naturally, he told Millar that he was ‘cool towards the notion’. He did however admit that his personality and policies irritated many Labour MPs. ‘It’s the old story,’ he confessed, ‘that your opponents are across from you in the House of Commons and your enemies are next to you. There are a number of people who resent me, but all I have done is get on with my job, and I don’t think anyone would accuse me of not being a team player.’ The profile’s first public description of his home was not encouraging. The austerity of a new floral three-piece suite in the living room, and the undisguised sparseness of the other rooms with their bare walls and a solitary piano, a present from his mother, were not mitigated by his exclamation, ‘Moving here has changed my life,’ or the disclosure that he played golf and tennis, watched football and ‘many films’, and read detective novels. Piles of books were scattered around the house, most of them about political theory and ideology. Only a few looked unread. The humanisation of Gordon Brown required something to fill the glaring gap – a woman in his life. Coyly, he explained, ‘Marriage is something (#litres_trial_promo) that hasn’t happened yet. I’ve been too busy working, but everything is possible.’ He admitted to a ‘girlfriend who is a lawyer’, but stipulated that Caldwell should not be named, to which Millar agreed. To compensate for that self-censorship, she conjured the colourful depiction of Brown as ‘the thinking woman’s crumpet’, apparently known as ‘the awayday favourite’ by female staff on BBC’s Question Time because he was their choice of companion when travelling outside London.

The interview, however, was a failure. Brown’s resistance to introspection and reluctance to admit to any ambitions beyond politics left the reader baffled about the real man. There were no clues about his personal life, his ambition, his inner turmoil or even any mention of his unusual habit of always wearing dark blue suits, bought in bulk, and red ties. Unanswered was the question of whether Brown was merely a product of his era, or a man who might one day shape the nation’s destiny. Some would say that he was not so much unwilling to reveal himself as incapable of self-analysis or even self-deprecation. Outside politics, he was unable to define himself. While there was no doubt that following his progress would be worthwhile, his destination was unresolved.

The only real consequence of the interview was to encourage Neil Kinnock to suspect plots. In the fevered atmosphere, he believed that Donald Dewar, with John Smith’s support, was seeking to mount a coup against him in favour of Smith, an accusation Dewar’s confidants laughingly derided. For his part, Smith was convinced that Brown was plotting against himself, and asked the GMB trade union leader John Edmonds to warn Brown off. Edmonds telephoned Mandelson at his home in Hartlepool on a Friday night. ‘I gather the mice are playing,’ he said. ‘What are you talking about?’ replied Mandelson. ‘People say you’re plotting for Gordon and against John.’ Mandelson denied the allegation. Brown, Edmonds continued, should cease manoeuvring to become the leader after the 1992 election. In Edmonds’s opinion, the party would not skip a generation. John Smith was the party’s candidate. Brown heard about the threat within minutes. Frustrated by Kinnock and irritated by Smith, he pondered whether he should strike. His opportunity was short-lived.

Smith complained to Kinnock about Brown’s ‘precociousness’. Kinnock appreciated Brown as a ‘bright spark’, and since Smith was a year older than himself, half-favoured Brown as the next leader; but Smith refused to countenance the jump of a generation. Kinnock made no attempt to reconcile the two, except to bark, ‘Grow up.’ To reinforce his position, Smith summoned Brown and demanded a personal assurance that he would not stand in the next leadership election. Instead of outrightly refusing to commit himself, Brown mumbled some inconsequential platitudes. At the crucial moment, calculating the compromises and betrayals that would be necessary for success, he lacked the courage to accept the challenge. ‘You won’t stand in my way after the next election?’ asked Smith directly. ‘No,’ Brown meekly replied. He would tell his staff that he had refused to join any plot because he feared that rumours of division could cost Labour the election. The self-discipline of the machine politicians protected Kinnock from newspapers reporting disenchantment among the parliamentary party.

Gordon Brown had harmed his own cause. He emerged from the foothills of a botched coup neurotic about the whispers. ‘Who’s saying things about me?’ he asked Mandelson. Doubts and distrust became embedded in his relationships. In self-protection he began minutely controlling every aspect of his life. At private meetings he became irascible, although in public his carefully written and rehearsed speeches, liberally sprinkled with original jokes, concealed his anxieties. His self-discipline suggested an assured future. At the 1991 party conference in Brighton he taunted the Tories about their grubby relationship with City ‘fat cats’: ‘First a privatisation write-off, then a City sell-off – and then a Tory party pay-off.’ The Conservatives, he mocked, depended on financial support from mysterious foreign billionaires, including a tainted Greek shipping owner. ‘Most shamefully of all, [they take donations from] a Greek billionaire moving his money out of colonels into Majors.’ The cheers temporarily reinforced his self-confidence.

Brown’s contribution to the party’s manifesto for the 1992 election – ‘It’s Time to Get Britain Working Again’ and ‘Looking to the Future’ – reflected the next stage of his journey away from the Tribunites. He favoured regulation and competition rather than nationalisation, private business rather than state intervention, and supported seeking private venture capital on ‘strictly commercial lines (#litres_trial_promo)’ for investment in public services. The flipside was his regurgitation of Harold Wilson’s thirty-year-old mantra of the ‘white heat of technology’ in a ‘new agenda for (#litres_trial_promo) investment’. Using Wilsonian buzz words – technology, innovation, revolution, investment, modernisation – he castigated the Tories’ ‘trust in simplistic market answers’, especially to create a skilled workforce.

Even Brown was frustrated by the lack of originality in relying on Wilsonian vocabulary. He blamed Neil Kinnock personally, and the coterie around him including Charles Clarke and Patricia Hewitt, who professed to understand ‘modernisation’ and ‘the Project’ but who in his opinion were an albatross around the neck of the party as it prepared for the election. His revenge was to take pleasure in irritating Clarke by arranging meetings with Kinnock without telling his chief of staff. The consequence was uncoupling during the weeks before election day, 9 April 1992. Working from an office near Waterloo station, Brown barely spoke to John Smith, and fumed about the self-indulgence and lack of professionalism among the ‘London losers’, the wild and woolly left in the London Labour Party who were organising the hopeless campaign. He cursed the fact that Smith was approving policies without asking, ‘Can we win with this?’, and speaking to Donald Dewar about policy while ignoring himself. He cursed the party’s refusal to promote him as a spokesman on television, although he himself was partly to blame for that. Unlike every other shadow minister, he refused to appoint a liaison official at Walworth Road as a point of contact while he toured the country. Charles Clarke urged him to do so, but was rebuffed. Geoff Mulgan, his senior aide, never discussed Brown’s personal campaign with David Ward, Smith’s campaign manager. ‘You’re not a team player,’ Smith raged at Brown. ‘The problem is that you want to be the team leader.’

Smith was right, but was too stubborn to understand the reason. Convinced that tax increases were vote-winners, he had arranged a dramatic unveiling of his proposals on the Treasury’s steps in Whitehall just days before the election. As Smith stood in Whitehall surrounded by his smiling Treasury team, Brown seethed. Two years later he would praise Smith’s passion for equality, but at that moment he knew the folly of honesty. As they walked to their cars from the Treasury steps, Brown sniped at Smith, ‘You’ve lost us the election.’ Smith was visibly shocked, more by the disloyalty than by the prediction. Even Kinnock, under pressure from Brown, had confessed over dinner with friendly journalists at Luigi’s restaurant that Smith’s shadow budget was ‘wrong’, and had pledged to row back. Smith was unperturbed. A telephone call on Monday, 6 April, three days before election day, from Terry Burns, the Treasury’s permanent secretary, reinforced Smith’s conviction. Burns invited Smith to visit the Treasury to discuss Labour’s intentions if elected. There had been several previous conversations about Labour’s plans, which included possible withdrawal from the ERM. As Smith confidently drove to Whitehall carrying some papers prepared by Brown, he was convinced of victory. Left behind, his assistant Helen Liddell said quietly, ‘We’ve lost. Taxation has lost us the election.’

On advertising billboards across England, Smith’s tax increases were exploited by the Conservatives as Labour’s ‘double whammy’ of ‘more taxes’ and ‘higher prices’. John Major, parading as the victor of the Gulf War, exploited Kinnock’s waltz into the Tory trap of Labour’s reputation for economic incompetence. Although in Labour’s folklore the polls rose in their favour after Smith presented his shadow budget, nothing could save the party after Kinnock’s disastrous performance at a premature victory rally in Sheffield. Middle England decided that Labour could not be trusted. Tax and his own personal image, Kinnock was told, had extinguished their chance of victory. Five years later Brown would say, ‘I was always loyal to John Smith in public, but in private I had disagreements about the 1992 proposals.’

Just before election day, Tony Blair invited Robert Harris, an intelligent journalist and friend of Peter Mandelson, to lunch at L’Escargot in Soho. ‘Do you think Labour will win?’ asked Blair. ‘Yes,’ replied Harris. ‘I don’t think so,’ said Blair. ‘We’re going to lose.’ Labour had failed to break its dependence on the trade unions, and failed to understand the aspirations of hard-working English people of all classes. After the defeat, continued Blair, Gordon Brown would run against John Smith for the leadership, and Blair would stand for deputy. That scenario would require Brown to be courageous, and Blair appeared convinced that he would be. In fact Blair’s conjecture was either naïve or provocative. Over the previous twelve months, he knew, the trade unions had vetoed a challenge to Smith, and the parliamentary party was divided. He was deftly promoting his own interests. Brown was close to Smith, while Blair’s impatience with the Glaswegian was well known. Blair’s influence in a shadow cabinet led by Smith would be less than Brown’s. A Brown coup was the best option for Blair’s future.

Watching from Scotland as the election result was announced for Basildon in Essex, Brown exploded in anger. The sitting Tory MP had held on to a seat that Labour had to win if it was to have any chance of gaining power. ‘Basildon man’, cursed Brown, was ‘selfish’. Labour’s defeat was humiliating. The Tory majority fell from 102 to twenty-one, but it was their fourth successive election victory. Although there was a 2 per cent swing to the Tories in his constituency, Brown personally achieved a massive majority of 17,444. At that desperate moment Brown could not understand why England’s aspiring working class seemed to hate Scotland’s passion for collectivism and government interference. Both he and Blair were in despair.

THREE Turbulence (#ulink_f09e4025-7544-5cc7-a4d5-0f6c97d11198)

The curtains of the Kinnocks’ house in Ealing, west London, were tightly drawn on the bright morning of 10 April 1992. Inside, the occupants were crying. Neil Kinnock was shocked that Labour had not won the election. In the west of Scotland, John Smith was similarly distraught, but robustly rejected any responsibility for the defeat. On the banks of the River Forth, Gordon Brown was considering the consequences of Kinnock’s resignation.

In his telephone conversations with close friends including Nigel Griffiths, Nick Brown, Martin O’Neill, Gavyn Davies and Doug Henderson, Brown alternated between bafflement and explosions of despair. Only Tony Blair aggressively argued in favour of Brown taking the risk of standing for the leadership. He invited Brown to meet at his home in Trimdon, in his Sedgefield constituency, with Nick Brown. As they walked in the countryside, Blair urged him to stand as the modernising candidate. Labour’s English MPs, he said, would support him against Smith who they agreed was incapable of appealing to aspiring English people. Three times Brown had placed first in the elections for the shadow cabinet, and his continuing popularity guaranteed him a fourth victory in the autumn.

At this decisive moment, Brown was paralysed by his emotions. The trade unions, he was told, favoured Smith; many MPs were against a divisive vote so soon after the party had been through hell to unite itself; and he had been assured that he would inherit the crown after Smith. In meetings over the following two days at Nick Brown’s home in Heaton in Newcastle, and then at County Hall, Durham, with Mandelson, Brown repeated all those reasons for not challenging Smith. The judgement of the Scottish establishment, he told Blair, could not be ignored. All were united by a near-blood oath to the clan chief. The middle-class minister’s son hated the thought of bloodshed. Listening to Brown, Blair was unimpressed by what he later dubbed a masquerade. In the opinion of those associated with ‘The Project’, Brown lacked courage to seize the opportunity and break the mould. He was a woolly apparatchik, eloquent about the party’s ideal philosophy, but unable, like a star pupil politely waiting for the offer of a prize, to elbow his way brutally past those he despised. The conversations ended with Blair losing his temper. Brown, he said, lacked the resilience to withstand personal criticism from his peers, and feared failure. He was a coward. The scales, Blair would tell Anji Hunter, had fallen from his eyes. In the future he would be less deferential towards Brown, less obedient. ‘He chickened out, taking the easy option,’ judged Blair. Others were less critical. ‘Gordon won kudos for not standing,’ said Tam Dalyell.

Five years later, Brown presented his faint-heartedness as loyalty. ‘I felt I owed a debt of gratitude to John Smith,’ he told Paul Routledge. ‘I felt I had to be loyal. It was for no other reason. I had worked with him for almost eight years on the front bench, and it was right for me to be loyal. I thought the Labour Party was more ready for change than people imagined, but I never thought for a minute of standing against John Smith.’ He considered standing for the deputy leadership, but was turned down by Smith, who felt that two Scotsmen would be electorally unattractive. In turn, Blair rejected Smith’s offer to be his deputy. Revealing his prejudices, Smith chose Margaret Beckett, a left-wing trade unionist certain to antagonise middle England. To minimise their embarrassment and pose as ‘agents of influence’, both Brown and Blair telephoned journalists to explain why they were not standing for the deputy leadership. Few were convinced.

Brown, previously tipped as the leader-in-waiting, was further deflated when, on 26 July 1992, the day after John Smith’s election victory, the Sunday Times devoted five pages to a profile of Tony Blair as the party’s next leader. Two days later Charles Reiss, the London Evening Standard’s political editor, published a percipient prediction under the headline ‘Coming War Between Brown and Blair’. The whispers in Westminster, reported Reiss, revealed a depth of unhappiness among English Labour MPs about Smith’s appearance as a ‘smiling uncle’. Compared to Blair, who looked approachable and urbane, the newly crowned leader was from the wrong generation. Even the cautious and rhetorical Brown, he wrote, offended some as old-fashioned. Some observers wondered (#litres_trial_promo) whether the rivalry between Brown and Blair would mirror the similar battle twenty years earlier between Roy Jenkins and Tony Crosland, whose long friendship was corroded by their acrimonious contest for the Labour leadership during the 1970s. The speculation was short-lived. The party was preoccupied by yet another autopsy about its failure to overturn a Tory government responsible for a major recession. The debate identified several culprits, including Gordon Brown.

Shortly after his appointment as John Smith’s shadow chancellor, Brown hosted a drinks party in his office. In the sombre atmosphere, Peter Mandelson, the newly elected MP for Hartlepool, was openly rebellious. ‘The party,’ he said loudly, ‘has to modernise, and John Smith is not up to it.’ Mandelson’s disloyalty caused no surprise. The dissent was not directed towards Smith alone. Mandelson’s audience knew that in other rooms Brown was under attack for having approved Smith’s discredited shadow budget. Brown’s silence was deemed to be incriminating. He dismissed the criticism as irrelevant. In 1997 he would claim that his new position as shadow chancellor had bestowed on him the power to challenge Smith ‘to change our (#litres_trial_promo) whole economic policy’. That was undoubtedly the Herculean challenge he set himself in 1992, but at the time many doubted whether he could overcome Smith’s conservatism, and whether the party could change sufficiently to avoid a fifth election defeat.

The hunger for victory persuaded Brown finally to acknowledge the achievements of Thatcherism. He jettisoned any affection for Neil Kinnock’s ‘Red Rose’. That misty-eyed, superficial change of image had not neutralised the public’s perception that Labour would restrict options, dampen ambitions and nationalise fitted kitchens. On the contrary, Kinnock had reinforced ‘Basildon man’s’ perception of Labour as an enemy, keen to impose shackles on behalf of society. Until the Attlee legacy was repudiated, the new shadow chancellor knew, Labour could not pose as a party offering people opportunities. ‘We’ve got to work from first principles towards policies,’ he again told his advisers including Michael Wills, Geoff Mulgan and John Eatwell. The path back to power, he accepted, was for Labour to appeal to the middle class by changing its image and policies. The first obstacle was the party members, including himself.

In July 1992 the party faithful were still cursing the ‘culture of contentment’. Gordon Brown hated ‘Basildon man’, the motivated working-class aspirant whom he damned as ‘a selfish, indeed (#litres_trial_promo) self-centred individual’. To win ‘Basildon man’s’ allegiance, he decided to conceal his disgust and promote the new credo that ‘There is no clash between individual freedom and the advancement of the common good.’ In the frenzy of his writing and speeches, he appeared to abandon his attachment to the idea of the state ‘that all too easily assumes that where there is a public interest there must always be a centralised public bureaucracy’. The state itself (#litres_trial_promo), he acknowledged, could itself be a damaging vested interest. In his rush during the summer to compose a new ideology, there were inevitably contradictions. He abandoned pure socialism but espoused collectivism, arguing that individuals should group together for the common good. He abandoned state controls but wanted the markets to operate subject to such controls in the public interest. The new gospel was to revolutionise the Labour Party’s image, but only partially its substance. Gordon Brown could not break away from his life’s attachment to socialism. He urged the faithful not to despair, because ‘The truth is (#litres_trial_promo) that our natural constituency is the majority who benefit from a just society.’

In the new House of Commons, the Tories were soft targets. During the election campaign John Major had pledged, ‘Vote Conservative on Thursday and the recovery will continue on Friday.’ Instead, the recession had worsened. Unemployment was rising back towards three million, interest rates were increasing, property prices were falling, car workers were working short time, and the government was poised to announce massive spending cuts. Norman Lamont, the chancellor, was regularly lambasted for misleading the country that taxes would be cut, when in fact they were going up. Inexorably, an old-fashioned sterling crisis was about to explode. Devaluation from the exchange rate of DM 2.95 to the pound was the best cure, but Britain’s membership of the ERM rendered that remedy unavailable. Lamont sought help from the German central bank, but was snubbed. Germany’s economy was expanding while Britain’s was shrinking. Unusually, Lamont’s crisis was also Brown’s. He had supported entry into the ERM, and he rejected unilaterally devaluing sterling.

The unfolding disaster fulfilled the predictions of Bryan Gould and other Labour opponents of joining the ERM. Their criticism was inflamed by Brown’s aggressive dismissal of their opinions. Robin Cook, supported by Peter Hain, Ken Livingstone and other anti-Europeans, wanted devaluation. Even John Smith supported ‘realignment’. ‘Labour, (#litres_trial_promo)’ warned Smith, ‘should know the dangers of fixed exchange rates. Harold Wilson’s greatest mistake was to hold sterling against the dollar between 1964 and 1967.’ Gordon Brown disagreed, and insisted that Labour could never again be the party of devaluation. The party, he warned, would lose credibility by following such a policy. Tough on the new orthodoxy, he was sticking to the ERM; forgetting the modernisation gospel he had preached just days earlier, he promoted Old Labour policies of cutting interest rates and greater government investment. Using the identical lexicon as Harold Wilson twenty-five years earlier, he regularly lashed out at the ‘handful of shirt-sleeved speculators’ and City whiz kids dictating the lives of millions and the destinies of national economies. The outbreak of warfare in the party became focused on Brown, who appeared a confused ideologue.

In early September 1992 the economic crisis escalated. The government’s defence of the pound was faltering. Brown’s support for remaining in the ERM was emphatic. ‘There are those (#litres_trial_promo) like Lady Thatcher who believe that Britain should devalue,’ he wrote in the Sunday Express on 6 September, ‘and turn its back on Europe and the exchange rate mechanism with all the harsh consequences that would ensue.’ Brown’s alternatives to devaluation were state subsidies and increased taxes. Throughout that week, as the crisis intensified, he was telephoned by journalists and asked why the pound should not be devalued. ‘I can’t afford to think it’s overvalued,’ Brown replied, ‘because it would seem as if Labour believed in devaluation.’ Those who pushed him to promote Britain’s exit from the ERM were met by a solid wall. He refused to consider the possibility that he was wrong. His inconsistency gave the impression that he did not understand economics. In 1997 he would tell Paul Routledge (#litres_trial_promo) that he had anticipated the crisis. Considering his statements at the time, this appears to be untrue.

Late in the afternoon of Wednesday, 16 September 1992, Brown was in his office in 1 Parliament Street, overlooking the Treasury building. That morning he had still been convinced that the government would remain in the ERM, helped by Germany’s revaluation of its own currency. He would be vindicated, he reassured John Smith, despite his critics including Ken Livingstone, who again had advocated devaluation. Around Brown were his advisers Neal Lawson, Michael Wills, Lord Eatwell and Geoff Mulgan. The tension was high. The constantly updated television news bulletins reporting Norman Lamont’s battle to save sterling were unnerving. If Labour had won the election in April, Brown would have been the focus of the TV cameras outside the Treasury, and the target of baying Tory MPs inside the Commons. His plight was better than Lamont’s, but the politician whose talent was to ridicule his opponents knew that he was vulnerable to mockery. He had allied himself to a policy which, to his amazement, was collapsing – and worse, he did not understand the reason.

At 7.30 p.m. everyone in Brown’s office watched the television pictures of the chancellor emerging into the spotlights, brushing his hair, and confessing defeat. Britain, he announced, was withdrawing from the ERM and devaluing. In a surreal exercise, the viewers in Brown’s office darted between the television and the window, gazing down at Lamont in the distance to reassure themselves that the television pictures were reality.

After Lamont’s announcement came to its abrupt conclusion, the atmosphere in the office was ‘on a knife edge’, recalled one of those present. All eyes swivelled towards Brown and then away. His shock was palpable. He had made a fundamental mistake, and he was terrified. This was the most testing moment of his political career. His refusal to seek the nomination in Hamilton or to contest the party leadership were failures of courage, but were not life-threatening. This crisis endangered his entire future. At that moment he was due to lead the attack against the Tories for a policy he himself supported, and simultaneously he was under attack from the left wing of his own party for ideological folly. No one was certain whether he would cope with the explosion of emotion. Under pressure, the ashen-faced Brown’s behaviour was extraordinary. Some eyewitnesses say they observed the neurotic pessimism of the son of the manse. Others witnessing the brooding volcano in that untidy office would mention the inherent self-destruct button of the Scottish character.

But Brown did not self-destruct. He reasserted his self-control, the tension eased, and he began designing a strategy for his survival. Driven by his hatred for the Tories and his searing ambition to become party leader, he contrived a convincingly venomous denial of the past. ‘We have to fight to avoid going down with the government,’ was the common sentiment. His first decision was to reject an invitation to appear on that evening’s Newsnight. He knew he would have to answer the charge that if Labour had won the election they would have been hit by the same crisis, and would have reacted identically to the Tories. The party, Brown decided, had to avoid self-flagellation and pontificating about the ‘current mess’ (#litres_trial_promo). Instead, he would offer soundbites damning the government.

As he faced the news cameras he propped a piece of paper in front of his eyes bearing the words, unseen by the viewers: ‘Huge chasm’. His identical soundbites, emphasising this ‘huge chasm’ between the government and Labour, blamed everything on the Tories, and suggested that Labour had never endorsed the disastrous policy. ‘We demanded interest cuts,’ he repeated endlessly, although that was not a solution to the crisis. ‘The government failed to listen to our warnings … The Tories are the party of devaluation … The Tories cannot be trusted on the economy.’ The government’s humiliation was transformed into a Labour success. ‘I say to Norman Lamont: spend your energies pursuing the useful job of creating jobs for others rather than the futile goal of clinging to your own.’ Of John Major he said: ‘The recession started when he became Treasury secretary, worsened when he became chancellor and intensified when he took over as prime minister. Every time he changed jobs, thousands lost theirs.’ Stubbornly, he repeated his rehearsed phrases and ignored supplementary questions. He may have turned the facts upside down, but the public was unconcerned. Their spleen was directed at the Tories. Labour’s support for the policy was forgotten. Brown’s calculated indifference to the truth did not impress the party cadres. The left, disgruntled by his modernisation agenda, was whispering against the now isolated shadow chancellor.

Two weeks later, Brown arrived at the 1992 party conference in Blackpool. The criticism had not relented. The opinion polls showed that Labour was still not trusted by voters on the economy. His fear had plunged him into a deep, black mood. He was convinced that Robin Cook and John Prescott were conspiring to expel him from the front bench, and that he was fighting for survival. Reconciling Brown with Cook, complained fellow shadow cabinet member Frank Dobson, the spokesman for employment, had become ‘a lost cause’. Brown’s grudges exploded in private but were concealed from the public. As he toured the corridors at the conference hall he repeatedly told delegates he encountered, ‘There is no way that Labour could have kept its credibility if I’d come out in favour of devaluation.’ Because he had resisted the devaluation chorus, he continued, Labour had been immunised from blame for the collapse of the pound. The Tories, he said, should be cast as the party of devaluation. Repeatedly he told his critics to blame the Tories for ‘betraying Europe (#litres_trial_promo)’, twisting the responsibility for the ERM crisis away from the real culprits, the Germans and the EU Commission who had refused to support Britain. His conference speech was an old-fashioned tirade: ‘The City of London is Britain’s biggest casino, and the winners are celebrating over £500 million won by cocky young men betting on a certainty.’ He demanded curbs on currency speculators (whom he had earlier predicted would be controlled by the ERM) and advocated ‘managed exchange rates (#litres_trial_promo)’ as ‘absolutely necessary’. The contradictions were glaring, but that was irrelevant. Despite his faltering popularity, he was again first in that year’s elections for the shadow cabinet, with 165 votes.

Brown returned to London determined not to waver. Preoccupied by a zealous conviction of his virtue, he became impenetrable and impregnable to the doubters. He was dubbed a political glacier, but he pursued his duty. ‘I must come up with some big ideas,’ he told friends. In 1906, 1945 and 1974, Labour had reinvented itself. In 1992 the party again required a huge intellectual effort if it was to win credibility. Those pessimists preaching that Labour’s support could not break through the 35 per cent barrier, or that the party had a declining base, were ignored. His tactics had provided breathing space and an inspiration for a new crusade. He immersed himself in rewriting Labour’s policies to make the party electable, in a style his supporters called ‘radical populist’. His latest political journey was calculated to convince electors that Labour was abandoning the economic policies on which it had fought the previous election.

Brown was resolved that Labour would never again pledge to raise taxes in an election campaign, but that was only the beginning. The image of Labour as the party of inflation, high spending and begging from the IMF had to be eradicated. No future Labour government, he decided, could finance failing industries or restore unlimited powers to the trade unions. He would pledge support for full employment, but refuse to support higher taxation or restore the earnings link to state pensions. He began speaking about the importance of developing Labour’s response to the new shibboleths: globalisation, the financial markets and the ‘knowledge economy’. Relying on competition in the market rather than imposing state controls, he slowly recognised, gave people greater opportunities; knowledge rather than capital had become the key to wealth, and he listened to those saying that the poor would be enriched by learning new skills rather than by the imposition of state control over wealth. The new gospel would present the party as a modernising agent for the economy, society and the constitution. Much of Thatcherism, Brown acknowledged, was irreversible.

His reward was more unpopularity. Senior colleagues including John Prescott, David Blunkett, Jack Straw, Robin Cook and Michael Meacher regarded his ‘radical populism’ as ‘nauseating’. Brown, they believed, was ‘harbouring dangerously revisionist (#litres_trial_promo), pro-establishment ambitions for the party’. Although they did not share Bryan Gould’s violent characterisation of him as a more fanatical monetarist than the Tories, they objected to any abandonment of socialism. Brown rebutted their criticisms. In the fashion of an evangelist, he behaved like the leader possessed of the truth and commanding his flock to follow. But to assuage his critics, he began perfecting the art of addressing different audiences with different messages. To please the left, he promoted himself as a true socialist. ‘Labour,’ he wrote in Tribune, ‘rejects the notion (#litres_trial_promo) that a free-market approach to currency markets will bring lasting benefits to the British economy … Never again must speculators control the policy of government. Action must now be taken to strengthen European co-operation to diminish the power and role of speculators.’ Simultaneously, he was reinforcing loyalties among those friends who loathed the Tribunites. Supported by Blair and Mandelson, he confronted his critics. Robin Cook, the health spokesman, had predicted, ‘Labour will never govern again unless it adopts proportional representation.’ Cook was brushed aside by Brown with open scorn. Bryan Gould was damned as ‘dangerous and reckless’. John Prescott was derided for criticising the modernisers’ attempts to expunge the image of ‘a party of (#litres_trial_promo) the poor and the past’ and to broaden Labour’s appeal to the middle classes. Seemingly uninvolved in the steamy rows was John Smith. The party leader disliked any dilution of Labour’s old ideologies. Just ‘one more heave’, he believed, would expel the Tories. Brown, Blair and Mandelson sought another route.

A possible way forward was revealed at a conference at Ditchley Park between the ‘modernisers’ and US presidential candidate Bill Clinton’s advisers. Although he disliked Thatcher’s indifference to social justice, Brown was impressed by Clinton’s equal antagonism towards the idle poor and the idle rich. Everyone without a good excuse, said Clinton, should work. ‘We want to offer a hand up, not a handout,’ was his memorable piety. The growing success of Clinton’s presidential campaign, thanks partly to his economic proposals, reinforced Brown’s commitment to abandon Labour’s traditional philosophy of universal benefits. Changing Labour’s gods, he calculated, could only be done piecemeal, accompanied by pledges zealously to help the working poor and the underclasses. To stem the inevitable criticism that he was adopting Thatcherite policies, he planned successive diversions to restate his socialist credentials. He would criticise the very class whose support he was seeking – the capitalists who on the eve of the election he had condemned as ‘doing well out (#litres_trial_promo) of the recession’ – and praise the performance of the Scandinavians, Germans and Japanese, although he knew comparatively little of their true economic predicament. Working up to fifteen hours a day, he analysed the party’s weaknesses and concluded that its salvation required not just new ideas, but a new vocabulary describing a new party. Just as Margaret Thatcher had recruited Keith Joseph, Nicholas Ridley, Nigel Lawson and other intellectuals from the Chicago School to bury memories of the Heath government under new policies, Gordon Brown began, with Blair and Mandelson, to search for catalysts of a new party. For his personal quest, he needed new advisers.

His office had been reorganised under Sue Nye, an aggressive chain-smoker, formerly employed by Neil Kinnock, famous for asking ‘Have you got a mint?’ to disguise her habit. Although she might have been tainted by her association with the notorious pre-election rally at Sheffield, Nye was trusted as loyal, hard working and ruthless. Like Jessica Mitford, she decided by just a glance whether someone was acceptable or to be excluded. Her reasons for freezing out a person could be inscrutable, but her phrase ‘If you’re outside the family, you’re radioactive’ appealed to a man cultivating the authority of the clan chief.

Within the citadel, Brown needed a soulmate. His enquiries suggested that Ed Balls, a twenty-five-year-old Oxford graduate employed as a leader writer at the Financial Times, would be ideal. The Nottingham-born Balls, Brown heard, was a loyal Labour supporter but was disillusioned with John Smith. He had studied at Harvard under Larry Summers and Robert Reich, both advisers to Bill Clinton, and was sparkling with ideas about monetarism, how to avoid boom and bust, never rejoining the ERM, giving independence to the Bank of England and revolutionising Britain’s economy. Brown cold-called Balls to arrange a meeting. He was impressed. Balls’s intellect and their mutual admiration of America helped to form an immediate bond. In an exchange of letters, they agreed that Labour’s future success depended on winning the electorate’s trust in the party’s economic competence. Most importantly, Balls was prepared to undertake the grind to produce the fine economic detail that was beyond Brown’s experience. The association with Balls and his future wife, Yvette Cooper, would change Brown’s life.

In January 1993 Brown and Blair flew to Washington. Ed Balls had reinforced Brown’s attraction to Bill Clinton’s ideas, especially after Clinton’s election victory the previous November. With Balls and Jonathan Powell, a diplomat at the British embassy, they listened to Larry Summers and Robert Reich explain Clinton’s seduction of the American middle classes away from the Republicans, and his welfare-to-work programme. In a newspaper article after their return, Blair wrote enthusiastically about the exciting change in Washington. He praised the new vitality in the United States, and hailed the thousands of young people coming to Washington to build a new era. ‘The Democrats (#litres_trial_promo)’ campaign was brilliantly planned,’ Blair wrote. Labour, he suggested, should copy Clinton’s policy, stressing ‘the importance of individual opportunity; of community strengths’.

Brown also returned inspired to seize the middle ground from the Tories. He was attracted to Clinton’s core proposition that governments had responsibilities to the whole community. That was not a new idea. Since 1988, Brown and others (#litres_trial_promo) had discussed it with Clinton’s staff. The Democrats (#litres_trial_promo)’ genius was their packaging. Labour, Brown felt, should avoid outrightly campaigning for egalitarianism. Rather than preaching ‘total equality’, the party should pledge ‘equality of opportunity for all’, with the assurance that ‘everyone can fulfil his or her potential’. The new slogans would offer choice and social change. The critical promise would be to reduce unemployment in a ‘partnership economy’ without increasing taxes.

To position Labour as the party of low taxation, Brown developed new catchphrases despite the protests of the left: ‘We do not (#litres_trial_promo) tax for its own sake’; ‘We do not (#litres_trial_promo) spend for its own sake’; and ‘We are not against wealth’. Simultaneously, he began to harp on the government’s tax increases – albeit only 1 per cent since 1979 – which contradicted the Conservative election pledge to lower taxation. The Tories were crudely classified as liars: ‘Either these ministers were incompetent on a scale which beggars belief, or … they set out to deceive the people of Britain on a massive and unprecedented scale.’ The gauntlet was thrown down: ‘There is no one left for this government to betray. They have no credibility. The electorate will never trust them again.’ Endless repetition, Brown hoped, would produce rewards.

A journey to the Far East in 1993 reinforced his conviction to discard other Labour sacred cows. Britain, he realised, could not compete with China on the cost of production, but only on the quality of the products. To beat the Pacific Rim required a skilled British workforce. ‘Capital’, demonised over the previous century by socialists, was a worthless target, he decided. The buzz words of his new Labour creed were ‘human capital’ and ‘knowledge corporations’. ‘Their lessons must be applied here,’ he wrote in countless newspaper articles about innovation in the Far East, developing the idea that ‘the value of labour can be enhanced as the key to economic prosperity’.

To spread the message from his office in London, or over the weekend from his home in Edinburgh, he sought to dictate the news agenda with interviews and press releases, urging Peter Mandelson to hunt for every possible appearance on radio and television to place him in the spotlight. He preached the homily that ‘in the modern economy we will earn by what we learn’, and recommended that ‘the system of personal taxation and benefits should favour those who upgrade their skills’. To improve those (#litres_trial_promo) skills he proposed a University for Industry, bringing together universities, industry and broadcasters and using satellite communications to disseminate and constantly upgrade information.

The powerhouse for this change was to be the Treasury. ‘I see the (#litres_trial_promo) Treasury,’ Brown wrote, ‘as a department of national economic reconstruction to deal with the short-term problem of unemployment and the long-term national economic decline.’ Revealing his own abandonment of socialism as a figleaf to give false comfort to the middle class, he ridiculed the Tories for relying on the free market and individual opportunity rather than government intervention to finance industry. ‘I see the (#litres_trial_promo) public sector as the engine of growth out of recession,’ he wrote, re-emphasising his true beliefs. He spoke of levying a windfall tax on the excess profits of the privatised utilities – copying the Tories’ windfall tax on banks – to finance a ‘New Deal’ on employment and, with another reminiscent whiff of Harold Wilson, he attacked the major banks for increasing their dividends.

This potpourri of socialism and Clintonism irritated John Smith. The leader disliked the modernisers’ policies, and he ostracised Mandelson. Smith was not surprised when John Edmonds, the GMB union leader, called him personally to protest about Brown and Blair’s visit to America. ‘They’re getting too much publicity,’ complained Edmonds. ‘This Project is mischief-making and about personal ambition.’ Although a decade later Edmonds would acknowledge ‘a lack of imagination among the trade unions in the early 1990s’, he was gratified in 1993 by Smith’s rejection of the modernisers’ proposals for the next election campaign. Smith supported large (#litres_trial_promo) government spending, and disliked Brown’s refusal to commit Labour to use the proceeds from council house sales for more building. In meetings of the shadow cabinet, the leader remained silent when Brown’s proposed windfall tax was criticised for being too small. ‘We cannot meet those expectations,’ Brown told Frank Dobson. Smith overruled Brown for being ‘too conservative’.

In contrast, during their arguments, while Murray Elder, Smith’s chief of staff, sat silently in the background, Smith growled, ‘You’re going too fast.’ In private, Brown raged about Smith’s unwillingness to support the modernisers while encouraging the traditional left. While in public Brown praised John Smith’s ‘egalitarianism’ and ‘concern for justice’, emphasising Smith’s concern as a Christian socialist for Labour’s moral purpose, he detested Smith’s blinkeredness. Smith ignored the Tories’ private polls which showed that Labour was still regarded as ‘dishonest and incoherent (#litres_trial_promo)’, and on the side of losers. Relying on the lowest common denominator for electoral appeal, Smith was sure, would prove successful. ‘The Tories are destroying themselves,’ he observed about the government’s bitter battles over Europe. ‘Labour can sleep-walk to victory.’

Brown found that his frustrating battle with John Smith to change Labour was losing him friends and allies. Visitors to his office reported that his Horatio-on-the-bridge act on the shadow spending ministers was causing him anguish. ‘Gordon is torn and depressed about the irreconcilables,’ John Monks observed. Trade union leaders whom Brown regarded as friends – Rodney Bickerstaffe, Bill Morris and John Monks – were surprised during their private meetings that the man casting himself as the future ‘iron chancellor’ forgot to smile while brusquely refusing to advocate higher public spending funded by higher taxes and borrowing. Brown’s image was affecting his credibility. ‘Gordon,’ said one, ‘is really not interested in people; he’s only interested in people as economic agents, the ants in the anthill, and he wants ants to have a nice anthill.’ The alienated Labourites did not disagree with Norman Lamont’s successor as chancellor Kenneth Clarke when he jibed that Brown’s regurgitation of lists, strategies, statistics and predictions of doom were self-defeating. ‘He has as much policy content as the average telephone directory,’ mocked Clarke languidly across the floor of the Commons, ‘and if I may say so – it is a modest claim given the competition it faced – I thought the best parts of the hon. gentleman’s speech came when he was quoting me.’ Brown scowled. The dispenser of ridicule hated receiving similar treatment. Even John Smith’s (#litres_trial_promo) agreement to relaunch Labour on 9 February 1993 as the party of the individual and to abandon any commitment to renationalisation brought only temporary relief.

Brown’s misfortune was that changing Labour’s economic policy to attract the middle classes was more difficult than Tony Blair’s task, as shadow home secretary, of altering the party’s social policies. While Brown chased every news bulletin, Blair, also helped by Mandelson, concentrated on making limited appearances with ‘warm and chatty’ preludes to reflective answers suggesting the moral high ground. Blair’s insistence (#litres_trial_promo) on accepting interviews only on his own terms, and resistance to giving instant reactions to please the media’s agenda, gave his rarer interviews a cachet, and gracefully neutralised his opponents.

Brown had become weary. A visit to Newbury in early 1993 to campaign in the by-election caused by the death of its sitting Tory MP, John Major’s adviser Judith Chaplin, revealed the perils for self-publicists. The previously safe Tory seat was vulnerable. Norman Lamont had committed atrocious gaffes, not least his statement that high unemployment was ‘a price well worth paying’ to reduce inflation. The Tory candidate was an unappealing PR consultant. The seat should have been an easy trophy, but Brown’s performance in front of the television cameras at Vodafone’s headquarters, which were in the constituency, was unproductive. Confidently, he told journalists about the area’s high unemployment. ‘Rubbish,’ exclaimed Chris Gent, Vodafone’s managing director. ‘Our company has grown by 25 per cent in the last year.’ The Liberal Democrats won the by-election.