Before dawn on Friday, Gordon Brown summoned a small group of confidants to
the cabinet room at 10 Downing Street to thrash out the final details of his
reshuffle plan.
Around the long mahogany table were Sue Nye, his trusted director of
government relations; Nick Brown, his old ally and soon to be chief whip;
Joe Irvine, his political secretary; and a handful of bureaucrats whose job
it is to ensure that the game of ministerial musical chairs is played within
the rules.
While the cabinet had no inkling of Peter Mandelson’s imminent return, all
those present for the breakfast meeting had been in the loop for some time.
Unlike so many other recent botched announcements, “Project Peter” was hatched
in total secrecy. The surprise element was carefully guarded: earlier in the
week journalists had been briefed to expect a “limited reshuffle”.
Ed Balls, Brown’s closest ally, Ed Miliband, now secretary of state for the
newly created Department for Energy and Climate Change, and Douglas
Alexander, the international development secretary, were the only three
ministers sufficiently trusted to know of the negotiations.
When the news finally broke that the man his enemies knew as the Prince of
Darkness was to be brought back to the cabinet for the third time, there was
disbelief.
Michael Meacher, the former environment minister, reflected the mood of many
when he said: “Mandelson back in the cabinet must surely be the most bizarre
political appointment since Caligula made his horse consul.”
Yet the return of Mandelson, previously the European Union’s trade
commissioner in Brussels, as secretary of state for business, enterprise and
regulatory reform is merely the most eye-catching of a series of “back to
the future” government changes. Taken together they form an attempt to
reconstitute the winning team that swept Labour to power in 1997.
Margaret Beckett, a former Labour deputy leader and veteran of four cabinet
posts, has returned to the government at the age of 65 as housing minister.
Nick Brown, Tony Blair’s first government chief whip, has been given back
his old job. In the background Alastair Campbell, Blair’s notorious spin
doctor, is advising Brown on strategy and fundraising for the cash-strapped
party.
Unsurprisingly, at a press conference on Friday, Brown did not present his
changes as the reunion of some old pop band hoping to emulate past hits.
Instead the reshuffle was touted as a calculated response to the global
financial crisis.
The prime minister insisted that Mandelson’s surprise summons had been in the
“national interest”, adding: “Serious people are required for serious
times.” Mandelson himself spoke of the need for “all hands on deck”.
Some argue that Brown’s reshuffle was less a display of strength and more a
sign of his growing impotence as a leader. “It is a sign of weakness rather
than a sign of strength to appoint him [Mandelson],” said Alan Simpson,
Labour MP for Nottingham South. “He is just a very divisive character. I
predict that he will be up to his old tricks by the end of the year.”
The doubts go right to the top of the party hierarchy. One cabinet minister
described the appointment as “mad medicine”. Ann Black, of Labour’s ruling
national executive committee, said: “The only person who will be ecstatic is
Rory Bremner.”
What really prompted the prime minister to risk his fate on a divisive figure
who has already resigned twice from the cabinet in disgrace? And what are
the chances of success for this extraordinary gamble? REWIND 10 days to the
Labour conference and the headlines were dominated by Brown’s solid speech
and the bizarre 3am resignation of Ruth Kelly, the transport secretary.
However, in the bar of Manchester’s Radisson hotel where cabinet ministers
gathered in dark corners over glasses of sauvignon blanc and Peruvian lager,
two subjects dominated the conversations.
The first was the failure of Brown to appoint a strong figure who could
challenge him in the sphere of economic policy. Troubled times demanded a
strong chancellor and the current incumbent, Alistair Darling, lacked the
necessary cojones, went the argument.
The second complaint was about the “dysfunctionality” of No 10. “There seem to
be a lot of people running around Downing Street looking busy, but no
decisions are being made,” muttered one senior member of the cabinet. “I
have no idea who does what. Gordon needs to have some substantial figures in
that bunker of his who can stand up to him.” Another cabinet minister said:
“Any reshuffle needs to be more than skin deep. We are woefully exposed in
the area of the economy.”
In the days that followed, the cabinet grumbles of discontent coalesced into
something close to an ultimatum. A list of ministers including Jack Straw,
the justice secretary, James Purnell, the work and pensions secretary,
Jacqui Smith, the home secretary, Tessa Jowell, the Olympics minister, and
Andy Burnham, the culture secretary, all expressed the view that urgent
changes needed to be made.
Geoff Hoon, who last week moved from chief whip to transport, and John Hutton,
who stepped aside for Mandelson at business to become defence secretary,
were also concerned about Labour’s failure to “communicate its message”.
The “grey beards” of the group, Straw and Hoon, are known to have told the
prime minister directly of his ministers’ concerns.
For Brown, sacking Darling, one of his oldest political allies, was
inconceivable. In the summer he had given a private assurance to the
chancellor that he would not be moved. Instead, he began considering the
options for the post of business secretary.
If Mandelson would take the job, Brown reasoned, no one could then accuse him
any longer of filling the cabinet with yes-men and inexperienced youngsters.
If anything, the restructuring of Downing Street represented a more serious
challenge. The plan that emerged on Friday was nothing less than a complete
overhaul of the No 10 machine.
Stephen Carter, who had been appointed by Brown in January as his £160,000
“senior political adviser”, was sidelined with the sop of a peerage and the
new title of minister for communications. It was an embarrassing admission
that the man whom Brown had personally plucked from Brunswick, the City PR
firm, only nine months ago to bring focus to Brown’s operation had failed in
his task.
More upsetting for Brown would have been the decision to move on two trusted
allies who had been with him all the way in the “long march” to No 10.
Damian McBride, his press spokesman, was stripped of his responsibility of
briefing the media and given a new undefined “strategic” role, while Ian
Austin, the Dudley North MP, was ousted from the key role of parliamentary
private secretary.
The colourful McBride had enjoyed briefing journalists over an afternoon pint
of lager at Westminster’s Crown and Two Chairmen pub, while Austin’s modus
operandi was to corner critics of the prime minister in the members’ tea
room and tell them in his blunt Black Country accent why they were wrong.
Friends of McBride, who this weekend was in Paris and uncontactable, insist
that the move was his own decision and Austin said he was happy with his new
role. That may be true, but ultimately their departure was part of the price
that Brown had to pay for his own survival.
The big winner in the shake-up is Liam Byrne, who moves from immigration
minister to take up a new post as Cabinet Office minister. Crucially he will
have an office in No 10, probably inheriting Carter’s room next to Brown’s
ground-floor “den”.
Byrne, a Blairite former management consultant who has been an MP for only
four years, will have the task of restoring function to the prime minister’s
dysfunctional office.
Although it was portrayed as an outward-looking reshuffle, focused on events
in the wider world, other moves show quite how far it was aimed at the
Labour party and its woes.
Caroline Flint, the glamorous housing minister who had been expecting cabinet
promotion, has been sidelined as Europe minister. Labour whips said she had
been punished because of her close association with the rebel MPs who
launched a failed coup against Brown last month.
Jon Trickett, an outspoken leftwinger who has called for a windfall tax on
energy company profits, has been made Brown’s parliamentary private
secretary in an attempt to reach out to disgruntled MPs who think the
government has drifted too far to the right.
The humiliation of Des Browne, who resigned as defence and Scottish secretary
after being offered a demotion, could come back to haunt the prime minister.
While Browne’s exhaustion with the dual role has been an open secret at
Westminster for months, it was the Scottish element of the job that he hoped
to shed, not the defence brief. He is said to be extremely disappointed at
being forced to resign before he had “seen out” the military operation in
Iraq.
Apart from Mandelson, the most controversial appointment is that of Nick Brown
as chief whip. Brown was demoted and then sacked by Blair. In recent weeks
he has been running a “shadow” whipping operation to firm up support for his
namesake. One MP said of the new chief whip, who is responsible for party
discipline: “Nick is like Marmite. You either love him or you hate him.” The
same could emphatically be said of Mandelson, although with perhaps fewer
people on the admiring side.
To understand exactly why his return to the cabinet is so shocking, one has to
peer into Labour’s recent history. In the 1980s, when Brown and Blair were
new MPs and Mandelson was Labour’s precocious director of communications,
the trio were known as the “three musketeers”. As they discussed the policy
ideas and communications ideas that would eventually become known as “new
Labour”, it seemed then that nothing would separate them.
It was in 1994 that the long cold war began. When John Smith, the Labour
leader, died, Brown assumed that Mandelson would back him for the
leadership. He was wrong. In a now notorious fax, Mandelson detailed why he
would instead support the less experienced but more telegenic – and English
– Blair. The memo concluded waspishly by urging Brown to “withdraw with
enhanced position, strength and respect”.
The hatred was of an intensity unusual among two men. “I love you but I can
destroy you,” Mandelson said to Brown in a telephone call in 1994.
Things got even worse in 1998 when Mandelson was forced to resign from the
cabinet for the first time over his secret £373,000 Notting Hill home loan.
Brown’s aides were blamed for leaking the explosive revelation to the press.
When Mandelson resigned for the second time, over allegations relating to a
passport application for an Indian businessman who had given £1m to the
Millennium dome, Brown’s aides were not directly involved. However, his
supporters saw the departure as a significant victory in their battle to
weaken Blair and force him from office.
Like any separated couple attempting a reconciliation, the first steps between
Brown and Mandelson were halting and awkward. They began the flirtation that
was to culminate in last week’s reshuffle at 175 Rue de la Loi, Brussels,
which houses the headquarters of the European commission.
In February Brown was in the Belgian capital for a series of meetings with
officials. According to friends, amid the polite discussions of arcane
detail, Mandelson put across a clear message: “I am ready to help.”
Over the coming months, as Labour collapsed in the polls, contact between
Brown and Mandelson grew. Insiders say that after initial conversations
about trade, they soon found common ground and it was almost as if they
picked up where they had left off before the big rift. Each resumed their
old roles with Mandelson, the master strategist, helping to formulate the
autumn conference slogan of “fairness”.
The two men spoke almost daily, often for up to an hour at a time, during
August with Mandelson sunning himself in Sorrento while Brown was ensconced
in rain-swept Suf-folk, writing his all-important conference speech.
On more than one occasion Brown took the risk of inviting his former foe to
Downing Street for a private meeting – a move that would have triggered
intense speculation had it been exposed. Mandelson was smuggled in by a back
door. So intimate had their relationship become by then that the two men
even chatted privately about reshuffle tactics.
However, according to friends of Mandelson, when the call came from Downing
Street on Thursday offering him a peerage and with it a longed-for return to
frontline Westminster politics, it was a complete shock.
“He called me and said he had just been offered this job, should he take it?”
said one long-standing ally.
Friends suggested last night that Mandelson was initially wary of putting his
life once more under the spotlight back in London. He had enjoyed being away
from the attentions of the British press in Brussels.
“This was not a course he expected his life to take,” said a friend. “He
absolutely loved being commissioner. It was obviously a dilemma. But if the
prime minister thinks you can be of help, you have to have a very good
reason to say no.” Will Brown’s gamble work? Naturally Mandelson’s friends
believe that his appointment is a masterstroke.
Ben Wegg-Prosser, his former aide, said: “Peter Mandelson is one of the few
class acts in British politics. His loyalty to the Labour party is without
question and his leadership qualities have never been in doubt.”
The mainly Blairite band of MPs, who only last month were calling for a
leadership election to oust the prime minister, are in a state of awestruck
silence. “His presence in the cabinet will take the wind out of the junior
plotters,” said one cabinet minister. “You can’t have a Blairite plot
without Peter Mandelson.”
One of the rebel backbenchers, who had written to the Labour party calling for
leadership nomination papers to be sent out, conceded: “The revolution has
now been postponed. I admit we did not spot the severity of the financial
crisis and it would now seem silly of us to dwell on internal Labour
politics during a period of national emergency. Mandelson’s appointment has
wrong-footed us all. It is a bold stroke from a man we thought suffered from
crab-like caution.”
Mandelson, the arch-Labour moderniser, was no friend of the trade unions when
he was last in the cabinet. But the “brothers” seemed relaxed about his
appointment. Hutton, his predecessor, was regarded as being even more
right-wing.
Paul Kenny, general secretary of the GMB, described Mandelson as
“professional, businesslike and sharp”, adding: “In Europe he was not always
on the side of big business.” Another union leader said: “Attila the Hun
would be better than John Hutton.”
Predictably the Labour left has heaped derision on the decision to bring back
its chief tormentor. John McDonnell, the leftwing Labour MP who stood
unsuccessfully for the leadership last year, said: “This is an extraordinary
step backwards into the worst elements of the Blair era, to reinstate
possibly the most divisive figure in Labour’s recent history.”
The effect on the rising members of the cabinet remains to be seen. Balls
telephoned Mandelson to tell him that he supported his appointment, after
reports yesterday that he had tried to block it. He admitted in an
interview, however, that “the appointment is a risk and we have not always
seen eye to eye”.
Any divisions will be exploited by the Conservatives. In public they are
revelling in the return of “Lord Sleaze” to the cabinet.
William Hague, the shadow foreign secretary, said: “In bringing back Peter
Mandelson - the man who created Labour spin - [Brown] has broken his promise
to govern in an honest and open way.”
However, privately David Cameron, the Tory leader, and George Osborne, his
shadow chancellor, will be unnerved by the comeback of such a master
tactician.
“Dave and George are keen students of the 1990s new Labour playbook on how to
win power,” said a Tory aide.
“They regard Mandelson and Campbell and Blair in the early days with a certain
amount of reverence.”
One cabinet minister said Mandelson’s compelling political presence would
indeed distract from the impact made by the young Tories. “Peter sucks the
oxygen from the court of David Cameron,” said the minister. “Having the
focus on him for whatever reason and the fascination of the media with him
is very good.”
How Mandelson’s return plays out ultimately depends on two things: the opinion
polls and Mandelson himself.
Labour’s Manchester conference helped to give Brown a modest “bounce”, causing
the previously yawning Tory lead to narrow. An ICM poll yesterday showed
Labour on 30%, trailing the Tories on 42%, but well up on the disastrous
showings of the summer.
If the long-term position continues to narrow, if Labour appears to have
momentum, then Brown’s position as leader will remain secure. However, if
Labour falls back then it will not be long - Mandelson or no Mandelson -
before the malcontents resume their plotting.
Mandelson must also resist the temptation to go back to his old habits of
anonymous briefings and back-stabbing political rivals. There are many
Labour figures still in government who bear the scars of run-ins with the
“sultan of spin”.
Already there have been suggestions that Mandelson’s rapprochement with Brown
might not be entirely sealed. A senior Tory has claimed that in the past few
weeks he had a conversation with Mandelson in which he was highly critical
of the prime minister.
“He poured out pure poison about Brown. It was not like a passing thing,” said
the Tory. “He had really thought it through.”
In particular, Mandelson had suggested that Brown was vulnerable to the charge
that he presided over a culture of spiralling personal, corporate and
government debt - which was one of the themes of the Tory conference in
Birming-ham last week.
Publicly, Mandelson claims to have changed his ways. Asked by a journalist
yesterday for a background briefing on his return to power, he replied: “I
have news for you. There are no off-the-record briefings.”
As he arrived on Friday at the Victoria Street HQ of the business department,
he told waiting officials that he was hoping it would be “third time lucky”.
Brown will be praying that it is.
Hit parade: who is up and down in the No 10 charts
MARGARET BECKETT
Old job Backbencher
New job Housing minister An extraordinary survivor, her media
firefighting skills will be crucial in her new role as the housing market
seizes up
LIAM BYRNE
Old job Immigration and Treasury minister
New job Cabinet Office minister Former management consultant seen as
highly efficient administrator. Must turn dysfunctional No 10 into fighting
machine
NICK BROWN
Old job Deputy chief whip
New job Chief whip Expected to take a fierce approach to MPs’
discipline. Has been chief whip before - he lost the job when Mandelson
resigned
TONY MCNULTY
Old job Home Office minister
New job Pensions minister Reputation as a political bruiser. Talent for
defending the indefensible at Home Office has impressed Labour’s high
command
ED MILIBAND
Old job Cabinet Office minister
New job Energy and climate change secretary Much more popular with
Labour MPs than his foreign secretary sibling. Newly created department will
give him chance to shine
DES BROWNE
Old job Defence and Scotland secretary
New job Backbencher Blundered over capture of British sailors by Iran,
and found himself the victim of a whispering campaign at Westminster
RUTH KELLY
Old job Transport secretary
New job Backbencher Rising star under Blair, she was the youngest ever
female cabinet minister. Was known to be frustrated by Brown’s leadership
CAROLINE FLINT
Old job Housing minister
New job Europe minister Rapid rise and good looks incited some
jealousy. Expected a cabinet job and won’t like being out of the limelight
in Europe
STEPHEN CARTER
Old job Strategy chief
New job Communications minister Clashed with Brown’s ‘long marchers’
and became locked in a bitter power struggle. Move admits he failed to
deliver the goods
DAMIAN MCBRIDE
Old job Chief spin doctor
New job Strategic Cabinet Office role Ruthless tactics alienated some
colleagues, who blamed him for briefing against them. Paid price for
‘becoming the story’
Peter Mandelson, the man for a political dust-up - and a resignation or
two
‘Of course I still love you Gordon . . . I love you, I can destroy you’
- Peter Mandelson to Gordon Brown following their rift in 1994
‘Peter asked me for 10p to phone a friend the other day. I said, “Here take
20p and ring them all”’ - Brown to a party meeting in 1996
‘Peter said he had no desire to destroy Gordon but he had no doubt Gordon
was determined to destroy him’ - Alastair Campbell, Tony Blair’s
spin chief, on the feud, as related in his diaries
‘You know what his name is? He’s called Peter. Do you think you will get on
the executive, Peter?’ - John Prescott addressing a crab in a
glass jar in 1997, referring to Mandelson’s efforts to join the Labour
‘Gordon and Peter really hate each other’ - Campbell’s
response, as told to his diary, to Blair’s request for a line of ‘truth’ for
a 1999 conference speech
‘Brown’s economic record is not all it’s cracked up to be’
- Mandelson in 2006
‘I don’t know whether this is going to come as a disappointment to him, but
he can’t actually fire me’ - Mandelson last year on being
asked whether he feared the sack from Brown
Peter Mandelson remarked to officials at his new department on Friday that he
hoped it would be ‘third time lucky’ for him in the cabinet. The previous
two times ended in ignominy
RESIGNATION No 1 In December 1998 it emerged that Mandelson, then
secretary of state at the Department for Trade and Industry, had accepted a
£373,000 loan from Geoffrey Robinson MP. At that time, the DTI was examining
Robinson’s business interests. Initially, Mandelson denied any conflict of
interests and maintained he had ‘insulated’ himself from the inquiry into
Robinson’s affairs. Two days later he resigned, writing in a letter to Tony
Blair that he should not have taken the loan. Robinson also quit.
RESIGNATION No 2 After 10 months on the back benches, Mandelson
returned to the cabinet as Northern Ireland secretary. In January 2001, it
was claimed that Mandelson phoned Home Office minister Mike O’Brien on
behalf of Srichand Hinduja, an Indian businessman who had been seeking
British citizenship. Hinduja received his passport in the same year as it
was disclosed that his family had donated £1m to the Millennium Dome.
Mandelson had been the minister in charge of the dome at that time.
Mandelson resigned again, but was later cleared of any wrongdoing
