"I keep hearing that I am angry, insecure and self-conscious,” began
Gordon Brown's speech to Labour donors at a dinner on Thursday. “Well, how
would you feel if you had friends like Peter Mandelson?”
It was meant as a joke to lighten the gloomy mood of the assembled
businessmen. The prime minister was referring to leaked e-mails published
last weekend which had been sent by Mandelson before his cabinet return last
year. In them he had laid bare his criticisms of Brown’s character.
The prime minister had arrived at the £500-a-plate event at Stamford Bridge,
home of Chelsea football club, flanked by Harriet Harman, Labour’s deputy
leader, but none of the guests was convinced by this symbolism. For some
ministers Lord Mandelson is not only the “real deputy prime minister”, but
also wields as much power as Brown himself.
The main subjects for small talk as diners tucked into their mozzarella salad
and herb-encrusted chicken breast were the failed Blairite coup of the
previous week, whether Brown would survive until the next general election
and, most importantly, the burgeoning influence of Mandelson.
“Peter was true to his mercurial reputation,” said one guest. “A ripple went
round the room that he had just arrived, but then nobody could be sure where
he was. It was like he was orchestrating the evening from some hidden
off-stage position.”
The dust is beginning to settle on the extraordinary events of last week and
the new Whitehall landscape is starting to emerge. It is clear that
Mandelson bestrides it like a colossus.
The question now dominating the minds of Labour MPs is: will Mandelson use his
new power positively or will his well-documented tragic flaws return to
haunt him and the party? Right now he is feted as the saviour of the Labour
government, but how long before the backlash begins in earnest? IN the House
of Commons on Wednesday it was William Hague, the shadow foreign secretary,
who best expressed the mixture of alarm and bemusement at Brown’s
appointment of “the most powerful unelected deputy since Henry VIII
appointed Cardinal Wolsey”. In typically droll fashion Hague added: “It
would be no surprise to wake up in the morning and find that he had become
an archbishop.”
The business secretary has indeed been remarkably adept at acquiring titles of
historical significance to go alongside his ministerial brief. Last week he
was made first secretary of state, the title held by the energetic Michael
Heseltine in John Major’s administration, and lord president of the council,
the official post of the all-wise Willy Whitelaw in Margaret Thatcher’s day.
Then there is the sprawling new super-department which spans business
regulation, the Post Office, universities and even space travel. It was
created from the merger of his old business department with the short-lived
Department for Innovation, Universities and Skills. Some £7m had been spent
setting up a separate ministry for higher education. Last Friday it was
abolished at the stroke of a pen to the chagrin of many within Whitehall.
Mandelson is supported by six senior ministers of state and four junior
ministers. No other department has such a large team.
He has three separate offices. There is a suite in the Victoria Street HQ of
the business department, believed to be larger even than the fabled “tennis
court-sized” office occupied by Heseltine in the same building in the 1990s.
There is also a room in the House of Lords and last week he acquired an
office in the Cabinet Office, a short corridor away from Brown’s No 10 den.
The near-imperial trappings of power are important outward signs of
Mandelson’s powerful new role. However, the minister, once dubbed the
“prince of darkness”, also uses hidden, informal methods of exerting
influence. The reshuffle has given him “spies” in most important departments
of state. A number of ministers in his business department also have offices
in other ministries: Lord Drayson in defence, Rosie Winterton in the
communities department and Lord Davies of Abersoch in the Foreign Office.
“Under Mandy’s reign, these ministers will all become his informants, ensuring
there is no area of Whitehall beyond his control,” said a Whitehall insider.
Furthermore, Mandelson has been granted an important role overseeing the new
domestic policy council, a ministerial committee overseeing delivery of
public services.
Under a more plodding minister this job would carry little weight, but for
Mandelson the committee is the vehicle by which he can shape the direction
of the big spending departments.
Mandelson has also secured the promotion of his two closest friends in the
cabinet: Shaun Woodward, the Northern Ireland secretary, and Tessa Jowell,
the Olympics minister. In addition to their existing duties, both Woodward
and Jowell have desks in the Cabinet Office. “Peter has put them in there as
Gordon’s babysitters,” said one special adviser. “It is as if Peter does not
trust him to be left on his own.” Other ministers defer to him as Mandelson
asserts his superiority over them with his waspish wit. One aide recalls the
recent humiliation of a junior member of the cabinet: “We were called into
Mandelson’s huge office. Peter said to my minister, ‘You look dreadful,
poppet, take one of these’. Peter produced a bottle of painkillers and gave
[the minister] two pills. He meekly swallowed them with a glass of water
provided by Peter. It was all about asserting psychological control.”
It is Mandelson’s control over the prime minister which is the wellspring of
his power. “Get me Mandelson,” comes the cry from Brown’s den each time a
difficult issue arises.
“Gordon has this psychological inability to make decisions,” said one
frustrated minister. “The more stress Gordon is under the more indecisive he
becomes and the more he needs Peter.”
Friday’s cabinet meeting was a case in point. Brown began the proceedings but
quickly handed over to Mandelson, who had prepared a paper called Building
Britain’s Future, laying out a blueprint for the government’s recovery. He
was listened to in rapt silence.
His confidence is such that on a trip to Berlin last week, Mandelson
effectively rewrote Britain’s policy on the euro, declaring that we were
“obviously” heading for entry into the single currency.
Brown likes to posture as a euro-sceptic and used to send out his attack dogs
to “monster” any rival minister who stepped out of line on the issue.
However, Mandelson’s provocative remarks passed with barely a murmur from No
10. SUCH unaccountable exercising of power has not gone unnoticed by voters.
A YouGov poll for The Sunday Times reveals widespread public disapproval of
the expansion of Mandelson’s Whitehall empire and his emergence as the
effective deputy prime minister.
The poll shows that by more than four to one, people think Mandelson’s
elevation as an unelected member of the government is a bad thing. While 47%
said it was bad, only 11% thought it was good, and among Labour supporters
fewer than 30% approved of Mandelson’s rise.
Unease is bubbling in the Commons, too. MPs of all sides are concerned about
the huge power wielded by Mandelson and a number of his junior ministers and
the fact that he cannot be held to account by the elected House of Commons.
Five of his retinue of 10 ministers are peers.
Margaret Beckett, the former cabinet minister who is now standing for Commons
Speaker, believes this issue needs addressing. She said that if elected to
the post she would introduce reforms to make Lords and ministers more
accountable to the elected MPs. “There is scope for a better working
relationship between the two chambers,” she warned.
Questions remain over Mandelson’s plans to part-privatise Royal Mail.
Ministers have been signalling that the plan is in cold storage and any
attempt to revive it would lead to a revolt from Labour backbenchers. “In
the failed coup, the centre and the left of the party never moved against
the leadership,” said one Downing Street insider. “If Mandy tries to push
his pet project on them, they will come for Gordon.”
Privately, women ministers are concerned about the unfettered power of
Mandelson. “Peter does not have children,” said one senior woman MP. “He
works 24/7. He does not get the family work-life balance agenda. He sees
issues such as parental leave as an attack on business. Instead of what it
is which is a vote winner, especially among women.”
Mandelson may also face a powerful revolt from vice-chancellors who resent the
abolition of the separate universities department.
Sally Hunt, general secretary of the Universities and Colleges Union, said the
“merger seems to signal that further and higher education are no longer
considered important enough to have a department of their own”.
Mandelson will be responsible for setting out the terms of reference for a
review of student top-up fees. There will be fears that those studying
“irrelevant” arts degrees might be forced to pay more than those studying
for vocational qualifications that will help business.
David Willetts, the Tory universities spokesman, said: “It is worrying that
universities are going to be seen as merely the instruments of business.”
Even cabinet members are starting to question Mandelson’s benign empire. “It
is as if we have gone back to the 1980s comfort zone,” mused a minister in
the MPs’ tea room last week. He was referring not just to Mandelson, but
also to the appointment of Glenys Kinnock, the wife of former Labour leader
Lord Kinnock, to the post of Europe minister.
Last week’s leaked e-mails disclosed the serious misgivings that Mandelson had
about Brown as recently as 18 months ago. In an interview yesterday,
Mandelson acknowledged that in the light of such past battles with Brown,
his position at the heart of the cabinet was “almost unimaginable rather
than just simply ironic”.
He claims to have found a new faith in the prime minister’s abilities but
Labour insiders fear the capricious Prince Mandy could easily turn on Brown
again.
Yesterday he unhelpfully reminded people about the precariousness of Brown’s
position, saying that an autumn challenge to the prime minister was almost
inevitable. “There’s a small group who keep coming back. They won’t be
reconciled to the prime minister’s leadership,” he said.
Mandelson has given the prime minister the kiss of life but, any time he
likes, he could also deliver the coup de grâce to his premiership.
Spending cuts row – the truth behind the bluster
FOR a beleaguered government it looked like a political gift, writes David
Smith.
Asked last week about how the Tories could avoid cutting National Health
Service spending, Andrew Lansley, the shadow health secretary, said it would
get extra resources, as would schools and international development. But, he
added: “That does mean for three years after 2011 a 10% reduction in the
departmental expenditure limits for other departments. It is a very tough
requirement.”
Gordon Brown seized on the admission to draw the contrast between Labour and
Tory spending plans. After unleashing a string of figures suggesting a rise
in government expenditure up until 2014, he concluded: “The only party
proposing a cut in public spending is the Conservative party.”
This weekend Labour has put out a dossier with the slogan a year, on average,
since 1999.
Even that does not tell the full story. The government is being forced to
spend more on what Brown used to describe as the “bills for failure” –
rising debt interest and higher social security payments for the unemployed
– so the amount available to government departments for spending on public
services will drop significantly.
Real-terms departmental spending will fall by 2.3% a year from 2011, 7% over
three years, according to the IFS’s calculations. Rarely has spending been
squeezed so sharply. If the health budget is frozen in real terms, the
burden on other departments is even greater: they would be subject to a
three-year cut of 9.6%.
This is where Lansley got his 10% from, although he did not make the
distinction between cash and real-terms cuts. The Tories insisted he was
merely pointing out what would happen under Labour’s own plans if it chose
to protect the NHS from cuts.
It is not quite as cut and dried as that. Treasury officials say that while
the IFS’s analysis is based on their own figures, they do not necessarily
accept its breakdown between rising debt interest and social security
payments and other elements of spending. Darling, in other words, has not
admitted to even a 7% cut, while Lansley has put Tory intentions on record.
“The key is that it isn’t a question of Tory cuts versus Labour spending
growth,” said Gemma Tetlow of the IFS. “Whoever is in power, public services
are going to be cut in the next spending round.”
John Hawksworth, an expert on the public finances with Price Waterhouse
Coopers, said the next government would have to go beyond the plans
currently set out.
“We estimate a more stringent spending option would, without further tax
rises, require cumulative real spending cuts in the three years to 2013-4 of
around 15%, assuming zero real growth in health spending,” he said.
This may be closer to what the Tories do if they take office next year. Aides
to George Osborne, the shadow chancellor, said the party believes spending
next year, 2010-1, is too high and a Tory government would seek to cut it.
So, amid all the smoke and mirrors, there may be a genuine tax-and-spend
battle ahead. Both parties will cut spending, but the Tories will seek
bigger reductions, partly through efficiency savings. Labour might deliver
slightly smaller spending cuts but will, instead, have to put taxes up more.
It is a choice, although not necessarily an appealing one.
Mandys down the ages
Warwick the Kingmaker
The most powerful English noble of the 1450s, Richard Neville was earl of
Warwick and earl of Salisbury. In the Wars of the Roses he helped Edward IV
become king, only later to switch sides (rather like Mandelson) and help
restore Henry VI to the throne, hence his nickname. Killed in battle
Cardinal Wolsey
Having served Henry VII, Thomas Wolsey grew in prominence under his successor
Henry VIII, becoming Archbishop of York, a cardinal and chancellor –
dominating politics of the royal court while Henry amused himself. He owned
Hampton Court. Ended badly when he failed to get Henry a divorce from
Catherine of Aragon. Died on his way to the Tower
Robert Cecil
Key adviser to James I. A spymaster said to have a network of agents (think
Derek Draper), he was implicated in numerous machinations; some even suspect
he was behind Guy Fawkes and the gunpowder plot. Again, it ended badly: he
died heavily in debt “David Cameron – Mr 10%”, outlining what it says would
be a series of broken promises by the Tory leader if the cuts described by
Lansley are imposed. The Tories, in turn, have published a rival document,
detailing “Gordon Brown’s budget dishonesty”. Who is right and is this a
foretaste of a year-long election battle?
The answer lies in the details of Alistair Darling’s April budget, as
deconstructed by the independent Institute for Fiscal Studies (IFS). It
disclosed that, from 2011, the public spending brakes would be applied
dramatically. After allowing for inflation, spending would drop by 0.1% a year.
Much of the burden of this drop would fall on so-called capital spending – new
schools, hospitals and roads – which would halve over three years. But
current spending on services would also be squeezed, rising by 0.7% a year
in real terms, compared with 3.9%
