Was there a deal between Tony Blair and his Chancellor of the Exchequer Gordon Brown that brought Blair to the top post? If so, what was the pay-off for Brown?
THE singular failure of the official Opposition Tory party to mount any challenge to the ruling Labour Party since 1997 within or outside of Parliament has led the British media to search for opposition within the ranks of the Labour top brass. Nowhere has the speculation on rifts been stronger and more persistent than over the rivalry between Premier Tony Blair and his Chancellor of the Exchequer, Gordon Brown. Blair himself has likened their relationship to a marriage and occasionally British newspapers run stories of yet another stormy disagreement.
Ideologically, there seems little to choose between them: both are from the traditional Right of the Labour Party and both are architects and archetypes of "New Labour" in the sense that they regard the Thatcherite period of tight fiscal control of the economy and the privatisation of public services as being not only irreversible, but also actually beneficial. Brown is naturally the more cautious of the two and perhaps with a weather-eye on the party's rank-and-file supporters and on his own future, has not been as publicly enthusiastic about the New Labour "project" as Blair, who has revelled in abandoning Labour's long cherished beliefs.
When the much-respected Labour leader John Smith died in 1994, Blair and Brown were the front-runners for the crown, with insiders feeling that Brown, as the parliamentary and platform performer, had an edge over Blair. However, Blair had the advantage of a "mediagenic" persona, and in this age of "image" and "perception", this was felt to be all-important. Blair has acknowledged this many times, not least cheekily telling the Labour Party at a conference prior to the 1997 election victory, that the party and its members only put up with him because they felt (and feared) that they could only win with him as leader. Brown appears to have believed the same, and to the surprise and dismay of his supporters stood aside in favour of Blair and did not contest the leadership that many thought he could win.
The deal was made, allegedly, over lunch, and the vital question that has teased commentators ever since is what the pay-off for Brown was. That he would have complete and unquestioned control over the Treasury was and has become subsequently very clear as a phalanx of Ministers in the spending departments have discovered much to their annoyance. However, it seems unlikely that the ambitious Brown was bought off without anything less than a promise that in course of time Blair would step aside and pave the way for Gordon Brown to step into the top job.
The latest signs of differences of opinion between the two have centred on issues that will determine whether Labour is seen as successful or not. One is the handling of the tricky issue of the European single currency (the Euro) due to come into circulation in 12 countries in January 2002, and the other is the funding of the National Health Service (NHS).
THE NHS is a touchstone of faith for many Labour members who still believe it to be the party's greatest achievement. Introduced by one of Labour's all-time heroes, Aneurin Bevan, at the end of the Second World War, the NHS is an essentially redistributive mechanism that is publicly funded through taxation and "free at the point of delivery". Labour has always rallied its own faithful with the threat that the Tories will abandon the NHS. Indeed, on the eve of his first victory in 1997, Blair declared that the country had "24 hours to save the NHS".
However, Blair and the fiscally cautious Brown have hitherto been convinced that the public will not vote for a party that raises taxes. This presents them with a huge dilemma as the costs of the NHS have been rising steadily. Opinion polls suggest that the Labour government's inability and perceived unwillingness to halt the slide in standards of public services have been a major reason for the disillusionment among Labour's core voters. A creeping privatisation of the NHS has been going on for some time. Health Secretary Alan Milburn has announced that private hospitals will be paid by the state to treat NHS patients - in a desperate attempt to reduce waiting lists. There is also an ambitious scheme on to recruit private finance to fund hospital buildings which will then be leased back to the health service.
However, this seemingly unstoppable drift came to a shuddering halt when Chancellor Brown rose to make his autumn budget statement in the House of Commons. Brown announced a massive investment in health, reiterating the distinctly "Old" Labour belief that the NHS should be directly funded by taxation. How much of this Blair took in is a matter of speculation. His distraction from domestic affairs while he plays a roving diplomatic role in keeping together the pro-U.S. coalition over Afghanistan has led to much criticism of negligence of domestic affairs. That Blair was not fully up-to-speed on the debate became clear in his subsequent parliamentary exchange with the Leader of the Liberal-Democrats, Charles Kennedy. Kennedy shrewdly reminded Blair of the Premier's previous promise to bring the United Kingdom's spending on health up to the level of its European partners and asked if is this was still the case. Blair's answer in the affirmative coupled with Brown's commitment to public funding through taxes means that there will have to be a large rise in taxes, as much as 12 pence in the pound according to some pundits.
By the same weekend, Blair was backpedalling furiously, saying that the commitment to match European levels was only in "broad terms". But the die had been cast. The Tories can now remount their old tax cutting horse, Blair has been upstaged and embarrassed, and Brown is the hero of the public sector unions and "Old Labour" who are delighted with such a clear commitment to the public good being paid for by the public purse.
Equally damaging are their differences over single currency. With Western Europe both excited and apprehensive about the introduction of the Euro in January, this truly historic event has been far from the headlines in the U.K. In his Labour Party conference speech shortly after the September 11 attacks, Blair made a wide-ranging appeal for stability through the strengthening of international cooperation. Significantly and controversially, he included membership of single currency as one such stabilising factor. However, the government's official position is encapsulated in Chancellor Brown's "five tests" for U.K. membership. In effect these are no more than general guidelines that say that it must be in the U.K.'s provable interest to join, which in other words means when Gordon Brown says it is appropriate to join.
Blair seems to be more in favour of joining. He will certainly be unable to fulfil his desire for Britain to "be at the heart of Europe" while it remains outside single currency. Whether the Euro will succeed or not is an open question. At the moment Brown can play it both ways; if it does not work, it will have been prudent to stay out; if it does work, it will still have been prudent to have allowed it to prove itself and he can then pragmatically advise the U.K. to join.
Brown giving Blair the go-ahead to take the U.K. into the Euro regime may be the final price Blair needs to pay for the fulfilment of the original alleged pact that could pave Brown's way to power.
Michael Hindley was a Labour Party member of the European Parliament from 1984 to 1999.