Peter Mandelson - The Third Man - Life at the Heart of New Labour

While the invented version of this story didn’t help, as I began spending more and more time in Hartlepool, I found it to be the exact opposite of its parochial media stereotype. The scores of people I met during my bid to become the prospective parliamentary candidate in 1989, and the many thousands more I would meet as their MP, were almost without exception outward-looking and open-minded. And much too canny to be taken in by the guacamole story. The choice of candidate was to be made in mid-December, and I still have the outline speech that Gordon hammered out for me on his office typewriter as the basis of my presentation to the selection meeting. The theme was hardly revolutionary, but it was modernising in the sense that it championed social justice without linking it to higher taxes, ‘matching unused resources with unmet needs’. I think that what most won the day was my genuine enthusiasm both for serving the future interests of Labour nationally, and Tony-style, for engaging with and listening to my constituents.

During the run-up to the vote I had said that the first thing I would do if I were selected was to buy a home in Hartlepool, and I soon found a comfortable four-bedroom house on Hutton Avenue, near the civic centre in the heart of the town. It cost a little under £90,000. My mother helped with the deposit, and I took out a mortgage for much of the balance. The only sadness was that, to make ends meet, I would have to sell my wonderful little cottage in Foy.

In London, my living arrangements were also in flux. I was lodging in the Islington home of one of my closest political friends and her family. Sue Nye had worked as a ‘garden girl’, one of the Downing Street secretaries, for Jim Callaghan, moving with him into opposition, and had gone on to play a steadily more senior role with Michael Foot and now Neil. Her husband, the Goldman Sachs chief economist Gavyn Davies, was high-powered and wealthy. He was also informed and astute about politics, warm and generous and utterly without pretension. They offered me a room in their home until I could find a more permanent base, which I did when I bought a small flat in neighbouring Wilmington Square the following year. But my focus had begun to shift away from the capital, towards Hartlepool and the north-east.

On the day of my selection, Tony was in Sedgefield giving a speech. It would mark the beginning of his emergence as a politician whose weight and prominence in the party were equal to, and eventually greater than, Gordon’s. None of us realised this at the time. Weeks earlier, Gordon had finished first in the elections for the shadow cabinet, and was rewarded with a departmental role of his own, as Trade and Industry spokesman. The increasingly settled view was that he was future leadership material. Tony’s shadow cabinet brief had changed as well: he was now Employment spokesman. He spotted early on that the party’s support for the European ‘social chapter’ meant that a Labour government would have to abandon its backing for arrangements under which employees could be required to be members of a designated trade union. He also had the modernising instinct to make a virtue out of necessity. As I was addressing the selection meeting, Tony was telling his constituency party that Labour would no longer back the so-called ‘closed shop’. He spoke, almost literally, to three people and a dog. But by pre-arrangement with Colin, I made sure the media were primed to give Labour’s most serious policy shift since Gerald’s move on defence the prominence it deserved. The TV bulletins and newspaper headlines unsettled the unions and the Labour left, but gave encouragement to the growing band of ‘modernisers’ in the party. They also raised Tony’s profile in much the same way Gordon’s showdown with Nigel Lawson had done for his a year earlier. Before long he too would find himself being talked about as a future leader.

I was hugely excited by my selection as a candidate, and even more so at the prospect, in a solid Labour seat, of becoming an MP. But while I knew I would now be spending at least a couple of days each week in Hartlepool, I assumed that I would continue my work at Walworth Road. Within days, however, I realised that Neil, and particularly Charles, wanted me out. Neil was relaxed when I told him I intended to apply for the seat, because he assumed I wouldn’t get it. ‘I should not be hopeful, kid,’ he told me. ‘I wish you well, because I want you to have what you’ve set your heart on. But Hartlepool won’t have you. I know what sort of party it is.’ At first, neither he nor Charles seemed bothered by my increasingly frequent trips to the north-east to drum up support for my candidacy. I was still in London for any major media or campaign event, and in touch with journalists by phone when I was away, and Colin was doing an excellent job anchoring the operation during my absences. But when I won the selection, Neil was shocked, and Charles’s attitude hardened. ‘Betrayal’ was the first word to cross Neil’s lips, I was later told. ‘I should have known Peter would have conducted this like a military operation, every door knocked on, no stone left unturned, the charm turned on,’ he apparently said when he had calmed down a bit. ‘He deserves it, but it’s left us in the shit.’ On the Monday after my selection, Charles called me into the Shadow Cabinet Room in the opposition leader’s suite in the Commons. ‘I have never known Neil so angry over anything,’ he said. ‘You cannot stay. You’ll have to leave, and we’ll find someone to replace you.’ He added that if it were up to him, I would be clearing out my desk that day.

For four years, I had worked side by side with Charles. We could not have been closer politically. I had always viewed the challenge of overhauling Labour’s image as inseparable from promoting Neil as leader, often at the cost of friction with the NEC. I recognised that in fighting for my own seat, I was going to be less directly involved in the next election campaign, but I knew I could still help, and had assumed that, in some capacity, I would do so. To be told to clear my desk, without a successor or any continuity in place, struck me as rash and irresponsible. When I told Julie about my talk with Charles, she was alarmed at the idea of my packing up and going. So were Sue and others in the office. Philip was even more upset.

When they made their views known to Neil, he decided I should stay on until party conference the following autumn. Charles acquiesced. He recognised the advantages of my staying put for now, but was resolutely opposed to my having any role in the general election. He vetoed fresh appeals from Philip as the campaign drew nearer. I am sure that he understood my desire to stand as an MP. It was a desire he shared, and would later fulfil, and I suspect this may explain why he reacted so strongly to my doing so now. He also saw my decision as an act of flight, undermining Neil’s last realistic shot at power.

For a while, it looked very realistic indeed. Mrs Thatcher was being battered by protests against her Community Charge, or ‘poll tax’. She was in lethal cabinet combat with her Chancellor Nigel Lawson over whether Britain should join the Exchange Rate Mechanism, a system whereby currencies’ exchange rates were fixed within a series of narrow bands, linked to the German mark, intended to stabilise currency swings in preparation for a single European currency. Lawson wanted Britain to join. Mrs Thatcher did not, and had put him in his place by bringing in his rival Alan Walters as her economic adviser, a move that eventually provoked his resignation. In March 1990 I helped mount a by-election campaign against the Tories in Mid-Staffordshire, which we won with a 21 per cent swing, essentially by making it a referendum on the poll tax. In May, we made further gains in the local elections. By the end of the party conference season in the autumn – and the end of my five years at Labour headquarters – two separate polls showed us with a double-digit lead over the Tories.