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

There was a further awkward moment when he arrived at Kim Darroch’s office some months later, at the end of February 2008, for what both of us must have feared could be a tense reunion. I was with Kim and a handful of aides when Gordon strode into the outer office. At first my old friend and more recent foe did not see me at all. After he had greeted everyone else in the room, I finally had to take the initiative. ‘Hello,’ I said. Gordon quickly replied: ‘Oh. Hi, Peter, hi. How are you doing?’ We made our way to Kim’s office, and settled into a pair of plush chairs in the centre of the room. I had expected that we would begin with trade, and we did. That was my job, after all. Our only real conversation since Gordon had moved into Number 10, a telephone call four months earlier, had been about the world trade talks. I was also fairly sure that both of us – by instinct, and from a sense of familiarity and partnership that went too far back to have disappeared entirely – would be unable to keep from talking about politics. Within barely a minute, we were not only discussing the big-picture issues Britain faced, we were talking about Gordon, about his government, and about the nose-dive in public support they were both suffering. It would be wrong to suggest that it was like the old days, as if the rift between us had not happened. But the conversation was easy, calm, and at times extraordinarily forthright – on both sides.

Gordon’s main concern, a theme to which he would return repeatedly in the months ahead, was that he was ‘not getting the communications right’ – not with the media, nor with the British people. My reply was that good communications required not just good, confident people and organisation, but clear, bold policy. ‘I’ve got all the policy, all the ideas,’ Gordon insisted. ‘I just can’t communicate it.’ I told him that was not always my impression. His policies had to be thought through. They had to be ‘prepared, bottomed out, agreed and owned by relevant ministers’. Instead, it seemed to me, he had been seduced by the idea that a constant stream of media announcements could take the place of hard policy. I told him he had to wean himself off these ‘announceables’. Policy was tough going, especially when it involved changing or reforming anything. You had to keep pushing uphill. Then people would start noticing that something serious was happening. That was where ‘communications success’ would come from. I was at pains to reassure him that there was still a real opportunity for him to regain the political initiative. The key, I said, was the economy. ‘You’ve got to present yourself as the guy with the experience, the big brain, to deal with the big problems,’ I told him. ‘That is your USP.’ The point I sought to make, as subtly as I could, was that David Cameron did have natural communications skills. Gordon’s task, one to which he ought to be genuinely well-suited, was to make it clear that his grasp and determination in dealing with the economic crisis stood in contrast to Cameron. He had to be able to portray the Tory leader as ‘the guy in short trousers, who’s good enough perhaps to lead a student protest, but certainly not to lead a country’.

Our talk had been scheduled to last for twenty minutes. By the time Gordon left for the Commission headquarters, behind schedule for his meeting with the Commission’s President, José Manuel Barroso, we had been talking for well over an hour. Gordon seemed more upbeat when we’d finished talking, and more focused on how to get a new hold on government. I felt oddly buoyed too. I realised that despite all that we had gone through, I still cared about him. I wanted him to succeed. And, if I’m honest, I was pleased he was seeking my views and advice on how to help rescue and repair the New Labour project that he and I and Tony had begun. It was also puzzling that he should start opening up to me in the way he had. Given all that had happened between us, he had reason to doubt whether he could trust me. Surely he had people around him in London he could rely on, without needing to talk to me?

Within days of Gordon’s return to London, leaving me in Brussels to wrestle with my trade negotiations, there were signs that our meeting had at least begun to repair our relationship – but also of how difficult it might be to break long habits of misunderstanding and mistrust. A first hint at reconciliation came just forty-eight hours later, when he phoned me from Number 10. It was ostensibly to say that he had enjoyed our talk, but mostly to discuss a speech he was giving a few days later, at Labour’s Spring Conference in Birmingham. I told him he needed to identify his strengths and play to them. People felt threatened by the economic storm clouds. He had had a decade’s experience as Chancellor. He was seen as having a command of economic policy. His task now, and his opportunity as well, was to explain what was really going on, and how he and his government would enable Britain to deal with the storm and to come to terms with the new economic order more widely, and indeed benefit from it. ‘People think GB is brainy, so he should turn it to his advantage,’ I scribbled on my notepad when we had finished speaking. ‘He should identify our national strengths and position, and set out an agenda to maximise these to our lasting gain.’ That, essentially, is what I said to him. It was also what he went on to say in Birmingham – sort of. The speech began well. Then it faded out. It started on the theme of ‘fulfilling our national ambitions’, then meandered, without any real emotional connection, into a patchwork of policy examples and occasionally catchy phrases. It lacked a central, driving political message, a coherent story of the difficulties Britain faced, how Gordon proposed to lead us past them, and why he was best-placed to do so. It would be several weeks before I next talked to Gordon. By that time, there would be a reminder of the old days, and the old mistrust as well.

After our meeting in Brussels, my press spokesman Peter Power, who had learned very adeptly to pick his way on my behalf between the shoals and currents of trade policy and UK domestic politics, was besieged by questions from the media. He fended them off with an admirably straight bat. The Prime Minister and Britain’s European Commissioner, he said, had had a ‘friendly’ discussion – about the world trade talks, about Britain’s place in Europe, and about domestic politics. When asked whether this meant I might now hope to stay on for a second EU term, Peter was understandably keen to find a way to dodge the issue. He opted not to be drawn, rather than reaffirming my Today programme pledge not to seek a further term. His reticence invited speculation that I was fishing for an invitation to stay on. When Gordon was asked to comment a few days later, he replied that I had done a good job in Brussels. His choice of tense unleashed a new spate of headlines. ‘Mandelson’s Hopes of Serving Second EU Term Crushed by Gordon Brown’, blared the Daily Mail . It seemed that old habits – mine, Gordon’s, the media’s – would die hard.

Gordon’s political problems were clearly on a downward spiral. Partly, as he had insisted to me, it was an image problem. Once the ‘iron’ Chancellor, and then briefly a breath of fresh air in Downing Street, he was now seen as a ‘dithering’ Prime Minister in political freefall. Worse, he had become not only a figure of disdain, but of ridicule. This sense was summed up by Vince Cable, then acting leader of the Liberal Democrats, standing up at Prime Minister’s Questions and deadpanning: ‘The House has noticed the Prime Minister’s remarkable transformation in the last few weeks – from Stalin … to Mr Bean.’

There were problems of policy substance, too. By far the most pressing was a legacy of Gordon’s final budget as Chancellor, three months before he had moved in next-door. As part of an eye-catching announcement reducing the standard tax rate to 20p, beginning in April 2008 – which meant now – he had axed the entry-rate 10p bracket. The unintended, and clearly unanticipated, effect was to damage those at the very bottom of the ladder just as the economic crisis was beginning to bite. The immediate result was the worst backbench rebellion Gordon had faced as Prime Minister. That subsided – only just – when he promised a package to compensate those who stood to lose out from the tax changes. This was the last thing we needed in the run-up to local elections across England and Wales on 1 May, and the results were disastrous. In the most high-profile contest, for Mayor of London, even Ken Livingstone could not stave off defeat to the Conservatives’ Boris Johnson. I won’t claim to have shed many tears for Ken. With an ego the size of the London Eye, and what I always felt was a facile populism, he had delighted in stirring up ‘real Labour’ opposition to Tony during our first years in government. Still, I recognised that his defeat was bad news. Even Ken’s image as a maverick, untainted by ordinary party constraints, had not saved him from falling victim to our declining fortunes. Nationally, we were not only outpolled by the Tories – by a margin of 44 per cent to 24 – we finished in third place, behind the Liberal Democrats.