Broken Vows (29 page)

‘Right. Thank you,’ said Blair, wrapping up the meeting. The authority of his office had suffocated any questions about possible failure. The Americans would be told that Britain would join the invasion. All those in the room were sworn to secrecy. The Cabinet would not be told, as too many ministers were untrustworthy. Blair would consider how to win the public’s support over the summer. His emphasis on concealment prevented Whitehall from mounting the traditional Red versus Blue military exercise to scrutinise the risk.

Boyce departed the meeting with neither additional funds nor Blair’s
decision about the packages. Richard Wilson departed feeling ‘very startled’ about the prime minister’s secret progress towards war. ‘I was taken aback,’ he would say. ‘There was a gleam in his eye. I was worried that he was getting into a position which was dangerous. And I told him.’ Blair gave Wilson one of his wry grimaces. The Cabinet secretary clearly did not grasp that the decision had been taken.

Admiral Alan West, the commander-in-chief of the fleet, did understand. He immediately ordered the dispatch of mine warfare ships to the Gulf and signalled that the fleet and marines should be prepared for war by the end of the year.

Meyer called Manning to ask why Blair was giving Bush unconditional guarantees. ‘We tried to stop him, but he refused,’ Manning replied.

On 25 July, Blair appeared at his monthly press conference. Asked about Iraq, he answered, ‘I think we are all getting a bit ahead of ourselves on the issue of Iraq. As I have said before, action is not imminent, we are not at the point of decision yet.’

Towards the end of 2001, David Blunkett was told that over 500,000 migrants would have arrived in Britain during that year. ‘We’re going to be tougher,’ he told his officials, bearing in mind the government’s original estimate of 100,000. After twelve weeks of focusing totally on security in the wake of the Islamic attack on America, the Home Office resumed normal business.

The media pressure started again. Blunkett responded by publicly warning immigrants to ‘become more integrated by being more British’. The headlines dismayed Blair. He was not disturbed by warnings about the effect on housing, schools and the NHS of an additional half a million people. The actual numbers never concerned him. The majority of immigrants, he was told, would arrive ‘legitimately’ as members of a British family. His only interest was bogus asylum-seekers, and he chivvied Blunkett to enforce deportation orders. ‘We need to build fifteen detention centres,’ Blunkett replied, who expected the funding would be personally negotiated with Andrew Smith, the chief secretary at the Treasury.

On the day, he was met instead by Gordon Brown and Ed Balls. Blunkett began describing the problems caused by the uncontrolled arrival of asylum-seekers. ‘We’ll only be approving the money for three centres,’ the chancellor said brusquely. The undertone was his personal support for large-scale immigration.

Unexpectedly, Blair then turned up. ‘It’s too much money,’ Brown repeated, at which Blunkett became irate.

‘Let’s go to a room without officials,’ interrupted Blair.

After a prolonged argument, Brown shouted, ‘Right, four centres.’

‘We’ve been shafted,’ screamed Blunkett in turn, snapping a pencil in half.

In the end, only three centres for just over a thousand people were built. In the face of his chancellor’s intransigence, Blair was powerless.

He was also irritated. At their next monthly stock-take, he complained about the asylum laws being ‘perverse and dysfunctional’. They prevented the Home Office from finding the asylum-seekers, holding them in centres and deporting them. ‘What more powers do you need?’ he asked the officials. ‘Tony ignores the fact that the Human Rights Act created grounds for new appeals,’ noted Nick Pearce, a special adviser.

Blair was facing in several directions at once. To persuade the wider electorate about the government’s tough stance and to prevent those who did arrive from obtaining work, he endorsed Pearce’s new White Paper foreshadowing harsher controls. At the same time, he considered abandoning the vouchers he had approved in August. ‘You could be reducing your armour,’ Stephen Boys-Smith warned Blunkett. ‘The vouchers have only just been introduced.’ Eight months earlier, Boys-Smith had told Jeff Rooker, the new immigration minister, that vouchers had limited the number of asylum-seekers that year to ‘80,000. With cash benefits 180,000 would have arrived.’ But Blair insisted that the vouchers were disliked by both asylum-seekers and trade union leaders. Blunkett agreed with him.

To win the public’s trust, on 24 April 2002 the home secretary endorsed his constituents’ complaints in the Commons, while introducing the latest Nationality, Asylum and Immigration Bill. Asylum-seekers, Blunkett blurted out, were ‘swamping’ schools and doctors’ surgeries. Despite a request from Downing Street, he refused to apologise for the outburst; but at the same time, with Blair’s agreement, he reduced the backlog of asylum applications by ‘quietly’ approving the entry of 50,000 people. More unannounced amnesties would follow.

Asylum, Blair privately admitted, had become ‘the toughest issue’,
one with ‘the capacity to explode at any moment’. Sarah Spencer, the academic who specialised in immigration, was told that Downing Street had held ‘fifty meetings’ about cutting the number of asylum-seekers by 50 per cent because Blair blamed himself for failing to focus on domestic issues.

The message to Spencer was wrong. Blair was in fact congratulating himself on the increase in the number of foreigners in Britain, especially students. Britain’s education industry, he boasted in a speech, had attracted 24 per cent of the global market, producing £1.2 billion in income. In 2000, an additional 75,000 students had arrived, and the numbers would rise every year from then on. But he omitted to mention one aspect of that increase: after relaxing the rules for granting student visas in 1999, a flood of bogus students had registered at phoney colleges to gain permanent entry. When a newspaper exposed the racket, Blair cursed the Home Office’s lack of ‘cutting-edge policies’ for those illegals. The culprit, he agreed with Blunkett, was Boys-Smith. Regardless of the justice of the complaint – and there were good reasons to dispute their judgement – he had to go.

‘This is a mess,’ Blair told Bill Jeffrey, a civil servant he trusted after they had worked together in Northern Ireland. ‘It’s out of control and needs sorting out.’

Jeffrey replaced Boys-Smith as the head of IND in July 2002. His briefing from Blunkett was unambiguous: ‘I want people to come here freely and I want them to work.’ Two months later, Blunkett criticised Asian immigrants for failing to learn and speak English, and was attacked as racist. Blair was not disturbed by the contradictions. Blunkett had negotiated the closure of Sangatte, and his new Immigration Act restored several of Michael Howard’s barriers, including the denial of benefits to asylum-seekers if they failed to register on arrival. Both events, Blair knew, attracted good publicity, but they were mere gestures. Since 1997, at least 67,000 foreigners had passed through Calais as illegal migrants, and during 2002 over 100,000 would apply for asylum, up from 92,000 the previous year.

Michael Barber’s report during that month’s delivery meeting about improvements in Calais was used to brief Jeffrey. The new IND chief, said Blair, should sharply reduce the number of illegal migrants and chase the bogus students. On the other hand, he added, ‘I’m all for good immigration.’ Jeffrey appeared to be unaware of ‘managed migration’ and how controls had been relaxed under the guise of work permits. ‘Don’t mention the advantages of immigration in public,’ Blair cautioned a meeting that included Andrew Turnbull, ‘because they won’t even want that.’ The electorate, he went on, should be told only about the government’s efforts to stop bad immigration. Jeffrey nodded. Since the IND head was Blair’s personal appointment, Blunkett did not reveal his doubts about his ‘detached’ official. He had, after all, reached an understanding with Blair that summer.

The two had discussed whether the citizens of eight European states (known as the A8 nations) due to become members of the EU in May 2004 should be allowed to enter and work in Britain immediately. Other EU countries, including Germany, planned to delay such privileges for seven years. Initially, Blair was wary about lifting all the restrictions on migrants from the new EU states. His misgivings were addressed during a trip to Warsaw, where his hosts in the British embassy described the virtues of allowing unlimited numbers of Poles into Britain.

‘Let’s be good Europeans,’ Blair was told by the Foreign Office’s senior representative.

‘Yes,’ he replied. ‘We shouldn’t worry about numbers.’

In London, Turnbull agreed. The Germans, he thought, were ‘crazy’ to pass up the opportunity of employing hard-working East Europeans. The only concern was public opinion. Too many people were alarmed by what some Blair aides called ‘the immigration tinder box’. Arguments in support of the unrestricted admission of A8 nationals, Blunkett noticed, made Blair ‘jumpy’. The solution, everyone agreed, was to avoid mentioning numbers.

‘Is this handleable?’ Blair asked.

‘Yes,’ replied Blunkett. ‘It’s legal migration which we can control.’

The truth, both knew, was the opposite. The IND had already lost control over those East Europeans ostensibly coming to Britain as students or tourists, and many of the A8 nationals, especially those from Poland, were already working in Britain, often illegally. Deporting them, Blunkett had decided, was expensive and pointless. Since the IND could not even guess at the numbers intending to come after their countries’ accession, Home Office officials seized upon a report produced by Christian Dustmann of University College London. Dustmann’s research for the European Union estimated that 13,000 Poles would arrive in 2004. IND officials were dubious about Dustmann’s investigation, but the report’s academic label suppressed any controversy. ‘We didn’t spell it out’, Blunkett would later say, ‘because of fear of racism. We were on the side of the angels.’

Unknown to the public, the ‘angels’ in the government did not know how many foreigners would be coming into Britain, or how many would be legal, or from which countries they would come. No civil servant in the Home Office was even asked to make an inspired guess.

The best antidote to a cycle of negative news, Blair believed, was an announcement of the government’s intention to spend billions of pounds. The blowback came when such a promise failed to materialise. That was Blair’s burden twenty-two months after he had pledged on David Frost’s show to save the NHS.

Gordon Brown was still refusing to hand over the money. Insiders’ reports about the two men’s arguments were repeated by Mo Mowlam, a retired and disappointed Northern Ireland minister. Their disputes, she told a newspaper, were ‘crippling the government’. On 18 November 2001, Downing Street summoned journalists to insist that the relationship between Blair and Brown was ‘closer and better than any of their predecessors’. Simultaneously, a Treasury spokesman denounced the ‘same old gossip’ as ‘malicious tittle-tattle with absolutely no foundation’. To confirm the message, Brown told
The Times
, ‘Tony Blair is the best friend I’ve had in politics.’ Three days on, he denied that he had ever left their meetings ‘shouting and screaming’. Then, five days later, on 27 November, he launched another attack against Blair.

Brown’s weapon was a report by Derek Wanless, a banker and statistician. To present himself as the defender of the traditional NHS, Brown had asked Wanless how Labour could save it. The result did not match Brown’s expectations. The service, wrote the banker, suffered from poor productivity and, compared to other European countries, provided inferior treatment. The NHS’s budget should double over ten years, but going by past history the additional money would increase
rather than solve the problems. Brown, convinced that the NHS was ‘the envy of the world’, was horrified by Wanless’s conclusions.

Just before presenting the findings to the Commons, Brown was summoned to No. 10. In retaliation for the Wanless report, Blair had commissioned Adair Turner, a former head of the CBI, to review the NHS’s management. Turner’s conclusions confirmed Alan Milburn’s contention that the bloated ranks of NHS managers ‘have never saved a life’. The health service’s survival, Blair told Brown, depended on money and also deep-rooted changes. A bitter argument erupted. Blair wanted the money without increasing taxes, while Brown feared that, if too much was spent now, no money would be left when he became prime minister. ‘This is bollocks,’ Alastair Campbell pronounced in a reconciliation session. The bruiser urged both to embrace each other as Christians, but the peace was short-lived.

Wanless listened to the chancellor’s presentation of his report to the Commons on his car radio. To his horror, Brown was distorting his conclusions. Wanless had praised ‘choice’ and the NHS’s use of the private sector, but Brown announced that the banker opposed both those policies. That very day, he had also told the
Sun
that the NHS would not receive ‘an extra penny’ without reforms. Those did not include ‘choice and diversity’, which, he told the newspaper, was ‘all crap’. He quite happily stymied Blair without offering any alternative. On the sidelines, Wanless was outraged by the misrepresentation.

Two days later, the mood in Cabinet was unusually fraught. Blair put forward his argument about the NHS in terms of ‘wreckers against modernising reformers’, while Brown presented himself as substance versus style – the chancellor’s code for Blair’s ideological misconduct. In dictating the terms of the war, he classified Milburn as a Blairite enemy. ‘This is the same man’, countered Milburn, ‘who in 1998 asked me to plan the privatisation of the Royal Mail.’ As usual, Brown refused to discuss his differences with Milburn face to face. ‘It did sometimes feel’, noted Campbell, ‘like there were two governments.’

That weekend, Brown invited himself to appear live on David Frost’s
TV show. To the inevitable question about the leadership and the deal for the succession, he offered a surprise answer: ‘What Tony Blair and I have said to each other really is a matter for us.’ Frost was speechless. Brown was implying that the two had agreed a timetable after all.

Blair’s anger soared. Over the past months, he had toyed with the idea of resigning just before the end of his second term. After Brown’s cryptic comment, he told his chancellor over dinner before Christmas to forget about a smooth succession if a bid were made to force him out. Blair’s ultimatum was succinct: unless he could create a legacy as the NHS’s champion, he would not leave Downing Street before the next election.

Their argument seeped into every Whitehall department and beyond. An effective chief of staff or Cabinet secretary would have sought to reconcile the two men, but Jonathan Powell was not qualified to navigate through the warring factions, and Richard Wilson was impotent. ‘The mood in the media’, Campbell noted, ‘was now pretty nasty.’ Newspapers were also reporting disputes among Cabinet ministers. Reflecting his personal antagonism, John Prescott took a sideswipe at Robin Cook, calling him ‘a little red gnome’, and then blasted a warning at Blair that any further privatisation of NHS services would not be accepted by the party. Defending his reforms, Milburn ignored Prescott but attacked Brown. In retaliation, Brown’s supporters openly mocked the Blairites.

Seven months after his landslide victory, any awe about Blair’s wizardry had evaporated. In early 2002, the London
Evening Standard
reported that ninety-four-year-old Rose Addis had been found by her family crying in bloodstained clothes in a north London hospital. Her maltreatment at the Whittington hospital was compounded by Blair revealing personal details about Addis, and the Labour-supporting medical director of the hospital accusing Addis of racism.

Blair was agitated. No one had yet produced a blueprint to reform the NHS. He despaired that ‘delivery’ was being frustrated. Senior civil servants blamed the paralysis on the contradictory advice he was receiving from his advisers. In turn, David Blunkett and John Reid, the
secretary of state for Northern Ireland, charged the civil service with disloyalty and incompetence. ‘We’ll put the best people in to monitor delivery,’ Richard Wilson had said, ‘and civil servants will be rewarded for success.’ Blair was unconvinced. Bad civil servants, he knew, were protected, while the good ones were not promoted and, once disenchanted, lost their flair.

The farrago was intensified after the sudden death of Brown’s newborn daughter. Brown’s tragedy evoked sympathy for a man whose unconventional personal life appeared to have stabilised after his marriage to Sarah Macaulay in August 2000. Encouraged by the advice that a bachelor could not hope to become prime minister, with fatherhood the fifty-year-old chancellor had embraced the whole domestic package. The effect of his daughter’s death in Scotland on his conduct in Westminster, however, was short-lived. After his return to London, his impatience for the leadership intensified. He planned to use the party’s spring conference to renew his aggression against Blair. ‘He hasn’t changed,’ Blair said after meeting Brown in Downing Street. ‘If anything, he’s worse.’

Blair’s predicament, as always, was aggravated by problems with financial donors. In 2000, Labour had passed legislation ostensibly to prevent corrupt contributions to political parties and, in 2002, had claimed the moral high ground by outlawing anything that could be interpreted as a bribe by corporations to governments to win commercial contracts. But, on 10 February, a newspaper revealed that Lakshmi Mittal, an Indian billionaire living in London, had given £125,000 to the Labour Party. After the donation, negotiated by Lord Levy, Blair had written privately to the president of Romania endorsing the tycoon’s bid for a local steel mill. At the same time, he encouraged the British ambassador in Bucharest to endorse Mittal’s business activities. The letters had been organised by Powell following Mittal’s introduction to Blair at a high-value donors’ party organised by Levy in June 2001. The original draft presented by Powell for Blair’s signature had described Mittal as ‘my friend’, but the endearment was judged to be excessive and was removed. In the aftermath of the donation, the DTI also supported
Mittal’s application for a £70 million loan from the European Bank of Reconstruction and Development.

The DTI’s patronage of an offshore company that paid little tax and employed fewer than a hundred people in Britain was unusual. When questioned, a Downing Street spokesman denied that Blair had known about the donation before signing the letter. That statement contradicted Levy’s memory. The spokesman could also not explain why Blair should support a foreign-owned company against the rival bid for the steel mill by Corus, a British-owned steel-maker that was struggling to survive. ‘Cash for influence’ mirrored the 1997 Ecclestone affair, and the sleaze associated with Geoffrey Robinson a year later. The prime minister’s judgement appeared permanently warped by money.

At the outset, Blair refused to be embarrassed by his association with Mittal. With no reason to fear Iain Duncan Smith, the Tories’ new leader, he praised Mittal’s business as good for Britain. Campbell told the media their enquiries were ‘boring’. The calculated indifference imploded after Campbell’s repeated changes to the narrative were headlined by the
Sunday Times
as ‘Lies, Damn Lies and Labour Spin’.

Unexpectedly, more allegations of sleaze entrapped Stephen Byers at the Department of Trade and Industry. Jo Moore, his special adviser, had again become enmeshed in allegations of distorting news to the government’s advantage. Martin Sixsmith, a DTI spokesman, revealed that he had forbidden Moore to publish unfavourable statistics about the railway network’s poor performance during the funeral of Princess Margaret, who had died on 9 February. Moore denied that had been her intention, but the throwback to her suggestion on 9/11 to ‘bury bad news’ confirmed the cynicism at the heart of the government.

Until then, both Blair and Campbell had protected Moore. Both approved of her conduct after 9/11 and blamed disloyal civil servants for the original embarrassment. In the macho male culture shared by both men, manipulating the media was not a sin. This time, however, she was asked to resign. Her belated departure failed to protect Byers from other allegations of misleading the Commons or, as the
headline-writers pouted, being a ‘Liar for Hire’. Byers, a prized Blairite, had attracted torrid headlines alleging he had misled the Commons about Railtrack, had even found himself accused of smearing a survivor of the 1999 Paddington rail crash, and was now lying on TV about Sixsmith’s conduct. He survived, but Campbell admitted, ‘We are swimming through treacle.’

Instead of questioning his own judgement, Blair once again blamed his misfortune on the ‘feral beast’ that was the poisonous media culture. On the first anniversary of his rise to power, he had been warned by Matthew Parris that while he could take comfort from the fact that most sleaze stories sink like rocks, apparently without trace, ‘slowly the whole foundation rises towards the surface … because [while] you can get away with a lot for quite a long time, while the love affair lasts … the old scandals never die’. Then comes the reckoning.

Among the list of government-inspired ‘distortions’ were reports about the NHS. Blair was relying on the targets set by the new Delivery Unit. In the first months, Michael Barber’s ‘name and shame’ had produced improvements and good media headlines, and Barber gave himself a pat on the back since departments were turning the extra money into desired outcomes – ‘unlike 1998,’ he would write, ‘when money disappeared into black holes’. Yet, in 2002, the government’s auditors discovered the opposite, with some health authorities running huge deficits. To avoid censure and dismissal for missing targets, their senior managers had seriously overspent.

Driving change from Downing Street by setting highly ambitious targets, Blair realised, had its limitations, but he could not think of an alternative. To clear his mind, he wrote a memorandum over a weekend at Chequers. Having finally persuaded Brown to announce increased NHS funding in the next Budget, he questioned why, despite the extra money already spent, waiting times were not falling and the number of patients being treated was not rising. It was the same disappointment he had suffered throughout his premiership. Would things never get better?

Milburn replied that his own ideas had once again changed radically. The NHS Plan 2000, he said, was a revitalising shopping list. The government needed finally to cross the Rubicon and embrace choice as a cornerstone of the NHS. The heart of Milburn’s plan was to resurrect competition as the gospel, which meant reintroducing the Tories’ internal market. Blair agreed, and Milburn began drafting a new White Paper, ‘Delivering the NHS Plan: The Next Steps’. Ten years of policy in opposition and government was being jettisoned.

In Blair’s new NHS, all hospitals would compete against each other to win contracts from private care trusts (PCTs). England’s best hospitals would be liberated from central control. Those so-called foundation hospitals would be run by local organisations and would have financial and managerial independence from Whitehall, although they were subject to targets. NHS managers who failed to perform would be dismissed. ‘It’s Groundhog Day for you, Andy,’ said Milburn to Andrew McKeon, the department’s director of policy and his internal ally. McKeon had helped Ken Clarke shape the reforms in 1991 and had contributed to Stephen Dorrell’s White Paper in 1996. Having watched Labour rip it all up, McKeon now witnessed Blair returning to the original philosophy. However, a decade later, one difference was critical: while the Tories had developed the reorganisation slowly, Milburn refused to commission pilot schemes to test his ideas. Blair wanted instant results – and numbers became important. ‘It will be heavy-duty and ruthless,’ observed McKeon.

To seal the devolution of health care, Milburn started another round of reorganisation. The primary-care groups were transformed into 302 PCTs, funded by a new system of payment by results and supervised by twenty-eight strategic health authorities.

Blair finally believed he had reached the beginning of the future. In that new dawn, the NHS would be equipped with a giant new IT infrastructure. One computer system would give instant access to the records of 50 million patients across the country, compiled by 30,000 GPs and 300 hospitals. Accurately described as ‘the world’s biggest
civil information technology programme’, the unprecedented technical ambitions matched Blair’s search for a legacy. In February 2002, he hosted a seminar to approve the scheme. No critics were invited. To those querying the estimated cost of £2.3 billion, Milburn replied that the finances of the NHS were being monitored by an inspectorate reporting to Parliament. Blair praised Richard Granger, hired to supervise the project, as a man ‘with a demonstrable professional track record’ in Internet technology, something that was unavailable within the civil service. Recruiting Granger, John Birt told Blair, was a triumph over risk, establishing ‘a more strategic and innovative approach to policy’ than civil servants could achieve.