Broken Vows (37 page)

Boyce was similarly puzzled: ‘We had no war cabinet, and if I’d asked half the Cabinet, they would not have known we were at war.’

After ten days, the British advance in the south was halted to allow the Iraqi army to retreat and avoid unnecessary death and destruction.

‘Can’t we get on?’ Campbell asked Boyce during the halt.

His impatience irritated Boyce, who would again complain that ‘We lacked any sense that we were at war.’ Across the country, however, the public supported the troops. An ICM opinion poll found that 84 per cent of those questioned believed that the war should be fought to a successful conclusion, although two-thirds replied it would be justified only if WMDs were found.

On 2 April, twelve days after the invasion began, the American army reached the perimeter of Baghdad. Among the news items was the shooting of seven Iraqi women and children by American soldiers at a checkpoint. In his office, Blair looked at Peter Stothard, the former editor of
The Times
, who had been shadowing him during the invasion. ‘It does really get to you,’ he said. He added he was ready ‘to meet my Maker’ and answer for ‘those who have died or have been horribly maimed as a result of my decisions’.

Five days later, American soldiers entered the capital. The city quickly slipped into chaos but, under orders from Rumsfeld, the army did not intervene. ‘Stuff happens,’ he said. ‘Freedom is untidy.’

Blair’s daily routine was similarly a succession of struggles for power. Overnight, he had been fighting against the neocons to keep Bush’s support for the UN taking a major role in Iraq and to ensure he did not abandon his announcement of a new initiative for a Middle East peace plan. At the same time, he was recovering from another blistering argument with Brown, ostensibly about the euro. In between, Campbell was moaning that Fiona Millar had called him ‘a bastard’ that morning
and thrown a cup at him; he had decided to resign. Blair could cope with warfare but not with Campbell’s departure: his spokesman was the one person he trusted and needed. At the end of the day, he flew to Belfast to meet Bush. By any reckoning, the president’s agreement to endorse Blair’s Ulster peace plan was an extraordinary climax before another storm.

Blair returned to London certain of victory in Iraq. The British army controlled Basra and southern Iraq and had lost only thirty men. In the north, the Americans were crushing the last bursts of opposition and searching for Saddam. At about 8 a.m. on 9 April, Boyce arrived for his daily briefing. Blair was slumped in a sofa. The walls of his office were covered with maps.

‘We can say officially the war has ended,’ Boyce announced. Blair registered no joy. There was no sign of emotion. The admiral could just as well have announced that a number 24 bus had broken down in Whitehall.

‘Any news about WMDs?’ asked Blair.

‘No, Prime Minister,’ replied Boyce. ‘They’ll probably be found in a bunker.’ The civility was ice cold. After his retirement, Boyce would criticise the Labour government’s ‘trade’ on the armed forces’ loyalty and indomitable can-do spirit without providing adequate money as ‘wrong and immoral’.

Later, Blair met his ad hoc group of ministers and officials. The UN inspectors and the American army, he said, were searching for the buried WMDs. ‘I wonder why the WMDs weren’t used during the war,’ piped up one voice. After a murmur of agreement, nothing more was said.

In the Commons that day, Blair enjoyed his moment of glory. The ‘Baghdad bounce’ was propelling his approval ratings upwards. To prove his righteousness, he had rejected an invitation to meet Vladimir Putin, Gerhard Schröder and Jacques Chirac at the weekend in St Petersburg. Blind to the consequences of Saddam’s fall, he classified the three as deflated rivals rather than potential allies. ‘I suppose I have toughened,’
he told
Saga
magazine in anticipation of his fiftieth birthday. Iraq was his Falklands. He had come of age. He could even spare a moment to record a cameo appearance for
The Simpsons.

Back in Downing Street, the television screens were reshowing a small crowd in Baghdad toppling Saddam’s statue. With exquisite symmetry, Fiona Millar walked into Blair’s office to announce that since she neither liked nor respected him any more, both she and Campbell would definitely be resigning. At eleven o’clock that same morning, just hours before he delivered his Budget speech, Gordon Brown was needling Blair in a Cabinet meeting. Blair was stung by the absence of any praise from his colleagues or the media.

The latest battle for control of Downing Street had been raging for about ten days. The victory in Iraq, Gordon Brown feared, might persuade Blair to reconsider his resignation. He needed to act. For his part, Blair felt isolated. The constant altercations with his chancellor were wearing.

On 1 April, Blair sat through Brown’s long presentation on Britain’s readiness to join the euro. To provoke Blair, who, Brown knew, had still failed to master the technicalities of what membership would mean for the British economy, he declared that his decision would be revealed in the Budget. In a heated exchange, Blair, who knew that the chancellor was still against Britain joining the euro, forbade him to terminate the option publicly.

Their argument continued the following day. Blair raged. Some would recall him telling Brown to resign, while others would say the chancellor was dismissed; a third group would describe Brown storming out of the room having agreed to resign. Overnight, both men stood at the precipice.

In the morning, Blair considered the folly of losing a chancellor while British soldiers were risking their lives. Trust in the government was precarious. With the party split, he had limited the damage within the Cabinet, but the divisions over the euro could not be similarly concealed. He had failed to forge the alliances recommended back in 1998 by Richard Wilson. But, as the Cabinet secretary also observed, Blair usually anticipated the troublemakers and manoeuvred appropriately. In this case, he encouraged Jeremy Heywood to negotiate a truce.
Brown agreed to say nothing about the euro in his Budget and prepared instead a lengthy assessment for a future Cabinet meeting.

Just as one fire was extinguished, another burst into flames. In the tit-for-tat to prove his power, in the days before the Budget Brown refused to disclose how much money he would allocate to the NHS for the following three years. ‘I went mad,’ recalled Milburn, although as he wasn’t even allowed to enter the chancellor’s office, he was unable to vent his anger to Brown’s face. Awareness of Milburn’s anger and Blair’s impotence emboldened Brown. This was the moment to exact his revenge for being outwitted by Milburn seven months earlier over the press release describing the compromise over foundation hospitals.

Just before the Blackpool party conference, Brown had circulated to the Cabinet a forty-page paper that attacked choice, competition and foundation hospitals. ‘That was an apocalyptic moment,’ Milburn reflected. ‘Brown had distributed his paper without Blair’s knowledge. It was deliberate subterfuge.’ Brown had co-ordinated his revolt with Bill Morris. The trade union leader was due to raise the flag during the conference.

‘This is the end,’ Milburn told John Prescott in a telephone call from Durham.

‘I agree,’ said Prescott. ‘I’ll tell Gordon that if this leaks, that’ll be the end of it’ – meaning the final straw for his brokering of Brown’s bid to become prime minister.

Remarkably, Brown’s mutiny evaporated without a whisper. His paper was suppressed. ‘Tony should have sacked Gordon there and then,’ thought Milburn.

But he didn’t. In the battle between principle and a phoney prophet, Blair had incited Milburn to lead the charge against Brown, but when it came to sacking his chancellor, he ducked for cover. Hopeless or helpless, this was the wrong time to fight, he decided. Compared to securing Brown’s continued support for Iraq, Milburn’s muscular loyalty could be taken for granted.

At midday on Wednesday 9 April, Blair was sitting on the front bench
beside Brown for the Budget speech. No outsider could have imagined the tumult he had endured during the day. His cheers for his chancellor masked his anger – and also his nonchalance towards the economy. In a quick-fire speech, Brown was admitting that his optimistic predictions of 2002 were wrong. The public-sector net debt, which had been falling steadily from 42 per cent of GDP in 1997 to about 31 per cent in 2000, was rising remorselessly, as he borrowed to pay for public services and tax credits. Public spending had increased by 5 per cent in 2003/4. Brown had assumed that the debts would be repaid by increased taxes, but the combination of the dot-com bubble bursting and increased oil prices had suffocated economic growth. He shrugged off forecasts that Britain’s deficit would soar, while Blair sneered at the Tory taunts. Preoccupied by conflicts in Iraq and Downing Street, he did not flinch as Brown increased taxes and raised borrowing in one year from £11 billion to £20 billion, breaching the 40 per cent of GDP mark. He seemed oblivious that Brown’s ‘golden rule’ limiting borrowing exclusively to investment was being broken. He even cheered Brown’s announcement that tax credits, or ‘progressive universalism’, were expanding – immune to the fact that the welfare programme was veering out of control.

Brown originally intended to give the poor means-tested cash credits, financed by loans, to augment their incomes. By 2003, he was giving credits to nearly every citizen, including those in employment, regardless of their wealth. The cost was about £10 billion a year, twenty times more than originally estimated. The Inland Revenue was struggling to cope. A hundred million telephone calls swamped the Revenue’s centres in 2003 as hundreds of thousands of poor people could not get their cash. Nearly 2 million would eventually be penalised for receiving too much money, losing the Exchequer over £2 billion in a single year. The tax-credits system, Nicholas Montagu, the chairman of the Inland Revenue, admitted, has ‘gone spectacularly wrong’. Despite the rising bedlam, he was barred from the chancellor’s office.

Brown’s personality generated dysfunction. Civil servants in the Treasury had become afraid of him, and because in order to control the
process he rarely made a decision until the last moment, they were wary of correcting obvious errors without his approval. Even Blair apologised for the ‘hardship and distress’. But Brown, knowing that Blair did not dare challenge him about the chaos or the cost, admitted nothing. ‘He told me there was no more money,’ Blair whispered to a Labour minister in the Commons chamber about the extra billions of pounds being spent. ‘They basically lied to me to get it through me,’ he said later.

Worse, with the exception of the very poorest poverty levels in general had not fallen, and some people were getting poorer. Brown’s claim in 2001 to have taken a million children out of poverty was discredited by the government’s own statistics. Only half that number had benefited, and his programme’s fate was dire. Blair was flummoxed.

Two weeks later, Blair and Brown met to discuss a route towards joining the euro. For months, Downing Street had been briefing journalists on how Blair was determined to join and would hold a referendum to win public endorsement. The scenario, conjured up by his media fixers, of a meeting between Labour’s two leaders was overshadowed by newspaper reports that Cherie had exploited an offer by a Melbourne shop-owner to ‘take something’ as a gift. She had grabbed sixty-eight items. ‘I wish she didn’t have this thing about a bargain,’ Blair told Peter Mandelson. On her return home, he pleaded, ‘When we leave we’ll have lots of money. We’ll have enough. You’ve got to stop this.’

His wife was chastened but could not help herself. Her lack of self-control had seen her asking the Queen whether Queen Victoria had had an affair with John Brown, and matily telling Princess Anne, ‘Call me Cherie.’

‘I’d rather not, Mrs Blair,’ Anne had replied.

Thinking only of his own position, Brown arrived at the euro meeting expecting another showdown. ‘I know what you’re up to,’ he told Blair. ‘I know your plans.’ He expected to be fired, but Blair ducked for cover as usual. He was too distracted by Iraq to seize the opportunity.

An example of his distraction came at an NHS stock-take. ‘What’s on your mind, Tony?’ asked Milburn as Blair entered the Cabinet room.

‘What
is
on my mind, Alan?’ Blair replied, looking absent-mindedly over his glasses.

‘NHS workforce?’ prompted Milburn.

‘Ah, yes,’ said Blair, and uttered hardly another word.

‘There’s finally progress,’ Michael Barber told the meeting. Emergency waiting times had fallen and access to health care was easier and faster.

Blair later sent his congratulations. Rigidly enforcing targets, he was sure, had worked. But he had one reservation. ‘Do we have to crack down on hospitals like this every year?’ he asked Julian Le Grand. ‘Is there no other way to keep this going?’

The professor sympathised. Targets were draconian and caused ill feeling. Over the course of a year, he replied, they did shake up the system, but in the long term could be toxic and would fail. ‘It’s like a macho culture that demands instant delivery.’

Many NHS executives were being bullied after failing to meet a target. To avoid dismissal for breaching the four-hour wait in accident and emergency units, ambulances were parked outside hospitals until the staff were ready to treat the patients. Bureaucrats were ‘gaming, cheating and misreporting’ their results. In Scotland, administrators changed their system of measurement to prevent embarrassing comparisons. No one mentioned that similar practices in the private sector would be a criminal offence. ‘Hit the target and miss the point’ had become the shorthand for the flaws in the Delivery Unit’s operation and the NHS’s performance. Yet Blair was not persuaded by these negative reports. Despite the unpleasant culture, he believed there was no other way. Nevertheless, to resolve the doubts over targets and markets, command and control, choice and competition, he asked Le Grand to join his Downing Street team of advisers.

New arrivals in Downing Street noticed an omission in Blair’s lexicon. Unlike Margaret Thatcher, he never said, ‘I want the money well spent.’ Relying on Barber’s targets had replaced any interest in seeking value for money. In contrast to executives in the private sector, Blair never asked whether Nigel Crisp could cost a patient’s cancer
treatment. Nor did Barber. Both aides were focused on numbers and waiting times, not finances. Blair failed to realise that Crisp’s passion for ‘shovelling in the money’ made him disregard the complexities of incentives, improvements and prices.

To satisfy Blair’s fixation with modernisation, Crisp had created a unit actually called the Modernisation Agency, at an annual cost of £230 million. Some 760 staff spoke about ‘change’ produced by ‘inclusivity’ and ‘collaboration’, but not about ‘productivity’. ‘They’re tinkering at the edges’, complained a senior adviser, ‘because Nigel wants to hold on to the NHS’s traditions.’

‘It’s flabby,’ agreed Neil McKay, the senior NHS executive.

Le Grand’s outsider’s view offered an explanation. His book
Knights and Knaves
challenged the civil servants’ mantra that they were serving the public interest. Many officials, he suggested, were knaves working in their own self-interest. The monster derided as the Blob – the one-third of civil servants at the Department of Health who were former NHS managers – resisted reforms. Those officials, disdainful of Downing Street, ploughed their traditional furrow, rarely recommending changes. Even Simon Stevens, Blair’s special adviser, acknowledged that the NHS had ‘gone from the trust to the mistrust model’. For those NHS employees, like Crisp, who had been praised for their altruism by Brown, Le Grand’s book was the satanic outpourings of a heretic.

Crisp regarded the NHS as stately. He loathed those who described it as a real-time business – one that generated about 10 per cent of the British economy. At the end of 2002, his anger was directed particularly at Ken Anderson, the experienced hospital manager recruited from Texas to introduce cost controls. The American had asked an irritating question after he arrived in Richmond House: if 90 per cent of the economy is based on choice and competition that works, why not the NHS? Anderson represented what Crisp disliked: an independent disrespectful of the Establishment.

The health department, Anderson announced, was ‘obsessed’ by buildings. NHS Estates was a huge organisation that focused on the
size of rooms, car parks and the construction of new hospitals as the way to improve patient care. ‘Abolish it,’ he told Stevens. ‘To get change, you can’t nickel-and-dime. The NHS is filled with folk trying to block change. You need to offload billions of pounds of work.’

Anderson was introduced to Blair, who was sympathetic to his lament that the NHS was being run in the interests of its employees and not the patients. ‘They believe 200 per cent that the NHS belongs to them,’ said Anderson. ‘They don’t want to change it.’ Crisp, he added, ‘hates talking about money. He loves talking cerebrally about “change”. He oversees forty-two NHS quangos employing ten times more staff than the department’s headquarters in Whitehall. And nothing happens. He ignores that he’s running the biggest business in the world.’ (Anderson did not count the Chinese army as a business.)

‘How do we change it?’ asked Blair.

‘You’ve got to use the private sector.’

Anderson assumed that ‘Getting Tony to land on a decision will be difficult. The problem for him will be a political bridge too far.’

For four years Blair had relied on Milburn and Stevens as agents of change, but they were not guided by either an ideology or a master plan. Everything was hit or miss; even the anticipated showdown with Brown about foundation hospitals was undirected. ‘Progress is always heavy lifting,’ a Downing Street adviser told Blair, ‘but your problem is that you’ve no clear sight of your destination.’

Blair had no answer. So much was piecemeal, even haphazard, with disappointment the inevitable outcome. The latest disillusionment came in the form of Wendy Thompson, the new head of public-service reform tasked with ensuring Barber’s NHS targets were met. Blair’s choice was not a success. Thompson complained about excessive expectations and was accused of impolitely asserting her authority. Matthew Swindells, a respected health adviser in Whitehall, was among several who resigned rather than experience her conduct. David Omand called her ‘a complete disaster because she didn’t understand government’. Resolving the problem was Jonathan Powell’s job, but he
could neither manage people like Thompson nor co-ordinate policies with Brown, who steadfastly ignored him. Once again, everything depended on Blair.