My Millbank

In politics, Peter Mandelson and Roger Liddle explain for the benefit of their less worldly-wise readers, ‘getting your way can require a degree of intrigue and manoeuvring.’ The straight-dealing Tony Blair would, they say, prefer that this was unnecessary and does not really ‘enjoy the modus operandi’. How very fortunate the Labour leader is, then, to be able to count on the services of one whose name has become a byword for political manipulation and deviousness. ‘Nobody has brought more professional skill to the debasement of British public life than you,’ Michael Heseltine recently taunted Mandelson, who beamed back appreciatively.

Indeed, so fixed has Mandelson become in the political imagination as Tony Blair’s Rasputin and High Priest of Spin that he is sometimes still dismissed as a bit of a cartoon villain: a mere courtier and media magician, with an engaging line in pantomime menace and a taste for red roses and pistachio backdrops. As the transformation of the Labour Party accelerates month by month, the absurdity of such a misreading becomes ever more apparent. The Member for Hartlepool has emerged from the shadows – where he masterminded Blair’s 1994 leadership campaign and played a central role in shaping the new leader’s core team – with a public concentration of power to set off his unequalled private influence.

For a man never elected to a single party position, Mandelson can boast an impressive portfolio. Along with his formal post as front – bench Civil Service spokesman, he chairs Labour’s general election campaign committee, sits on the campaign-strategy and policy-planning groups and has also effectively resumed the job he held under Neil Kinnock as Communications Director, though his centre of operations has now moved to the Party’s new media headquarters at Millbank – ‘my Millbank’, as he likes to call it. It has become a Westminster cliché, echoed privately by the Shadow Chancellor and one-time Mandelson intimate, Gordon Brown, that Mandelson is Labour’s real deputy leader. His grip on strategy and policy direction, as well as campaigning and presentation, is increasingly tight. When Mandelson mutters that he is unhappy, say, with Labour plans to abolish compulsory competitive tendering in local government, rest assured they are not long for this world.

All this depends, however, on his exceptionally close relationship with Tony Blair: the two have, on his own entirely credible assessment, ‘almost identical ideas’. The potential fragility of such a position is lost neither on his enemies nor on Mandelson, who tasted internal exile under John Smith and did not relish it. Belatedly weary of his Cardinal Richelieu reputation and riled by taunts that he is a hollow man without personal beliefs, the response has been a 100,000-word credo to show he can be a real politician like his grandfather, Herbert Morrison. The decision to write The Blair Revolution was made, Mandelson has explained, after reading a profile I wrote of him last year in the Guardian – ‘the single most damaging piece ever published about me’, he insists – which described how he had become the focus for unrivalled loathing among Labour MPs.

What would normally be a well-worn career step for a rising politician was a risky one for both Mandelson and Blair. It was made dicier still by Mandelson’s calculated choice – bold or arrogant, according to taste – of the former Liberal Democrat and Social Democratic Party by-election candidate Roger Liddle as his coauthor. Considering that Liddle, an adviser to Bill Rodgers in the dog days of the last Labour Government and a fellow Lambeth councillor of Mandelson’s in the early Eighties, only rejoined Labour while co-writing the book, this was not simply a case of spitting in the eye of his enemies or preferring to work with a pal. It was evidently intended to send an unambiguous message about the political and constitutional direction in which New Labour is heading.

And as with so many of Mandelson’s wind-sniffing calculations (if not as many as he would have us believe), this one has paid off. For all that John Prescott won rapturous applause at the Scottish Labour Party Conference by deliberately muddling Mandelson and Liddle’s book up with a rogue Chinese satellite and dismissing it as a ‘giant piece of junk’, the threatened backlash has failed to materialise. There have been a couple of wounding attacks, notably by a genuine one-time deputy Labour leader, the born-again Roy Hattersley, who damned Mandelson and Liddle as pretentious, feeble, absurd, ignorant and damaging to Labour’s cause. But for the most part, their efforts have been politely received by the media and public audiences they are concerned to impress and the perennial consistency of Mandelson’s politics has been acknowledged, to his satisfaction.

Mandelson’s (and, by extension, Blair’s) labour movement critics – ever hopeful that the Hartlepool Mephistopheles is riding for a fall – have by contrast largely treated the self-proclaimed ‘inside account of New Labour’s plans’ with contempt. ‘We’ve been reading passages out to each other in the corridors,’ one Labour MP says gleefully. ‘It is a work of utter risibility. Mandelson wanted to be the new Anthony Crosland and has instead become a figure of ridicule.’ This is to underestimate not so much the literary merit, but the political seriousness of the New Labour ‘project’ delineated in the book. Despite the last-minute filleting of the text by the authors to avoid premature Party spats, the essence of the programme outlined in Mandelson’s original book proposal – coalition with the Liberal Democrats, public sector no-strike deals, workfare for the long-term unemployed, expansion of private pensions and scepticism towards universal benefits – has survived, hedged about with suitable get-outs. But more important, the broader ideological and political thrust behind Labour’s ‘unfinished revolution’ is for the first time laid brutally bare by its hitherto most elusive architect. Given that his alter ego is generally expected to become prime minister next year, it would be wise to take note.

At the heart of the book is a relentless assault on the traditional Labour Right and its ‘old-fashioned Labour dogma’ of Keynesian corporatism, redistributive taxation, universal benefits and comprehensive education. So far as Mandelson and Liddle are concerned, the Left (represented by Tony Benn and Ken Livingstone) was disposed of in the Eighties and the time has now come to settle accounts with the political heirs of Crosland and Gaitskell. Since Hattersley is prominent among their number, his rage at Mandelson, who supported his leadership campaign against Kinnock in 1983, and Liddle, who was the very epitome of tax-and-spend politics as a Liberal Democrat, is understandable. The growing realisation by the old social democratic Right, whether in Parliament or the trade unions, that they have been jettisoned by Blair’s modernisers in favour of an alien post-social democratic agenda is the main factor fuelling the regular and ineffectual spasms of Old Labour discontent. In case anyone might miss the point, Crosland and his Fifties’ revisionist bible. The Future of Socialism, are sternly taken to task by Mandelson and Liddle for ‘taking economic growth for granted’ and allegedly equating high public spending with progress to a more equal society. New Labour is often derided on the Left as an ‘SDP Mark 2’. But as the pair acknowledge, the original SDP was incorrigibly Old Labour by Blairite standards. They have more time for David Owen’s later ‘tough love’ posture, though preferring what they call a ‘rounded’ blend of social market and community.

Their explicit starting point is Thatcherism, their strategy to ‘move forward from where Margaret Thatcher left off’. Their culprits are the stock-in-trade of the New Right’s spear-carriers of the Seventies and Eighties: the ‘left-wing chattering classes’, ‘teacher unions’, ‘educational egalitarians’, ‘trade-union restrictive practices’, ‘Bennite fantasies’, the ‘Marxist heresy’, the ‘infamous Clause Four’ (pointedly misquoted), ‘prejudiced class warriors’, ‘the over-mighty state’ and ‘troublemakers and extremist groups’. At times, the text almost takes on the character of a group therapy session, where a couple of reactionary old codgers who have had to sit tight-lipped through years of politically correct meetings are at last allowed to give free rein to their real feelings.

While ‘the Left’ is used only as a term of abuse and Old Labour excoriated at every passing opportunity, Thatcher is merely taken to task for her excesses (‘having got part of her diagnosis right’), for being mean-spirited and for failing in some of her objectives. Where Tony Blair hints and generalises, Mandelson and Liddle helpfully spell things out. Privatisation – overwhelmingly unpopular with the public and every single case of which Labour has voted against in the House of Commons – has nevertheless, the authors believe, led to ‘increased productivity’, ‘brought about improvements in operating efficiency and facilitated new investment’. Such accolades echo the passions of the little Blairs and Mandelsons now running amok in town halls, waging war on ‘producer interests’ and putting everything that moves out to tender. In New Labour’s pursuit of the ‘rigour of competitive markets’ and the ‘dynamic market economy’, it transpires, there will be no place for redistributive taxation rates for high earners, let alone on wealth. This is not, as other Labour spokespeople might have implied, for fear of losing BMW-owners’ votes or unsettling City bankers, but out of principle, because ‘substantial personal incentives and rewards are necessary in order to encourage risk-taking and entrepreneurialism.’

Similarly, Britain’s notoriously insecure and lop-sided industrial relations system has been ‘changed for the better’ by Thatcherite trade-union reform, according to Mandelson and Liddle. And there will be no unpicking of Tory antiunion legislation (including, we are told, the web of statutes outlawing secondary action – something Blair has yet to mention to the people who will be paying for his general election campaign). The Mandelson and Liddle view of the function of trade unions under capitalism is somewhat akin to the Leninist view of unions under socialism: they have a ‘role as a representative channel and in protecting individuals against arbitrary management’. Since finishing the book, Mandelson has fretted that he was ‘10 per cent too soft on the unions’. That is hard to see at an initial reading: trade unions are blamed for being ‘crude’, inherently conservative and for handicapping competitiveness; the authors even argue for signing up to the Social Chapter so Britain can block employment rights that might lead to ‘inefficient practices’. There is, nevertheless, a certain uncharacteristic caution on the subject.

That could not be said for their unrestrained embrace of City economics, once again chafing at the boundaries of official Labour policy. John Smith’s commitment to use all the levers of economic intervention to achieve full employment has gone. In its place, the target has been scaled down to tackling long-term unemployment, while macroeconomic stability and low inflation are held – as they are by the Conservative Government and against a battery of evidence and theory – to be the key to overcoming Britain’s chronic under-investment and achieving economic success. If intellectually perverse, this at least has the political advantage of allowing New Labour not to have to sign up to dangerous nostrums about regulating the City, changing company law or using the public sector as a motor of investment. Clearly, stakeholding is not to be pushed beyond the level of warm words and exhortation.

In place of a credible economic and full employment strategy, we are offered a hotch-potch of welfare, training and educational schemes and wheezes: from student loans to Thirties-style state marriage dowries to mentors for problem teenagers to the ‘mobilisation’ of middle-aged people’s homes to pay for their old age and grandchildren’s education. Most have the common feature of relieving the public purse of the burden of poverty. And none of Mandelson and Liddle’s incrementalist policy-wonking, ‘clear-sighted plans’ or ‘new, practical visions’ – fleshed out with a cast of advertising copywriters’ characters, such as Eileen the dinner lady and Ben the media director – offer much promise of making a serious impression on that.

Underlying all the changes that Blair and Mandelson are successfully propelling through the Labour Party is the imperative of ‘modernisation’: the conviction that unless the Party’s policies and very nature are refashioned in the image of our time, it is electorally and politically doomed. The assumption that a Left-Right antinomy can and must be superseded by a traditional-modern one pervades The Blair Revolution. But unlike, for example, the fairly straightforward idea of modernising machinery or production techniques, the notion of social and political modernisation is shot through with ambiguities. Is it supposed to imply that there is a fixed and unilinear path of social development along which countries can move to become more modern? Should the politically-driven social changes of the past two decades be regarded as modern simply because they have just taken place?

Even to ask these questions reveals the absurdity of the concept of modernisation as it is currently used by Labour’s leaders, and more widely in Europe and elsewhere. In what sense are policies for redistribution, social ownership or equality ‘outdated’, as Mandelson and Liddle regard them – except in that they are not currently being pursued? And in what sense is free-market economics, first codified more than two hundred years ago, ‘modern’ economics? There are echoes in the modernisers’ catechism of the once reviled (and now inevitably reviving) theories of Fifties American sociologists like Talcott Parsons, who claimed that ‘traditional’ Third World societies were set on modernising path to becoming secular Western capitalist democracies – or of Francis Fukuyama and his utopian account of the ‘end of history’. Part of the modernising agenda within the labour movement clearly reflects a genuine attempt to get to grips with deep-seated social and economic change; but part reflects a determination to accommodate to the current dominant ideology and balance of social forces, rather than seek to change them.

Mandelson’s own attitude neatly bears this out. Pressed to explain what modernisation means, he replies that it is another word for ‘revisionism’: ‘it means we embrace the market economy.’ Capitalism, in other words? ‘Yes, capitalism,’ he exclaims, holding up his arms in mock-acclamation. Of course, no such immolation of socialism is going to help reform-minded politicians find more effective ways of reaching the social goals that traditional social-democratic solutions failed to achieve. Nor is the modernising fever unique to Britain. Over the past decade, a succession of socialist and social-democratic parties – in France, Spain, Italy, Australia, New Zealand – have adopted a modernising rhetoric while giving free rein to business and the market, and ended up mired in corruption, presiding over mass unemployment and social exclusion, and rejected by their core supporters. Now, post-Clinton, the process has gone a stage further and a succession of Blair-like ultra-modernisers – politicians like Gerhard Schroeder in Germany and Walter Veltroni in Italy – are on the rise across Europe.

This is not simply the result of a succession of electoral defeats. For sections of the Left, modernising politics represents a defensive response to the crisis of social democracy and the collapse of Communism, on the one hand, and to economic globalisation and class recomposition, on the other. But it is also a lagged response, an accommodation to the social realities of the Eighties. The same paradoxical tendency of the modernisers to meet the challenges of the past, rather than the future, can be found in Labour’s determined lurch to the right at the same time as the evidence shows the electorate is moving in the opposite direction. While opinion polls now regularly return large majorities for renationalisation, higher taxes on profits and the well-off, cuts in arms spending, controls on City speculators and the like, New Labour resolutely rejects such policies in the name of electoral realism. And while the Party’s appeal is focused ever more lovingly on the Southern middle class, polling data show that Labour’s lost voters at the 1992 general election were overwhelmingly concentrated among working-class people – the so-called C2s and DEs who make up three-fifths of the electorate – across the country. In a similar vein, Mandelson and Liddle boast that half Labour’s new members are ‘professionally employed’, while only one in ten is a manual worker – a profile utterly unrepresentative of Labour voters, or even of the wider electorate.

It is difficult not to believe that all this has more to do with making Labour acceptable to the powers-that-be than with building a winning electoral majority. But in the process, Labour’s modernisers are helping to create a crisis of political and social representation, whereby large parts of the political spectrum and the population are effectively denied a voice. A two-party Parliamentary system can only function properly when both parties are themselves genuine coalitions or alliances. On the Tory side, the coalition is breaking apart, and on the Labour side it is being systematically dismantled by the Party leadership. Mandelson and Liddle are clearly well aware of where this process could take them and, convinced that a modernisation programme can only be carried out from the centre ground, come out in support of electoral reform and alliance with the Liberal Democrats. Differences between them, they concede, are becoming ‘increasingly blurred’.

As it turns out, the only point at which Mandelson and Liddle could meaningfully be accused of radicalism is in their advocacy of a package of Charter 88-style constitutional and political change: at the national level, a Bill of Rights, a reformed judiciary and the abolition of hereditary peers; at the regional and local level, devolution, annual elections, referenda, elected executive boards and directly elected mayors. Naturally, their pet version of electoral reform is the ‘alternative vote’ system of preference voting in single member constituencies, which would have the effect of favouring centrist parties. But the implications are potentially far-reaching. The combination of some form of proportional representation with the state funding for political parties already promised by Labour would very likely hasten an organisational break with the trade unions and probably split the Labour Party. If there is little prospect of a Blair government having much impact on the country’s social and economic ills, there are now signs that it might end up making fundamental changes to the political system.