One of the great puzzles of the English is the way most of us still insist that nothing really changes. Even after Thatcher upturned the economy and modernised British society with exceptional brutality, we still tell each other that politics will continue much as before. Even as the Scottish Parliament and the Human Rights Act alter 300 years of parliamentary rule, we reassure ourselves that such reforms do not interest people and do not really matter. Even when Peter Mandelson rockets to the height of fame and influence and then plunges back to earth in an 18th century parabola of pride and fall, we say knowingly that it is all about personalities, not policy.
Such insouciance is a familiar hallmark of Mandelson's own version of history. Once under his spell, no divisions of substance within the New Labour "project" could be discerned. There was only one message; all else was a matter of personalities.
But there are big differences over policy within the Blair government, and even among the New Labour modernisers. For example, Mandelson proclaimed that the government "is intensely relaxed about people getting filthy rich." He presented his White Paper on a knowledge-led economy as heralding the end of government belief in state regulation. By contrast, Tony Giddens, also in Blair's camp, argues for a society which limits inequality of incomes and learns to regulate in a "reflexive" fashion suitable to a cosmopolitan society. Thus New Labour contains an unfinished argument over whether intervention in the market is to be reshaped or jettisoned.
A second, more pressing, difference among the modernisers is over the nature and destination of its constitutional reforms. Here, the prime minister has so far followed Mandelson's approach in preference to that advocated by Gordon Brown-or that implicit in the sweeping constitutional radicalism of the Northern Ireland Peace Agreement. Instead of Labour celebrating the energy unlocked by its reforms, Mandelson's line was to insist that the centre remains in control. He was confident that the national question would be safe in Blair's hands.
In Scotland, Northern Ireland, and now also in Wales, the hubris behind this assumption is evident. To read the newspapers in the "other" countries of the United Kingdom is to enter a different political universe where everyone knows that the foundation of politics is changing. But, at the heart of England, the London media remains cynical and disbelieving. There are thus two narratives to Labour's modernisation. There was-and remains-modernising the Labour party to make it fit to govern. Stop there, and the ambition is to become the modern masters of the old state. This is what Labour was in 1945. It is what Labour tried to be in 1964. And it is what Mandelson seemed to personify in the current government. But there is a second narrative too: to modernise the British state so that it is fit for a democratic European society in which sovereignty is shared.
now that philip gould has published his account of the creation of New Labour, it seems that confidential discussions of policy development before 1997 are open season. I had two memorable encounters with Peter Mandelson, in the period of John Smith's leadership, when Blair was shadow Home Secretary. A special meeting was organised by Graham Allen MP to discuss how to sell the idea of a Bill of Rights to the voters. Blair opened the event with an account of the way he had been converted in one of those "This House" debates, where he had found himself convinced by his opponents. We then broke up into smaller groups and I found myself in one with Peter. He suggested that the line should be "A Bill of Rights means better government." I commented that politicians always say they will offer "better government." It would be preferable to present basic rights as giving us "a better system of government." "System?" Mandelson queried, "That sounds like Grosvenor Square." (Where I had, indeed, stood in 1968 to suggest that the US leave Vietnam.)
It was my first-and, it turned out, my last-participation in a high-level Labour party policy discussion. My role as an outsider was to try to be constructive, so I let the Grosvenor Square remark pass. But I had been silenced by a familiar Mandelson technique. In a prescient Spectator article about him before the election, a friendly journalist, Anne McElvoy, reported how she had told him that he was "unwise to take a chauffeur-driven Rover from James Palumbo." He asked her if she thought he should travel on a penny-farthing. The Tories have always had access to business support, Peter continued, it was now Labour's turn. Pro-business herself, McElvoy warned him publicly: "The problem for politicians who acquire an appetite for luxury is that it is usually paid for by someone else. The recipient of the largesse is then stuck with defending the reputation of his benefactor." It turned out that she understood the future better than he did.
My second experience of working with Mandelson was on the issue of proportional representation. Before 1992, the Labour Campaign for Electoral Reform had grown into one of the most energetic causes within the party. The Plant commission was established to make recommendations. Raymond Plant had come round to support PR and so, it seems, had Neil Kinnock. The hope was that after the election the commission would be turned into an official body. The election was lost, John Smith became leader and, although in many respects a radical constitutional reformer, he was a strong supporter of first-past-the-post. It seemed that the Plant commission would recommend some form of PR, and that the leader would then reject it. This was a potential disaster for reformists in the party and for organisations such as the cross-party lobby group Charter 88, which I then led-and which could have been irrevocably split.
John Smith had to be stopped from turning Labour policy against PR. By chance, Jeff Rooker told me that New Zealand was about to hold a referendum on the issue. No one in Britain had seriously considered this option. I obtained as many copies as possible of the Saatchi and Saatchi-designed material from the antipodes. Paul Hirst wrote a paper for Charter 88 advocating a referendum in Britain. Copies of the pack and the paper were sent to John Smith via his advisor David Ward; to Gordon Brown via Geoff Mulgan; and to Tony Blair. Then I called Peter, who came into the Charter 88 office and took the material away with some scepticism.
The next day I got a call. "Do not publicise what you are doing or it will make it more difficult." The come-back was swift and it impressed. I have no idea whether Mandelson's influence had any effect on John Smith. What I know is this. He read the material immediately. He saw the tactical point: that a referendum would prevent damaging division in the anti-Conservative camp and in his own party. And as he personally favoured a form of PR, albeit of the least democratic kind, a commitment to a referendum would keep the option open to be fought another day in more favourable circumstances. Smith was persuaded. He was also happy to acknowledge that the case had come from Charter 88, something which had evidently worried Mandelson and which presumably lay behind his desire for secrecy.
I recount these two episodes to show that Mandelson is not the "spin doctor" he is often made out to be. The notion of a spin doctor implies an emptiness with respect to policy and belief. But Peter is not subtle, diplomatic or cunning. On the contrary, his qualities are speed and brutal clarity. He says what he thinks and imposes his view as hard as he can.
His commitment to rule from above became more apparent the next time I saw him. It was at a conference on freedom of information. By now, Blair was the leader and Peter was an official spokesman. Peter agreed that, after the Scott report which had just come out, public support for freedom of information could well be over 90 per cent. None the less, he said: "It will have to wait." It is rare to hear a politician say that something which is very popular, costs very little and is party policy, will not happen if he can help it.
The first cry of the modernisers was that Labour must not call for changes which the majority of voters do not want, and expect to be elected. Thus Labour had to catch up with settled opinion on nationalisation. Freedom of information, however, was an extraordinarily popular issue. There was and is no electoral drawback to this reform. It also matters in people's everyday lives, for example with respect to food safety. It was an Old Labour instinct for control, not electoral cunning, that motivated Mandelson's scepticism towards freedom of information.
The management of constitutional reform commitments-inherited from the era of Kinnock and Smith-by political "control freaks," is producing a political effect best described as constitutional interruptus. From Scotland to the Lords, from freedom of information to human rights, it starts in stirring fashion, then pulls back from making the connections and fails to deliver on the spirit of reform, leaving expectation aroused but not satisfied. As a result the national question has started to beat more loudly.
In response to the challenge of the Scottish National Party, Labour's most important constitutional spokesmen-Blair, Brown and Irvine-finally spoke out at the end of 1998. Each addressed the relationship of Labour's institutional reforms to Britain's national identity. All declared that the country must now become a uniquely multinational, multi-ethnic and multicultural country. "To achieve this," Brown argued, "we must move from an old, centralised uniform state-the Britain of subjects-to a modern, pluralist democracy-the Britain of citizens... Britain will need not only unifying ideas of citizenship, but the new constitution we propose." Shortly after, however, the Lord Chancellor, Derry Irvine, denied any such proposal: "We have embarked on a major programme of constitutional change realigning the most fundamental relationships between the state and the individual... We are not, however, hunting the chimera of constitutional master plans, nor ultimate outcomes."
Brown says that the government will change "the system." Irvine argues that it will not. The two formidable Scots are aware of the core issue that neither referred to directly. Brown's new settlement means a written constitution. He wants to go the whole way. Irvine's formulation rejects this. It makes the case for interruptus. The prime minister also addressed the matter in a speech in Strathclyde. Even though the arguments of his two chancellors are incompatible, Blair managed to present an overview that did not contradict either of them.
Blair has kept his options open. Brown has been allowed his view, it seems. Irvine, who is hardly a man of half measures, was obliged to defend Labour's historic changes in unconvincing language as "incremental," an effort to "try to manage and respond... by modernising and reforming existing political processes" (my emphasis). A generous interpretation would be that Downing Street wants to assess the public response. But Alastair Campbell holds, like Mandelson, that constitutional reform is of little interest to ordinary people. He says this to the media, openly and repeatedly. The lack of interest in constitutional arguments from the government's media managers means that the story is not "spun" and therefore is seldom followed very closely by the press. Neither Brown's statement nor Irvine's speech were covered in the main broadsheets. If there is a great debate over British sovereignty, it proceeds in silence.
The silence is desired by many at the heart of government. An effort is being mounted, as Jack Straw put it recently, to "bed down" the government's reforms-a suitable fate, perhaps, for constitutional interruptus. Behind this reassuring phrase there is a purpose. In management terms, the approach is sometimes called tight/loose control. You encourage subordinate branches or people to act with autonomy while retaining the ability to tighten the rein whenever necessary. In a Christmas interview, Straw stated: "The more powers are devolved to parts of Britain and to citizens, the greater the need for a strong, small centre." Tell that to the Scots... Straw advocates a central controlling judgement to decide what is good for each part of the "pluralist" United Kingdom. Irvine states that "what strong established democracies such as ours must do is to try to manage and respond." He calls this approach "the principle of 'what matters is what works.'" Mandelson could not have put it better. It is the defining oxymoron of his version of New Labour, in which "what matters is what works" is seen as a matter of high principle.
this approach leads to a form of government best described as "corporate populism." It creates a dynamic, "can do" approach which centralises strategic decision making. It is a clear improvement on Old Labour. And it is far preferable to the Tories-especially after 18 years of disregard for public goods. None the less, it is not a democratic approach to the exercise of power. If it continues it will become increasingly illegitimate. It is not yet fatal, and the exit of the corporate populist par excellence-Peter Mandelson-may swing the balance of argument against it.
Corporate populism is an approach to power, not an ideology or creed. It is an attitude which helps to create both the refreshing effectiveness of the Blair administration and its suffocation of independent opinion. The heart of corporate populism is the way Downing Street treats the government of the country. It manages party, cabinet and civil service as if they were parts of a single giant company whose aim is to persuade voters that they are happy customers who want to return Labour to office.
All modern governments must believe in some kind of agency. They spend between 30 and 50 per cent of the gross domestic product. Whether they are religious fundamentalists or ponderous social democrats, they are bound to have assumptions about how to exercise power. In Britain, since the arrival of the welfare state, there have been broadly three such assumptions: consensus politics, conviction politics and, now, corporate populism.
As corporate populism contains aspects of both consensus and conviction, its distinction can be illuminated by contrast with each of them. Consensus politics assumed that the state-personified by the famous man in Whitehall-"knew best." Its origins lay in the success of the mobilisation for total war under Winston Churchill after 1940. It held that intelligent chaps who combined merit and prudence had led the country to world greatness. Their judgement had been tested in total war and most of the public had the good sense to extend their trust to them in peace. The best Labour chaps thought like this, as did the clever Tory chaps. So, too, did the greatest chaps of all, those who were "not political"-the mandarinate who monopolised policy advice. They were epitomised by Lord Bancroft, head of the civil service until he was sacked by Thatcher. He once declared that government "retains a depth, a touch of mystery. It turns not only on decisions rationally taken, but on those shirked or fudged, on the lift of an eyebrow or the unanswered question." The state operated through a private language of discreet quasi-masonic gestures; in this way empire was won and then relinquished, nuclear weapons were tested and Europe was joined.
Thatcher called it socialism. Her politics scorned the idea that such people knew best. The only creative agency was the market. The duty of the state was to free society from restriction and regulation, not least the state's own raised eyebrows, to clear the way for market forces and, when necessary, to relieve the poor left destitute in its wake. To achieve this, Thatcherism became the radical destroyer of the Establishment.
New Labour has inherited Thatcher's scorn for the Establishment but it rejects the belief that the market always "knows best"-and is happy to keep the state's share of GDP at 40 per cent. It wishes to prevent the damage which unrestrained capitalism does to many people, and the backwardness it imposes on Britain as a whole.
But if it looks neither to the Establishment nor to the market, how does New Labour imagine that it will achieve its reforms? The prime minister began the last election campaign by asking voters to trust him. Many did, and still do. His government, however, does not trust the people. It trusts only itself. As a result, Downing Street has become enamoured with the image of agency provided by big companies. Unlike the free market, the big corporation is a place of order and policy. It creates wealth and jobs, it develops and applies knowledge in a purposive fashion, it innovates, it is a global player competing around the world. It is light on its feet, effective and meritocratic. When it works, it improves living standards. It gets results.
In the first of its annual reports (the culmination of Mandelson's year in charge of the presentation of policy) Blair claimed that, "Changing a government is like sweeping away the entire senior management of a company." Speaking at the launch of a new college which will train future headteachers, Blair mocked education's current approach to management:"It's like saying to the managing director of a big company: 'Here's your 1,000 staff-now go out and manage them and get the best out of them, but we're not going to give you much help.' No company worth anything would do that." At the same event, David Blunkett, education secretary, was reported as saying that his department "sees itself as the equivalent of regional group management with headteachers as its plant managers."
The corporate populists know that the competence of headteachers is defining for a school. They refuse to accept the wild fluctuations in the quality of heads. They are investing ?100m to provide a facility where heads can increase their skills and learn best practices. The downside is that the government starts to interfere in more and more of the details of school life and thus starts to undermine the status and morale of teachers. It is a culture that can stifle effective education, pupils being neither products nor customers.
Corporate control is based on central strategic power-a focus on outputs and flexible management-while sales require market populism. Rich and poor alike should want to enjoy the corporation's products, whether plastics, supermarkets or television shows. Its public image and its products should never be too low-brow or too high-brow. Rather, the aim should be a classless universal appeal. New Labour created just such an identity for itself in its election campaign. It continues to do so in office.
take two recent examples of this corporate populism in action. The first brings us back to constitutional reform and how central strategic control is to be maintained over devolution. In response to the accusation of being control freaks, ministers respond by asking how this could possibly be the case when they are devolving so much power. A recent speech by Blair to senior civil servants reveals how the government believes it can have it both ways: "I attach great importance to a unified civil service working for all three administrations... We do not want anybody in the Welsh Office or the Scottish Office to feel that they are being cut adrift from the civil service. I also attach great importance to the establishment of efficient machinery for close working between the UK government and the devolved administrations."
Whitehall plans to oversee appointments in Scotland and Wales, so that their permanent civil service looks for advancement not within these countries, but to the centre. A special joint ministerial committee will negotiate united policies on issues such as EU grants and will head off and settle differences. This extraordinary innovation-the committee will work out of the prime minister's office to manage the unity of the United Kingdom-was announced to a near-empty House of Lords on 29th July at 1am. Even now, it has never been reported in a national paper.
Nor is this all. To bolster the controls provided by the unified administration and the joint ministerial committee, Irvine announced that "there will be 'concordats' between Whitehall departments and their counterparts in the devolved institutions which will be models for future co-operation." Doubtless the concordats are being drafted well in advance of any mere elections in Scotland and Wales. Meanwhile the Bill on London government is about to become a classic example of controlled devolution. One of its clauses states that "the secretary of state may by order make further provision for preventing [the mayor] from doing anything... which is specified in the order."
The second example of corporate populism concerns the government's view of accountability. Last summer the government produced its first annual report. An official government document, its appearance is indistinguishable from the Labour manifesto except that it is thicker and has more full-page colour photographs. Blair termed the report "a major innovation" and said at the launch: "It is the first time government has attempted to produce a document for the public that sets out what it has done... and then invites the public to make a judgement on it... People voted for this government on the basis of five pledges and manifesto promises based on a ten-point contract. They are entitled to know how we are shaping up-to hold us to account-year by year as we fulfil those pledges."
This is the promise: a new annual form of accountability. Alastair Campbell told the media that, from now on, it will be the equivalent of no less than the State of the Union address. Blair presented it to his assembled ministers (who had just been re-shuffled) and senior civil servants. They all applauded. There were no questions. Parliament had risen the day before. Accountability? Those who acquire the report (price ?5.95, Cm 3969) can tear out the "Your Say" page at the back and fax it to the report desk in the prime minister's office. It provides a narrow two-line space for "My number one priority for the year ahead" and a similar space for "My view on the past year." The Cabinet barely meets, Labour's National Executive has been neutered, the Commons is ignored, the Lords has been suborned. In these circumstances the government is unlikely to be held to account by fax.
It is efficient. Great things can be achieved-possibly peace in Northern Ireland, perhaps even the abolition of illiteracy. But it is no way to run a country. Far from seeking to encourage active citizenship, New Labour seeks to control the electorate and turn it into a satisfied customer. "In all walks of life people act as consumers not just citizens," Blair wrote in the annual report. It is not a vision in which the British public is seen as owning its own country and its political institutions. It is not one in which "we the people" are sovereign. Instead, the state has decided to identify the desires of voters before they can gain their own voice. In this way our feelings are attended to, but our dependency is maintained. It is the modernisation of subjecthood.
It cannot last. No political party, let alone the thin grey line of New Labour pagers, can replace the Establishment in order to preserve the absolute sovereignty of the executive. If Blair continues to embrace corporate populism, he will become the last premier of the old regime rather than the first of the new one.
Of course, members of the English political class, like Mandelson, will find such a statement "Grosvernor Squarish" (meaning empty and portentous). They do not believe that there can ever be a new democratic settlement. They want a stronger, smaller version of the present one. But with the Establishment broken, deference dissolved, the Tories in ruin, the Church of England reduced to a sect and the monarchy sidelined, only New Labour is holding the old machine together. The strain is evident in Wales, where a ruthless effort is being mounted by Millbank and No. 10 to prevent Rhodri Morgan from becoming first minister. You can see why. Educated at Harvard and Oxford as well as in the valleys, regional yet worldly and hardly a leftist, he has just the kind of modern, independent approach you would expect in a new European politician. But this means he would want to pick his own senior civil servants; that he has the audacity to object to Whitehall concordats; that he will not be deferential in the planned joint ministerial committee when he joins Blair and Dewar. He must be stopped! And, by God, the trade union bloc vote will be utilised to do it. Perhaps it will succeed. It often has. But it is clear enough that, if not in 1999, then before 2009, there will be first ministers and powerful mayors who are not the placemen of No.10 and that "the system" which governs the United Kingdom will be changed.
The main reason for this is the European Union. This brings us to the concluding paradox of our story. Peter Mandelson was among the government's most committed Europeans. He saw that power was there. He was determined that we should share it and join the euro. He took a sustained interest in how this might be achieved. He decided that it could be finessed by bringing Rupert Murdoch round. He even described his calculation in a television interview. So, while Mandelson rejected any embrace of constitutional reform as a whole and insisted that it be managed piecemeal so as to preserve the system, he also insisted on the need to fuse our currency with the euro, one of the greatest overall changes to our constitutional status imaginable. To cover himself, Mandelson hung out tattered Thatcherite imagery of the national-popular. He posed with a bulldog in the 1997 election, imitating the pose Norman Tebbit had adopted ten years before when Mandelson ran Neil Kinnock's general election campaign. He told an audience of Asian businessmen that "together, we have reclaimed" the Union Jack, "restored as an emblem of national pride and national diversity... of a diverse and outward-looking Britain." He declared that the Dome represents the nation's "craving for unity."
Within the narrow reasoning of corporate populism it seemed obvious enough. One had to retain control at home while exercising influence abroad. Downing Street says privately that voters will come round in the referendum when they realise that joining the euro is a necessary step to protect British influence. This has been the public tune of official pro-Europeans since Macmillan: that Britain needed to join in order to conserve its standing. Participation in the euro, however, is not just about conserving what we have, but changing ourselves, too. On this, the opposition speaks the truth, which gives it a certain advantage if it is the only one to do so.
The government continues to lampoon advocacy of big-picture constitutional reform. Irvine says that the alternative to proceeding piecemeal is "a master plan." Straw tells The Times that the alternative to "case by case" reform would have to be "a huge government of Britain Bill, five volumes long, that could not be properly scrutinised." They imply that an overall approach is un-British and impossible. Yet the euro was created by just such a process and is proof that modern politics is not trapped in a choice between the bit by bit or the all at once. It is possible to set an ambitious goal-a new currency, a new constitution-and then proceed towards it step by step. Indeed, the government knows that it is setting about the transformation of sovereignty, but has decided it is a message it cannot sell.
Britain had a clear constitutional story. There was the absolute sovereignty of the Crown in Parliament. Its absolutism was shared by an elite, not exercised by a tyrant. The unwashed were allowed in bit by bit when this was necessary to preserve the whole. It was staggeringly successful-creating and relinquishing the world's greatest territorial empire. That story has come to an end. The old constitution, which was as coherent as it was unwritten, is in pieces.
British exceptionalism is finished. The Eurosceptics deny this and claim that we can preserve traditional Anglo-British sovereignty. The elitist affliction of pro-Europeans leads them to duck the sovereignty argument altogether, preferring people who place their trust in the technocrats. Three years ago, Edward Heath gave a Winston Churchill speech to the European Movement in London. He disparaged the Eurosceptics and rubbished opposition to currency union. He was introduced by Mandelson, who told us how he had met Heath as an aspiring young politician and how much he had admired him ever since. Both single. Both meritocratic products of the southern suburbs. Both exceptionally able and obsessive. Each arrogant and lacking the popular touch. Each, in their different ways, seeking to modernise a country in decline. Seen together, they appear to be pressed from a similar mould.
It is 25 years since Heath left Downing Street but we are still waiting for a democratic second chamber, a Freedom of Information Act, our own Bill of Rights, and the other necessities of a normal western society. Why? The answer, it seems, is that the good old system always provides an opportunity for determined and ambitious English politicians-like Heath and Mandelson-to modernise it, rather than replace it. The question for Tony Blair is whether he wishes to continue to follow Mandelson in this course, or whether he can abandon the corporate populism that is its latest reincarnation and embrace the risks of a real constitutional democracy.
