Blair's missed chance

Reviewing the extraordinary career of Lord Blair, Roy Denman finds the roots of his failure in the decision-taken just after the triumph of May 1997-to postpone early entry into Emu
February 20, 1998

Lord Blair celebrated his 70th birthday last month. So this is a timely survey of one of the most charismatic and eloquent politicians that 21st century Britain has so far produced. Blair remade his party. In doing so, he walked off with the clothes of the Conservatives, scored the greatest electoral victory in British history, but was finally brought down, like his two predecessors, over Europe.

The biography passes quickly over the early years. Tony Blair had a conventional upper middle class, public school and Oxford education; he showed himself intelligent and personable but not academically brilliant. He became a barrister, but his interests were always political. At 30 he was a Labour MP, at 41, following the death of John Smith, he became leader of the opposition. At 43 he was prime minister.

Where the book comes alive is Blair's campaign to modernise the Labour party. He was quick to see the reason why the Conservatives had been in power for 54 of the 73 years between the fall of Lloyd George's coalition in 1922 and 1995; he was clear about how fundamentally Labour had to change.

Edward Bear throws some new light on Blair's manoeuvring to get this done. It meant abolishing clause four and trimming the power in the Labour party of the trade unions. It meant something more. Just as the Conservative party had accepted in 1951 the welfare state, so New Labour needed to accept the tax reductions of Margaret Thatcher. Blair is shown deploying a mixture of audacity, guile and eloquence in persuading his shell-shocked party to accept this.

He succeeded. Blair broke the mould of British politics where figures as formidable as Hugh Gaitskell and Roy Jenkins had failed. New Labour stood between the redistributive socialism of Tony Crosland and the social Darwinism of Thatcher. It occupied the centre ground once held by moderate, one-nation Conservatism. It was middle-England-friendly.

So middle England voted for it in May 1997. Only those who have reached their 40s will now remember that tumultuous night. This book brings it vividly to life-the Conservative greats falling like ninepins through the early morning hours. Labour achieved a majority of 179. Half their MPs had never expected to get elected. It was the greatest defeat for the Conservatives since 1832.

Of course the vote was not just an endorsement of New Labour. The book quotes John Major (the forgotten, lacklustre figure whom Blair defeated) as forlornly reminding friends that he had won more votes in 1992 than Blair in 1997. After 18 years of Conservative rule and growing evidence of sleaze, arrogance, in-fighting and incompetence in high places, millions of Conservatives had simply refused to vote. But Edward Bear also records a conversation in which Blair recognised his debt to media tycoon Rupert Murdoch. The deal the two had done before the election paid off. The Sun, with 10m readers, had swung massively behind Blair. That support, Blair was convinced, had turned a possible victory into a landslide.

For six months the sun shone and Britain purred like a cat. Then the new government had to make its first big decision. Most members of the EU were forming a single currency bloc on 1st January 1999. What would be the attitude of Britain? The book makes it clear that, up to that point, the government had run on decisions taken by Blair and his associates before the election. This was a new one. After several weeks of internal discussion, while a confusion of leaks and counter-leaks took some of the shine off the new team's lustre, Gordon Brown, the then Chancellor of the Exchequer, set out the government's decision. Saving some quite unforeseen developments, the British government ruled out membership of Emu for the life of the present parliament-in effect until 2002.

At the time this seemed a prudent decision. Public opinion polls showed a two-thirds majority against a single currency. In any case, early entry would have been difficult because the British and continental business cycles were out of line, and a period of stability for sterling would first have been necessary. But the government's election victory had been so crushing and the Conservative party so enfeebled and split on Europe, that a New Labour victory in 2002 seemed in the bag. A referendum could have been held shortly afterwards and Britain would have swept into Europe with Tony Blair at the helm.

The book's description of how it all went wrong reads like a thriller. The British economic boom, which had led the Conservatives in 1996 to boast that they were the leaders of Europe, reached the end of its cycle in 1998, while the continental countries were reviving. The growing number of those venturing across the Channel could see for themselves that British living standards were again slipping behind those of their neighbours. Pressure for more money on social services began remorselessly to rise-there was a serious health service crisis in the winter of 1998-99-and the government was forced to break its pre-election pledge not to increase basic rates of tax. Foreign investment began to move to the Eurobloc and British unemployment rose. So again did the sullen mass of the underclass, and the crime rate. At home the bloom was off the rose.

In Brussels, Gordon Brown found that every meeting of EU finance ministers was preceded by a Eurocouncil of those countries which were members of Emu. These discussions would often take all day and sometimes most of the night. He and his Greek, Danish and Swedish colleagues would only be allowed to join in when the decisions had effectively been taken. And the economic summits of the G7, to which Britain had been proud to belong, had gone. In its place was the G3-Emu, the US and Japan.

Then came the bombshell-the European surcharge of October 2000. The book contains a good deal of information, from interviews by the author with officials in Frankfurt and the British Treasury and the Bank of England, and later the European commission, about how the crisis developed: the run on sterling, the frantic defence of a now isolated currency, the now famous picture of a haggard Gordon Brown facing the press after a sterling devaluation of 30 per cent against the euro and a foreign exchange loss of some ?2 billion. From a telephone conversation between No 10 and the commission quoted here it is clear that British ministers could not believe that the Europe of the 11 would respond with the surcharge of 25 per cent imposed three days later on British exports.

The resulting uproar in the British press threw the Tories a lifeline. Germanophobia burst all previous bounds. The Sun's headline read: "To Hell With the Hun." The Spectator produced a special issue in red, white and blue. Tory pro-Europeans were mainly limited to a few former cabinet ministers, not, as someone tactfully put it, in their first youth. A large majority of the party, now led by Michael Portillo, scented blood and exultantly joined in a massive display of jingoism. The book describes the mood of despondency at Chequers during the weekend after the surcharge-the demonstrators outside, burning effigies of Chancellor Sch?uble and President Chirac; inside, the desperate discussion on which way to turn. The decision to postpone the election until the last moment in 2002 was based on the hope that things might turn up. A truce was eventually patched up over the surcharge. But its imposition, the rebuff, the sense of isolation and sour decline, touched that stubborn streak of insularity in the British and produced a bitter rejection of Europe. The book's analysis of the 2002 election shows that it was this mood which so nearly allowed the Conservatives to win back the ground they had lost so overwhelming only five years before.

The rest of the Blair story is a sad one. His majority for the next five years was narrow and diminishing; a re-invigorated Tory opposition had found in Europhobia a new cause and growing popular support; any prospect of winning a referendum on entering Emu had slipped away. Indeed, our European partners now gave up hope of our joining and went ahead without us. In June 2005 the Europe of the 11, shortly joined by Poland, the Czech Republic and Hungary, signed a separate treaty (the Treaty of Aachen), setting up a fully-fledged political federation.

At home the sky grew darker. The government's handling of public relations became as resented as sleaze had been under its predecessors; New Labour had enjoyed a considerable success in the year or so before the 1997 election, with its skilful use of spin doctors, but as the years went by, the more they distorted reality the more the public became sceptical. The economy did not help. Even before the surcharge, foreign investment in Britain began to move to the continent; afterwards the flight was headlong. With the economy in decline there was simply no money for the expansion of social services which the supporters of New Labour had hoped for-even though the armed forces were cut markedly below the level they had been at the time of the Gulf war. There is a vivid account of the discussions between the chiefs of staff before their collective resignation in the autumn of 2003.

The story effectively ends with the sad picture of Tony Blair preparing to go to the palace, immediately after the election of May 2007, to take leave of King William and vacate Downing Street for Michael Portillo.

The most interesting part of the book is its reflection on Tony Blair's key decision-to wait from 1997 to 2002 for a referendum on Emu. Edward Bear produces some contemporary evidence, based on reputable opinion polls, that if Blair, in his first year in office, had launched a wholehearted campaign for Emu, and then held a referendum, he could have won it. This seems thoroughly plausible. In his first year, Tony Blair could have walked on water. The Tories were a defeated rabble led by a second lieutenant.

Of course Britain would not have entered Emu immediately; the precise moment of entry could have been settled in the light of the relative movement of the British and continental economic cycles. But combined with entry into the ERM and a readiness to correct an overvalued sterling-euro rate by balancing lower interest rates with some additional taxation, Blair would have sent a convincing signal at home and abroad that Britain, at long last, was not just talking about Europe, but was willing shortly to assume the burdens of a big player.

And what a big player Blair could have been! The book quotes a respected observer at the Amsterdam summit of 1997 as remarking that there were only two dominant figures present, Chancellor Kohl and the newly arrived Blair. Kohl bowed out before the German elections of 2001. Blair, with his youth, his charisma and his mantle of success, could have been the leading player for a decade both in Europe and with the US and the wider world.

But he was a cautious man. He was above all concerned with winning the next election. As a skilled politician he knew how suddenly the public mood could change. He had not expected the huge majority he got in 1997. If the Sun and the rest of the North American-owned press had turned violently against him in an early referendum on Europe, as he was told in no uncertain terms it would, his majority might simply have melted away. So he decided to wait and see. As Edward Bear points out, this was less a case of indecision than a reluctance, shown already in several cases early on as prime minister, to oppose a powerful, articulate lobby-for example when he decided to back down over planned restrictions of tobacco advertising and cuts in extra funds for Oxford and Cambridge.

The second quality the book highlights is a lack of any clear overriding aim. What did Blair want to achieve? He wanted a trendy, slick, modern Britain. But beyond that, what? He was not a Conservative. Lionel Jospin, the first French prime minister he met, did not regard him as a fellow socialist. Perhaps Tony Blair simply wanted power. Many have wanted just that. But the great ones had a sharper sense of aim.

This, Tony Blair might have developed. He could have redrawn the map of Europe. But like virtually all British politicians of the last 100 years, he knew little of it. The book tells a story of Blair visiting Berlin towards the end of his second period of office. Shifting the German capital from Bonn to Berlin had tilted the balance of Europe. After half a century in a sleepy Rhineland town, the government of the greatest power in Europe had returned to its old home. The British ambassador took Blair for a short drive. He explained that from Berlin the world looked different. The wind blew in from the east. Warsaw, Prague and Budapest were next door. It was from here that Bismarck had tried all his life to keep the telegraph line open to St Petersburg. The ambassador showed Blair something of the rebuilt splendour of the old imperial capital, the huge sweeping avenues, the autumn sun gilding the tip of the Quadriga on the Brandenburger Tor, and the equestrian statue of Frederick the Great. Blair thought the ambassador was overdoing it. "It's one European capital among many others," Blair said shortly. "Effectively it's the capital of Europe, but it needn't have been," said the ambassador. He did not think that the prime minister had understood.

Blair's ten years in office covered much ground other than Europe. But it was on the issue of European unity that he missed his chance-in his very first year. The history of Britain's relationship with Europe in the 20th century is full of missed chances. This was the last and the greatest. It was also a personal tragedy.
Tony Blair: the lost leader

Edward Bear

Prospect Books, 2023, $40