by Tom Bower
Blair ignored Hague’s brickbats. His nervous dislike of his own party was reflected by his agent’s advice on his first visit to a working-men’s club: ‘Don’t ask for Perrier.’ But the party’s rapturous response had restored his self-confidence and, since the Tory corpse was heading further to the right, as reported by Gould, he could tell his colleagues that the Conservatives were no longer an electoral threat.
Privately, however, Blair knew that Hague’s speech had exposed his limitations, and he feared that his ministers were insufficiently courageous to overcome Whitehall’s neoliths. Beyond the core of his team, he lamented, few genuinely understood how New Labour’s success depended upon slaughtering those ‘sinecure cynics who despise anything modern and are made uneasy by success’. New Labour making good on its promises depended on his own relentless willpower.
The Dome in Greenwich, where the arrival of the new millennium would be celebrated, reflected those weaknesses. There was no reason why Blair’s ambition for the Dome to project Britain as young, confident, relaxed, dynamic and diverse should not have been realisable after the Cabinet had agreed, in June 1997, to continue with the project inherited from the Tories. With two and a half years before its opening, there was sufficient time to hire Disney’s expertise and prepare an entertaining show that, predicted Mandelson, the then minister for the Dome, will ‘make a powerful statement to the world about Britain’s new-found pride and self-confidence’. The only necessity was appointing a creative manager. Selecting the right person for any task ranked high among Blair’s weaknesses, and instead of luring a Disney executive, he chose Jennie Page, a callow bureaucrat. The result would be a financial and cultural disaster. The estimated cost was heading towards £828 million, double the original budget. If New Labour’s ‘modernisers’ could not even produce Disney-by-the-Thames, how could they transform Britain’s public services, which were already consuming nearly 35 per cent of the nation’s revenues?
THIRTEEN
Saving the NHS
* * *
Blair would write that his conference speech of 1999 reflected his anger at the entrenched interests within the NHS and its trade unions. In hindsight, he blamed the NHS managers who supported Labour for preventing change. That could not have been true. At the time, he offered no radical plan to reform the health service, instead repeatedly urging his inner circle, ‘We need a strategy.’ Civil servants were asked to produce a solution for a politician searching for a spiritual identity. They duly examined Blair’s speech for clues. Replacing ‘conservatism’ with ‘modernisation’, they decided, was not a policy.
With Blair’s support, Frank Dobson had repudiated the Tory reforms, issued commands and waited for the extra billions of pounds to save the NHS. ‘We will run from the centre and govern from the centre,’ Blair had often said, but he also complained that his message about ‘change’ was failing. The NHS, he acknowledged, was ‘underfunded, under pressure and unappreciated’ – and was not delivering. A Mori poll showed that public satisfaction with the NHS had fallen from 72 to 58 per cent during the previous year. Blair was baffled.
He had inserted into his conference speech ‘the dreaded internal market’ would be ‘banished for good’, words that Dobson had applauded. Blair knew that this wasn’t true, but with similar hyperbole he had also promised his audience that his plan to improve cancer treatment would save not 60,000 but 100,000 lives. Winter would test his veracity.
To find a solution, he engaged in circular conversations with health experts, always starting with the same two problems: Dobson had not yet saved the NHS; and money was not proving to be a quick fix. Some visitors told him that effective reform depended on breaking down vested interests and ending centralised control. Blair’s charm convinced them that their arguments had made an impression. They were mistaken. George Alberti, the respected president of the Royal College of Physicians, was taken by Blair’s manner but understood the reality after advising Blair that ineffective A&E departments should be closed.
‘You can’t close A&Es,’ protested Robert Hill, Blair’s special adviser. ‘They are in today’s towns what churches were in the nineteenth century.’
‘Treating a hospital as an icon’, replied Alberti, ‘is not an excuse for unsafe care.’ Hill, he concluded, was ‘a bit thick. Not up to standard.’
Blair confessed some doubts. ‘We were wrong to end GP fund-holding, weren’t we?’ he asked Alan Langlands.
‘Yes,’ the chief executive agreed.
Not mentioned was Blair’s impatience with Dobson. In reality, both men were floundering. Neither understood that officials were unable to solve a crisis perpetuated by politicians.
Circumstances altered Blair’s assumption that Dobson should remain responsible for the NHS. There was no intention to remove the minister, but the left-winger Ken Livingstone unexpectedly threatened, despite Blair’s efforts, to stand as Labour’s candidate in London’s first mayoral election, a successful Blairite innovation. In the prime minister’s opinion, the party’s only suitable contender was Dobson, a London MP, although, as the candidate improbably recalled, ‘It wasn’t significant for Blair whether I stood or not.’ The health minister volunteered to take the risk in exchange for Blair’s assurance of a return to the Cabinet if he were defeated.
Dobson was replaced by Alan Milburn, who in late 1998 had been moved from health to the Treasury.
‘Put your foot on the accelerator,’ Gordon Brown advised.
‘We need to modernise,’ Blair told him.
‘Yes, Tony,’ replied Milburn, who would recall, ‘I returned to find a burning platform, which was a blessing rather than a curse.’
Waiting lists had not been cut but instead had increased by 150,000. The waiting time for heart and hip operations was still two years. Over the previous three years, despite Brown’s freeze, spending on the NHS had increased annually by about 3 per cent, yet only 2 per cent more patients were being treated. One explanation was that since 1997 the service had recruited more administrators than nurses.
‘The NHS has imploded,’ Milburn told Blair soon after his move. ‘The situation is grave, especially for Labour.’
Blair summoned the department’s senior civil servants to ask why the party’s assumption that it would deliver remarkable achievements had not materialised. The NHS, he suggested, not for the first time, required a new plan. ‘The 1997 White Paper’, he told the officials, ‘is unfinished business.’ They in turn silently registered that the White Paper was now discredited. Few dared to volunteer the full truth. Health care was a Byzantine jigsaw without straightforward solutions. Pushing one button caused unexpected repercussions, and the complexity was increasing. Blair wanted ‘modernisation’, the officials understood, but he failed to grasp that managing change required special skills.
While academics were ripping apart research into the past and proposals for the future, Blair’s refusal to consider any departure from Dobson’s orthodoxy, especially Labour’s partisan opposition to ‘choice’, presented an unusual log jam.
‘Right, we’re going to sort this out,’ he said, believing that words themselves would guarantee delivery. He still expected extra money to resolve the crisis, and Milburn agreed. One solution both excluded, for the umpteenth time, was to use the private sector. ‘That’, Milburn declared, ‘would be a Trojan horse for privatisation.’
Getting extra money depended on the chancellor. At a meeting in Downing Street on 19 November 1999, Gordon Brown sulked. Despite his boast that the state’s finances were robust, he refused to allocate any additional new cash for hospitals. Blair did not understand why. Thanks to the inheritance from the Tories, the budget was running a surplus, the debt was still falling and, as he told supporters in Newcastle, ‘We’ve introduced literally a revolution in economic management.’ Brown’s pieties about ‘ending boom and bust’, ‘prudence’ and ‘the abolition of the economic cycle’ enhanced the government’s reputation as public-sector debt continued to fall t
o historic lows, offsetting damaging publicity about the chancellor’s stealth taxes, an increase in national insurance and a self-destructive 75p rise in the weekly pension.
‘He sees himself in opposition to us,’ said Blair, infuriated when Brown, without any consultation, and after refusing extra money for hospitals, announced a plan to cancel the Third World’s debt to Britain. His contempt towards Blair had become brazen. ‘Don’t ever speak to me like that again,’ snapped Blair in fury after another insulting incident. ‘We might be better off without him,’ he told Campbell. ‘He has flaws.’ His chancellor’s bachelor lifestyle – chaotically untidy homes and tormented relationships with women – reflected his awkward psychology. In his relationships with the public, civil servants and those beyond his intimate circle he was devoid of emotional intelligence, though he still attracted many admirers. In his bid for the leadership, for instance, Brown adroitly wooed Murdoch’s newspapers and the Daily Mail group, which would revere him as blessed by ‘a mantle of greatness’. By contrast, the Blairs’ dinner with the Mail’s editor and proprietor would end amid mutual loathing. The problem, as Blair conceded, was the absence of a replacement for his chancellor. ‘You always think Gordon speaks for the party,’ Charles Clarke told Blair. ‘He hasn’t got the pull.’ Blair disagreed. He knew Brown had assiduously courted support among MPs and the trade unions. Fearing that the NHS could become a negative issue at the next election, Blair was convinced that the only solution to Brown’s sabotage was to override him in some way. But circumstances gave him scant opportunity.
A new storm was growing over NHS waiting lists. Once again there were reports describing the sick waiting on hospital trolleys for twenty-four hours before being admitted. Among the victims was Mavis Skeet, a cancer patient whose long wait had possibly condemned her to a premature death.
Then, on New Year’s Eve, a new disaster materialised. Poor organisation meant hundreds of guests and journalists hoping to celebrate the new millennium were left fuming outside the Dome, unable to pass through the sole security control. Inside, Blair and the Queen awkwardly held hands, obviously wretched. Cherie looked even worse. Inside and out, the Dome was an unmitigated flop. And it got worse. Ten days later, after returning from a break as a guest of Cliff Richard in the Algarve, Cherie was stopped at Blackfriars station for travelling without a ticket. She was fined £10. The media headlines fed Blair’s overriding conviction: ‘In the fast changing world … one must communicate at the speed of light compared to the speed of sound.’
The same applied to the NHS. On 14 January, the New Statesman revealed that Professor Robert Winston, a pioneer of in vitro fertilisation and a Labour peer, blamed ‘a conspiracy of silence’ for deceiving Blair about the parlous state of the health service. He also accused Blair of deceit about closing down the internal market when he hadn’t. To illustrate his case, Winston described the treatment his mother had received in a London hospital. He had found her lying abandoned and unfed – after waiting thirteen hours in casualty – on the floor of a mixed ward, where she later caught an infection. The exposure of such negligence by an eminent doctor was aggravated by the sight of Winston leaving his home the next day looking ‘beaten and dejected’ following a conversation with Alastair Campbell. In his briefing to journalists, Campbell blamed the Conservatives for the poor treatment received by Winston’s mother.
To break the cycle of misery, Blair needed to deflect the criticism. Repeating once again in the Commons that Brown’s ‘extra £21 billion is real money’ was certain to rebound. The public knew the truth about the chancellor’s triple counting. ‘It’s time to stop fighting the last war,’ Blair agreed. Among those close to Milburn, the questions from Downing Street suggested that Blair was finally taking a serious interest in the NHS. As usual, he did not ask experienced civil servants for advice. As Andrew Turnbull put it, ‘He’s charming but deep down he has no respect for us.’
To stage a counter-coup against Brown’s withholding of funds, Blair’s office arranged for a television interview with David Frost on Sunday morning, 16 January 2000. ‘In the hours before his appearance’, reported an eyewitness, ‘Blair’s office was chaotic.’ Closeted with Milburn, the health secretary’s assistant Simon Stevens and his own special advisers, Blair was preparing a bombshell to capture the headlines. A telephone call the previous night from Downing Street to the Department of Health’s chief economist had revealed that while Britain was spending 6.9 per cent of its GDP on health, Germany and France each allotted over 10 per cent, with the European average at 7.9 per cent. ‘Tin-helmet time with Gordon,’ an adviser chuckled. Brown was not told about the plan.
In the course of his interview, Blair admitted there were ‘problems’, but he ruled out the NHS’s use of the private sector. His masterstroke was to announce an unprecedented 5 per cent annual increase in spending for the next five years so that the NHS would match the European average. In effect, the NHS budget would rise from £34 billion in 1997 to £76 billion in 2006. In the hours after the interview, spending extra billions of pounds was presented as a triumph. Brown had been outsmarted, but Milburn and Stevens were struggling to understand precisely what Blair had promised. No video recording had been made in Downing Street, and the requested transcript from the BBC got stuck in a faulty fax machine. ‘It was the most important battle of his prime ministership,’ Jonathan Powell would write.
‘He’s stolen my fucking budget,’ screamed the chancellor as soon as he heard, accusing Blair of thinking the solution to every problem was ‘always more money’. In their first conversation after the broadcast, Brown flatly told Blair that the NHS’s budget would not be increased before the election, and then only after a Treasury review. His refusal was followed by other Cabinet ministers demanding their share of the chancellor’s fabled war chest, built out of the accumulated surplus.
The ‘crisis’ for both the NHS and the government dominated the week, and the afterglow of the promised bonanza faded within days. The public and media were unconvinced that money alone would cure the problem. Opinion polls showed a majority were now dissatisfied with the government. ‘The headlines are a nightmare,’ an adviser briefed The Times. ‘It is turning into a disaster.’ The blame was placed on an ‘overenthusiastic briefing’ by Robert Hill that suggested the extra billions would indeed prove to be the panacea. Nevertheless, despite the dissatisfaction 50 per cent of those polled said they would vote Labour, compared to 29 per cent for the Tories.
In Parliament and elsewhere, Blair was caricatured by some as an autocrat or control freak, but in truth he was struggling to make an impression. Standing on the stage of the Old Vic theatre to celebrate the Labour Party’s centenary, he addressed the disillusionment of his followers. In front of him were Ken Livingstone supporters, who were contemptuous of the Downing Street smear squad’s attempts to blacken their man’s reputation in the forthcoming mayoral election. After Blair left, the audience sang ‘The Red Flag’. New Labour’s roots were thin. His struggle to find a meaning for ‘modernisation’ seemed fruitless.
‘We’re putting money in,’ Milburn told Blair, ‘and nothing is happening. Everything is flat, except waiting times. The NHS is the last great nationalised industry that is an untenable model for the twenty-first century.’
Blair agreed: ‘The NHS should be a system of care, not a nationalised industry.’ Researchers had discovered discrepancies in care between the best and worst hospitals. Some employed twice as many nurses for the same number of critically ill patients; there was a 200 per cent difference between the cost of the most and the least efficient hospitals; some GP surgeries gave patients an appointment within twenty-four hours, while others expected their patients to wait five days; and the top 25 per cent of trusts used their consultants twice as productively as the bottom 25 per cent. The variation in performances and costs was as intolerable as the BMA’s obstruction to change. ‘This is the last-chance saloon,’ Milburn told a group of doctors at a dinner in Downing Street. Bu
t other than identifying enemies in the public services and spending money, Blair and Milburn were stuck.
Fundamental changes were needed. Blair and Milburn’s dilemma was that they lacked an acceptable solution. Like all party loyalists, both had ridiculed the six years of John Major’s government, when Ken Clarke had challenged those very same vested interests. Their mockery bequeathed vacuity. Harping on about ‘modernisation’, ‘reform’ and ‘New Labour’ as the route to a better NHS was meaningless. ‘We didn’t have the same sort of prior intellectual ferment to build on,’ admitted Powell in a backhanded compliment to Thatcherites. ‘To a large degree we had to make up our philosophy as we went along.’ Their struggles led to Labour politicians being ridiculed. Rory Bremner’s parody on his weekly television shows of Blair as an empty vessel buffeted by Brown and under Campbell’s control was too close to the truth.
‘Gothic quadrangles were his territory,’ observed Andrew Turnbull. ‘Oxford, the Inns of Court, Parliament. As a small-organisation man, he completely misunderstood that one man cannot run the government machine. He needed systems and specialists.’
New Labour’s skill was to discover what the electorate wanted and promise to deliver it. Blair was still struggling to discover how to move from shadow to substance. He explained his failure to Milburn as him being ‘terrified of the past’. The crowds cheering him as he drove from Islington to Downing Street on 2 May 1997 were crying out for maximum change, yet while his rhetoric matched their aspirations, his paralysed government was providing the minimum.
Ferocious arguments finally cajoled Brown into opening the purse strings. At the same time, Milburn persuaded Simon Stevens, by then Blair’s health adviser in Downing Street, to rethink the NHS before spending the extra billions. ‘There can be no parameters,’ he told his senior officials. In his opinion, most of his department’s staff were inflexibly resistant to change. In too many meetings he listened to officials reciting numbers proving that targets had been missed, but he still feared that new policies would destroy the essence of Nye Bevan’s 1948 dream. ‘I need to mount a coup against the department,’ Milburn decided. He recruited six advisers to staff a new strategy unit led by Chris Ham, a senior civil servant, and Stevens. His starting point was radical: the NHS was too big to succeed. ‘I took a blank sheet of paper,’ he would later say, ‘and the new NHS plan wrote itself.’
