by Tom Bower
Blair stared. ‘I am,’ he replied. ‘I know I am right about this.’
Blair recognised his minister’s weakness. Since his conversion to supporting competition, Milburn had become intolerant of his Labour critics and was unloved by the NHS establishment. To push his agenda, he had bullied his path through the opposition and had lost support. In one reluctant concession, he agreed to establish Monitor, an agency to protect the NHS’s values inside the foundation hospitals. ‘The best politics’, he had announced combatively, ‘is the best policy. Labour will get the benefit.’
Brown badgered Blair to silence Milburn. In response, Blair questioned Brown’s ability to become prime minister. In a throwaway comment, he even gave the impression he could replace the chancellor with Milburn. Then, fearful as ever of Brown on the back benches, he backed away and summoned Milburn and Stevens for an hour to seek reassurance.
‘If we lose the vote,’ threatened Milburn, ‘I’ll resign.’
‘Don’t be foolish,’ replied Blair. ‘If we lose, I’ll bring the legislation back without the Brown compromises.’
‘I didn’t believe Tony,’ recalled Milburn. ‘He wasn’t a coward but he was pragmatic. Brown had too much support in the party, and there was Iraq.’ But he did not reiterate his scepticism. He nodded as Blair repeated that foundation hospitals were of ‘monumental historic importance’, and then volunteered that he had surrendered too often to Brown; now he, Blair, needed to draw a line. Politically, he would test Brown’s motives by announcing more innovation and competition in the NHS and other public services. His reforms required new ministers, so there would be changes once the crisis had passed.
But first he needed to end the revolt. After telephoning some rebels to avoid defeat – and he counted over a hundred opponents – he called Brown over the weekend at his home in Scotland. As usual, the conversation, punctuated by threats and blackmail, ended without resolution. Many of his Labour opponents, Blair knew, were influenced by the continuing failure to find WMDs. Other critics in the party sensed that Blair’s support for foundation hospitals was not ideological. Blair could not accept that introducing the market into the NHS meant, if the circumstances arose, allowing a foundation hospital to become bankrupt. He did not rebut Brown’s spectre of abandoned patients suffering in a failed hospital with the natural answer – that a failed hospital would be automatically taken over by a successful group. Blair’s silence reflected his drift.
On Sunday morning, 6 May, he telephoned Milburn. ‘We’re going to have to find a way through this,’ he said.
‘What do you mean?’
‘We’re going to have to compromise with Gordon.’
Milburn was outraged. Blair had travelled to the turning point but refused to change direction. The wise politician, Blair had decided, is a trimmer, not a destroyer. ‘It’s the right thing to do,’ he said.
‘I had told Blair in 2001 to get rid of Gordon,’ Milburn said later, still feeling betrayed. ‘I got fed up with hearing, “Something must be done about Gordon.” I realised nothing would be done. He had tried to manage Gordon rather than pull the trigger. Brown blocked every reform. I was in a cul-de-sac and there was no way out.’
Blair’s fate was precarious. On Monday, Brown refused to return from Scotland to vote. At last, Blair grasped the nettle: if the government were defeated, he told Brown, he would be sacked. His chancellor returned to London and ordered his supporters to make an about-turn. Despite his speeches in the Commons and his calls to individual MPs, Blair was nevertheless faced with a revolt by sixty-five of his party. Victory had come at a price. Even more MPs were expected to join the rebellion in later votes.
Trust in their leader had fallen further. Chris Smith emerged from the mist to denounce Blair as a man who ‘never claimed to be part of the heart and soul of the Labour movement’. Blair was again torn over whether he should run for a third term or fight Brown by throwing himself into ‘truly radical’ change for the NHS. He was persuaded by Cherie to trounce his rival. ‘I’ve been driving with the handbrake on for too long,’ he exclaimed. Finally, he would wholeheartedly embrace the revolution. He would prove that he could turn lemons into lemonade. Milburn, he assumed, would be delighted.
His health minister’s request for a meeting in early June, he reckoned, was routine. That morning’s Sun newspaper had reported – to Milburn’s surprise – that Blair was to appoint him home secretary. ‘I don’t know if that’s true,’ he thought as he walked into Blair’s office. His own vision of the future was very different. After weeks of turmoil, he told the prime minister that he was resigning. Blair was ‘shocked’ as Milburn blamed disruption to his family life as the reason. ‘Blair made it easy,’ he recalled. ‘He didn’t roll his blue eyes and he didn’t offer me another job. He had a lot of empathy. In any case, I was unpersuadable.’
Some judged Milburn’s departure as seismic. Once again, Blair had been delinquent with a relationship. Not only had he forsaken loyalty and bowed to an enemy, he had also failed a test of leadership by sacrificing a potential successor. Carelessly, he had not considered the consequence of tilting against the standard-bearer of everything he held precious. Having championed Labour as Britain’s natural party of government, Blair was undermining his own ambition. Jack Straw and John Reid may have looked into the mirror and seen themselves as Blair’s successor, but neither possessed Milburn’s potential. Blair appeared to care more for his enemies than his friends, and his concessions to Brown had tipped the balance. ‘Your problem’, he told Milburn, ‘is that you’re too rational for politics.’ Milburn would see himself as principled. By contrast, Blair had equivocated too long and was then short-sighted and selfish.
Across the NHS there was shock and anger. There was predictable gossip about Milburn’s ‘family life’, while others accused him of betrayal. Blair they accused of folly: he had gone to war against Saddam but not against Brown. ‘He [Brown]’, Blair would write, ‘was a brake, not a brick wall … I believed he was the best chancellor for the country.’
Blair’s own sense of his debt to Brown could not be overestimated. On arriving in the Commons in 1983, he had volunteered, ‘I was very non-political in my view of politics.’ While he governed by instinct rather than analysis, Brown’s strength was to develop slogans from analysis. After he gave Blair the phrase ‘tough on crime, tough on the causes of crime’ for a speech, Blair admitted, ‘I really never looked back.’ But, in his opinion, Brown had mistakenly assumed that Blair remained ‘an empty vessel into which the liquid that was poured was manufactured and processed by him’. His illusion, continued Blair, was that ‘I was just a front man … incapable on my own … [but] no matter how good an actor you are, in the end it’s not an act.’
Driven by instinct, Blair’s flexible showmanship always trumped Brown’s addiction to convention. Their endless arguments about the succession would lead Powell to write, ‘His way of managing Gordon was to string him along indefinitely without ever addressing formally the difficult issue of who was in charge.’ Others would say the opposite. Blair was clear that he was the commander but acknowledged that, if sacked, Brown would be able to mobilise sufficient MPs and trade union leaders to destabilise the government from the back benches and deprive Blair of support.
Blair never examined similar rivalries in history to understand how powerful challenges to his predecessors had been defeated by careful preparation. Successful leaders like Harold Macmillan and Margaret Thatcher survived by marginalising opponents. Dismissing the big beast would have outraged Neil Kinnock (still a force), John Prescott and the trade unions, but eventually they would have put party ahead of personality. By sacrificing Milburn, Blair put his own security ahead of principle. He did not seek to understand how Clement Attlee, Hugh Gaitskell and Harold Wilson had disarmed their opponents. He lived in ignorance of history by believing that his successful fight in 1995 to ditch Labour’s Marxist Clause Four was world-shaking. In truth, the vote was a signpost. His power wa
s based on his electoral victory and was challenged only by the defeated Brown. Blair’s weakness was to shy away from spilling blood when he was guaranteed victory, without understanding the strength of the truism that cemeteries are filled with indispensable people. Instead, he consoled himself that the advantage of Brown’s presence outweighed the cost of his absence.
As usual, Blair’s survival gene suppressed any self-blame. Despite his surprise at Milburn’s departure, he refused to look back in self-recrimination. His resilience was fed by focusing on the future. While he acknowledged Iraq as one reason for his weakness, he failed to recognise something more profound. Kevin Tebbit, a seasoned Whitehall warrior nearing retirement, identified the flaw: ‘Blair didn’t own his policy. He didn’t understand that you have to stick to it all the way like a gadfly. He was like a barrister who came and then walked away. He should have dipped everyone’s fingers in the blood to get delivery.’
Milburn’s departure was followed by Simon Stevens accepting a post in America. ‘You’re leaving,’ Ed Miliband, a Treasury special adviser, told Stevens, ‘so we won’t pay any attention to you.’ Within a short period, Blair had lost his two agents of change. Nigel Crisp was empowered to be in sole charge of the NHS – and he did not believe in the prime minister’s reforms.
Blair retaliated by appointing John Reid as Milburn’s replacement. Born in Glasgow, Reid’s early life of whisky, womanising and membership of the Scottish Communist Party had permanently alienated the Presbyterian Brown from the sinful Catholic. As a shrewd political operator during the 1970s, Reid had proved himself to an admirer as ‘remorseless, unremitting and practical. Just like Stalin.’ To defeat Labour’s left wing, he had advised Neil Kinnock, ‘Get the synthesis right, pick the moment and then kick the shit out of them.’
In compensating for his lack of political substance, the muscleman had become Tony Blair’s ‘Mr Fixit’ – ‘a semi-polished pearl among a lot of mud’. Known as ‘a safe pair of fists’, Reid was more than just another minister; he was the remaining Blairite who could be nurtured to challenge Brown for the leadership.
In the reshuffle following Milburn’s departure, Reid was given his fourth job within a year. ‘Oh fuck, health,’ he cursed in an eruption that echoed across Whitehall. On his first day in Richmond House, he assured officials that his period in the building would be short. He would rely on Paul Corrigan, a former academic and his special adviser, to supervise Nigel Crisp.
Among Reid’s visitors that day was Dame Carol Black, the president of the Royal College of Physicians. In advance, Reid was given a list of ten issues Black wanted to raise and a 300-page briefing about the problems, in the manner Milburn preferred. ‘I don’t fucking understand the point of these ten fucking points,’ Reid screamed to Andrew Foster, a senior official. ‘I just want one page. And when fucking Black comes into the room, you can fucking answer her questions.’ There was a pause, and he then asked, ‘What is a physician?’
‘Well, a surgeon cuts and a physician doesn’t,’ he was told.
Reid greeted Black with charm. To prove his expertise, he said, within the first moments, ‘I realise that physicians don’t cut people up.’ Black looked baffled throughout the remainder of the meeting.
Next, Reid prepared for his first radio interview. His questioner, Foster advised, would ask about the MRSA bug infecting hospital patients. Dirty staff were causing widespread illness, but Reid did not ask about the bacteria or the treatment. Instead, the new minister sat with a piece of paper reciting the bacteria’s full name. One of his talents was to ‘wing it’ by delivering soundbites to the media, so when he appeared on Radio 4, Reid spoke confidently: ‘I know the public are worried about methicillin-resistant Staphylococcus aureus, known commonly as MRSA, and believe me, we are going to defeat this problem.’ His audience, Reid knew, would be impressed by his fluent enunciation and unaware of his ignorance. Blair’s minister was skilled at managing the message. Corrigan, the department would come to recognise, was more interested in caring for Reid’s image than supervising the NHS’s management.
Reid’s first challenge was to resolve the consultants’ contracts. Nine months earlier, the doctors had rejected Milburn’s offer, which would have terminated some profitable abuses. A presentation to Blair by the health department on 4 November had revealed an ugly scenario of a war between ministers and doctors. For a politician who preferred to be liked, this was a prospect to avoid. The antagonism with the consultants, Blair declared, should end. He wanted Reid to make the NHS a vote-winner for the election. There was nothing ‘progressive’ or Third Way in the instruction; all that mattered was crushing the ‘wobble’ to win a third term. As usual, Blair did not ask about the financial cost.
Foster gave Reid a thirty-two-page brief and an equally thick appendix describing the disagreements. ‘Far too much,’ snarled Reid. ‘Two pages. Nothing more.’ The detail was irrelevant. He called Paul Mitchell, one of the BMA’s negotiators: ‘We’ll do six tweaks and have a deal in forty-eight hours.’ The tweaks included abandoning two of Milburn’s demands: that the consultants work exclusively for the NHS for the first seven years; and that they be available for work after normal hours and over weekends.
‘If you give that away,’ Reid was told by his senior official, ‘the costs will increase by many millions.’ The minister wanted headlines confirming him as a problem-solver. He surrendered. Blair approved the increase in costs while travelling abroad after a telephone conversation with Brown, but he and his Downing Street advisers did not understand the consequences. Neither Reid nor Corrigan asked Crisp whether the right contracts had been drafted for the health authorities to present to the doctors. For his part, Crisp, with limited interest in human resources, left individual hospital managers to accept the contracts offered by the BMA. Not surprisingly, the BMA’s version favoured the doctors.
‘The BMA don’t have the patients’ interests at heart,’ George Alberti, the former president of the Royal College of Physicians, warned Blair. The government’s three pay settlements had rewarded NHS staff with an average 9 per cent pay increase, without any improvement in productivity. Within a year, British doctors and nurses ranked among the highest paid in the world. After taking account of the pay awards and rising drug costs, only 2 per cent of the annual 10.8 per cent increase in the NHS budget would be spent on patients. The estimated cost of the NHS’s new computing system, which had been approved by Blair in 2002, had risen from £2.3 billion towards £10 billion. The prime minister said nothing. ‘We changed the doctors’ contracts’, Powell would write, ‘so that they were better paid and had to work more hours for the NHS.’ Two years later, Blair discovered that, despite their higher income, they were working fewer hours.
‘The boss says I should see you first,’ Reid told Ken Anderson soon after arriving. The new minister’s self-introduction was appealing: ‘I believe that if we don’t change the NHS, it will become a poor service for poor people.’ For Anderson, Reid was a breath of fresh air. The minister had no stake in the NHS Plan 2000. Milburn and his bullying was replaced by a politician uninterested in policies. ‘Foundation hospitals’, said Reid at the outset, ‘are important.’ His commitment to the market was unquestioned.
Blair had defiantly announced plans to double the number of foundation hospitals after the enabling bill was passed by MPs in July with a majority of thirty-five, before heading for further trouble as it passed through the parliamentary process. ‘Does it mean that a hospital could close?’ he asked the House rhetorically. ‘Yes, it does.’ Brown’s opposition was Reid’s incentive to make foundation hospitals work. He assumed that Crisp would compensate for his own meagre knowledge.
Blair’s misfortune was that the NHS’s chief executive had little interest in building the infrastructure to implement his reforms. ‘The rats are returning to the ship,’ Milburn observed, surveying the dismemberment of his ambitions as civil servants in the department resurrected old attitudes.
Blair wa
s fighting on every front: the NHS staff, the trade unions, the civil service and a third of the Labour Party, led by Brown. Signalling his weakness, he had capitulated to allow the anti-hunting bill to pass through the Commons, provoking ferocious demonstrations in Parliament Square. His only weapon was his oratory, and he chose the NHS as the theme of his speech at the 2003 party conference in Bournemouth.
In anticipation of his appearance in front of a huge audience, Blair’s eyes sparkled. After endless rewrites and fraught rehearsals, the perfected tone enhanced his quest to crush his critics. His overriding ambition, or the ‘supreme fulfilment of my mission’, as he would write, was to show ‘how progressive politics, itself modernised, could modernise the nation’. In other words, he wanted to establish New Labour as the natural party of government by burying the distinction between left and right.
Achievements and adversaries were at the heart of an impassioned speech to a divided party. Cardiac deaths, said Blair, had fallen by 19 per cent since 1997, and cancer deaths by 9 per cent. ‘We should be proud’, he told his audience, ‘that we have increased public-service pay.’ But, he added, obstructive civil servants were preventing more improvements. Putting power in the hands of the patient and ending ‘one size fits all’, he said, were vital to ‘change the system … The reason I bang the drum for change is I get so angry that it takes so long, restless at how much there is to do. I want us to go faster, further.’ Few in the hall understood his accusation: they were the conservatives obstructing modernisation.
His critics outside the party dissected the hyperbole. Rates of death from cancer and heart disease had been falling ‘at similar rates’ since 1971, and cancer treatment across Europe was better. Britain’s survival rates were improving, but not by comparison to neighbouring countries. Much of the extra money spent on the new cancer programme, an audit revealed, was being wasted on bureaucracy and on unused technology because too few specialists had been trained. Targets were being shown to be meaningless. No one, for example, could identify how long a patient had waited at different stages in the treatment process. More waste was uncovered at the Modernisation Agency. The 760 employees were accused of causing disruption and the agency was closed. Other units created in Downing Street to modernise the NHS had caused confusion, and they too were shut down. To confirm his reputation as a cost-cutter, Reid also terminated the Health Action Zones as aimless and expensive. But, at the same time, he approved the employment of more doctors, nurses and managers, and rubber-stamped the creation of Transferring Community Services, another new programme designed to redirect 250,000 NHS employees towards improving a wide range of treatments – all without questioning the self-defeating complexity and cost of the growing number of services. The ever-increasing budget spent on more staff was justified by a fall in waiting times for inpatient treatment from 12.9 weeks in 2000 to 8.2 weeks in 2008. Few wanted to notice that the productivity of the workforce was deteriorating. The extra staff were working less. The solution, Julian Le Grand told Blair again, was to make a fundamental change in the NHS.
