Peter Oborne

Has Gordon Brown delivered his last Budget? The truth is that Blair hasn’t yet decided

Has Gordon Brown delivered his last Budget? The truth is that Blair hasn’t yet decided

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The general election of 2005 is starting to develop along curiously similar lines to 1987’s. A dominant ruling party is seeking a third consecutive election victory. The Prime Minister is no longer the electoral asset he was: furthermore, he is disliked, in some places hated, by an ever growing number of his own MPs. An obvious successor, just waiting for the moment to challenge, stands impatiently in the wings. The government campaign is in disarray, confronting a revitalised and at last technically competent opposition.

There is, however, one very sharp difference between the two election campaigns. Back in 1987 the Tory party was extremely well aware that Mrs Thatcher had become, in electoral terms at least, a menace. Party chairman Norman Tebbit, and the advertising agency Saatchi & Saatchi, resolved to keep her out of sight. Their strategy was to try to remind the British people that they were re-electing the Conservative party, while somehow causing them to forget that this meant putting up with Mrs Thatcher too.

Of course there were various courtiers who intimated that Norman Tebbit was excluding Margaret Thatcher from the campaign in order to further his own nefarious leadership ambitions. This faction found a champion in the employment secretary Lord Young, and even recruited its own advertising agency, Young & Rubicam, which ingeniously discovered polling evidence that proved Mrs Thatcher was a tremendous asset. By the end of the 1987 general election the Conservatives were basically pursuing two parallel campaigns: the Young & Rubicam/Lord Young campaign, and the Saatchi & Saatchi/ Norman Tebbit campaign. The never-resolved conflict between the two led to the celebrated row in the Cabinet Office on ‘Wobbly Thursday’ when Young seized Tebbit by the shoulders and shouted, ‘Norman, listen to me, we’re about to lose this fucking election.’

The same battle is being fought in Downing Street today, only in reverse. New Labour is just as well aware as the Tories were in 1987 that its Prime Minister has become an electoral menace. But it has heroically decided to ignore the evidence from focus groups and polling agencies, and put Tony Blair at the centre regardless. The courtiers Alastair Campbell, Philip Gould and Alan Milburn (today’s equivalent of Lord Young) have dictated the campaign strategy. This means boosting the electorally problematic Blair and excluding the more acceptable Gordon Brown. More clear-eyed advisers, like the ace New Labour strategist Douglas Alexander, who might have argued differently, have been frozen out.

Sadly for Gould, Milburn and Campbell, their strategy has failed. The more they put the Prime Minister on show, the more the voters turn against him, as this week’s Independent/NOP poll, showing a sharp rise in Tory support at the expense of New Labour, is the latest to demonstrate.

This week saw New Labour’s ‘Wobbly Thursday’. On Wednesday lunchtime Gordon Brown stood up to deliver his Budget. His message, metaphorically, was: ‘Tony, listen to me, we’re about to lose this fucking election.’ Gordon Brown showed how to win it. But he made it clear that the way to victory on 5 May was on his own terms, not the Prime Minister’s. He curtly dismissed the euro, the Prime Minister’s favourite project. Downing Street is extremely nervous about the massive extension of the New Deal, and is having kittens about the wealth-distributive consequences of Gordon Brown’s Budget. Middle-class voters have been punished by the freezing of personal allowances, while new tax credits help the poor. Nobody watching Gordon Brown in the Commons chamber on Wednesday was left in the slightest doubt that Labour will fight this spring’s general election with two leaders, two campaigns, two strategies and two visions.

It is an extraordinary state of affairs, this abyss between the Prime Minister and the Chancellor of the Exchequer. I had assumed that the two men would reach some form of settlement before the election campaign proper started. But the Budget showed this was not so. I am told that Tony Blair, right up to the last moment, was almost as much in the dark as the rest of us about the contents of this Budget. Derek Scott, Downing Street economic adviser for the first six years of the Blair government, has told us how Gordon Brown on one occasion caused the Prime Minister to plead with him to ‘give us a hint’ of the Budget contents. Matters have got worse since the days when Scott was in Downing Street. Brown refused to talk to the embattled campaign chief Alan Milburn, though there was some communication thanks to the family connection between David Miliband at the Cabinet Office and his brother Ed, a Treasury adviser.

In return, I am told, Tony Blair has refused to give Gordon Brown an assurance that he will remain Chancellor after the election. The Chancellor has been told it is no good asking. This is unprecedented. In 1997 and also in 2001 Brown went into the election with a promise from Tony Blair that he would occupy the Treasury after election day (David Blunkett was the only other Cabinet minister who received this kind of explicit assurance).

Some around Blair have extrapolated from this state of affairs that Brown faces dismissal after the election. There has even been some briefing to the effect that Brown has now delivered his last Budget (blamed, fairly or not it is hard to say, by insiders on a dinner conversation between Tony Blair’s fixer Lord Levy and various media grandees last week). But this briefing is valueless. The truth is that Tony Blair himself does not yet know whether he will move or sack Gordon Brown. One very Blairite, and very well-informed, Cabinet minister has been freely saying around town in recent weeks that a large majority means that Brown will go.

But even that is not certain. From within Downing Street Lord Birt has been devising various plans to attack the power of the Treasury, to be put into effect immediately after the election. Meanwhile, there is some talk of increasing the power of the Foreign Secretary. Gordon Brown may be offered the choice between a stronger Foreign Office and an emasculated Exchequer after the election. Everything is up in the air and anyone who says that they know for sure what will happen is lying.

The failed relationship between Gordon Brown and Tony Blair, the two founders of New Labour, should make rich pickings for the resurgent Tory opposition as election day approaches. But they should not be too confident. The late Hugo Young, a political writer of great elegance and penetration, once described how 1987 ‘was not a smooth campaign, but was marked throughout by destructive episodes of personal rivalry and disagreement’. And so it was, but Mrs Thatcher’s Tory government was still returned by a very handy majority of 102.