Peter Oborne

Things may be looking up for Blair, but it is still not certain that he will fight the election

Things may be looking up for Blair, but it is still not certain that he will fight the election

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As any investment banker will tell you, share prices in ailing companies rarely go down in a straight line. The process of decline is typically punctuated by periods of stagnation, known by technical experts as a ‘false bottom’. But these treacherous episodes are not nearly as perilous as the moment when a share price in long-term collapse starts to rally. The first two or three tentative bits of good news can be readily discounted. But gradually observers on the sidelines get drawn in, concluding that the stock really has turned the corner. Then the bears or short-sellers start to panic, hurriedly buying back stock to cover their positions, driving the price up yet further. At this stage smaller investors get caught up in the general excitement, completing the virtuous cycle.

That is exactly how matters stand with Tony Blair this July. Ten weeks ago, with Iraq mired in gloom and Downing Street’s authority greatly diminished by the U-turn on the EU constitution, the Prime Minister was shot to pieces. It is a tribute to his formidable talents and inner resilience that he has since rebounded so strongly. He has just enjoyed the strongest and most confident period since things started to go so wrong for him at the start of 2002.

The Prime Minister’s defenders, not that easy to find at Westminster this spring, have been growing in number. Now the claim is being authoritatively made that Tony Blair has turned the corner, just as Margaret Thatcher did in 1986, and intends — as Cherie Blair has reportedly claimed in private conversation — to ‘go on and on’.

Andrew Rawnsley — by no means a mere fairweather friend of the Prime Minister — set out this case with great aplomb in last week’s Observer. The happy Blairite vision goes something like this: Iraq is past the worst now that the handover of power has taken place. Tony Blair can therefore return with a sigh of relief to domestic politics, where his hand is much stronger than realised. Rebellious Labour MPs will fall silent as the general election, tentatively scheduled for next May, approaches. Meanwhile the government can start to sell its powerful message about the genuine improvements that have taken place in health and education. The economy remains strong. Tony Blair will soon be ‘revalidated’ by a third landslide election victory. Gordon Brown has missed his chance, and will go down in his history as the man who lacked the courage to seize the crown. This is an intelligent and plausible analysis, shared by many of the best judges in Westminster, who have been proved right many times before. It may seems churlish, as well as foolhardy, to take issue. But the fundamentals remain just as bleak for the Prime Minister this summer as they did in the spring.

First of all Iraq. Last week was one of the bloodiest since the end of the war: 80 dead on Thursday and a further two score at the weekend. The British press, with the clear-sighted exception of the Independent, have ceased to give this near daily carnage the attention it merits. By contrast, our newspapers gave handsome coverage to the so-called ‘handover of power’, a hurried, hole-in-the-corner affair taking place secretly and without warning in a heavily guarded compound, after which the US plenipotentiary, Paul Bremer, scuttled as fast as he could to the airport. But the occupying troops — bizarrely compared by Foreign Secretary Jack Straw to the Allied forces which stayed in Germany to combat Soviet communism after the second world war — remain. As Gandhi remarked about Western civilisation, the handover of power in Iraq would be a very good idea.

So Iraq remains capable of causing sharp embarrassment to Tony Blair. It is claimed that Lord Butler, the former Cabinet secretary who gave Jonathan Aitken a clean bill of health, is set to break the habit of a lifetime and make some awkward comments on Downing Street when his report on the Iraq war is published on Bastille Day, 14 July. I will believe this only when I see it. The Butler report comes some 48 hours ahead of the twin by-elections at Leicester South and Birmingham Hodge Hill. Defeat for Labour in either of these stronghold constituencies would be a humiliation for the government, and cannot be ruled out.

The problem is that the partial restoration of the Prime Minister’s fortunes at Westminster has not spread to the country at large. The latest memo from Philip Gould, Tony Blair’s political consultant, was leaked at the weekend to the Sunday Mirror, to the vast consternation of Downing Street. It showed how, according to private research, the Prime Minister has a catastrophic negative rating deep into double figures. He is as close to becoming an electoral liability as he ever was. The rush of advisers to the Downing Street exit door remains striking. This week there have been reports that the political aide Sally Morgan is set to join the exodus. Colleagues further state that doughty Dave Hill, who succeeded Alastair Campbell as director of communications and strategy, is growing frustrated. As might readily have been predicted, Hill is growing weary of being second-guessed by people who, technically at any rate, no longer work in Downing Street.

Nevertheless it remains almost impossible that the Prime Minister will be forced out of office before the general election. I am told, however, that Sir Andrew Turnbull, the Cabinet secretary, was recently asked to contemplate the mechanism that would accompany any prime ministerial resignation. No prime minister has quit of his own accord since Harold Wilson made way for Jim Callaghan in 1976, and there are all kinds of curious issues to be taken into account: the availability of the Queen, changes of staff at No. 10, relations with the Labour party, arrangements for the succession. Sir Andrew’s was not some abstract exercise. It supposed that the Prime Minister would step down not long after the Iraq handover of power.

It is difficult to be sure how much to read into this. Precautionary studies of this nature are not uncommon. Nevertheless, it is worth bearing in mind that the original Granita deal between Gordon Brown and Tony Blair — spelt out to me in loving detail as long ago as 1996 by one of the Chancellor’s inner circle of friends — always envisaged that Tony Blair would step down at or around his 50th birthday. There is a widespread assumption that the Prime Minister would renege on this arrangement, but it would perhaps be ungenerous to assume that Tony Blair automatically breaks all his promises.

It has been well said that prime ministers seldom leave office of their own accord. This factor may settle matters in the end. Most of the talk that the Prime Minister intends to stay on comes from his allies with a strong vested interest that he should do so — Cherie Blair, Lord Falconer, Peter Mandelson. And so he may. Nevertheless this July marks the start of a three-month window when Blair can elegantly depart. Only if he is still in office this November, after the party conference season, can it be concluded with certainty that he will fight the election. Tony Blair just might conclude that this summer, with the wind in his sails and at a time when the world least expects it, is an elegant time to go: an auspicious moment like this is unlikely to come again.