[A-List] UK state: New Labour infighting

["Michael Keaney" <michael.keaney@xxxxxx>]

Reaching for power

To seize Blair's crown, Brown must offer an alternative. Hence the rows over
top-up fees and hospitals

Jonathan Freedland
Wednesday November 20, 2002
The Guardian

At last it's in the open. After eight years of dark whispers, coded messages
and plain guesswork, the legendary Blair-Brown split is finally emerging
into the daylight. No longer is the tension inside this, the most crucial
relationship in British politics, expressed chiefly through anonymous aides'
swipes at the other man's abilities or, worse, psychology. Now there is
ideological substance to the feud; some clear red water is opening up
between our prime minister and his chancellor.

Of course, they're not having stand-up rows in public - not yet anyway. But
the battle between Brownites and Blairites has stepped up to a new level in
the last few weeks. The current row over top-up fees - charging students big
money to go to the best universities - is the most public outbreak of
hostilities, but the recent confrontation over foundation hospitals was no
less revealing.

And make no mistake, the ongoing protest against higher college fees is more
than yet another "leftwing rebellion". The two lead voices have been Clare
Short, who called extra charges "a really bad idea", and Frank Dobson, who
said such a move would be "just plain wrong". Who are Short and Dobson?
Allies of Gordon Brown, that's who. Short is one of the few devout Brownites
round the cabinet table, while Dobson is close enough to the chancellor to
have had a key aide in common: Dobson's former PPS, Ann Keen, now does the
same job for Brown.

This is more than Westminster tea-leaf reading. Allies of the chancellor are
explicit, and passionate, in their denunciation of these latest schemes
which, in their kinder moments, they attribute less to the PM than to the
outriders who surround him. (Downing Street policy unit head Andrew Adonis
is a favourite target along with - who else? - Peter Mandelson).

The argument over university fees is the clearest. The Brown camp believes a
sacred New Labour goal, equality of opportunity, would be imperilled if low
or even middle-income teenagers were scared off certain courses or
universities by the cost. For the moment, Brown confines himself to asking
questions about any new funding arrangements. Is it fair for parents'
resources to be a decisive factor in where, or if, someone goes to college?
What is less likely to deter a would-be student: upfront charges paid now,
or a graduate tax to be paid later, once higher education has worked its
magic and the ex-student is earning proper money? The chancellor prefers not
to spell out the answers to his own questions, but he doesn't need to. If
anyone can make a more cogent case against top-up fees, I'd like to hear it.

The flap about foundation hospitals never gained quite the same degree of
public heat, but only because it seems more technical. At issue is Brown's
insistence that any of these dozen new super hospitals stay within the NHS
and on its balance sheet when it comes to borrowing money. He fears that to
borrow elsewhere, they would have to have their own "revenue stream": a flow
of money distinct from their NHS budget. The only way they could achieve
that, say the Brownites, would be to treat more cash-generating private
patients and "turn off the taps of NHS work".

Still, a larger belief animates the Brownites' opposition on both issues.
They want to set a limit on how far the marketplace should reach into the
public sphere: up to here and no further, they are saying. On hospitals the
position is especially clear: "We have to have the courage to say we believe
in markets generally, but that they do not work in healthcare." They say
this not out of sentiment, but the hard-headed, economic calculation that
markets and health don't mix: they bring neither efficiency nor equity. The
same goes for a free market in higher education: the only way it could work
is unjustly.

Ranged on the other side are the Blairite ultras. They believe that the NHS,
like the other public services, is a 60-year-old system inherently unsuited
to the 21st century. No amount of money pumped into these creaking dinosaurs
will make them work better. In the words of Mandelson, they are a "crumbling
and defenceless sand castle". Those on high income, used to high consumer
standards in every other aspect of their lives, will not tolerate such
shoddiness indefinitely. They will walk away from the state sector, taking
their tax pounds with them, if public services are not top-notch. Another,
simpler ideological strand runs through parts of the Blair camp: the gut
instinct that says when it comes to providing services, private is always
good, public is always bad.

This then is the faultline. Both sides insist they still believe in public
funding of public services but, while the Blairites regard everything else
as up for grabs, the Brownites want to declare some areas off-limits to the
market.

That faultline is not always easy to see. Sometimes it is presented as the
gap between centralisers and reforming devolutionists, with Brown and his
control-freak Treasury determined to run military-style, top-down public
services from Whitehall. (His allies strongly reject that, claiming he is
all too willing to grant hospitals, for instance, "earned autonomy" and the
right to plan ahead with long-range budgets). More recently, the split has
been cast as a clash of old and New Labour, with the Brownites clinging to
the public service ethos out of sentiment (and a desire to keep Labour
activists sweet). But the view from the Treasury is that these are mere
smokescreens for the real divide: public v private.

Where does this row go? Both sets of antagonists admit it is profound "It's
about what a Labour government is for," says one close combatant - but
there's less clarity about how, and for how long, it will be fought. The
obvious climax would be a battle for the succession. Students of the
Blair-Brown relationship note that next June marks the point when the PM is
due to hand over power to his chancellor - at least according to the legend
of 1994's Granita summit, when Blair, rather than Brown, emerged as the
candidate to succeed John Smith. Halfway through the second term, that's
what the legend said.

Blair does not look like a man about to step down voluntarily. But how would
Brown seize the crown if had to? He has few allies, and lots of enemies, in
the cabinet. If disaster struck the government, he would surely be just as
damaged as Blair. As one senior Conservative puts it, the co-architects of
New Labour are "yin and yang, twin faces of the same person". They stand or
fall together.

The only way would be for Brown to represent an ideological alternative to
Blair, one the party might rally around. The Brownites insist that that is
not what is going on right now. Even privately, they stress that we are
witnessing a genuine debate about the direction of this government, not a
career move by Gordon Brown. That may be so, but the chancellor's own
motives hardly matter. A gap is opening up in the very centre of New
Labour - and it will form the landscape for any future challenge to succeed
Tony Blair.