A Journey (84 page)

We had also got ourselves into a typical egalitarian muddle over the universities that were lower ranked. The previous Tory government had converted the so-called polytechnics into universities, which was fine except that it fuelled the myth that all universities were of the same academic standing, which manifestly they weren’t. And even the universities that had been polytechnics, some of which were offering outstanding service, needed flexibility in funding.

In late 2001, the key heads of the Russell Group – the twenty leading British universities – came to see me in Downing Street. Their message was stark: they needed significantly more funding. Roy Jenkins, then Chancellor of Oxford, was strongly in favour of tuition fees, urging them to me privately. Ivor Crewe, at that time president of Universities UK (the university principals’ and vice chancellors’ committee), was equally emphatic. As an old SDP hand – and so someone with knowledge of progressive politics – Ivor got the politics completely, and he was unequivocal that there had to be change.

I had promoted Estelle Morris to be Secretary of State for Education in June 2001, following on from David Blunkett who became Home Secretary. Estelle was an interesting example of what you see rarely in politics. She eventually resigned in October 2002, and said simply,‘If I am really honest with myself I was not enjoying the job . . . I could not accept being second best. I am hard at judging my own performance. I was not good at setting the priorities. I had to know I was making a difference, and I do not think I was giving the prime minister enough.’ I wasn’t sure if she was serious; and came to the conclusion she was. It had just got too much for her, and she was unhappy. She was by no means emotionally frail – on the contrary, she had held her seat against a fierce and, as ever with the Lib Dems (her main opponents), pretty vicious local campaign. She was by all accounts exactly as she seemed: decent and hard-working; but the top flight in politics is extremely rough, and she just felt overwhelmed.

So she went, and was replaced by Charles Clarke who, having lived through the Kinnock years,was sufficiently tough and could be rough himself. He gave the whole area a big push forward. However, he also had to inherit what had become a very tricky piece of politics with Gordon.

Once the university chiefs had laid out the problem, I knew we had to act. We had the manifesto commitment not to allow top-up fees, it was true, but frankly it would have been absurd to postpone the decisions necessary for the country because of it. So I began what turned out to be a process of internal debate and discussion, essentially with the Treasury, that lasted almost two years. From the outset it was clear that Gordon intended to resist. It was only afterwards I understood his problem. Essentially he thought he was going to fight the third election and he didn’t want anything that cramped his programme or was unpopular, and this was plainly going to be so. Therefore he approached the thing, as ever, not with outright dissent but with the tactic of postponement.

In late 2001, we first broached the subject. Not unreasonably at that point, he asked for a lot more work to be done. The work was duly done, and at further meetings during the first half of 2002 we started to get down to the decision. It was here that Estelle felt caught between the two of us, and her own instincts were insufficiently powerful for her to take a stand. So it more or less developed into a battle of wills between myself and Gordon. I would say that it was at this time that the creative tension, which up until then had been on balance positive, became on balance negative. I’m not saying there weren’t still enormous positives in having him there – he was, as I always repeat, a big figure, a credible one and without question an asset to the government in broad terms and therefore it was right that he remained as Chancellor. But the problem was that because of his expectation and desire, he wanted to freeze progress until he took over. I was never totally sure where his own proclivity lay in terms of policy, but the desire to freeze-frame the government – evidently impossible – became overlaid with an agenda that defined itself subtly but actually very clearly to the left as time went on. This was almost personified in our advisers: Ed Balls for his part (then chief economic adviser to the Treasury), Andrew Adonis for mine.

Andrew and I were both close to Roy Jenkins. I missed Roy hugely after he passed away in early January 2003. When Andrew phoned to tell me the news, I was desperately sorry. Roy was, to the soul of his being, someone of genuine integrity. He had been a friend and mentor. He would have opposed Iraq, I am sure; but he would have understood why I did it. He had passed on to Andrew not just his politics but his political character: a rational, reasoning seeker after truth. To him, as to Andrew, the first question was: is this right? Only after that question was answered would he ask: is it politic? It was and is the correct approach to politics and, incidentally, is certainly consonant with the public’s approach. But it is rare.

Ed Balls was and is immensely capable intellectually, and also has some of the essential prerequisites for leadership: he has guts, and he can take decisions. But he suffers from the bane of all left-leaning intellectuals. As I have remarked elsewhere, these guys never ‘get’ aspiration. They would deny it of course, but they see the middle class – apart from the intellectual part of it – as an unnatural constituency for them. Not that they see them as the enemy or anything – that would be to exaggerate grossly – but they would think that a person worried about their tax rates was essentially selfish, and therefore by implication morally a little lost. They could ‘get’ that it might not be smart to penalise them; but not that it might be wrong to do so.

Ed had worked out a strategy for Gordon that sort of went like this: there is a trade-off between equity and markets; Blair is pushing us too far towards ‘marketisation’ and thus away from equity. So all of this language around choice, competition, diversity, flexibility; all of it is in the end an attempt to move us to a system that is intrinsically inequitable; and what’s more poorly motivated, since it’s all part of an obsession with the middle class – historically a small part of Labour’s support – at the expense of our ‘core’ voters.

To this intellectual critique he added a truly muddled and ultimately very damaging party critique. This was the view – I fear tutored by Gordon’s inclination in dealing with the party – that I deliberately chose confrontations with the party in order to demonstrate my independent credentials with the public, i.e. I sacrificed the party to woo the public. This was a very common opinion.

Mostly he was pretty respectful. Over time and the innumerable meetings with Ed and Gordon, I gradually got Ed to lose his reserve – after all, I was prime minister – and provoked him into his true opinions. His basic sense was that this whole assault on traditional party thinking was to prove I was ‘exceptional’. ‘Exceptionalism’, he called it. What he meant was that I believed only I could win, and that all these rows – over tuition fees, schools reform, health reform, ID cards, asylum, law and order, welfare – were almost manufactured, in order to create the sense of a leader above the party. He believed, and I think persuaded Gordon, that you could be a traditional Labour leader and still win.

I used to tell him this was fundamentally and dangerously to misunderstand both the intellectual and the political basis for New Labour. Intellectually, it was perfectly straightforward: all governments round the world, certainly those getting re-elected, were refashioning their state and public services to make them more accountable to consumers and users, who in the other domains of their lives were habitually making their own choices and decisions. In other words, my argument was that these reforms were cutting with the grain of where ‘the people’ were heading.

Politically, I tried to explain that the whole purpose of my period as leader was to create a permanence in New Labour that meant precisely that I was not the exception. Even back in 2002, it was plain that we were a stronger, more enduring, more stable Labour government than any before us. It was true that I believed a Labour leader could not be a traditional Labour politician to win, but only because I believed we had to change the tradition. Once New Labour became integral to the way the Labour Party thought and operated, we would have a different tradition, one more sustainable, more credible and more electable. I didn’t choose to have rows with the party; I chose to reform. But if the reform was resisted, then you couldn’t avoid the row.

Anyway, as 2002 went on, it became apparent that we were stuck. In early 2003 and with Charles Clarke now pressing, we held further meetings. This time I insisted that the Treasury come forward with a specific alternative, rather than continually raising objections to the tuition-fee proposal we had outlined.

In summary, we were proposing that rather than pay tuition fees of £1,150 per annum upfront, while the student was at university, there should be a variable fee of up to £3,000 per annum – the variation to be at the discretion of the university – to be repaid after graduation on a means-tested basis. There would be maintenance grants for the poorer students and bursaries would be encouraged. The whole package would boost the income of the universities considerably, by over 30 per cent per annum. It was plainly a fairer system. It was true there would be more debt, but we would only recover the money from graduates as they started earning. And poor students would get real and significant help. As ever in these situations, there were tactical compromises along the way to sweeten the pill – some of which I was reluctant to make and all of which added to the cost – but there was no doubt it would be enormously advantageous to our universities, separate them out from those struggling in mainland Europe and bring us back into contention with those of the US. Indeed, after the measures were passed, several vice chancellors told me the change literally saved their universities from financial collapse. Also, as our opponents knew, once introduced as a concept, there was no looking back.

The Treasury kept demanding that more work and analysis be done. They pointed to the fact that our proposals had drawbacks. I responded that all systems have drawbacks. They produced polling that said our scheme was unpopular. I said that all changes were unpopular, except funding universities better through higher general taxation, and the moment it stopped being a question about funding and became a question of tax, that of course was unpopular too. In truth, therefore, this was a classic case of a change that was necessary and right and would never prove popular. On the other hand, as I always reasoned, people expected governments to take unpopular decisions, expected to complain about them and expected leadership to overcome complaint. However, if ever you stopped leading, it would cease to be a complaint and become a notice of dismissal; because, in their heart of hearts, people know governments are there to lead.

Eventually, we flushed out of the Treasury a kind of alternative, which was to all intents and purposes a graduate tax, pure and simple. This, naturally, was equally unpopular according to the polling, but more than that, it suffered from what I thought was a serious and irremediable defect: it meant that instead of a graduate paying back their own fees, there would be a general tax on graduates, dependent on their income and not on the education they had personally received. In other words, it amounted not to a personal repayment of a personal debt, but a general graduate repayment of the collective student debt. I didn’t like this at all. It broke the essential link between what a student got and what they gave back; and it changed the nature of our taxation system radically, but not sensibly or sensitively.

Being plainly Ed’s idea, it was never pushed very hard by Gordon, and so it kind of fell away. That meant it was our proposal or nothing. Eventually in mid-2003 I just said: we will meet again in a month’s time; the final decision will be taken; at that point you put up or we proceed. We proceeded, but we had wasted valuable time.

Throughout, Andrew Adonis had been a complete star, producing endless analyses and counter-analyses, marshalling the arguments with his customary clarity, patiently and politely urging it all forward. Andrew was in stark contrast to Ed. In a political scrap, Ed would win. And Ed, as I say, was generally a clever guy. But in terms of public appeal and sense, Andrew was just in a different league. He understood entirely why it was so crucial that we reach out beyond Labour’s traditional base; he was himself a representative of aspiration, his father having been a Greek Cypriot immigrant postman; and he knew that if Labour was to govern for significant periods, it had to be as a party of the future-orientated centre ground.

Andrew carefully put together the facts and arguments. Charles Clarke was strongly in support. For the first time, I felt with Charles, Alan Milburn and David Blunkett I had people alongside me fully in tune with what I wanted to do and why. They had the same instincts and each had the political skill to mount the Labour case for modernisation and change. All of them had honed those skills in umpteen interactions with recalcitrant union leaders, bolshie MPs, lefty activists and assorted intellectuals whose main contribution was to explain why nothing should change in the name of being real radicals.

Whereas I had a tendency to think I could persuade anyone of anything provided I truly believed it (not even experience ever quite eliminated this trait of mine), they were more realistic and more effective. They knew the difference between tactics and strategy and how and when they had to be synchronised.

We held back the Queen’s Speech until late that year – almost the end of November. Of course the news continued to be dominated by Iraq, by the continuing attempts to stop terrorism threatening that country’s fragile condition, and by the Hutton Inquiry. But the real reason for the delay was sorting out what was going to be a major domestic agenda around the NHS, schools, antisocial behaviour and tuition fees. After much prevarication and again a lot of opposition from next door at Number 11, I had also got agreement in principle to identity cards. All of these issues – at various stages of legislation – were going on apace.