He turned back to Byrne.
“Vicious circle, Liam. We’ve got to try to grow our way out, but we’re so far behind the 8-ball that we can’t raise borrowing. We have to maintain capital spending to restart the economy. HAVE to. It’ll be unpopular, but we can freeze wages for public servants, freeze some benefits, freeze recruitment and look to cut administrative costs somewhere. I need to free up at least ten billion to go into shovel-ready projects and I need to do it now. And I can’t.”
“Will Gordon accept any of that?” asked Byrne.
“Short answer – no. Long answer – fuck no. And that’s the reason this Emergency Budget is taking so bloody long.”
***
BBC News, 29 June 2010
The Chancellor, Ed Balls, today unveiled the Emergency budget. The standout measure was the announcement that all salaries of public funded employees will be limited to a maximum rise of £500 per year for at least four years. Housing Benefit will be frozen in real terms for a similar period of time, and the clawback rate of Tax Credits has been increased. The Identity cards Bill has been postponed indefinitely. Petrol, alcohol and tobacco duties are up from midnight tonight…
… Shadow Chancellor George Osborne stated “it’s fairly hard to get to grips with a so-called Emergency Budget that does nothing but tinker around the edges. It’s unavoidable to conclude that perhaps the Chancellor misunderstood the question”…
… Liberal Democrat Spokesman Vince Osborne seemed to agree, noting that the apparent hesitance to engage with “any significant fiscal changes” was a pronounced failure of nerve on behalf of the Chancellor…
… UKIP leader Tim Congdon told the BBC, “The entire exercise was a waste of time from beginning to end. If he didn’t want to change anything, why bother in the first place?”…
CHAPTER THREE
From “On the Cusp”
‘Against all the odds, Brown had managed to acquire an aura of stolid immovability: All but defeated and written off – indeed, with his political obituary practically typed up – he was, impossibly, still Prime Minister of the United Kingdom of Great Britain and Northern Ireland.
And then, a few weeks later, the atmosphere had been lightened further within the inner echelons of the Government by the revelation of the expenses issues around David Laws, a major player in the Orange Book wing of the Liberal Democrats. At last, they thought, some of the expenses mud had slapped onto the Lib Dems. Laws’ profile had been raised briefly within the Westminster Village of journalists following the Election, when there was speculation that Clegg might challenge Huhne following the comparatively disappointing Liberal Democrat result, with Laws his chief lieutenant. However, this had proved to be that rarest of beasts in Westminster: a genuinely unfounded rumour. The outcome – his raised profile triggering a closer look by the Daily Telegraph at their stash of acquired expenses records, had had the predictably unfortunate repercussions. This had been a minor episode on the broad scheme of events, but it brought the occasional smile to the faces of those attending Cabinet meetings.
The preliminary estimates from the Office of National Statistics on Q2 growth for 2010 cheered up the Government side further and put a cast-down expression on the faces of the Conservatives, seeming to indicate that a “steady as she goes” Emergency Budget had been the right thing to do. The line “Told you so!” blared out from the Daily Mirror and the Guardian was eager to point out that it obviously had been no time for a novice. Un-noticed went Brown’s victory over the Chancellor’s desire to shift what spending could be afforded from current to capital expenditure.
This good news could not, of course, last. The often rambunctious Parliamentary Labour Party could be relied upon for splits and counter-briefings the longer it stayed in power, and now was no exception. The ex-Chancellor, Alistair Darling, unexpectedly put his foot in it when…’
***
Conservative Campaign Headquarters, 30 Millbank
“Well done, Andy!”
Andy Coulson looked up. George Osborne was standing by the open door, leaning against the door jamb.
“Sorry, George?” Coulson asked, nonplussed.
“The Darling story. I just heard from … well, let’s say I have independent sources. Nicely played. How did you set him up?”
Coulson rubbed his eyes and glanced at his watch. Eight-thirty. The long summer days had tricked him again; he should have been heading home hours ago.
“I’m sorry, George, I don’t know what you’re talking about. What’s happened with Darling?”
Osborne shrugged. “Well, I guess it was an unforced error, then. He’s been peeved ever since he had to ‘decide to spend more time with his family’ after Brown made his new Cabinet.”
Coulson leaned forward. “Don’t torment me, George – let me know. We’ve had precious little good news recently, apart from the Woollas thing. And Brown made Woollas resign from being Immigration Minister as soon as the case was presented, so we couldn't play as much off of that as I'd've liked.”
“Well, it turns out that Alistair Darling was chatting to a couple of journos from the Times earlier this evening in the Strangers’ Bar, and they were buying. And he relaxed and said a couple of things that maybe he shouldn’t have done, and forgot to make sure they were off the record,” said Osborne.
“Well?”
“Well, he said – apparently – and it’s getting printed up tomorrow – that the Q2 jump was ‘largely an artefact of inventory restocking’ and had nothing to do with the Emergency Budget, that there’s no easy route out, the hard times will come again, and… hang on,” Osborne looked down at his phone and continued, “that the ‘the fortunate reluctance of the markets’ to charge higher interest rates on UK debt following the May downgrade had been ‘partly due to the fact that the main purchaser is the Bank of England, and partly because things are so bad out there for the future that even we look downright attractive’.”
Coulson blinked. “Brown’s going to go absolutely mental! Why the fuck would Darling go off-piste like that?”
“Oh, yes, Brown will need a new Nokia or two about now,” said Osborne with a wide smile. “And as for Darling… he’s been painted as the fiscal fall guy ever since Balls got into the Treasury. Every decision he made – even those that were forced on him by Brown – has been subject to a shake of the head and a despairing cry by Ed-the-perfect. Which Balls has promptly ensured has quietly leaked to the Labour back-benchers, just so they know any problems are the fault of his predecessor, and any triumphs are his own. “
Osborne shrugged. “Alistair just got too pissed off, and it overcame his native caution. To be fair, he probably did assume it was off the record. Consciously, anyway. Subconsciously he might have been wanting to kick back” His smile, if anything, broadened. “Any economic in-fighting can only help us, and if it’s happening without any intervention from us, so much the better.”
Coulson’s expression mirrored Osborne's, and then darkened briefly. “So what are we going to do about UKIP? Latest poll has them still on 13 percent, and Ashcroft’s polling has them doing better in the shires than anywhere else except the South West. So they bugger us up in the heartlands – and we need to shift resources to defend what should be safe seats.”
Osborne’s smile faded. “Huh. Just when I was feeling happy for a few minutes - thanks for that, Andy! Short answer: I don’t know. Labour are hurting, the Lib Dems are screwed in the South West – one of their own heartlands, and UKIP aren’t actually making enough traction to get anywhere like into power. If we could just sidestep the UKIP threat, we’d be golden.”
Coulson shrugged. “If wishes were horses…”
Osborne looked irritated. “Yeah, yeah, enough. I can’t work out a strategy to torpedo the buggers.” He looked thoughtful. "But I might know a man who can…”
***
A dining room, somewhere in Primrose Hill
He put d
own his glass of red wine and sighed. “My dear fellow, much though I enjoyed the meal, and the rapprochement, I do find myself wondering whether this will – again – end in tears. For both of us.”
His dining partner, younger and less polished, considered his words. “Peter, what happened last time was a mistake for both of us, yes – and one that started with me. I couldn’t resist…”
“’Putting the boot in’, is, I believe the phrase you’re looking for.”
“Yes. Another would be ‘my eyes lit up’. Gordon was very vulnerable, the Labour Party looked wracked with disunity, and I wanted to have it released into the Westminster Village that one of the other architects of New Labour did not rate Brown for PM one little bit.”
Mandelson shook his head. “You caused me no little embarrassment, you know, George. I had no choice but to strike back.”
“I know.” Osborne looked abashed. “And your counterstroke hurt me more than I hurt you.”
“Palpably.” Despite himself, Mandelson looked a trifle smug. “The quail’s eggs were wonderful, by the way.”
“Peter – I must confess that my intentions were not simply to share a meal, however pleasant the meal or the company might be.”
Mandelson shrugged. “Of course not. But, I fear, that’s all that is likely to result. So at least we should enjoy the meal.”
“Peter. I know it would be hard to confide in one another once more…” Osborne began.
“Hard? Impossible, I should say. I like to think I am no fool.”
Osborne shook his head. “No, of course not. But you do have one fatal weakness.”
Mandelson looked amused. “This, George, I have to hear. Not only have you identified my ‘fatal weakness’, but you are willing to let me know what it is?” He paused. “So I should attempt to isolate it myself. Well, there’s the obvious one, but I fail to see how it would help you. Eschewing anything personal, which would be beneath you…”
“Of course,” murmured Osborne.
“…we have my well known and some might say dangerous fascination with what you might term ‘conspiracies and manipulation’. But I fail to see precisely how that would help you. I obviously would therefore not appreciate being made the butt of such manipulation – as you did with the yacht conversation – so I would be, if anything, less likely to be willing to re-engage in the same area. Have I missed something?” Mandelson raised an eyebrow.
Idly, Osborne wondered how he could do that – a single eyebrow at a time. He would be ashamed to admit it, but he’d actually tried to replicate the expression and failed totally every time. Maybe Mandelson only did it to wind him up.
Osborne broke the brief silence. “Actually, you have, Peter.”
Mandelson raised the other eyebrow to meet the first, coincidentally relaxing Osborne somewhat. “Pray tell.”
“You actually love your reputation as the schemer, the manipulator, the politicker divorced from principle, but – importantly – it isn’t true,” said Osborne.
“It isn’t? I am NOT a scheming manipulator, worthy of being regarded as a veritable Prince of Darkness?” Mandelson reached for the wine bottle to refresh his glass. “You wound me, George.”
“Oh, you are a manipulative, scheming son of a… Labour politician, certainly,” replied Osborne with a disarming smile. “But you are NOT divorced from principle. In fact, virtually everything you’ve ever done in the field of politics has been for what you’ve kept in mind as your belief of the Greater Good.”
“I think you’ve gone from wounding me to flattering me. Steady on!” said Mandelson, smiling.
“Whatever works. Down to brass tacks: I… well, we in the Conservative Party… have a little UKIP problem,” said Osborne, firmly.
“Indeed. You have a problem with them. I… well, we in the Labour Party… do not. I’m sorry, George, but I fail to see common ground here.”
Osborne shrugged. “You will. You’ve never been one to focus too much on the short term, unlike your Leader.”
Mandelson looked uncomfortable. “I think you are too harsh on dear Gordon, but what exactly do you mean? In the short term, Tim Congdon and his troops will be splitting your vote far more than ours. In the longer term, he might even fatally damage your Party. Once more, I fail to see common ground. I sympathise, but not enough to bury the hatchet, I’m afraid.”
“Think it through, Peter. We will not give up easily – we won’t ‘go gently into the night’.”
“You’ll ‘rage against the dying of the light’? You will threaten me with a Samson in the temple scenario?” asked Mandelson.
“Not by choice. But if UKIP gain ground – or even hold ground against us…”
“And the polls indicate they are stubbornly refusing to die away in the evidence of the last election,” interjected Mandelson.
“Yeah – like the SDP didn’t die. And now their descendants are so, so close to holding the balance of power … and some might argue that their very philosophy won. Labour had to adopt a very SDP-friendly platform to win power,” said Osborne.
“Well, yes, the SDP make a good precedent for not ignoring the threat of UKIP to you. But your point was… oh.”
Osborne was impressed, despite himself. Nothing had yet eroded Mandelson’s political antennae.
“Let me think for a moment,” said Mandelson, leaning back and staring at the ceiling.
There was a prolonged silence, finally broken by Mandelson. “I’m still unconvinced. With the SDP, we in Labour HAD to move centre-wards. UKIP are to your outside, are they not?”
“Not in everything. In fact, they’re all over the place,” said Osborne.
“The perfect protest Party,” mused Mandelson. “Our dear friends in the Liberal Democrats could only aspire to such perfect opportunism. Still, UKIP are largely known for being firmly on the right.”
“Do you really still believe in that simplistic spectrum?” asked Osborne. “A defined left, centre and right? The old argument of Keith Joseph – to find the ‘common ground’ - is all but orthogonal to that line. And UKIP have the common touch. Far more than us. More than the Lib Dems – and, I’m afraid, Peter – more than you, despite the remnant tribal loyalties.”
“Still, the threat is more to you,” responded Mandelson.
“So, when we are pressed, and our backs are to the wall, in desperation, we’ll have to take aim at the UKIP fox. It may not help, but we’ll never go down whilst bullets are left in the gun,” said Osborne.
“The UKIP fox? Ah – Europe.” Mandelson blinked. “You’d leave the EU!?” He sat bolt upright. “George, you have to know that such would be a colossal mistake. You’d be isolated, alone, marginalised!”
“We’d not unilaterally leave – but we may have to offer a referendum on it, and do it firmly. With a well-defined timetable within a fairly short time of taking power. And I’m not sanguine about winning it. We may well do so, but…”
“…the vicissitudes of the electorate. Indeed,” said Mandelson.
“So. Ideally, you’d like to see us weakened, but with UKIP doomed. I’m getting desperate – Labour are in trouble, certainly, but so are we. We simply cannot dislodge this threat. I’ve wracked my brains, but all strategies are flawed. Ignore them? Doesn’t work. Attack them? Legitimises them. Mock them? Tried that – it just annoys soft supporters and actually builds their support. Steal their clothes? What clothes do they have that everyone recognises? Aside from their EU policy – which isn’t really THAT large a motivator for even their soft supporters. The activists, sure, but we’re not getting them back even with a referendum.”
Osborne leaned forward. “But the EU referendum is almost the only symbolic thing we CAN do to placate the UKIP forces. David is starting to panic.”
“Well, we can’t have dear David panicking, can we,” said Mandelson, sarcastically. He raised a hand to forestall Osborne. “No, no, my friend, I am seized of the need. You have quite convinced m
e.”
There was a long silence. Mandelson was slowly sipping his wine, his eyes distant.
“Do you have anything at all?” asked Osborne, finally.
“George, George, patience. It can be possible that some problems require more than fifty seconds of pondering, you know. You’ve tried the obvious, as you’ve listed… hmm. Give me a couple of days and let me get back to you. Even a brief period of Tory rule would indeed be preferable to a rampant UKIP.”
He levelled his gaze at Osborne. “But do not mistake me – I will be endeavouring to minimise the advantage to you and disadvantage to us.”
Osborne relaxed back into his chair. “Peter, I never thought it would be any different.”
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