As part of that framework Balls put the case for Bank of England independence: ‘freed from debilitating market doubts about the government’s anti-inflationary resolve, a Labour chancellor would be free to concentrate on many other aspects of policy’. The persistent references to ‘boom and bust’ in Balls’s pamphlet became a Brownite theme, dangerously so as it was to turn out when the economy went into deep recession in 2008, although the causes and consequences were different from those referred to in Balls’s pamphlet. There was no space for nuance in 2008, no scope for explaining that they were referring to a different type of ‘bust’.
Brown was fascinated by Balls’s ideas. They seemed to address the dilemmas that he faced. He yearned for a stable framework, or at least the perception of one, so that he could focus on his other objectives without worrying that the economy or the currency was about to collapse. The youthful Balls had ideas about how to build the stable architecture, and yet like Brown he was also committed to tackling unemployment and poverty. In interviews later Balls described himself openly as a socialist, a rare admission in New Labour circles and not a term used by Brown. Keynes was one of Balls’s heroes, long before the economist became more fashionable after the credit crunch in 2008.
When Peter Mandelson briefed the Sunday Times in September 1994 that New Labour’s economic policies marked ‘the death of Keynes’, Balls was distraught and made sure that a counter-briefing took place in which all talk of Keynes’s demise was dismissed as nonsense. This was the first direct spat between Balls and Mandelson, typically personal animosity mingled with profound ideological differences. At the time only the animosity attracted attention, as if they were all characters in a soap opera without a principle between them.
In economic matters Balls was supremely confident and Brown was not. After all there were not many economists in their twenties with close contacts at the top of the then glamorous Clinton administration and who had written a daring Fabian pamphlet that seemed to offer a new direction for left-of-centre politics. His arrogance and ruthless loyalty to Brown were characteristics much commented upon in the years to come. But Balls was a less confident public performer, and he was driven by principle and conviction as much as by a yearning for his master to become Prime Minister. In the following years there was much analysis inevitably of the Blair/Brown partnership and Blair’s relationship with his press secretary, Alastair Campbell and with Peter Mandelson. The Brown/Balls relationship was equally important. In terms of policy development Balls was the third-most important figure in the New Labour hierarchy after Blair and Brown.
In spite of the age gap, the conflicting views at that point on Europe, and their differing backgrounds, the bond was not surprising. Together Brown and Balls watched closely the development of economic, social and welfare policies under Clinton. Arising from their joint passion, Brown and Balls began work on a Welfare to Work scheme and hailed a ‘new deal’ for the unemployed. At the same time, with the 1992 election always on his mind Brown stepped up his main political mission, proving that it was the Tories who could no longer be trusted on tax and spend.
At the start of 1994 he pointed out that taken together, direct and indirect tax was higher than under the previous Labour government. Brown spelt it out: ‘These figures destroy the Conservatives’ only political claim. Never again can they say they are the party of low taxation.’
Not surprisingly quite a few Labour party members worried about such protestations. ‘Are we going to replace the Conservatives as the party of low taxation?’ shadow cabinet members asked in private with growing despair. Brown’s plans were subtler than that, but he was happy for the question to be raised, such was the need to purge the electorate’s anxieties.
Some feared he was moving rightwards at an alarming speed. The normally highly perceptive David Blunkett observed to me despairingly in the autumn of 1992: ‘Gordon is a monetarist.’ Blunkett had been made shadow health secretary and wanted to say at least a few comforting words about Labour being committed to higher spending. Brown forbade it. Blunkett was left condemning the Tories’ lack of investment without any obvious follow-up. He was furious.
While Blunkett detected Thatcherite orthodoxy, some of Brown’s colleagues saw him as one of the vaguely defined ‘modernizers’. As far as the angry John Prescott was concerned Brown was one of the ‘beautiful people’ preoccupied by television and other media appearances, not so much a Thatcherite as a celebrity mouthing banalities. Prescott’s anger serves as a reminder that in 1992 Brown was seen as a media star, so apparently at ease with the medium that he was despised by those who also wanted to make the occasional appearance on television.
In his first two years as shadow chancellor Brown had made substantial progress on three different fronts. He had started to change the terms of the debate about trust and competence, although he was being helped more than he dared to realize by the implosion of the Conservative government. He had moved Labour on from the era of the shadow budget, even though this was the source of considerable tension with John Smith. By the early summer of 1994 it was Brown who was the one who was tough on spending and attacking the Tories for putting up taxes. Equally important work was being done behind the scenes to ensure that if Labour won next time it would be more than just a competent echo of the tired, divided Conservative administration, with welfare to work, a windfall tax, a minimum wage and new training schemes being devised.
But between the summer of 1992 and 1994 his party noticed only Brown’s noisy attempts to ditch perceptions about tax and spend. Shadow cabinet members, MPs and some party members took his protestations at their surface value. As a result, in the summer of 1993 his oscillating career hit its deepest low yet, a mere twelve months after he had been widely seen as Labour’s big star.
Brown feared he had become so unpopular in the party that he would lose his seat on the National Executive Committee. He and Blair had only stood for election for the party’s so-called governing body the year before. In August and early September 1993 in the build-up to the elections for the NEC, Brown lapsed into gloom, telling colleagues that the party did not understand what he was trying to do. He imagined a nightmare situation where he was voted off the Committee in the full glare of the party conference, humiliating him personally and sending out a signal that Labour was not ready to reconsider its vote-losing economic policy: here was someone who wanted to be the party’s next leader who could not even win an election to a committee. He brooded excessively in the summer of 1993, telling Blair often over this period how tough it was making Labour electable and becoming personally unpopular.
I was invited to Brown’s office on the Thursday before the Labour conference in which the result of the election would be announced. He was in a terrible state, slumped on his chair, clothes crumpled as if they had been lived in continuously for a decade, baggy-eyed. It was the first time I realized what a physically transparent politician he was. He exuded gloomy fearfulness, this time over the NEC results. ‘The media doesn’t understand what I’m trying to do,’ Brown told me, without fully explaining what it was that he was trying to do.
When Brown felt under pressure, especially when he thought he was being misunderstood, he was capable of behaving abominably. There was no restraint, no sense of what was acceptable behaviour. On one tense occasion in the build-up to the NEC elections Blair walked into Brown’s office at Westminster with a young adviser. Brown was kicking the wastepaper bin around the office in frustrated fury, having read a critical article in a newspaper. As Brown was giving the poor bin another kicking Blair looked at his adviser and placed his finger to his head, indicating his partially amused despair at Brown’s loss of control and suggesting that he was bonkers.
The bin kicking in 1993 was an early example of his eccentric self-absorbed thoughtlessness. Two young advisers, closer at the time to Blair than Brown, Derek Draper and Tom Happold, helped Brown solicit support for his vulnerable candidacy of the NEC. They worked into the night on the shadow chancellor’s campaign, stuffing envelopes and contacting potential supporters. In the end Brown was re-elected, although the level of his support dropped from the year before.
Afterwards a relieved Brown sought to show his appreciation by inviting Draper