would pay ‘a few extra pence’. The newspaper headlines ‘Labour Tax Fiasco’ frightened the middle classes. Thatcher’s accusation that with Labour ‘financial prudence goes out of the window’ struck a mortal blow.
Campaigning in Scotland, Brown was distanced from these misfortunes. The swing to Labour in his area suggested that there would be a rout of Tory seats. He did not believe the national opinion polls, and was heartened on election night by a BBC Newsnight exit poll predicting huge Tory losses and a ‘hung’ parliament. His smile disappeared long before his personal result came in. The Tories lost in Scotland but would be returned with an overall 101-seat majority. Brown won his seat with an increased majority of 19,589, practically 50 per cent of the votes cast. His personal pleasure was suffocated by the national result. ‘He was shaken by the defeat,’ reported a close friend the next morning. ‘He thought Labour would win nationally as it had in Scotland.’ Ten years later, Brown would claim to Paul Routledge that at the time of the 1987 election he had blamed Labour’s plans for high taxation for having ‘put a cap on people’s aspirations’. In reality he appears not to have contemplated lower taxation until long afterwards.
In the autopsy of the defeat, the dissatisfaction with the party’s deputy leader Roy Hattersley was widespread. John Smith, popular, funny and fast at the dispatch box with a joke or a mocking aside, was expected to inherit the shadow chancellorship despite his poor grasp of economics. He encouraged Brown to stand for election to the shadow cabinet, impressed by the young man’s loyalty, hard work and use of leaked documents to discomfort the government. Brown was pleasantly unintoxicated by his status, arriving at meetings like an overgrown student with bundles of ragged papers spilling onto the floor. He was also noticeably devoid of the argumentative stubbornness that would emerge later. Smith’s endorsement was critical to Brown’s campaign in the election. Helped by Nick Brown, a northern England trade union officer also elected to parliament in 1983, he came eleventh out of forty runners, an unexpected success. John Smith was duly appointed shadow chancellor and Brown shadow chief secretary to the Treasury, the youngest member of Neil Kinnock’s new team. ‘He’s going to be the leader of the Labour Party one day,’ Kinnock told Tom Sawyer, a member of the party’s National Executive Committee. Kinnock regarded Brown as a kindred spirit against John Smith, of whom he was wary, although he judged both Scots to be reliable. The Scottish MPs were a group of experienced politicians, held together despite personal differences by a tribal brotherhood based upon ability. United by their hatred of Thatcher and not scarred by Militant, their principal shortcoming was provincialism. Everything was interpreted from a Scottish point of view, and as a result their contribution to the inquest into the causes of the unexpected election defeat was muddled.
Kinnock ordered a review of the party’s whole ideology. Labour, he acknowledged, was unelectable without the support of the middle classes. The review of the economic policies was entrusted to Bryan Gould, a New Zealander and the shadow spokesman for trade and industry. Gould, an organiser of the recent election campaign and a member of Labour’s left wing, believed that traditional socialism remained the party’s anchor. Brown no longer agreed, and refused to participate in Gould’s work. His unease had emerged after forensic discussions about the party’s policies with Doug Henderson, John Smith and Murray Elder – all Scotsmen who would spend one week every August hill-walking and mountaineering in Scotland with their families. ‘Brown wanted a break from the past,’ reflected Gould sourly. ‘His idea was to be more congenial towards the City.’ Gould, more senior than Brown, was unwilling to accommodate Brown’s ill-defined opinions, and was encouraged to pursue his course by Peter Mandelson, whose patronage had promoted Gould’s importance in the media. ‘Peter gave me a very comforting feeling,’ Gould acknowledged, ‘introducing good contacts and placing my name in very good contexts.’
The stock market crash on 19 October 1987, ‘Black Monday’, confirmed Gould’s conviction about ‘capitalism’s irreversible crisis’. Ideologically, Brown could offer no solution to Labour’s unpopularity in the polls or suggest an alternative to Thatcherism, apart from announcing that Gould’s intention to re-impose economic controls would guarantee electoral disaster. ‘Bryan’s being unhelpful,’ Brown was told some weeks later by John Eatwell. ‘His report to the party conference will recommend the renationalisation of some privatised companies.’ Brown agreed that Gould’s proposals, the springboard for his ambitions to be party leader, were reckless. He combined with Blair to urge Mandelson to abandon Gould. While Mandelson pondered, Brown and Blair took it upon themselves to frustrate the review.
Busy preparing to dispatch his final report later that day to the printers, Bryan Gould was surprised when Gordon Brown, Tony Blair and John Eatwell entered his office in the Norman Shaw building unannounced. ‘We want all references to nationalisation and renationalisation taken out of the report,’ announced Brown. ‘You’re too late,’ replied Gould angrily. ‘You refused to sit on the committee and do any work, and now you want to interfere. No way. Go away! All of you!’ Gould stared particularly at Blair. His presence was inexplicable, since he, as shadow spokesman for employment, was not even eligible for membership of the committee. The report was dispatched and printed. Gould’s victory, however, was bittersweet. At the end of 1987 a series of unfavourable references to him appeared in newspapers. He suspected that he knew the identity of the source, but his repeated attempts to reach Peter Mandelson were unsuccessful. Eventually he elicited an unexpected response. ‘You should get to know Gordon,’ said Mandelson. ‘He wants to be a friend of yours.’ Gould realised that he was being abandoned. Mandelson’s seduction – the offer of friendship, with its concomitant demand for emotional commitment – had been aborted. Even worse, Mandelson had switched. He was now briefing against Gould and promoting Brown and Blair. ‘It’s an ideological war,’ Gould realised, but was nevertheless relieved when his report, ‘The Productive and Competitive Economy’, was approved by the party executive on 25 May 1988. Unintentionally, he had prompted the conception of an emotional, triangular relationship between Mandelson, Brown and Blair.
Peter Mandelson had become persuaded that Gordon Brown was the party’s future. Compared with so many Labour politicians, Brown was immensely attractive. Unaware of his lurking volcanic aloofness, Mandelson regarded Brown as a sensitive, handsome, entertaining professional tainted only by impatience and intensity. Among other MPs he was regarded as unselfish, willing to help those in difficulty, extending personal kindnesses even to those with whom he disagreed if they had won his respect as an intellectual equal, and arguing from knowledge rather than purely prejudice. Watching him at receptions, as he glad-handed and back-slapped the faithful with apparent conviction, and without betraying his dislike of the performance, few would have recognised the brooding workaholic who invariably arrived late at a restaurant for dinner with friends and, after gobbling down his steak and chips or a plate of spaghetti, would rush back to his rooms to either type a speech or read a book.
Brown’s combination of intellect, sophistication, ambition and popularism appealed to Mandelson. Standing on the steps of the party’s headquarters in Walworth Road, he told Andy McSmith, a Labour press officer, ‘Gordon will one day be the party’s leader.’ Mandelson’s prediction surprised McSmith. Brown was still largely unknown. Mandelson acknowledged that obstacle, but had repeatedly promised Brown that it would be overcome. During their frequent meetings Brown constantly complained, ‘I’m not getting enough mention in the papers. My name’s only in a couple of them.’ Mandelson reassured him that his hard work would be rewarded. Both were grappling with the party’s ideology, and belatedly welcomed the opportunities of the 1987 defeat. With the support of the party’s left wing and the endorsement of Neil Kinnock, Brown believed he would eventually succeed the Welshman as the party’s leader. He dismissed the chances of his rivals, except possibly John Smith, who was handicapped by his poor relationship with Kinnock. Brown’s quandary was how to develop an alternative to Thatcherism. Marooned among orthodox Scottish socialists, he was still estranged from the consequences of ‘Big Bang’.
Nigel Lawson’s boom had visible fault-lines, but Thatcherism appeared irreversible. Relying on people and markets rather than Whitehall civil servants to manage the economy was attractive to electors. Mandelson, alert to the new ideas, understood the dilemma. ‘I think you should go to Gordon,’ he told Michael Wills,