The Third Man: Life at the Heart of New Labour. Peter Mandelson

political risks, to make Labour electable. But at Walworth Road, the unsettled aftermath of the Underwood interregnum had left Colin both exhausted and sceptical about whether there was any real will to win. Before long, he resigned too.

      In October, I went to see Neil and Glenys at their home in Ealing. I could see a new desperation in Neil. He was very nervous about the coming election, and said he felt an inability to ‘find words’ for his speeches – an especially painful anxiety for a leader who relied so much on his oratory. He felt he was losing the battle against his poor image, and was upset at the favourable press Major was getting. As we talked, Glenys suddenly interjected: ‘Why don’t you have Peter back to organise things and get a better press?’ If there was any doubt of how low Neil’s self-confidence had sunk, it was clear in his reply. He couldn’t bring me back, he said, ‘because of the Mandelson myth, and what everyone will say about him pulling the strings and controlling me’. I left disappointed not so much by my own inability to help Neil, as by the growing feeling that no one could do so. He seemed isolated, down. It was as if the fight had gone out of him.

      For a while, there were murmurings among Labour MPs, shadow cabinet ministers and the unions about replacing Neil. Some union leaders began quietly to canvass the option of John Smith becoming leader before the election. Gordon and Tony even went to see John to gauge his intentions. He replied that he was not interested. He said he did not think we had any chance of winning with Neil, but that he was not going to take the risk of taking aim at him and missing. So Neil survived the talk of rebellion.

      My view was that even under a new leader, we would have a hard time winning. With the exception of our abandonment of unilateralism and a partial retreat on nationalisation, our policies simply hadn’t changed enough since 1983. With John’s commitments to £3 billion in increased pension and child benefits in the policy review, we would also be going into the election on a platform of higher taxes. And since he had pledged to unveil a fully-fledged ‘shadow budget’ before voting day, tax was sure to become a major issue. As the campaign approached, John finalised a package that would increase National Insurance contributions for anyone earning more than £21,500 a year. It was a formula for alienating voters of almost every class and background.

      Neil knew this was trouble. He tried, but failed, to get John to scale down his proposals, and at least to phase in the NI increase. I am sure even John recognised the danger, but he felt it was outweighed by the loss of trust he would risk by a last-minute change to his tax or spending plans. Gordon, Tony and I also felt the tax issue would greatly hurt our chances in the election. But although it didn’t really register with me at the time, there was a nuance of difference in the reasons each of them objected. Gordon favoured John’s plans for increases in state help for pensioners and struggling parents. His problem was practical and tactical: how to pay for them, and how and when to announce and implement them. While Tony saw welfare increases as a commendable long-term goal, he felt that Labour’s priority must be to demonstrate to middle-class voters, and to our traditional working-class supporters who aspired to be middle-class, that we would not raise their taxes. We had to show we were on their side. That outweighed all other considerations for him. To the extent that I thought about the discrepancy, I put it down to the fact that Gordon’s political position was more delicate than Tony’s. His roots, like John’s, lay in Scottish Labour. Now that he was Shadow Trade and Industry Secretary, he held the senior economic portfolio next to John, making any appearance of disagreement with him out of the question.

      There were growing strains in his relationship with John. Gordon’s rise through the party’s ranks had caused suspicions in the Smith camp that he might become a rival for the succession if we lost the election. These were being fed by Gordon’s oldest and bitterest Scottish Labour rival, Robin Cook. John got the head of the GMB union, John Edmonds, to phone me in Hartlepool late one Friday night with the aim of putting Gordon in his place. ‘I gather the mice are playing,’ he began. When I replied that I had no idea what he was on about, he said: ‘I hear you and others are trying to push Gordon. This isn’t helpful.’ I wasn’t, and I told him so. In fact, Gordon, Tony and I were all sceptical about whether John could deliver the change Labour needed. We had been talking, if only in speculative terms, about the merits of a ‘modernisers’ challenge’, with Gordon going for the leadership and Tony as deputy. The Edmonds phone call was obviously intended to pre-empt any such move.

      It was followed, days later, by a more explicit signal. On the shuttle flight down from Edinburgh to London, John turned to Gordon and asked point-blank whether he would try for the leadership. Feeling cornered, Gordon answered in the only way he felt he could: ‘No, absolutely not.’ ‘Good,’ said John, ‘because it would not help our friendship if you did.’ Gordon was so worried about the veiled threat that he asked me to ensure that his undertaking to John appeared in print. I obliged, and later in the week a columnist duly reported that should Labour lose the coming election, Gordon would not be a candidate for the leadership against John. Nobody assumed that Neil would stay.

      This did not keep Gordon from making his misgivings about the shadow budget plans clear to John. Short of going public, though, he was never going to be able to force a change. The Tories had no need for such scruples. On 10 March, the day before Major called the election, the Tories’ final budget took aim at our obvious vulnerability on taxes. Lawson’s successor as Chancellor, Norman Lamont, announced a new 20p income tax band.

      To many in Labour, and to at least some in the media, we still had every chance of winning the election. We had a small lead in the opinion polls, even after the budget. The Tories had been in power for thirteen years. The economy was in the deepest recession for decades. Our manifesto was more voter-friendly than in 1987. But not by much. When the NEC met to sign off on it, Neil mustered a majority against a series of motions from Tony Benn, Dennis Skinner and their allies: a call for an explicit reference to socialism, a vow not to impose pay restraint, and a demand to phase out private beds in NHS hospitals.

      Our campaign strategy was to play things safe, not to screw up, and to cling on to our poll lead until the finish line. David Hill did a highly professional job at Walworth Road, while Philip was an even more important mainstay than in 1987. We had a few mishaps, but none of them fatal. After the campaign was over, the media and many inside Labour singled out Neil’s final, prematurely triumphal rally in Sheffield as crucial to the result. I never believed that. Nor did Philip’s later research bear it out. It was our tax and spending plans, made starkly clear in John’s shadow budget a few days before the election – and the way that message played into a wider image of Labour as too extreme, too much of a risk, to be trusted in Downing Street – that sealed our fate.

      My own campaign involved making my case to the voters of Hartlepool. Just because I was standing in a safe Labour seat didn’t mean it was fail-safe. I highlighted local issues, above all the need for investment and economic growth in a town still feeling the effects of the post-war decline of its staple industries. I also raised what would soon become a distinctly New Labour priority: the need for even a left-of-centre party to get serious about crime, and tougher on criminals. The personal high point for me was when my mother, always reluctant to venture into the political limelight, joined me on the campaign. The political high point was my result. The Tories added 1,000 votes, or 1 per cent of the electorate, to their 1987 tally. Our vote rose by more than 3 per cent, to nearly 52 per cent.

      Still, I had no doubt by election day that Britain as a whole was going to vote in a fourth-term Tory government, and the national results were indeed the worst of all worlds for us. We had lost. But we had picked up forty seats, bringing our total to 229. The Tories, on 376 seats, had lost forty-two. The Lib Dems, with twenty-two, were two seats down on 1987. Though John Major would still have a comfortable Commons majority, the election had been close enough for many in Labour to feel we were almost