While I instinctively disliked the idea of taking more taxpayers’ money, there seemed to be a recurring problem with our system.
Apart from big individual donors, of course, the whole system of trade union funding of the Labour Party was antiquated and wrong. Whatever people might say about the closeness of business or wealthy individuals to the Conservatives, the unions’ funding of Labour gave them votes at the party conference, votes to choose candidates and the leader, and votes to determine policy. They owned Labour lock, stock and block vote.
Throughout the time I was party leader and prime minister there were talks between the parties to try to find a solution. I was prepared to go along with a cap of £50,000, or possibly less, on donations from individuals, as long as it was accompanied by a cap on union donations and the reform of Labour’s union links. I supported the idea of tax relief on donations, to ensure that parties had to fundraise properly and listen to their members, not just wait for the next dollop of taxpayer cash to arrive. But the talks always broke down. The caps we were prepared to accept were seen by the other parties as too high, and Labour was never truly prepared to break the union link.
In any event, we were proving, step by step, that party funding through donor clubs, big one-off events and the party conference was possible. We established the ‘Leader’s Group’ of large donors, each committed to giving the party £50,000 a year. While this is a huge amount by any normal measure, it was a great improvement on passing the hat around to a very small number of multi-millionaires for a few massive, often multi-million-pound, donations. At its peak, the Leader’s Group grew to over two hundred people, and became the mainstay of our funding.
While the press was determined to paint it as a ‘cash for access’ organisation, I was very proud of what we had built. We had shown that, even without extra state funding, our party could be properly funded. There were enough members for it to be clear that no individual would have undue influence. The dinners we had were informal and fun. And while there was no improper influence, as the financial and economic crisis hit, we had instant access to some of the best financial brains in the country.
With Andrew Feldman as chief executive and then chairman, we bridged the gap between the person who raised the money and the person who decided how it should be spent, ensuring real commercial control; and from 2006 onwards the party never ran a deficit, and even had a surplus after both the 2010 and 2015 election campaigns, something which is unprecedented in modern party history. We sold our historic headquarters in Smith Square, and even the loss-making annual party conference started to make money: by the time I left office it was making close to £2 million a year. The party was debt-free, and there was around £2 million cash in the bank.
Of course, the most important question in terms of preparing for power was what to do about our policies. A new focus on the environment was one important element. Mending our broken society would be another. On my first full day of leadership I launched one of our new policy review teams alongside Iain Duncan Smith, whose Centre for Social Justice (CSJ) think-tank was pioneering a radical approach towards tackling the cycle of social deprivation. IDS’s review, and a speech I delivered on it a few months later, would prove the most controversial of the period. I wanted us to admit that although we had talked about aspiration a good deal, Conservatives had not done enough thinking about those for whom the bottom rungs of the ladder of opportunity just weren’t there, or had been smashed before they’d had a chance to climb them.
The speech I made at the CSJ reasserted the Conservative mantra, which I fully subscribed to, that poverty or deprivation were never an excuse for crime. But, I added, there was a context, a background, that we needed to understand better. So, as I put it, when people crossed the line and committed a crime, the response needed to be rapid and tough. But to help more of them stay inside that line, we needed more understanding, more help – even more love. I homed in on ‘hoodies’, the name for both the hooded sweatshirts teens wore and the teens themselves: ‘When you see a child walking down the road, hoodie up, head down, moody, swaggering, dominating the pavement – think what has brought that child to that moment,’ I said.
We needed to deal with the background issues that led some towards a life of crime, like family breakdown, unemployment, drug addiction, children growing up in care, and educational underachievement. It was a classic compassionate Conservative speech and series of remedies. But the combination of hoodies and love outraged some in the press: ‘Hug a Hoodie’ was the News of the World’s take on the intervention.
I don’t regret the speech. It set the context for a new approach: committed to backing the police and supporting tough penalties in our courts, but tackling the failures of the care system, reforming adoption, targeting family breakdown and chaotic families, and beginning the long process of reforming our prisons. These were to be some of our most important achievements in government, and their genesis was in a speech that many at the time said would herald our defeat.
As part of the same train of thought, even before I became party leader I had been developing the idea of a school-age programme that would help our children – all children, not just a privileged few – gain the skills they would need for adulthood, such as resilience, confidence, teamwork, respect and responsibility.
I came up with the idea after talking to those who had taken part in National Service, the period of compulsory post-war service in the forces which ended in the 1960s. The main thing that came across from those conversations was that everyone had been in it together. It didn’t matter who you were, rich or poor, white or from an ethnic minority, academic or not – you forged a common identity. That’s why I wanted there to be a residential element in this new programme, to take teenagers out of their comfort zones and put them into groups with others of different backgrounds, and also a volunteering element, teaching them the value of putting something back into their community.
National Citizen Service was, I believed, the answer to many questions of our age. The education system was failing to equip children with the skills for adulthood; NCS could help fill in the gaps. Our society was broken; NCS could teach the respect that was so lacking. Integration hadn’t worked – we were still too segregated, too suspicious of each other; NCS would bring people together, and prove that ultimately we had so much in common. Although it was never made compulsory, NCS would end up as a rite of passage for every teenager who wanted to take part. Today, more than 500,000 have done so, and it is the largest and fastest-growing youth volunteering project of its kind in Europe.
As we developed individual policies, a theme was emerging. This was helped along by another moment that would have a profound impact on me, and as a result, on the future direction of the party.
Balsall Heath was a neighbourhood in Birmingham that had been blighted by crime, prostitution and antisocial behaviour. House prices fell. The middle classes moved out. But a group of people who remained had got together and taken matters into their own hands. They tore down the escorts’ fliers, harassed kerb crawlers and reported the drug dealers to the police. They started taking better care of the parks and public spaces, planting shrubs and trees.
I was so taken by this story that I went to stay with one of the residents, Abdullah Rehman, and his family. I ate with them, slept in their spare room, and walked their children to school with them. Interestingly for a British Muslim family, they had chosen the King David Jewish faith school, on the basis that it had a good ethos and understood the importance of faith. ‘We all believe in Abraham,’ Abdullah told me as we dropped the children off, before showing me around the community he had helped to transform.
Here, in this Midlands suburb, society was proving more effective than the state. Bit by bit, the idea of government nurturing a stronger, better, bigger society was forming in my mind.
So in those first few months there was a lot to sort out: the political strategy, the governing philosophy, the personnel, the purse strings and the policies. But those aren’t the only demands on a new opposition leader.
If you have any hope of being an effective prime minister, and of looking like a credible candidate for the job, you need a crash course in diplomacy, and foreign and security policy. My early overseas trips did a lot to shape my