By PETER WATT Inside Brown's bunker: Peter Watt was responsible for ensuring a smooth transition of power from Blair to Brown Soon after I became General Secretary of the Labour Party, I started work on a secret project codenamed ‘Cake’. This was the name we gave to plans being drawn up for swapping the most electorally successful Labour Prime Minister in our history for Gordon Brown. I, Alicia Kennedy [deputy general secretary], Roy Kennedy [director of finance and compliance], Hilary Perrin [who managed our regional offices] and Marianna [my chief of staff] agreed to hold regular meetings to flesh out how the transition would work. We were paranoid about details of these meetings leaking – or even the fact that they were taking place. It was winter 2005, only a few months since Tony had told voters he would be staying put until the next General Election, which was not expected to take place until 2010. We went to great lengths to ensure nobody knew about the gatherings. We were careful never to leave anything lying around the office that might give the game away. When it was time for the planning meeting, one of us would say to the others ‘Let’s go and get a coffee and some cake’ as a signal to head off to a private room, and so the meetings became known between us as Project Cake. During this period, I used to meet Tony at least once a month, Gordon about every six weeks, and John Prescott, who was a pivotal figure in the transition, every fortnight. These meetings became increasingly important and it quickly became clear that Tony was in no hurry to leave: he still had important things he wanted to achieve. It was mainly public-sector reform – he felt there was still a very long way to go and wanted to lock in the changes he felt were necessary before Gordon took over. It was clear he did not trust the Chancellor to continue his work. Meanwhile it was evident from my meetings with JP and Gordon that they did not trust Tony to leave office until the last possible moment. JP would say things like: ‘Gordon just wants to push Tony out, and that’s unacceptable and wrong.’ On the other hand he sympathised with Gordon. ‘I can understand why he feels so frustrated because Tony won’t commit. He keeps saying he’ll go, but he won’t say when,’ he would say. Fundamentally, all these meetings were about when and how Tony would go. The rest was window-dressing. A major sticking point was whether Tony would remain an MP when he left office. Gordon did not want Tony to stand down as MP for Sedgefield, fearing that the by-election this would trigger would draw attention away from the early days of his premiership. There was the danger that it would become a referendum on Gordon becoming Prime Minister, and that if Labour lost the constituency it would ruin any political honeymoon. However, Tony was keen to make a clean break. Gordon’s team thought he was just being selfish, deliberately making life more difficult for them. Of course I had more than just the transition to worry about. When I had been Labour director of finance, I had been told that, unbeknown to the National Executive Committee, the party’s ruling body, and Jack Dromey, party treasurer, the party had £13million of loans from supporters. When the controversy over links between donations to the party and the awarding of political honours started to build, stories about the loans also began to appear in the Press. There was now no escape from putting the NEC in the picture. In March 2006 I told the NEC about the loans. They were livid. I spent much of the following day at the T&G’s headquarters sitting in Jack Dromey’s office, going through the finances with him. It was the first time I knew that Jack had asked to see paperwork, indicating the level of concern. At a meeting of the party business board the day after, it was agreed Jack and I would give a prepared report about the loans. Afterwards Jack and I, who had been working really well together, went for a cup of coffee. We talked through what our report might look like and he was very supportive. He left at 4.45pm. Just after 7pm I was thinking about leaving the office when a Press officer called. ‘You’d better come round,’ she said. There, on Channel 4 News, was Comrade Jack, blowing a gasket. ‘No10 must have known about these loans. I’m the treasurer of the Labour Party and to be absolutely frank I don’t believe the Labour Party has been sufficiently respected by No10,’ he spluttered. I stared at the TV in disbelief. Was this the same man who that afternoon had agreed with the rest of us that no statement should be issued for the time being? But he was just warming up. That night he toured the TV studios, turning what was already a difficult situation into a full-blown crisis. He suggested he was ready to question the Prime Minister about what had happened if necessary. John Prescott called me. ‘Have you seen what that b*****d is up to?’ he shouted. ‘What the f*** is he doing? Wait till I f****** speak to him.’ I couldn’t see how Jack’s approach was going to be good for anyone, except possibly Gordon. 'Behaved like children': Blair didn't trust Brown to continue his public sector reform Later, rumours swirled in No10 of a furious bust-up between the Chancellor and the Prime Minister. ‘I’ll bring you down with sleaze,’ the Chancellor was said to have yelled. Word of the bust-up quickly spread through Downing Street, and the Chancellor’s alleged threat became common currency. To what extent was Jack acting on Gordon’s orders when he took to the airwaves that night? I cannot be sure. Gordon told me privately he had no influence over Jack. I told Tony about this comment. He looked skyward in a ‘believe that if you want to’ way. As 2006 wore on, Gordon became increasingly frustrated with the uncertainty over when Tony was going. The Prime Minister was repeatedly asked in public about his plans but never gave anything away. It made Gordon more and more suspicious that he wouldn’t keep his word about stepping down well before the next Election. I was on a junket in Strasbourg in September 2006 when Gordon decided to launch his latest grenade. For weeks, there had been rumours that he was plotting an attempt to unseat Tony after tiring of the Prime Minister’s persistent refusal to say when he was planning to stand down. On September 1, Tony gave an interview in which he refused to name a departure date, but also ruled out saying any more on the subject either before or during the Party Conference, due to open on September 24. Gordon’s supporters were incandescent. Tony had metaphorically stuck two fingers up at them. In Strasbourg I heard BBC reports of letters being drafted by a group of Labour MPs calling on Tony to go. Soon they were calling for a ‘bankable’ public statement from the Prime Minister. Prescott was furious. He rang me on my mobile. ‘What the hell is Gordon doing?’ he demanded. JP liked to think he knew everything worth knowing. This had caught him by surprise. ‘I understand why Gordon’s p***** off, but this is not the way to go about things!’ he fumed. While the media was never able to prove that Gordon was behind what was happening, it was obvious that JP had his own view. I got back to London where, unusually, I had routine meetings scheduled with both Tony’s and Gordon’s teams. I also had separate meetings with Tony and Gordon themselves. I sat down with Spencer Livermore, Gordon’s director of political strategy, and Sue Nye, Gordon’s senior adviser, at the Treasury and made some remark about all the drama. I felt I couldn’t pretend everything was normal. Agreement: Neither Brown or Blair wanted Harriet Harman to win the deputy leader contest ‘I’ve no idea what you’re talking about,’ Spencer said, putting on his best poker face. Just after 1pm I was still in the Treasury, this time sitting alone in Gordon’s office waiting for him. He strolled in. ‘What’s the theme going to be for conference?’ he asked me, as if nothing was happening. ‘It’s up to you and Tony,’ I replied – obviously it wasn’t my call. Gordon scowled. ‘You can never get a straight answer out of Tony,’ he glowered. By now, Khalid Mahmood, a parliamentary private secretary (PPS), had announced his resignation. Tom Watson, a junior Defence Minister known as a ‘Brownite’, had already resigned. David Cameron declared that the Government was ‘in meltdown’. Rumours were swirling of more resignations to come. ‘Obviously things are especially difficult at the moment,’ I replied to Gordon, a huge understatement in the circumstances. ‘These things will blow over,’ he said dismissively, as if none of it really mattered. ‘It’s very unsettling for the staff,’ I pointed out, really annoyed at how offhand he was being. ‘It won’t go on very long,’ he replied, and the subject was closed, though he suggested coming over to see the staff at party headquarters – something he’d never done before. He was obviously keen to keep the party machine on side. I left the Treasury and made my way to the meeting with Tony. At No10 I found Ruth Turner, director of Government relations, watching live reports of the resignations of Mahmood and, by now, four more PPSs. ‘Gordon is doing more to damage the party than anything else. No one will thank him for removing Tony even if he succeeds,’ she said. When Tony was ready to see me, I went into his office just off the Cabinet room. He was standing up, looking the worst I’d ever seen him – old, grey and drained. ‘Tony, I’m so sorry about what’s happening to you. It’s so wrong,’ I said, meaning it wholeheartedly. ‘It’s just politics,’ he said, doing his best to sound unfazed, though it was obvious he was shell-shocked. ‘It’s just Gordon. He can’t stop himself. He always has to push, push, push,’ Tony replied flatly. Like JP, he was in no doubt about the Chancellor’s hand in the revolt. The next day, in what was a big climbdown for him, he finally gave in to the Chancellor, and publicly confirmed that he would step down as Prime Minister within 12 months. It was the ‘bankable’ public statement Gordon’s henchmen wanted. The Labour conference in two weeks’ time would be his last as Labour leader, he announced – though he still did not give a precise date for his departure. Not long afterwards Gordon called me and said he’d been thinking about the future of the party and how to strengthen it. ‘I want to come and talk to all the staff,’ he announced. I was surprised. I hadn’t expected him to follow through. I rang Ruth. ‘I don’t know what he’s playing at,’ I said. ‘Well, we can’t exactly stop him doing it,’ she replied, agreeing it was strange. ‘Keep us posted.’ When Gordon arrived, he gave a warm speech and was received politely. It was all going quite well, until he decided to do a tour of the office. He wandered round the big open-plan room with a weird fixed grin on his face, shaking hands with the staff and saying ‘Thanks for everything you do’ over and again. There was no variation and he never added any small talk. As he approached people’s desks, they would stand up, accept the handshake and wait for him to say something else. Each time there was an excruciating moment while they waited for him to speak and he just stood there staring back at them, before moving on to the next person. It was all very wooden and embarrassing, especially when he forgot who he’d met and ended up shaking some people’s hands twice. They were forced to go through the whole ritual again, pretending they’d not met him just a few minutes before. I watched from the sidelines cringeing. His strange manner as he toured the office increased the misgivings of those of us who were angry about what had happened and unsure that he would be a successful leader. The episode was a painful illustration of his lack of social skills. After the Party Conference in Manchester, we began the groundwork for the transition. Over the summer, there had been mounting pressure on David Miliband to consider throwing his hat into the ring, and there were rumours that he had quietly been canvassing support. Though he had not impressed at conference, which cost him momentum, we certainly could not afford to assume that he would not put himself forward. The veteran Left-wing MP John McDonnell had made it clear he hoped to run, so there would definitely be a contest. Gordon was desperate to block any competition for the job he had long coveted. As Alan Johnson had bombed at conference, David was seen as his only serious rival. It was common currency at Westminster that Tony wanted the young Environment Secretary to run. However, as time went by it looked less likely. That didn’t stop Gordon worrying. He was so fearful about facing a challenge that he actually wanted us to use our leverage to help lock him in as the only candidate. He was determined to torpedo possible opponents. My colleagues and I were shocked when, during the long negotiations about how the contest would work, he blatantly tried to skew the process as it was being drafted to make it more difficult for anyone else to run. One of our plans was to have complete transparency over nominations for the leadership. The idea was that there would be a two or three-day period in which MPs could nominate candidates, and during this time we would publish the names of runners and their backers as they came in. However, Gordon did not want us to publish the names of any candidate until they had at least 45 nominations, the minimum required to run. This would have made it very difficult for anyone but him to stand. If we had bowed to his demands, it would have meant that MPs thinking about supporting someone else, like David, would have been left in the dark about the strength of the opposing candidate. Gordon, who wasn’t going to have any difficulty drumming up 45 supporters, would become an official candidate within minutes of nominations officially opening, with the list of his backers on the website getting longer by the minute. As an MP with an eye on your career, how could you risk not adding your name, when you had no idea if any rival was near to getting the 45 required? Gordon’s plan would have made it virtually impossible for anyone else to stand, and any notion of party democracy would have gone out of the window. I saw this as a blatant attempt by the Chancellor to sew up the contest. I talked to Mike Griffiths, the NEC chair, and he agreed with me. Others at HQ felt the same. Gordon backed down. In the event, David did not stand anyway, and John McDonnell failed to get 45 nominations. To the disappointment of those who were unsure Gordon was the right person for the job and wanted to see him prove himself against a rival (not least because it would have seemed more democratic and we would have avoided accusations of a ‘coronation’), he would be crowned leader without having to fight for the position. With hindsight, I think it was a terrible mistake that nobody else ran, but I understand why it didn’t happen. Privately, it was quite clear to any Cabinet Minister considering challenging Gordon that they would never be forgiven. They knew they would have no chance of being brought back into the fold if, as seemed almost certain, the Chancellor won. You cannot blame people like David for baulking at the prospect of consigning themselves to the political wilderness. There was also the deputy leadership contest to consider – JP was leaving at the same time as Tony. Six candidates were expected: Harriet Harman, Alan Johnson, Hilary Benn, Hazel Blears, Jon Cruddas and Peter Hain. In February, Jacqui Smith, then chief whip, and I began holding informal meetings with each of the declared candidates to discuss the rules, official and unofficial, for the contest. They were strange events. I was amused to note that Harriet always commandeered the big armchair in Jacqui’s office, while everyone else contented themselves with the smaller seats. She would pontificate about how she was going to be very ethical about the way she ran her campaign, only fundraising from small donors. I thought it was absolute tosh and Jacqui and I would glance at each other, discreetly rolling our eyes. Gordon’s coronation was scheduled for Sunday, June 24, at a special Party Conference in Manchester, and the results of the deputy leadership contest were to be announced then also. I spent the day before the ceremony supervising the electronic count. The result flashed up on the computer screen – Harriet had won. I had said I wouldn’t tell anyone the result until the official announcement but I received a call from Gordon’s office asking if I would tell just him, personally. I went to his hotel where he had been putting the finishing touches to his big speech the following day. ‘Harriet won.’ There was no mistaking it – his face fell. There was a long pause. Then he put his hands on my shoulders, and said: ‘It will be all right. We’ll make it all right.’ Next morning, around ten, Tony phoned me, all agog to know who’d won. ‘I can’t tell you,’ I said, teasing. ‘Go on!’ he coaxed. ‘Oh OK. Harriet.’ There was a sharp intake of breath. ‘Oh well. Oh well,’ he said slowly, sounding heavily disappointed. It was obvious this was not the result he wanted. I later told the candidates themselves, who were gathered together in a room. Alan must have been sick as a dog, as the result was so close. In the final round, he’d scored 49.56 per cent of the votes to Harriet’s 50.43 per cent. I am convinced that if he’d worked a tiny bit harder he would easily have swung it, but he was just not hungry enough for the job. Poor Hazel had come last. She’d called herself the Marmite candidate, admitting you either loved her or hated her, and so it proved. Following the announcement of the deputy leadership result there was a short break, before the big handover ceremony from Tony to Gordon. You would not believe how much detailed preparation had gone into the precise choreography. The main sticking point was whether Tony would be on stage for the event, a question that had been endlessly disputed. It was like dealing with two children. Gordon would say Tony should only be there if he wanted to, while Tony would say he would only do it if Gordon wanted him to. This went on for months. A few days before the ceremony, Tony finally decided he was prepared to be on stage for the handover. That’s when the argument became really heated. Gordon wanted Tony to rise, give a very short speech and remain standing while we showed some video clips. The film was going to be a kind of ‘life and times of Gordon Brown’, accompanied by rousing music to whip the audience up into a frenzy before the man himself appeared on stage. Gordon’s idea was that Tony should hover around on the stage for a full six minutes while the film was screened and then, as it wrapped up, say something like: ‘Ladies and gentlemen, I give you your new Prime Minister, Gordon Brown.’ Tony wasn’t having any of it. He felt he’d look an idiot. Did Gordon honestly expect him just to stay standing at the lectern during the film, with a reverential expression on his face? ‘I’m just not doing it,’ he said, in a voice that meant his decision was final. On the day itself, the issue had still not been resolved. We were still hoping that Tony would stay on stage and announce Gordon’s arrival, but just in case he refused, we recorded a voiceover that could be used. As I sat down for the ceremony, I still had no idea what Tony was going to do when the film of Gordon came on. To my horror, as the big screen lit up, he just walked off the stage. All I could think was: ‘Oh my God – is he going to come back?’ If he didn’t reappear, we would just have to use the voiceover. Thankfully, when the film finished he just sauntered back on to the stage, looking as if nothing had happened, announced Gordon’s arrival, and the rest went smoothly. To Gordon’s annoyance, Tony wanted to do one last session of Prime Minister’s Questions in the Commons before he went. He had it all planned – he wanted to give a little speech, say goodbye, take off his glasses with a flourish, and walk out of the chamber. If he was to get his way, it would mean that although Gordon was now leader of the Labour Party, he would have to wait until after PMQs the following Wednesday to become Prime Minister. Gordon was furious. ‘I’m the leader of the Labour Party on Sunday, and I’m Prime Minister on Monday,’ he huffed. I could see why he was p***** off, but Tony was adamant. In the end, we persuaded Gordon that the few extra days before Tony left would give him time to plan his Cabinet. On Wednesday, June 27, with the House of Commons chamber packed to the rafters, Tony delivered his last words from the Dispatch Box and, to a standing ovation, headed out of the chamber to start a new life. Soon after, Gordon’s team began arriving at No10. We had suggested that they retain some people from Tony’s team, at least for a few weeks, to make it all easier. It made sense for there to be some old hands around who could show Gordon’s people the ropes. But Gordon wouldn’t hear of it. As Tony walked out of the Commons, there was a mass exit of the entire No10 team. They trooped out through the Cabinet Office, dumping their security passes on the way, and the new lot walked in to a sea of empty desks. There was no handover at all. Such was the level of petty rivalry and lack of trust between the two most powerful politicians in the country. After escaping bankruptcy in 2006, we stopped spending money we did not have with such casual indifference. Our very own credit crunch did not affect everyone in the party equally, however. Before becoming Prime Minister, Gordon went to some lengths to insulate himself and the Treasury from our financial troubles, setting up his own personal pot of cash at party HQ. This was money we could not dip into, since it was set aside for the Chancellor’s own projects. Murray Elder – Lord Elder, an old friend of Gordon’s – helped secure donations from the Chancellor’s supporters. The money was registered as a donation to the party in the normal way. But instead of going into the overall pot, the cash went into a separate account, which we called ‘the fund with no name’. When I took over as finance director in 2005, I was given an exercise book with a record of his deposits and withdrawals. All we at HQ knew was that it was for Gordon’s private polling. I never asked for more detail, so I don’t know if that polling was to inform Budget decisions, or for his long campaign to become party leader. Technically, there was nothing improper about it but it always seemed strange that he should have his own stash of cash. Whenever the balance was running low, Murray would go off and secure more donations to top it up. Inside Out: My Story Of Betrayal And Cowardice At The Heart Of New Labour, by Peter Watt, is published by Biteback on January 25, price £16.99. To order your copy at the special price of £13.99 with free p&p, call The Review Bookstore on 0845 155 0713.'I'll bring you down with sleaze'... What Chancellor Gordon Brown screamed at PM Tony Blair on the night that Donorgate exploded into public view
Last updated at 10:00 PM on 16th January 2010As General Secretary of the Labour Party, trying to organise the transition of power from Tony Blair to Gordon Brown, Peter Watt was caught between a Prime Minister who didn’t want to leave, and a Chancellor who couldn’t wait to get rid of him. Here he reveals the secrets of the struggle between the warring factions who could agree on only one thing – neither wanted Harriet Harman as deputy leader.
Gordon’s private pot of money
Read more: http://www.dailymail.co.uk/news/article-1243766/Chancellor-Gordon-Brown-screamed-Ill-bring-sleaze-PM-Tony-Blair-night-Donorgate-exploded-public-view.html#ixzz0cpCVuwGT
Sunday, 17 January 2010
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