A Journey (47 page)

I had an increasing worry on health and education, which was that while the Tory reforms may have been badly implemented and badly explained, their essential direction was one that was in fact nothing to do with being ‘Tory’, but to do with the modern world. These reforms were all about trying to introduce systems where the money spent was linked to performance and where the service user was in the driving seat. They were often divisive and even misguided in policy detail, but the overall approach was born of the same social and economic trends that had given rise to support for privatisation and tax cuts.

I could see a trend that was about breaking down centralised and monolithic structures, about focusing on the developing tastes of consumers, about ending old demarcations in professions; and this trend seemed to me to be related to how people behaved, not how government behaved. The precise shift in the way the private sector was organised and managed seemed, and not unnaturally, to have its echo in the challenges facing the public sector.

In crime and in welfare policy, I figured the Tories had not really thought it through and had only really begun to think radically at the end of their time. But in the NHS and schools it was different – there were elements of the changes they had made that we needed to examine and learn from, not dismiss.

The trouble was, at the time there was not a great appetite in the Labour Party for such thinking. Indeed, it was heretical. In particular, at the helm of the NHS, I had put Frank Dobson. This, in itself, indicated how little I understood when first in office. The truth is Frank was genuinely and, to be fair, avowedly Old Labour. He was one of the many who considered New Labour a clever wheeze to win. He didn’t understand it much, and to the extent that he did, he disagreed with it.

The hierarchy in the department and in the NHS, though truly dedicated and fine public servants, believed sincerely that there was an incompatibility between private sector concepts like choice, and the basic equity of the NHS as an institution. It was the age-old problem of the policy becoming the principle, so the policy of the NHS for 1948 – perfectly appropriate for its time – became the hallowed principle for all time.

So I was turning all this over in my mind during 1999 and beginning a conversation with my nearest and dearest political associates. But I had two problems: the first was Frank Dobson, the second was money. I knew that the underinvestment in the NHS was clear and the Tories had not understood it, or maybe hadn’t wanted to. When we compared our spending with that of any similar country, the disparity was plain. Money was not sufficient. But it was necessary.

The winter crisis was the immediate manifestation of the problem. But that was all it was. The true problem lay deep within the service: the funding and how it was run.

I had had a series of seminars with health professionals that the excellent Robert Hill (my adviser on health and author of NHS Direct) had put together for me. It was fascinating. From within the NHS, there were people who fully endorsed the NHS principles of equity, but were chafing at the bit about how the service was managed; how outdated its practices were; how there was an incompetence in some of its systems that led to consequences that were truly inequitable.

I had also had a conversation or several with Gordon about NHS funding; but as I anticipated, he was fairly adamant against doing anything big on it. Incidentally, I make no criticism of that. It was his job as Chancellor to run a tight ship in respect of the finances and repel boarders, as it were.

So I had to get the money, in order to get the reform; and in order to get the reform, I had to get a top team who believed in it.

I did the first in a somewhat unconventional way. I was due to do my annual new year
Frost
programme interview.

David Frost was still far and away the best interviewer around on TV, far better than those who sneered at him for not being sneering enough. He wasn’t rude or hectoring, but had an extraordinary talent for beguiling the interviewee, leading them on, charming them into indiscretion, tripping them, almost conversationally, into the headlines. I lost count of the number of times Alastair would say to me, ‘What the hell did you say that for?’ after a Frost encounter. I would say, ‘What?’ and he would explain and I would go: ‘Oh.’

Also, David had the revolutionary notion in his head that the audience wanted to hear what the person answering the questions had to say, rather than the person asking them. By this device, he got people to say much more than they intended and on a much broader range of topics. You would always end up with four or five news stories out of the interview. And of course by being insistent but not aggressive, he made it far harder, psychologically, for the interviewee not to answer directly.

Anyway, in this instance there was no need to worry about what I might say inadvertently. I had decided to say it advertently. I decided to commit us to raising NHS spending to roughly the EU average. Naturally, there were a plethora of methods for calculating what that was. There were armies of statisticians and accountants who worked it out and came to different conclusions from each other, but the basic point was fairly clear and the signal such a commitment sent would have its own determinative impact.

On Saturday, Robert Hill and I worked through the possible permutations. I talked again to Gordon, who became more adamant. But I was convinced, as a matter of profound political strategy, that this decision had to be taken and now.

I also knew by then that we had a chance of getting the reform. In late 1999, Alan Milburn had replaced Frank in the department. Alan had been Minister of State and really shone there and was fully simpatico with the direction of change. Frank had resigned in order to concentrate on the mayoral contest for London.

I admit, at this point, that I had not discouraged Frank from resigning, partly because I thought it would free up the Department of Health. It did, however, leave us with a big problem for the mayoral race. The truth is that Frank had about as much chance of beating Ken Livingstone in a contest to be London mayor as Steptoe and Son’s horse had of winning the Grand National. At a later point of this saga, when in the course of the election I was trying to lift my team’s spirits, I said gamely that I thought Frank would just win it. To which Anji said: ‘If you think Frank Dobson can beat Ken Livingstone in London, I’m calling a doctor.’

So there was a big mess looming in London; but by the time I did
Frost
, I knew what I wanted and I had who I wanted at the helm.

I did the interview and, to David’s pleasure, I didn’t need my confession to be extricated, but averred it fully, openly and right speedily, as it were. It was one of the few examples I can remember of going on a programme with a story in mind and emerging from it with the same story on record.

There were a few days of tin-helmet time with Gordon, but he could see the inevitability of it and anyhow the politics made it impossible to oppose. It was a straightforward pre-emption. But it was a pre-emption that was both necessary and justifiable. It then allowed me to get on with the other part of the plan: to work with Alan on a serious proposal of reform.

We talked about it and agreed that we would work over the coming months to produce a proper, fully-fledged plan of transformation for the NHS. After some toing and froing we agreed it should be a ten-year plan. The aim should be to change fundamentally the way the NHS was run: to break up the monolith; to introduce a new relationship with the private sector; to import concepts of choice and competition; and to renegotiate the basic contracts of the professionals from nurses to doctors to managers.

The most important element was that it implied a resolution of what had been revolving in my mind for some time. We had come to power in 1997 saying it was ‘standards not structures’ that mattered. We said this in respect of education, but it applied equally to health and other parts of the system of public services.

In other words, we were saying: forget about complex, institutional structural reforms; what counts is what works, and by that we meant outputs. This was fine as a piece of rhetoric; and positively beneficial as a piece of politics. Unfortunately, as I began to realise when experience started to shape our thinking, it was bunkum as a piece of policy. The whole point is that structures beget standards. How a service is configured affects outcomes.

That is, unless you believe that centrally managed change works best. This is where the change in thinking had deep political as well as service implications. Part of the whole thought process that had gone into creating New Labour was to redefine the nature of the state.

Except on law and order, I am by instinct a liberal. That is one reason why I used to go out of my way to praise Lloyd George, Keynes and Beveridge; and why I always had respect as well as affection for the mind of Roy Jenkins.

In a world in which the individual sought far greater control and power over their own lives, it seemed inconceivable to me that any modern idea of the state could be other than as an enabler, a source of empowerment, rather than paternalistic, handing out, controlling in the interests of the citizens who were supposedly incapable of taking their own decisions. That intuition, that gut feeling then obviously had to be translated into the praxis of state institutions. Really it was as simple as that; a symmetry between the policy and the philosophy.

From early 2000 onwards, with the funding issue resolved, at least in general terms, Alan and I and a close team of advisers started to work out what would become the ten-year NHS Plan.

Meanwhile, we were working in other policy areas to similar purport. Andrew Adonis had taken over as my education adviser. I can’t remember exactly how he came to us. He had been an academic at Oxford and member of the SDP. He had been committed to writing a biography of Roy Jenkins (which the pressure of work prevented him from completing) and had been a journalist for the
Financial Times
and the
Observer
. His arrival was fortuitous and gloriously productive. He was totally decent, had a first-class intellect, and was not afraid to think without ideological constraint. He completely ‘got’ New Labour.

Of course, there was resentment of him because of the SDP past. By the way, it was similar with Derek Scott, who advised me on pensions and macroeconomic policy. Derek was really tough-minded and acerbic, and added a new dimension to the team. He had, however, the diplomatic skills of Dirty Harry. Meetings with the Treasury would turn into war zones and he could go off faster than the average firecracker. But, funnily enough, I liked having him around.

Andrew, by contrast, was such a thoroughly nice guy that even diehard SDP-haters found it difficult to dislike him. Not that a few of them didn’t try really hard, mind you.

David Blunkett, like me, was undergoing the same reconsideration around standards and structures, and of course Andrew greatly urged in this direction. David had pulled around him a strong team as well, with people like Michael Barber and the permanent secretary of the department Michael Bichard, who was one of the best. So we also began rethinking our way through school and university reform, with the same principles as in health.

Criminal justice was altogether a different bag of nails. There the problem was and is profound. Over time, it led me to a complete reappraisal of the nature, purpose, structure, culture, mores, practice, ethos – you name it – of the whole system. It was and is essentially dysfunctional. But more of that another time.

Suffice to say, as one of my longer year 2000 notes put it, we needed to become more searching, more radical, more groundbreaking in our approach to the whole post-war settlement around public services and the welfare state, right across the board.

Throughout the first half of the year, we beavered away, especially on the NHS. In March, I made a statement to the House on NHS modernisation, which paved the way for the later July plan.

At the same time, the mayoral race trundled on with entirely predictable outcomes. There were two stages: first, the race for the Labour nomination; second, the race for the office itself.

As to the first, we put our all into securing Frank Dobson the nomination. We had a formidable machine in those days and it did its job formidably. The feeling about Ken among the top brass was unbelievably strong. And, of course, stupid. I don’t exempt myself. I didn’t feel visceral about it, as John and Gordon did. I rather admired Ken’s style, his quirkiness, which made him stand out as different, and his ability to communicate. I also exaggerated the dangers of his policy positions, not wilfully, but just out of force of habit when describing an opponent’s politics. It shouldn’t be like that; there is always a risk in politics that when you disagree with someone, you magnify the disagreement. Two shades of grey become black and white. A mistaken policy becomes a disastrous one.

Ken as a Labour candidate was going to be a problem for a very simple reason: he disagreed totally with the /files/04/57/76/f045776/public/private partnership John Prescott and Gordon had designed for the Tube. Since London transport in many ways defined the job, it was going to be difficult to have a Labour candidate dedicated to stopping the Labour transport policy.

I supported the policy, but felt strangely less sure about its modernising nature. I also thought Bob Kiley, who Ken wanted to bring in to run the Tube after a successful spell as chief of transport in New York, had something to commend him.