Election `97: For a while, time is on his side

In a world turned upside-down, plans are being laid that will form the next few years
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No one, including the Labour leader, thought it possible. Between 2 and 3am on Friday morning on his plane back from the North to London Alastair Campbell, Tony Blair's press secretary, was being bleeped every 20 seconds or so with news of Middle England seats falling to Labour. And when Michael Portillo's defeat was announced, the Labour leader's determination not to give in to complacency cracked; the Conservatives, he announced, were now in complete turmoil. There was no champagne; on his flight back to power Mr Blair sipped tea.

Even now, three days on, the scale of the transformation of British politics is hard to appreciate. Labour's largest ever majority has done nothing less than turn the nation's political geography on its head.

The Conservatives, the most formidable fighting force in British political history, have been wiped out completely in Scotland and Wales and banished from almost every big English city. Their share of the vote was as low as at any time since 1832, their number of MPs as paltry as 1906, after which, as one ex-minister observed last week, it took the party a full 18 years to return to power. And with every prospect of 10 years of Labour power, there was talk of the Conservatives splitting, of pro-Europeans joining a Liberal Democrat party whose popularity had surged to a level unprecedented in modern times.

Friday morning brought a mixture of anti-climax and disbelief to many key players. At Millbank Peter Mandelson, the campaign manager, insisted on holding a 6am strategy meeting, leaving the building only when Blair had crossed the threshold of No 10. Clare Short, soon to be in the Cabinet, spent five hours of her first day in government at a garage in Birmingham when, returning from a celebration with party workers, her car broke down at 5.30am.

And Labour Party workers found difficulty in adjusting to a political world turned upside-down. One said: "It's all too huge to contemplate. I've just watched the Six O'Clock News and Robin Cook is the Foreign Secretary. It's just all rather difficult to believe." Another bemused party worker added: "There was a perfectly nice, polite student who used to work in Gordon Brown's office. I can remember him taking messages and making the tea. Now he's an MP."

THIS extraordinary pace of events is not for the faint-hearted. In the top echelons of Whitehall few will be enjoying the bank holiday at home with their families. Senior civil servants who were at their desks yesterday will be there tomorrow. The central elements of the Queen's Speech will effectively be decided by the end of Monday before some ministers have even had a chance to finish reading their briefing documents. Said one civil service source: "A lot of it will be over by Monday evening in terms of the first few years in office. Some on the Labour side probably think it will be like the 1960s when Crossman came in and his reaction was, `Well, what are we going to do now we're in power?'. These days you get an avalanche of paper and officials saying, `I'm afraid, minister, your public spending bid has to be in by Thursday'." An early row will be whether the Queen's Speech includes the incorporation of the European Convention on Human Rights into British law. The Cabinet Secretary and Home Office officials are likely to oppose the move.

Even before John Prescott had been appointed a member of the Cabinet, a fierce Whitehall turf war waged over where the minister would sit, and which of two permanent secretaries would be his closest aide. There are new and potentially difficult relationships to be negotiated. Civil servants do not know what to expect; their reflexes have been shaped by nearly two decades of conservatism. The Civil Service has suffered years of Treasury cost-cutting. One official predicted: "No one will resist. But ministers will be learning and civil servants will be learning. They will be under tremendous pressure because there are fewer of them. There will be mistakes in the first few weeks, and when mistakes are made you can count on it that ministers won't want to blame themselves."

And there will be tensions. Blair wants his own people in place. Jonathan Powell, a former career diplomat, has been appointed chief of staff at No 10 (rather than, as expected, principal private secretary) with a massive remit to co-ordinate the Downing Street policy unit, the political office and the press office. Alastair Campbell takes over as press secretary "co-ordinating government activity". In deference to Civil Service sensibilities both men are being given the status of "special adviser" - political appointments paid out of the public purse - rather than normal Whitehall mandarins. But Mr Campbell expects to co-ordinate all government publicity.

To help him (and Downing Street) keep a grip, a network of "informers" will be placed around Whitehall. These will be one of the two political advisers allowed to each cabinet minister, one who works on policy, the other to liaise with the party and Downing Street (as one subversive put it, to act as "political commissars").

For years Labour has been run by a tightly disciplined and centralised machine. But, as one official said: "Once you give ministers their offices they and their officials are not going to wait around for the Downing Street press office to take credit for anything that goes well."

Friends and enemies alike believe Labour may have underestimated just how different it will be. A front bencher from the last parliament said frankly: "None of us has the first sodding idea about what government means, whether any of us will be any good at it, or even what being good at it means. In many respects the skills required in opposition are diametrically opposite to the skills needed in government. Some of my colleagues have made a career out of being a conduit for leaks from the Civil Service to the press. That's hardly going to be much good in government."

The sheer volume of paperwork in Whitehall means that Downing Street will have to relinquish some control. Politicians will have to trust each other and delegate more - but Labour's top brass is not noted for either of these skills. Relations between the top three Cabinet ministers - John Prescott, the Deputy Prime Minister, Gordon Brown, the Chancellor, and Robin Cook, the Foreign Secretary - are at best prickly. Each will now be backed by a department. Their meetings will be brief and more formal, there will be less opportunity for private chats.

FORTUNATELY Mr Blair's relationship with each of his key Cabinet colleagues is better than theirs with each other. He has other advantages, too, most notably the size of his majority. True, the new parliamentary Labour Party will have a larger contingent of left-wingers. But the left of the party knows that this has been a personal victory for Blair. As one Labour apparatchik said: "The mood of the nation has not been to back Old Labour, or even Kinnock Labour, so they're hardly going to be embracing Ken Livingstone." For the moment, insiders expect the left to be constructive. Blair's other crucial advantage is the disarray in which the Opposition finds itself. Campaigning for the Tory leadership had begun well before the election defeat. As one MP put it: "There is an informal contest to see who has got the best set of `good luck on election day' letters from potential leaders. Most have a Portillo, a sizeable number have a Dorrell, some have printed Lilleys, a few have hand-written Howards. And hand-written Heseltines are prized." Kenneth Clarke, the strongly pro-European Chancellor, faces an uphill battle to be leader of a party more than half of whose MPs are against a single currency. His backers expect a solid showing of perhaps 40 MPs - something that might be a precursor to a deal with another contender.

Mr Portillo's shock defeat has robbed the right of an obvious prime contender, leaving the field open to Messrs Howard, Hague, Redwood and possibly Lilley. None of these has a clear edge. It was announced yesterday that Michael Heseltine, who was taken to hospital with pains in the chest, would not be putting his hat into the ring. Tories from right and left had been seeing him as a potential stop-gap until Mr Portillo or Chris Patten can be brought back into parliament. It might now be impossible to orchestrate a stop-gap candidate. All this implies a battle, certainly including Hague and Howard, but with no clearly predictable outcome.

John Major's refusal to stay on in a temporary role means the battle will take place speedily. With a budget expected in July the Tories will want a proper Shadow Cabinet in place as soon as possible. Too radical a shift to the right could, of course, set off further turbulence. Any leader who rules out the European single currency is unlikely to be able to keep Mr Clarke in his Shadow Cabinet. That in turn raises the possibility of the ex-Chancellor leading a small group of pro-Europeans to side with the Government or the Liberal Democrats.

With that in mind, Paddy Ashdown's party, which had an outstanding result with 46 seats, may seek to lure one-nation Conservatives. The Liberal Democrats' performance - a personal triumph for Paddy Ashdown - makes them the largest opposition force to Labour in Scotland and Wales. Constitutional reform opens up new vistas as well with opportunities for the third party to win seats in the new Scottish Parliament and Welsh Assembly. The party also sees itself as having a sizeable role in the Commons, influencing policy on key issues such as Europe, taking the lead against Labour on issues such as civil liberties, constitutional reform and the financing of education.

BUT Labour's stunning victory leaves Mr Blair with little need to deal with other parties or to promote proportional representation (although he has offered a referendum on the voting system). How will Mr Blair use this position? Will he be a true radical or a closet Conservative? Early signs are of caution with flashes of boldness. Within hours of taking office he had ruled out including Liberal Democrats in his government. And there will be no Cabinet job for Peter Mandelson, one of his closest allies and an architect of Labour's modernisation. He has retained key figures on the left, including Clare Short and Robin Cook, both of whom have big constituencies in the party, and demoted one or two others such as Michael Meacher. Other non-Blairites will be given their chance in office.

This is a gradualist agenda rather than a bold and triumphalist one. One ally argued: "He must be overwhelmed by the transition from Opposition Leader. His natural instinct would, for example, have been to put Mandelson in the Cabinet but he's probably thinking things are rather different now he's finally in government." Yet there are powerful signs of things to come. Frank Field, the man whose thinking on social security has been more reformist than many Conservatives, will have responsibility for long-term strategy as a Minister of State. Mr Mandelson will get on to the ministerial payroll, well outside the Cabinet. Mr Blair knows he has time on his side.