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Cliff Edge, Collapse and Scandal

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It’s June 2007, Gordon Brown is prime minister, and it does not stop raining.

There was something apt about the ex-chancellor’s premiership beginning with the wettest weather in decades.

I had – and still have – huge respect for Brown’s intellect and his appetite for hard work. And mutual friends have told me how charming and entertaining he can be in private. But in public he seemed to have only one character setting: dour.

And when it came to Parliament, he had only one political setting: everything was about killing the Tories. While other Labour frontbenchers would build relationships with their opposite numbers, Brown would have absolutely nothing to do with his. The one time he did reach out to his shadow George Osborne, George and I were having dinner in Pizza Express in Notting Hill Gate. Brown wanted to ‘pair’ – i.e. agree that neither of them would vote in an important forthcoming debate. When George very politely explained that he couldn’t do this without consulting our chief whip, Brown simply shouted and swore at him, before slamming down the phone.

So when he succeeded Tony Blair, I was rejoicing. We were ahead in the polls. And I was up against someone who hadn’t been elected, who had some real flaws – and who I thought it was possible to beat.

But initially things didn’t work out that way. As ever, ‘events’ intervened.

On Brown’s second full day in the job, there was an attempted bomb attack in London’s Haymarket, and then, the day after, terrorists drove a jeep laden with gas cylinders into Glasgow Airport. Brown reacted swiftly and effectively – and struck exactly the right tone about the threat we faced and how we should meet it.

The non-stop rain led to non-stop floods, affecting first one part of the country and then another. Brown immediately toured the affected areas, pledging money to flooded-out communities and families.

Then, after plagues of fire and rain, came disease. Foot-and-mouth was discovered on several Surrey farms. Having spent little more than a day on holiday, the new prime minister darted back.

And as his side of the political seesaw rose, mine began to sink.

First, Quentin Davies, a pinstripe-suited Tory MP, defected to Labour with a resignation letter of pure vitriol. His criticism of the modern­isation project was very personal.

Then came a by-election in Ealing Southall. Our candidate was a successful and engaging British Sikh called Tony Lit, and although we were never going to win in the London borough, we wanted to put up a good fight. But in doing so we ended up setting expectations in the wrong place. I had also agreed to the idea of the candidate running on the ballot paper under the description ‘David Cameron’s Conservatives’. This looked arrogant and hubristic. I campaigned hard, visiting the seat five times – and we came a dismal third.

I had a chance to seize back the initiative. Social action – our policy of backing volunteering at home and abroad – was a strand of modern, compassionate conservatism we were determined to demonstrate. Project Umubano, led by the MP Andrew Mitchell, was to bring together forty enthusiastic party volunteers in Rwanda that summer, and I was to join them for a night.

The problem was that parts of Witney were still flooded. But I had visited the flood victims, and I was absolutely determined that the Conservative Party would not be a follower on overseas aid, but a leader.

Nevertheless, the visit was dogged by questions about why I was in Africa when my own constituency was under water. That night I looked out from the Christian mission where we were staying, gazing over the lights of Kigali, reflecting on the critical coverage. I knew that it had been a mistake to come. But sometimes there are mistakes in politics you’re glad to have made, and this was one of them.

When Brown overtook us in the polls, rumours began swirling around about an impending vote of no confidence in my leadership. It really was personal.

Brown summed up the mood at PMQs with a rare quip (that’s how bad things were – Gordon Brown was making effective jokes): ‘The wheels are falling off the Tory bicycle, and it is just as well that he has got a car following him when he goes out on his rounds.’

William Hague was emphatic that if Brown was thinking straight, he would call an immediate general election, before the party conference season even began. That way, he would give us no chance to make up the ground we’d lost. I knew that we had just one chance: we had to deliver a Conservative Party conference in October that would metaphorically blow the doors off.

Though our policy-review teams hadn’t even reported back yet, we cobbled together a bumper series of announcements for each day of conference, from cutting stamp duty to introducing new cancer treatments. The Friday before conference, the whole lot – every single policy – was emailed to George’s chief of staff, Matt Hancock.

But Matt’s email address included his middle initial. We had inadvertently sent the full Tory plans to eccentric Lib Dem MP Mike Hancock.

The sender was mortified. The press officers were up in arms. I, however, was sanguine. ‘They’re great policies,’ I said. ‘If they leak, they leak. I’m off home.’ So many things in politics are seen as a calamity. Very few actually are.

However, we would spend the whole conference somewhat on tenterhooks, wondering on which day our precious policies were going to be published before we announced them. To this day I still don’t know why they weren’t.

Labour had a successful conference in Bournemouth, where Brown’s chief bruiser Ed Balls was briefing that there would be an election.

Then came our turn in Blackpool. A cliff-edge moment for our party – and for me.

William opened with a cracker of a speech, chastising Brown for hosting Margaret Thatcher in Downing Street the previous month (a move he must have hated but which made him look both magnanimous and bold).

George then unveiled what I termed his ‘hammock idea’, the conference announcement he’d always dream up while reclining somewhere hot over the summer. This year was the biggest yet: raising the inheritance tax threshold to £1 million. It was deeply Conservative, rewarding people who worked hard, saved and wanted to pass something on.

The finale of the conference, as always, was the leader’s speech. It would be back in the Empress Ballroom in Blackpool’s Winter Gardens where I’d delivered that leadership-winning, no-notes speech two years earlier. I had been pondering whether I could repeat the feat, not as a stunt, but because I was genuinely frustrated by my seeming inability to get across who I was, what I thought and what I wanted to do for Britain.

The lecterns I spoke behind felt like a barrier between me and the audience, distorting what I was saying and what people were hearing. Steve Hilton agreed. Sam told me to go for it. But last time was just ten minutes, I said. This is an hour. I have to cover everything. And it’s my political life on the line now.

But I knew what I wanted to say. It would be me up there, no artifice, no barrier. So in the run-up to the conference I was not just working on my speech with Ameet Gill, but secretly learning its structure, key points and key phrases as we went along.

Come the morning of the speech, I had rehearsed sections but never practised the whole thing in one go. Sam and I snuck out early for a walk on Blackpool beach. I bounded back, full of vim.

As I walked out onto the stage, I knew it was do or die. ‘It might be messy, but it will be me,’ I told the packed hall. As well as being ‘me’, it was terrifying, exhilarating – and knackering. After an hour, I reached the peroration. ‘So, Mr Brown, what’s it going to be? Why don’t you go ahead and call that election? … Let people decide who can make the changes that we really need in our country. Call that election. We will fight. Britain will win.’

I wish I could say I owed it to Cicero. In fact, it was inspired by the moment that David Niven loses his temper with Gregory Peck at the end of one of my favourite films, The Guns of Navarone. All that classical education gone to waste.

Before the conference began we had commissioned a ‘tracker’ or daily poll to see if anything we were doing was shifting the dial in terms of what the public thought. And we decided to continue the poll as the conference came to an end. It was money well spent. Our poll ratings ticked up daily through the conference – and then shot up at the end. I watched the news that evening and thought that I could see – for once – that I had really made that vital connection: from the hall, through the television, to the viewer at home.

But the country’s cameras were now trained once again on Gordon Brown: will he or won’t he?

The next day we were straight back into election planning meetings, as the tracker revealed we were neck and neck with Labour.

Then on Friday, as I drove to Dean, Andy phoned to tell me about a significant opinion poll which would be in that Sunday’s News of the World. It had been carried out only in marginal seats, and it showed, pretty comprehensively, that Labour would not win an election. Far from extending their majority, they would be losing seats to us. It was the final – and in my view, the key – factor that caused Gordon Brown to decide not to hold an election.

Brown argued that his decision had nothing to do with the polls. This enabled us to get the narrative going that as well as being indecisive and temperamental, he was taking people for fools. Andy came up with the refrain ‘Brown’s bottled it’, and we even had bottles of Brown ale made.

A word on being indecisive. The previous year, February 2006 had brought Elwen into our lives. Like Nancy, he was born under C-section at St Mary’s, Paddington.

Normally, parents can discuss baby names at their leisure. But we didn’t have that luxury. Gabby burst in soon after the birth telling us we had to come up with a name now, otherwise I’d look indecisive. I liked Arthur. Boring, said Sam. She sent me out to buy a book of names, and decided on Elwen – not the Welsh Elwyn, but the J.R.R. Tolkien version, meaning ‘friend of the elves’. So Elwen he became (but Arthur Elwen on his birth certificate).

Everyone who was there during the summer and autumn of 2007 remarked on how calm I was. Calm on the eve of the make-or-break conference. Calm when I was told about the accidental email leak. Ed found it infuriating that, just as I didn’t overreact to bad news, I was often disappointingly unimpressed when he brought me good news – treating triumph and disaster just the same.

People may interpret that as being indifferent, or ‘chillaxed’. It’s not. It’s because I know that bollocking people, blowing your top, throwing tantrums, doesn’t get you anywhere. It didn’t help Gordon Brown.

But Brown had helped us. By flirting with an election, then pulling out, then denying his reasons for doing so, he exposed his weaknesses. At the same time, he had brought out our strengths – our ability to refuel, to recalibrate, to come together as a team when we were under assault, to stick to the course even when events were trying to divert us. And the fact that our modernisation was working.

Brown continued to demonstrate his tin ear when he stuck with his plans to abolish the 10p rate of income tax for some of the lowest earners in Britain, in order to reduce the overall rate from 22p to 20p. Labour MPs were in full cry on behalf of all those who were going to lose out. There didn’t seem to be any way of compensating them without either reversing the policy in its entirety or spending a vast sum of money. It was to have a big impact on the electoral battles ahead.

Conventional wisdom holds – and my experience so far had proved – that there are two days that matter more to an opposition than all the others: local election day and party conference speech day. These are the moments – sometimes the only moments – when the searchlight beam catches you, and people focus briefly on politics and consider whether your party is up or down, and whether you look like a prime minister or a duffer.

I became increasingly obsessed with this theory, and knew that the London mayoral election in May 2008 was another such moment. We would only win in London if we could find a candidate who could reach out beyond our Conservative-voting base.

Boris Johnson likes to say he was my last choice, but it’s not true. George and I were keen to persuade him, and we worked hard to do so. One of the promises we made was that we would do everything to help him run the best-financed and organised campaign that money could buy. We made good on this promise by delivering to him the best campaigner on the planet: Lynton Crosby.

On election night, when it became clear the Conservatives were going to have their first London mayor, Boris arrived at the party at Millbank. As we walked in together, we joined hands and raised them in the air. A great pic. But Boris didn’t let go. So, rather strangely, we walked into Millbank Tower hand in hand. ‘I told you: hold, lift, drop,’ Andy chastised us. ‘Where was the drop?’ Of course, the drop came much later.

A fortnight afterwards we faced a by-election in Crewe and Nantwich, following the death of Labour stalwart Gwyneth Dunwoody. I threw myself into the campaign, visiting the constituency several times. Standing on a bench in the high street, giving an impromptu speech, I looked around at all the support – sometimes you don’t need tracker polls, you can just sense it – and I thought: we’re going to win this.

We did – the first by-election win from Labour since 1982. Ed Timpson became the first Tory in Crewe since the 1930s. The tide was turning.

But despite being on a roll, news of another by-election was much less welcome.

The shadow home secretary David Davis had decided, bizarrely, to force a contest in his Yorkshire constituency in protest at Labour’s increase of the maximum period of detention without trial from twenty-eight days to forty-two. This was a policy our party was vigorously opposing in Parliament, so the only conclusion I could reach was that the whole thing was a vain – and potentially damaging – ego trip.

William – yet more William wisdom – made me promise that I would not guarantee David his job back once the by-election was over. ‘It’s a team game, and he’s decided to leave the team,’ was his blunt assessment.

I called David and explained that if he insisted on the by-election, we would support him in the campaign. But I needed a full-time shadow home secretary, and could not guarantee him a return to the role. The truth was that I was delighted to have this unexpected opportunity to dispense with him, without anyone being able to say I was to blame.

I played it safe with his replacement as shadow home secretary, appointing Dominic Grieve, the shadow attorney general and a top Commons performer. While his views on combatting terror were similar to David’s, they were a little more nuanced, and I felt he would give more priority to concerns about national security.

In the end, the division between civil liberty Conservatives like him and national security Conservatives like me was to prove fatal, as we were later to clash over the European Court of Human Rights. These tensions paved the way for Theresa May. One of the reasons I thought she’d make a great home secretary was that we agreed on these issues and many more.

All my woes during the beginning of Gordon Brown’s premiership were about to pale, however, as two meteorites hit British politics in quick succession: the financial crash and the MPs’ expenses scandal. Both would shake people’s faith in the establishment, shape politics – and in the case of the crash have a huge impact on people’s lives for many years to come.

Brown was right to say that the economic crisis ‘started in America’, because it was there that subprime mortgage lenders had been providing credit to people who hadn’t a hope of paying the money back. Other financial institutions sliced and diced these loans into toxic bonds that were bought worldwide as investors searched for high yields.

And, of course, it was in 2008 that American investment bank Lehman Brothers fell, dragging the world’s financial markets down with it. But it was a crisis to which Britain was particularly exposed. Our lending and banking practices had been infected with similar over-exuberance. One of our largest mortgage lenders, Northern Rock, was among the first victims of the credit crunch, and faced collapse in 2007. Our banks were some of the most over-leveraged (indeed, the later bailout of the Royal Bank of Scotland remains the biggest rescue of a bank ever). And – absolutely crucially – our economy was built on a mountain of debt. Not just private sector debt, but rising government debt from an administration that hadn’t adequately used the good years to run surpluses and pay down debt.

So yes, the fire began in America. But Britain had been piling up kindling for many years.

Being the opposition party at this moment left us with a difficult balancing act. Hold the government to account, but don’t damage the national interest. Support the government in its necessary action, but make sure you don’t become an irrelevant echo. Think through the policies needed for the future in a way that convinces people, while avoiding populist kneejerks. An additional complication was that we were the party that had championed the deregulation that some were arguing had allowed the bad banking practices to take place. We were up against a prime minister who had been chancellor for a decade, and who believed he understood the complexities of the international financial system better than anyone.

And then there was the most difficult thing. We had agreed – and announced back in September 2007 – to match Labour’s public spending plans.

Governments determine the base line of arguments about tax and spending. If you depart from it, you end up vulnerable (as we had been in 2001 and 2005) to being described as vicious cutters or, as in Labour’s case, big taxers.

Labour had solved that problem in 1997 by offering voters a period of stability in which they would match our plans. After that, all bets were off. We had been critical in the 2005 election of Labour’s borrowing and spending, and remained critical, but we had lost the argument. We had had to make a decision when a possible 2007 election loomed, and had decided to use Labour’s 1997 technique. We would match their plans for a couple of years, allowing us the freedom to impose better control after that.

In the light of the 2008 crash, this was clearly a policy mistake, if not a political one, and we needed to change our approach. So we tried to do three things in framing our response.

First, we would be constructive. As Her Majesty’s Loyal Opposition, moments of national crisis demand that you put the emphasis on the word ‘loyal’. Over in America we were seeing the damage that could be caused by political wrangling, with the rejection by Congress on 29 September 2008 of the Troubled Asset Relief Program. It sent the markets into free fall.

I was in Birmingham at our party conference, and decided to make an emergency statement on the penultimate day. In that, and in my main speech on the final day, I struck a constructive tone. Not only should we be working with the government, but with the financial services industry. I knew instinctively that this was what was needed to meet our short-term priority: preventing a rapid banking collapse and thereby protecting people’s jobs, homes and businesses. And I knew it was necessary to meet our long-term aim: fixing the free enterprise system so that never again could it inflict this damage.

That’s why we supported Brown’s plans for the recapitalisation of the banks, for example when the government bought 58 per cent of RBS in November 2008. There was a strong argument for stripping the most damaged assets out of the banks and creating a ‘Bad Bank’, as other countries had done in previous crises, but ultimately we backed the injection of public funds to prevent their collapse.

Second, we took our time. We formed a council of advisers, comprising former banking chiefs, top civil servants, Conservative chancellors and others, to guide our approach. Sir Brian Pitman, former head of Lloyds Bank, who I had got to know when I was at Carlton, was a regular visitor. Terry Burns, former Treasury permanent secretary, was key, as was Ken Clarke, who we soon brought back into the fold as shadow business secretary.

They were unanimous that, while it felt as if we were facing a totally new and potentially terrifying set of economic circumstances, there were lessons to learn from history. The Wall Street Crash hadn’t caused the Great Depression, it was the banking crisis that came after it, and the policy response to that crisis, which let bank after bank close, taking with them savings, credit and any chance of recovery.

Those who argued that all we needed was tighter financial controls and more government spending were wrong: this was a monetary crisis, and the most important part of the solution was monetary action: flooding the system with liquidity, preventing the collapse of systemic financial institutions, establishing new sources of finance – government ones, if necessary – to lend money to small businesses now starved of cash.

Confident of this analysis, the third thing we had to do was to be bold. In November 2008, we announced that we would move away from Labour’s spending plans. Championing prudence was particularly brave at a time when the whole world was fixated on a Keynesian ‘spend, spend, spend’ solution to the crash. But we genuinely believed that the government’s fiscal position was so precarious that it could not afford to go beyond the ‘automatic stabilisers’ of higher benefit bills and lower tax receipts that in any event push up the budget deficit when the economy stops growing.

Discretionary increases in government spending and tax cuts were all right for those countries that could afford them; those that couldn’t were playing with fire. So, in another bold step – particularly for a party that prided itself on supporting low taxes – when Labour announced a temporary cut in VAT, we voted against it.

The real boldness, however, was in directly advocating a policy of austerity in terms of cutting government spending for the future. After all, what party goes into a general election talking about cuts? And we were using that crucial word: cuts.

This caused more trouble for Gordon Brown, who, after having mistakenly declared himself to have ended the b-words – boom and bust – simply refused for weeks and weeks to use the c-word.

Some critics say that we were as naïve as Brown – and that we never saw the bust coming. But it was before the crunch and crash that I’d given a speech at KPMG warning about Labour’s unsustainable deficit and debt. We knew their overspending would come to bear on us all. We knew the economy was built on sand. We just didn’t know the meteorite would hit when it did.

Other critics say that we were desperate to cut public spending in order to dismantle public services. Well, since we’d promised in 2007 to match Labour’s spending plans, clearly that wasn’t the case. The reality was, in the phrase George coined and then made famous through endless repetition, they hadn’t fixed the roof when the sun was shining.

The reason for cutting was therefore the total opposite. It was to save public services. The greater the debt, the more money we would be spending on repayments. The weaker the economy, the less to spend on public services. We saw this clear as day, and I suspected that working people would see it too. They knew the UK hadn’t been living within its means, and that that needed to change.

We were making some tangible policies in order to prevent such a situation occurring ever again. That included another bold step, which was to give away a power that chancellors had long held.

I had some experience of the stringency with which annual accounts and results were published when I worked at Carlton. Lawyers and auditors would pore over every word to check for accuracy. But that was business. In politics, it seemed to be totally different. It was up to the Treasury to predict future growth on which its spending plans would be based. That gave it the opportunity to manipulate the growth forecasts and fiddle tax receipts, which Labour took full advantage of.

Gordon Brown and Alistair Darling’s forecasts became works of fiction. At every Budget and Pre-Budget Report they would become increasingly optimistic. When better estimates or true figures emerged, there were wild disparities. George and I proposed that an independent Office for Budget Responsibility (OBR) should make those predictions instead. Of course it wasn’t easy for anyone to guess how much the economy would grow (or, at this point, contract). But by removing the potential for bias, we could prevent figures being massaged to justify spending increases our country couldn’t afford.

That Christmas of 2008, shops like Woolworths and MFI were disappearing from our high streets. The New Year, 2009, brought confirmation of Britain’s first recession since 1991. What concerned people wasn’t just how the deficit would affect them today. It was how this ‘spend today, pay tomorrow’ culture was saddling the next generation with debt. How wrong it was – morally – to make our children pay for our excesses. This was perfectly captured in our poster that January – a picture of a baby with the line: ‘Dad’s nose. Mum’s eyes. Gordon Brown’s debt.’

Brown’s favourite insult to hurl at me was ‘This is no time for a novice.’ I worried deeply that, at this time of great financial turbulence, it would become especially potent. After all, George and I had never held ministerial office. And we did make mistakes.

But we had carefully thought out our strategy. We stuck to our instincts – instincts we believed the public would share – that a crisis caused by recklessness and secrecy should be met with prudence and honesty. And we ended the period with more people trusting us than the government on the crucial issue of managing the economy – the first time we had had a consistent lead over Labour since the 1990s.

But the second meteorite was about to hit.

Great political controversies tend to drive us all to think in simple headlines. This one seemed like a straightforward story: brave campaigner sets out on a mission to unearth grave wrongdoing; Parliament resists releasing information it ought to; the information comes out anyway, and it reveals appalling practices, illegality and corruption.

All those things are true of the expenses scandal, but the full truth is more complex. And I didn’t just have a front-row seat, I was on the judge’s bench – and in the dock myself. And what I saw from that unique position was, yes, wrongdoing that needed unearthing, but also unfairness, heartbreak and lots and lots of grey areas.

The context was this. MPs were entitled to claim an ‘Additional Cost Allowance’ (ACA) of up to £24,000 per year for running a second home, because they have to be based in Westminster for part of the week and in their constituency for the rest of it. There was also £22,000 of ‘Incidental Expenses Provision’ for office expenses, over and above the salaries for staff. Rules about employing relatives as members of staff were virtually non-existent.

The ACA in particular was treated by many as if it should be claimed automatically. Over many years the salaries of MPs had been held back – usually for political reasons – and their allowances increased instead. Often, MPs would just send a load of receipts in to the Commons Fees Office and let them decide what household expenditures or repairs should qualify.

Our party had a taste of what was coming when it was revealed that there was little evidence of what MP Derek Conway’s researcher, his son, had done to earn the thousands of pounds he’d received at the taxpayer’s expense.

Labour experienced its own preview of the scandal when some receipts for which home secretary Jacqui Smith had been reimbursed were published. They included two pay-per-view pornographic films, which her husband soon owned up to.

I knew I had to act fast. I made sure all our MPs filled out a ‘Right to Know’ form that provided the basic details of their expenses claim and whether they employed any relatives. These would be made public.

Labour’s reaction was to continue to attempt to keep the problem under wraps. Leader of the House of Commons Harriet Harman wanted the House to vote to ensure that MPs’ expenses were exempt from the Freedom of Information Act. But it was too late. The Daily Telegraph bought a stolen disc with every MP’s expenses claims set out in full, receipts and all. Day after day it published the details. Determined to remain ahead of the game, I called a press conference at the St Stephen’s Club. My response included an apology and a roadmap – and I didn’t conceal my anger about what had been going on: ‘Politicians have done things that are unethical and wrong. I don’t care if they were within the rules – they were wrong.’

I set up an internal scrutiny panel, a so-called Star Chamber, including my aide Oliver Dowden, known as ‘Olive’, who I also called ‘the undertaker’, since he so frequently brought me the bad news. The panel, assisted by a team that was combing through all the information, would examine the expenses claims of every Tory MP, and would decide who had to pay money back. Anyone who refused to comply would lose the whip. This was faster and firmer than the Parliament-wide independent inquiry that Brown would set up, and showed that we had understood the severity of the situation and had gripped it early.

The whole thing became a daily ordeal. The Telegraph would call up in the morning, give us details about whose expenses they were going to expose the next day, and allow us until 5 p.m. to respond. Ultimately the call – both the judgement call and the phone call to the MP – had to be made by me.

The calls included some of the strangest conversations. ‘Your entire family were working for you?’ ‘Why do you need a ride-on lawnmower?’ ‘What does your swimming pool have to do with your parliamentary duties?’

As before and since, I always tried to give people a chance to explain their situation, rather than being driven by arbitrary deadlines. But it was hard. Some colleagues didn’t help themselves by taking to the airwaves. Anthony Steen became one of the most famous examples. Having claimed over £80,000 for the upkeep of his country house, including rabbit fencing and tree surgery, he insisted to BBC radio that he had behaved impeccably: ‘I’ve done nothing criminal, that’s the most awful thing, and do you know what it’s about? Jealousy. I’ve got a very, very large house. Some people say it looks like Balmoral …’

He had to go.

I had to deal with Peter Viggers, who had claimed, among £30,000 of gardening expenses, for a £1,600 ‘floating duck island’. With Michael Ancram, whose swimming-pool boiler was serviced at taxpayers’ expense. With Douglas Carswell, who put a ‘love seat’ on expenses. With John Gummer, whose moles were removed from his lawn using public funds. It just seemed to go on and on, and to get weirder and weirder.

Then there was Douglas Hogg, who was, according to reports, reimbursed by the taxpayer for having his moat – yes, moat – cleaned. To be fair to him, he had never actually claimed for this directly. He had given all his receipts to the Fees Office and, satisfied that they added up to far more than the ACA, they had just given him the full amount. I could see his point. He was doing what he had been told to do. It was all within the rules. But, as Andy put it, the point was that he had a bloody moat.

There were some heart-rending examples at the other end of the spectrum. One MP who was asked to pay back thousands of pounds was desperate not to do so, both because it would look as if he was admitting guilt when there was no impropriety, and because as a young MP with a large family he genuinely couldn’t afford to.

The sheer, granular detail being unearthed made the scandal run and run. Receipt by receipt, the Telegraph gave an insight into MPs’ lives – and revealed a class that seemed completely out of touch with normal people. Never mind that most MPs had claimed only for rent or mortgage interest payments or the odd piece of IKEA furniture, and had been urged by the authorities to claim even more. The colourful examples stood out, showing a world of ride-on mowers, moats and mole-free lawns.

Of course, I had a colourful example of my own – violet-coloured, to be specific.

I had only ever claimed for the mortgage interest on my constituency home. It was a simple approach, specifically permitted by the rules, and seemed to me to be clearly within the spirit of what was intended. But one year I had an extra bill, which I handed to the Fees Office. Ordinarily this would have been logged as ‘maintenance’, and would have attracted absolutely no attention. Except, like a good West Oxfordshire tradesman, my builder had detailed the work he had done: ‘Cleared Vine and Wisteria off of the chimney to free fan.’ As with so many other claims, it was the detail that did for me. People still ask me how my wisteria is doing today.

Every party was embroiled. Which meant we could only fix the broken system if we worked together.

In fact, before the scandal broke I went to see Gordon Brown in his Commons office with Nick Clegg to see what the three main party leaders could do. He gave us a take-it-or-leave-it proposal: a per-day allowance for MPs – not all bad, but far from right.

Had we been with Tony Blair, the three of us could have thrashed out something workable. With Brown, it was pointless. He was sullen and stubborn, and couldn’t hide his contempt. Clegg and I both concluded that it was impossible – he was impossible.

What were the long-term implications of the expenses scandal?

We lost a lot of good MPs, as people who weren’t even guilty of any wrongdoing, such as Paul Goodman, left Parliament.

The British Parliament is one of the least corrupt in the world, but it would be forever tainted. I believe deeply that people go into it to make a difference and to serve, not to see what they can get out of it. Yet ever since 2009, my postbag has been full of letters about how venal our MPs are.

It left many Tory MPs feeling aggrieved with me. They felt that the system I had set up to clean house made them look as though they had done something wrong, when they felt they hadn’t. At one point Andy walked into my office and said there was a serious chance of rebellion. I said I didn’t care. ‘This is the right thing to do – if it’s going to take me down, then so be it.’

So while it stored up bad feeling between me and some in the party, I don’t regret the position I took. Politics ended up with a model that was more transparent and that cost far less, and our party drove that.

In the normal course of things the searchlight might land on politicians once or twice a year, but its harshest glare is saved for momentous events like the financial crash and the expenses scandal. Under that intense scrutiny, I thought we had demonstrated that we were the party with the answers not just to a broken society, but to a broken economy and broken politics too.

But we were also suffering from our own broken – a broken promise.

In 2004, Tony Blair had pledged to hold a referendum on a proposed European Constitution, but it was rejected at plebiscites in France and the Netherlands.

The European powers went back to the drawing board and came back with the Lisbon Treaty, which retained many of the elements of the constitution – creating an EU Council president, foreign minister and diplomatic service, eliminating national vetoes in many areas, and paving the way for more vetoes to be eliminated.

We argued straight away that if the government had said it was going to have a vote on the constitution, it must have one on this treaty – especially since it was more significant and far-reaching than its immediate predecessors, Nice and Amsterdam. I was clear about the lessons from Maastricht: it was right to give people their say on such important changes.

I thought – I still think – that Labour’s failure to hold the referendum it had promised in 2004 was outrageous. It had managed to avoid all questioning on the European constitution during the 2005 election campaign by saying it would be subject to a separate vote. And then it didn’t hold one. So in the Sun in 2007, as the treaty was still being negotiated, I gave a ‘cast-iron guarantee’ that a Conservative government would hold a referendum on any EU treaty that emerged from the negotiations.

In 2007 it seemed entirely likely that we would be able to fulfil this if we entered government, since we all thought that the Parliament wouldn’t run its full course to 2010. But as Brown delayed, member states had the time to ratify and implement the treaty – including the UK, which did so in July 2008.

By 2009, our last hope was the Czech Republic. I wrote to the president, Václav Klaus, pleading with him to wait until after a UK general election before he ratified the treaty. But he replied that he could not hold out that long – another eight months – without creating a constitutional crisis. The Czech Constitutional Court ruled against the one remaining challenge to the treaty, and Klaus signed it that November. On 1 December the treaty was passed into law. Our promise to hold a referendum on it was redundant.

I gave a speech declaring that a Conservative government would never again transfer power to the EU without the say of the British people, and that any future treaty would be put to a vote. (True to our word, we made this ‘referendum lock’ law in 2011.) In that speech I talked about ‘the steady and unaccountable intrusion of the European Union into almost every aspect of our lives’. I said: ‘We would not rule out a referendum on a wider package of guarantees to protect our democratic decision-making, while remaining, of course, a member of the EU.’

I could feel the pressure on Europe quietly building. The anger at the powers ceded at Maastricht and since was reawakened by the denial of a referendum on Lisbon. The anger was not just coming from the usual suspects and the Eurosceptic press, but from constituents and moderate MPs. I felt it too. I was thinking intensively about the issue, and about how to make this organisation work better for us. And I was clearly stating that a referendum of some sort might be on the cards at some point in the future.

For the Record

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