The man who calls the shots

Peter °borne says that the Prime Minister is a client of Rupert Murdoch's global empire — and he decided to hold a referendum on the EU constitution only because the press magnate told him to An essential part of the New Labour belief system is structured around the proposition that Tony Blair is a resolute, bold, decisive leader. The Prime Minister has worked hard to build and then to sustain this myth. Last October he informed the Labour party conference that 'I can only go one way. I've not got a reverse gear.' This pronouncement, made during a woeful attempt to emulate the oratorical successes of Margaret Thatcher two decades earlier, was palpable nonsense. Since then the Prime Minister has switched from contemptuous revulsion to warm-hearted affection for Ken Livingstone. He performed a last-minute somersault about holding an inquiry into weapons of mass destruction. This week came the biggest shift yet, with a damascene conversion over the proposed referendum on the European constitution, expected to receive the Prime Minister's signature at Goteborg in June.

This was a humiliation, as Tony Blair's nervous, high-pitched, petulant performance after being ordered to make a Commons statement on Tuesday showed. It was more humiliating still for those loyal ministers — Peter Hain, Charles Clarke, Denis MacShane, etc. — who have rallied behind the Blairite standard. Three weeks before Tony Blair's stuttering Commons U-turn, poor MacShane, Minister for Europe, was informing MPs in lordly fashion that the government would never 'surrender itself to the populist plebiscites of the Rothermere press'.

While these Blair loyalists looked ridiculous, the Prime Minister's frontbench adversaries gloated. Chancellor Gordon Brown, sceptical about the constitution from the start, basked in quiet triumph. David Curry, a pro-European Tory MP, was accurate as well as wounding when he compared Tony Blair to John Major at his indecisive worst. Nine years ago, after John Major's elimbdown, Tony Blair famously sneered at the Despatch Box. 'I lead my party: he follows his.' Now Tony Blair finds himself in the same predicament as poor Major. The central mystery, as yet unanswered, is what brought about the change of heart. For more than a year Tony Blair had been admirably consistent about his reasons for rejecting a referendum. The first was that the constitution was an essentially trivial affair. 'If there was fundamental change here,' he pronounced on 27 May 2003, 'there would be a case for a referendum. But there is not.' The second reason was connected with the Prime Minister's avowed reverence for parliamentary democracy. Blair was reluctant, so Downing Street maintained, to intrude on matters which should properly be determined by MPs, the elected representatives of the people.

Tony Blair indicated on Tuesday that he had not changed his mind about the underlying unimportance of the new European constitution, while his reverence for parliamentary democracy remained undiminished. He did, however, provide his own explanation for the new posture on the referendum. He asserted that he wants to come out fighting for Europe, have a debate, dispel the Eurosceptic 'myths' that have befuddled the brains of the British people for so long.

This version of events is frankly incredible, bordering on an insult to the intelligence of his audience. For the very people most dismayed by the Prime Minister's capitulation over the referendum were the pro-Europeans. Peter Mandelson has been reduced to a despairing silence, likewise Stephen Byers. Tony Blair's announcement has been greeted with dismay in European capitals: private anger in Paris, something like contempt in Berlin, resignation in Brussels. Neil Kinnock voiced this disappointment while Simon Buckby, who as director of the Britain in Europe campaign has been betrayed countless times by the Prime Minister, expressed vexation and disappointment. So did Donald Anderson, the Europhile chairman of the Commons foreign affairs committee. It is the Eurosceptics who are most pleased — above all, perhaps, Foreign Secretary Jack Straw, who has been doubtful about the constitution right from the start.

The real explanation for Tony Blair's belated conversion is different. It has nothing to do with the fanciful notion that the Prime Minister, after seven years of equivocation and funk, has suddenly resolved to stiffen his sinews and fight the great battle for Europe. The latest move cannot be understood without reference to News International, the great media conglomerate whose newspaper titles include the Times, the Sunday Times, the Sun, and the News of the World. There is a growing body of evidence that the Prime Minister received what was in effect an ultimatum from Rupert Murdoch, the News International proprietor.

Murdoch did not personally intervene to secure the referendum. He was too grand, or maybe too busy, for the comparatively menial task of telling this British prime minister what to do. Instead he delegated the task to an agent, Irwin Stelzer. Stelzer, a sophisticated New Yorker educated at Stuyvesant High, stands in the same kind of relationship to Murdoch as Suslov did to Stalin. He advises the media baron where to stand on British politics, passes confident judgment on Gordon Brown's borrowing requirement, and performs certain confidential tasks. Stelzer writes a dry, intelligent column in the Sunday Times business pages. This weekly tribute to Milton Friedman and the manifest virtues

of market forces is always read with keen attention at — among other places — the Treasury.

Over the last month Stelzer has made three critical interventions. He had one long conversation with Tony Blair and another with Gordon Brown, an encounter viewed with nervousness and dread within Downing Street. Two weeks ago he wrote a fascinating article in the Times — to all intents and purposes an open letter to the Chancellor — in which he warned of the troubling consequences of inheriting power in the wake of the European constitution. Gordon Brown, Stelzer warned, would end up as an impotent prime minster of a castrated nation if Britain signed up.

Nor was this all. Another News International title. the News of the World, dramatically accused Tony Blair of being a 'traitor' over the constitution. This was strong stuff. The NoW has performed many gyrations in its time, but surely advising its readers to vote for a traitor as prime minister would prove to be a step too far. Meanwhile, confidentially and behind the scenes, Rupert Murdoch was talking to the Tory leader Michael Howard. He informed several key intermediaries that he was prepared to throw at least one of his major titles behind the Conservative party at the general election. According to one Downing Street source Tony Blair received the message, directly and indirectly, that neither the Times nor the Sun would back New Labour at next year's general election while Tony Blair remained hostile to a referendum.

By late last month the Prime Minister was halfway to giving in. He indicated as much to Murdoch. News International papers ran stories that Tony Blair was about to give way. These stories were dismissed by the Downing Street press office and. indeed, by the Prime Minister himself. No. 10 sources say that at this stage he had not fully made up his mind. That, at all events, is what the Prime Minister is said to have told the Foreign Secretary Jack Straw before setting off for an Easter break with his family in Bermuda.

Always the Prime Minister uses these breaks for what Downing Street people like to call `blue-sky thinking'. Taking advantage of his absence from the quotidian burden of business, Tony Blair ponders strategy. On this Bermuda trip, says one insider, Tony Blair concentrated on his looming summit with President Bush and the attendant problem of Iraq. But he also gave full attention to the vexatious matter of the referendum. 'It was while he was sitting by the poolside in Bermuda,' says the insider, `that the decision was made.'

Once again, Murdoch was told first. But though the Murdoch empire knew, the Cabinet did not. As late as last weekend, Cabinet ministers were ringing each other up in bewilderment to find out the new government line: they would have done better ringing Trevor Kavanagh, the political editor of the Sun. Last weekend Downing Street excused its reticence by saying that all announcements should be made first to Parliament; but the Murdoch press had been informed long before. Matters were still shambolic on Monday, which was why the Speaker intervened to force the Prime Minister to the floor of the Commons. The matter has not yet been discussed in the European Strategy Committee, a new body formed some six months ago supposedly to bring some coherence and robustness to EU policy. Indeed, the decision has still to be discussed in formal Cabinet, though it was at last on the agenda for Thursday's meeting as The Spectator went to press.

Tony Blair's loss of dignity has been very great. As ever, it was the loyalists, the ones who had gone out of their way to defend the Prime Minister's public position, who were betrayed. Alan Milburn and Stephen Byers were standing beside the Speaker's chair as Tony Blair made his announce

ment — they must have known exactly how Peter Hain or Charles Clarke felt, the knowledge of being cut adrift without consultation as the Prime Minister casually cast aside what he had previously represented as a core belief.

Various interpretive tools have been used by commentators to make sense of the seven years of Blair government. Early on there were claims that the 'stakeholder economy' lay at the heart of it all; later the `Third Way' came into vogue. But nothing makes much sense until one grasps that Tony Blair is, in practice, a local client of the News International global empire. This has been manifest right from the moment he became Labour leader ten years ago. Practically his first action was to fly 12,000 miles to address a conference of Murdoch executives in Australia. On the eve of the 1997 election the Prime Minister informed the Sun of his love' for the pound sterling; six months later the Times was gifted the exclusive story that the government had ruled out the euro referendum. Tony Blair has always been in need of father figures: the schoolmaster Eric Anderson, the cleric Peter Thomson, the statesman Roy Jenkins. None has been so long-lasting, or half as important, as Rupert Murdoch of News International. This relationship explains the central paradox of the Blair incumbency: the Prime Minister's success as a politician but his failure as a statesman.

Another paradox was Tony Blair's claim, made on Tuesday, that he would use the referendum to fight for the European cause he has consistently betrayed for the last seven years. This claim was swallowed wholesale by one gullible New Labour commentator, Johann Hari of the Independent. Hari's article ineffably claimed on Wednesday that, 'the referendum will give pro-Europeans the chance to nail the Murdoch lies'. But Tony Blair has only accepted this referendum because Murdoch told him to.