Thirty years ago, under the vaulted ceiling of the Royal Horticultural Hall in London John Smith was declared Leader of the Labour Party. He had won by a landslide easily brushing aside his challenger Bryan Gould with 91% of the vote. In less than two years Smith was gone, killed by a heart attack early on 12th May 1994, aged just 55. Today it is easy to overlook Smith’s brief leadership of the Labour. This is inevitable due to the passage of time, but it is also partly the result of a narrative that Smith’s was relying on ‘one more heave’ to win the keys to 10 Downing Street.
A recent example of this critique was Davd Miliband’s speech to the Mile End Institute on 6th May in which he confessed “after John Smith’s two party conference speeches, I walked up and down the sea front in Brighton and Blackpool deeply worried that we were failing to understand that in 1992 the electorate had told us, in no uncertain terms, that they wanted a different offer from Labour”.
I served as John Smith’s Head of Policy from 1988 to 1994 when he was Shadow Chancellor and then Leader of the Opposition. Not surprisingly I believe the ‘one more heave’ characterization of John Smith to be unfair. It is also vacuous. Any party that has just lost an election and is serious about gaining power must try to win the next. The important strategic question is what kind of ‘heave’ is required. Implicit in Miliband’s critique is the suggestion that Smith had no appetite for further modernisation of the Labour Party. On this I think Miliband, who I admire as one of the most convincing advocates for New Labour, is wrong.
Thirty years after his election it is timely to re-examine Smith’s tenure as Leader of the Labour Party in a more balanced way. This is a task for historians, but as a close adviser and friend of Smith’s I feel entitled to offer a perspective different from Davd Miliband’s. I spent countless hours with Smith discussing Labour’s strategy and policies. Never once did he say anything to support the idea of ‘one more heave’. Smith’s motivating passion for politics was to achieve power for a purpose. He hated opposition and bitterly regretted the lost decade of the 1980s when Labour was nowhere close to winning an election. He was sure Labour would win again in the late 1990’s. But he was far from complacent about the task of defeating the Tories. What is true is that Smith’s strategic approach to securing victory was not the same as the so-called ‘modernisers’.
Smith was a man with remarkable inner self-confidence. Coming from Labour’s social democratic tradition, by the mid-1990s he felt that the tide of political ideas was moving his and Labour’s way. Unlike Neil Kinnock or indeed Gordon Brown and Tony Blair (who was briefly a member of Labour CND) Smith did not have a political past that he wanted to resile from. Nor did he feel the need to run against ‘old’ Labour. He wanted to concentrate his fire on a Conservative Party that after more than 12 years in office was very vulnerable to attack.
Nevertheless, Smith knew that for Labour to win further modernisation was necessary. For him this was best achieved not by confronting the Party but by persuading it. Alistair Campbell described the tension between the ‘modernisers’ and Smith as a struggle between ‘frantics’ and ‘long gamers’1. Smith was certainly the latter. And he was determined to stage manage the likely four years of opposition from 1992 to 1996. This required a combination of strategic patience and stealth. Smith was cat-like, capable of bold jumps but wanting to be sure of his footing.
Smith’s approach was well described by Andrew Marr in the Independent in January 1993. “Mr. Smith has been busy” Marr wrote, “There is a strategy, there is a plan. What confused everybody so far is that, quite deliberately, Mr. Smith has ensured that the early stages of the new strategy were developed covertly and slowly. The reason is that under Neil Kinnock’s leadership Labour developed a whole raft of new policies speedily and semi publicly. One consequence, however, was that by the time the election came around, some of the new thinking had been stolen by the Tories and the rest looked stale. So, instead Mr. Smith plans a rolling programme of steady but increasingly radical policy changes”2.
In fact rather than a rolling programme, Smith’s strategy was to divide the Parliament into two distinct phases; the first up to the 1994 European Elections had three main priorities:
First, complete the One Member One Vote (OMOV) reforms for electing the Leader and Parliamentary candidates;
Second, maximize Tory divisions over the Maastricht Treaty, securing ratification whilst minimizing any Labour rebellions;
Third, reform the party’s unwieldy policy-making process.
To achieve these objectives, Smith wanted to avoid internal Labour divisions. He didn’t want to be distracted by rows over so called ‘Clintonisation’ or Clause 4, although unfortunately both encouraged the ‘one more heave’ mythology.
Smith was bemused that the election of President Bill Clinton in November 1992 quickly shifted from a cause of Labour celebration to a source of dispute. He was very interested in Clinton’s campaign strategy and established a formal process to learn lessons from the US election. But almost immediately Claire Short, John Prescott and others complained about ‘modernisers’ using Clinton’s election to push Labour too far to the centre. Adding fuel to these exaggerated concerns was a visit by Tony Blair and Gordon Brown to Washington in January 1993 to learn lessons for themselves. To try to defuse the tension I was asked by Smith to join this visit as I was already there on short holiday with my American wife and family. The meetings were useful; but did have one jarring moment when a representative of the Democratic Leadership Council wondered out loud if there would be any mileage in advocating the death penalty in the UK. For the record this idea was instantly dismissed not only by all of us but also by Paul Begala, Clinton’s leading strategist who showed a good grasp of the differences between US and UK political values.
More serious than the row about Clintonisation were the far more substantive arguments over OMOV. These began after Smith’s decision to delay by one year taking the OMOV issue to the Party Conference. Advice from Niel Kinnock’s team after the 1992 election was that the OMOV deal was ready to be clinched that September. Smith doubted this. He had been given warnings from friendly trade union leaders such as the late Rodney Bickerstaffe who advised Smith he could not rely on promises of support made previously to Kinnock. Bickerstaffe argued that Smith would have to win his own deal. Smith was confident he could, but only by delaying the decision until 1993. Another influence was that the size of the union block vote at Conference was going to be reduced from 90% to 70%, making it easier to secure these vital reforms. Smith’s subsequent win by a very narrow margin showed that the decision to delay had been astute. Had he gone for OMOV in 1992 and lost, the defeat would have damaged his credibility and definitively set back the cause of party modernisation.
Instead, Smith was free after ‘Black Wednesday’ in September 1992 to exploit the total collapse of John Major’s credibility with the Pound’s humiliating exit from the Exchange Rate Mechanism (ERM). Smith’s parliamentary performances at this time were magisterial, combing wit with a devastating demolition of the Government’s policies. This was achieved because he had moved quickly to shift Labour’s policy on the ERM immediately after the 1992 election.
During the leadership election Smith had proposed a managed realignment of the ERM, which was already advocated by the German Bundesbank, and could have avoided the chaos of Black Wednesday3. This smart change of policy gave Smith the flexibility to pour scorn on Major as the ‘devalued Prime Minister of a devalued government’. In contrast, Gordon Brown, then serving as Shadow Chancellor, had rather stubbornly clung to Labour’s previous policy. In his autobiography Brown acknowledges that this was a mistake4. Fortunately the media overlooked this potentially damaging difference of view, and Smith’s swift and successful recalibration of Labour’s ERM policy reaped immediate political rewards.
For Labour’s ‘modernisers’, however, the ERM crisis is almost entirely overlooked in their carefully curated narrative of the path to victory in 1997. Remarkably it is hardly mentioned at all in Tony Blair’s autobiography ‘A Journey’5. Similarly it scarcely features in the late Philip Gould’s euphoric account ‘The Unfinished Revolution – How The Modernisers Saved the Labour Party’. Characteristically Gould does record that a focus group in Harlow had said the ERM debacle would have been handled “much worse” by Labour6; exactly the kind of self-flagellation Smith would have dismissed with some unprintable language!
In fact, from an Opposition perspective the ERM crisis was handled brilliantly by Smith who knew very well how profoundly damaging it was to the Tories. Labour took over the lead as the Party best able to handle the economy and quickly established a huge 22-point poll advantage over the Conservatives. Leading political scientists – such as Professor John Curtice – have argued that the ERM crisis was single most important reason the Conservatives lost in 19977. The ERM crisis lends some support to the old saying that “Oppositions don’t win elections, governments lose them”. I don’t think John Smith believed that, but he did know that an Opposition Party on the attack could inflict mortal damage on their political foe.
If Black Wednesday decisively wrecked the Tory’s reputation for economic competence it was the Maastricht Treaty ratification crisis that destroyed their ability to govern. Labour’s strategy, crafted by Smith together with George Robertson, then Labour’s European spokesperson, was to drag out the legislative process as long as possible, and table a ‘ticking time bomb’ amendment on the Social Chapter opt out which led to a defeat for the Government8. An embattled John Major, calling some his colleagues the ‘bastards’, was forced to resort to a confidence. Threatened with annihilation, the Tory rebels fell into line, but the damage to Major’s authority was severe.
In marked contrast, Smith had kept Labour’s own Maastricht divisions under control. This was achieved by taking the highly unusual step of allowing a series of debates in the Parliamentary Labour Party before the Shadow Cabinet agreed the whip. All the votes went Smith’s way, but his inclusive style earned respect from among even the most persistent Maastricht rebels, including a then largely unknown back bencher Jeremy Corbyn.
This consensual approach was also used to introduce significant profound reforms to Labour’s policy making process. Smith was determined to overhaul the way in which the party developed policy. Change was needed to tackle successive policy failures. Labour’s disastrous ‘Programme 1982’ paved the way for defeat in 1983. The more successful 1989 ‘Meet the Challenge and Make the Change’ Policy Review signalled necessary modernisation of Labour’s agenda, but also contained many quasi commitments that the Tories used as the source for their damaging ‘Tax Bombshell’ campaign9.
Smith’s solution was to establish a National Policy Forum (NPF) launched in May 1993. He presented the NPF as more inclusive than Labour’s traditional system of conference resolutions often determined by union block votes. Unquestionably, however, the NPF gave more control to the Shadow Cabinet providing the Labour leadership with a far more flexible way to develop polices ahead of any pre-election manifesto commitments. That this was achieved with barely any protest from the traditional left was impressive, possibly due to the level of trust Smith was generating across the party.
Another significant step Smith took was to deliberately outsource new thinking on key policy areas. He was fully aware that Labour’s tax and welfare policies (originated in the 1989 Policy Review and included in the Shadow Budget in 1992) would need be reviewed and also insulated from future Tory exaggerated ‘tax bombshell’ attacks. To allow fresh thinking while avoiding this trap, Smith established a new independent Commission for Social Justice, chaired by Lord Gordon Borrie and hosted by the Institute for Public Policy Research. The Commission’s secretary was a then mid-twenties David Miliband. Despite his angst-ridden musings on Brighton and Blackpool seafronts he had, in fact, been given a great opportunity to help modernise a key area of Labour’s policy agenda.
In 1993 Smith himself played a leading role in one key area of policy, constitutional reform. During the Callaghan Government as a Minster of State, Smith had piloted the ultimately and unsuccessful devolution proposals for Scotland and Wales. He strongly felt this was his unfinished business. He also believed that, after 14 years of a Tory Government mired in sleaze and scandal, constitutional reform could be presented as a new deal for democracy and empowered citizenship. It was also a policy area the Tories wouldn’t try to steal that had minimal cost to the taxpayer. Smith wanted to bring forward a strong reform agenda but was very disappointed by an early draft prepared by Tony Blair, then Shadow Home Secretary. He decided to take on the role himself and at my suggestion offered to give a speech to Charter 88, the human rights campaign led by Anthony Barnett. Smith knew Charter 88 and Barnett would be a sceptical audience, but that appealed to him and was characteristic of his self-confidence and willingness to act boldly on secure ground.
Smith’s Charter 88 speech delivered in Central Hall Westminster on 1st March 1993 set out arguably the most comprehensive agenda on constitutional and democratic reform made by any Labour Leader. Anthony Barnett has written that “It transformed Labour from a constitutionally conversative party into a radical, reformist one”10. Smith warned that Britain had become an elective dictatorship and argued that “we must replace the out-of-date idea of an all-powerful nation state with a new and dynamic framework of government”. He wanted Britain to become a modern European state which empowered “municipal, regional, national and European decision-making”. Smith called for incorporation of the European Convention on Human Rights into British law. He was scathing about Whitehall’s obsession with secrecy and pledged to introduce a Freedom of Information Act. He demanded an independent statistics office to prevent government manipulation, and similar laws against corporate cover ups so that “the cobwebs of unnecessary secrecy around the British Boardroom are blown away”. Smith’s speech combined with his support for devolution in Scotland and Wales established commitments that are amongst the most substantive legacies of the Labour Government elected in 1997.
Had Smith lived beyond May 1994, the second phase of his leadership would have been built on the anticipated victory in the European Elections due in June. That was very much on John’s Smith’s mind when he spoke at Labour’s European Gala Dinner on 11th May 1994 together with the guest of honour Michel Rocard, the Leader of the French Socialist Party. In his final political act, an after-dinner meeting with Rocard, Smith predicted another strong result. He was right. Less than a month after his death, Labour won 42.6% of the vote and 62 seats; a spectacular result presided over by Labour’s acting Leader Margaret Beckett that almost matched Tony Blair’s landslide in 199711.
Smith’s untimely death means one can only speculate about what the second phase of his leadership would have delivered. As a close confidant I have a fair idea of what he planned to do. For sure he would not have tried to scrap Clause Four. Smith felt the subject was theological, arcane, and only liable to generate unnecessary division. He had already signalled that nationalisation would not be a priority under his leadership. In an important speech to the Local Government Conference in February 1993 he argued, “In the modern world you simply can’t leave everything to market forces, any more than you can leave everything to the state. For the truth, and we all know it is, is that we need both dynamic markets and active government. For years we have conducted a largely sterile debate about the ownership of industry and services as if privatisation and nationalisation are the only conceivable choices in economic policy”.
To reinforce this pragmatic approach Smith was planning to unveil a new statement of Labour values that would effectively supersede Clause 4. It would have developed ideas Smith set out in his RH Tawney Memorial Lecture delivered in March 1993. The lecture is important as it set out fully Smith’s social democratic values rooted in his Christan faith. He attacked Margaret Thatcher ‘s legacy of destructive individualism arguing that real freedom depends on the interdependence of the individual and society. This underpinned Smith’s radical vision in which he saw a powerful connection between democratic reform and an extension of individual rights with active government promoting social justice and economic prosperity.
Smith’s ‘aims and values’ statement was intended to be launched ahead of the 1994 Annual Conference and then submitted to the National Policy Forum. The statement would have provided a policy framework and language not very different from Tony Blair’s in the run up to the 1997 election. Smith would not, however, have contemplated rebranding the party he led as New Labour or wished to follow Tony Blair’s relentless push to the so-called ‘middle ground’ . He believed in a more robustly radical social democratic vision than the aspiring ‘modernisers’. This difference came sharply into focus when Smith addressed the Trades Union Congress in September 1993.
Smith’s speech pleased union members just as much as it caused concern to Tony Blair and Gordon Brown. In the speech Smith strongly defended the role of trades unions, their relationship with the Labour Party, and made a clear commitment to full employment: “The goal of full employment” he said, “remains at the heart of Labour’s vision for Britain. Labour’s economic strategy will ensure that all instruments of macroeconomic management, whether it concerns interest rates, the exchange rates, or levels of borrowing, will be geared to growth and rising employment”. Smith also repeated his support for the minimum wage, implementation of the Social Chapter of the Maastricht Treaty and the introduction of a new charter to put part-time and full-time workers on the same footing.
Both Brown and Blair disliked the speech worrying that it was heralding a return to union ‘beer and sandwiches’ at Number 10. But John believed wholeheartedly in what he was saying. Gordon Brown in his biography recalls his “dismay” at Smith’s description of Labour’s macroeconomic policy12; although it is hard to explain what precisely he was so upset by. Smith’s statement was simply a description of the available levers of economic policy with a commitment to growth and full employment that would be entirely familiar to Keir Starmer’s Shadow Chancellor Rachel Reeves today. Given the recent growth in part-time employment, the gig economy, and zero-hour contracts, Smith’s concern for stronger employment rights now seems far sighted.
Another area where Smith would have moved further than New Labour is corporate regulation. For Smith the modern alternative to old style nationalisation was a more dynamic and smart approach to regulation of privatised utilities and a willingness to be robust in tackling corporate abuse or market failures that held back prosperity or consumer rights. In the wake of Black Wednesday, for example, Smith became increasingly interested in financial regulation. On becoming Labour Leader he was invited to Chair an Economic Committee of the Socialist International (SI). From this platform work was begun on what was intended to be a successor to the 1980 Brandt Commission Report. Chaired by former German Chancellor, Willy Brandt, the Commission’s Report ‘North South’ became an unlikely best seller and set out a new framework for global economic and social development.
Working with the SI and also the Leaders of the Party of European Socialists Smith began to develop ideas on financial governance and reform of the Bretton Woods institutions (the International Monetary Fund and the World Bank). It was expected that an updated Brandt Commission report would be published in 1995. A major focus would have been risks of financial deregulation and the growth of derivatives trading. Concern about this was included in a Declaration of Party Leaders of the PES adopted in April 199413 specifically at John Smith’s request. It read as follows:
“National regulations no longer offer a solution to the problem of erratic movement in speculative capital. Only international cooperation can help. We urge Central Bank authorities in Europe and worldwide to thoroughly examine the implications of the huge growth in trade in financial derivatives which are adding to the volatility of financial markets. The Central Banks, the Bank for International Settlements and the European Monetary institute must co-operate closely to ensure greater transparency in derivative markets and ensure that financial innovation of this sort does not threaten the stability of the international financial system.”
Smith’s warning now seems powerfully prescient. Had he lived I am very confident that the dangerous flaws in financial de-regulation would have been further exposed in his updated Brandt report. Rather than heed these warnings both in the US and UK further financial deregulation was promoted. The Glass Steagall Act – that maintained a wall between commercial and investment banking was abolished by President Clinton and New Labour supported a ‘light touch’ regulatory regime for the UK’s financial system. This was overwhelmed by the onset of the financial crisis in 2008 and severely damaged Labour’s reputation for economic competence just as the ERM crisis did to the Tories in 1992.
I am often asked about what John Smith would have achieved had he become Prime Minister. Usually this is followed by a question about whether or not he would have supported the 2003 Iraq war. I am confident he would not have. Smith would have paid close attention to the guidance of the Foreign Office and unlikely to ignore the warnings of President Jacques Chirac of France. He would have found them much more reliable counsel than the White House hawks advising President George W. Bush. I believe Smith would have emulated Prime Minster Harold Wilson in the 1960s resisting requests from President Johnson for the UK to send troops to Vietnam. And perhaps, as I highlight above, Smith might have been able to lead reforms to global economic governance that could have prevented the disaster of the 2008 financial crisis. These are very big calls and purely speculative as sadly Smith’s death denied his opportunity to serve as Prime Minster.
But Smith was Leader of the Opposition, and in that role I believe he was far more influential and effective than David Miliband and other ‘modernisers’ seem willing to accept. Wrongly in my view, they have tried to draw a definitive line between the ‘New Labour’ project and the previous leaderships of Neil Kinnock and John Smith. But this kind of ‘year zero’ narrative overlooks the modernising achievements of both former Labour leaders. Kinnock transformed the party in the mid-1980s, moving away from large scale nationalisation, unilateral disarmament, withdrawal from Europe, and bravely confronted the entryism of the Militant Tendency. And Smith acted successfully to reform the Labour’s relationship with trade unions, modernise its policy making, and inflict lasting damage on the credibility of John Major’s Conservatives.
Rather than recycle the mythology of ‘one more heave,’ wouldn’t it be refreshing if the leaders of the New Labour era could simply acknowledge their huge good fortune to have inherited the Party leadership in 1994 in such favourable circumstances? The truth is that Labour’s landslide in 1997 wasn’t only about them. As we mark the 30th anniversary of his election as Labour Leader, John Smith’s significant contribution to both the party’s return to power and achievements in office deserves to be recognised.
1 John Smith A Life by Mark Stuart Politicos 2005 page 138.
2 ‘Slowly, covertly, John Smith draws a new map’ by Andrew Marr, The Independent 29th January 1993.
3 Speech by John Smith to the European Parliamentary Labour Party, Strasbourg, 9th June 1992 and also Commons debate on the European Community 2nd July, Hansard Col. 1050.
4 My Life Our Times, by Gordon Brown, Bodley Head 2017, page 91.
5 A Journey, by Tony Blair, Hutchinson 2010, pages 37, 59, 112.
6 The Unfinished Revolution – How The Modernisers Saved the Labour Party by Philip Gould
7 Q & A with Sir John Curtice – In From the Cold (substack.com) February 6th 2022.
8 Treaty Of Maastricht (Social Protocol) – Hansard – UK Parliament
9 See: John Smith’s Shadow Budget – Myths and Lessons for Labour by David Ward, Mile End Institute 16th March 2022 140_22-MILEEND_REPORT_Budget-1992_v3_web.pdf (qmul.ac.uk)
10 John Smith and the path Britain did not take | openDemocracy by Anthony Barnett 12th May 2019
11 Labour’s vote share in the 1994 European Elections was 42.6% compared with 43.2% in 1997 General Election.
12 My Life Our Times, by Gordon Brown, Bodley Head 2017, page 87.
13 Declaration of the Party Leaders, ‘the European Employment Initiative’ adopted by the PES on 6th April 1994 section 5.4 page 11. This document was prepared by a working group under the chairmanship of Allan Larsson, the Swedish Finance Minister in which I served as John Smith’s representative.