Hail the great moderniser

Almost two years after the 1987 general election, Peter Mandelson joined Neil Kinnock and his team for what had become an annual drink in his office after the Budget speech. After another bout of deep depression, Kinnock seemed a new man - bouncy, outgoing, determined - so much so that Mandelson asked him: "What's happened to you?" A funny play he had seen at the National Theatre, the Labour leader explained; the therapy of painting his daughter Rachel's bedroom and, "last but not least, the letter that a true friend sent to me". He leapt over to his briefcase and extracted a creased note that had been written to him after an especially difficult television interview with Brian Walden. At first Mandelson was baffled, but then it came back to him: he had written the letter himself and its bluntness had verged on the brutal. The future was in Kinnock's hands, it had said; he could turn his party's fortunes around, but if he carried on like this, refusing to take advice - such as the extensive briefing Mandelson had given him before the Walden interview - there was little point in carrying on to the election. Mandelson remembered how well Kinnock had received the admonition; at the time the "two most important words" in the letter, he had said, were the last ("Love Peter"), whereupon he gave Mandelson one of his famous bear hugs.

The exchange said a lot about the relationship that dominated Mandelson's professional life in the three turbulent years after the 1987 election. His loyal service to Kinnock - often executed at the expense of other members of the Shadow Cabinet as well as of his own colleagues at Walworth Road - was founded on more than Fuhrerprinzip. He would be accused of putting leader above party. But, for Mandelson, loyalty to the leader was loyalty to the party. Kinnock had to be wholeheartedly supported - and this was sometimes a relatively lonely task at Walworth Road - precisely because he represented the party's best interests, and saw that it had to change.

Tim Allan, the young BBC producer who was to work for Tony Blair after John Smith's death in 1994, saw Mandelson's attitude to the party as being like that of a fanatical football supporter: if his team was doing well, then he was happy; if it wasn't, he was despondent. For the four years after Mandelson arrived at Walworth Road, he had little doubt that Neil Kinnock, the proto-revisionist and moderniser, with all his faults, and descents into depression, was the best hope for driving through changes that would guarantee Labour's return to electability.

Indeed, Mandelson had been prompted to return to politics precisely because Kinnock had already started to make changes. Kinnock himself saw the NEC's appointment of Mandelson as communications director as a welcome "bit of evidence that things were starting to shift. But I realised that what I was witnessing was not an avalanche but a glacier." There was, in other words, much, much more to do.

Kinnock made a dramatic start at the October 1985 Bournemouth Labour Party conference when he launched his famous denunciation of Militant. Walking out of the auditorium immediately after the speech, flushed with pleasure, Mandelson bumped into John Birt, who had been a relatively remote figure during his years at LWT. "That was just wonderful," he told Birt. "Wasn't Neil fantastic? That was the most brilliant speech. I'm so excited..." At the top of the International Conference Centre escalators he saw Patricia Hewitt; they hugged emotionally and Mandelson repeated that it had been "the most moving, most exciting speech I've ever heard".

Bournemouth had electrified Mandelson, strengthening his determination to work single-mindedly for his leader. But he had a lot to learn, and not much time to learn it. Working on Weekend World, a prestigious but distinctly minority-audience programme, was not the same as working on news. Moreover, he knew next to nothing about modern advertising techniques. Mandelson turned to someone who might be able to help: Philip Gould, a 34-year-old former advertising man and London Business School graduate.

Mandelson commissioned Gould to produce his "exhaustive review". The 64-page report, which appeared in December, was seminal in the transformation of Labour Party policy and presentation over the next 12 years. It took about six weeks to produce, and cost the party pounds 600. To compile it, Gould set about interviewing some 30 people inside and outside the Labour Party.

Gould's preliminary investigation was not exactly open-ended. For example, its central recommendation - the creation of a Shadow Communications Agency with access to modern marketing techniques including, for the first time in Labour's history, qualitative polling through focus groups - had been discussed by Mandelson and Gould before the enquiry even began.

The interview Gould conducted with Mandelson is most revealing of his attitudes at the time - and shows how little, in the main, they have changed since. Mandelson knew little about mass communication, but he knew - and knew he knew - a great deal about the Labour Party. According to Andy McSmith, then working in the press office: "The thing that surprised me most was that I expected him to talk about Neil in the sort of unsophisticated way that non-politicians talk about him. But he had a very sophisticated understanding of the party." He was "a born again Neil Kinnockite".

But when it came to the archaic party structures, the newly appointed 32-year-old Communications Director was much more wary. "I'm not into committees. Once you set up committees, it generates membership, minutes, interests, scrutiny, jealousy."

Instead, there should be a "Director's Group", with the advertising professionals reporting to him. "Do not forget this is a political party. All the time in the Labour Party you are boxing with those people in the NEC, to whom we are all ultimately accountable below God, who do not know what we are doing, who if they did would oppose it, who are thoroughly indisposed to all these methods, and with whom you have to play it very carefully."

But Mandelson was in little doubt about the need to start reconnecting the party with the voting public: "Health, social services, housing benefits, law and order, making people secure in their homes and on the streets. All these are very important issues for Labour which we've got to address... have something relevant to say... which is attractive and not off-putting... which is very hard when it comes to law and order and Bernie Grant [the Tottenham MP who had strongly criticised the police for their conduct during the riots that led to the murder of PC Keith Blakelock] in one sentence eclipses everything we have to say... And we have to say it loudly and repetitively."

The emphasis on law and order is striking; this was not turned into an identifiably Labour issue until Tony Blair's period as Shadow Home Secretary seven years later. Mandelson warmed to his deeply revisionist theme: "We have to present an image of the party... that chimes in with what people want to think... Take an issue like disarmament. We are very open to one simple line, 'One-sided disarmament' [which the Tories had exploited to devastating effect during the 1983 election]. It's an inventive phrase which very accurately sums up what Labour is about... unilateral nuclear disarmament. Now that doesn't chime with the nation's feelings and we'd better take note. And you could say the same about the economy. Where's the money going to come from? The sky's the limit. Don't we care about inflation? Trade union power? Trade union blackmail? These are the big issues. We've got to acknowledge our vulnerabilities. It's not just a question of having some neat way of saying: 'You're number one with Labour.' People are not idiots."

However accurate a description this may now seem in hindsight, of Labour's weaknesses in the early Eighties, it was, in a paid party official in late 1985, high heresy, even when uttered in deepest privacy.

Not long before the 1987 election, Mandelson was alarmed to read the full draft of the joint TUC-Labour economic statement, about which he outlined his misgivings to Kinnock. Kinnock was energetically shining his shoes, as he often did, and seemed disinclined to change the document. What did Mandelson want to add? It was more, Mandelson explained, a matter of what he wanted to subtract.

At which point Kinnock, still polishing away, admitted his true feelings: "Kid, you don't think I believe in this shit?" he asked. Mandelson muttered something about having felt doubtful about "certain aspects" of the document. "Peter, it's crap, it's crap," Kinnock replied. It was clear that he was talking less about a single document than about the party's whole range of tax and spending commitments. Indeed, conscious of the Tories' powerful appeal as the party fostering individual prosperity, he had already warned the NEC that Labour would be vulnerable to the charge that it would raise taxes to an unacceptable level. But now he was much blunter. The party, he asserted, was in a "time-warp": "After the election, we are going to have to draw a lot of teeth," he went on. What did he mean? Mandelson asked. "We've got so much to do," Kinnock replied. "But the time is not now; the time will be after the election." Unclear quite what Kinnock meant, Mandelson said he "looked forward to being around" when that happened.

JUST 10 years after he had gone to work for the Labour Party, Mandelson, now a close adviser in the Blair circle, made several personal handwritten amendments to a late draft of the new Clause Four of the Labour Party constitution. The draft spoke of the "peaceful resolution" of conflict. Scrawling in the margin, "Won't a Blair Government ever go to war?", he proposed: "We are committed to the defence and security of the British people and to co-operating in European and international (UN and Commonwealth?) institutions to secure peace, freedom, democracy, economic security and environmental protection for all the peoples of the world" - an amendment that was incorporated almost verbatim.