Book of the Week: The Third Man: Life at the Heart of New Labour

The worst thing about this book is the title, which will serve only to reinforce lazy media stereotypes. The original "Third Man", Graham Greene's Harry Lime, was, after all, a black marketeer who sold diluted penicillin with devastating results for child hospital patients. Not even Peter Mandelson's worst enemies have accused him of anything so sinister.

There is just one episode recounted in the book where Mandelson, like Orson Welles in the film, confesses to operating in the shadows. It occurred in 2006, when Tony Blair was desperately seeking to avoid making a formal announcement that he would step down as prime minister in favour of Gordon Brown.

At the time, Mandelson was a European commissioner and it would have been inappropriate for him to be publicly involved in the affairs of an EU member government, even his own. He therefore channelled his advice "through the young man who had become Tony's strategic communication director the year before, my friend and former aide Ben Wegg-Prosser". It is an innocuous confession.

But perhaps Peter Mandelson has a romantic image of himself as a sinister Prince of Darkness operating with great cunning in the shadows. Gilbert Ryle, the Oxford philosopher, once remarked that "many a bull emerging from a blood-stained china shop has congratulated itself on its Machiavellian diplomacy". Mandelson's activities were all too often in the open. That indeed is why he aroused such hostility, a hostility not untinged with jealousy, among his colleagues in the Labour Party. There was nothing secret about his battle to transform Old Labour into New Labour. The battle lines were publicly announced, and the combat often vicious. Mandelson was more often Lochinvar than Machiavelli.

The Third Man is so fluently written and so enjoyable to read that it would be easy to slide over its basic message. The author has indeed been ill-served by the instant commentators. For the significance of the book does not lie in the "revelations" that tell us at great length what we know already, that Tony Blair and Gordon Brown had an ill-starred relationship, one that resembled that of a married couple endlessly quarrelling but staying together for the sake of the children, the children in this case being the Labour Party.

Many of the "revelations" could have been omitted from a book that is far too long. Instead, the real significance of The Third Man lies in the picture it gives of the development of New Labour, and the problems facing a party of the Left, which, in 2010 as in the 1980s, has lost touch with its natural supporters.

Mandelson's first official post with the party was as director of campaigns and communications in 1985. Two years earlier, Labour had achieved its worst general election result as a national party, scoring just per cent of the vote, 2 per cent ahead of the fledgling SDP/Liberal Alliance. Not only was Labour no longer a party of government; it was struggling even to retain its place as Her Majesty's Loyal Opposition.

Upon his appointment, Mandelson was allocated an office, or rather "a cubbyhole" that "consisted of a wobbly chair, a dodgy looking three-legged table wedged up against a filing cabinet to balance it, a World War II vintage intercom, and a dying spider plant on the windowsill behind me". From this unpromising beginning, he began to construct New Labour at a time when Tony Blair and Gordon Brown were still unknown backbenchers.

New Labour was a matter of substance as well as style. It was an attempt to shift the direction of the party, an attempt that had first been made, unsuccessfully, by Hugh Gaitskell in 1960, when he sought to remove Clause IV - which committed Labour to the nationalisation of the means of production, distribution and exchange - from the party's constitution.

From the start Mandelson, caricatured as being preoccupied with spin, appreciated that it was not enough to alter the image of the party. Substituting the red rose for the red flag would do little for Labour unless the policies of the party were also transformed.

It was indeed because he was concerned with substance that Mandelson aroused such hostility among the stalwarts of the Shadow Cabinet and the National Executive Committee, who felt that he was trespassing on their domain. The director of campaigns and communications should, in their view, stick to communications rather than concerning himself with policy.

Mandelson's first task was to build up Neil Kinnock. The 1987 general election was marked by a broadcast focusing almost entirely on the Labour leader, "Kinnock the Movie", the work of Hugh Hudson, the director of the film Chariots of Fire. The aim, as Mandelson confesses, was to build up Kinnock's "stock as a new kind of leader, and in effect to camouflage most of the policy prospectus on which we were asking voters to put him into Downing Street".

The result was what Private Eye called "a brilliantly successful election defeat". Labour gained just 20 seats, and Margaret Thatcher was returned with a healthy majority of 102. The one consolation was that Labour had "cantered home well ahead of the SDP-Liberal Alliance, by eight percentage points and nearly three million votes. We had won the battle of the opposition".

But the battle for New Labour had scarcely begun. The image and packaging were changing, but the product remained the same. "Intellectually, Neil (Kinnock) understood the need for change," Mandelson insists.

"The trouble was that his heart, and more so his soul, weren't in the scale of change needed. Labour had to find ways of appealing to voters far beyond our old loyalist core. We had to have something to say not only to the have-nots in society, but to the haves - a group of which Thatcherite Britain's 'new working class' either directly had, or aspired to, membership."

The task would take another 10 years to achieve. "Getting any fundamental policy change through was not just a matter of changing Labour's landscape. It was more like draining a swamp."

Mandelson held three Cabinet posts in the Blair/Brown governments, and, especially as business secretary from 2008 to 2010, exerted considerable influence on national affairs. Yet his greatest influence, he would probably agree, came before 1997, when he played a leading part, perhaps the leading part, in transforming Labour from a party of protest to a party of government.

New Labour was a revisionist enterprise seeking to modernise Labour's fusty heritage, a heritage combining the statist and paternalist philosophy of Sidney and Beatrice Webb with a fuzzy and ill-thought-out approach to the defence of the country. The Third Man is the essential guidebook to how it was done, and why it needed to be done. As Mandelson appreciates, however, revisionism cannot be a once-and-for-all enterprise. It is rather a continual challenge for a party of the Left.

Today the task of the next leader of the Labour Party is to revise the revisionism of the 1980s and 1990s so that Labour becomes once again a party with a real understanding of, and sympathy with, popular aspirations.

That is an easy moral to formulate, but the history of the 1980s and 1990s shows how difficult it is to apply it in practice.

THE AUTHOR

The Prince of Darkness, The Dark Lord, Mandy: Peter Mandelson has been known as many things during his time in government, but rarely has he been called boring. Born in 1953 in South London, he read Philosophy, Politics and Economics at St Catherine's College, Oxford before becoming director of the British Youth Council.

After a brief foray into local politics, he became a producer at London Weekend Television before returning to politics as the director of communications for the Labour Party. He quit his position when he was selected as the Labour candidate for Hartlepool.

He was elected in 1992 and joined the government of Tony Blair after the election of 1997. He twice had to resign as a minister, and stepped down as an MP in 2004 to become EU Trade Commissioner. He was made a peer in 2008 when Gordon Brown invited him back into government.

During his time as MP for Hartlepool he saw his party suffer a crushing defeat in the mayoral elections for the town to H'Angus the Monkey, the local football mascot.