The Corruption of New Labour: Britain’s Watergate?

[Mark Stapleton]

All this and he's Bush's best buddy, too. What a winning team.

The interesting point is whether the Labour Party will be able to survive the Blair scandals. It's the kind of bad publicity that can put a party in opposition for a decade.

The last thing you need is a decade of crazy-ass Tory policies.

Maybe there's hope for the party. The post from Michael Meacher on this thread was impressive:

http://educationforum.ipbhost.com/index.php?showtopic=7829

[John Simkin]

A few years ago I met Lord Evans. At the time he was chairman of Faber & Faber. The meeting was about an e-learning project I was involved in with the Guardian. He came across as a man with principles. Since 2003 he has been the government spokesman on constitutional affairs. He is also on the committee that vets donors to the Labour Party. It has just emerged that he plans to resign this week because he is “extremely unhappy” that his committee was never told by Tony Blair and Lord Levy about the loans provided by the businessmen who were put forward by the government for honours. Lord Evans now claims that Blair set up the committee as a “smokescreen”.

[John Simkin]

It has now emerged that the knighthood for Gulam Noon was proposed by Patricia Hewitt, the Health Secretary. Hewitt is to be interviewed by the police in order to discover why she thought Noon deserved a knighthood. I don’t suppose it could have anything to do with the fact that Noon paid £2,500 toward the Labour Party in Hewitt’s Leicester West constituency at the 2005 general election, even though he has no known links to the area. £2,500 seems very cheap for a knighthood. Maybe he also had to pay money to individual party members.

[John Simkin]

Lord Wedderburn, who has been a Labour peer for nearly 30 years, has left the party benches in protest at Tony Blair’s policies and allegations of cash for honours. Wedderburnhas written to Lord Grocott, Labour’s chief whip in the Lords, saying he can no longer support the party’s policies and “malodorous practices”. He says the undermining of civil liberties with anti-terrorism legislation and the decision to invade Iraq contributed to his decision, but the allegations of cash for honours was the “breaking point”.

“I can’t follow the whip of people who approve of all that,” he said last week. “I don’t know whether or not the government has behaved illegally, but it has created a stench in politics. People are looking at the Lords and are saying, ‘What the hell is going on?’ “I was in hospital over the summer and a nurse asked me how I got my title and then she giggled. It made me realise how many people now see the house.”

Wedderburn said he did not understand why Lord Drayson, a businessman and Labour donor, was made a peer and given a job as a defence minister.

Wedderburn said he was also opposed to the undermining of civil liberties with anti-terror laws and the invasion of Iraq. “Now not even the generals will defend it. We all know what skulduggery went on with the dodgy dossiers and Blair was personally involved in that,” he said.

Wedderburn, who has been a member of the Labour party since 1946 and is a former professor of commercial law at the London School of Economics and was employment spokesman for the Labour party for 13 years.

[Sid Walker]

Lord Wedderburn, who has been a Labour peer for nearly 30 years, has left the party benches in protest at Tony Blair’s policies and allegations of cash for honours. Wedderburnhas written to Lord Grocott, Labour’s chief whip in the Lords, saying he can no longer support the party’s policies and “malodorous practices”. He says the undermining of civil liberties with anti-terrorism legislation and the decision to invade Iraq contributed to his decision, but the allegations of cash for honours was the “breaking point”.

“I can’t follow the whip of people who approve of all that,” he said last week. “I don’t know whether or not the government has behaved illegally, but it has created a stench in politics. People are looking at the Lords and are saying, ‘What the hell is going on?’ “I was in hospital over the summer and a nurse asked me how I got my title and then she giggled. It made me realise how many people now see the house.”

This man is clearly 'old Labour' with a normal skin (unthickened by years of crimes and hypocrisy).

A Nu Labour apparachnik would:

(1) Ensure the nurse was fired.

(2) Have her put under surveillance so like-minded family and friends are added to a subversives database.

(3) Arrange for her subsequent arrest under the anti-Terrorism laws.

(4) Call the Chair of the hospital board and threaten funding cuts.

Edited October 15, 2006 by Sid Walker

[John Simkin]

The main reason that Rupert Murdoch supports New Labour concerns its tax policy. He has not allowed Blair to to even consider increasing the 40% tax rate on those with the highest incomes. Mind you, as Bruce Page pointed out in The Murdoch Archipelago by Bruce Page (Simon & Schuster 2003): "We all know that Murdoch’s media empire operates at the very edges of democratic behaviour and proper business practice. For example, News International despite its vast revenues has paid virtually no income tax to the British exchequer for decades."

As another writer pointed out: "Murdoch also makes use of international accounting loopholes and offshore tax havens, Murdoch has paid corporate income taxes at one-fifth the rate of his chief U.S. rivals throughout the 1990s, according to corporate documents and company officials." (Paul Farhi, Washington Post).

Although New Labour promised to close these loopholes when in opposition, once it gained power it allowed him to avoid paying tax in the UK.

New Labour has increased public spending and so it has had to increase the tax on middle-income groups. As a result, Britain’s tax burden is growing faster than that of any other European country, with middle-class taxpayers working nearly half of every year for the state.

A report last week from the Organisation for Economic Co-operation and Development (OECD) said the share of national income taken in taxes is rising more sharply than anywhere else in Europe. The OECD reported a rise in Britain’s tax burden from 36% to 37.2% of GDP last year. Equivalent to £310 in extra tax for every adult in the UK, it represented the biggest increase for any European country.

According to the accountants Grant Thornton, many middle-class households can expect to see half their income disappear in taxes, either when they earn it or when they spend it.

[Sid Walker]

Claire Short has finally tired of the Party Whip.

Her resignation statement goes some way to explain and rationalise her

earlier hesitancy to desert Blair, which was used to help legitimize the

illegal invasion of Iraq in 2003.

It shows massive disappointment with the Nu Labour episode.

Clare Short: I quit because this is not a Labour government

Ruthless use of the whips' power crushed the spirit of MPs

Independent on Sunday, 22 October 2006

http://comment.independent.co.uk/commentat...icle1919042.ece

Clare Short is MP for Ladywood

I'm afraid the reality is that I have lost confidence in Her Majesty's

Government. This is very sad. The opportunity of 1997 was as big as that

of 1945. Under Neil Kinnock and John Smith, Labour had prepared itself

for power as a modern social democratic party. Tony Blair brought extra

gloss, but we were set to win. New Labour has done a lot of rewriting of

history.

The Government did reasonably well for the first three years. The rot

set in with the second term. Blair had become more confident and did not

want his legacy to be spin and focus groups. When I left the Government

over Iraq I assumed there would be great debate in Parliament and party

to hold Blair to account, and to start to put things right. I soon found

that the system was broken.

Then came top-up fees and the unwillingness to consider other options,

such as a graduate tax. I was seeing more and more asylum-seekers at my

advice bureau and it became clear that the system was a mixture of

cruelty and incompetence. The endless targets, initiatives and

reorganisation of health and education were undermining much of the good

the extra money was doing. Criminal justice policy was dictated by the

tabloids. Then came plans for mega-casinos to regenerate poor areas. And

even more seriously, control orders and proposals for 90-day detention.

The rhetoric of the "war on terror" was inane. The policies exacerbated

the problem.

Increasingly, I voted against the Government and was saddened as the

Labour conference became a rally for the leader. I returned to the back

benches expecting to use the Commons to make my case but found it

transformed. All bills were guillotined. Ruthless use of the whips'

power crushed the spirit of the Parliamentary Labour Party.

My unhappy relationship with the whips started early. Hilary Armstrong,

Chief Whip, made threats. She said I must not say that we were spying on

Kofi Annan, nor that Tony had deceived the country by taking it into

war. Because I would not agree, I became a pariah.

I considered not standing in the 2005 election but friends were sure the

party would recover and convinced me I should stay. Sadly, there was no

fightback. Gordon Brown was increasingly diminished and forced to say he

supported all that Blair had done.

Then Brown backed the commitments to a renewal of Trident and nuclear

power without any serious debate. It seemed nothing would change. At the

Hay book festival this year, I said there was a high likelihood the next

election would produce a hung parliament that could give us a changed

electoral system; then all such questions could be reopened. The Chief

Whip wrote to say I was not allowed to say this because it would mean

Labour MPs losing seats.

There were constant stories in the press to say I was to be expelled or

punished in some other way. I decided not to stand in the next election

and thought that, with just a couple of years to run, the whips would

leave me alone. Then, while I was Addis Ababa trying to help an NGO that

was in trouble, I received media calls about a public rebuke from the

Chief Whip and threatening letters saying that informing the whips of my

visit did not mean I had permission to go. It seemed they planned to

prevent me speaking at the lectures and meetings I had committed to, and

that a stream of rebukes was inevitable. The elastic snapped.

This is not a Labour government. And I have no confidence in it. The

right thing to do is resign the whip and sit as an independent Labour

MP. After 23 years in the Commons and 36 in the party, I have decided to

use my last couple of years to speak freely. Many of my constituents

have spent the weekend telling me that I should not go, but when I say

that I will be there until the next election they are more content.

Our political system is in trouble. The Middle East is burning. I feel

very sad that my relationship with my party has ended up like this. But

electoral reform is the key to fixing our politics and changing our

country. There is no point in being in public life if you are not

allowed to speak.

[John Simkin]

Over the last few days Matt Carter, the former general secretary of the Labour Party and three senior Downing Street aides, including Jonathan Powell, Blair’s chief of staff, have been interviewed by the police.

Blair will be the last one interviewed. It is expected to take place in the next five weeks. Lord Levy’s friends are saying that he has told the police that the idea of raising money through loans came from Blair. As one pointed out that Levy “has nothing to do with honours and could not offer anyone anything – that is up to the prime minister”.

[John Simkin]

An investigation has revealed that all those rich businessmen who gave loans in exchange for honours and government contracts have had a direct relationship with Tony Blair. Sources close to Levy say that it was Blair who negotiated the details of these corrupt dealings. In fact, Levy claims that he was against raising money in this way.

As Lord Okeshott, a Liberal Democrat peer, said: “The police can hardly conclude their inquiries into the possible sale of Labour peerages without interviewing Blair who is the monopoly supplier.” He should have said, it is unthinkable to arrest and charge people like Lord Levy, Matt Carter and Jonathan Powell without dealing with the mastermind of this conspiracy, Tony Blair. This will indeed be a test of democracy if our corrupt prime minister is allowed to get away with his crimes.

[John Simkin]

We are now getting very close to the time when Tony Blair will be interviewed by the police about the loans for honours scandal. Afterwards the police will put their case before Ken MacDonald, the director of public prosecutions. It is believed that officials in the Conservative Party will also be charged with the same offences. MacDonald has already made it clear that he will not take part in the case because he is a former colleague of the prime minister’s wife. It is believed his deputy will make this decision. If he decides that Blair should be charged with the offence, the case goes before the attorney general, Lord Goldsmith. He owes his title and position to Blair. In fact, the men have been friends for years. Goldsmith was the man who ruled that the invasion of Iraq was a legal act. He was about the only senior lawyer in the UK who came to this conclusion.

Lord Goldsmith has made it clear that he will not take the same action as Ken MacDonald. He insists that he has every right to consider whether the prosecution is in the “public interest”. It is believed that Lord Goldsmith thinks that “prosecutions that damage confidence in the two main political parties are not in the public interest”. Surely, the point is that the public no longer have confidence in the two main political parties and this will not return until they are charged with the crimes they have committed.

[John Simkin]

Peter Henry Goldsmith, a prosperous lawyer, who gave money to Tony Blair’s New Labour Project. In 1999 he was rewarded when Blair gave him a peerage. An early example of “cash for honours”.

In June, 2001, Blair appointed him as his Attorney General. In this post it become his responsibility to argue the case for the legality of the invasion of Iraq. Blair refused to make the advice public. Lord Goldsmith's original memo, written on March 7, 2003, was eventually leaked to the press, which led to its official publication on 28 April 2005. In the memo, Lord Goldsmith discusses whether the use of force in Iraq could be legally justified by Iraq's 'material breach', as established in UN Security Council Resolution 1441, of its ceasefire obligations as imposed by Security Council Resolution 687 at the end of the First Gulf War. Lord Goldsmith concludes that 'a reasonable case can be made that resolution 1441 is capable in principle of reviving the authorisation [of the use of force] in [Resolution] 678 without a further resolution.' However, Lord Goldsmith did concede that 'a court might well conclude that [operative paragraphs] 4 and 12 do require a further Council decision in order to revive the authorisation.'

In his final advice to the Government, written on March 17th 2003, Lord Goldsmith stated that the use of force in Iraq was lawful. This advice stated Lord Goldsmith's preferred view in more unequivocal terms than his earlier memo, without reference to the doubts expressed therein. This has led to allegations that Lord Goldsmith succumbed to political pressure to find legal justification for the use of force against Iraq. Shortly after the leak Lord Goldsmith released a statement in response to such allegations, saying that the two documents were consistent, pointing to the difference in the nature of the two documents and the firm assurances he had received between 7th and 17th March that Iraq was indeed in breach of its obligations under Security Council resolutions.

The controversy was furthered by the resignation of Elizabeth Wilmshurst, deputy legal adviser to the Foreign Office, on 20 March 2003. A full version of her letter of resignation became public in March 2005. In this she stated that the reason for her resignation was that she did not agree with the official opinion that the use of force in Iraq was legal. She also accused Lord Goldsmith of changing his view on the matter.

This is now the man who will decide if Blair faces prosecution for the "cash for honours" scandal.

[Jackie Ashley]

The cash-for-peerages story is turning toxic. Downing Street and the Metropolitan Police seem to be mud-wrestling about fair play and who's leaking what. We hear a blow-by-blow account of each and every stage of the investigation. The press is excited enough to have elevated "Yates of the Yard", the man leading the inquiry, into a national hero. Labour's national executive has been brimming with anger. And serious questions are being asked about the role of the attorney general.

Behind all this is a political backstory that is murkier still. There's no doubt now that the Blair camp thinks John Reid can beat Gordon Brown for the leadership, and that Reid is making quiet preparations. There are still plenty of ministers, caught between their dislike of the chancellor and fear of him, to swing either way. Yet the Blairites think a Reid challenge is only plausible if the contest is delayed until the second half of next year. They need the Labour party to have its second thoughts before the leadership election. This means they need Tony Blair to stay in position until the summer, or even the early autumn.

And cash for peerages threatens all that. The police are getting rather more help with their inquiries, it seems, than anyone had expected. The questioning of the cabinet and of Blair's closest staff about their knowledge of loans to the party that might have been followed with recommendations for peerages is unprecedented in modern times. There is a momentum here. Either Blair somehow manages to halt it, or it will overwhelm him.

Some conclusions follow so obviously, it shouldn't be necessary to repeat them. After the Hutton report and all the accusations that followed, it is essential that this inquiry be seen to be entirely impartial and above board. There must be no hint of political involvement. Of course Lord Goldsmith, the attorney general, should stand aside. He is a friend of the prime minister, and indeed owes his job to him. Goldsmith is no doubt a fine, honourable, independent-minded fellow. Surely he understands the perception problem, though.

We know that Blair has not gained financially in any way, and that this is about a widespread political failure, touching all the parties. Politics has become hideously unpopular. In the struggle to pay for it without further infuriating taxpayers by legislating for state funding, the party leaders have had to go begging to businessmen. But the way New Labour has been run has made things worse for everyone involved, including Blair. Since the mid-90s, all Labour decisions have led straight to "TB" and his inner clique. All business - including funding, including honours recommendations - has been personal business.

It isn't hard to imagine a different way of doing things. There should have been entirely separate party fundraising, with absolutely no connections to No 10. Donors would not therefore have had the personal touch from the most powerful man in Britain, and the fundraisers would have had a harder job. It would have forced them to reach down, below the fat cats, to party sympathisers and members. The galas, quiz nights, appeals, 0800 phone numbers and pestiferous mailshots used by charities would have been in play.

Meanwhile, by now we should have had a properly reformed second chamber dependent on election, or at the very least an entirely independent nomination system, so that the issues of who legislates and who pays were kept properly separate.

In his rush to legislate on hot-button issues identified by pollsters, such as law and order, Blair has always been impatient with the "processology" of constitutional reform and the wearisome bureaucracy of party management. Lord Levy and friends provided a short cut. We are only beginning to understand the full price being paid. Cash for peerages has helped feed a rancid cynicism and hopelessness about parliament. In recent selections for top Labour target seats, which once would have attracted 40 or 50 would-be candidates, there have been no more than three or four applicants. People are becoming wary of going into politics.

Here is part of the new agenda for Gordon Brown to cope with. He too has been very keen to keep in with his favoured business people and newspaper tycoons. He should be careful: if he is to turn round opinion and beat David Cameron, he will need to obliterate the notion that patronage still plays a big part in politics and that money talks. It cannot simply be achieved by new rules. It needs a new example, too.

Meanwhile, the biggest issue around the cash-for-honours scandal is weirdly under-discussed: the involvement of businesspeople in schools. It's the stockbrokers, property developers and entrepreneurs putting cash into academies who should provoke the real argument, particularly inside the Labour party.

The motivation behind the academies is wholly good. There are far too many children stuck in failing schools in poor areas, and the statistics on the numbers of teenagers unable to read, write or perform basic maths are truly shameful. Radical action to try to turn round such schools is central to Labour's purpose. And you might well say that if it takes the involvement of the odd car salesman with Christian fundamentalist views, or a blue-chip financial company, or some millionaire who'd like to put something back into his area, then that's a small price to pay.

But while most of those funding the new academies may well be doing so for the right motives, it certainly raises the possibility of more favours being sought or expected in return for such beneficence. We seem to be turning back the clock, while across the world countries have moved from relying on the whims of local benefactors to an age of tax-funded local accountability. If we are tossing all that to one side, is it not worth rather more of a debate?

In the end I cannot help thinking that cash for peerages is the wrong issue for Blair to be skewered on. Yes, it shows up the deep flaws in his way of government. But look across the Atlantic. Bush has just been smacked across the face, at last, for the Great Disaster: Iraq. That has been a cleansing moment for America. And here? It's all loans for ermine and a deputy leadership contest, without a whiff of any great debate or change of direction. This autumn's cash-for-honours blockbuster is another symptom of political failure, not political renewal.

http://www.guardian.co.uk/commentisfree/st...1946282,00.html

[John Simkin]

The cash-for-peerages story is turning toxic. Downing Street and the Metropolitan Police seem to be mud-wrestling about fair play and who's leaking what. We hear a blow-by-blow account of each and every stage of the investigation. The press is excited enough to have elevated "Yates of the Yard", the man leading the inquiry, into a national hero. Labour's national executive has been brimming with anger. And serious questions are being asked about the role of the attorney general.

Behind all this is a political backstory that is murkier still. There's no doubt now that the Blair camp thinks John Reid can beat Gordon Brown for the leadership, and that Reid is making quiet preparations. There are still plenty of ministers, caught between their dislike of the chancellor and fear of him, to swing either way. Yet the Blairites think a Reid challenge is only plausible if the contest is delayed until the second half of next year. They need the Labour party to have its second thoughts before the leadership election. This means they need Tony Blair to stay in position until the summer, or even the early autumn....

Here is part of the new agenda for Gordon Brown to cope with. He too has been very keen to keep in with his favoured business people and newspaper tycoons. He should be careful: if he is to turn round opinion and beat David Cameron, he will need to obliterate the notion that patronage still plays a big part in politics and that money talks. It cannot simply be achieved by new rules. It needs a new example, too.

It is completely false to suggest that Brown is not involved in the “loans for honours” scandal. Along with Alan Milburn, he ran the 2005 election campaign. It is inconceivable that he did not ask questions about where the £18m came from.

It also has to be remembered that Brown told the Today programme in 1997 that he had no knowledge that Bernie Ecclestone had given money to Labour, when, in fact, he had. , according to Andrew Rawnsley, he later told one of his closest aides: "I lied. I lied. My credibility will be in shreds. I lied. If this gets out I'll be destroyed". Luckily for him, this did not emerge for a couple of years after the event.

[John Simkin]

We know that Blair has not gained financially in any way, and that this is about a widespread political failure, touching all the parties.

There is no doubt that the Tories have been guilty of taking money for favours in the past. However, that does not mean that Labour should not be held accountable for doing the same thing.

It is not true to say that “Blair has not gained financially in any way” from his acts of corruption. What about the £3.5 million contract he has signed with Rupert Murdoch for his memoirs for Harper Collins. This was a scam that David Lloyd George used. Margaret Thatcher and John Major signed similar deals with Murdoch. Harper Collins never got that sort of return from book sales. However, it is a good way to pay a bribe.

Lyndon Johnson used to get his paybacks from his business friends by them advertising on his wife’s television and radio stations. Blair no doubt has similar arrangements in place. Maybe this is why certain organizations pay former politicians to make lecture tours of the US after they leave office. This is a good way to pay political bribes.

[John Simkin]

At a meeting of the Labour Party National Executive in March, Tony Blair claimed that all donors who gave Labour substantial funds before the general election wanted to keep their names confidential to avoid being “trashed in the media”. This information comes from executive member, Ann Black, who posted the information on her website.

However, key witnesses are telling the police another story. Lord Levy has claimed that it was Blair who encouraged donors to give loans rather than donations. This is supported by two of the donors, Chai Patel and Sir Gulam Noon. Patel points out that he offered £1.5m as a donation but was telephoned by Lord Levy to say they would rather have a loan. He was later nominated for a peerage. Noon tells the same story. He told the Sunday Times: “My position is that I was very happy to contribute as a donation but that I was asked to give a loan.” Noon, like Patel, was also nominated for a peerage.

Why would the Labour Party want a loan rather than a donation? There is only one possible reason. They did not want the public to know that wealthy businessmen were buying honours. My making them loans they did not have to be revealed to the public. However, by looking at their accounts, it is unclear how the Labour Party would ever be in a position to pay back these loans. The plan was for these loans to be changed into donations in a few years time. This cannot happen now and so the Labour Party faces a financial crisis. If it was a public company, it would be forced into bankruptcy.