In Westminster they used to say that while Tory scandals are invariably about sex, Labour scandals are always about money and it still holds true today. What did for John Major in the 1990s was the Tory leader's 'back to basics' policy initiative, which famously became “back to my place”, as ministers resigned successively after revealing illicit affairs. Now Blair’s illicit financial affairs are doing for him. We are witnessing the decline and fall of the Tony empire.
There was financial sleaze too, of course, under the Tories - cash for questions - but then you kind of expected it from them. What you didn’t expect was that New Labour would try to outdo the Conservatives in the sleaze stakes. I mean, fourteen million pound in secret loans. This from the party that created the Electoral Commission and introduced the legislation for compulsory registration of loans over #5,000. Labour has been conspiring to evade its own rules on party funding.
This political split personality is very much a New Labour phenomenon. Part of the party wants Labour to be the property of the people; the other part seems determined to sell it off to the highest bidder. The astonishing revelations last week about the cash sloshing around Downing Street - while the treasurer of the party, Jack Dromey, John Prescott and Gordon Brown were kept in the dark - are but the ignominious destination of a journey New Labour embarked upon even before Tony Blair entered Number Ten.
When he became leader in 1994, Blair saw it as imperative that Labour cease to be in financial hock to the trades unions, which had been paying eighty percent of the party revenue in the 80's. . He wanted to move towards a more American form of “high value” fund-raising by seeking donations from philanthropic businessmen - though some of them turned out to be not entirely philanthropic.
Pretty soon, Labour was playing the old Tory game of handing out knighthoods and peerages to anyone able to cough up a couple of hundred grand ‘for the cause’. Tony Blair denies that honours were for sale - that would anyway be a criminal offence - but the correlation between top donors and Labour peerages is too close to be mere coincidence.
Earlier this year The Sunday Times revealed that Dan Smith of the Specialist Schools Trust was telling businessmen that they would get honours “for certain” if they funded a city academy. At the centre of this financial network was Tony’s tennis partner, Lord Levy, the self-made businessman who brought you the pop groups “Dollar” and “Bad Manners”. His nickname, “Mr Cashpoint”,tells you all you need to know.
No laws were broken, but that isn’t the point. Sleaze is about probity, about avoiding the appearance impropriety in public appointments. It is about not looking as if money talks in government. Yet, New Labour “modernisers” started talking cash almost as soon as Labour came to office. Recall the lobbyist Derek Draper, ex-aide to Peter Mandelson, boasting in 1998 of “trousering #250 an hour” for introducing wealthy people into the corridors of power. The “cash-for-access” scandal revealed that a whole raft of Labour figures had been selling their New Labour contacts.
Then we had Bernie Ecclestone, Powderjet, Lasksmi Mittal, the Hindujas. Draper’s boss, Peter Mandelson, had to resign over a loan of #375,000 from the millionaire minister, Geoffrey Robinson. Another leading Blairite, Tessa Jowell's mortgage was paid by a curious cash injection from Tony's friend, the Italian Prime Minister Silvio Berlusconi. Bungs from Berlusconi, cash-for-peerages and now loans-for-honours. Tony Blair insisted at the height of the “lobbygate” scandal that he was “a pretty straight kind of a guy” and we all pretty much believed him. If said that today, he would be laughed off the TV screens.
If secret loans had been used to fund a Labour constituency association, or a local council, those responsible would probably find themselves in jail. I’m not suggesting that the Labour whistle-blower Jack Dromey is lying about having been kept in the dark about the latest loans. But you have to wonder how the party treasurer could not have been aware that the party had for years been dependent on massive loans to maintain its overdraft with the banks. I mean, does he never read the annual accounts?
Dromey clearly saw that he was likely to become a fall guy as the cash for honours scandal proliferated. So he decided to turn super-grass. He made a round of devastating tv and radio interviews which effectively branded his own party leader as a crook. This is more like the Mafia than politics. You almost expect him to be found hanging from Blackfriars Bridge.
What an end for the 'peoples’ party', a government which Tony Blair promised would be “purer than pure, whiter than white”. The truth is New Labour has always had an exaggerated respect for wealthy people, almost an infatuation. Modernisation made wealth respectable in Labour circles after 1994. Having abandoned socialism, it was suddenly cool to praise plutocracy, or as Peter Mandelson famously proclaimed in 1998:” Labour is intensely relaxed about people getting filthy rich.”
Mandelson, Levy, along with pollster Philip Gould and other new Labour super-fixers seems to have been the core of an extraordinary inner party network, based in Number Ten, which became organisationally and financially separate from the Labour Party. They even had an name for it: “the Project” - an ironic reference to the US Neo-conservatives’ “Project for a New American Century”. Harold Wilson might have called them “a tightly-knit group of politically motivated men”.
Some have compared the Project to the “entryist” Militant Tendency, which was expelled in the 1980s for creating a “party within a party”. Exept that this was more a party without a party. Sickened by the leadership, Labour party activists have left in hundreds of thousands, leaving Labour without the foot-soldiers, door-knockers, envelope lickers that used to win elections. That’s why the Blairites needed the #14million in loans - to buy a media election campaign based on advertising and sophisticated polling.
New Labour naiveté about the rich was coupled with greed. A Prime Minister on a mere #180 thousand can’t help but feel inferior when the average salary - yes, the average - of a British chief executive officer is #550,000. The Blair’s didn’t even have a proper house, poor souls, just a couple of grace and favour mansions like Chequers and Number Ten. Cherie Blair seems to have been obsessed by this, which is why they took on four million pounds worth of mortgages for those flats in Bristol and a trophy house in London’s Connaught square.
I still don’t believe Tony Blair, or Cherie is corrupt. It’s worse than that: the totally lost their moral balance and sense of propriety. They think everyone is rich; that everyone has a two million pound house and a cottage in the country; that everyone sends their children to private schools.
I suspect this was the a large part of Tony Blair’s obsession with his education reforms. Tony Blair wanted to compete with fee-paying schools by creating ‘sort-of’ private state schools, which would - by occult selection - become good enough to be considered acceptable to rich parents. It is hard to think of any other reason why the Prime Minister should have courted disaster on this incoherent and unnecessary legislation.
In the long term the education bill could be far more damaging than the loans scandal. The Prime Minister has, in a very real sense, “crossed the floor” - he has allowed another party, the Conservatives, to play a key legislative role in his government. The bill would have never reached the statute book had it been left to the Labour Party alone. Labour MPs are forever being lectured on the need to be loyal to their party right or wrong, yet here is their leader forming a defacto alliance with David Cameron.
At least Ramsay MacDonald had the decency to resign in 1931 when he couldn’t get his party to accept his policies. Labour’s first Prime Minister formed a coalition with the Tories and the Liberals which - and Labour historians tend to forget - led to him winning the largest Commons majority every won by any British Prime Minister - 498 seats - in the 1931 general election. But the Tory leader Stanley Baldwin took MacDonald by the hand only to take him later by the throat, forcing him out of power. MacDonald died soon after, a pathetic figure, ridiculed by Conservatives and loathed by Labour.
David Cameron may be planning a similar fate for Blair. By adopting him as their own, the Tories are playing a very subtle game, severing the bonds of sentiment between Blair and Labour, bonds which were never all that firm in the first place. Having been so set in the ways of party discipline under Blair, most Labour MPs have been suffering in silence.
But they are eventually going to have to act to bring this terrible saga to a conclusion. Tony Blair is hugely damaged now - unable to get his legislation, lost in financial scandal, irremediably tainted by Iraq. He could have stood down after the general election ,on a high, and entered history as the first Labour Prime Minister ever to win three general elections in a row. But he chose to remain, demanding that his party endorse an illegal war, and his agenda for privatising public services.
Tony Blair has forced through some of the most regressive legislation on civil liberties that parliament has ever seen - on detention without trial, ID cards, ‘glorification’ of terrorism, religious hatred. Many Labour MPs believe, as the respected backbencher Michael Connarty has put it, that New Labour has violated all that Labour stands for and that this is "the end for Blairism"..It could also be the end for Labour fore there is now a very real possibility that they could lose the next general election.
British voters do not like divided parties, and Labour is now as divided as John Major’s government was in 1996. Britain does not like sleaze either, and now Tony Blair has landed the government with the mother of all sleaze scandals. People are fed up with the Iraq war and appalled by the casualties. Moreover, Britain is a country which invented many of the freedoms, like habeas corpus, which the Prime Minister is trying to take away.
David Cameron is well placed to exploit all these issues. And there isn’t much time left. The party can’t wait until the next general election, more than three years away. By then Labour could be history. If they want to win next time they have to seize the time - show that the Prime Minister has lost their confidence and that they are not prepared to see their party sold to the Conservatives.
And Gordon Brown? Well, at Prime Minister’s Questions on Wednesday, the day of the fateful vote, Gordon Brown and John Prescott, flanking Blair, both wore bright red ties. It was surely a subliminal message to Labour supporters that Tony Blair isn’t one of them any more. If they'd held a red flag aloft, they couldn’t have been more explicit. Teh question now is: will Labour MPs get it?