Money for Something

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Review of 'Labour Party Plc', David Osler, Mainstream Publishing £15.99

Which party received more million-pound donations in 2002: Labour or the Tories? Ten years ago, when Tony Blair was still a shadow cabinet minister, this would have been a strange question to ask. Now, to know for sure, you would have to wait until they both published their accounts, and then ask about all the information not contained there. While political parties have to disclose who donates more than £5,000, they don't have to disclose the total amount they raise.

'Labour Party Plc' tracks the party's relationship with business from the early steps made by Neil Kinnock, to John Smith's more overt flirting, to the love that dared speak its name under Tony Blair. David Osler looks in turn at funding of the Labour Party by rich individuals and big business, the scramble for lucrative government contracts once Labour was in office, and the way that business has been invited to help formulate government policy.

Osler suggests that one key turning point was Black Wednesday in 1992. On that day the pound was kicked out of the scheme that was the precursor to the euro and the Tories looked like they might never win another election. John Moores, director of Littlewoods football pools, described the motivation of big business in forming closer ties to the Labour Party during this period: 'Since Labour is going to form the next government, it's worth getting to know them.' Another executive was more explicit in saying why he supported a New Labour initiative before the 1997 election: 'Some of those involved are clearly dedicated Labour supporters. But most, like us, simply want to influence policy.'

This new receptiveness on the part of business was only part of the picture. Former leader John Smith signalled Labour's desire to court business with a series of meetings with people from the City of London--dubbed the prawn cocktail offensive. Up for discussion were not just policies on the economy and companies, but also anything that might upset the wealthy.

Blair pledged to keep top-rate income tax at 40 percent in the 1997 election manifesto. Formula 1 boss Bernie Ecclestone, after his £1 million donation had been returned following a scandal over tobacco advertising, explained that his gift was a result of Labour's pledge not to raise income tax. 'As a substantial contributor to the Inland Revenue, I have clearly benefited from this decision,' he wrote. After all the questions about the possible link between party donations and government policy, such an explicit connection did not merit many column inches.

This is a book about changes in British society and politics, not just about Labour's internal transformation. Private companies are building hospitals and are being asked to run schools. Making financial gifts to a government that hands out such contracts seems, for them, only common sense.

Small anecdotes in the book can be as telling as better known cases. For example in 1999 Labour brought in a private contractor, Sema, to run the party's own membership services. Twelve party employees saw their performance market-tested and were given a choice--work for Sema or take voluntary redundancy.

This book details the process by which Labour has become a second party of business, rather than discussing further issues such as the political implications of this for socialists or the link between New Labour and the unions. You might think a book about party finances is not ideal bedtime reading. You might be surprised.