Socialist Worker

New Labour, sleaze, police interviews and BAE

by Simon Basketter
Issue No. 2031

The stench of corruption around the Labour party is becoming overwhelming.

On Thursday 14 December, Tony Blair became the first serving Prime Minister to be interviewed by the police in a criminal investigation.

Blair chose the same day to shut down a major criminal investigation into alleged corruption by the arms company BAE Systems and its executives claiming it would endanger Britain's national security.

Under Blair’s instruction Lord Goldsmith, ended the Serious Fraud Office inquiry into alleged bribes paid by BAE to Saudi officials.

BAE and the Saudi embassy had frantically lobbied the government to end the investigation.

According to Goldsmith 'the wider public interest… outweighed the need to maintain the rule of law'.

The reason is not national security whatever that may be, but simply that BAE had claimed that it was about to lose out on a third phase of the Al-Yamamah deal, in which the Saudis would buy 72 Typhoon aircraft in a deal worth £6 billion.

An insight into the unpleasant links between business and politics is that over the last few days, shares had begun to rise in BAE and its major suppliers such as Rolls-Royce as news of the plan to close the inquiry began to leak.

Britain made overseas bribery illegal in 2002. Labour ministers subsequently claimed they were determined to stamp out corruption, but no prosecutions have taken place under the new law.

So much for Blair's claim on coming to office in 1997 to sweep away Tory 'sleaze', 'clean up politics' and lead a 'whiter than white' administration.

The police questioning was over the cash for peerages scandal. Blair's tennis partner and personal fundraiser Lord Levy — known as 'Lord Cashpoint' — negotiated nearly £14 million in secret loans.

Labour's former general secretary, Matt Carter, then a key member of Blair's inner circle, had told the businessmen that their loans would not have to be declared.

Four businessmen who gave Labour £4.5 million in unpublicised loans and were subsequently nominated for peerages.

They were Barry Townsley, a stockbroker who has also donated money towards a city academy school; Sir David Garrard, a property developer who also donated money to a city academy; Dr Chai Patel, chief executive of Priory Clinics; and Sir Gulam Noon, who said he was advised to keep a £250,000 loan secret, and that he was blocked from joining the House of Lords once the loan came to the attention of the Lords Appointment Commission.

More than 50 witnesses have been questioned, including Patricia Hewitt, the health secretary; Jonathan Powell, Blair's chief of staff, and Alan Milburn, who ran Labour's election campaign, with roughly a third of them under caution. Three were questioned under arrest — Lord Levy, Des Smith, a fundraiser for city academies, who boasted to a journalist that donations of several millions of pounds were likely to be rewarded with a peerage by the Prime Minister; and Sir Christopher Evans, a biotech millionaire.

All of them have denied any wrongdoing.

It’s not just Blair, Sir Ronald Cohen a substantial donor to the Labour Party was nominated for a knighthood six years ago by the treasury. That same year, Cohen was chair of Gordon Brown's social investment taskforce.

What the press refer to as “sources close to the Prime Minister” – spin doctors – say Blair cannot see why people are so concerned that wealthy donors to the Labour Party were offered peerages in return for loaning millions to Labour before the last election.

Corruption is at the heart of the way the system works. Neoliberalism normalises the unaccountable power of wealth and money is the deciding factor for everything. Whether it selling weapons of mass destruction or our childrens' education, Labour's commitment to business is at the root of its corruption.

Click here to subscribe to our daily morning email newsletter 'Breakfast in red'

Article information

Sat 16 Dec 2006, 00:00 GMT
Issue No. 2031
Share this article


Mobile users! Don't forget to add Socialist Worker to your home screen.