Socialist Worker

New Labour sleaze: A shabby history of 'friends in the north'

Simon Basketter digs into the dirt of Labour's latest funding fiasco

Issue No. 2079

Labour minister Roy Jenkins (right) and corrupt Newcastle council leader T Dan Smith (centre) pictured in the 1960s

Labour minister Roy Jenkins (right) and corrupt Newcastle council leader T Dan Smith (centre) pictured in the 1960s

The shady funding of the Labour Party by rich business bosses was thrown into the spotlight this week.

Labour Party general secretary Peter Watt resigned following the revelation that a property developer gave hundreds of thousands of pounds in donations without revealing his identity.

Watt allowed property boss David Abrahams to use three employees as fronts to pay the Labour party nearly £600,000.

Abrahams had been deselected once as a Labour parliamentary candidate. He does business under two different names and seems to be ten years older than he claims.

When he was a Labour Party candidate, he claimed a wife who was not his wife and a son who was not his son.

Anthea Bailey told a local newspaper that she had agreed to get engaged to Abrahams as a 'business arrangement' so he could create 'the right impression'.

He was granted planning permission for a business park next to the A1 near Durham.

Permission had initially been refused in 2005. In the period between the application being rejected and then accepted Abrahams donated £200,000.

Abrahams said, 'Any suggestion that I have made donations in exchange for favours is false and malicious. I will not hesitate to issue proceedings to protect my reputation.'

Harriet Harman MP was given £5,000 during her successful bid for the Labour Party deputy leadership. This money came from Abrahams though it was again registered as coming from one of his employees.

Hilary Benn got £5,000, but this time in Abrahams' own name. Strangely, Gordon Brown turned down a donation from Abrahams.

Abrahams sat in the front row for Tony Blair's resignation speech in Sedgefield – yet a remarkable list of leading Labour figures claim not to know of the party's third biggest donor.


Sleaze over donations is one of the most honoured traditions in British politics. Before 1975 MPs didn't even have to declare which firms paid them.

The reason they now do is because of a scandal that broke in the early 1970s. It was revealed how a clutch of MPs had used questions and parliamentary motions to promote the interests of the corrupt architect John Poulson. One MP had to resign, and the parliamentary 'register of interests' was set up.

The scandal originated with corrupt developers and politicians in the North East of England, including Newcastle council leader T Dan Smith. The BBC's 1996 drama serial Our Friends In The North featured fictionalised versions of these characters.

While some politicians ended up in jail the real cost was paid by others. Dodgy planning decisions and overpriced developments made millions for developers but did nothing for ordinary people.

Brown's Labour Party finally seems to have found a party tradition that it believes is worth holding on to – being in hock to the building bosses.

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Tue 27 Nov 2007, 18:48 GMT
Issue No. 2079
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