By Paul FootPeter Morgan
Downloading PDF. Please wait... Issue 261

Dirty Business

This article is over 22 years, 1 months old
With New Labour facing yet another cash for favours scandal it's little wonder that the public consider them even more sleazy than the Tories.
Issue 261

Oh dear, oh dear. The old Tory governments of Thatcher and Major, New Labour assured us, were ‘drowned in sleaze’. Corruption was their undoing, and the constant pledges of Labour’s new, young, clean politicians, led by Blair, Brown and Mandelson, were going to clean up the whole mess. Now New Labour is back for a second term with an impregnable majority, and what is this? An opinion poll finds that the public consider New Labour even more sleazy than the Tories ever were! Blair and Co regularly mock and contradict that finding. The high peak of their argument appears to be that two Tories, Aitken and Archer, went to prison for corruption, while New Labour champions are all out of jail. The public are unimpressed.

Aitken and Archer went to prison not for corruption, but for perjury, to clear their name of allegations that were perfectly true. Long after he was known to be a corrupt liar, Archer was favoured and ennobled by Tory prime ministers and befriended by Labour leaders. Aitken was entirely cleared of corruption in his arms dealing by a unanimous vote of an all-party House of Commons select committee. On the other hand, almost the first act of the New Labour government was to erase from its programme one of the few outright commitments in it–to ban tobacco advertising. Bernie Ecclestone, Formula One motor racing billionaire, objected to the ban for the very good reason that by far the biggest beneficiary of tobacco advertising was Formula One motor racing. Ecclestone was a Tory. Why should such a brash tycoon have any influence on a Labour government? Answer–he had given £1 million to the Labour Party. A meeting was held in Downing Street and the outcome was obvious. It was plainly grotesque to continue with a policy that would damage so bountiful a benefactor. The policy was ‘revised’. Tobacco advertising on Formula One cars was permitted. Then someone accused the prime minister of corruption, so the Labour Party gave the money back to the millionaire. Its policy had changed for nothing.

Now here come another trio of millionaires, called Hinduja. They were worried about their security because they were wanted in their home country, India, on corruption charges connected with the sale to the Indian government of guns from the Swedish arms manufacturer Bofors. They gave extravagant parties in London, at which a perennial honoured guest was Peter Mandelson. Mandelson was worried about the Dome, a ludicrous white elephant on which his and New Labour’s reputation depended. The Dome was running out of money. The Hindujas sprang forward with another £1 million. Almost at once they got the precious British passports they wanted. Mandelson rang the Home Office to ensure their applications were treated with proper respect–and, would you believe it, they were.

Mandelson forced to resign

Meanwhile Mandelson himself was in a spot of bother. He had borrowed nearly half a million pounds from his cabinet colleague, Paymaster General Geoffrey Robinson, in order to buy himself a luxury home in Notting Hill. He didn’t declare the loan, and when it was finally exposed Mandelson resigned. Quick as a flash, he was back in the cabinet, in good time for him to ring the Home Office about the Hindujas, and when that phone call was exposed he was sacked again. Now he is getting ready for a ‘comeback’.

This is more than can be said for Geoffrey Robinson, Blair’s first Paymaster General, who has now been found to have been a beneficiary of the generous crook Robert Maxwell–to the tune of £200,000, no less, the cheque which Robinson just cannot find. Robinson’s connections with the accountants Arthur Andersen, which raised funds for New Labour, have been exposed in a recent book by Tom Bower, just in time for the Enron scandal. Enron went bust last year in a spectacular bankruptcy caused by various imaginative accounting devices dreamed up by Andersen. From 1994 to 1996 Andersen’s sister company employed Patricia Hewitt, a rising star in New Labour, and cooperated generously with New Labour before and after the 1997 election. Its main aim in life–to remove the ban on it imposed by the former Tory government because of its dishonesty over the DeLorean scandal–was achieved within seven months of New Labour coming to office.

Now Blair is in trouble for writing a letter to the prime minister of Romania begging him to hand over his privatised steel industry to yet another Indian millionaire. This one gave £125,000 to the Labour Party, though Blair insists he never even knew it. So straight is he that he doesn’t even know who gives money to Labour–until he reads it in the Sunday Telegraph or gets denounced for it in the Commons by Iain Duncan Smith.

This lot are drowning in sleaze, and their excuses are pathetic. It is easy to write off each allegation and each disaster as a sign of personal weakness or greed. The reason, however, is much less delicate. Corruption is not a by–product of capitalism-it is an integral part of it. A system that divides the people of the world into rich and poor, and then hands over all political, economic and military power to the rich, depends constantly on the ability of the rich to buy influence and power.

In his 1987 book ‘Corruption in British Politics 1895-1930’, G R Searle notices how the natural tendency to corruption of the British political system in the 19th century, under Liberals and Tories, began to wane after 1918 with the advent of the labour movement and universal suffrage. This was because the power and thrust of Labour came not from above, from the big corporations or mega-rich individuals, but from below, from individuals hostile to great wealth, and from trade unions. The more democratic the trade unions, the less vulnerable they were to corruption. As long as Labour relied for its finance on its own constituent organisations, notably the unions, corruption was held at bay. It was the removal of that ballast by Blair, Mandelson and Co in the New Labour offensive of the 1990s that floated Labour so dramatically into the same sort of corruption that had swamped the Tories–and even worse. The challenge thrown out to British labour by the great wave of sleaze that now swamps its leaders is not to seek to wriggle out of the allegations by lies and prevarication, but to return to the democratic principles and organisations that brought the party into being in the first place, to public ownership and public accountability. Capitalism will always be corrupt, but socialism and its modern champions need not be.

– – – – –

Private companies are raking in the profits as a result of government PFI schemes and private contracts. Research carried out for Unison by ‘Labour Research’ shows how well companies have been doing out of increased involvement in public services. The survey also showed that workers employed by private firms are paid less than workers in the public sector. They also received minimal holidays and no sick pay, pension or compassionate leave. Some of these companies include:


Turnover: £685.9 million. Pre-tax profit: £38.3 million.

A French-based multinational, Sodexho has 145 contracts nationwide, mainly in the NHS. It also made millions from the government voucher scheme for asylum seekers.

Rentokil Initial plc

Turnover: £2,545 million. Pre-tax profit: £401.1 million.

Part of the Rentokil multinational, it is involved in cleaning in the NHS, and makes huge profits from supplying school meals.

Capita Group plc

Turnover: £453.3 million. Pre-tax profit: £40 million.

Capita has some 77 contracts, mainly in local government. It has also moved into education management with a partnership with Leeds education service.

ISS Mediclean

Turnover: £97.8 million. Pre-tax profit: £6.7 million.

ISS is a subsidiary of Danish group ISS International Systems. It has 160 contracts nationwide and makes most of its profits from cleaning in the NHS.

Sita Holding UK Ltd

Turnover: £386.2 million. Pre-tax profit: £16.5 million.

Sita is a subsidiary of the French multinational Suez Lyonnaise des Eaux, and makes most of its money from street cleaning and rubbish collection.

Serco Group plc

Turnover: £772 million. Pre-tax profit: £34 million.

It is involved in 12 PFI schemes, including private prisons and metro railways in Manchester and London Docklands.

Compass Group plc

Turnover: £5,447 million. Pre-tax profit: £181 million.

It has 190 contracts across the country, mainly in the NHS and education. It also makes millions out of providing school meals.

Serviceteam Holdings

Turnover: £113.8 million. Pre-tax profit: £2.6 million.

It has built its profits from rubbish collection and street cleaning. Its contract with Lambeth council was the first local government PFI contract.


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