I was wrong. I thought the canaries would never sing. Spats Campbell was out of the way. Fingers Levy would never crack. Powell the Towel could take the third degree and “Academies” Adonis would stay shtum. Besides, the fuzz had no way in. The Brown mob next door was all omerta, what with Ballsy, Stockings Vadera and the Warburgs racket to protect. Sure it would all spill out one day. But this was about big guys and serious money. There could be no real threat from PC Plod of the Yard.
If Assistant Commissioner John Yates and his team are not modelling themselves on Chicago’s Untouchables they are a good imitation. The idea of big names caught short on an election punt and having to pawn coronets round a bunch of the loansharks is almost beyond fiction. Besides that, the capo will not be capo much longer. The cosa will not be nostra and the usual protection will not apply. So when black sedans start cruising the block, wise canaries turn state’s evidence.
This is very bad news for Tony Blair. Yates claims to have interviewed 35 members of his party, along with 29 Conservatives and four Liberal Democrats. The interviews concern two matters. The first is the sale of honours, mostly knighthoods and peerages, which is illegal under the 1925 Honours (Prevention of Abuses) Act. The act was supposedly to protect the dignity of the honours system, hardly of great public import, but under Lloyd George it became enmeshed in the vexed question of party finance.
Here the problem for Yates has been to prove causal connection. Bill Snoggins has lunch with Lord Fingers and becomes Baron Mile End Road after £2m lands in Labour’s funds. But who says the peerage was not pure coincidence, on account of Snoggins’s kindness in funding the Tessa Jowell Memorial Olympics Academy? The other matter receiving Yates’s concern is the Political Parties, Elections and Referendums Act 2000, introduced by Blair to counter Tory sleaze. Under this law donations to parties would have to be declared and spending subject to a limit of roughly £19m, though loans (or commercial loans) would not. A peerage could thus be offered as security against an undisclosed loan but not awarded until, at a later date, the donor agreed to convert the loan into a gift. It was a means of evading the law which, according to some donors, the Labour party asked them to use. Blair claimed at a party meeting on March 21 that it was the donors who had requested anonymity.
I had assumed that all this would slither into the long grass.
Everyone would lie through their teeth, given that honours have been sold to sustain political activity since the days of James II. The police would merely pass vague affidavits to languish with the Crown Prosecution Service. The prime minister would fudge the issue with an “air-clearing” inquiry into party funding under a patsy judge or a world-weary former civil servant. They would advise that the only way to stop politicians from breaking the law was to give them lots of public money. Sure enough Blair appointed such a commission, under Sir Hayden Phillips, which has yet to deliver its final report.
Yates’s big break appears to have been the oldest in the copper’s book. Four gentlemen came up with the cash but the coronets failed to arrive. (The peerages were stopped by the very scrutiny committee set up by Blair to highlight “Tory sleaze”.) Yates suddenly found himself with some very unhappy witnesses. What had seemed a minor Westminster diversion went critical.
The prime minister of Britain is thus about to be questioned, presumably under caution, for a criminal offence. All party leaders have sold peerages and everyone in the know knows it. Michael Foot once told me that his list of peers was turned down by his whips’ office in 1980 on the simple grounds that “they have no money”. But the system depended on “my word is my bond”.
The irony is that a gesture towards cleaning up the system appears to have been cause of its collapse.
A decision to prosecute the prime minister rests bizarrely with Lord Goldsmith, the attorney-general, whose job is in the prime minister’s gift. Goldsmith is an old Blair friend, a former Labour donor who was also ennobled before being made attorney-general. Since to put it mildly this might render him less than impartial in the public eye, Goldsmith has denied himself any practical role in the decision (though curiously he says he cannot “constitutionally” rule himself out). He would delegate it to the Crown Prosecution Service, whose director is Ken Macdonald.
Unfortunately this gentleman is also a Blair friend, indeed has “shared chambers” with Blair’s wife Cherie. So he must delegate the decision to Philip Sales, the chief Treasury solicitor. Nor does the chain end there.
By an astonishing coincidence, Sales happens to be the appointee and protégé of Blair’s close friend Lord Irvine, the former lord chancellor no less. At this point it would appear that the number of Blair friends in law is outstripping the number of prosecuting attorneys. So Sales must delegate the momentous decision to an outside QC, as yet unnamed.
Any ordinary member of the public might wonder whether British justice has advanced one iota from the days of the Restoration Cabal. Everyone who knows the attorney-general affirms what a splendid chap he is and how he would sell his best friend down the river if the duties of his office required it. But that is said of all attorney-generals. It is why most modern constitutions keep the conduct of the law, and especially the legal oversight of ministers, out of the hands of party politicians.
Goldsmith is both a legal adviser to the nation and yet a legal defender of the government. Hence his apparent change of opinion to help Blair when the chief of the defence staff queried the legality of the Iraq invasion. That was compromise enough. Now to have him having to exercise, or even delegate, discretion over whether his boss should face criminal charges is beyond compromise. It is absurd. If such conflicts of interest occurred in local government ministers would be crying foul.
Against this looming storm the Phillips inquiry into party funding no longer offers Blair a plausible liferaft. Indeed the public might reasonably ask, if Blair is innocent and there was nothing dodgy in the election fundraising, why is Phillips necessary? The parties already receive some 50% of their election expenses from the taxpayer, in free broadcasts, free post, free security and party subsidies at Westminster. The rest comes mostly from the unions and big individual donors, who seem happy to swap money for gongs. Labour raises 13% of its income from its members and the Tories just 6%.
Phillips’s unspoken job is to get the politicians off the cash for honours hook by giving them taxpayers’ money instead. He asked in his interim report last month what people might think of new money to fill the gap between the existing 50% and the paltry members’ subscriptions — and by implication to avoid the need for unions and tycoons. The idea is outrageous. Any hope of giving MPs another penny of public money should have been laid to rest by the revelation last month that they are giving themselves an average of £130,000 each in expenses alone, 30% more than in the last parliament, taking their gross income from the state to £200,000.
Constituency participation in Britain is moribund because MPs have stripped power from local party members and watched local donations fall. They like to pretend that this is a common trend. It is not. At the 2004 American election, 37% of John Kerry’s donations came in sums of less than $200 and 31% of George Bush’s. Nearly 3m people gave money to the campaigns, a number that tripled since 2000. A galvanised electorate is not just a donating one but a participating one.
Parties should stop selling peerages and start selling themselves, their policies and politics generally to the electors. Electors should feel it is worth joining parties in return. For MPs to take compulsorily what they cannot raise voluntarily is a capitulation of open democracy to corporate statism. Parties are lavishly treated by the taxpayer.
If they cannot raise more from their own efforts, they should not spend more.
