22. Corruption – bosses “worth fighting for”


There was a growing mood of opposition to New Labour which was fuelled by the ‘Mandelson affair’. Peter Mandelson was the ‘eminence grise’ of New Labour, as Tony Blair pointed out, its real founder. He was forced to resign as Trade and Industry Minister on 24 December 1998 over ‘financial irregularities’. We commented in Socialism Today that this was an unexpected Christmas present to all those who had been brutally trampled on or elbowed aside as Blairism had risen to dominate the Labour Party. It revealed the tensions – real abiding hatreds amongst the different cliques in the leadership – both within the party, and between it and the growing sections of disenchanted former supporters.

Mandelson was important in the sense that he personified starkly this process. He had acquired his ‘legendary’ abilities by allegedly managing the media. He drew some lessons – for diametrically opposed political reasons – by witnessing at first hand Militant’s approach towards the media in the 1980s. We pointed out in Socialism Today that we successfully used the press to partially counter the witch-hunting manoeuvres of right-wing Labour’s NEC. This involved the public discussion of ‘secret’ reports of right-wing party officials which detailed the behind the scenes plans to purge the left within the party, beginning with Militant and its supporters. We aimed to raise the level of understanding of Labour Party members and those workers we could reach by relating the witch-hunt to the struggle for jobs, housing, improved conditions and the broad historical struggle for socialism.

In contrast, Mandelson’s ‘black arts’ – the US-inspired ideas of spin doctoring – had precisely the opposite intention: to deceive, mislead, misinform and denigrate opponents by falsifying their ideas and actions. One of its central aims was to dissipate the opposition, both within the Labour Party and amongst the broad mass of working people, to the policies of right-wing Labour as they rose to power. We wrote: “The events surrounding Mandelson have been given a highly personalised slant in the media. But what is highlighted here are not the personal traits and inadequacies of Mandelson, Blair and the Chancellor Gordon Brown – considerable though they are – but the failure of their policies. If tomorrow Brown replaced Blair, little would change in the policies of the government or the party regime within New Labour.”1 This, of course, was entirely borne out when Brown took over from Blair in 2007. But then Brown had to endure the odium of all the policies which Blair and he had presided over during their reign. The result was the victory of the Tory David Cameron in tandem with Nick Clegg’s Lib Dems and the brutal attacks on working people which flowed from this.

Mandelson, the arch practitioner of Blairism, adopted a nauseating flunky-like attitude towards the rich and powerful. Ramsay Macdonald, even before he betrayed the labour movement in 1931, was noted for his obsequiousness towards the possessing classes. Mandelson displayed the same fawning attitude towards Prince Charles and his ‘lady’, Camilla Parker-Bowles (dancing with her regularly at parties). He never hesitated to bend the knee before the rich barons of capitalism. Mandelson sought to put his ‘filthy rich’ doctrine into practice through his friendship with the appropriately titled Paymaster General, Treasury Minister Geoffrey Robinson. This millionaire ‘socialist businessman’ had ‘earned’ part of his considerable wealth as an adviser to a Belgian millionairess named Bourgeois! He achieved notoriety when it was exposed that he held £12 million in an offshore trust located in a tax haven, along with his formal links to the corrupt ex-tycoon Robert Maxwell, not to  mention his ‘failure’ to register his directorship of seven companies. This has a topical ring in light of the later exposure of tax evasion and corruption in the Panama Papers.

Mandelson, obviously choking with frustration in his Islington basement flat, yearned to be part of the glitterati in fashionable Notting Hill ‘swanky land’. The bridge to this was a £373,000 loan from Robinson, nearly ten times his parliamentary salary. This house would be worth millions in current property prices. The most astonishing feature is that he and Blair did not see that he had done anything wrong in accepting a loan from his rich ‘friend’ who just happened to be a well-known candidate for future ministerial office in a New Labour government! Mandelson’s only ‘regret’ was that he did not mention it to either Blair or to his ministerial permanent secretary. Contrast this behaviour – and the corruption that was to follow in the expenses scandal and much else besides – to the spotless record of Militant and the Socialist Party, whenever we have been elected to public positions either as MPs or trade union officials. The late Terry Fields, Dave Nellist and the late Pat Wall, when they were elected to Parliament, were selflessly devoted to the working class and lived on a worker’s wage. Joe Higgins in the Irish Parliament acted likewise.

Some, even on the left, after New Labour come to power, saw the clash between the Blair-Mandelson axis and Deputy Prime Minister John Prescott and the ‘Brownies’ as a left-right division. It was not. It had more of the character of a struggle for influence and power within the apparatus. Sometimes, this can indirectly reflect class pressures but not in this case. So removed from reality was the discussion within New Labour that Charlie Whelan, then Brown’s spin doctor press secretary, was presented in the press and by his friends, such as the Daily Mirror journalist Paul Routledge, as a ‘lefty’ bruiser and a ‘progressive’. He was nothing of the kind. He was a fixer for the right wing in the engineering union (AeeU) before joining Brown’s office. He delivered the votes of right-wing unions for the Blair ‘modernisation project’, including the dilution of trade union influence within the Labour Party.

This situation gave a certain space to Prescott, who called for a return to ‘Labour fundamentals’, thereby resurrecting the ghosts of ‘old Labour’, and for ‘Keynesian’ measures and state intervention. His very mild statements produced near panic in the capitalist press and New Labour ranks. More serious capitalist commentators were clear that this was no traditional left-right split. Blair’s strength, Andrew Rawnsley in the Observer commented, lay in the fact that “there was no united body of colleagues offering a coherently argued alternative to Blairism. Is anyone calling for the nationalisation of the commanding heights of the economy and pip-squeaking hikes in income tax? Not out loud, they are not. Not in whispers either. John Prescott knows they were not elected on that programme. Gordon Brown will be at one with Mr Blair in agreeing that they would not have been elected on that programme.”2

While all this was going on Blair had been in the Seychelles. As soon as he landed in Britain, he vindicated Rawnsley’s analysis by declaring: “Labour as a party is now more ideologically united than at any time I’ve known it.” Despite Prescott’s endorsement of Brown’s alleged Keynesianism, he had pursued the opposite agenda – much to the annoyance of real Keynesians, like Will Hutton of the Observer. Hutton pointed out that Brown’s policies were an unhappy “mishmash” incorporating some of the Conservatives’ economic policies.

To underline the point Sir Clive Thompson, the head of Rentokil Initial, a viciously anti-union firm, declared at the CBI conference in November 1998: “Labour is now the sort of centre right party for which I would consider voting.” The capitalists clearly recognised that the former social democratic leaders had abandoned socialism and were prostrating themselves before the ‘market’, i.e. capitalism. This was summed up at the meeting of European ‘socialist’ leaders. The then French finance minister Dominique Strauss-Kahn – who fell from grace after his involvement in sex scandals years later – declared: “Gone are the days when Margaret Thatcher’s Britain and François Mitterrand’s France were implementing almost entirely opposite policies.”3 Now the former social democrats were just implementing Thatcher’s policies in a disguised fashion. The attacks on welfare  recipients and the catastrophe in the NHS  had all produced huge discontent faintly echoed even within Blair’s sanitised New Labour. Official figures indicated a haemorrhaging of Labour Party members. The resignation of Paddy Ashdown as leader of the Liberal Democrats, to take effect after the June 1999 European elections, meant that the proposed Blair-Ashdown ‘project’ – with pR at its heart – was now effectively put on ice. In December 1998, Blair had gone further than the suggestion of a Lib Dem-Labour coalition: “My vision through New Labour is to become as the Liberal Party was in the 19th century, a broad coalition of those who believe in progress and justice, not a narrow class based politics, but a party founded on clear values.” He went on: “The ideological differences between me and many of the Liberal Democrats are pretty small.”4 Philip Gould New Labour’s ‘philosopher’ in Blair’s court camarilla had declared in his book The Unfinished Revolution: “The better course would be for liberalism and labourism to unite.”5

The division between the Liberals and the Labour Party was historically rooted in the incapacity of the liberal capitalist parties to solve the problems of the working class. This was why the Labour Party was created in the first place, at the expense of the Liberal Party, particularly by winning over Lib-Lab workers. Blair had already involved the Lib Dem leadership in a government committee and was considering attaching civil servants to help them ‘develop government policy’. He also proposed that they would have greater access to ‘confidential government papers’. In other words the Lib Dems were already in a de facto coalition with Labour and the Tory ‘wets’. Michael Heseltine and Ken Clarke were being courted with appointments to government ventures such as the Millennium Dome and ‘export promotion’ organisations. This virtual political fusion between the Blairites, ‘liberal’ Tories and the Lib Dems themselves, even if a programme of cuts in public expenditure was to take place similar to 1931, would not have provoked anything like the same response within the Labour Party at that stage. In view of this the best workers and youth were looking for a socialist alternative and the Socialist Party offered such an alternative.

Meanwhile, Brown was boasting that the economy under his supervision would be able to avoid a recession in 1999. Two days later, the official figures showed manufacturing industry was in a worse position than in 1981, a time of severe economic contraction when millions were made redundant and the unemployment level stood at over three million. Some important manufacturing companies were threatened with going to the wall. Stephen Byers, the newly appointed Trade and Industry Minister, explained that the government’s role was not to “hinder entrepreneurs, but to work to ensure the market functions properly. There can be no return to the outdated interventionism of the old left… The corporate state did not work.”6 A more explicit repudiation of everything that Labour had stood for in the past was not possible. Notwithstanding Byers’s lack of intervention, the economic storm clouds were gathering and threatened even industrial giants such as BMW, particularly the Rover Longbridge factory. Therefore, Byers rushed to offer government aid. Despite this, the new chairman of BMW refused to confirm that the Longbridge plant would be kept open.

The jobs of thousands of car workers were at stake. Yet the government rejected the only policy which offered some kind of solution, public ownership. We pointed out that, as the world economy was heading for a downturn, there was massive overcapacity in the global car industry, which was leading to pressure from mergers, predatory buyouts and job cutting ‘rationalisations’. On the other hand, public ownership would preserve the creative skills of the Rover workforce. Managed by elected representatives of the car workers and other unions, together with the wider community, the publicly owned Rover could begin an audit of society’s real transport needs. This would not be Byers’s ‘corporate state’ but socialist nationalisation and working class control and management. The revolt against New Labour’s preparedness to abandon car making at Longbridge had resulted in a revolt of Rover car workers the previous year. This pressure later forced the management to step back a savage retrenchment of jobs but it was an indication of the parlous economic situation Britain was in at this stage.