Politics
A strange conversation
Published 27 November 2006
A strange encounter with Tony Blair's friend, the Labour fundraiser Lord Levy, at a Guardian party
Cash for honours, loans for peerages, or just plain old-fashioned political shenanigans? Call it what you like, the Labour Party's ill-conceived scheme to raise a fighting-fund for last year's election campaign has already proved disastrous. Even before Deputy Assistant Commissioner John Yates of Scotland Yard presents his findings to the Crown Prosecution Service, the party is broke, its activists are demoralised and its future is uncertain.
Once more, Downing Street is telling us that the investigation is a waste of police time, and lawyers have been instructed to argue that the process has been compromised by leaks. This is rich, considering how prepared Downing Street has been to brief on the matter, initially to make light of it, but more lately to cry foul.
As events snowball, I am reminded of a strange conversation I had with Lord Levy, the Labour Party's chief fundraiser and the man at the centre of the affair. The exchange took place at this year's Labour Party conference during a reception hosted by the Guardian and Observer, where Levy took it upon himself to act as an unofficial "meeter and greeter".
Levy and I started talking, particularly about a Channel 4 Dispatches documentary on the "cash for honours" affair which I had presented and had been broadcast that same night.
Levy was his legendary charming self. Disarmingly, he told me that his wife had watched the programme and found it very fair. I was delighted, but said there was one matter I felt I had to raise with him. What did he make of the general point I made in the programme: that the loans from wealthy party supporters were not intended as loans, but were to be converted into donations?
He gripped my arm like a long-lost friend and said, by way of answer: "Only some of them." I asked him what he meant and whether he could point to any specific loans. He volunteered the name of Lord Sainsbury, the billionaire former science minister who had lent the party £2m.
The point is that large donations, under this government's own legislation, had to be declared, but loans did not. So what exactly was Levy saying to me? Did he misunderstand my original question? That is possible, but he had gone on to give me an example. Was he joking? Again possibly, but it's an odd matter to joke about. Or was he merely expressing his hope that the loans would be converted into donations?
Small team
As the police investigation deepens, I have frequently had the impression that those at the centre of this scandal have not fully acknowledged the seriousness of the matter. Perhaps they are beginning to now.
A senior Labour source has told me that party officials now believe the loans scheme was dreamt up at a meeting attended by Blair and a tiny group of trusted loyalists: possibly just Levy; Jonathan Powell, the chief of staff at No 10; and the then party general secretary Matt Carter.
When the party's National Executive Committee first asked questions about the loans, the source says he was told: "Don't worry. They aren't really loans, they are donations."
Whether any of the lenders were apprised of this is another matter. Those who have given loans have made clear that they acted with complete propriety. Lord Sainsbury has always maintained that his £2m was a commercial loan, intended to be paid back. When I reported Levy's comments to Sainsbury, a spokesman said: "It's very clearly a loan that Lord Sainsbury gave. If he'd wanted to give a donation, then he would have given one. The reason he gave a loan was that he had recently given a large donation. It was a loan on commercial terms."
Hubris is a default position for ministers and has dominated the loans story from the outset. It is important to remember that it was Geoff Hoon's attitude to the original questions raised about the loans that led Scottish Nationalist MP Angus MacNeil to report the matter to the police. Perhaps if the then leader of the house had been a little more humble in his answers to SNP leader Alex Salmond in parliament on 9 March he might have saved his government a great deal of embarrassment.
But when Salmond said there was a "groundswell" for an investigation into loans for honours, Hoon harrumphed as only he knows how: "Clearly, my political antennae are not as well attuned as the honourable gentleman's. I have not detected a great groundswell."
Labour MPs insist that the loans question never comes up on the doorstep. This may be so, but the party now has so few activists to knock on doors that it is hard to see how they could know.
What is certain is that there is a "groundswell" of opinion among those who care about the Labour Party that the government is dangerously out-of-touch with the public mood.
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