Here we go again

The Tories will face prolonged embarrassment and questioning about their funders following the Derip

Can it really be the case that Peter Mandelson has finally turned his love of the high life to the political advantage of the Labour Party? As the shadow chancellor, George Osborne, struggles to extricate himself from the swirling allegations made by the scion of an international banking dynasty, involving party fundraising and a Russian aluminium oligarch, it is tempting to think so.

Lord Mandelson is like a political cluster bomb. Since he arrived back in Britain less than a month ago he has shown that he has lost none of his ability to attract the most explosive controversy. But his years in Brussels appear to have brought a new edge. With previous scandals, over his home loan from the then Labour paymaster general, Geoffrey Robinson, or his troubled relationship with the Indian billionaires the Hinduja brothers, he was content to bring only his own party into disrepute. This time his activities look set to drag in the opposition as well.

The label of “novice”, waved by Gordon Brown in his enemies’ direction at the Labour conference in Manchester, now weighs heavily around George Osborne’s neck. He is starting to discover that when you mix it in the big playground, the older boys can play rough. It is one thing picking off Gordon Brown when he is isolated; it is quite another when Big Brothers Mandelson, Alastair Campbell and John Prescott have turned up.

From the moment “sources” spilled the beans about a private conversation between Osborne and Mandelson at a dinner hosted in Corfu by the financier Nathaniel Rothschild, the shadow chancellor found himself in a potentially dangerous position. He chose to let the story run that Mandelson had “dripped poison” in his ear about Brown. This was a high-risk strategy – because, at this point, Osborne knew very well that while he himself was in Corfu he had taken the Tories’ chief fundraiser, Andrew Feldman, to meet the Russian aluminium tycoon Oleg Deripaska on board his yacht. Is it credible that Osborne took him along to make a social call to Deripaska? Of course it’s always possible.

This raises worrying questions about his judgement. Feldman now appears to be unclear as to whether a suggestion was made at any point that it might be possible for Deripaska to make a donation through a British company.

“What the public are entitled to know,” said Feldman, “is whether we accept donations and whether we explain to people exactly how to make a legal donation.” Osborne has failed to deny that such discussions took place, assserting only that no donation was solicited and none was given. At the time of writing there was no suggestion that the Conservative Party broke the rules in this case or that they intended to. Deripaska never made a donation. But it certainly attracts attention to donations that have been made to the Conservative Party during the David Cameron era, when the party has operated at the very fringes of what is permitted. Antony Barnett, of Channel 4’s Dispatches, recently revealed details of the cash the Tories had received from City hedge -fund managers who had profited from the economic crash, and asked whether Cameron was being entirely open with the British public about his party’s sources of funding.

There remain several outstanding questions in the light of the Deripaska affair. The Political Parties, Elections and Referendums Act 2000 was introduced to end foreign donations to British political parties. It is, therefore, perfectly legitimate to ask whether the Conservative Party is now following the spirit of the law in receiving these donations. How about the £50,000 donation from Venson Automotive Solutions Ltd, accepted on 20 September last year?

Venson is owned by the Irish businessman Dermot Desmond, also the single largest shareholder at Celtic Football Club, who is listed as worth $2.5bn by Forbes this year. Venson is a British company, so no rules have been broken. But as an Irishman, Desmond is a foreigner and his company made a donation to the Conservative Party. Is it a foreign donation? Strictly speaking, no it is not. Was this the model suggested to Deripaska? Who knows? As transparency in politics is something Cameron’s Conservatives are keen to promote, it would be interesting to clarify this. The Liberal Democrat leader Nick Clegg put it best when he said: “What does strike people is the slight whiff of hypocrisy about the Conservatives talking about the new politics, turning a new page, turning their back on the old ways of politics, and yet still going around, it’s alleged, with a begging bowl to the rich and famous around the world.”

In this case, how do they explain the donation of £50,000 from 22 January this year made by Australian mining magnate Robert Champion de Crespigny, or the £50,000 from the German Andreas Heeschen, who owns the firearms manufacturer Heckler & Koch, made in May 2007?

Again, the law has not been broken in either case. This is because both Heeschen and de Crespigny are on the UK electoral register. As such they are, strictly speaking, able to donate to British political parties. But would they describe themselves as British? All this money was brought in by Feldman, who has been a brilliant fundraiser for the Conservative Party.

Will the British public be persuaded by Mandelson’s assurances that Chinese walls were strictly respected during his own conversations with Deripaska when he was European trade commissioner? Helpfully, we have the testimony of Benjamin Wegg-Prosser, Mandelson’s former aide, who now works in Russia himself. Writing on his blog, Wegg-Prosser described a visit by the trade commissioner to his “dacha”, followed by a dinner with Deripaska. He reported fierce arguments over the World Trade Organisation and Russian tariffs on Finnish timber imports. “Their friendship was founded on these sort of jousts and arguments,” wrote Mandelson’s close political ally. Perhaps he thought he was being helpful, but this is precisely the sort of conversation the EU commissioner should have been avoiding. There is no obvious conflict of interest here, but some would argue that an EU commissioner should never have put himself in this potentially compromising position.

There is genuine delight on the Labour benches at Osborne’s embarrassment at the hands of his old university friend Rothschild. But when the dust settles over the claim and counterclaim surrounding the events in Corfu last summer, the Labour Party will have to assess whether it really has fallen in love with Mandelson, as Tony Blair once suggested it must. He has certainly brought a vibrancy to the government. But it is a difficult call for Brown, who would never be seen on the yacht of a Russian oligarch. In his Presbyterian universe, such behaviour is best left to the Tories.

Back in Westminster, the Prime Minister should be pleased at the way his party has rallied behind him at this time of crisis. One backbencher previously hostile to Brown said: “Gordon looks 20 years younger and has been really commanding in the House. He is a different man.” Cabinet ministers are talking enthusiastically about the National Economic Council, the group of 19 ministers and civil servants set up to tackle the economic crisis.

At first ridiculed for its unwieldy size, the NEC, which meets twice a week, is now being hailed as one of the Prime Minister’s most important innovations. In particular, ministers are said to be delighted that their proposals are being acted on by civil servants within days rather than months. Already proposals on increasing the speed at which small businesses will be paid have emerged from the Council’s deliberations. Ministers have been instructed to work on contingency plans in their own areas and further announcements on housing, regeneration and training will be made in the next few weeks.

It is also significant that Dan Corry has been moved to lead the group of specialist advisers to the committee from his previous job as head of the Downing Street policy unit. Corry, a special adviser from the Blair era with a Treasury and DTI background, is widely respected across Whitehall and is seen as a non-sectarian figure.

The polling remains dismal for Labour, though. The government’s electoral recovery is slipping despite admiration for Brown’s handling of the crisis within the Westminster village. The latest Guardian/ICM poll had the Conservatives on 42 per cent and Labour on 30 – a 12-point gap, which remains unchanged from the same poll a month ago.

As we move towards this winter’s pre-Budget report, the thoughts of Labour backbenchers will turn once more to the package the Chancellor has prepared to compensate their constituents for the abolition of the 10p tax rate and measures to protect people against the ravages of the credit crunch. As the rebel MP Frank Field has noted, there is plenty of scope for critics of the Prime Minister to regroup if the measures are not seen to be adequate.

The challenge for Brown in the months to come will not be persuading the Labour Party to embrace Peter Mandelson and his unsavoury Eurotrash friends. It will be to embrace the Labour Party and engage with the genuine fears of working people and the businesses that employ them as the country enters recession.

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Erdogan’s purge was too big and too organised to be a mere reaction to the failed coup

There is a specific word for the melancholy of Istanbul. The city is suffering a mighty bout of something like hüzün at the moment. 

Even at the worst of times Istanbul is a beautiful city, and the Bosphorus is a remarkable stretch of sea. Turks get very irritated if you call it a river. They are right. The Bosphorus has a life and energy that a river could never equal. Spend five minutes watching the Bosphorus and you can understand why Orhan Pamuk, Turkey’s Nobel laureate for literature, became fixated by it as he grew up, tracking the movements of the ocean-going vessels, the warships and the freighters as they steamed between Asia and Europe.

I went to an Ottoman palace on the Asian side of the Bosphorus, waiting to interview the former prime minister Ahmet Davu­toglu. He was pushed out of office two months ago by President Recep Tayyip Erdogan when he appeared to be too wedded to the clauses in the Turkish constitution which say that the prime minister is the head of government and the president is a ceremonial head of state. Erdogan was happy with that when he was prime minister. But now he’s president, he wants to change the constitution. If Erdogan can win the vote in parliament he will, in effect, be rubber-stamping the reality he has created since he became president. In the days since the attempted coup, no one has had any doubt about who is the power in the land.


City of melancholy

The view from the Ottoman palace was magnificent. Beneath a luscious, pine-shaded garden an oil tanker plied its way towards the Black Sea. Small ferries dodged across the sea lanes. It was not, I hasten to add, Davutoglu’s private residence. It had just been borrowed, for the backdrop. But it reminded a Turkish friend of something she had heard once from the AKP, Erdogan’s ruling party: that they would not rest until they were living in the apartments with balconies and gardens overlooking the Bosphorus that had always been the preserve of the secular elite they wanted to replace.

Pamuk also writes about hüzün, the melancholy that afflicts the citizens of Istanbul. It comes, he says, from the city’s history and its decline, the foghorns on the Bosphorus, from tumbledown walls that have been ruins since the fall of the Byzantine empire, unemployed men in tea houses, covered women waiting for buses that never come, pelting rain and dark evenings: the city’s whole fabric and all the lives within it. “My starting point,” Pamuk wrote, “was the emotion that a child might feel while looking through a steamy window.”

Istanbul is suffering a mighty bout of something like hüzün at the moment. In Pamuk’s work the citizens of Istanbul take a perverse pride in hüzün. No one in Istanbul, or elsewhere in Turkey, can draw comfort from what is happening now. Erdogan’s opponents wonder what kind of future they can have in his Turkey. I think I sensed it, too, in the triumphalist crowds of Erdogan supporters that have been gathering day after day since the coup was defeated.


Down with the generals

Erdogan’s opponents are not downcast because the coup failed; a big reason why it did was that it had no public support. Turks know way too much about the authoritarian ways of military rule to want it back. The melancholy is because Erdogan is using the coup to entrench himself even more deeply in power. The purge looks too far-reaching, too organised and too big to have been a quick reaction to the attempt on his power. Instead it seems to be a plan that was waiting to be used.

Turkey is a deeply unhappy country. It is hard to imagine now, but when the Arab uprisings happened in 2011 it seemed to be a model for the Middle East. It had elections and an economy that worked and grew. When I asked Davutoglu around that time whether there would be a new Ottoman sphere of influence for the 21st century, he smiled modestly, denied any such ambition and went on to explain that the 2011 uprisings were the true succession to the Ottoman empire. A century of European, and then American, domination was ending. It had been a false start in Middle Eastern history. Now it was back on track. The people of the region were deciding their futures, and perhaps Turkey would have a role, almost like a big brother.

Turkey’s position – straddling east and west, facing Europe and Asia – is the key to its history and its future. It could be, should be, a rock of stability in a desperately un­stable part of the world. But it isn’t, and that is a problem for all of us.


Contagion of war

The coup did not come out of a clear sky. Turkey was in deep crisis before the attempt was made. Part of the problem has come from Erdogan’s divisive policies. He has led the AKP to successive election victories since it first won in 2002. But the policies of his governments have not been inclusive. As long as his supporters are happy, the president seems unconcerned about the resentment and opposition he is generating on the other side of politics.

Perhaps that was inevitable. His mission, as a political Islamist, was to change the country, to end the power of secular elites, including the army, which had been dominant since Mustafa Kemal Atatürk created modern Turkey after the collapse of the Ottoman empire. And there is also the influence of chaos and war in the Middle East. Turkey has borders with Iraq and Syria, and is deeply involved in their wars. The borders do not stop the contagion of violence. Hundreds of people have died in the past year in bomb attacks in Turkish cities, some carried out by the jihadists of so-called Islamic State, and some sent by Kurdish separatists working under the PKK.

It is a horrible mix. Erdogan might be able to deal with it better if he had used the attempted coup to try to unite Turkey. All the parliamentary parties condemned it. But instead, he has turned the power of the state against his opponents. More rough times lie ahead.

Jeremy Bowen is the BBC’s Middle East editor. He tweets @bowenbbc

This article first appeared in the 28 July 2016 issue of the New Statesman, Summer Double Issue