Who really influences new Labour?

Mark Watts and <strong>Rob Evans</strong> find that lobbying by the US embassy gets results

Have you ever wondered why new Labour seems, on some issues, so indifferent to consumer opinion? It is, after all, normally sensitive to a fault about the reactions of Middle England and the Daily Mail. Yet Tony Blair has declared that genetically modified crops could produce "more nutritious and better-tasting food". New Labour has also argued against the European Union ban on hormone-treated beef.

Is it possible that the government has decided that somebody else's opinions and interests should have an even higher priority than those of the Middle England consumer? The answers may lie in a batch of documents that you are not supposed to know about, produced at the US embassy in London.

They date back to the period before the 1997 general election, when US embassy officials compiled a "strategic commercial plan". Its aim was to "assure positive impact of potential Labour government on US trade and investment by cultivating policy-makers to bring them closer to US point of view on major trade issues". Nothing wrong in that: every country tries to promote its business by lobbying policy-makers in other nations. But the US plan does seem to have been remarkably successful, to an extent that those lobbying firms that came to the surface in last year's Drapergate scandal might well envy.

The embassy's paper said that Britain was not only a "principal market" for American exports, it was also a "commercial gateway" and a "launch-pad" for other markets, especially in the rest of Europe. The paper said that it wanted Britain to stop the EU introducing tough restrictions on GM products. The plan, it said, was to "urge HMG to support actively within the EU policies that will lead to open, transparent access for agricultural goods produced by the US-approved genetically engineered methods". America would urge Britain to support the "elimination" of the EU ban on US hormone-treated beef.

On GM foods, the US government's lobbying achieved its aim when Blair decided to brush aside consumer hostility and allow the development of GM crops. US officials are also delighted with British support over American hormone-treated beef. Britain, along with Spain and the Netherlands, is in a minority in the EU against the ban on hormone-treated beef. A diplomatic cable from the US embassy in Bonn said that Nick Brown, the Agriculture Minister, at a meeting in Germany in January, gave private advice to his American opposite number, Dan Glickman, on how to beat it. The trick, Brown said, was not only to lobby the agriculture ministers, who represent producers' interests, but also the trade and finance ministers, who speak for consumers and taxpayers. Brown, according to the cable, said that other European countries would have to "come around" to support America over hormone-treated beef.

The agriculture ministry denied that Brown had taken "anybody's side" during his discussion with Glickman. It also denied that the US government had browbeaten Britain into accepting GM crops. A spokesman said: "We have our own regulatory system, which we use to approve, or otherwise, all GM food. The US government can make any representations it likes, but we will still go by our own systems. The US government had no influence whatsoever on our GM policy."

Charles Secrett, director of Friends of the Earth, was sceptical about this defence. He said: "No one has been able to work out why Tony Blair is ignoring public opinion in his rush for GM food. This shows the explanation is Britain's continuing subservient relationship with the United States. Bill Clinton matters more to new Labour than British consumers."

It is not only on agricultural issues that US government lobbying has proved successful. In December 1997, the government blocked new gas-fired power stations, in order to promote the use of coal, and announced an energy review. Six months later it proposed a "stricter consents policy", under which such plants would not normally be built.

A US embassy report said: "Many US companies that recently invested in the regional electricity companies are awaiting final permits to turn on gas . . . Millions of dollars of investment are tied up." The US commerce secretary, William Daley, telephoned Margaret Beckett, then the trade secretary, while two senior embassy officials met one of her top aides "to advocate on [behalf] of several US companies".

What happened? The British government granted permission for American companies to build three new gas-fired power stations, including final approval last December for a 750MW gas-fired power station at Coryton, in Essex, to be built by Intergen, a joint venture between the US construction firm Bechtel and Shell. The government said it was because of "unique circumstances and their impact on the interests of the developer", apparently a reference to supply contracts that Intergen had already signed.

The US embassy lobbies vigorously on all sorts of things. For example, it lobbied on a Ministry of Defence project to provide secure communications for the armed services. An initial $32 million contract went to a US-British joint venture in which an American company is the biggest partner. Now it is lobbying for a contract to build Heathrow's fifth terminal and for greater access for American airlines.

Our embassies abroad lobby in a similar fashion. We must hope that their success rate is as high as that of the US embassy.

Mark Watts is the chief investigative reporter for "Sunday Business"