A deal that shames Blair

Observations on fraud investigation

The story of how, in 2001, Tony Blair came to approve the sale of an outdated and overpriced military radar system to an impoverished African country is a dark chapter in new Labour's story. When it emerged last month that the deal is being investigated by the Serious Fraud Office for alleged impropriety, we the Tories were determined to shine a spotlight on the affair and pushed for an opposition day debate.

Which is why in the Commons at the end of January you saw the normally loyal International Development Secretary, Hilary Benn, a decent member of this government, squirming with embarrassment as he was forced to defend the Prime Minister's decision to permit a deal he knew to be rotten. After he had spoken, his former boss Clare Short rose to condemn a deal she had opposed tooth and nail at the time.

In 2001, the Prime Minister was asked to consider granting export licences for the sale to Tanzania of an air traffic control system. The system cost £28m and the heavily indebted Tanzanian government took on more debt to secure it. The International Civil Aviation Organisation had said that the system was "not adequate and too expensive for civil purposes", while the International Monetary Fund said it was concerned about the impact of the purchase on Tanzania's debt burden. The World Bank was also opposed, arguing that the system was outdated, and that a satisfactory alternative could be secured for a fraction of the price.

In Tanzania, opposition was widespread. In 2001, more than half the population lived in severe poverty. Life expectancy was 45 years. Primary-school enrolment was 67 per cent. Some two million people were living with HIV/Aids. According to Oxfam, £28m could have provided basic healthcare for two million people, or education for 3.5 million children.

In Britain, a wide spectrum of development organisations was opposed. Oxfam said the deal was "outrageous" and "a complete waste of money". Clare Short, the then international development secretary, said the deal "stank" and would damage Tanzania's development. Now we know that Hilary Benn also opposed the deal. Yet, despite the opposition of the most informed observers, the licences were approved at the end of 2001, forced through by Tony Blair.

Last year the SFO started investigating the deal for alleged corruption. On 15 January this year, it was reported that some $12m (£6m) of the £28m total cost of the project had been secretly paid into the Swiss bank account of an agent with connections to senior military and government officials in Tanzania.

These revelations raise serious questions about the depth of the scrutiny that was given to the deal when it was considered and the wisdom of the government in making that decision. It is astonishing that the government concluded that spending £28m, over a quarter of the value of UK aid to Tanzania, on an outdated and unsuitable radar system, did not contradict its own guidelines.

Such events threaten to undermine public support for overseas aid. Governments cannot simultaneously negotiate debt relief while allowing poor countries to saddle their citizens with illegitimate debt. Nor should this government sign high-minded, anti-corruption declarations in international forums while sanctioning questionable deals in No 10.

Months before approving the deal, the Prime Minister said Africa was a "scar on the conscience of the world". I don't doubt his sincerity in wanting to reduce poverty. But when Blair reflects on his premiership from the comfort of retirement, the Tanzania radar saga will be a scar on his conscience.

Andrew Mitchell MP is shadow secretary of state for international development

This article first appeared in the 12 February 2007 issue of the New Statesman, Sunni v Shia

David Young
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The Tories are the zombie party: with an ageing, falling membership, still they stagger on to victory

One Labour MP in Brighton spotted a baby in a red Babygro and said to me: “There’s our next [Labour] prime minister.”

All football clubs have “ultras” – and, increasingly, political parties do, too: although, in the case of political parties, their loudest and angriest supporters are mostly found on the internet. The SNP got there first: in the early days of email, journalists at the Scotsman used to receive bilious missives complaining about its coverage – or, on occasion, lack of coverage – of what the Scottish National Party was up to. The rest soon followed, with Ukip, the Labour Party and even the crushed Liberal Democrats now boasting a furious electronic horde.

The exception is the Conservative Party. Britain’s table-topping team might have its first majority in 18 years and is widely expected in Westminster to remain in power for another decade. But it doesn’t have any fans. The party’s conference in Manchester, like Labour’s in Brighton, will be full to bursting. But where the Labour shindig is chock-full of members, trade unionists and hangers-on from the charitable sector, the Conservative gathering is a more corporate affair: at the fringes I attended last year, lobbyists outnumbered members by four to one. At one, the journalist Peter Oborne demanded to know how many people in the room were party members. It was standing room only – but just four people put their hands up.

During Grant Shapps’s stint at Conservative headquarters, serious attempts were made to revive membership. Shapps, a figure who is underrated because of his online blunders, and his co-chair Andrew Feldman were able to reverse some of the decline, but they were running just to stand still. Some of the biggest increases in membership came in urban centres where the Tories are not in contention to win a seat.

All this made the 2015 election win the triumph of a husk. A party with a membership in long-term and perhaps irreversible decline, which in many seats had no activists at all, delivered crushing defeats to its opponents across England and Wales.

Like José Mourinho’s sides, which, he once boasted, won “without the ball”, the Conservatives won without members. In Cumbria the party had no ground campaign and two paper candidates. But letters written by the Defence Secretary, Michael Fallon, were posted to every household where someone was employed making Trident submarines, warning that their jobs would be under threat under a Labour government. This helped the Tories come close to taking out both Labour MPs, John Woodcock in Barrow and Furness and Jamie Reed in Copeland. It was no small feat: Labour has held Barrow since 1992 and has won Copeland at every election it has fought.

The Tories have become the zombies of British politics: still moving though dead from the neck down. And not only moving, but thriving. One Labour MP in Brighton spotted a baby in a red Babygro and said to me: “There’s our next [Labour] prime minister.” His Conservative counterparts also believe that their rivals are out of power for at least a decade.

Yet there are more threats to the zombie Tories than commonly believed. The European referendum will cause endless trouble for their whips over the coming years. And for all there’s a spring in the Conservative step at the moment, the party has a majority of only 12 in the Commons. Parliamentary defeats could easily become commonplace. But now that Labour has elected Jeremy Corbyn – either a more consensual or a more chaotic leader than his predecessors, depending on your perspective – division within parties will become a feature, rather than a quirk, at Westminster. There will be “splits” aplenty on both sides of the House.

The bigger threat to Tory hegemony is the spending cuts to come, and the still vulnerable state of the British economy. In the last parliament, George Osborne’s cuts fell predominantly on the poorest and those working in the public sector. They were accompanied by an extravagant outlay to affluent retirees. As my colleague Helen Lewis wrote last week, over the next five years, cuts will fall on the sharp-elbowed middle classes, not just the vulnerable. Reductions in tax credits, so popular among voters in the abstract, may prove just as toxic as the poll tax and the abolition of the 10p bottom income-tax rate – both of which were popular until they were actually implemented.

Added to that, the British economy has what the economist Stephen King calls “the Titanic problem”: a surplus of icebergs, a deficit of lifeboats. Many of the levers used by Gordon Brown and Mervyn King in the last recession are not available to David Cameron and the chief of the Bank of England, Mark Carney: debt-funded fiscal stimulus is off the table because the public finances are already in the red. Interest rates are already at rock bottom.

Yet against that grim backdrop, the Conservatives retain the two trump cards that allowed them to win in May: questions about Labour’s economic competence, and the personal allure of David Cameron. The public is still convinced that the cuts are the result of “the mess” left by Labour, however unfair that charge may be. If a second crisis strikes, it could still be the Tories who feel the benefit, if they can convince voters that the poor state of the finances is still the result of New Labour excess rather than Cameroon failure.

As for Cameron, in 2015 it was his lead over Ed Miliband as Britons’ preferred prime minister that helped the Conservatives over the line. This time, it is his withdrawal from politics which could hand the Tories a victory even if the economy tanks or cuts become widely unpopular. He could absorb the hatred for the failures and the U-turns, and then hand over to a fresher face. Nicky Morgan or a Sajid Javid, say, could yet repeat John Major’s trick in 1992, breathing life into a seemingly doomed Conservative project. For Labour, the Tory zombie remains frustratingly lively. 

Stephen Bush is editor of the Staggers, the New Statesman’s political blog.

This article first appeared in the 01 October 2015 issue of the New Statesman, The Tory tide