Breaking point

As the donation saga rumbles on, frustrated MPs tell our political editor, Martin Bright, that they

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At the latest meeting of the Parliamentary Labour Party, an old soldier urged the utmost discipline on younger MPs, saying that if they thought this was a crisis, they simply hadn't lived. Sounding every bit the haunted veteran who had seen action in the trenches of the 1970s and 1980s, Gerald Kaufman said the present difficulties were nothing compared to the proper catastrophes he had witnessed: the 1976 IMF crisis, or the 1983 election manifesto, for which Kaufman himself had coined the phrase "the longest suicide note in history".

His choice of examples from history was revealing. Kaufman did not say that the crisis over donations from the businessman David Abrahams did not compare to, say, the seriousness of the Ecclestone affair, when the party had to give back £1m donated by the Formula One boss. Nor did he mention the Hinduja brothers' donation that led to the second resignation of Peter Mandelson. Nor did he raise the more recent spectre of "cash for honours". The implication was that what is happening now is worse than anything encountered under Tony Blair's premiership. Invoking the era of Callaghan and Foot, Kaufman's attempts to calm nerves had the opposite effect. It was small comfort to hear that things weren't quite as dark as in Labour's darkest days.

It is no surprise in the circumstances that many backbenchers are beginning to feel betrayed by Gordon Brown's promises of change. "Betrayal" has always been a particularly dangerous word on the left. Blair was accused of treachery because he was seen to have traded principle for electoral success. Brown will be a traitor twice over if he is judged not able to deliver either.

In fact, in somewhat biblical fashion, some MPs fear that Brown may have betrayed Labour thrice. First, he promised that a "government of all the talents" would not lead to appointing ministers from other political parties. It transpired that he offered jobs to Liberal Democrats, including a cabinet post to Paddy Ashdown. Second, he excised the final vestiges of power from Labour party conference by ending the practice of tabling "contemporary motions", often critical of government. Third, he appeared on the steps of 10 Downing Street with the party's ghastly nemesis, Margaret Thatcher.

Doubts are also raised about his promise to change new Labour's style of government. As one furious anti-Blair backbencher told me: "With Blair you had a ruling clique who pretended to listen; with Brown you have a ruling clique who think they own the party and don't even pretend to listen." The Glasgow MP John Robertson made the boldest intervention at the PLP meeting by asking the Prime Minister to prove that his government had become genuinely inclusive and was willing to listen to voices from outside his inner circle.

Such concerns have been magnified by rumours that Brown is showing all the worst characteristics of a moody boss in his treatment of junior staff around Downing Street. At first I thought this was classic black propaganda, but I have since heard that he applies the same "robust" approach to his ministers, who are routinely woken at 6am to take his calls.

Hollow pledge

Brown may be forced into a more open approach because his inner clique is not as unassailable as it once was. While the Young Turks have been damaged by recent events, particularly their efforts to bounce him into a snap election, the self-styled greybeards such as Alistair Darling and Des Browne have lurched from one departmental crisis to the next.

Now the PM has vowed to reform party funding once and for all. But, after ten years of Labour trying, this latest pledge rings a little hollow. I would like to believe it, but my experience over the past few days does not fill me with hope. A week ago, while officials were still claiming that Abrahams was unknown to senior figures, I was told the eccentric businessman was a regular at fundraising gala dinners and had possibly attended party conferences in his capacity as a high-value donor. Labour later grudgingly confirmed that it believed he had indeed attended a dinner and a party conference, but could provide no further detail. Finally, a week later, a statement arrived. "David Abrahams has attended gala dinners and party conferences in the past. We are not commenting any further as there is an ongoing police inquiry into these matters." Suddenly the attendances had become plural.

It is, of course, nonsense that the party can't give details of Abrahams's attendance at functions because of a potential criminal investigation, unless it has suddenly become an offence to attend a gala dinner or political conference. On 4 December his spokesman said: "The truth is that he's attended lots and lots." If he did attend "lots and lots" of Labour events involving the elite of the party, what access did he get to ministers and senior officials, and why did none of them think to check who he was? The party is still a long way from full disclosure on this matter.

The Commons debate into party funding that followed the Abrahams saga showed that while the Tories are happy to crow, they remain in denial about their own funding arrangements. Francis Maude provided a good warning of what a Conservative government would look like as he repeatedly refused to give a straight answer about the domicile status of his party's deputy chairman and major donor Lord Ashcroft.

I suggested to one minister that the real lesson of all this was that it showed the full scale of the Tory recovery. For the first time in a decade, the opposition had become a finely honed fighting machine. He sighed before saying: "And how!" Although much of the credit for the story must go to the Mail on Sunday for some impressive dirt-digging journalism, there is no doubt the research department within the Conservative Party played a crucial role. A young Cambridge graduate called Richard Hardyment, one of a two-man "dirty tricks" team in the Tories' political department, has become an instant Tory hero. It was he who filed the original Freedom of Information request to the Highways Agency that exposed the involvement of Raymond Ruddick and Janet Kidd, both employees of Abrahams, through correspondence about an application to build a business park near Durham. The sorry tale of Abrahams's use of proxies unravelled from there.

I am told the Tory research department has acquired a new edge since it was taken over by James O'Shaughnessy, who was brought in from the centre-right think tank Policy Exchange to sharpen up operations. At the time, the NS reported that this young wonk was expected to develop the crucial link between policy and research on one side and the press operation on the other. This has borne fruit more quickly than the Tories could have imagined. As one apparatchik told me: "The walls between research and press have completely broken down and we're all working together now. There is a real hunger to get [the Labour Party] out of power."

Natural justice

Let me make it clear: there is no doubt in my mind that Gordon Brown believes passionately in the core left-liberal principles of equality, social justice and opportunity for all. Despite all the vitriol thrown at him by the hostile media over the past weeks this remains the case, more than it ever was for Blair and more than it ever will be for David Cameron. Brown is still the politician most likely to deliver the fruits of those principles, even after the "election that never was". That is why he retains the support of his party. As he told a still loyal, if sorely tested, PLP, their great movement is still "for the many not the few" and the Conservative Party is not. This doughty statement of values has just enough life left in it to rally the troops.

And yet doubts are creeping in about just how committed Brown is to equality in practice rather than theory. The Commons Treasury select committee has criticised the government for pulling back from its commitment to halve child poverty. A report from the think tank Policy Network suggests that growing inequality in the UK is due not to the effects of globalisation, but to political choices made by the government. Already some Labour MPs are questioning Brown's decision to oppose EU proposals to grant temporary and agency workers equal pay and conditions to permanent staff. On the face of it, this should be a no-brainer for a Labour prime minister, but, as I write, Brown is busy trying to organise a blocking minority including Germany, Poland, Malta and Ireland. As a defence, he is using the old Thatcherite canard that any check on the free market will necessarily lead to loss of jobs.

Words are no longer enough. Gordon Brown needs to prove he means what he says on equality. Perhaps he should also start listening to Labour MPs, whose loyalty is at breaking point, when they tell him he is wrong. Unlike his pre decessor, he could even recognise that sometimes, just sometimes, they might have a point.

This article appears in the 10 December 2007 issue of the New Statesman, How New Labour turned toxic