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Labour’s intervention in Haringey shows the era of local Blairite stitch-ups is over

Council leaders must be more responsive to party members.

Media coverage has been bordering on feverish over the resignation of Claire Kober, Labour leader of Haringey Council in north London. Kober had backed a development vehicle opposed locally by Labour MPs and members, the Liberal Democrats and the Greens, as well as much of the community.

But after Labour’s ruling National Executive Committee made a unanimous request to suspend the project, 71 of the party’s 123 council leaders chose to attack this as “dangerous and alarming”, “uncomradely and disrespectful” and “an affront to the basic principles of democracy”. Why should this be, when the vision Jeremy Corbyn brought to Labour’s local government conference was so positive about the role councils could play under a transformative government?

Corbyn was, after all, a councillor (in Haringey as it happens) and represented council workers as a trade unionist. The 2017 general election manifesto promised devolution of powers, new forms of local taxation and powers to intervene in the local economy, shape town centres and build council houses. It was a far friendlier message than that brought to the conference 20 years ago by newly elected prime minister Tony Blair, who demanded big changes and “tough choices” on spending. If councils failed to modernise, “their powers could be given to businesses and voluntary organisations”, he said. Too many were apparently “mediocre” and their policies incoherent.

A leading Labour local government figure of the time tells me that Blair, in all his years  in office, met with the NEC representatives of the Local Government Association just four times and remained contemptuous and disrespectful towards the sector throughout his leadership. So why are Labour local government heads less enthusiastic now about a leader who values them? The answer lies in the settlement Blair made with council leaders, not unlike that between a feudal king and his nobility. He created strong council chiefs who, with the co-operation of the party’s regional offices, were able to ensure troublesome critics could be barred from selection, leaving leaders free to run their towns and cities as they chose. In return, they would provide their overlord with a loyal ground force, who could be relied upon to operate the local party machine and deliver the outcomes No 10 desired.

Councillors sign contracts, enforced by the leader’s whip, covering campaign activity, community and party engagement, surgeries, meeting attendance and specific responsibilities. If they behave themselves, they will be readmitted to the panel of candidates before the next election and perhaps promoted. If not, the whip will give them an unsatisfactory report. Agreements between council leaders and regional officers ensure applications for the panel, and appeals against exclusion, have the desired results. Sometimes a councillor’s “performance” is affected by caring responsibilities or disability. 

In 2013 in Haringey, Kober achieved her desired outcome because Luke Akehurst, secretary of Labour First – a network describing itself as the voice of “moderate party members”– and at that time a councillor in Hackney, chaired all the interviews for the panel with carefully chosen colleagues and excluded some applicants from the left.

In 2017, the left won control of the Haringey Local Campaign Forum – which oversees the selection process – so other methods were sought to shut out their applicants. As well as taking the step of having two separate assessment panels, Kober produced a dossier in her selection interview against other candidates. Of course, because of rules around negative campaigning, this wasn’t considered.

The Haringey Development Vehicle is the result of an ideology that views market forces as best-placed to solve society’s woes – in this case, sloshing libraries, schools, small businesses and thousands of homes into a £2bn private fund, then knocking most of them down. The scheme made no promise of any social housing. It feels like, in London at least, we’re witnessing a sea-change moment in attitudes to these monolithic, outsourced schemes designed to extract profit rather than serve local residents. In Southwark, the Labour council has called a halt to the controversial redevelopment of Elephant and Castle, while London mayor Sadiq Khan has said that City Hall funding for estate regeneration will be dependent upon balloting of local residents.

With local elections coming up, it is important to minimise any disruption. That is precisely why the NEC decided to intervene in Haringey. And while the committee had already discussed the disastrous collapse of Carillion – which may have pushed some people into stronger opposition to the proposals – it did not ask Haringey to change its view. The NEC merely said that if mediation proves unproductive, it “strongly advises that the process to agree the [development vehicle] is paused” (my emphasis), “and that contractual arrangements are not signed prior to May’s local elections, after which they should be reviewed”.

Labour’s selections process must be improved. Manipulated for political advantage by strong leaders with great powers of patronage, it disempowers the communities we’re meant to represent. If our party is to elect councillors who are true community organisers and will enact radical change on the ground, we have to make our council leaders more responsive, both to their fellow councillors and to party members. 

Jon Lansman is the founder of Momentum and a newly elected member of Labour’s National Executive Committee

This article was updated on 09 February to remove a reference to an exclusion from a selection panel.

This article first appeared in the 08 February 2018 issue of the New Statesman, The new age of rivalry

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Can Britain’s new powers to investigate unexplained wealth prevent real-life McMafias?

The government is waking up to the fact that global criminals are fond of London. 

The BBC’s McMafia, a story of high-flying Russian mobsters and international money launderers woven into the fabric of London, ended this month. Despite the dramatic TV twists, the subject matter has its basis in reality. As a barrister dealing with cases that involve Russia and former Soviet states, my experience is that politicians and business people use the apparatus of the state to put rivals out of business by any means possible.

In McMafia, previously straight-laced fund manager Alex Godman (played by James Norton) begins transferring money under the cover of a new investment fund. With a click of a button, he can transfer a shady partner’s money around the world. As the Paradise Papers underlined, money can indeed be hidden through the use of complex company structures registered in different countries, many of which do not easily disclose the names of owners and beneficiaries. One company can be owned by another, so the owner of Company A (in Panama) might be Company B (in the Cayman Islands) which is owned by Company C (in the Seychelles) which owns property in London. To find out who owns the property, at least three separate jurisdictions must be contacted and international co-operation arranged – and that’s a simple structure. Many companies will have multiple owners, making it even more difficult to work out who the actual beneficiary is.

I represent individuals before the UK extradition and immigration courts. They are bankers, business people and politicians who have fled persecution in Russia and Ukraine or face fabricated charges in their home country and face extradition or deportation and will often be tortured or put on show trial if we lose. Their opponents will deploy spies, who may pay visits to co-defendants in Russia for “psychological work” (aka torture). Sometimes the threat of torture or ruin against a person’s family is enough to make them confess to crimes they didn’t commit. I have seen family members of my clients issued with threats of explicit violence and the implicit destruction of their life. Outside their close relatives’ homes in Russia, cars have been set on fire. Violence and intimidation are part of the creed that permeates the country’s business and political rivalries.

As in McMafia, London has long played a bit part in these rivalries, but the UK government has been slow to act. In 2006, Alexander Litvinenko, a former Russian security agent turned defector, was killed in London using Polonium 210 – a radioactive substance put into a cup of tea. Although Russian state involvement was suspected from the beginning, the UK government tried to block certain material being released into the public domain, leading his family to complain that the UK’s relations with Russia were being put before the truth. In 2016, a decade after his death, the inquiry finally delivered its verdict: there was a “strong probability” Litvinenko was murdered on the personal orders of Vladimir Putin. Yet in the same breath as condemning the act, David Cameron’s spokeswoman said the UK would have to “weigh carefully” the incident against “the broader need to work with Russia on certain issues”.

The government of Cameron’s successor has however been quick to use McMafia as a spring-board to publicise its new Unexplained Wealth Orders (UWO). These new investigatory powers are purportedly to be used to stop the likes of Alex from hiding money from the authorities. Anyone with over £50,000 of property who is politically exposed or suspected of a serious crime, will be forced to disclose the source of their wealth on request. While most British homeowners would own more than £50,000, the individuals are likely to be high profile politicians or under investigation already by the authorities. If they fail to respond punctually, they risk forfeiting their property.

The anti-corruption organisation Transparency International has long campaigned for such measures, highlighting cases such as the first family of Azerbaijan owning property in Hampstead or senior Russian politicians believed to own flats in Whitehall. Previously, confiscating hidden assets has been a lengthy and complex process: when the High Court confiscated an £11m London house belonging to a Kazakh dissident, the legal process took seven years.

The new Unexplained Wealth Orders mean that the onus is shifted to the owner of the property to prove legitimacy and the origin of the wealth. The authorities will have much greater power to investigate where finance and investment originated. But in order for them to work effectively, they will have to be backed up by expert prosecutors. The government still has a long way to go before it makes London a less attractive place to hide money.

Ben Keith is a barrister at 5 St Andrew’s Hill specialising in extradition, immigration, serious fraud, human rights and public law.