By Stan Crooke
"I was brought up as a Labour voter and it was euphoric when they got into power. I didn't realise it wasn't New Labour at all — it was the Tories dressed in red." — Noel Gallagher, of Oasis.
Tony Blair has announced he will resign as Labour Party leader on 10 May. All hopes that the end of Blair will mean an end to Blairism — i.e. to Thatcherism dressed up in Labour clothing — or, at least, that there will be a chance openly to register labour-movement opposition to Blair-Brownism in the coming leadership contest, depend on John McDonnell.
Blair's likely successor is Gordon Brown, his ally in the conversion of Labour into a reliable “party for business” in the 1990s.
John McDonnell is the only candidate standing not only for the policies of the labour movement on issues like privatisation and union rights, but also for the restoration of control by the labour movement over the top levels of the Labour Party, that is, for the reappearance of the labour movement as an independent force in politics.
“WE are now today the people’s party, the party of all the people, the many not the few,” said Tony Blair on his election as Prime Minister in 1997.
Other New Labour politicians were more up-front about where their priorities really lay. “Business will stay at the heart of our government,” explained Trade Secretary Patricia Hewitt, while Peter Mandelson, Blair’s personal fixer, put it rather more bluntly: “We are intensely relaxed about people getting filthy rich.”
New Labour’s idolisation of free-market capitalism quickly won it words of admiration from big business. “Labour is now the sort of centre-right party for which I would consider voting,” said the anti-union boss of “Rentokil”, Sir Clive Thompson, at the 1998 conference of the CBI.
Big business’s admiration for New Labour also took on a more material form: millions of pounds worth of donations.
Even before he became Labour Party leader in 1994, Blair was already beginning to receive what at that time counted as spectacularly large donations from businessmen (although they were soon to be dwarfed by the donations which flooded in after the 1997 general election).
Using the mechanism of ‘blind trusts’ — whereby the source of the donation would supposedly remain unknown to the recipient – some £2.5 millions was raised for Blair’s private office (i.e. not the Labour Party, but Blair’s personal entourage) between 1994 and 1997.
Most of these donations came from a limited number of wealthy individuals. Of the four who have been publicly identified to date, two were subsequently awarded peerages by Blair.
The money which poured into the “Labour Leader’s Office Fund” blind trust allowed Blair to run the biggest opposition leader’s office in history, employing 23 full-time staff, including chief press officer Alastair Campbell and chief of staff Jonathan Powell — both of whom enjoyed six-figure annual salaries.
Other leading figures in the New Labour project also used “blind trusts” as a conduit for donations from the captains of industry, including the John Prescott Campaign Research Trust, the Margaret Beckett Research and Administration Trust, and the World Affairs Research Trust, which raised money for Robin Cook.
Another “blind trust”, which traded under the name Labour Front Bench Research Fund, raised money for other frontbenchers. But it was after the Labour electoral victory of 1997 that the money really began to flood in from big business.
Formula One boss Bernie Ecclestone, for example, donated £1 million (although the ensuing scandal forced Labour to give him a refund). In 1998, the year in which he was also made a lord, publishing tycoon Paul Hamlyn donated £500,000, and a further £2 millions two years later.
1998 also saw property developer Robert Bourne and drugs company boss Isaac Kaye each donate £100,000, while Planet Hollywood founder Robert Earl donated £1 million. But even the latter donation was easily overshadowed by a succession of donations totalling £7 millions from David Sainsbury, former chair of the supermarket chain.
Other prominent New Labour donors included Robert Gavron and Gulam Noon.
Gavron, the chairman of the Guardian Media Group, who had previously expressed his admiration for Thatcher, donated £500,000 to Labour in the same month that he became a peer. Gavron had also been a generous contributor to the “Labour Leader’s Office Fund” blind trust.
Noon was head of the Noon Products company which had refused to recognise the GMB in its Southall plant in 1998, despite the union having recruited 90% of the workforce. He donated £100,000 to the Labour Party, and, by coincidence, was given a knighthood in 2002.
The point is not just that the Blair-led Labour Party took money from big business, but that this big-business money boosted the “machine” of professional political operatives around Blair and Brown — many of them people with no labour-movement background — much more than the Party in general.
While people like Campbell, Powell, Anji Hunter, or Philip Gould, became household names, and important in Labour-leadership decision-making, the previously important position of general secretary of the Labour Party became an insignificant back-room administrative post. Many readers will have heard of Morgan Phillips, Jim Mortimer, Larry Whitty, or even Tom Sawyer, past general secretaries of the Labour Party. How many, even among labour-movement activists, know the name of the current general secretary? (It’s Peter Watt.)
Much of the Blair-Brown “machine” now roosts in government, paid from Government funds. Around it is a whole little world of think-thanks, PR firms, lobby groups, and so on, with no real connection to the labour movement, but a symbiotic relation with the decision-making layers of “New Labour”.
In the years immediately following its electoral victory of 1997 the New Labour government established a myriad of task forces, working parties and policy action teams, all of them dominated by the representatives of private enterprise and big business. Of the hundred biggest companies in the UK, 30 had representatives on one or more of these bodies.
Around 320 task forces had been set up by 1999. Trade unionists constituted just 2% of their membership, while over 35% of their members came from the ranks of big business. In task forces set up by the Treasury and by the Department of Trade and Industry (DTI) the domination by big business was even more pronounced: businessmen constituted nearly 90% of members of the former, and 75% of members of the latter.
Captains of industry were also provided with a more straightforward means of shaping government policy. Lord Haskins, owner of Northern Foods, for example, was given a key role in the Department for Environment, Food and Rural Affairs, while former BP chairman David Simon was given the post of Minister for European Trade, and David Sainsbury was given made Minister for Science in the DTI.
Particularly noteworthy was the appointment of Christopher Fay as chairperson of the government’s Advisory Committee on Business and the Environment, a body with the remit of encouraging business to adopt more environment-friendly policies.
Fay’s previous jobs had included chair of Shell UK, executive of the British Airports Authority (BAA), and president of the UK Offshore Operators Association — all three of which have appalling environmental records and a history of campaigning against the pro-environment lobby and local environmental-protection campaigns.
And where did Blairite apparatchiks go when they got fed up, or lost out in office politics? To big business, of course.
Anji Hunter, former Director of Government Communications, left Downing Street to become Director of Communications for BP on £200,000 a year. Derek Scott worked as an economic adviser to Blair from 1997 to 2006, and then quit to become an economic consultant with the KPMG accountancy firm, while Sally Morgan, former secretary to Blair, was taken as a non-executive director of Carphone Warehouse.
The enthusiasm with which Blair and his inner circle sought financial backing from big business and welcomed its representatives into the government’s apparatus of decision-making was the flip-side of the Blairite drive to cut the Labour Party free from the trade union movement.
Financially, big business was to take the place of the role previously played by the trade unions. Already by 1999, for example, 60% of the party’s income came from donors (20% from donors giving over £5,000), 10% came from commercial activities, and just 30% from trade unions – although trade unions had previously provided 90% of the party’s income.
Politically, Blair responded to the needs of big business rather than those of the trade unions. On one level, there was nothing new about a Labour government acting in the interests of big business. What was new, however, about Blair was his determination to shut down all inner-party channels through which the unions could influence Labour Party policy-making.
After a decade in power, after a decade of alienating Labour’s natural supporters and the organisations which had founded the Labour Party, Blair is finally on his way out. But the political machine set up around him and Brown remains intact.