Labour can learn a lesson from Mr Hamilton's fate

REJOICE, REJOICE: Neil Hamilton is a broken man, declared "destroyed" and branded a "twit" in banner headlines. Pressed on the Today programme as to how it felt when "every single newspaper in the land condemns you", Mr Hamilton replied with some dignity that it did not feel too good, but that he would soldier on somehow.

Revelling in the destruction of any human being, even one as foolish and flawed as Mr Hamilton, brings me out in a perverse flush of sympathy. Then, just as compassion threatened to overwhelm, Mr Hamilton slipped up and reminded me and a few million others of his true nature. Asked whether he has learnt humility, he replied with the priceless oxymoron that he had indeed learned humility "in a big way". Fantastically, brilliantly, confidently humble in a major way. Elsewhere, a victorious Mohamed Al Fayed reinterpreted the meaning of Christmas by declaring that the festival of goodwill had come early and that he was going to mark it by exacting the pounds 1m costs from Mr Hamilton and to plunder the pockets of his backers to make good the shortfall. Oh come all ye vengeful.

What a morality tale, personal and political, with which to mark the dying days of the century. Here were two men who thoroughly deserved each other. Each is the catalyst of the other's misfortune. If Mr Fayed, with his warped sense of justice, had not set out to corrupt Mr Hamilton, he might yet have secured his precious British passport and spared himself the reputation of dung-fly. If Mr Hamilton had not allowed himself to be so corrupted he would not be facing financial ruin and the public shredding of his character.

It is a sorry reflection on the Tory party, which allowed Neil Hamilton, Jonathan Aitken and Jeffrey Archer to flourish and allowed them to sap the moral credibility of Conservatism. These broken men are the public symbol of a broken party, its spirit bowed and purpose squandered. William Hague is draining the chalice of humiliation to the dregs. However hard he tries to distance himself from the disasters of the Major years, they keep catching up with him, like an embarrassing relative who always find your address no matter how often you move house.

The Tory body politic is now such a shrunken, confused saddened entity that the days when it functioned at all invite a kind of nostalgia. I spent the mid-Nineties working at The Spectator, a magazine then possessed of a thoroughly misplaced confidence in the continuance of the right's domination of British politics.

English Conservatism has always placed a premium on style and Archer, Aitken and Hamilton had that certain something. Respectively, they possessed the wealth, the glamour and the witty irreverence held to be the natural gifts of Tories, the qualities that sustained the party even throughout that dull period in its leadership.

Every child knows that sleaze played a major part in Mr Major's catastrophe. The truth is more complicated. It is not so much the corruption of the individuals that inflicted such deep and lasting scars, but the utter failure of judgement about their fellows on behalf of senior figures who should have known better. Lord Harris of High Cross, the amiable libertarian peer, professed himself "astonished" by the revelation that Mr Hamilton had allegedly demanded pounds 10,000 from an oil company to table a parliamentary question. One can understand his disappointment. But why should he have been so surprised, given his friend's proven lack of candour about his financial affairs?

The repeated and continuing suspension of disbelief, the willing surrender to credulousness, has been the hallmark of a group of people incapable of facing up to the harsher truths about itself. When will they learn? Mr Hague appointed Michael Ashcroft as party treasurer, ignoring several warnings about the potential for conflict of interest. Lord Archer was endorsed as a man of "integrity", the one asset not even his closest friend would say he possessed - unless he paid them to do so.

Political tribalists will simply conclude from all this that Conservatives are more crooked than Labour and that the New Labour era could never end in such a bonfire of the vanities. However, one law is eternal in politics, namely that the higher a party's fortunes, the further it has to fall. A prolonged period in power without the cleansing filter of a robust Opposition carries risks. The first risk is that the Government fails to deliver on what it was elected to do while convincing itself that everything is going marvellously.

In the key areas Mr Blair promised to improve - health, education, the public services and, latterly, transport - his government displays a tendency to boast of having achieved a lot more than it has actually done. It indulges creative accounting to suggest that far greater amounts have been spent on schools and hospitals than is really the case: a failure of nerve, since the need to trade figures in these areas is almost always proof that the vaunted reforms are not convincing the public.

Almost half of those interviewed by Mori earlier this month felt that the Government was not keeping its promises. Inventive use of spending figures will not convince them otherwise. An accompanying danger is the unravelling of central purpose, something which tends to become visible to party leaderships only when it is too late to do much about it. Mr Blair needs to refine what he means by his pledge to "modernise" the state sector - and get on with doing so. This is the time to take really brave steps to change the inefficient structures of health and education. Yet No 10 appears to be preoccupied with the enjoyable game of stuffing the Conservatives, rather than building on its early reformist zeal.

Sleaze is no respecter of party allegiance, but the product of opportunity and the arrogance of power. The Government has been fortunate in that its own dealings over party funding and the inquiry into the former paymaster general Geoffrey Robinson's affairs - shelved this week by DTI investigators - have been eclipsed by the afterwash of Aitken and Hamilton and the fresh turbulence provided by Lord Archer. That does not mean it can afford to be less than rigorous in demanding the highest standards of probity and transparency on its own benches.

Finally, parties have most to lose when they fall for their own mythology, as the Conservatives did when they came to believe that their rule was invincible. The guardians of the Government's image should, however, be wary of creating a false personality cult around a naturally popular leader. It was unseemly of Downing Street to track down the woman on the Tube who failed to fall into a swoon of admiration just because the Prime Minister got on a train and tried to talk to her.

The Conservatives became so overweening in their self-regard that they failed to notice how much the public had come to distrust and dislike them. The surest guard against such a fate befalling New Labour's politicians is for them to look upon the fallen idols of yesterday's politics and remember that they, too, are mortal.

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