Labour's rich friends
Once champagne socialism was a term of abuse. Now they're all welcome at the party
Sunday 21 June 1998
There's something very familiar about the anger and sourness of this sentence and you could be forgiven for mistaking it for a cutting from the mid-1980s - one of those routine swipes at the Thatcherite fat cats. It is as if the Spectator, having moved into opposition with the Conservative Party, has also managed to acquire the language of envy of Michael Foot's Labour Party.
Still, the magazine was right to point to the wealth that has coalesced around New Labour, all of it new money and made in the past decade or so by people in the media and financial sector.
The elevation of Waheed Alli and Melvyn Bragg to the peerage yesterday serves to underline the character of the New Establishment. Alli, the co-founder of the television company Planet 24, is at the age of 34 worth pounds 10m, while Bragg, an original backer of the LWT franchise bid in 1991, made pounds 2.8m when the company was sold three years later. Bragg and Alli are part of a group of millionaire supporters which includes Gerry Robinson of Granada; Lord - David - Puttnam, the film producer; Sir Terence Conran, the designer and restaurateur; Lord Hollick, the head of, among other things, the Express Newspapers group; Chris Haskins, chairman of Northern Foods - also made a working peer yesterday - and, of course, Geoffrey Robinson, the multi-millionaire Paymaster General.
It's an impressive list and interesting for the fact that only one member of it - Sir Terence - was wealthy at the beginning of the last decade. Those being elevated have grown rich during the years of Labour's exile, many of them benefiting in the City and in the world of television and the media from the reforms of Margaret Thatcher. These are men who enjoy their wealth, with none of the squeamishness about money that might have been found in previous circles of Labour support. More importantly, the Labour Party itself is entirely unembarrassed by the association, taking very public pride in having the support of millionaires such as Gavyn Davies and Waheed Alli.
How things have changed since the 1970s, when there were few greater objects of hate among many in the People's Party than those condemned as champagne socialists.
But it is easier to make big money than it used to be and, because of the reduction in tax for high earners under Margaret Thatcher, a great deal easier to keep it. So there are many more millionaires about, by no means all of whom are inclined to support the Conservative Party.
Historically, the Labour Party has always drawn some of its leading lights from public schools and enjoyed the support of a few rich supporters. In the 1930s these tended to be wealthy aristocrats who deployed their money in a deferential mission of political reform, seeking - perhaps because they did not need to - neither influence nor advancement.
By the 1960s the Labour Party of Harold Wilson was looking for financial support not to the old establishment but to entrepreneurial outsiders such as the Jewish businessmen Harold Lever and Lord Kagan. They were acceptable because their wealth was demonstrably the product of their commercial energy rather than of inherited wealth and class privilege.
You could say much the same of New Labour's supporters, though they come from a broader variety of backgrounds than was evident in either Wilson's entourage or Thatcher's.
Indeed, for the high command of the Labour Party, background and past political affiliations seem unimportant. There are no qualms about the dealings with the Conservative Party of Gerry Robinson or Sir Terence Conran. As long as these individuals believe in Tony Blair's still-unmatured mission, they are warmly greeted into the fold. The only question asked of them is the one Lady Thatcher used to put before making any appointment: "Is he one of us?"
Blair's millionaires do not, of course, go down as well with the government back benches, which are often as traditional in their views about the preternatural divisions of class and wealth in British society as the blustering political exiles of the Spectator. One can imagine the heavy sighs of Dennis Skinner as he watches the millionaires form around Tony Blair, few of them concerned or familiar with the procedure of the House of Commons, yet all dedicated to an extra-parliamentary structure of influence and fixing. Importantly, they commit time to the New Labour project: Gerry Robinson is installed at the Arts Council, Conran and Puttnam advise in any number of capacities and Alli is a member of the Panel 2000, created to sell Cool Britannia to the world, and gives two- and-a-half days a week to the party.
Meanwhile the right evokes fears of cronyism, conveniently forgetting the very tight circle of businessmen - for instance Lord Hanson, Sir Geoffrey Sterling, Sir Michael Richardson, Lord King, Lord Saatchi and Lord Bell ( Sir Tim) - that formed round Margaret Thatcher and benefited immensely from her policies. Apart from being mildly hypocritical, this is to misunderstand the nature of Blair's millionaires. They are not bound together in a financial- industrial cooperative and as far as one can see do not envisage any kind of commercial synergy arising from their support of New Labour.
Indeed in some cases the pledge of loyalty seems to be rather against commercial interest. For example, Lord Hollick, an enthusiastic member of the Blair-Brown project from the beginning, has let it be known that the Express group is aiming to appeal to a much younger, less conservative readership. He is apparently prepared to see the circulation of the Express slide until this new core readership is established. This is a brave strategy for it is an article of newspaper wisdom that readers do not always follow the sudden political passions of their newspapers; and there is still no certainty that the election result is necessarily indicative of a permanent attitudinal change in the population. Lord Hollick makes the demographic argument well, but there must be a suspicion that political enthusiasm has skewed his commercial judgement. At any rate he cannot yet be accused of the sort of "twisted cronyism" conjured up in the Spectator's editorial.
This is not to say that a man such as Gavyn Davies will be unaffected by his enormous wealth. Money, particularly in the quantity he stands to make, buys great freedom but it also tends to set you apart from common concerns. Mr Davies, who became well known to television audiences for his morose dispatches from the dealing room of Goldman Sachs during the recession, is already rich and remains well grounded. But whatever his virtues, the pounds 60m realised from the sale will mean he becomes a de facto target. Money is still despised by most people in politics - or is at least the object of very great suspicion - as Geoffrey Robinson, who is worth pounds 30m, discovered in the row about offshore trusts last year.
However much he protested his innocence the media and back benches - on both sides of the house - were disposed to believe the worst of him. As a result it seems likely that he may lose his job in the reshuffle, although there are no complaints about his performance under Gordon Brown
The same worry may affect Gavyn Davies's future. He was an adviser to the Labour governments of Harold Wilson and Jim Callaghan. He is a good friend of Gordon Brown and his wife, Sue Nye, runs the Chancellor's private office, so it is reasonable to expect him to leave the commercial sector and take up a role as understudy to the Governor of the Bank of England, with a view to eventual succession. With such a large fortune, it may now be difficult for him to follow this route because the innate hostility of the press to wealth means that he will be regarded as fair game.
This arises from the old British belief that a rich man on the left must also be on the make. It is a measure of our deep tribal allegiances, which are much less evident in other liberal democracies. You can be a billionaire in France or America without the slightest risk to your left- of-centre credentials.
However, it is true that all of Blair's millionaires want more than just an invitation to a Downing Street summer party. They desire influence and some sort of job in the programme to modernise Britain. In this they are invigorating the tradition of the great and good - rich people with committee skills and time on their hands.
Tony Blair is following a pattern laid down at the beginning of the century and much adhered to by Lady Thatcher, who knew that her revolution would be successful only if her followers could be put in place right through the political establishment.
In the appointment of Melvyn Bragg, Waheed Alli and Chris Haskins to the upper chamber there is, of course, an element of pay-back. All three millionaires donated heavily to New Labour and Bragg helped to fund Blair's leadership campaign. They are Tony's friends certainly, but not yet his cronies.
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