`We can't be like the last lot' - or can we? The Independent year

The Return of Sleaze

"WE CAN'T be like the last lot." Peter Mandelson's parting plea to Tony Blair on the night of his resignation crystallised perfectly the crisis that now faces the Government at the end of 1998.

For a Labour Party that in opposition led a crusade against Tory sleaze that bordered on the evangelical, the past year's string of sexual and financial scandals has surprised even the most cynical of observers.

This week's revelation about Peter Mandelson's pounds 373,000 loan from Geoffrey Robinson was just the latest in a series of stories that left the Government open to the charge not just of impropriety, but also that most damaging political sin of the modern age - hypocrisy.

The Prime Minister's halo had already begun to slip in the wake of the Formula One/Ecclestone affair, but the combination of Sandline, Lobbygate and Ron Davies's nocturnal exploits on Clapham Common ensured that the whiff of sleaze was never very far away.

The year got off to a shaky start when the Home Secretary, Jack Straw, was identified on 2 January as the minister whose son had been arrested for buying pounds 10 worth of cannabis from a tabloid newspaper reporter.

Seventeen-year-old William Straw received a caution from the police and his father won widespread respect for the way in which he handled the affair.

By coming clean early about the issue, New Labour had proved it was different from the Tories and the Blair government remained untarnished. Even so, the incident was a prescient indication that Labour was just as fallible as the Tories on questions of personal morality.

The first scandal of real substance surfaced in May, when it was alleged that the Foreign Office had colluded with a British firm of mercenaries to help restore the democratically elected President of Sierra Leone. Peter Penfold, the British High Commissioner, and other FO officials were accused of knowingly breaching the United Nations arms embargo in offering assistance to Sandline International.

Tony Blair dismissed the controversy as a "hoo-hah" as the Foreign Secretary, Robin Cook, came under systematic pressure to resign.

Mr Cook refused to quit and his Prime Minister stood by him, but the affair guaranteed that Labour's much-hyped "ethical foreign policy" was effectively dead in the waters off Freetown.

Trouble flared again in the summer in the form of Derek Draper, a former aide to Mr Mandelson and self-confessed "big mouth" who bragged to undercover reporters that he had exclusive access to the heart of government.

"There are 17 people who count. And to say that I am intimate with every one of them is the understatement of the century," he said.

Mr Draper resigned from lobbying firm GPC Market Access following allegations that he had offered access to ministers and insider information in return for cash.

The incident forced the Government to tighten up rules on lobbying and gave credence to Tory claims that "Tony's cronies" were receiving preferential treatment.

Mr Draper's boast that "I just want to stuff my bank account at pounds 250 an hour" resurrected images of the disgraced Tory MP Neil Hamilton receiving brown envelopes stuffed with cash in return for asking Commons questions.

Ministers easily shrugged off the juvenile braggadocio, but Mr Draper's words revealed for the first time that there may be something rotten at the heart of New Labour.

However, it was sex, not finance, that grabbed the nation's attention when the Secretary of State for Wales, Ron Davies, presented Mr Blair with his first cabinet resignation in October. Mr Davies quit his post after he admitted picking up a man from Clapham Common in "a moment of madness" before being robbed at knifepoint.

The Caerphilly MP denied allegations that he had been involved in a homosexual encounter or drug use, but his failure to disclose all the details of the incident dragged out the affair.

In November, Nick Brown, the Agriculture Minister, was forced by the News of the World to admit his homosexuality. Mr Brown's swift admission indicated a mature approach that seemed to suggest that Labour really was different from the Tories.

Mr Mandelson was then himself "outed" by the former Tory MP Matthew Parris, and later denied stories that he had visited gay bars on a Department of Trade and Industry tour of Rio de Janeiro.

So far, Mr Blair had shown a Clintonesque ability to rise above the fray, his own Teflon premiership unaffected by the mini-scandals to have surfaced to date. He had stuck by his friend Geoffrey Robinson, the Paymaster-General and millionaire businessman accused of benefiting from the distinctly Tory-like arrangement of an offshore trust.

The murky world of Mr Robinson's finances seemed the antithesis of New Labour's commitment to transparency and fair-dealing, but Mr Blair remained steadfastly loyal.

Even revelations about the MP's links to companies run by the former tycoon, Robert Maxwell, did not threaten his position. It was only when Mr Robinson was forced to issue an apology in the House of Commons in November, for failing to declare directorships in the MPs' register of interests, that his resignation finally looked probable.

Downing Street whispered that Mr Robinson was going to go quietly over the Christmas break. Yet just when the Government could be forgiven for thinking that the year of revelations was finally over, the bombshell landed.

Last week's disclosure that Mr Mandelson had failed to declare the Robinson loan blew a huge hole in Labour's image as the party of clean politics.

The Prime Minister's own personal judgement, in standing by Mr Robinson and failing to sack Mr Mandelson, came into question. New Labour was portrayed as a naive dilettante that had been seduced by business and wealth. The Blair honeymoon was finally over.

More secrets are sure to emerge in the new year when both a biography of Mr Mandelson and a book by Robin Cook's former wife, Margaret, will be published.

Mr Mandelson also faces a possible inquiry into his mortgage application and there remain several unanswered questions about Mr Robinson's financial affairs and his connections with other Labour MPs.

Yet despite its year of troubles, it appears that the Government's Teflon coating has only slightly worn. Latest polls put Labour at 54 per cent, more than double the Conservatives' tally. If he was still around, that is a statistic that the Sultan of Spin would be planting on every MP's pager over the festive break.