Ian White, Oxfordshire's director of social services, found that Islington children's department was "paralysed by equal opportunity and race issues"; managers believed they would not be supported if they investigated gay or black social workers. So children were put at risk and at least 26 boys and girls were sexually abused. More than a third of the staff involved have never been investigated and some may now be working with children elsewhere.
What did Mrs Hodge have to say? When the allegations that Mr White investigated first appeared in the London Evening Standard, she dismissed them as gutter journalism. Last week, the Sun quoted her as saying: "I have had nothing to do with Islington for three years and I would not be sent a copy of the report, so I haven't read it. And I'm not going to rush to get a copy." She denies those were the words she used.
But Mr White's rebuke to Islington council will damage not just her but the Labour leadership, too. Just as the press once saw her as the incarnation of Labour's "loony left", so it now sees her as the personification of "new Labour". Once, she flew the red flag from Islington town hall. Now, she is deeply involved in opposition child policy. She is the leader of a Labour party team on nursery education. The Sun made much of her closeness to the Blairs and accused her of once leading "the hard-faced harridans of the left" and of presiding "over a regime which left the door open to perverts in the name of gay rights".
Tony Blair's mission is to bury Labour's past, but it keeps coming back to haunt him.
Later last week, Mrs Hodge went on Radio 4' s Today programme and admitted: "As far as services for children are concerned, we failed. I accept responsibility." But she accepted responsibility "in the same way" that she took credit for the good things Islington had done.
It was a bravura performance, but it was not an apology. Margaret Hodge is not much of a "sorry" person. Nobody has ever written about her without mentioning inherited wealth, big cars, second homes and (she has four children) employment of nannies. When she led Islington council, people never tired of pointing out that she sent her children to schools in another borough. Even if she used the state system, they gossiped, she had private tutors for her children. (She has admitted to tuition in music and languages and "an odd bit of extra support" in reading and maths.) If you have to put up with that for most of your political career, you develop a thick skin.
MARGARET Hodge has lived a dizzy life. She was born Margaret Oppenheimer (not the Oppenheimers, she always says, lest anybody think the family was richer than it actually was) in 1944 in Egypt, the middle of five children of German-Austrian Jewish parents. Her family fled to the UK when she was five after the first Arab-Israeli war. Her father, a steel trader, built up a new business in England. They settled in Orpington, Kent.
From her early teens, Mrs Hodge betrayed the kind of brittle restlessness that has characterised her life. She was educated locally until the age of 13 when her "unruly" behaviour caused her to be packed off to boarding school in Oxford. She entered the London School of Economics in 1963, majoring in government in her economics degree. There seems to have been a further shortfall in discipline: the intellectual charms of Karl Popper and Ralph Miliband proved less attractive than a rich Canadian boyfriend who took her to the opera. "I had a wonderful time," she breathes wistfully. "But I got a third. I still dream about my failure to work. One of my nightmares is my finals."
She was already into politics before she left school. As a sixth-former she sold the CND paper outside Foyle's bookshop. Aldermaston marches and Vietnam protests followed, though she joined the Labour Party rather than one of the ultra-left fringe groups. After LSE, she "mucked around", doing stints on television political programmes before deciding they were all "incredibly self-centred". She went back to academe, starting an MA in philosophy at Bedford College, London, but found that too esoteric.
After her first marriage to Andrew Watson, an economist at the department of transport, she decided they needed money and she took a well-paid job in the economics department at Unilever. This also turned out to be unsatisfactory. "It was my first experience of discrimination against women. The boys were allowed to write reports, but the girls only provided the information on which they were written. I told the - woman - director of personnel 'this is not on'. She said: 'If you don't like it, leave.' "
Mrs Hodge moved into international market research, but gave up full- time work in 1971 when she had her first child. Her own mother had died when she was quite young, and "I thought I would enjoy motherhood as a full-time job". This, too, went into the Great Expectations Unfulfilled file, and after moving to Islington she became involved in local community work, particularly housing, when the old lady next door experienced Rachmanism at first hand. So much of her life seems to have been like this. Something happened and, oh, well, look what happened next.
That was how she became an Islington councillor. She was pregnant with her second child in 1973 and a friend suggested she could "keep sane" by standing in a by-election. She was elected and within two years, still only 31, she was chair of the housing committee. But when she lost the position, after a rightward shift on the council, she briefly lost interest in local politics.
In 1978, she divorced and was re-married, to Henry Hodge, a lawyer and fellow Labour councillor in Islington, by whom she had her third and fourth children. Then the borough was convulsed by the breakaway of the SDP. Most of Labour's councillors deserted. But the Social Democrats were routed in 1982, Labour taking all but one of the council seats on an uncompromisingly left-wing manifesto. Mrs Hodge emerged as leader.
"The Socialist Republic of Islington" became a byword for a new municipal socialism, opposing the government's rate-capping policies by refusing to set a rate and putting itself in the forefront of ethnic and feminist movements. In no small part because it is a media village, the borough's real and imagined political correctness (though not called that then) repeatedly hit the headlines: the "banning" of baa-baa blacksheep in nurseries, the prohibition on "black" bin-liners.
Mrs Hodge says: "We made mis- takes in those early Eighties. But we also had successes, particularly on equality. We were challenging deeply-held prejudices, and that opened us up to the 'loony-Left' attack. We thought we could change the world by passing resolutions. There were some gestures across London that were ill thought-out but there were also some very good initiatives that have become accepted orthodoxy."
After the 1987 general election, Mrs Hodge took another turn, this time politically. There would be no more red flags on the town hall roof, she announced; people should be given what they wanted rather than what activists thought they should want. Mrs Hodge and Islington became standard-bearers of the new, non-loony, consumer-conscious Labour Party, taking the first faltering steps along the road to Blairism. Gigantism was out. Housing, social services and environmental health were decentralised to 24 neighbourhood offices. It was a recipe for loose management and Hodge now regrets it. "There are no easy answers, particularly in London. It was incredibly difficult to recruit social workers. Finding people to work in children's homes was impossible. We were dependent on agency staff." She "didn't twig" how poor some of her managers were.
MRS HODGE is intelligent and charming. She believes passionately in social justice and gets wide credit for her organising abilities and originality. But consistency and steadiness have never been her strong suits. Nearly two years ago, she left Islington council and joined Price Waterhouse as a public sector consultant. Once dismissive of parliamentary ambitions - she preferred "effecting change at local level", she said in 1988 - she now has a safe seat in east London and is regarded as a potential high-flyer in a future Labour government.
What, I asked amid the potted palms of the Waldorf Astoria hotel, would she say to a group of Islington residents who besieged her table? "I would sit down and talk to them." Go on ... "I'm sorry. We got things wrong." At last, an apology from a politician. But it was like getting Baroness Thatcher to say sorry to the miners. Margaret Hodge may have climbed out of Islington politics, but its ghosts are still haunting her.
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