Saturday, October 25, 2008

Prince of Darkness continues to weave his spell

Apologies for lack of blogging this week - a combination of illness and extreme busy-ness - but here's my weekly Journal column, focusing inevitably on the so-called Corfu capers.

It is no exaggeration to say that, of all the men and women who have influenced the course of political events over the past 16 months of the Brown premiership, the one who had possibly the greatest impact was Shadow Chancellor George Osborne.

It was his audacious plan to slash Inheritance Tax for all but the very-super-rich unveiled in his 2007 conference speech that, more than any other single factor, persuaded Mr Brown not to call a general election that autumn.

Many thought it finally marked the 36-year-old Mr Osborne’s arrival as a genuine player in the front rank of politics - a “Big Beast” in the old Tory parlance.

But if so, the events of the past week have reopened some of the old doubts in the party about whether Mr Osborne’s exalted position in the Tory hierarchy is a case of too much, too young.

The tale of the "Corfu Capers" is an intriguing demonstration of how high society and its tangled network of relationships can impact on day-to-day political events.

It all began when former Hartlepool MP Peter Mandelson, then a European Commissioner, made some critical comments about Mr Brown to Mr Osborne while they were both staying at the Greek villa of their mutual friend, Nathaniel Rothschild, this summer.

When a few weeks later Mr Brown made the dramatic step of restoring the newly-ennobled Lord Mandelson to his Cabinet in his reshuffle, what had been merely a juicy piece of gossip became political gold-dust.

A story duly appeared in The Sunday Times in which it was claimed that the new Business Secretary had “dripped pure poison into the ears of a senior Tory” about the Prime Minister during the holiday.

Mr Rothschild was furious at what he saw a breach of confidence, and got his own back by deciding to reveal what else Mr Osborne had got up to on his holidays.

Specifically, he claimed that Mr Osborne and the Tory chief executive Andrew Feldman had tried to solicit a £50,000 donation to Tory funds from a Russian oligarch, Oleg Deripaska, while visiting his yacht.

Mr Osborne has denied this, but "friends" of Mr Rothschild has now made clear that if he continues to query his version of events, he will destroy him, suggesting he has written witness statements from others who were present.

There is no suggestion that it was Lord Mandelson who tried to persuade Mr Rothschild to exact revenge on Mr Osborne.

It seems the merchant banker was simply so enraged by the breach of confidence that he decided to administer what one close associate called a "slap on the wrist."

However Tory leader David Cameron's office was warned following the Sunday Times' story that the Business Secretary knew something "explosive" about Mr Osborne and that the Shadow Chancellor should "be careful."

Mr Osborne has been forced to learn two hard lessons. First, you don’t breach confidences. Second, you don’t mess with Mandelson.

It seems unlikely as yet that the Shadow Chancellor will have to resign, and even though Mr Brown has said he hopes "the authorities" will investigate, it is not entirely clear whether any actual offence has been committed.

But it does focus attention on the Tories' readiness for government and specifically on whether they have yet got the make-up of their senior team quite right.

Already this question has been thrown into relief by Mr Cameron's failure to restore David Davis to the Shadow Home Secretaryship even though his successor Dominic Grieve seems ill-fitted for such a cut-and-thrust role.

Now the focus is on Mr Osborne - and whether someone who looks and sounds a bit less like a merchant banker might be a more convincing advocate for the Tories in the midst of the current crisis.

There has been persistent talk in Tory circles that if he wins the next election, Mr Cameron intends to bring Ken Clarke into a front-line role in government, possibly as Leader of the Commons.

But if he really does intend to employ the 68-year-old bruiser's considerable talents, he should not waste time hanging around for polling day.

He should bring Mr Clarke in now - preferably as Shadow Chancellor so he can deploy all his Treasury experience against Labour as the economic crisis continues to unwind.

Mr Clarke has long harboured a grudge against Mr Brown for the way he failed to give the Tories any credit for stabilising the economy between 1993 and 1997. What better way to get his own back.

The Corfu affair also focuses attention once again on the whole issue of political donations, demonstrating that no party is immune from the problem.

Last year we were all agog over whether Newcastle businessman David Abrahams had channelled donations to the Labour Party through associates in the city. Now the spotlight is once again back on the Tories.

What it shows is that attempting to rid British politics of sleaze is a bit like trying to abolish sin

Unless and until we move a situation where political parties are state-funded, these sorts of controversies will surely continue to recur.

For me, though, what has really elevated this story beyond the realms of run-of-the-mill political tit-for-tat has been the involvement - however innocent - of Lord Mandelson.

It has been yet another fascinating example of the Prince of Darkness's almost unique capacity for causing mayhem, even if it is sometimes inadvertent.

We saw this in his Cabinet career with his two resignations. We have seen it in the way he can both electrify and terrify the political establishment in almost equal measure.

Three weeks into his third Cabinet comeback, the man once known as the Prince of Darkness has certainly not lost his lethal touch.

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skipper said...

Agree Clarkey should be brought back; despite being of the wrong 'tribe' most Labour people have a soft spot for him. Agree also your analysis of Corfugate but my surprise at this juicy episode of political gossip has been the 'chivalrous' distaste for breaching private confidences. More appropriate to late Victorian or Edwardian times but three cheers for it anyway as a glimmer of decency in the heartless world of high politics.

Anonymous said...

Mandelson gone by Christmas.

MorrisOx said...

With great respect, Paul, I don't think it says diddly-squat about the Tories' readiness for Government. Distasteful as it may seem to some, the practice of sipping with the rich 'devil' has been going for decades, and transparency is the only answer.

Public funding or fixed electoral budgets may be a partial solution, but why shouldn't people be able to contribute to a cause they believe in, as long as they do so openly? Neither should we be surprised if powerful interests try to exercise those interests - though once again, they should only be able to do so openly.

Osborne may have been guilty of political naivete, but that's it. The rest is circulation-related froth.

Mandelson, however, is guilty once again of living up to his long-established reputation.

Pete said...

it is not entirely clear whether any actual offence has been committed

Oh I think it has most definitely been established that no offence has been committed by Osborn - but Mandelsen...?

Edward Sexby said...

I do find it extraordinary how the rather uninteresting story of how a shdow minister might have looked for a loophole in funding rules has overshadowed the fact that an EU trade minister has had a long-term association with a businessman who has gained from changes to tariffs over which that minister has influence.

It is notable how both the liberal and Tory media have gone chasing the wrong fox. A conspiracy theorist might almost conclude that Labour and the Tories have more to lose by an investigation into the real story than with Osborne's escapades.

James Higham said...

Prince of Darkness


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