Top 50 Political Scandals: Part One

11 July 2009

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Part One of The Spectator’s Guide to the 50 Biggest Scandals — counting down from 50 to 26

30. We are not amused with the Prime Minister, 1986

One necessary fiction of Britain’s constitutional arrangements is that the monarch has no political opinions.

So WHEN the Sunday Times splashed on 20 July 1986 on tensions between the Queen and Margaret Thatcher, it created a political frenzy. The story, which quoted ‘sources close to the Queen’, reported that ‘the Queen considers the Prime Minister’s approach to be often uncaring, confrontational and socially divisive’.

The row rolled on for days, with palace press secretary Michael Shea desperately attempting to deny the story for which he was the source. After duelling letters from the palace and the Sunday Times in the Times, the row calmed down. But by the end of it no one could be in any doubt that the Queen and those around her had serious doubts about the Prime Minister and her policies.

29. Mandelson’s home loan, 1998

Peter Mandelson’s stock was rising steadily in 1998. He had made the transition from spinner and fixer to full Cabinet member with ease. His five months at the Department of Trade and Industry had gone so well that his ambition to match his grandfather’s achievement and become foreign secretary seemed well within reach.

BUT THEN a bombshell dropped: Mandelson had taken a secret loan of £373,000 from the Paymaster General Geoffrey Robinson to buy a house in Notting Hill. To make things worse, Robinson’s business affairs were under investigation by Mandelson’s own department.

Mandelson believed that he could ride out the storm and was furious at the Brownites who he thought had leaked the story to damage him. But Blair disagreed and Mandelson was forced to resign two days before Christmas. The resignations did not stop there. In the New Year, Charlie Whelan resigned as Gordon Brown’s spin doctor, saying that the speculation about whether or not he had leaked the Mandelson story, something he denied, made it impossible for him to do his job.

28. Arms to Iraq, 1991-96

Almost 20 years ago, a businessman from Coventry arrived at work to find two dozen Customs officials waiting to raid his office.

Paul Henderson was managing director of Matrix Churchill, an engineering firm that was soon to become famous for all the wrong reasons. It was a world leader in specialised metal-cutting machinery, and had been sending more than a few of its products to Iraq. The Customs men believed that Henderson had done this in explicit violation of a ban on arms sales.

Mr Henderson called his MI6 handler straight away. He had been working closely with British intelligence, who knew precisely what he was selling to Iraq and why. They were using him to gather information about Saddam Hussein’s regime. He also knew that several ministers from John Major’s government knew all about his exports, and had granted licences. How could Matrix Churchill have broken the law if it was working so closely with the government? MI6 told him it would die down. They could not have been more wrong.

Three directors were arrested and put on trial at the Old Bailey, to the horror of the ministers who had approved their deals. Whitehall went into damage limitation mode. Sir Nicholas Lyell, the attorney general, advised ministers to sign public interest immunity certificates to ensure the defendants would not be able to cite documents showing they acted with official approval. Yet this all collapsed when Alan Clark took to the witness stand and admitted that Matrix had been permitted to export £37 million worth of arms-making machine tools to Iraq.

Once the Matrix Churchill Three walked, another scandal opened. How had the British government been able to act in apparent violation of its own export policy? Why was parliament not informed of this change in practice? John Major ordered a review to be held by Sir Richard Scott, who was widely regarded as an independent and forceful judge (having recently found against the government over the Spycatcher case). He went on to survey 130,000 documents — one of the most exhaustive inquiries in British history.

The Scott inquiry uncovered a staggering milieu of deceit, disarray and dissembling. The government had used emergency wartime powers, which Attlee had forgotten to abolish, to change export licences without having to inform parliament. And while Britain had signed the UN embargo banning the sale of arms and dual-use equipment to Iraq, ministers regarded this as redundant after the Iran-Iraq war ended in 1988, and encouraged Matrix Churchill to go ahead.

So why not tell the public? William Waldegrave cited national security issues. Sir Richard said in his report that this was utterly bogus. ‘The overriding and determinative reason’ for not telling parliament ‘was a fear of strong public opposition to the loosening of the restrictions on the supply of defence equipment to Iraq, and a consequential fear that the pressure of the opposition might be detrimental to British trading interests.’ In other words, it was an 18-carat cover-up.

The damage done to the Major government was immense, as it cemented the idea of an overbearing, arrogant state mistrustful of the people it was supposed to be serving. Sir Richard summed up its attitude thus: ‘We know what is good for you. You may not like it and, if you were made aware of it, you might protest, but we know what is best.’ Robin Cook’s evisceration of the government in the Commons is remembered as one of Labour’s finest moments in opposition.

A small memorial plaque stands in place of the Matrix Churchill factory, which has now been flattened. Once regarded as one of the finest businesses of its kind anywhere in the world, it died within two years of the arrests; 650 jobs were lost. And although no minister resigned after the Scott inquiry, the scandal helped harry the Major government to its grave.

27. Cherie, the con man and his girlfriend, 2002

Many in the press had it in for Cherie Blair, so it came as a delight for them when it turned out that she was involved with a convicted con man.

Cherie had decided to buy a couple of flats in Bristol, where her son Euan was going to university. Not having the time to look at them herself, she had deputed her lifestyle guru Carole Caplin (above) to do so. Caplin was controversial enough (she believed in a lot of odd new-agey things) but her boyfriend Peter Foster was of an entirely different stripe altogether. He was a convicted fraudster.

Tensions flared in Downing Street as the information Cherie provided Alastair Campbell to give the press was incomplete. When her hairdresser objected to the aggressive tone Campbell was taking with Cherie, Campbell snapped, ‘You mind your own business. Remember you’re just a f***ing hairdresser.’

The story died down when Cherie made an emotional television appearance and admitted that as she tried to juggle the commitments in her life, ‘some of the balls get dropped’. But ultimately what protected Cherie was the fact that a Prime Minister can sack a minister, but not his own wife.

26. The Wilson Plot, 1979

The Wilson plot isn’t just a scandal, it’s an ongoing mystery. Even now, 34 years after Harold Wilson’s resignation, trying to untangle the threads of truth from the twisted plait of paranoia, conspiracy and denial is daunting.

IT ALL began during Wilson’s second term in office, when the PM became convinced that he was being spied on by British intelligence. He would shush visitors dramatically, finger on lips, pointing at the light fittings where he believed bugs to have been planted. At the same time rumours — spread by MI5? — began to snake across the country: Wilson was a Soviet agent; the KGB assassinated Gaitskell so as to manoeuvre Wilson into power; he was an adulterer, embroiled in some unspecified but nonetheless unspeakably sordid sex scandal with his secretary. ‘There is a whispering campaign against me,’ said poor Wilson.

But the centrepiece of the Wilson plot was the great man’s conviction that there existed a secret plan to topple him. A coterie of secret agents, military generals and aristocrats, he said, had cooked up a plot to seize Heathrow, the BBC and Buckingham Palace. This done, the Queen was to read out a speech urging people to support the coup and Mountbatten was to act as interim prime minister.

So was he right? It would be easier, more reassuring, to believe that Wilson was delusional; that the first tentacles of Alzheimer’s were already spreading paranoia and confusion through his brain. Certainly, an internal inquiry into the affair under Callaghan concluded that there had been no conspiracy.

But a decade later the Wilson plot was back, lurching around zombie-like on centre stage again. A former security officer, Peter Wright, wrote a book called Spycatcher in which he confirmed all Wilson’s worst fears. Wright claimed that he and 30 other officers had been involved in the attempt to destabilise the prime minister, who they believed to have been turned by the KGB.

MI5 denied the charges vigorously and in the end Peter Wright himself appeared on Panorama and confessed that his book had been a great exaggeration. But the Wilson plot won’t die that easily. Just as the whole affair was considered buried, in 2006 others involved told BBC journalists that there was a Secret Service anti-Wilson agenda and the possibility of staging a coup was discussed.

So whom to believe? Was Wright right? Why is MI5 still so sensitive about the subject? It’s enough to induce spasms of Cold War-style anxiety in the most level-headed 21st-century pragmatist.

You can read Part Two of The Spectator’s Guide to the 50 Biggest Scandals here.