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The disgrace of the Lords is a parable for the end of New Labour

Fraser Nelson says that the ‘cash for amendments’ scandal dramatises the accelerating decay of the Brown regime — economic, political, constitutional. A saga that began in 1997 with grand promises of reform is entering its last bleak phase

28 January 2009

12:00 AM

28 January 2009

12:00 AM

Fraser Nelson says that the ‘cash for amendments’ scandal dramatises the accelerating decay of the Brown regime — economic, political, constitutional. A saga that began in 1997 with grand promises of reform is entering its last bleak phase

Even at the ripe old age of 79, Lord Taylor of Blackburn knows how to strike a bargain. ‘Some companies that I work with will pay me £100,000 a year,’ he told the undercover reporter posing as a lobbyist. ‘That’s cheap for what I do for them.’ What he claimed to do for them was help mould the law of the land for a fee — all, he later insisted, following the rules. And thus the final curse descended on Gordon Brown. He now has Callaghan’s economics, Foot’s unpopularity, Kinnock’s poll ratings and Major’s sleaze — a full house of political misery.

The scandal is unlikely to end with Lord Taylor and the three other Labour peers embroiled in what has inevitably become, since the original Sunday Times revelations, the ‘cash for amendments’ scandal. Already, newspapers are on the trail of other lords who have tabled parliamentary inquiries linked to their paid advisory roles. Follow the money, and we find things like the curious £3,000 gift made to Jack Straw, the Justice Secretary, by one of the companies Lord Taylor advised. A sleaze trail has been uncovered, and there is no telling where it may lead.

What makes this especially toxic for Mr Brown is that he can hardly claim that the House of Lords is an innocent retirement home. Whole families of stoats will have given their lives for the ermine draped on the shoulders of Peter Mandelson, Paul Myners and Shriti Vadera — all ennobled by this Prime Minister and parachuted straight into the very heart of his government. While peers may have made up the numbers in Tory governments, they now hold great power in Mr Brown’s. Seldom has the Lords tearoom had so many powerful ears to bend, making it the perfect target for lobbyists.

The kindest interpretation is that Lord Taylor was grossly talking up his ability to mould laws in the Lords. This is, after all, the game: the politician sells himself by exaggerating his power to the lobbyists, who in turn exaggerate that power further to their clients. But that this game should be played at all in the Lords is an appalling testimony to the debasement of this ancient institution under New Labour. The hereditary peers have been replaced by stooges appointed as a reward for their party donations, to liberate a particular constituency or to be parachuted into government without irksome voters being involved.

While Labour did not fully reform the Lords — far from it — it has certainly reshaped it. It was only eight years ago that the Neill Committee on Standards in Public Life ruled against a formal complaints procedure for the Upper House due to ‘the strength of the culture of personal honour in the Lords’. More than a third of today’s peers were ennobled after that date, almost half appointed under Labour. Yet the Neill Committee left in place a clear framework for the House of Lords: cash for questions — asked directly or indirectly — is not allowed. And it is this that the Conservatives should be focusing on.

Had Lord Taylor been a Tory and the year been 1995, then it is easy to imagine the ferocity with which Alastair Campbell would have pursued him. Question after question would be tabled about his meetings with lobbyists, and the full inquisitor-ial power of New Labour would have been brought to bear. Yet there is, as yet, no sign of such fury from the Tories. David Cameron has allowed himself to be diverted on to the technical question of what should happen to Lord Taylor if he is proven guilty — rather than the question of whether he is guilty.

The Tories show little appetite for the type of fierce cross-examination that the late Robin Cook specialised in. Mr Cameron is again talking pensively about ‘broken politics’, a phrase he borrowed from Barack Obama’s campaign, and suggesting a working group to look at the Lords rules. It is as if the mechanics are somehow to blame, rather than the deplorable behaviour of particular peers. For all the embarrassment of the past week, this suits Labour well enough, which itself says it wants to tighten the rule book — but, of course, all in good time.

It’s not just that the word ‘sleaze’ brings unhappy memories for the Tories. Mr Cameron suspects that parliamentary scandals leave the public cold, and has come to regret spending so much time on the Damian Green arrest when he could have been focusing on the economy. After the Derek Conway expenses scandal, Tory focus groups were unable to name the man or the party. The problem isn’t the blue rosette or the red rosette — the problem is the rosette full stop. These days, contempt for the political class is not tribal but total.

Nor is Mr Cameron suggesting a wider overhaul of the second chamber. Being able to appoint Lords has its uses for him, too. There is the small matter of the as yet un-nobled Stanley Fink, the billionaire who has kindly agreed to be Tory Treasurer. And Mr Cameron is expected to follow Mr Brown’s lead in appointing what the Prime Minister memorably called a ‘government of all the talents’ or ‘goats’ — outsiders brought into his government. Being able to offer ermine is a powerful negotiating tool when seeking to hire outsiders on a Whitehall salary.

Mr Cameron’s ‘goats’ are likely to be better groomed that Mr Brown’s. The names already being circulated in Tory circles include Anya Hindmarch, a hugely successful designer and entrepreneur who names Baroness Thatcher as one of her inspirations. Then there is Camila Batmangeilidjh, founder of a charity named Kids Company which works with vulnerable children from broken homes. There is even talk of Feargal Sharkey, former lead singer of the Undertones rock band, now chief executive of UK Music, being approached as a creative industry adviser — together with duller, worthier names to address health and financial policy.

So there are many reasons for Mr Cameron to stay at the margins of the Lords debate, rather than seize it as a weapon to finish off the government. His increasing lead in the opinion polls makes him risk-averse. ‘When the man in the street has decided to vote Tory, it’s a great error to presume you know why,’ a senior party figure told me. ‘You don’t want to shatter their illusions.’ So silence, runs the argument, has its virtues. Tony Blair ran for power on soundbites and fluff and was punished by three landslide majorities.

It is also believed in Cameron HQ that it is the economy — not sleaze, incompetence, or any Tory attack line — that will finish Mr Brown. Polls certainly show a direct link between pessimism over the economy and Labour’s declining popularity. Mr Brown raised hopes last October by insisting he had a solution, and that his stimulus plan was an effective means of fighting the recession. This was always a gamble, because the voters were always going to judge him mercilessly on the basis of the plan’s success or failure. Four months, two bank bail-outs and some £400 billion of pledges later, it is depressingly clear that he has accomplished nothing.

The Prime Minister points to Barack Obama’s stimulus package and claims that the two of them are united in their determination to act urgently and aggressively, leaving the Conservatives isolated in the world. But the American stimulus was accompanied by a clear message to the electorate: the president explained just how many jobs it would save, and what the long-term effects would be. Such an analysis was strikingly absent from Mr Brown’s plan. So The Spectator commissioned a study from Oxford Economics, one of the country’s lead
ing economic consultancies, to assess the impact of the Pre-Budget Report.

Its results make clear why no similar study was published by the Treasury. While there will be a positive impact this year — the economy will shrink by 0.4 per cent less than it would have otherwise — the prospective effect on jobs will be minimal. Just 35,000 would be saved, in a year when the number of those claiming unemployment benefit is forecast to double to 2.1 million. Even this difference is almost eradicated by next year’s VAT rises, and slowdown in public works spending, which would cost about 30,000 jobs and retard any economic recovery by 0.3 percentage points.

Yet the real impact comes in later years, when Mr Brown seeks to pay for the stimulus by raising National Insurance contributions and increasing tax on higher earners. This would cost 91,000 jobs in 2012 and 84,000 jobs in 2013. Oxford Economics stresses these are estimated figures — the economic picture is worsening so rapidly that few would be so bold as to say how many jobs will be there to be saved. But the principle holds good. The ‘help’ this year will be more than outweighed by jobs lost in later years. Taken as a five-year package, the Brown ‘stimulus’ will destroy about 170,000 jobs — but it will leave the government a good deal better off.

There is one last hope for the Prime Minister. In April he is to host the G20 summit, and there has been much excited talk about Barack Obama coming to discuss the future of world finance. It would be the photo opportunity from heaven: Mr Brown beaming in the centre, the new president at his side and other heads of state coming to listen to the Prime Minister who — as he put it — ‘saved the world’. It would help dramatise his theme: that this is a global downturn, and so not his fault. If a Budget is delayed to about this time, with a last-throw-of-the-dice stimulus, it could provide one final chance for a Brown revival.

But when Mr Brown spoke to the president last Friday, he heard the word that every anxious host dreads. Mr Obama said he ‘hoped’ to come to the G20 summit — nothing firmer. The word, repeated in public statements by the White House afterwards, was no error. ‘As yet, his attendance is unconfirmed,’ says the US embassy in London. And if the star guest doesn’t show, then the other world leaders may not either. The G20 may revert to its original format: an unremarkable finance ministers’ summit. Having hyped the summit so much, it would mean abject humiliation for Mr Brown.

It is not as if the year cannot get any worse. Within a few weeks the House of Commons will release 1.2 million receipts from MPs claiming public money. No one is quite sure why Mr Brown moved to prevent their publication, before being forced to back down last week. The Tories’ theory is that dark, career-ending ministerial secrets lurk among those receipts, and that when they are published a whole new chapter in Labour sleaze will be opened.

Even without them, the opinion polls are unremittingly bad for Labour — testing the psychologically important 30 per cent barrier. ‘And if it gets below 30, Gordon will go back to the dark place,’ a Cabinet member tells me — referring to the gloom and paranoia that gripped the Prime Minister over the summer. ‘He knows, we all know, that there is so much left to go wrong.’ With the prospect of further bank crises hanging over the government like the sword of Damocles, scandal in the peers’ tearoom may prove to be the least of his worries.

There is a powerful allegorical quality to the Lords scandal. The chamber so brutally attacked by New Labour as the embodiment of all that was wrong with Britain in 1997 may yet come to embody all that is devious and corrupt about New Labour in its death throes. Yet there is a crucial difference. In 1997, sleaze was brilliantly used by Labour to divert attention from a near-miraculous economic recovery. Now, it simply the latest squalid addition to a compendium of abject failure.

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