Tuesday, March 07, 2006

New Labour's Italian Job

What’s the most expensive thing you’ve ever been given as a present? My ex bought me an iPod when they first came out a few years ago and still cost £400. When I graduated, my dear old mum came up with a well handy grand in cash towards my overdraft. And that’s about it.

These were people that loved me. So I suppose the charitable assumption must be that Italy’s rightwing prime Silvio Berlusconi loved tax avoidance specialist David Mills – husband of cabinet minister Tessa Jowell and a former Labour councillor himself - a hell of a lot when he handed over a gift of £344,000.

The average UK employee would need to put in 15 years of hard graft to earn what in some circles is considered a run of the mill – or should that be run of the Mills, perhaps? – sum of money.

Even before our loophole artist’s highly remunerative Italian Job hit the headlines, a less publicised story also illustrated tellingly how the New Labour-big business nexus operates.

Tim Allan, for six years a key Blair adviser and erstwhile deputy spindoctor to Alastair Campbell, these days operates a public relations concern called Portland. His clients include Asda, the British wing of the notoriously anti-union global supermarket chain Wal-Mart.

Allan advised the company on its plans to dismiss GMB members who refused to give up union rights at a depot in Washington in Tyne & Wear. It charged £50,000 for its work, including a £14,000 success fee. For that kind of money, I guess he was ‘Happy to Help’, as it reads on the inane name badges Asda staff are forced to wear.

Asda has since been forced to pay £850,000 in compensation for unlawfully offering financial inducement to vote away bargaining rights.

The name Berlusconi may well feature in Allan’s biography, too. After he left the Downing Street press office in 1998, he took a £100,000-a-year job as director of corporate communications with Rupert Murdoch’s satellite broadcaster BSkyB.

That same year, Murdoch wanted BskyB to buy a controlling interest in Italian television group MediaSet. Owner of that company? Silvio Berlusconi. Small world, isn’t it?

Anticipating unfavourable political reaction, Murdoch effectively boasted to colleagues that Britain’s prime minister was routinely in the habit of carrying out News International’s bidding: ‘I’ll have Tony test the waters’. So it was that Blair ended up button-holing his Italian counterpart Romano Prodi by phone to lobby for the bid, which ultimately proved unsuccessful.

We don’t know whether or not Allan did anything to facilitate this process. But presumably it is precisely the kind of thing that fell into his six figure salary remit.

News International, of course, has famously paid no corporation tax in Britain for over a decade, despite making profits that have topped £300m. As a tax avoidance lawyer, Mills will be lost in admiration at such a bravura performance.

Recall also the Blunkett affair last October, in which the former leftwinger turned Blairite was forced to step down from the cabinet after revelations about his business dealings.

The one-time municipal socialist joined the board of DNA testing business, and bought shares in the company, which stood to profit from government contracts in the event of an expected flotation. Blunkett could have pocketed £300,000 for a £15,000 outlay.

The average person on Incapacity Benefit is given less than £4,400 a year to live on. Yet the government is threatening to cut even that pittance to something like £2,900. Put in perspective, that’s less than 1% of a Berlusconi Bung or a Blunkett Blag.

Yet many figures in the New Labour milieu continue to show themselves ready to help companies bend – and even break – the law, providing there is a fat cheque for a sum ending with at least four consecutive zeroes in it for their good selves.

While I’m not unsympathetic to some of the proposals to re-engage the public in politics suggested by the Power Commission, the year-long inquiry funded by the Joseph Rowntree Trust, inevitably they miss much of the point.

Disengagement from politics comes is inevitable after a 15 year-long wave of sleaze scandals, in which politicians of both major parties have shown themselves equally eager to jump when big business says jump. Their actions effectively do to the electorate what the rent boys supposedly did to Mark Oaten.

New Labour has chosen to stand for the unionbusters, not the unions. The tax avoiders, not the tax payers. Self-interest, not socialism.

This article is scheduled to appear in next month's Red Pepper. In the mean time, read an informative piece on Incapacity Benefit from the Socialist Party here, and what my former boss at Tribune, Paul Anderson, has to say about the Jowell affair and the state of British investigative journalism here.

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