How did His Majesty’s Government get itself in such an integrity-destroying tangle over Peter Mandelson’s appointment as Ambassador to the USA? The Foreign, Commonwealth and Development Office, 10 Downing Street, Cabinet Office, Security Services and the senior Civil Service have all faced serious potential reputational damage. What’s at the root of this?
Flashback to the late 1970s and early 1980s. To an extent the early 1970s was the heyday of Soviet Socialism. There was much admiration of the Soviet system even among the British middle classes, albeit more in theory than in practice. At my university there were several active political groups; the Revolutionary Workers Party, the Revolutionary Workers and Trotskyists, the Spartacist League, and the Communists, with the Labour group dominated by Militant. There was a small Tory contingent (mostly engineering students) and three Liberals.
The Labour leadership, including PM Callaghan, struggled with limited success to keep the party mainstream and less ‘ideologically left’. Thatcher countered successfully with a quasi-ideological ‘free market/small government’ approach in 1979, appealing to working class ‘cloth cap-italists’. Notwithstanding, the leftward drift of Labour continued and the leftist Michael Foot became leader, badly losing the 1983 election. Neil Kinnock replaced him and, blaming the far left for the defeat, took on the radicals. The infighting crippled the party and they lost the 1987 and 1992 elections (with much help from the right wing anti-Labour media).
Two years after Thatcher was elected, the Labour Party divided between those who wanted to stay and attempt to seek power without the left, and those that saw Labour as unreformable. The latter formed the SDP (later merging with the Liberals) and the former seeing future Labour success in recognising the power of big business and media moguls
Peter Mandelson was the exemplifier of the ‘recognise where power lies’ approach. He had seemingly agreed to join the SDP (he handled my national publicity when I was elected as a Liberal Councillor in Lambeth) but in the end decided to stay with Labour and implement the ‘power-realism’ approach. On the night of my election, at a party in Albert Square, out came his now famous Black Book and he almost ‘instructed’ editors and journalists to write up the story ‘along the lines suggested’. Mandelson was very effective indeed. He appeared to know every journalist, editor, and media owner in the UK (and their foibles), and could apparently make or break careers.
This approach formed part of the idea that if Labour didn’t get cosy with the media bosses, and big business and finance behind them, they would never enjoy power again.
Not all Labour moderates agreed, but Mandelson and colleagues had a logical ace up their sleeve. If Labour were out of power permanently, they couldn’t do anything for the poor or “working people”. Being close the big business meant that they could at least do something, and something is better than nothing.
Unfortunately the approach took on a life of its own. It got Blair elected in 1997, but there were no boundaries. In hurrying away from socialism (especially in its anti-business flavour) when do you stop running, and when does cosying-up become adulation? Oligarchs like Deripaska and fixers like Epstein were flamboyant and able to arrange vast ‘donations’.
The bigger policy problem, even existential for the West, was the accelerated concentration of economic power fuelled by the remedies applied after the 2007/8 financial crisis, and the consequent ‘financialisation’ phenomenon. Index funds, hedge funds, private financing, and an explosion of derivatives, inter alia, led to extreme concentration of economic power, opaque monopolisation and endemic regulatory capture, (let alone the impunity of the Epstein cadre). These factors are existential because they are a house of cards; the bubbles of government and private debt could so easily be burst (for example by interruptions to the recycling of Gulf oil revenues into the US and UK financial systems). British state institutions have participated in the ‘culture of adulation’ of concentrated economic power, with few detractors.
It is a reasonable expectation that political forces and state institutions which are over-friendly with big business and finance, will not be minded to pursue public policy and tackle these existential factors. Those in the Labour Party who had grave reservations over the Mandelson approach years ago, will likely be proven right.
* Paul Reynolds works with multilateral organisations as an independent adviser on international relations, economics, and senior governance.
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9 Comments
@ Caron,
“Notwithstanding, the leftward drift of Labour continued……badly losing the 1983 election”
There’s an implication of cause and effect here. You’ve omitted to mention that Mrs Thatcher initially created high unemployment and trailed badly in the polls. This was a case of cause and effect. This, however, was before the Falklands War (1982). Her unpopularity was reversed spectacularly afterwards.
The election of Blair was quite predictable at the time. The opposition wasn’t particularly inspiring ,but he was honest in the main about his politics, albeit that he did first win his seat standing on an anti EU/EEC platform! So the Labour Party knew what it was getting. This is fair enough IMO. The Labour Party has always proclaimed itself to be the “broad church”. Blair was smart enough to keep the left onboard.
The two big mistakes of the present Labour leadership was firstly to think, on the advice of people like Mandelson, that the left had nowhere else to go. Secondly it was they could get away with a blatant deception in the electoral process. Starmer pretended to be something he was not to win the leadership. Most who exited Labour in the years following weren’t actually expelled. They left in disgust. Neither were they all “Revolutionary Workers Party” supporters. Actually that should be WRP.
Most wanted a return to the mixed economy of the post war years.
So now Starmer and Co find themselves attacked on two fronts and quite unnecessarily too.
PS I’m not sure why I addressed my previous comment to Caron! Clearly it should have been to Paul Reynolds.
Starmer won the last General Election largely because, although he was boring and the son of a tool maker, people thought he was basically competent and a safe pair of hands. He has shown with the Mandelson appointment that sadly he wasn’t.
Not sure what falling in Windermere ever proved other than it was wet, and poor old Michael Foot was much more intelligent and better than he was ever given credit for. Politics can be cruel.
@ Peter Martin Congratulations on a good fightback by the Trotters last week, Peter.
This would go some way to explain how the Usual Suspects gain large government contracts while small UK companies read about award of non-competitive contracts in the news afterward. The usual banter about free dinners and trips to the Boat Race do not quite explain it all. Some entities seem to obtain Preferred Bidder status even before the project is on the books. The unusual relationship between Blair and Murdoch may tell us something (not the episode at the end).
For Lib Dem historians, the mention of the SDP as the tradition that Mandelson did *not* take is interesting. Something about dispersing power, perhaps?
At Newcastle University in the mid-sixties we only had the Labour Club and the Socialist Society. I turned up as a Fresher hotfoot from the Scarborough Liberal Assembly with a thousand leaflets and instructions to re-start the defunct Liberal Society. There was no stall booked for the Freshers Fair but the one Communist took pity on me and gave me a third of her stall. I subsequently became friends with Hugh Gaitskell’s nephew (Labour) and the son of Nobel Laureate Dorothy Hodgkin (Socialist). There was a lot of mutual respect amongst the politically committed across the parties. Happy Days!
When Peter Mandelson was appointed as the British Ambassador to Washington, I was the only person who d ever met him, who said this was a bad idea. I knew Peter 26 years ago when I ran against him in his last ever parliamentary election in Hartlepool. For Labour MPs to come forward today & say they always thought the appointment a bad idea is just unbecoming of Labour MPs. It is the sort of remark President Trump would say. My assessment was based on Peters record as EU Trade Commissioner & how that contrasted so much with President Trumps absurd anti free trade policies. I can only recall Rachal Maskell speaking out at the time and of course she has never met him.
@ Nigel,
Certainly the Blairites wanted us all to love Peter Mandelson. Blair himself once said:
“My mission to transform the Labour party would not be complete until it had learned to love Mandelson.”
So Tony still has some work to do then! 🙂
On the other hand Tony Benn once said
” I find Peter Mandelson a threatening figure for the Labour Party. ”
Jeremy Corbyn recently said:
” I was extremely grateful for the role that Peter Mandelson played in the last election in Islington North: he came along and canvassed, and we won with 50% of the vote. That is the only useful thing he has done for a very long time that I can remember.”
So you weren’t the only person “who’d ever met him who said this was a bad idea”. Or in Tony Benn’s case that he was a “wrong ‘un” .
Mandelson wasn’t known as the “Prince of Darkness” for nothing!
@ David,
” …although he was boring and the son of a tool maker”
I know you probably didn’t mean it this way but it does read as there being some relationship. There’s nothing wrong with being the son of a toolmaker. My own father wasn’t actually a toolmaker but he did work with lathes and milling machines. I can’t claim to have had a deprived childhood, though. We weren’t affluent but we never went hungry. I doubt if Starmer did either. There is something wrong with Starmer continually harping on about it, though, as if this somehow defines him as a person.
BTW. I had just about given up hope when we were down to 10 players and 3-1 down! Good match though. We probably will get into bother if we discuss football on LDV. You can find me on FB if you’d like to be ‘friends’ 🙂
Don’t do FB, Peter, but many thanks for the kind offer.
As you would imagine from where I’m from, I’ll always stick up for local lad Harold. Again, much better than he is often given credit for…… Open University et al… His statue by the station usually has a blue and white scarf on it and Kim Leadbeater often goes to matches.