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November 29th, 2007

Straw men and dodgy donors, US style

Even in the midst of yet another "sleaze" scandal, it almost seems unfair to compare campaign finance in America and Britain. Before a candidate has even been chosen, enough money has been rustled up in the 2008 US presidential campaign to pay for five  UK general elections.  And - so far - no Britons have found themselves behind bars for breaking electoral laws.

Yet there are some striking similarities in the extraordinary misjudgements made by donors and politicians on both sides of the Atlantic. And some differences that certainly do not bolster the Labour party defence.

Take the story of the Paws. In an outstanding investigation, the Wall Street Journal discovered that one of the biggest sources of funding for Hillary Clinton’s campaign came from a family of six living in a modest house under the flight path of San Francisco airport. Here’s a picture of the Paw house:

Paws_house_4The Paw household lived on the income of a postman but managed to scrape together enough pennies to donate more than $200,000 to Democratic candidates.

The family were linked to Norman Hsu, who now sits in prison facing charges of grand theft. Before his fall from grace, Mr Hsu become the "Hillraiser", a title awarded to people who "bundle" donations of more than $100,000 for the Clinton campaign. It is worth comparing the Paw dwelling to the house of Ray Ruddick, seen below.

Ruddick_houseThe jobbing builder and bingo enthusiast  found himself at the centre of a British political storm after donating £196,850 to Labour on behalf of David Abrahams, a wealthy landlord from Newcastle. The blue transit van is owned by Mr Ruddick.

Since the Sunday Mail contacted a startled Mr Ruddick it has emerged that Mr Abrahams channelled money through a total of four associates: a builder, a lollipop lady, a lawyer and a secretary. A bishop and a judge are leading an investigation for the prime minister.

Now the Paws and the Ruddicks are not the first households to be used as "straw men" for overenthusiastic donors to political parties.

The Republicans dug up a string of financing scandals through the 1990s that are so farcical they make the Paws and the Ruddicks look rather boring.

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November 26th, 2007

Triple whammy

A trio of polls on Sunday underscored the damage done to the government by last week’s triple whammy of the Northern Rock crisis, data loss debacle and the five former defence chiefs’ attack on the prime minister. The terrible Westminster week endured by Labour appears to have hit home with voters, suggesting the Tories’ attack on Gordon Brown’s competence is resonating across the country.

The Tories are ahead of Labour in terms of the party deemed to have the best policies, for the first time in more than a decade, according to an MSL survey in the News of the World. The poll also gives David Cameron an eight point lead over Mr Brown in terms of who is seen as the best leader - a remarkable reversal of perceptions during the prime minister’s first three months in office.

Nervous Labour MPs in tight marginals who are now missing Tony Blair’s sure electoral touch will find this sense of nostalgia enhanced by a BPIX poll in the Mail on Sunday, suggesting the two parties would be level pegging had there been no change of prime minister. As it is, the survey gives the Tories a five point lead.

Northern Rock and the "debacle" of the lost data files - to quote Jack Straw, the justice secretary - have clearly damaged confidence in Alistair Darling. A survey for the Sunday Telegraph found 50 per cent dissatisfied with his performance as chancellor, with fewer than a third - 32 per cent - declaring themselves satisfied.

November 21st, 2007

Sorry seems to be the hardest word

Gordon Brown said something today which I have never heard him say before. Sorry.

Referring to the government’s loss of 25m pieces of personal data in the post - described by one security expert as a "starter kid for identity fraud" - the prime minister did not mess around.

"I profoundly regret and apologise for the inconvenience and worries that have been caused to millions of families who receive child benefit," he told the Commons.

This seems to be the first time Mr Brown has apologised for anything as prime minister. I don’t recollect him ever apologising for anything, and his aides looked flummoxed when I asked them whether this was a first.

Mr Brown has expressed regret for his decision to raise the state pension by just 75p one year, according to Downing St officials. But that isn’t exactly the same as issuing an apology.

So - if this is indeed a first for Mr Brown - it shows the political magnitude of this data blunder and the possible damage it could do to the government.

What I’d like to know is whether the government is now going to underwrite every case of fraud committed on every parents’ bank account in the land - if these discs got into the hands of big-time crooks.

Mr Brown again repeated that any fraud would be compensated through the banking industry’s own code. But Treasury officials have also told me that the banks could then get that money back off HM Revenue and Customs, if they could show the fraud was linked to the lost data.

What we know about fraudsters is that - if they got their hands on the missing CDs - they would probably wait a few months before starting to rip off the banks.

In which case, how would the banks know whether HMRC was to blame? Or, put it another way, how could the government say it was not its fault, if the discs are still out there somewhere?

Is the government nationalising the Banking Code and its fraud compensation scheme? After guaranteeing deposits in the Northern Rock, is this starting to become a habit?

November 14th, 2007

Dippy? Berr? What’s in a name?

The rebranding of the Department of Trade and Industry as the Department for Business Enterprise and Regulatory Reform has cost £192,000 "to date," a written Parliamentary answer reveals. The six figure bill to the taxpayer includes the cost of designing the new departmental moniker, changing the website and new signage.

Is it worth it? Tony Blair was forced into a U-turn on a previous attempt to rebrand the department in May 2005, just a week after the announcement was made. Critics at the time pointed out that possible acronyms for the Department for Productivity, Energy and Industry included Dippy and Penis. Alan Johnson, the newly appointed secretary of state, insisted his department revert to its former DTI title, and pointed out that the cost of short-lived rebranding involved no more than the use of "one screwdriver to take down three letters [and] screw [them] back up".

The new department has not suffered the same abbreviated indignities as the ill-fated DPEI. But ministers appear slightly ill at ease with the sheer length of the title foisted on the department. The government insists on referring to it as "BERR" and this has now become its official abbreviation on documents and its website. But the Tories are sticking resolutely with DBERR.

November 13th, 2007

Nick Clegg and the forgotten lobbying year

Liberal Democrat activists obsessed with civil rights may well be taken aback by our report revealing Chris Huhne’s involvement in a company that pioneered mobile CCTV use in Britain (he certainly seemed to be when I put it to him).

But Nick Clegg, Mr Huhne’s rival for the Liberal Democrat crown, also has a surprising business past. For almost a year, Mr Clegg worked as a partner at GPlus, one of the most influential lobbying groups in Brussels.

This brief lobbying liaison is not something Mr Clegg is keen to highlight on the stump. He prefers to talk up his time as a trade negotiator, journalist and ski-instructor. One can understand why: since he left company, GPlus have taken on clients such as Vladimir Putin and Gazprom, the Russian energy giant. These are hardly popular causes among the LibDem faithful. 

In a press release announcing his appointment, Mr Clegg said it was ”especially exciting” to be joining GPlus at ”a time when Brussels is moving more and more to the centre of business concerns”. But, for all his initial excitement, this was a short career bridging the gap between him stepping down as an MEP in 2004 and becoming an MP in 2005. He lectured at Sheffield University during the same period.

Mr Clegg’s lobbying colleagues tell me he actively worked with them for just six months, largely part-time. As one of five partners, Mr Clegg drew on his inside knowledge of the European parliament to give several lectures to staff and clients such as Centrica, the energy group. He spent very little time on lobbying work for existing UK clients such as Asda, the supermarket chain, or Aviva, the insurer. But he did join GPlus teams pitching for new business.

Friends of Mr Clegg told me that the work helped him to support a family while he was waiting for a seat in parliament. But Mr Clegg does not seem to have made the most of the opportunities from his new job. When he joined the company, Mr Clegg  was awarded equity rights, which he never chose to exercise. He thus missed out on a big windfall: GPlus was bought by Omnicom for about £8m, soon after Mr Clegg’s departure. 

November 12th, 2007

Brown’s foreign policy: visionary or short-sighted?

Gordon Brown’s promise to outline his "vision" for Britain after scrapping plans for a 2007 election has raised expectations whenever he makes a new speech and provokes the inevitable question: "Is this it?"

Anyone hoping for a new foreign policy vision in Mr Brown’s speech to the Lord Mayor’s banquet in the City on Monday night is likely to have been disappointed.

"My approach is hard-headed internationalism," Mr Brown said. As opposed to what? "Internationalist because global challenges need global solutions." Hardly original. Reading the substance, Mr Brown’s foreign policy approach sounds rather like that pursued by Tony Blair.

There is a tough (US-friendly) line on Iran. There are warm words about the US ("our most important bilateral relationship"). Mr Brown criticises President Musharraf of Pakistan - a key Washington ally - for imposing martial law, but holds back from calling for Pakistan to be suspended from the Commonwealth.

The speech is a lacklustre affair, which will only add to speculation in the Foreign Office that Mr Brown is not focused on - or especially interested in - foreign policy. For a landmark speech, it has none of the passion or verve of Mr Brown’s recent speeches on liberty or education.

What it does contain is further evidence of Mr Brown’s belief that reformed global institutions such as the International Monetary Fund, World Bank and UN Security Council hold the key to solving the international problems he identifies. He dwells on these reforms at length.

But characteristically only a short part of the speech is devoted to Europe, perhaps the most effective multi-lateral organisation in the world - through which Britain can leverage its influence on issues like climate change, trade and security.

Mr Brown has a golden opportunity to lead in Europe along with likeminded allies like Nicolas Sarkozy and Angela Merkel but so far shows little inclination to get stuck in.

With the unratified EU treaty hanging over him until at least the middle of 2008, Mr Brown seems to have Europe locked up in a box marked: "Toxic: open at your peril."

If he is serious about developing a global policy, he should look beyond reforming unwieldy bodies like the UN and IMF - worthy though that cause might be - and start using the tools he already has at his disposal.

The EU is the world’s biggest and richest trading bloc. It is being copied in Africa, South America and South East Asia as a model for small countries hoping to shape globalisation. And it is a multi-lateral organisation which, in spite of its flaws, already works. He should grab the steering wheel.

November 5th, 2007

Brown’s faulty vision

Gordon Brown has a problem: he has talked about having "a vision for the future" and now he has to deliver. His ludicrous claim that he shelved the planned 2007 election to give him more time to explain his vision - nothing to do with the polls, of course - has put him under more pressure.

His aides are getting exasperated. "He’s setting out his vision all the time," said one. They point to his recent speeches on liberty and education - packed with philosophical musings - as evidence that his vision is there for people who want to see it.

The problem is that is not enough for his critics, who have their own motives for urging Mr Brown to use Tuesday’s Queen’s Speech debate on the government’s new legislative programme to chart a new course for his administration.

The dilemma for the prime minister is that the Queen’s Speech is perhaps the worst occasion to map out this new direction, even if he has one in mind.

Firstly the 25 or so bills are largely relics of the dying days of Tony Blair’s administration and Mr Brown does not seem to have thought up many new ideas in the four months since he arrived in Number 10.

Secondly, since Mr Brown trailed most of the bills in July he has completely lost any sense of surprise.

The prime minister will have to be on top of his game - not always the case in recent parliamentary performances - to avoid being portrayed by David Cameron as the visionary unable to move his government on to a fresh agenda.

Mr Brown probably deserves all he gets, having talked up the "vision thing" when he aborted the election. But lack of vision is not his real problem: after all the public seemed enthralled by him when he did nothing more complicated this summer than appearing to be a competent, unspun, hard-working prime minister.

Restoring that image - rather than making dense speeches citing Locke, Tawney and Himmelfarb - should be his first priority. The vision can wait.

November 1st, 2007

British jobs for foreign workers

The FT’s story today about foreign migrants in the British labour market tells us an intriguing thing about Gordon Brown’s Britain: the UK’s new economy seems to be better suited to foreigners than to the local workforce.

As we report, the British economy is generating plenty of  jobs - 270,000 net new posts over the last two years - yet at the same time the number of British nationals in work has fallen by exactly the same amount.

The 540,000 difference between the jobs vacated by Brits and the new jobs created has been filled entirely by workers from the European Union and - to a lesser extent - migrants from outside the bloc.

It is not entirely clear why this should be. The government says the indigenous population of working age fell during the last two years. But that does not get round the fact that Gordon Brown frets about the level of economic inactivity among local workers, hence his promise to find "a British job for every British worker".

The truth is that there are jobs there if you want them, as the migrant workers have shown. It is just that it seems many Brits would rather not do them, or that they are being forced out of the market by the recent arrivals from abroad. Simon Briscoe, our statistics editor, reckons the latter factor may be important.

(more…)


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