International

Politics to be cleaned up after Mittal row

By Hasan Suroor

LONDON, FEB. 21. The Mittal affair has prompted calls for a review of the links between political parties and big businesses, and Labour which has been embarrassed by allegations that it has been doling out favours to its rich donors is reported to be considering a cap on political donations. There is also a growing opinion in favour of state-funding of political parties to reduce their dependence on big money.

The Labour Party chairman, Charles Clarke, has said it is ready to look at "different ways'' of funding the political system which has been mired in a series of favours-for-cash rows. The Mittal episode, in which the government is accused of helping the Indian industrialist and Labour donor, Lakshmi Mittal, buy a Romanian steel mill in a controversial multi-million pound deal, has seriously "compromised the party's image and it is now widely seen to be more `sleazy' than the Tories who were voted out of power on the issue of corruption.

The pressure on political parties to avoid large donations comes at a difficult time for the Labour Party which is facing a debt of ten million pounds and is in desperate need of cash. Its economic difficulties have deepened following threats by trade unions to stop funding it in protest over the Government's "anti-labour'' policies and its tilt towards the private sector. The Tories are also reported to be struggling to keep the fire burning with reports indicating that they are losing upto 300,000 pounds a month. While both Labour and Tories claim to be keen on ridding themselves of the shadow of big business, there is much speculation whether they have sufficient political will to go through it, given the financial crisis facing them.

The debate on streamlining political donations and making them more transparent has been going on for sometime, but it has gained urgency after the Mittal episode which revived memories of the Hindujas' passport affair where Ministers were accused of trying to help the Hinduja brothers with their citizenship applications after they donated a million pounds for the Millenium Dome. There is believed to be increasing concern in Labour Party that it cannot afford to court such controversies without suffering serious political damage. Although the Prime Minister, Tony Blair's personal popularity remains intact, party backbenchers warn that this should not lull him into complacency. They fear that another Mittal-type row could do lasting damage to Mr. Blair's own standing, and hence the urgency to be seen to be doing something to head off allegations of sleaze.

Mr. Blair, who was initially opposed to state-funding is reported to be more sympathetic to the idea now, and is at least willing to discuss it. Echoing the new Blair line, Mr Clarke said: "There is a debate to be had as to whether the state should pay more (to fund the political parties), as happens in many other countries...We are ready to look at different ways of funding our democratic political system.'' The Tories too are inclined to take a more relaxed view of state-funding despite their consistent opposition to it so far. One senior Tory MP said he would favour state-funding, if it helped improving the image of political parties. ''...we cannot continue to have these allegations about funding (favours for donations)--true or otherwise--which do such damage to the reputation of politics,'' he said.

Meanwhile, senior Labour leaders denied that big businesses were given favours for their donations, and attacked the media for breeding cynicism about politics and politicians.

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