London Press Watch

Jan. 29 2002 5:46 PM

London Press Watch

Smoke without fire.

According to a survey of the 10 leading industrial nations conducted by KMPG, the large American accountancy firm, Britain is the second-cheapest place in the West to conduct business. Canada ranks first, but the survey says British labour costs are very good value, and that the town of Telford is one of the "rising stars" in the industrial universe. Noticeably absent from the KMPG survey is the amazingly low cost of influence in Westminster, as the latest round of Enron revelations illustrates well. Compared with Washington, where companies pay millions of dollars to both political parties as a matter of course (Democrats and Republicans received approximately $6 million from Enron from 1996 to 2000), London is very cheap. According to Ralph Hodge, former chief of Enron's European division who appeared on BBC's Newsnight yesterday, Labour and the Conservatives received about £35,000 each between 1997 and 2000. In addition, the Financial Times reports that Enron even spent £18,000 on a reception at the 1998 Labour Party Conference. Perhaps there was real champagne, too.

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Cheap as Britain may be, small sums of money go a long way, especially in British politics, where accusations of government wrongdoing tend to stick, regardless of how much money is involved. The Conservative Party and much of the British press suspect that Enron influenced Labour's energy policies. Yesterday, in an attempt to counter these allegations, the Prime Minister released details of the seven meetings British ministers had with Enron executives from 1997 to 2001. The press release added that Tony Blair had not met any Enron executives "in an official capacity". But "he couldn't rule out that they might have bumped into one another at some event, but he had no knowledge of it," the statement said.

With the exception of the Financial Times, which says there's no evidence to suggest Enron received special treatment for its donations to the Labour Party, the rest of the British press has reacted to Downing Street's revelations as if it were a team of disillusioned beagles revived by the sight of their first fox in years. "Influence was undoubtedly sought by Enron," says a Guardian editorial.  "The question is whether it was bought." Is that really the right question? As Ralph Hodge told Newsnight, it has become customary for wealthy companies to pay for plush tables at party banquets or to sponsor receptions at political conferences. Anyone who believes companies attend such occasions to listen to the toasts and speeches and to soak up the atmosphere in off-season Brighton or Blackpool is mistaken. Deplorable though the practice may be, rich corporations will forever be eager to pay to keep up appearances with political parties so long as the parties are willing to take their money. No one has yet suggested that anyone has broken any British law, but the appearance of wrongdoing does just as much political damage.

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