Questions raised over Labour’s election financing in Manchester

A recent edition of Channel 4’s Dispatches programme looked at Britain’s housing shortage and revived questions over donations made to the Labour Party in Manchester. I’ve just got hold of a transcript, so if you missed the show, here’s the story:

Manchester Central Constituency Labour Party has received more donations from property developers than any other in the country – tens of thousands of pounds. They’ve even solicited cash.

On 1st June 2004, the party held a fundraising breakfast here at the Manchester City Art Gallery. Among the donations was £5,000 from a company called “Ask Property Developments”.

The Labour Party did well in the subsequent election and was returned to power. And this is when things take an interesting turn.

On 7th July 2004, the Council announced who was to build a casino in this part of East Manchester.

Simon Ashley (SA, Leader of the Liberal Democrats in Manchester): “Then a couple of weeks later, an application comes in to build the casino in East Manchester and one of the companies that had donated, Ask Property Development, were the preferred bidders.”

Andrew Gilligan (AG): “They were chosen as the preferred bidders by the Council?”

SA: “They were chosen as the preferred bidders by the Council, yes.”

AG: “After they had given £5,000 to the Labour Group?”

SA: “Yes.”

AG: “How long after?”

SA: “Six weeks.”

AG: “Six weeks?”

SA: “Yeah.”

AG: “Is there a conflict of interest there?”

SA: “Well, nobody at that meeting declared an interest and I think certain people knew about the donations and those people should have declared an interest.”

Simon Ashley referred the leader of the Council and his Deputy to the body set up to examine Councillors’ behaviour, the Standards Board for England.

SA: “The Standards Board said that as they hadn’t personally benefited, that it was the party that had benefited, there was no conflict of interest and they needn’t have declared it.”

AG: “What did you make of that verdict?”

SA: “Well, I thought it was wrong then and I think it’s wrong now.”

AG: “Why?”

SA: “Well, clearly they benefited; they were elected. The money was spent in their election campaigns and they benefited by being elected and still running the Council.

We took our findings to Tony Travers, a public policy expert at the London School of Economics.

Prof Tony Travers (TT): “I think many members of the public would see giving people money indirectly to fight an election as an indirect way of trying to influence political decision-making. And, you know, in the end it creates a dependency, which is not good for local politics.

Ask properties told us it believed Labour’s policies were “advantageous to all Manchester” and it had made donations in order that Labour could “continue it’s excellent work”.

Our research shows property developers continue to pump money into Manchester Central Constituency Labour Party. And it’s not just casinos but student housing too.

In April 2004, the party received a huge personal donation of £10,000 from the Managing Director of Opal Property Group, Stuart Wall. Two months later, Opal submitted a planning application to convert this former car showroom into student accommodation.

Our records show that only one of the six Labour members sitting on the planning committee declared an interest and left the room when the matter was being discussed. The planning application was approved.

Stuart Wall said there was “no link” between his personal political donation, as a longstanding Labour supporter and any “business activity” conducted by his Opal Property Group.

AG: “What’s the overall effect of this on the reputation of politics, do you think?”

TT: “Bad. There’s no question that this kind of raising money for political parties, even if it is adjudged to be lawful, and it’s tested on occasion by the standards board, will, as at the national level, raise questions in the electorate’s mind, question which would further erode trust in British politics.”

…

In the last few years, thousands of luxury apartments have sprung up in Manchester and Salford. Waterside chic; urban living. Except that not many of the locals are feeling the benefit.

Steve Cooke (SC): “The number of people on the waiting list for Council Housing in Salford has now gone from just over 3,000 to over 12,700.”

AG: “In how long?”

SC: “It’s about five years or so. And yet we have over 6,000 houses lying empty in Salford.”

Many of those vacant properties are in the new luxury developments like these. Most of these homes have been bought by investors. Forty-per-cent are simply empty.

SC: “We’ve been saying for years, you need to stop building quite so many flats and start looking at family housing in different parts of the city.”

That was exactly what the government tried to do. It’s “North-West Plan” set strict limits on the numbers of new market homes in the region and imposed tough targets for developers to build houses which local people could afford.

AG: “What North-West didn’t need was lots more unaffordable, market housing but that is exactly what it got.”

The big house-builders hated the new North-West Plan. We’ve learned that they hired lobbyists called Media Strategy to get the affordable housing targets in it cancelled.

We’ve seen company documents in which Media Strategy boasted of its success by using “overt political pressure” and “thorough face-to-face briefings of politicians”.

After Media Strategy got to work, they succeeded in getting house-builders places on the board that drew up the North-West Plan. The old plan was torn up. The new policy was much more to the house-builders’ liking.

So when the policy was finalised last year, the amount of new housing had doubled to 22,000 a year and all targets for affordable housing had disappeared.

AG: “Why does Salford need affordable housing? It’s not been a high-priced area in the past.”

SC: “Well, the price of houses has shot up in the past few years. It’s more than doubled and a population which was falling is now levelling out and starting to rise again. So we’ve got this changing population; we’ve got far fewer affordable houses than we used to have and the ratio of incomes to house prices is getting wider.

AG: “And that’s why the original government strategy said we need affordable houses in this area and that’s why we needed a limit on market house. And so why was it changed?”

SC: “I wish I knew!”

The North-West Plan was designed to solve the North-West’s affordable housing crisis but the developers neutered it. And they didn’t stop in the North-West.

There’s an interesting online discussion about the piece here, including some exchanges with Andrew Gilligan himself.