With the ever-expanding scandal of the UK loans affair, teflon Tony
Blair may finally have come up against something that will leave a
mark, not merely on the PM himself, but on the Labour Party’s electoral
chances. Scarcely a news bulletin goes by without new information
coming to light – the latest being that one of the lenders was the head
of Capita, a company the British government pays hundreds of millions
of pounds to manage contracted out services. As yet there’s no smoking
gun, no memo saying “this person is appallingly unqualified to be in the
House of Lords but we owe him”.

Nor is there likely to be, even though the Scottish and Welsh
nationalists have upped the heat by reporting the matter to Inspector
Plod as a possible breach of the law against the sale of peerages,
thereby making an official criminal investigation unavoidable. But the
affair has finished Blair’s reputation as an honest man with the
British public and also soured his relationship with the British Labour

It’s a long time since that relationship has been sweet – nevertheless,
despite concerted opposition from the left sections of the party, Blair
has always held the respect due to a man who can win elections, even
amongst those who think him too far to the Right. The sense that Blair
and a few key New Labour players operate as a group within the party
has always been accepted as the price of power – it was most obvious in
the passage of the education bill, won with Tory support against 52
Labour dissenters.

But the loans affair leaves Labour members no alternative but to
confront the degree of contempt that the New Labour grouping – the
degree to which they consider the party itself to be little more than a
host vessel for the maintenance of power – holds for the rank and file.

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