SPECTAT THE OR
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MR DAVIES'S BUSINESS
here was a time when a rich man
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would have found it easier to squeeze through the eye of a needle than into the inner councils of the Labour party. No longer. First Geoffrey Robinson of the off- shore trusts was given a job in the Treasury, supervising overseas taxation policy. Now Gavyn Davies, a Goldman Sachs economist and close adviser to the Chancellor Gordon 13rown is about to benefit from one of the most blatant acts of collective corporate greed in recent financial history.
Mr Davies is a partner in the investment bank Goldman Sachs, which this week decided to become a public company. The 190 partners argued that this would give them access to the extra capital that they need to compete on a global level. More interestingly, it will also mean that each partner walks away with shares worth an estimated £60 million each. A recent change in the British tax regime means that Mr Davies will save £16 million on his tax bill, Provided he keeps the shares for a few years. The decision throws away the unique tradition that has made Goldman Sachs so successful. It makes a mockery of the intention of the firm's founders that each generation of partners should hold their stake in the company in trust for future generations of owner-managers. Despite the justifications, it was motivated by the determination of a group of rich men and Women to become even richer. Not one single Labour voice has been raised in hostile criticism. After all, the Party believes that it has discovered capitalism, and must therefore enthusiasti- cally embrace the concept of a few people making large amounts of money. Tony Blair is obviously proud that there is a place at the heart of New Labour for the very rich. Unfortunately, like many new recruits to complicated and ancient religions, Labour have become confused and overzealous. Theirs is the traditional zeal of the convert. They have mistaken greed for capitalism Lending silent supportto Gavyn Davies means that the Prime Minister is endorsing and encouraging the pursuit of individual enrichment by a firm's managers at the expense of its future success. So much for his party's theoretical commitment to long-termism.
As this Parliament, and possibly the next one, continues with Mr Blair in Downing Street, we will all have to monitor carefully the development of this unlikely love affair between Labour and capital. Money can be just as corrupting as power, and the combination of the two is particularly potent. Experience in town halls has shown us that the Labour party is far from incor- ruptible. The Prime Minister must take care that his party embraces a genuine capitalism, not a twisted cronyism.
There is an opportunity here for the Tories. Their first reaction will probably be exasperation; no Tory adviser, in a similar situation, would have escaped a barrage of `fat cat' criticism. In the longer term however, the Conservatives must loosen their opportunistic ties with big business. Instead, they should return to their historic role as the defender of the little man against the Whiggish plutocrats whose pro- gressive political views are balanced by reactionary economic opinions. They could start by asking Mr Davies to condemn his bank's decision, or admit to hypocrisy. If Mr Davies will not recant, then the Chan- cellor himself must denounce his adviser.
The ship of state is heading for another constitutional shoal. It has been reported that on New Year's Eve, 1999, the Queen will take a barge down the Thames and see in the new millennium in the Dome at Greenwich. This latest development epito- mises everything that is wrong with the relationship between the monarchy and New Labour. The Dome is a highly contro- versial political scheme, to which there are big objections. Despite the government's attempt to portray it as bipartisan, and Michael Heseltine's determination to frus- trate Tory attempts to oppose it, the Greenwich folly is a Labour, more specifi- cally a Mandelsonian, project. The Minister without Portfolio has staked his political reputation on its success. We can be sure that if it succeeds he will grasp, along with Mr Blair, most of the credit.
Of course, there is a good chance it will be exposed as an extremely expensive white elephant, in which case Mr Mandelson's political career will be over. This, however, is much less likely if the Queen gives the Dome such an overwhelming public endorse- ment. Her Majesty will have saved Mr Mandelson's reputation. This is not the first time that New Labour have persuaded her to take a political stance. Her support for the Good Friday peace agreement, before the Irish referenda, was another recent exam- ple. That was a mistake; floating down to Greenwich would be a folly. We can only hope that this latest leak from the New Labour news machine has not yet been cleared with the Palace. The Queen should let it be known that she plans to see in the millennium at Balmoral, where the Scots know how to throw a traditional Hogmanay celebration.
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