Will Liam Fox be damaged by Saatchigate?

The financial scale of Saatchigate is still disputed. Today's Times raises the estimated cost to £2.9m. Yesterday allies of Lord Saatchi claimed that the sums involved were "only" £769,000.

Thursday's Times reported that Michael Howard was "incensed" with Lord Saatchi. One "source close" to the outgoing Tory leader told Andrew Pierce:

"Michael was furious with Maurice’s criticism of the campaign. His sense of outrage will not have been lessened by the revelation of the scale of the costs run up by Maurice’s companies. Michael did not know about them because he delegated that to others."

Rumours of large payments to Lord Saatchi's companies were circulating around Westminster some months before the General Election. Some will conclude that Michael Howard should have known about the payments to his Co-Chairman's business interests and should have stopped them. Saatchigate is only the latest dent in Michael Howard's reputation. Today's Telegraph reports the decision to scrap the reforms to party organisation that he and Francis Maude unveiled a few weeks after the 5th May election.

Saatchigate only has the potential to damage Michael Howard's reputation. The consequences for Liam Fox may be greater. If Saatchigate develops from a August-time story to something bigger, Dr Fox will face questions about what he knew and what he did, as Maurice Saatchi's Co-Chairman.

Comments

[James Hellyer]

After the appointment of Lynton Crosby as campaign director after the last party conference Lord Saatchi apparently played no part in the briefings or approvals of Conservative advertisements.

As Saatchi wasn't directly involved on either side of the transaction, it's hard to what the scandal actually is - other than sour grapes on the part of those who devised our election strategy.

While it's true that there should be a system of controls in place that would stop someone awarding contracts to their own companies, there's no evidence here that happened. Or if there is, it's not been made public.

This increasingly looks like an attempt to smear Lord Saatchi for having the nerve to offer a dissenting voice.

[Richard Morris]

Well done barry Legg and "a better choice" for stopping half of Maude's package: http://www.abetterchoice.co.uk/index.php?option=com_content&task=view&id=49&Itemid=54

But there's clearly more to do - and equally clearly, it can be done! We can stop the leadership system being changed, so everyone who can should help the campaign against the changes.

[Mark O'Brien]

I don't like what this charade is turning into. Rather than seeking to delicately cast blame here and there, I think there's only one reasonable response to 'Saatchigate': let's stop fighting expensive election campaigns. Contrary to popular belief, they are unnecessary, it is easy to run a campaign on a more austere budget if you give more emphasis to each and every constituency campaign, rather than the big national picture, a cheap campaign only has to have shadow ministers visiting key seats and walking down the street or through the town centre, shaking hands with people, giving them the low-down on policy and giving quick stump speeches about everything we're going to do. After all, we still get equal news coverage, however much we spend. Wouldn't it be better if our coverage wasn't like Labour's Weakest Link ministers' presentations, with Blair shielded from any tough questions; or the Liberal Democrats' sit-down sessions with Westminster lobby correspondents; wouldn't we be presenting a much better image if we didn't stand in front of a big blue screen in an expensive auditorium, but if we were out on the streets, talking to people, and - as if politicians have become agoraphobic en masse - BEING BRAVE!

And maybe if we're not flashy and decadent, perhaps some people will have a bit more respect for us. The expensive campaign will only land us in more trouble.

[Editor]

I think you make a lot of good points, Mark...

The Tories haven't embraced the PR maxim that 'money spent early is spent better'. We still pour millions into 23rd hour billboard advertising of dubious merit and when voter perceptions are hard to shift. If we actually built the kind of grassroots army that Karl Rove/ George W Bush built we might end up in a stronger position. That needs to be done over the years before an election and by understanding and inspiring the parts of the electorate most likely to vote.

I can't agree with you, James...

'Saatchigate' matters a great deal. I don't accuse Lord Saatchi of anything dishonest or illegal. The problem is that the whole affair reinforces the popular sense that Conservatives look after themselves. Giving volunteer donors' money to 'insiders' might be excused if it had been very effective but it wasn't. Nepotistic spending habits look particularly unacceptable when they had negligible impact.

How the Conservative Party manages its internal affairs is one of the few clues that the electorate can assess for how we'll behave in government. They see us take power off of our members in the leadership election and they can be forgiven for wondering if we're really committed to localisation and the spread of democracy. Taxpayers see us run a poor campaign - in which we give as much as £3m to the business interests of well-placed insiders - and they wonder if we'll be wise stewards of their money.

[James Hellyer]

"Giving volunteer donors' money to 'insiders' might be excused if it had been very effective but it wasn't."

I think this is a false argument. It would only have a point if Lord Saatchi was responsible for the campaign in either commissioning his own company or working within said company to realise it.

The evidence so far is that he did neither. Indeed it appears that the real driver of the complaints is that he later criticised the strategy.

The real people who are to blame are the ones who did commission the election campaign and gave M&C Saatchi their briefs. Those people appear to be Michael Howard and Lynton Crosby.

It's the people who were behind the campaign who deserve criticism, not their patsy.

[James Hellyer]

At any rate, the key point in the coverage is Michael Howard disawoing all responsibility because he's delegated "day to day running of the campaign" to Lynton Crosby. So much for accountability.

[Editor]

Your arguments are very "lawyerly" James and completely fail the 'how will this look on the front page of the newspaper?' test. The crucial fact is that this episode reinforces the Tory problem of appearing to be in politics for ourselves and not for hardworking families or, in this particular case, for grassroots volunteers.

You say it is unfair to blame Lord Saatchi when the principal offenders are Michael Howard and Lynton Crosby. Maybe, maybe not. Whilst, of course, it matters to Lord Saatchi if he is seen as the principal offender it doesn't matter as far as how this looks for the Conservative Party. Tory HQ was either guilty of poor ethics for allowing an appearance of nepotism or incompetence for not having adequate internal controls.

[James Hellyer]

"Your arguments are very "lawyerly" James and completely fail the 'how will this look on the front page of the newspaper?' test."

I happen to think that if someone is being accused of wrongdoing, they actually have to have done something wrong.

Unless Lord Saatchi was either responsible for commissioning a company he part owns or directed their work from (in either his Party or company capacity), he has done nothing wrong and there was no conflict of interests.

That may not be tablod friendly, but it's how things stand.

"The crucial fact is that this episode reinforces the Tory problem of appearing to be in politics for ourselves"

And that's certainly the message the story sends. Why else would something that appears damaging to to the party be leaked to the press? It's a self-constructed scandal raised to get even with Lord Saatchi for speaking out. Why else do the stories consist of "sources close to Micahel Howard" bemoaning Saatchi's lack of loyalty?

"Tory HQ was either guilty of poor ethics for allowing an appearance of nepotism or incompetence for not having adequate internal controls."

I'm perfectly prepared to accept that CCO has inadequate internal controls. After all they can't even cope with a central membership resister and don't know who sits on the Constitutional Convnetion - if they can't do the simple things, then it's all too plausible that contracts are awarded on a nod and a wink.

But that's not the story here, even though it should be. The proper response to a story leaking about a party officer's company having a contract with the party, would be to state that the party's internal controls ensured that that person played no part in the tendering process, or that there was a failure but suitable safeguards are now in place.

Nobody has said anything like that. What have they said? Lord Saatchi's not loyal. That tells us all we need to know about why the story is there. It looks like it's all about getting their own back.

The election campaign failed not because we commissioned bad posters and leaflets (an awful lot of them were very good), but because they were trying to sell a something nowhere near enough wanted to buy.

This just seems to be another story with an agenda.

[Editor]

I don't think anyone has accused any one of "wrongdoing" in a legal sense. The "wrong" is the sour taste in the mouth caused by the whole episode. Lord Saatchi should not have allowed his business interests to prosper from Tory contracts whilst he was Co-Chairman. The CCO staffers who took the decisions to buy from their boss' companies (or the co-chairman's colleagues if it was they) should have known the inappropriateness of that.

You're right, of course, to say that the real problem was that Tory HQ was trying to sell something that too few people wanted to buy but I still think that you are missing the political difficulties of Lord Saatchi's business interests gaining so much from his time as Co-Chairman (even if legally he did nothing wrong and was not part of the signing of contracts).

[Selsdon Man]

I agree with the editor's comments. The only way to clear up 'Saatchigate' is to have an independent inquiry to examine the Party's procurement procedures for awarding all contracts. That would include those awarded to companies that owned or affiliated to (e.g. through the Influence network) M&C Saatchi. The report should then be presented to the next national convention.

[Editor]

Lord Fowler offers a spirited defence of Lord Saatchi on The Times' letters page:

"Sir, The criticism directed at Maurice Saatchi (reports, August 6) is unjust. Few people can have such a long record of helping the Conservative Party. His advertising campaigns substantially helped the party’s victories in the 1979 and 1992 election campaigns, but his contribution has gone way beyond that.

When I took over the chairmanship of the party after the 1992 election I inherited a frankly disastrous financial position. Maurice Saatchi was crucial in phasing the 1992 advertising bill and helping in every other way which was compatible with his responsibility to his shareholders. Surely at the last election the party understood that it was contracting with a public company?

He has been accused of disloyalty by suggesting that we have lessons to learn from our 2005 defeat. I would have thought that was self-evident. I had also understood that learning some of those lessons was what we were doing just now.

Personally I prefer to listen to someone who is prepared to be open about what he is suggesting than to the sly comments of people who claim to be “senior” Conservatives, but mostly dare not speak their names.

NORMAN FOWLER
House of Lords"

Some good points from Lord Fowler but the former Tory Chairman doesn't in any way deal with the central issue of how big-contracts-for-insiders spoils the Conservative Party's public reputation.

PS Lord Fowler is roundly criticised by Peter Oborne for his disastrous oversight of Boundary Commission issues during his time as Party Chairman. Writing in this week's Spectator Mr Oborne states:

"The last Boundary Commission review was carried out in the early 1990s, when Norman Fowler was Conservative party chairman. Fowler permitted the Tory case to be presented with unique incompetence, and in what can only be regarded as a suicidal manner. Each Tory constituency under threat from the Boundary Commissioners hired its own barrister to make its case, often against Tory rivals. Seats with comfortable majorities fought to be made even more comfortable, with little or no consideration for neighbours under threat. By contrast the Labour party, with a far clearer strategic view, fought a holistic campaign. Norman Fowler remains a dirty word in some Conservative Central Office circles to this day as a result of the negligence he is considered to have displayed in the early 1990s."

[James Hellyer]

"...the former Tory Chairman doesn't in any way deal with the central issue of how big-contracts-for-insiders spoils the Conservative Party's public reputation."

... because that really isn't an issue. M&C Saatchi had the contract with the Conservative Party before Lord Saatchi became Co-Chairman.

Whether Saatchi was giving his time or not, the company would have got the work because it was under contract.

I'm convinced that the only reason the story has been given legs is in retaliation for Saatchi speaking out after the election. The slant of every article in the press makes that abundantly clear.

But I doubt anyone else will see eye to eye with me on this.

[Paul John]

Let's make sure that inquisition into how the Tory leadership sqaunders money includes how and why Duncan Smith gave all that dosh to YouGov.

[James Hellyer]

Wasn't that the CSJ's dosh rather than the Conservative Party's dosh?

[Editor]

The Conservative Party - under IDS - and IDS' CSJ have both used YouGov.

But I can't see what the issue is?

(1) YouGov have proved to be a very accurate pollster. Along with NOP they were closest to the General Election result and were also the most consistent during the campaign (which would suggest reliability if we believe that public opinion didn't shift much during the campaign).

(2) IDS makes no financial gain from YouGov's success.