Labour Finance and Industry Group

The Labour Finance and Industry Group (LFIG) was created in the late 1980s to assist the Labour shadow cabinet. The antecedents of New Labour's adoption of PPP can be traced in the role of the Labour Finance and Industry Group in the early 1990's, which acted as a quasi civil service to the opposition front bench. As the Conservative government unveiled its PFI policies in the wake of their 1992 general election triumph the Labour party began a process of 'modernisation' which, according to some saved the party from political extinction (Gould 1998). For others, this process hollowed out the Labour party as a grassroots political movement aligned with collectivist or universalist values. The LFIG played a largely unnoticed role in the modernisation process, and during that period they 'undertook much of the preparatory research behind Labour's adoption of the PFI and claims authorship of much of the work which went into developing systems for using private sector funding to deliver public sector capital projects and service provision' (in Osler 2002: 20), a contribution 'generously acknowledged' by DPM John Prescott. The LFIG claims as a 'particular achievement' a conference they organised on PFI that formed the basis of party policy when in government. The modus operandi for the LFIG was to meet with shadow ministers and to host 'private seminars and dinners for open exchanges of views between shadow ministers and Group members and conferences to provide platforms for controlled publicity' (emphasis added)[1].

In essence, the LFIG and the Labour shadow cabinet were instrumental in developing a policy response to the Tories PFI which would appeal equally to the City and allay public fears of Labour as a tax and spend red menace returning to power. The LFIG was also, unsurprisingly, moving in the same circles as those party members connected with the mushrooming lobbying industry in the UK throughout the 1980s and 1990s (Osler 2002: 100-116). Many of these lobbyists would later provide important links between the Blair government and those private corporations in the market for PFI business, or in lobby-speak, they would help interpret the New Labour policy agenda for their private sector clients.

As Tom Pendry, former deputy chair of LFIG wrote recently in the Guardian (20 March 2006) the origins of Labour's courting of big business stretches back to the 1970s:

'There was an informal political club of supporters, with its roots in the Wilson-Callaghan, era that has never entirely been understood outside the circle of immediate donors and their political beneficiaries.'^[2]

For one so closely implicated in fostering relations between New Labour and outside interests Pendry appears to have some qualms about what was going on in the pursuit of funds to fight elections and finance the running of the Labour Party. Pendry asks:

'Why were prominent business figures as early as the mid-1990s operating opaquely to fund the private offices of rising politicians, internal party campaigns and individual bids for power? Who were they? What were their interconnections? What did they get in return? Did any of them have overseas connections? Who is now investigating this matter of central public interest?...all private-sector funds - not only to the party, but to past individual political campaigns, associated thinktanks and bids for leadership in cash or in kind (such as the loan of office space) in the 1990s - should be investigated by an independent party commission, to assess the scale of the problem and create more effective rules for future private-sector engagement with political funding.'

Notes

1. ^ Tom Pendry, Time to reform Labour's links with business The Guardian, Monday March 20, 2006