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Mandelson impartial but friend of family

By Ewen MacAskill, Chief Political Correspondent
Tuesday September 8, 2020

Peter Mandelson, the Trade and Industry Secretary, has an extensive network of influential friends and contacts. Among them is Elisabeth Murdoch, daughter of the tycoon and managing director of Sky Networks.

Diarists have reported the two as close. One reported Mr Mandelson dined with her twice in the same week just before Christmas: another that he offered a shoulder to cry on after the break-up of her marriage. "Complete rubbish," said his office yesterday. They are friends, but not that close. They have met less than half-a-dozen times.

Even if it is a loose link, it is a significant one. The last time they met was at a ceremony in February to announce sponsorship deals for the Millennium Dome, Mr Mandelson's pet project. Elisabeth Murdoch's BSkyB was among the much-needed sponsors.

The links between Government and the Murdoch empire are extensive. They stretch from Tony Blair, who flew to Australia in 1995 to woo Mr Murdoch, to a whole host of relationships at middle and lower levels: shared friends, shared social occasions.

But problems arise, when as with Mr Murdoch's planned take-over of Manchester United, there is a potential conflict of interest. Can Mr Mandelson, given his friendship with Elisabeth and the Government's relationship with the Murdoch empire, put aside his personal feelings and reach an impartial decision on whether or not the club take-over should go ahead?

Mr Mandelson's office insisted yesterday that the secretary of state would act with "complete impartiality".

The difficulty is that Mr Blair's Government is seen as being close to Mr Murdoch, and no matter how scrupulous Mr Mandelson might be in reaching a decision, if he gives the go-ahead, he will find it difficult to dispel suspicion. Labour MPs, at least in private, have expressed concern. Some predicted that the Government, given its fear of the power of the Murdoch press, will cave in. Others, confident the take-over bid will prove unpopular with the public, have hoped the Government would sever its links with Mr Murdoch.

In spite of the leadership's close relationship with Mr Murdoch, there is little love for him in the party at large, which is not slow to forget the way the Sun repeatedly undercut the former party leader Neil Kinnock.

Close relationships between ministers and those influential in business and the media are inevitable. Mr Mandelson, newly promoted to the Cabinet in the summer reshuffle, has more shakers and movers in his personal directory than any other government minister.

He has contacts ranging from the world of entertainment, such as the impressario Sir Cameron Mackintosh and the Ministry of Sound's James Palumbo, through to the socialite Lady Carla Powell, wife of Lady Thatcher's foreign affairs adviser, Sir Charles Powell. His circles overlap. Matt Freud, the PR man organising the launch of the Millennium Dome, is a friend of Elisabeth Murdoch and Mr Mandelson.

A pointer of what might happen in the case of Manchester United is provided by the example of another contact, Bob Ayling, chief executive of British Airways who also chairs the body running the Millennium Dome.

When Mr Mandelson took over as secretary of state, he faced a potential conflict of interest when asked to rule on BA routes. But Department of Trade lawyers advised there was no conflict of interest, and they are likely to do so in this case too.

Apart from the Mandelson-Elisabeth link, Mr Murdoch can speak direct to Mr Blair and to the Chancellor, Gordon Brown, who flew to Idaho earlier this year to attend a Murdoch conference. Mr Blair ran into trouble when, in information that had to be prised from Downing Street, it was revealed that he had intervened on behalf of Mr Murdoch in a business deal with the Italian prime minister, Romano Prodi. Alastair Campbell, Mr Blair's chief press officer, is the architect of Labour's policy of successfully winning over or neutralising rightwing tabloids such as the Sun. He is a former Murdoch employee, and was political editor of the now defunct Today.

There is a more direct link between the two organisations. Tim Allen, who worked for Mr Blair as a press officer for years and was, after the election, deputy press secretary at Downing Street, left before Christmas to join BSkyB as director of corporate communications.

The proposed take-over throws up other connections. The deal is being put together by the investment bank Goldman Sachs, whose chief economist, Gavyn Davies, is a friend of Mr Brown. His partner, Sue Nye, organises Mr Brown's office.

Mr Mandelson is in a potentially no-win situation - anger the Murdoch empire, or the football fans and the wider public. If he decides in favour of the Murdoch empire, he will face jibes that he put the interest of the Charmed Circle before the interest of ordinary fans, no matter how scrupulously he conducted himself during the investigation.

Labour is going to learn fast over the next months that being in government is tough.

Copyright Guardian Media Group plc.1998


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