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Lord Desai

Lord Desai
Lord Desai is a Labour Life Peer and a leading member of the Asian community in the UK. A former member of John Smith's shadow cabinet he is currently director of the Centre for Global Governance at the London School of Economics.

Interview Transcript:

NB: THIS TRANSCRIPT WAS TYPED FROM A TRANSCRIPTION UNIT RECORDING AND NOT COPIED FROM AN ORIGINAL SCRIPT: BECAUSE OF THE POSSIBILITY OF MIS- HEARING AND THE DIFFICULTY, IN SOME CASES, OF IDENTIFYING INDIVIDUAL SPEAKERS, THE BBC CANNOT VOUCH FOR ITS ACCURACY.

Jane Corbin, Panorama:
First of all, tell me how you know or met the Hinduja brothers and your first recollections and memories of the way they were or are.

Lord Desai:
I first met them on a plane going from Delhi to Bombay, and that was late 1992. I'd gone there to give some lecture, and after having given a lecture in Delhi I was going to Bombay and they were on the same flight as I was. I had, of course, heard of them, because they are quite famous people, but they sort of were very friendly on the plane. I think two brothers were there, Srichand and Gopichand and they said.. you know.. we must get together and you must meet and so on, and in the next sort of 4, 5 years, I saw them occasionally and I think they probably thought that I was a good Asian bloke to know. But I'm not a good Asian and not a good Lord so.. (laughs)

Jane Corbin, Panorama:
When you say they thought you were a good Asian Lord to know, how did they go about getting to know you?

Lord Desai:
Well you know they.. in a sense.. in a way one would do, you invite people to your home or to their office and talk about what can we do for you... what can you do for us sort of thing. And a variety of projects were discussed, none of which came to any fruition. But they were very much interested, as it were, getting to know me and for me to be part of their circle of patronage.

Jane Corbin, Panorama:

They certainly were interested in getting access to people

Lord Desai
Did you feel that they wanted to know people of influence, this was part of the way that they operated?

Lord Desai:
They did want to know people of influence, indeed a lot of the time they told me how many people of influence they did know. So they have extensive contacts and it was quite clear that they knew John Major and Margaret Thatcher and so on and so forth, and it was quite clear. I was probably the least important person they tried to influence but they certainly were interested in getting access to people.

Jane Corbin, Panorama:

If you want a concession... having a minister on your side is very helpful

Lord Desai
Why do you think they wanted to work in that way?

Lord Desai:
Well in a sense that's what a businessman does. You know.. a businessman wants inside information. Inside information is extra profits, be that an Asian businessman, a white businessman or a yellow businessman, and I think it's also true that if you want to get things done, knowing ministers is helpful. If you want a concession, if you want an investment contract, if not here abroad, having a minister on your side is very helpful.

Jane Corbin, Panorama:
And that's something the Hinduja brothers understood.

Lord Desai:
Well they definitely understood that. That I'm sure was their way of operation. They had operated in Iran and they knew in Iran how to do that, and they have been in oil trades and lots of barter trades where basically you do these things by person to person contacts.

Jane Corbin, Panorama:
And that was no different in Britain.

Lord Desai:
That's not different in Britain.

Jane Corbin, Panorama:

The Hindujas were not voters but they were very influential in the Asian business community

Lord Desai
Now you've mentioned meeting them on a plane in 1992. At that time of course the Conservatives were in power. Did you get the impression that they had strong links with the Conservatives in the 90s?

Lord Desai:
Absolutely, absolutely, I was told several times in conversations that they knew John Major, they knew Geoffery Howe, they knew Margaret Thatcher, they knew Nigel Lawson. Of course I had no reason to doubt that they did know them because also at that time the Conservatives were doing a big push for Asian businessmen to be on their side and regarded at least the business community among the Asians as very much the Conservative vote bank, and so this was all part of the same process. Oh the Hindujas were not voters but they were very influential in the Asian business community.

Jane Corbin, Panorama:
Now let's talk about the Asian community because of course as you say the Hindujas present themselves as being influential. I mean how far was that true?

Lord Desai:
I think it is hard to judge but I imagine that there is a lot of rivalry, certainly, among the top Asian businessmen, and I don't think they all quite approve of the somewhat pushier style of the Hindujas compared to the style they have. After all, we have some distinguished Asian businessmen. I mean in the House of Lords we have Lord Paul, we have Lord Parekh who are all distinguished businessmen and whose style is very different in operation than the Hinduja style.

Jane Corbin, Panorama:
So you think that has given rise perhaps to some dissention within the ranks as it were.

Lord Desai:
Well I think the Asian community, like many other communities, at home and in India or here or anywhere else, has that sort of minor conflicts and under an overall fašade of friendliness and bon ami there are little rivalries, and that's quite natural...

Jane Corbin, Panorama:
Now you talked about meeting them personally, having meetings beginning in 92, what did you make of S.P. Hinduja? I mean how important was he within the family? What was his role and what kind of a person did you find him to be?

Lord Desai:
S.P. Hinduja is a very intelligent man, and he is the lynchpin of the entire operation. As eldest brother he leads and he commands respect from his brothers and from the rest of the family. He is head of the Hindu joint family as it were, and the same would be true of any oldest brother in a joint family in India, so that is true. But he, I think, is really a man interested not only in business but in ideas. It's his concern that research and knowledge be pursued and he once showed me a document he wanted to argue for some world peace and he wanted to sell it to John Major and so he is very kind of fascinating person who has many ideas, but he is the brains behind the entire operation.

Jane Corbin, Panorama:

One doesn't get to be a billionaire without being very tough and very manipulative

Lord Desai
Some would say there may be a darker side to his personality, manipulative, tough in business, overly tough perhaps.

Lord Desai:
One doesn't get to be a billionaire without being very tough and very manipulative, and being smarter than your rivals, and doing down your competitors. I think that would be true. But within that I think he would perhaps present himself as a devout religious man who is a vegetarian, doesn't drink, he's interested in knowledge and so on, and both those sides are true. He is a very sharp businessman, really tough when it comes to negotiations, and not given to suffering rivalry. But then, why not?

Jane Corbin, Panorama:
So moving on we come now to the point where the passport application starts to come in. The Conservatives were in power, of course the Bofor scandal broke in India and it continued for many years. Do you think the Conservatives were aware of it and how much do you think that might have been an issue in the original decision to turn down a passport application from the brothers?

Lord Desai:
I'm not privy to how Conservatives think, but since I follow Indian news quite closely I was quite aware of the allegations and I was also aware of the lot of work that the Newspaper "Hindu" had done on this case, and the fact that the Hindujas were suspected of being involved has been public knowledge in India for ages. And it would be surprising if the Conservative Government did not know about it. They must have good intelligence coming in from India, they must have read newspapers. It was an open fact.

Jane Corbin, Panorama:
And of course they turned down the passport application.

Lord Desai:
I will not know why passport applications are vetted or turned down. When I myself applied for a passport, having other Indian passport about 25 years ago, no questions were asked. It took about 13 months but it was pretty straightforward. I did get my passport and I had not delivered any money to any party.

Jane Corbin, Panorama:

They did not hide the fact that they had obtained access to the highest echelons of the Conservative Party

Lord Desai
There was always the feeling that they had given money to the Conservative Party and that this would have been part perhaps of being in with the party of the time.

Lord Desai:
I think the important thing about the Hindujas is that they're not subtle. They do things very, very openly and I don't know whether they gave money or not but they did not hide the fact that they had obtained access to the highest echelons of the Conservative Party, and those things don't come cheap.

Jane Corbin, Panorama:
Moving on now to 97 or indeed just before it, 96, Labour was obviously in a position where they were going into the election with great strengths. There was going to be a sea change in the political establishment here, and it was at this time we certainly hear reports of the Hindujas beginning to make new political alliances. What do you think was going on in those months just before Labour came to power and indeed after the May landslide election?

Lord Desai:
I think they must have sensed in 95... 94-95 that Labour was going to win. They were of course already in touch with Labour Party even when we were in opposition. But I don't know that they really had access to John Smith, anything like as much as they have had subsequently. But I think they obviously tried. By that time they had abandoned any hope that I was going to be any help to them. So I saw less and less of them after 96. But I do know I saw them anyway gatherings in House of Commons and they were on the periphery in large public meetings, or they were in the front. And they were very assiduous in attending large receptions of that kind given by the Indian High Commissioner or given by some British official and they put a lot of leg work into networking.

Jane Corbin, Panorama:
You did have some dealings with them in the mid 90s over the question of a bank. Now tell me what happened there.

Lord Desai:
Well I think.. I was asked whether I would like to be Chairman of a bank they were going to start, Chairman of the board of directors. And I sort of thought why not? Srichand wanted to have an Asian bank just after the failure of BCCI, and the BCCI episode had made clear that a lot of Asian customers who did not find other British banks welcoming and they needed a different kind of banking, and Srichand was going to come into the gap created by the failure of BCCI, but I presume that he wanted me to be chairman because of name and reputation as an economist or whatever. And I said sure, will do. I said let's see what there is and so on. I didn't know who was going to be on the board beside me but presumed that the Midland Bank was going to be part of the deal 45% of the equity. He was going to sell 6%, he and other people, and 49% to the public. And I said okay, when it is ready let me know. I sort of did not show any great enthusiasm either way. I've got lots of other things to do, when this comes around we will.. I did not ask him about money. He didn't tell me anything about money, but I presumed it would have been well paid. In the event nothing happened. But he did once call me up and say why haven't you called me? I said why should I call you ? He said about the bank? I said what has happened about the bank? He said nothing, nothing has happened either. You have to tell me what has happened. I mean I'm not curious - which doesn't mean I wouldn't have been chairman but I'm not curious about what happens to the bank. I've got other things to do.

Jane Corbin, Panorama:
So it ran into the sands as it were.

Lord Desai:
It ran into the sand. I think it ran into the sand because what I heard was that they were also trying to cut a deal with the Royal Bank of Scotland, same sort of deal, and I think the Midland and Scotland talked to each other and cut them out and started their own pro-Asian sort of business recruitment plans... I think now British banks are much more welcoming to Asian depositors and so there's no need for an Asian bank anymore...

Jane Corbin, Panorama:
So now Labour comes into power. Tony Blair is Prime Minister and we begin to see certainly social events at which both the Prime Minister and Peter Mandelson and other ministers are present. How do you think Labour politicians at the highest level have regarded the Hindujas and what was the quid pro quo in terms of the way the Hindujas saw the new people in power?

Lord Desai:
Yes, I think in a sense Labour politicians must have known that Conservative politicians had gone to Hinduja's (Diwali) celebration. Now there is a problem about naivety when it comes to multiracial relations, and they may have thought that it would be insulting or thought to be slightly odd that Labour would not support an Asian businessman's desire to be seen with them. Or that there was no harm done because everybody else was doing it so they were not doing it. Also I think that the tendency was this is the way they behave and we cannot actually criticise... Politicians find themselves unable to treat all businessmen alike. Somehow they feel they had to make greater concessions to Asian businessmen or Chinese businessmen.

Jane Corbin, Panorama:

I certainly thought that it was very peculiar that the top people were going to these functions

Lord Desai
And you think that Labour made greater concessions to the Hindujas in their willingness to go to their functions to be seen with them.

Lord Desai:
I certainly thought that it was very peculiar that the top people were going to these functions, especially because by 97 / 98 the story about Bofors was much more widely known, much more circulated. Already things have happened about the government of India trying to get documents from Geneva etc. So I was surprised.

Jane Corbin, Panorama:
Why do you think the government didn't seem to know about it? Surely their own intelligence sources would have told them.

Lord Desai:
I think nothing had been proved. Nothing had been proved and to say that I will not accept your invitation because I think something is going to be against you. The man can only be hurt and said "How could you do this to me, you would not do this to a white businessman, why are you doing it on Asian businessmen?" You see there's that aspect of not knowing when to take race neutrally and when to take race specially, and we always have that problem.

Jane Corbin, Panorama:

Tony Blair did what John Major and Margaret Thatcher and everybody else did

Lord Desai
So that in a sense Labour was afraid of being criticised for... being insensitive to Asian feelings.

Lord Desai:
Treat a major Asian business house differently from how the Conservatives have treated it. People said why are you doing this? You know.. you going to lose votes. Are you being racist? And at that stage Tony Blair did what John Major and Margaret Thatcher and everybody else did. It is quite remarkable because I think in one sense the (Diwali) celebrations got more posh with Tony Blair than they were before.

Jane Corbin, Panorama:
Did you go to the Diwali celebrations?

Lord Desai:
I didn't go to any of them. I had invitation to every one of them.

Jane Corbin, Panorama:
And why didn't you go?

Lord Desai:
I don't like large gatherings and I knew that there was a purpose behind these invitations, and I was not going to be part of that.

Jane Corbin, Panorama:
Well the Asian community certainly in 1999 seemed to keep away from the Diwali celebrations, certainly the Indian High Commission. But yet the British Prime Minister was prepared to go.

Lord Desai:
Well the Indian High Commissioner was in a very peculiar position legally by that time because Indian CBI, the Central Bureau of Investigation, was trying very hard to get documents from Geneva and the Hindujas were moving court action against those documents being released so by that time thinking they have got to stage where there was a considerable tension. There certainly was a resistance on the part of the Hindujas apparently, to have the government defend their access to the Bofors papers. And I think therefore the Indian High Commissioner would certainly be careful. Why the British Prime Minister didn't have the same information is not for me to know.

Jane Corbin, Panorama:
Does it surprise you?

Lord Desai:
Well I think, as I said before, that aspect where multiracialism befuddles our minds. We somehow think that we cannot criticise an Asian businessman as firmly as we can criticise a white businessman. That's a mistake. I think it's wrong. We should create everybody neutrally in that respect and similarly in that respect and I think I would be as critical of the Prime Minister, as it were, getting pally with a criminal white businessman or a white businessman suspected of being tried for something as I would with any other businessman and I don't see that race or racism comes into it at all. But people have not got this straight.

Jane Corbin, Panorama:

I don't know what the Lord Chancellor had done to deserve a party.

Lord Desai
Around that time the Hindujas gave a party for the Lord Chancellor, Derry Irving, and indeed Keith Vaz was present there. What was your reaction to that party?

Lord Desai:
Well I got the invitation, I was rather surprised that there was a party for the Lord Chancellor. I don't know what the Lord Chancellor had done to deserve a party. But there was a party and I think like many of these things, it was obviously either a thank you party or a party to get access.

Jane Corbin, Panorama:
Keith Vaz of course also received a party from the Hindujas on the occasion of him becoming the first Asian minister.

Lord Desai:
Yes, I'm sure he did. I don't know whether there are two different parties or.. I think they're the same party perhaps. But you know, what I mean to say, when long before all this I got sacked from the shadow front bench in the Labour Party for getting my wires crossed with John Smith. There was no great problem, I knew I had embarrassed him. Srichand did say to me should I call up John Smith and ask him to restore you to front bench, and I was very surprised. I thought what had it to do with him. He said "He shouldn't treat one of our Asian people like that." I said well that's a Labour Party problem, you know, nothing to do with Asian. My being Asian was no way relevant to the fact that John Smith had sacked me because I had said something about VAT... but he very much wanted to do that sort of thing. So I'm sure one of the things he would have been very happy that an Asian had become minister and he wanted to say well done, one of our boys has become a minister.

Jane Corbin, Panorama:
Did you wonder about the closeness of the relationship between him and Keith Vaz at that point?

Lord Desai:
I didn't quite know how close the relationship was but then Keith has tried to maintain good contact with a variety of Asian businessmen.

Jane Corbin, Panorama:
Where do you think that business of them being prepared to contribute to the Dome and their relations with Labour came together ?

Lord Desai:
Well there are two things. I should say also that the 50th anniversary of Indian independence with a very big party at Dorchester - 1000 / 1500 people were there where the Hindujas were on the platform with the previous Indian High Commissioner and apparently I was told the party went on until 3 o'clock. I went there, took one look at it and left to eat in a quieter place because they were only serving chicken. Anyway, Srichand Hinduja wanted his own Faith complex, somewhere in Peterborough. He had a big scheme, and he showed it to me and he said would I like to be a trustee, I said fine, do that. I didn't do anything about it after that, not did he ask me. He did once, he said "Why didn't you come and help me?" I said you didn't ask me to help you, therefore I didn't help you. But he very much wanted very big spectacular Faith sort of permanent exhibit in Peterborough. He had found the land and so on. And I presume that not getting lottery money for that must have triggered idea well there is something here for his lottery monies and let me get into this. So that the Faith idea was common to those two things. And so presumably this is where all the discussions were going on.

Jane Corbin, Panorama:

I haven't been to the Dome and I wouldn't go there if they paid me

Lord Desai
Do you know anything at all about discussions as they went on over that year or so?

Lord Desai:
I know nothing, no. I mean, I read what I read and I thought ah, this is finally where the Faith complex has ended up. I haven't been to the Dome and I wouldn't go there if they paid me so, it was a gigantic folly.

Jane Corbin, Panorama:
Now when that Diwali party took place in 1999 at which the Prime Minister and his wife were so publicly present, what kind of message do you think it sent to the Asian community and also, in a wider context, the people back in India about the position that the Hindujas had achieved in British society?

Lord Desai:
Well I think people looking at it from a distance must have been impressed. I just find it very embarrassing to see the television clips of this because as I was saying subtle it was not... I was told that it was just an amazing circus, Alexandra Palace of all places. So in effect they had arrived at the pinnacle of their influence in British politics by that 1999. It was much more spectacular than the parties anybody else went to in the previous years, a much bigger party.

Jane Corbin, Panorama:
And of course, those pictures of the Prime Minister with them and Cherie Blair were beamed around the world seen in India?

Lord Desai:
Oh yes, yes indeed. I mean the point was and I'm sure that the Prime Minister knew this, or if he did not know this he was badly advised, that his presence would be exploited by the Hindujas as a proof that they had got very close, and that was a message to other governments. You know, we are very influential people. If you want access to British Prime Minister hire us as intermediaries. And that is a very important message to send in India as well.

Jane Corbin, Panorama:
And by this time of course, the Dome was on target, the Faith Zone was happening with the Hindujas' money, and they also had their passports.

Lord Desai:
Yes, I mean I hadn't realised about this passport business going on. I mean one moment Mohamed Al Fayed's passport and then the Hindujas' passport. Yes, indeed, that was the case. But I presume that there was also the problem of the Bofors going on at that time, and there must have been some connection which Srichand Hinduja is a very, very intelligent man. He makes connections which nobody else makes. And I'm sure in his mind these things much have a connection.

Jane Corbin, Panorama:
The passport and the Bofor's situation.

Lord Desai:
I'm guessing, I'm guessing but I think so. Or rather I could see the connection. I don't know that he could not see the connection.

Jane Corbin, Panorama:

I think what is very important to realise is that nothing illegal has been done by Hindujas

Lord Desai
So we now move forward to the great outburst of questions get asked in Parliament about Mr Mandelson and the passport and really there was all hell let loose. What was your reaction at that point when you saw what Mr Mandelson replied to that question and what subsequently unfolded in the week afterwards?

Lord Desai:
I think what is very important to realise is that nothing illegal had been done by Hindujas. It's not illegal to apply for a passport nor illegal to get it quickly back. It was not illegal to give money to the Dome. The mistake, if any, is on the part of us, not the Government, the Labour Party, that inferences were allowed to be made whether truly or not, that there was a connection between the donation for the Dome and the passport. And I think if an answer had been given without evasion straightforwardly, truthfully and immediately a lot of trouble would have been saved. If you believe there was no connection, there should have been no attempts to evade a simple question for written answer. Now what we know from what Peter Mandelson himself wrote in the Sunday Times, that his first instinct was to say oh, I don't want my name to get into this. But that will be the normal defensive instinct of a politician who has been in enough trouble. But if there is nothing to fear, there is nothing to hide. But again is an instance in which question about any other businessman, lets say an American businessman getting a passport, a white American businessman getting a passport and making a donation, I think somehow culturally will have been handled much better. I think our minds in British politics get unhinged when race gets involved and this is one of the reasons why all this palaver about this because it's somehow looks more suspicious and therefore people react more evasively, more defensively and I think it's a great mistake. You know.. if their government has nothing to hide, the government should have said there's nothing to hide.

Jane Corbin, Panorama:
In the aftermath it was revealed that Keith Vaz had had quite close relations with the Hindujas particularly when it came to pushing forward their passport application. What's your view of that?

Lord Desai:
Well I think Keith was always being helpful to the Hindujas and any other Asian who asked him to do these things. What is also very peculiar is that I don't know why anybody's passport application needs pushing. People apply for passports perfectly legally and they get their passport or they don't get their passport. That is the one view, and you join the queue and you get it, and of course he may want to add a reference. But I think beyond that it will be on the margin of correctness to push it beyond that, I would have thought, especially because they were not his constituents. A constituency MP has to do these sorts of things. And to some extent he has a larger constituency, but then there are things you do, there are things you don't do.

Jane Corbin, Panorama:
There was then of course the big row, Mandelson resigned. Keith Vaz found his job on the line and his reaction was to hit out against what he perceived to be racism. What was your reaction to that?

Lord Desai:
Well I think point is very, very clear that if you are a Member of Parliament and Minister, you are open to scrutiny and accountability. If you're Asian, white or yellow doesn't make the slightest bit of difference and the British press can be very rough, but then when you get into politics you know that. If you don't know that you should not be in politics. As Harry Trueman said, "if you can't stand the heat, get out of the kitchen". And I think when the media were having a go at Keith Vaz, having just had a go at Peter Mandelson and now having a go at the Lord Chancellor, I think it muddied the waters because it actually makes it difficult to argue about racism in genuine cases where racism is involved... And therefore to invoke racism was profoundly wrong in my view.

Jane Corbin, Panorama:

South Asia was at that time not dealt with by Keith Vaz

Lord Desai
The Hindujas then appeared on the David Frost programme and S.P. Hinduja on television said that, yes, they had contacted Mr Vaz to inquire what was the protection given to British citizens. What did you read into that remark?

Lord Desai:
Well in a sense I think Srichand Hinduja is in many ways very bright and in many ways very sort of unsubtle. I mean he wanted to show that he did have high access and he thought nothing wrong with having high access and that he had called the minister about this. The real question was that again as far as I know in the Foreign Office, South Asia was at that time not dealt with by Keith Vaz, it was dealt with by Peter Hain or John Battle or somebody and therefore the relevant minister for problems of extradition to India would have been not Keith Vaz, could have been somebody else. If it was a genuine inquiry of a concerned citizen.

Jane Corbin, Panorama:
So the fact that it was Keith Vaz that they went to would suggest there was some special relationship there.

Lord Desai:
What surprised me was at a time when a Minister of the Labour Government was in trouble Srichand Hinduja did not help matters by saying of course he has got a special relationship... That made it seem much worse if I may say so, because it really put Keith into great difficulty.

Jane Corbin, Panorama:
It seemed to suggest that they had approached him about their difficulties in India and what protection they might have as British citizens with their new passports.

Lord Desai:
I think it made it look like he was doing a job for them, rather than acting as a minister for all British citizens. It looked like, oh, we had a special favour rather than say any citizen can go to the minister to ask these sorts of question and we happen to ask him. Well of course he's Minister for Europe.

Jane Corbin, Panorama:
Not India.

Lord Desai:
Not India.

Jane Corbin, Panorama:
So how would you sum up this whole episode of the Hindujas and is your concern that their action has somehow spilled over to giving an indication about how Asian businessmen operate in the broader sense that is unwelcome. I mean what are your thoughts on this now looking back on it?

Lord Desai:
I think, and I know, because I've talked to some Asian businessmen, that they were very unhappy that it was thought that all Asian businessmen work like this, and all Asian businessmen try to suborn people in politics, try to buy access, not so buy access in general which everybody else does, but by access using the Asian link, that is where the problem is. Businessmen buy access all the time. But in a sense a Liverpudlian doesn't really feel he has to find a Liverpudlian MP to buy access to the Prime Minister and the link being through an Asian MP and an Asian businessman made it look to people superficially in my view, but made it looked to be polite. We really have to fight a lot of racism in this country. We have to avoid simple conclusions being reinforced. Prejudices being reinforced. And if it looks like businessmen and politicians because they come from Asia do not play by the rules everybody else plays by, then that looks bad for other Asian businessmen and other Asian politicians. I think the task of a prospective Asian candidate who wants to come into Parliament will be that much more difficult if people conclude from this, oh Asian MPs will only do work for Asians and not for anybody else or they will be easy prey to this kind of patronage, and whatever the truth of the matter I think that impression was given and I do think that we have to say no, Asian businessman in this country are honest, they're law abiding, they're straightforward, they have got to the top by playing by the rules, and while we may be friendly with Asian politicians they are not actually ever tried to gain special favours solely on the basis of being of the same racial community. That is where the problem is.

Jane Corbin, Panorama:

It does look very bad for us that we cannot discriminate between being friendly to business and being friendly to businessmen.

Lord Desai
And moving beyond the Vaz / Hinduja access, in more general terms what do you think this whole affair has meant for Labour and its relations with business and perhaps it's perception of how it should carry out those relations?

Lord Desai:
I think the important thing is that he had to convey the signal that Labour was not anti business. We were friendly to business. We just don't have to be friendly to businessmen. That is the difference between being friendly to business and getting involved with businessmen in a way that may look compromising to our ethical standards and I think we have to make the distinction between being friendly to business may require making it more competitive, denying access to businessmen specially, treating them all alike, rather than being seen with them, being partied by them, being feted by them. That gives impression that Labour has been captured by business which I don't think is true. But it does look very bad for us that we cannot discriminate between being friendly to business and being friendly to businessmen.

Jane Corbin, Panorama:

People do not like politicians to be seen to be hobnobbing with millionaires.

Lord Desai
Now what will happen? The Bofors case rumbles on. The Hindujas are still in India. How do you think Peter Mandelson and Tony Blair, how do you think the Labour hierarchy regards them now and what might happen in the weeks to come?

Lord Desai:
I imagine that there's going to be great reluctance to be seen again with the Hindujas even if they may not be convicted of anything. They may be completely innocent but from now on it will be sort of a distance. But I hope you also learn that these sorts of public displays of bon ami and affection, friendship resented by the public. As a result of other businessmen but that's another issue. People do not like politicians to be seen to be hobnobbing with millionaires of whatever colour they may be.

Jane Corbin, Panorama:
And should the Hindujas come back to England? I mean after all, this is a very politically charged time that we have ahead of us with an election up and coming.

Lord Desai:
Well I don't know when they're going to be able to come back, if they come back before the election it will be a media riot and it will embarrass the government, there's no doubt about that, even if they are acquitted or even if the case is postponed, they're coming back and want clearly to be seen to be another round of saga. But in the future they're perfectly free to come and live here. Even if they did not have a British passport they could live here after all, if they've got a good visa... So I think the Labour Party has to learn to treat everybody equally, and ethically.

Jane Corbin, Panorama:
Lord Desai, thank you very much indeed.

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