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Enron highlights UK Labour's love of big business

"Thousands of words -- very little story" is how the British government sums up the Enron scandal nipping at its heels.

Most opponents grudgingly agree.

But they know that in loudly probing the government's links with the collapsed US energy giant, they can stir up widespread distaste for Labour's love of big business.

Prime Minister Tony Blair's officials have been unusually open about details of ministers' meetings with the bankrupt US group's executives and the government's close links with accountants Arthur Andersen, Enron's auditor.

No wrongdoing has been uncovered.

But the ruling Labour Party did take money from Enron and Blair ended a bar on Andersen getting government work just months after taking office in 1997.

US President George W Bush's administration is also being pressed over its ties to Enron, a big political donor, and Andersen stands accused of destroying thousands of documents about the firm, which filed for bankruptcy late last year.

Andersen had been blacklisted from working for the British government since the 1980s because of its role as auditor to Northern Ireland-based carmaker De Lorean which, like Enron, collapsed. Newspapers have accused Labour of 'sleaze'.

"What you have here is thousands of words, very little story," Blair's official spokesman told reporters on Wednesday. "We have been totally open and transparent."

DOG EAT DOG

But in the dog eat dog world of politics, a lack of proof will not stop allegations being raised, particularly given 'New Labour's' fondness for rubbing shoulders with business chiefs.

"It's about the whole culture of support and links between big business and the Labour party and its possible influence on government. These issues remain," Liberal Democrat Treasury spokesman Matthew Taylor said.

To understand Blair's ardour for captains of industry, go back to 1992, when the party lost its fourth successive election because of perceptions that it could not manage the economy.

Finance spokesman John Smith became Labour leader in 1992 but died two years later. Blair stepped into the breach, knowing that until he could convince the public he would not raise their taxes and run the economy into recession, he would never get into government.

His revamped 'New Labour' party shed its left-wing clothes, romped to power in 1997 and has barely looked back. Nor has it lost a fondness for executives over old trade union allies.

Critics say the government has a track record of sailing close to the wind with its corporate friends. Every time an Enron looms over the horizon, questions will be asked.

NOT THE FIRST TIME

Early in government, Blair ran into trouble with motor racing boss Bernie Ecclestone.

His government gave Formula One an exemption from a proposed ban on tobacco advertising. It was then discovered that Ecclestone had made a £1 million ($1.41 million) donation to the Labour Party. The money was handed back.

Further embarrassment was heaped on Blair by a political aide in his office, Roger Liddle, who was questioned by officials over his links with a lobbyist.

Liddle was alleged to have boasted to journalists posing as businessmen he could fix access to ministers. He was cleared of wrongdoing.

He remains a fixture in Blair's Downing Street team.

And last year, the government became mired in controversy over the granting of British passports for Indian tycoons the Hinduja brothers after they sponsored the ill-fated Millennium Dome. That cost former minister Peter Mandelson his job.

Polly Toynbee, a Guardian journalist with close Labour links, hopes that Enron might force Blair to act.

"The greasy smell of money oozes through the corporate exhibition stands at the Labour conference each year," she said.

Labour peer Lord Haskins, who has close links with Blair but also heads Northern Foods Plc, also says political parties should think twice about corporate donations.

Most outraged are traditionalist members of Blair's party.

"I am embarrassed for the Labour Party that it should be put in a position where it has taken money from such eminently fraudulent people as Enron," former defence minister Peter Kilfoyle told BBC radio.

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