Leading article: The flawed judgement of a shadow Chancellor

George Osborne's attempt at media manipulation has backfired

It is a tale that might have been specifically designed to get up the noses of ordinary people as they peer down the barrel of a recession. The setting was a luxury yacht, moored off a Greek island this summer. The cast comprised a Russian oligarch, a hedge-fund manager, an EU Commissioner with a chequered personal financial record and a rising politician. There was even a global media magnate there for good measure. Everyone had a good time. But, two months on, there is a furious squabble about what each of them got up to below deck.

Swim through the swirling waters of claim and denial and you get to some pretty unambiguous conclusions. One relates to the judgement of the shadow Chancellor George Osborne.

The central question of whether Mr Osborne is guilty of actively seeking a donation for the Conservative Party from the Russian aluminium magnate, Oleg Deripaska, seems unlikely to be answered to general satisfaction. Despite the claims of the financier, Nathaniel Rothschild, that he can produce independent witnesses to back up his incendiary allegation of impropriety, this matter is unlikely to end up in court. No one involved has an interest in rocking the boat to that extent. So, in the absence of any new revelations, the argument seems destined to remain a case of one person's word against another's.

But Mr Osborne comes out looking like the most compromised figure in this affair. This is because the shadow Chancellor tried to use the media to taint Lord Mandelson, who returned from Brussels to join the Cabinet as Business Secretary earlier this month. Rather than sinking his adversary, Mr Osborne's guns backfired.

The shadow Chancellor was the source for the story in which Lord Mandelson was supposed to have criticised Gordon Brown prior to his Cabinet recall. How do we know that? Because it was Mr Osborne's ear into which Lord Mandelson supposedly "dripped poison" about the performance of the Prime Minister. It is conceivable too that Mr Osborne suggested the media might care to look into Lord Mandelson's relationship with Mr Deripaska. If so, this was risky behaviour from the shadow Chancellor in the light of his own meetings with the oligarch.

It is not so much Mr Osborne's leaking to the media that was the problem (as a newspaper, we welcome disclosures from anyone with information that is in the public interest), but his crass attempt to manipulate the news agenda for political advantage. If Mr Osborne is going to become Chancellor one day he needs to learn to box rather more cleverly.

The other lesson from the affair is that the issue of donations to political parties remains utterly toxic. The cash-for-honours affair, which erupted two years ago and blighted Tony Blair's final months in office, has poisoned public trust in the financing of our political parties. Why else would this allegation of a Conservative attempt to get around the rules governing donations (and remember that no money has been revealed to have changed hands) have been so inflammatory?

Cross-party efforts, begun in the wake of the cash-for-honours scandal, to reform further the rules governing political donations have been kicked into the long grass. They ought to be retrieved. Otherwise our politicians, of all stripes, will continue to find themselves all at sea whenever they are discovered to have been supping with wealthy businessmen.

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