Labour row over business 'favours'

Union fury as firms invited to draw up policies

Labour was hit by new claims yesterday that it was prepared to grant business leaders "special favours" after inviting them to play a formative role in drawing up the party's policies.

Labour was hit by new claims yesterday that it was prepared to grant business leaders "special favours" after inviting them to play a formative role in drawing up the party's policies.

Trade unions attacked the party's plans to hold a series of "corporate seminars" at its Millbank headquarters, at which business heads will meet ministers and make proposals for the manifesto on which Labour will fight the next general election.

Some Labour figures are worried that business leaders who have donated money may receive "special favours" if they use the sessions to press for policies that would work to their benefit. Although business has been briefed on Labour's policy-making machinery at seminars in the past, officials admit its role has been enhanced because the party wants to take account of the views of all sections of society.

Documents on the seminars describe business as a "key stakeholder group" and hint that it might advise Labour on overcoming union opposition to a bigger private-sector role in public services. The first seminar on 22 May on health will discuss: "What are the barriers to change? How can we overcome them?"

John Edmonds, general secretary of the GMB union, said: "Yet again we have the spectacle of Labour cosying up to companies that have given donations and are now giving advice on how to take on public-sector unions. Ministers should be sitting down with all sides to ensure public- service delivery, not reverting to 1980s-style union-bashing to curry support and donations."

Mark Seddon, a member of Labour's national executive committee, said the NEC had not been told about the seminars. "This is absolutely astonishing," he said. "Perhaps ICI will be asked to pay an affiliation fee and have a block vote at the Labour conference."

A Labour spokesman insisted: "This is not a fund-raising exercise. In year one of the policy-making process, we are carrying out an external consultation. It is right to consult with charities, non-governmental organisations and other groups. But the decisions on policy will be taken in year two by internal stakeholders – the members, the unions and ultimately the party conference."

The health seminar, to be attended by the Health minister Hazel Blears, will be followed on 12 June by a session with the Trade and Industry minister Alan Johnson.A welfare reform seminar on 25 June with Malcolm Wicks, the minister for Work and Pensions, will discuss full employment, child poverty and "how best do we encourage flexibility into the retirement age?"

The controversy came amid mounting criticism of Labour's decision to accept a £100,000 donation by the newspaper and soft porn publisher Richard Desmond. NEC members are demanding greater say over donations.

Charles Clarke, chairman of the Labour Party, said last night: "It's total nonsense to suggest that Labour's Partnership in Power programme is skewed towards business or that we shouldn't talking outside the Labour Party.

"We are proud that in evolving our policies for the next Labour manifesto we are discussing those polices very widely. We believe that it is the right way for a democratic political party to operate. Nobody is excluded. We welcome contributions and participation from everyone."

Labour's problems with rich donors were heightened when Tony Blair was asked about his links to Mr Desmond on BBC's Newsnight. In an interview to be shown tomorrow, the Prime Minister was asked by Jeremy Paxman if he reads Asian Babes, one of Mr Desmond's soft porn magazines. Mr Blair said he had not.