Inside Out: My story of betrayal and cowardice at the heart of New Labour [Hardcover]

When I sat down to read Peter Watt's memoirs, Inside Out, I was curious to find the answer to two questions.

First, I'd met him regularly at Electoral Commission meetings before he became Labour's General Secretary and he always struck me as a bright, enthusiastic - and young - person. When he was appointed General Secretary I was intrigued as to how someone who seemed so much younger and less experienced in the ways of the Labour Party than previous General Secretaries had made it to the top. For him, it was just nine years from starting work for Labour in a junior role through to becoming General Secretary on a salary of £100,000 at the age of 36; how did he rise so high so quickly?

Second, when the news broke about the David Abrahams donations being passed on through third parties, I was puzzled by his apparent defence that he didn't know this would be a problem. He had been sat in the same Electoral Commission meetings as me. He had received the same emails as myself. He'd had the same document from the Electoral Commission as me saying, " Transferring a donation to an agent rather than directly to a party must not be used as an attempt to evade the controls on permissibility and transparency." So how could he really claim not to know there was a problem with the David Abrahams way of giving money?

So although much of the book has already been heavily publicised, there was still much for me to get stuck in to. But even so, there are so many good tales in the book that even if you have already read the serialisation and aren't interested in my pair of questions, it is still an enjoyable read.

The book's structure flits back and forth through the years as it often follows themes rather than chronology but right from the start his account of workaholic pressures - partly induced by the job, partly self-induced - will sound familiar to many who have been in similar positions, inside or outside politics:

"I was even taking work calls on our wedding day on New Year's Eve 2003 ... Looking back, I can't believe my attitude. I'm sure the Labour Party would not have ceased to function if I'd turned my phone off for the day. I suppose I thought I was so important I should always be on call."

One of the strengths of the book is not just its account of the emotional ups and downs of life working for a political party, but also the telling detail. So much about New Labour is summed up in the account of Peter Watt's ties:

"For keynote speeches or important appearances, I might be asked to put on a certain tie to fit in with the colour scheme of the stage set."

Many of the comments about Gordon Brown have already been heavily covered in the serialisation and resulting commentary. If you missed all that, the following extracts are typical:

"Downing Street was a total shambles: there was no vision, no strategy, no co-ordination. It was completely dysfunctional ... Decisions about the most trivial things would take weeks, because nobody felt confident enough to sign anything off themselves ... Even getting the okay to send an anodyne email to members took an age."

The last point is a pleasant contrast with my own experience working for the Liberal Democrats it must be said. As to how he ended up General Secretary? His age did nearly count against him:

"Margaret [McDongagh, a former Labour General Secretary] thought I was too young for such a big job."

However, in his favour when it came to an NEC election to choose the General Secretary was the fact that he wasn't Tony Blair's favoured candidate in the contest. The detailed account of how Peter Watt worked his campaign gives a sense of a party well used to factions and personality splits; just the sort of infighting, in fact, which has sucked the life out of Labour:

"Privately, Gordon's people wanted me to win, purely because I was not Tony's candidate. It was the usual tribalism ... My supporters were a real motley crew: a strange coalition of trade unionists, people on the hard left and passionate Blairites."

As for the question of the David Abrahams monies, the picture he paints of the Labour Party's attitude towards the law regulating political parties is not a happy one. There is a throw away reference to robo-calling in 2007 which from the description would have broken the law and he goes on to say:

"The reality was that over the years we had been very blasé about our financial and administrative arrangements, and did not take sufficient care to ensure that everything we did was legal ... For some reason, often we forgot that the measures the government passed actually applied to us as well."

During my time working for the Liberal Democrats, I was often closely involved in election law and compliance matters (and am still the co-author of the party's two election law books). I often said to people, "Imagine the worst case scenario and you are up in court in front of a jury, all of whom have pretty sceptical views of what politicians are like. Could you convince them that what you did was legit?" It's an approach that worked well - over the years no complaint to the various authorities was ever upheld over any of the matters on which I'd given advice - but until reading Peter Watt's book I didn't appreciate quite how different it was from the culture in Labour.

As for the legality or not of David Abraham's donations passed through third parties, Peter Watt firmly places the responsibility elsewhere, on predecessors and on one of the party's lawyers, Gerald Shamash of whom he says:

"His views was that as the donors were technically giving their own money, it should not be a problem."

Only subsequently, after the whole affair had become public, did he ring Peter Watt and say,

""Peter, I've been looking at the relevant piece of legislation again. I've just discovered an obscure clause regarding so-called `agency arrangements'. It's possible the law has been broken," he said quietly."

It's a rather baffling account because that piece of legislation, whilst certainly only one part of a very long act, was not really that obscure. It's not an unintended side-effect of another measure or buried in an unlikely place. Moreover, you don't have to read the legislation to be aware of it. It was, as I mentioned at the start, clearly covered in the Electoral Commission's guidance, which was emailed to Peter Watt and myself (amongst others), and indeed political parties had been asked for their views on this guidance. Moreover, the idea that you could side step a control by passing money through a third party should instinctively sound like something that requires checking against the law.

Yet for all these opportunities to have found out that there would be a problem, according to the book somehow both Peter Watt (first Head of Compliance, then General Secretary) and Gerald Shamash (long term lawyer to the party) missed them all - the guidance wasn't read, the emails weren't read, the clause in the act wasn't read and more - and were taken by surprise.

The one unsurprising feature of the account is that when a second opinion was sought from a QC he concluded that Labour, "had certainly broken the law".

Peter Watt's account of the David Abrahams affair does also leave the puzzle that his book is co-authored by journalist Isabel Oakeshott and yet, as James Graham pointed out, the admission in the book that Peter Watt knew where the money was really coming from flatly contradicts the version of events reported at the time by Isabel Oakeshott.

In the book she has co-authored Peter Watt says he did know where the money was really coming from, yet at the time Isabel Oakeshott reported that Peter Watt, "did not know that David Abrahams, the Newcastle businessman and donor, was using agents". How that false story got given to Isabel Oakeshott and by whom is not explained.
Overall, Peter Watt admits to a very hand-off attitude towards knowing what was happening with donations, despite the legal responsibilities the law placed on him:

"Donors gave us money in dozens of different ways, many of them far from straightforward. Not being straightforward didn't make them illegal. I had no idea about the nature of the relationships between different donors ... I had no idea one of the individuals [in whose name £200,000 was donated to Labour] was a jobbing builder, and could not have been expected to know."

In the end the CPS concluded that, "Enquiries by police highlighted inconsistencies in the evidence which meant that the prosecution would not be able to present a reliable account of what had taken place or precisely what the registered treasurers [including Peter Watt] knew or did not know concerning the identity of the true donor."

In other words, they could not untangle conflicting evidence about who knew what and when with enough certainty to secure a conviction and that was the reason for not prosecuting, rather than any doubt over whether the fundamental arrangement was against the law.

Peter Watt puts rather a gloss on the CPS decision saying "I was vindicated", though he does add later, "When it came to money, as a party we were always pushing the boundaries. I am sure that is still the case today."

As to the answers to my two questions? Labour infighting, ability and a canny skill for taking the opportunities available explain Peter Watt's rise. But as for the David Abrahams donation, whilst the book contains an honest admission of many Labour failings when it comes to respecting the law, on the specifics of the individual case the account is a rather baffling one. Read more ›

I ordered this book with high expectations. Not only had it been serialised in a national newspaper, it had also led to a number of questions being raised in the House about Gordon Brown's secret fundraising account and to reports of how even Brown's own innner circle didn't like him very much.

I won't say that I didn't enjoy the book, but I will say that it was quite heavily padded. Not only that, but the scores of revelations, skeletons in closets and "buried bodies" I was expecting to read about were very thin on the ground.

The book is highly focused upon Peter Watt's personal life, and I admit that it was quite eye-opening to see what it is like to work for a political party. The stresses and pressures are conveyed very well, and the betrayal described in the final pages of the book is all the more gutting considering how much Watt had contributed to the party by this point. If he is to be believed, and I see no reason not to, he prevented the party from going bankrupt twice. His reward? A forced resignation and the discovery that Gordon Brown wanted to see Watt prosecuted in order to take the heat off himself.

What I found disappointing about the book was the way in which Watt's personal life was given too much time and his political revelations too little. For example, there is an entire chapter devoted to caring for his terminally ill father, including the full speech he gave at his father's funeral. Touching though this may be, I was hoping for much more insider information, "dirt" if you will. Given that Watt had decided to break his silence, I was expecting him to pull no punches. Instead, whilst he reveals a few juicy morsels here and there (the Douglas Alexander quote being my personal favourite), I got the impression that he was still holding back and had much more he could tell if he so chose.

The biggest downer was the way in which the book ended. Having built up Watt's career and laid the groundwork for the betrayal to come, the actual description of the final act was scant, and Watt's reflections on it were minimal.

That said, the book definitely lays bare far more than high-ranking figures in the Labour Party would like, particularly surrounding their parlous finances and the "election that never was". Furthermore, given the economic climate of late, it proves that the culture of spending what you haven't got and building up a mountain of debt was entrenched within the Labour Party itself. Little wonder that the frailties of the UK economy went unchecked for so long: if the very people in power couldn't keep their debts in check and were addicted to credit, what hope did the country have?

All in all, this is an interesting blend of part-politics, part-human interest. My main gripe would be that it lapses into human interest, thereby straying from politics, too often. Nevertheless it remains well worth a read and contains a lot of dirty laundry in need of a good airing.

This is an entertaining and timely read.

It is pretty clear, as is the modern trend, that this book has been written and great speed and the co-authors have done a great job in producing something clear and concise with a strong narrative.

However the book does not provide the scandal and secrets it claims. Fraser Nelson, the respected editor of The Spectator, says on the cover "It's the most explosive political book for years2 and "Peter Watt knows where the bodies are buried and isn't afraid to tell us". Sadly neither a true.

An entertaining read, but the book contains almost nothing that wasn't in the newspapers at the time.