Fatal Addiction

Book extract by Anthony Howard

'I know that in the past the Constructors’ Association has been likened to the Mafia and people have even called me the Godfather, but that’s just not true. I wish I was a Godfather.  They have millions of pounds in jets, instead of railway trains like me.  Believe me, if I were a Godfather, I would not be getting involved in wrangles over racing cars roaring around a circuit.' – Bernie Ecclestone

THE path to flotation had been proving much bumpier than the ideal race track.  However, Bernie Ecclestone’s and Max Mosley’s concurrent handling of the long-running, highly-contentious issue of tobacco sponsorship seemed altogether more assured.  This was the initial impression at any rate, though it very soon ran wide onto the marbles.

Appositely, the story broke on Guy Fawkes Day – November 5, 1997 – when public health minister Tessa Jowell had to explain that the government had granted Formula 1 exemption from an impending prohibition of tobacco advertising and sponsorship.

This apparently flew in the face of Labour’s manifesto and campaign rhetoric before the May 1 general election: 'A new minister for public health will attack the root causes of ill-health and so improve lives and save the NHS money.  Labour will set new goals for improving the overall health of the nation which recognise the impact that poverty, poor housing, unemployment and a polluted environment have on health.…

'Smoking is the greatest single cause of preventable illness and premature death in the UK. We will, therefore, ban tobacco advertising.'

On May 14, her words overshadowed that day by the Queen’s Speech outlining the new government’s programme, Jowell was already shifting from the clarity of the manifesto.  'There are some complex issues here,' she said,' including the use of sports sponsorship as a way of advertising tobacco brands.  We will need to look carefully at how to remove tobacco advertising from sporting events without creating any risks to those events in the UK.'

Conference

Jowell’s boss, health secretary Frank Dobson obfuscated further at a government-convened conference on tobacco on June 14.  'I know that some people here today from sports and arts organisations are concerned about the possible impact of our intention to ban tobacco advertising and sponsorship,' he declared.  'You are just as welcome as everyone else.  We have made clear all along we don’t want to harm sport and the arts.  And we will help you find other sources of sponsorship.'

Apparently less equivocal, Jowell told the same gathering: 'I want to change the balance of power…decisively towards the public interest and to make recruitment of new young smokers as difficult as possible.'  And she asserted that the tobacco industry’s strategy was to replace ' the millions of customers killed by tobacco every year around the world.'

On November 4, Jowell lit the fuse – in the form of a letter to European Union health ministers with reference to a draft European Commission directive banning almost all forms of tobacco advertising.  She wrote: 'We propose excluding F1 from the scope of the directive.'

She cited the 'global' nature of F1, saying such a ban was unenforceable in its case.  'We could not accept a directive whose effect would actually be to increase the exposure of our citizens to tobacco advertising.'  The quid pro quo to be exacted on the FIA was our old friend the voluntary code, in this case to further progressively diminish tobacco exposure on cars, personnel and around race circuits.

If the EU health ministers’ council could not reach an agreement on December 4, Jowell maintained, she would persist with the issue in April, 1998, when the European Union would again be under the UK’s presidency.  Failing an EC directive, the British government would introduce its own legislation for the home market.  And so the fireworks began.

Many were surprised – and even scandalised – at this 'U-turn' by New Labour or – as one commentator put it – the Blair government, which would 'do anything to avoid becoming unpopular with the well-connected, the well-organised and the well-heeled.'

Amidst the uproar, FIA president Max Mosley – by then coincidentally enjoying the sobriquet 'Don Corleone' in Italy – offered a more emollient explanation.  'We have always had a better relationship with Labour than the Conservatives,' he said.  'They are more interested in the sport.'

Motives

This revelation was a touch unexpected coming from so senior an officer of a sport driven by the most individualistic, competitive and capitalistic of motives.  Mosley also let on: 'We have been working towards a solution of this kind, and we hope something along these lines will prove acceptable.'  At this juncture, Ecclestone was keeping his head down.

This result for F1 was, it appeared, no flash in the pan, but the result of two years of assiduous campaigning.  'Leading motor sport figures' – ie: Ecclestone, Mosley et al – had met Tony Blair socially before and after the May 1, 1997, general election that made him Prime Minister.  The Blair family were spectators at the 1996 British Grand Prix.  Blair’s deputy, John Prescott, attended the race in 1995 and 1997.

That all appeared innocent enough.  Even socialists are allowed to have a bit of harmless fun occasionally – always assuming all the racket of motor racing is their idea of fun.

'John Major never came,' Mosley reported, 'and neither did his predecessor [Margaret Thatcher], even though it’s a huge British industry, hugely important for the country.'  No mention was made that Major’s chancellor of the exchequer, Ken Clarke, had lent his bluff, suede-shod presence to Silverstone grands prix.

It also emerged that a key lobbyist on the motor sport side was David Ward, formerly political adviser to the previous leader of the Labour Party, John Smith, who died suddenly in 1994.  Ward, now Brussels-based European director-general of the FIA, working in cahoots with Max Mosley, denigrated any suggestion that his close Labour connections had won special consideration.  He also emphasised that, while F1 teams and events attracted tobacco sponsorship, neither he nor the FIA received any money from tobacco interests.

Ward did admit: 'Of course it is helpful that I know a lot of the individuals but…the government said when they announced this that they wanted to consult with all relevant parties.  We have simply taken up the offer.  I am sure a lot of the other sporting bodies have done that. I don’t think there has been any special favour to me.'

Scrutiny

However, the matter was not going to be allowed to rest there, especially if the Tories had their way.  Formula 1 and its business dealings came under scrutiny as never before.  Ecclestone and Mosley now found themselves embattled on three fronts:

Ecclestone had also just been held in contempt of an Italian court investigating the death of Ayrton Senna at the Imola circuit in 1994.  The media wanted to see heads impaled above the city gates.

The Blair government was taking a deal of flack too.  Among the welter of criticism: bending the knee too readily to big donors to Labour’s campaign fund; indecision – or precipitate haste – over European Monetary Union; the upside-down, tatty Union flag flown on Remembrance Sunday; the casual dress and demeanour of the Blair children at their privileged vantage point above the Cenotaph in London’s Whitehall….

Already there was speculation that this pandemonium in Britain’s public and sporting life would come to be identified as the end of the honeymoon with the electorate, the turning point in New Labour’s over-blown fortunes, the beginning of 'Teflon' Blair’s slide towards electoral annihilation in the year 2001.

Was the most powerful figure in international motor sport, albeit inadvertently, now to become a breaker and maker of governments?   What fun!   So, what was the background to this fiasco?

A meeting at 10 Downing Street – waggishly dubbed the 'Bernie Inn' – on October 16 was the direct precursor to the Jowell letter of November 4. As part of the effort to repair Tony Blair’s battered credibility a note of the meeting, prepared by his private secretary, was eventually released on November 16.  It read:

'Prime Minister, you asked for a typed version of my hand-written notes of the meeting with Max Mosley and Bernie Ecclestone.  The meeting raised no new issues of substance that had not previously been discussed between the FIA and Government and therefore no formal minute was made.

Recollection

'However, for completeness and accuracy the text below includes in italics my recollection of points made during the meeting, but not included in my hand-written notes.  Of necessity, however, this is not an exhaustive account.

Present: Prime Minister; Max Mosley (president of the Fédération Internationale de l’Automobile) ; Bernie Ecclestone (vice-president of the FIA, president of the Formula One Constructors’ Association); David Ward (European director-general of the FIA); Jonathan Powell (Blair’s chief of staff); Private Secretary.

MM: Proposal for EC Directive put forward by Luxembourg Presidency makes no sense.  If F1 leaves Europe, you will get more, not less, sponsorship on TV. A perverse consequence. Subsidiarity suggested national legislation better anyway.  Great pressure to (move) to Far East.  Ran through list of countries wanting a grand prix.  Tobacco companies building circuits.  Had been to see Tessa Jowell (public health minister) and Tony Banks (sports minister).  Not sure if we understood.

PM: Don’t need persuading about basic case in favour of F1.  But also in favour of a ban on tobacco adverts.  Asked why we were pursuing a directive, not national legislation?

PS: Because it’s the best way of getting a ban quickly.

BE: FIA has made F1 very hi-tec.  If tobacco money goes, lose this.  He has put a lot of effort into developing TV.  Digital technology coming. TV will go with the races.

PS: Can you not find alternative sponsors?  E.g. car manufacturers.

BE: No.  They do not have the resources.

PS: Did you realise directive had a four year phase-in?  Would not come into effect for another two years, so six or so in all.  (No response.)

BE: Met Kohl (German Chancellor) (in Luxembourg) and Prodi (Italian Prime Minister). T hey agree with us that it is impractical directive and will say so.

PM: Why do other countries not see the problem?

BE and DW: Some of them do, which is why we cannot understand why they are arguing for the directive.  Italy had ban in place, but it did not stop GP taking place.  At the beginning of GP weekend the organisers paid a fine of $10,000 and that was the end of it.

PS: Not unusual for Health Ministers in other countries to take a hard stance on this.

DW: What about other sports?  E.g. motorbikes.

PM: Do other sports have the same degree of dependence?  (General discussion: some did have tobacco sponsorship, but not on the same scale.)

PM: Thank you for coming in.  Recognise the problems.  We would think about what they had said.'

Any journalist taking such scrappy notes of so sensitive and important an interview would be fired.  However, since this was apparently the culmination of a period of sustained lobbying to a number of ministers and officials, maybe attentive record taking was considered superfluous to a 'rubber-stamp' get-together.

It was a mark of Ecclestone’s and Mosley’s professionalism to pay a courtesy call on the head lad, to appraise him of progress, finally press home their message, and to reassure themselves there would be no back-sliding.

Arguments

Among the arguments deployed by the motor sport lobby:

• Britain’s motor sport industry is a world leader in car design, development and manufacture.

• F1 provides 5,000 jobs directly in the UK.

• It indirectly employs 50,000 people.

• Turnover is more than £1.5 billion.

• F1 is the industry’s main engineering and technological forcing house.

• Motor sport provides 150,000 part-time jobs indirectly in the UK.

• Exports worth £900,000 per annum.

• Silverstone earns £20 million from the British Grand Prix, and the local economy benefits to the tune of a further £8 million.

• If tobacco advertising and sponsorship were banned in Britain, F1 would move out to other markets – in Eastern Europe and Asia – where there is far less control over advertising. So television would continue to provide cigarette imagery in profusion to the UK audience.

The association between motor racing and smoking is long established.  For example, an abiding pre-war newsreel image is that of the diminutive Italian Tazio Nuvolari making a pit stop in his Alfa Romeo.  As churnfuls of highly-volatile fuel are sploshed into the filler cap behind his neck, our hero relaxes at the wheel, puffing away happily on a gasper lit for him by a thoughtful mechanic!  However, it was not until the late 1960s that tobacco began to assume the sophisticated significance it now has for Formula 1.

Today, the sight of a top-line racing car devoid of sponsors’ 'brand graphics' would be cause for much hand-wringing.  Indeed, it would be taken as a portent of the team’s imminent demise.  Thirty years ago, quite the reverse would have been the case.  In fact, the sight of a decal would have induced much spluttering and spillage of pink gins down the fronts of blue blazers.

Grand prix cars were expected to be raced only with paintwork in the colours of their countries of origin – blue for France, green for Britain, red for Italy, silver for Germany, white and blue for the USA.  Things were much simpler then – one knew that each manufacturer built virtually its entire car.  A Ferrari had a Ferrari engine (the only example where the tradition persists in F1 to this day), an Alfa Romeo had an Alfa engine, a BRM had a BRM engine.

Value

Just about the only items the teams did not fabricate for themselves – or have crafted nearby under their own names – were the tyres, spark plugs, carburettors, fuels and lubricants.  Though, again, the picture was fairly simple – obviously, the Italians ran on Pirellis, the French on Michelins and the British on Dunlops. There was none of this confusing nonsense about multi-nationalism and cross-frontier technology transfer.

It was even considered outré for a manufacturer or team to have its own name sign-written on the side of the car – a discrete enamel badge somewhere at the front was quite adequate identification – the shape of each car was clearly different.  This focus first began to be blurred by the application of small decals from manufacturers of essentials such as spark plugs, brake linings, fuel and engine oil – each seeking muted promotional value in exchange for free supplies.

One such supplier – Tony Vandervell, a bearing manufacturer – became so disillusioned with contributing to lacklustre British efforts – by BRM – to compete on level terms with the Continental grandes marques in the 1950s that he determined to create his own grand prix contender.  This became manifest as the beautiful, aerodynamically-bodied Vanwall – its name emblazoned in white on its green paintwork – that in 1958 won the first World Championship for manufacturers and took Stirling Moss to within half a point of a drivers’ title.

Further erosion of this everyone-knows-what’s-what clarity began with the emergence of the upstart garagistes – as they were superciliously dubbed by the established, self-styled grande marque teams.  These garagistes were mostly British – irreverent, bright-eyed, highly-competitive and capable of brilliantly-simple ideas that sliced straight to the point. They were at the cutting edge of the 'swinging 60s' and Harold Wilson’s 'white heat of the technological revolution'.

They began mostly in London’s suburbs or in the Home counties.  Cooper was first, followed by Lotus, Brabham, Lola, McLaren, Tyrrell, March, Hesketh, Williams, Arrows, Benetton (née Toleman) and Jordan. Between them, they established an unsurpassed technological and competitive legend, and now inhabit motor sport’s 'golden rectangle' bounded by the M1, M3, M4, M25 and M40 motorways.

Ken Tyrrell, who took the garagiste route to the top of motor racing, once best summed up such mastery by telling me: 'Small teams have always blown off big teams because they don’t have to hold a board meeting to decide to change the wing angle on the front of the car.'

Prosperity

Three key innovations sprang from – and were first fully exploited by – this quarter:

• Moving the engine from in front of the driver to behind the cockpit.

• Finding someone else to build the engine, thus saving a bundle on development costs.

• Sponsorship from non-automotive backers.

Ironically, the trigger for the third of these innovations was commercial television which first went on air in the London region in late 1955 and spread to cover all of Britain by 1962.  This powerful new advertising medium opened at a time of improving prosperity – 'You’ve never had it so good.' – and rising disposable incomes.  It was adopted not only by manufacturers of 'essentials', such as white goods and detergents, but by purveyors of 'luxuries' such as tobacco and alcoholic drinks.

Hampstead Fabianism swung into action – indulgently doing the thinking it felt obliged to do on behalf of its more-lumpen fellow citizens, too idle or too thick to do it for themselves.  The evils of the weed and the demon drink were no longer just inimical to non-conformist, Victorian notions of befitting behaviour – now 20th-Century science and medicine had proven them to be hazardous to health.  With this incontrovertible right on their side, well-meaning zealots pressed on with their long crusade to make the world a safer – if much less amusing – place.

They were scarcely a match for the wicked tobacco barons, who were – and still are – masters in the art of tactical retreat, lobbying, deployment of arguments, marketing, media manipulation and developing untapped markets.

The good guys made a crucial breakthrough in their long war of attrition with tobacco when commercials for cigarettes – but not cigars and pipe tobacco – were banned from Britain’s television screens in August, 1965.  An obvious effect of this was to leave the tobacco companies with huge surpluses in their advertising budgets which, just as sure as water runs downhill to form rivers, were bound to find alternative paths to the target audience.

At the time, 44 per cent of the total UK tobacco advertising spend went to TV.  Of the £8 million thus allocated, £2 million was devoted to cigars and pipe tobacco.  This left £6 million (£90 million-odd at 1997 prices) sloshing around.  Thus it was in 1968 that Colin Chapman, ever the innovator, joined forces with Imperial Tobacco to present the Gold Leaf brand on his Lotus Formula 1 cars, abandoning 'British Racing Green' in favour of the brand’s distinctive red-white-and-gold colours.

Prominence

Lotus was later to follow the switch in Imperial’s marketing thrust to give prominence to the black-and-gold packaging of the John Player brand, and the cars were even re-named 'John Player Special.'  Though it enjoyed dalliances with other types of backer – Martini, the Italian aperitif alchemist, and Essex, a Monaco-based international petroleum trader, for example – Lotus remained hooked on cigarettes to the last.  For during its final seasons, it ran in the rather-jollier yellow-and-blue of RJ Reynolds’s Camel brand, which subsequently switched to Williams.

First 'major brand' to follow Gold Leaf was Yardley, maker of middle-class cosmetics, or 'toiletries', which wanted to liven up its appeal and attract contemporary youth.  Yardley was ushered into the hurly-burly of Formula 1 by the rather stuffy and by-then-strapped-for-cash BRM team.  The Yardley marketing people paid BRM £40,000 a season in 1970-71 and, for 1972-73, they switched their colours to McLaren, a team on its way up, instead of down.

(At this juncture the 'chattering classes' and thus 'youf' had yet to be invented.  It was all Kangol caps, Gannex coats, whitewall tyres and two-tone paintwork in those days – Yeuch.)

Though it startled European aficionados, this new notion of sponsorship was not strictly original.  For, across the Atlantic, the starting grids for races such as the Indianapolis 500 were already populated with cars rejoicing in names that began implausibly with brand-titles such as 'Dean Van Lines', 'Sugar Ripe Prune', 'Simonize', 'STP Gas Treatment' or 'American Red Ball', and invariably ended with 'Special.'

Philip Morris Tobacco signed up for its first two Formula 1 seasons – with BRM – in 1972-73, and embarked on providing a 25-year object lesson in deploying and exploiting sponsorship.

It set about the formation of the Marlboro World Championship Team, providing an umbrella for the brand’s personal sponsorship of individual drivers in grands prix, Formula 2, Formula 3, rallying and motor cycle racing.  The company declared itself 'totally committed to motor sport as an image-building and promotional platform that has proved successful in terms of both visibility and awareness.'  Its use of motor sport spread to embrace sponsorship of championships, individual circuits and races, publications, and young-driver talent spotting and development.

Partnership

In 1974, it began a 20-year partnership with McLaren that was to yield nine drivers’ titles – with Emerson Fittipaldi, James Hunt, Niki Lauda, Alain Prost and Ayrton Senna – and seven constructors’ championships.  More recently, the major Marlboro wager has been transferred to Ferrari and its German wunder-fahrer Michael Schumacher.

Other cigarette brands that have attempted to emulate Marlboro include Rothmans (Rembrandt Corporation, South Africa), Benson & Hedges, (Gallagher, UK) Gitanes (Seita, France), Camel (RJ Reynolds, USA), West (Reemsta, Germany) and Mild Seven (Japan Tobacco).

Furthermore, while the story of the exemption granted to Ecclestone and Mosley by the Blair government was unfolding, there was increased talk of British American Tobacco – BAT – establishing its own – or taking over an existing – F1 team in alliance with racing car constructor Reynard.  The budget was rumoured to be £176-£250 million over five years, and the long-established Tyrrell team was a hot favourite as the target.

The figure given by the FIA in 1997 as tobacco’s annual investment in F1 was £100 million.  Though this was fraught with contradiction.  The tobacco companies themselves would only admit to spending a total of £9 million a year on sports sponsorship in Britain.   At the far end of the spectrum, Max Mosley himself had been quoted as saying the international tobacco spend on F1 was £125-£200 million.  Also, it had been estimated that tobacco provided one third of F1’s funding.

Observers calculated that four major British-based teams accounted for £60 million of tobacco sponsorship in 1997.  Williams and McLaren were able to attract £19 million each, from Rothmans and West respectively; Benetton received £12 million from Mild Seven; and Jordan was paid £10 million by Benson & Hedges.  These sums were however dwarfed by the £30 million of Marlboro money that went to Ferrari, enabling it to outbid rivals for the services of Schumacher.

What this sort of money is chasing is illustrated by American research, which indicates that a 90-minute broadcast of a major motor race will embody as many as 6,000 mentions – or sightings – of tobacco names or brand graphics.

Only one of the current F1 teams had set  out with a policy of avoiding involvement with tobacco interests.  This was Stewart Grand Prix, brainchild of three-times World Champion Jackie and his son Paul, which enjoyed an encouraging debut season in 1997.  Ironically, it had to an extent proved the FIA’s point, since its major sponsor was Malaysia – a whole country, no less – and it had found additional backing from companies operating in the Asia-Pacific region.

Billboards

Seen from the media buyer’s point of view, then, an F1 car is simply a very-visible, high-speed billboard.  The 'rate card' is defined largely by the visibility of the individual spaces on the car, the team’s success record and thus its potential to attract maximum attention from the cameras, and its promotability – ie: Many will always see Ferrari, no matter how abysmal is performance, as more glamorous than Williams, no matter how dominant it is year after year.

Broadly speaking the F1 'rate card' range of prices commanded are:

While the tobacco people themselves remain tight-lipped about exactly how much they really do spend on motor sport, they make no secret of the three things they seek from it: the audience, the audience and the audience.  And, no doubt, with ever-developing expertise, they have been reaching that audience far more economically than if they were still free to buy television air-time in major markets for the screening of commercials.

This is to an extent corroborated by an advertisement in a tobacco industry publication, which asserts it is feasible to sponsor an F1 team for a fraction of the cost often associated with F1, and to do this 'on a race-by-race basis that suits your marketing strategy'.  The Formula 1 car is 'the most powerful advertising space in the world.  It will carry your brand to viewers in 102 countries'.

Audience

What the tobacco promoters seek to achieve with that audience is the crucial bone of contention.  They argue that – far from creating new smokers – all they seek to do is re-inforce the brand loyalties of existing smokers and maybe persuade them to switch from one brand to another.  Despite the ill-mannered chorus of disbelief from the gallery, this is all said with a straight face.

Of course, that audience runs far, far wider than the spectators: the 100,000-odd people who pay so handsomely to walk through the turnstiles and witness each of the 16-17 grands prix on five continents.  They added up to 1,473,000 punters’ bums on seats in 1996.

What Formula 1 does on a far bigger scale, especially since it came under Ecclestone’s stewardship, is to deliver media.  Dramatic television audience growth has been a key feature of F1 in the 1990s: 43 per cent in Britain over five years; 340 per cent in Germany, thanks no doubt to the ascendancy of one Michael Schumacher.  There have been parallel increases in the amount of air-time focused on F1: 25 per cent in Britain in 1995, and an additional nine per cent in 1996.  Europe-wide, it is said, F1 is viewed by 57 per cent of ABC1 males aged 18-55.

Ecclestone’s plans to implement digital television coverage of grands prix were already well advanced, and were predicted to give the Formula 1 interests control over all such material seen by 450 million viewers in 130 countries.  By 1997, he had already invested £40 million in the concept.  One important implication was that, within three years, it could resolve the tussle over how much tobacco ID should be visible on cars and thus on screen.  For it could well become possible for the cars to run in their full sponsors’ liveries, complete with brand-names, without further upsetting the anti-smoking lobby.

An unadulterated picture would be transmitted to countries with no tobacco advertising restrictions, while the feed to audiences in countries with tobacco advertising bans would have the offending logos rendered unrecognisable – rather in the way that a TV interview subject’s face may be obscured to protect his identity for security reasons.

Television has also generated a radical shift in the audience for Formula 1 which, though very European in its origins and overall philosophy, now attracts only 12 per cent of its 320 million TV viewers from the European Union.  This compares with 70 per cent from the Asia-Pacific region – home of the 'tiger economies', which have enjoyed spectacular economic growth, albeit from a relatively low base, as well falling prey to more recent instability, sufficient to rock world stock markets and to require intercession by the International Monetary Fund.

Growth

However, the changing balance in the world audience, no doubt due mostly to the addition and growth in the numbers of Asia-Pacific viewers, rather than a decline in F1’s European following, had yet to precipitate a serious flight from traditional venues.

In 1967 for example, seven – 64 per cent – of the 11 grands prix were staged in Europe, three in north America and one in southern Africa.  Thirty years later, the series comprised 17 races – one in Australasia, one in Asia, one in north America, two in South America, and 11 – 65 per cent – in Europe with two each for Germany, Italy and Spain.

One reason is the relative financial and political stability of the major Western European economies.  They tend not to be subject to currency collapse or military putsch; the races are conducted in an orderly fashion by promoters who know how to raise the serious sums of money commanded by the grand prix circus; and there are sufficient punters able to pay the eye-watering ticket prices.

Ecclestone has been credited with personally promoting all but three – Monaco, Monza and Silverstone – of the 16-17 grands prix, underwriting the financial risks and controlling the revenues from ticket sales, on-circuit advertising and television rights.

In the first 47 years of the F1 World Championship, Britain scarcely dropped an opportunity to stage a grand prix, closely shadowed by other stalwarts such as Italy (two races a year through the ruse of staging one under the 'independent' San Marino flag), France, Germany (two races in 1967, one run under the Luxembourg flag at the Nürburgring, which happened to be in the constituency of pipe-smoking Chancellor Helmut Kohl), Belgium and Monaco (France’s second grand prix? – Don’t even think of implying this).

Holland, Spain, Austria, Portugal, Hungary and Sweden have been the less consistent of the European players.  The USA has seen its grands prix staged as far afield as Florida, New York State, California, Nevada, Illinois, Texas and Arizona – though IndyCar racing, run on ovals and road circuits throughout North America and elsewhere, has generally overshadowed F1 in the region.

That then leaves Latin America (represented by Argentina, Brazil and Mexico), Asia-Pacific (Japan, where F1 has caught on to such extent that ticket sales are heavily over-subscribed, and Australia, where F1 first put Adelaide on the map, then moved on to Melbourne), and Africa (Morocco, home of the historic Casablanca grand prix in 1958, and South Africa, where for years the grand prix represented the sole participation by the 'white supremacist apartheid state' in international sport).

Glamour

New circuits in Malaysia and South Korea were expected to be ready for inclusion in the 1999 calendar.  Plans for expansion into China, India and Indonesia were said to be well advanced, and optimistic noises had been heard from Finland about the year 2000.

It is certainly not enough for a sponsor to hand over a suitcase full of cash to a team, then fold his arms, sit back and wait for the results to roll in.  The sponsor must 'work' the investment to extract maximum 'added value' for the company and its shareholders.  This means matching the sponsorship cash with a hefty budget to exploit it by deploying a plethora of activity ranging from success advertisements to media and public relations events, corporate hospitality and point-of-sale displays.

All of this not only re-inforces the sponsor’s association with the glamour, excitement and machismo of F1, but it continually contributes to the promotion of F1 itself – no-one is going to say: 'Formula 1 is pretty boring and anti-social – let’s not tell anyone we’re spending millions on it.'

Plainly, the tobacco barons have been among the most generous, visible and consistent supporters of F1.  They make sure they get a healthy return, and they wield a lot of discreet influence.  Because of their 'pariah status', they have been prepared to pay a considerable premium – 10-50 per cent above what a 'conventional' sponsor would pay for similar exposure with a team of the same status.

This has been to the advantage of the recipient teams since they spend as much as 70 per cent of their budgets on development.  The more cash they have to deploy in development, the more likely they are to create a winning car, especially when faced with frequent rule changes which, with varying degrees of success, attempt to curb ever-increasing performance for safety’s sake.

So, certainly, if its supply of tobacco money were switched off tomorrow and no immediate substitute were found, Formula 1 would begin looking fairly sorry for itself fairly soon.  First to suffer would be engineering budgets.  Next to feel the pinch would be the drivers, for the market in their salaries is 'made' to a great extent by tobacco cash.

However, Formula 1 is an extremely resilient creature that has survived slumps, energy crises, wars, desertion by traditional backers and calls for its abolition on safety grounds.  There are plenty of pathologically-competitive people out there who badly want to do it, and plenty more only too eager to witness the spectacle.  Between them, they will invariably find a way.

Strictures

To begin with, they have already survived three decades of attempts by what the tobacco industry dismisses as 'a vocal minority' to deny them the pleasure of tobacco’s company.  ASH – Action on Smoking & Health – is one of the leading vocalists.   Among its strictures:

• 'Smoking is by far the largest preventable cause of illness, disability and death in the UK.'

• 'It accounts for four times as many premature deaths each year as road accidents, alcohol, fires, murder, suicides, poisoning and every other known cause of accidental death put together.'

• 'It is a uniquely harmful product , not only in the unparalleled scale of the harm it causes, but because it is always potentially dangerous, rather than just dangerous if abused or consumed in excess – like, say, motorcycles, cars or alcohol.'

• 'The tobacco industry uses sports sponsorship to circumvent restrictions on ordinary cigarette advertising.'

• 'Any promotion of tobacco helps maintain the social acceptability of smoking, and helps put across an image quite contrary to the realities of the habit.'

• 'The keen interest young people take in sport makes tobacco sponsorship of it particularly inappropriate.'

There is no evidence that tobacco sponsorship – or advertising – causes people to smoke, or smoke more, runs the industry’s counter-argument.  Competition for shares of a contracting market is the real reason behind the impressive sponsorship spending.  Cigarette manufacturers can only sustain their businesses by fostering awareness and goodwill, tempting users of other brands to switch and maintaining brand loyalty.  Sponsorship is not a convenient circumvention of existing controls on tobacco advertising.

This case was harpooned, though not necessarily fatally, by a study released by the Cancer Research Campaign in mid-November, 1997 – at the eye of the storm surrounding the government’s change of course on F1 sponsorship.  Researchers concluded that boys who enjoyed watching Formula 1 on television were twice as likely to start smoking and twice as likely to remember the names of leading F1 sponsors, Marlboro and Camel.

Horse trading

The CRC reasoned that – since there were 626,400 boys aged 12-13 in the UK, and 72,764 of them were motor racing enthusiasts – cigarette sponsorship of F1 ensnared nearly 10,000 boys a year into 'deadly addiction'.

CRC director general Gordon McVie sent the results to 10 Downing Street with a warning that one in two smokers die prematurely. McVie said of the report: 'This is damming evidence that tobacco sponsorship encourages young boys to take up smoking and encourages brand recognition.  The Government’s decision is totally indefensible.  None of the arguments hold water.'

In an editorial, The Lancet protested: 'An opportunity to deliver the tobacco industry an important blow has passed.  With such a dangerous drug as tobacco, the Labour Government should simply have said "no". It failed.'

Such failure – you may of course regard it as success – is not new.  For tobacco sponsorship has been restricted by 'voluntary agreement' in the UK since 1977.  'These restrictions balance out the sponsor’s legitimate right to recognition with the spectator’s equal right to enjoy his chosen event without distraction,' said the Tobacco Advisory Council at the time.

That first agreement – you may of course smell fudge – emerged from horse-trading between an industry under pressure, but never-the-less holding some strong cards, and a British government trying to strike a balance between the health dilemma and the implications of forcing the tobacco interests into a corner.  In the UK alone, those interests directly or indirectly embraced 250,000 jobs, £300 million in exports, and £4,275 million tax paid by smokers – almost enough to fund half the National Health Service.  On the debit side, cigarettes were blamed for 50 million lost working days and 50,000 premature deaths a year.

So a real cynic might have concluded the NHS was in profit on smokers.

A Department of the Environment statement emphasised that the tobacco companies had acceded to 'specific and strongly pressed government requests', but that doing so should not be taken as acceptance of the principle that 'one particular form of marketing activity should be subject to special restrictions…or…there should be any restrictions on company expenditure on any or all forms of publicity.'

Never-the-less, the agreement limited the industry’s sponsorship outlay to the amount spent during the 1976 financial year – increasing only in line with the Retail Price Index – and stipulated that confidential annual returns be made to the DoE.  When televised in the UK, motor racing was restricted to four tobacco advertising signs – of 11 square metres maximum area – for every 1.6 km of circuit.

Revision

Display of tobacco house or brand names on participants and their equipment was disallowed – 'Any sponsor of capital-intensive sports, namely motor racing, power boating and motorcycle racing, who currently displays a house or brand name or symbol on participants and their equipment shall remove such displays no later than 30 September 1979.'

In short, the industry had undertaken to go a bit easy while, much to its relief, the government was able to say progress had been made, rendering use of the big stick unnecessary.  A revision of the agreement came into play in 1983.  It stipulated that 'the display of house or brand names or symbols on participants and their equipment, or on officials or their equipment actively involved and likely to come within range of television cameras, is not permitted in the UK.'  (This included mechanics.)

The effect was that cars could appear only in the liveries of their respective tobacco sponsors, but these liveries and colours were so distinctive that 'subliminal' recognition was almost inevitable.

From the 'anti' point of view, the agreement underscored its own major weakness: 'Activities televised from outside the UK are not bound by this code.'  This was one reason why good old 'Auntie EU' had been beavering away for seven years to produce the directive at the centre of this latest furore.  The EU commissioner for social affairs, Padraigh Flynn, was dismayed when he received word of Britain’s new stance and, describing it as 'irrational', he cautioned that it could sabotage the entire initiative.

He was grievously disappointed because he had anticipated that Britain’s change of government – replacing those prickly Euro-sceptic Tories with something altogether more chummy and pliant – would halt years of EU deadlock over moves against tobacco.

One goal behind the directive was abolition of advertisements for cigarettes from newspapers, magazines and poster-sites throughout the 15 countries of the European Union.  Interestingly, while the intention was also to e the tobacco scourge off the face of Formula 1 and other such sponsored activities, there was nothing specifically to prevent a team from continuing to accept tobacco sponsorship payments.  Anyhow, the European Commission had no authority to suppress such transactions outside the EU – which left 115 countries beyond its well-meaning, busy-body reach.

Whatever the colour of the Westminster government, Flynn’s pet directive had always been vulnerable to opposition from five of the 15 EU member-governments.  Under complex EU voting rules, a 26-vote 'blocking minority' could sink such a directive, and the opponents’ combined voting strength in this case did so conclusively.  They comprised Denmark, Germany, Greece and the Netherlands – with a tally of 23 votes between them – and Britain weighing in with its 10 votes.

Dissent

That Germany, so keen on all things green, should deprecate measures against filthy smoking was a paradox highlighted at this time by difficulties there in achieving 'non-smokers’ protection' legislation.  One reason was that the bill had failed to attract the support of heavyweights like Helmut Kohl, who did not see 'why we need to put additional restrictions on people.'

Another was a hangover from the Nazi era, when Adolf Hitler had orchestrated the world’s most vigorous yet anti-smoking movement in concert with his ideas of racial and physical purity.  At a practical level, cigarette consumption in fact increased during that period, suggesting it provided a relatively-safe means of dissent during a period known to be a bit tricky.  At a philosophical level, Germany’s present rulers half a century later had no stomach for even the slightest hint of Nazi repression, to the extent that the right to smoke was an essential personal freedom.

'Why not snooker, why not basketball?' wailed EU health policy spokesperson Barbara Nolan at the time of the Jowell announcement.  'This is nonsensical.  This decision could mean the Commission withdrawing the whole directive.  If there were no tobacco advertising on racing cars other sponsors would soon come forward.'

John Maples, health spokesman of the Conservative opposition at Westminster, derided the announcement as a 'humiliating retreat' from Labour’s election manifesto pledges.

Non-motor sporting beneficiaries of tobacco largesse were also thoroughly hacked-off, if for diametrically-opposed reasons.  Charging 10 Downing Street with 'snobbery', Robert Holmes of the British Darts Organisation lamented:  'It’s particularly disappointing that a Labour government, of all governments, should strangle the life out of working-class sports.'

The organisation’s World Professional Darts Championship and Gold Cup both carried the Embassy cigarettes name under a £1.5 million four-year arrangement.  No doubt stung by the reaction from darts and others, such as snooker, in a similar predicament, Tony Blair told Parliament he would hear such pleas on November 25.

Reaction from anti-smokers was fairly predictable.  Sandy Macara, chairman of the British Medical Association, said: 'Clearly an unholy alliance of the tobacco manufacturers and the Formula One organisers has put the government in an impossible position.'

Free speech

Clive Bates, director of ASH, declared darkly that F1 and the tobacco industry had 'heavied' the government by threatening to take events away from Europe. 'We are very depressed indeed. Formula One is central to the tobacco industry because it has a great appeal to teenagers, it is glamorous, and has heroic drivers and fast cars.'

The press ran derisive editorials. A Financial Times leader began: 'Warning! A promise to ban tobacco advertising can seriously damage your credibility….

'.…Far from making one of the ‘hard choices’, which Tony Blair, the prime minister, promised, the government stands convicted of humiliating compromise….

'Ms Jowell believes that the tobacco industry’s aim is ‘replacing the millions of customers killed by tobacco every year around the world’. Ministers who agree should be ashamed of such a shoddy compromise.'

Predictably scathing, The Daily Telegraph said: 'What a dazzling illustration of the way Labour thinks.  Just after the election, the Health Secretary and the minister for public health announced that the new government would ban tobacco advertising from sporting events.  Indeed Labour wants eventually to ban all promotion of tobacco everywhere: from newspapers, billboards, shops and so on; a pretty extraordinary erosion of free speech in respect of a substance that may be bought legally at every corner.…

'….Formula One is to be granted an indefinite exemption.  And why?  Otherwise, we are told, Formula One would move outside Britain, threatening 50,000 jobs.  We merely observe in passing that the Government is effectively capitulating to the strong, and bullying the weak….

'….Only Formula One’s Bernie Ecclestone has been able to bend the Government round his finger, because he has the financial muscle….'

The Independent declared: '….The Government’s decision to allow cigarette advertising to continue in Formula One motor racing is a significant moment.  It is Labour’s first broken manifesto promise, and that matters more than it might because of the fuss that Tony Blair made about the Conservatives breaking their pledges, and how Labour’s manifesto was a "bond of trust", his own "contract with the people"….

'….Frank Dobson….stuck to the manifesto line.  He wasn’t to know that the Prime Minister was busy sawing a circle around his feet, but when he found out, the least he could have done was go on the Today programme himself, rather than sending a junior minister to sound silly on his behalf….'

Advantage

The Guardian rumbled: 'Not since the tobacco barons had Sir George Young turfed out of the Health Department for promoting anti-smoking policies 16 years ago has the industry scored such a political coup.  But yesterday’s victory by the merchants of death was far bigger: a humiliating retreat by Labour on its plan to ban tobacco promotion….

'….Tessa Jowell justified the move on the grounds that a tobacco ban would encourage Formula One to take its races to Eastern Europe or the Far East where there are no tobacco controls. Instead the motor racing industry had promised to regulate the scale of its tobacco advertising.  Ludicrously, ministers have made their concession without even a watertight agreement on what Formula One can show.  No one needs to remind the minister of the industry’s notorious history of ignoring voluntary agreements…'

Max Mosley was unfazed by this type of accusation, saying the decision was sensible and logical.  'The government is trusting us to do what we said we’d do, which is to reduce the tobacco coverage in Formula 1 and, once this begins to happen, I think everyone will see that they’ve done something very clever.  The government has used the situation to its advantage.  Wherever in the entire world a race is run, a car won’t leave the pit lane unless it complies with whatever arrangements we’ve made.  This is something no government can achieve because it doesn’t control things in every country, whereas we do.'

However, the orderly, leisured fashion in which this outcome had been sought, usually in congenial circumstances, over the previous two years, was suddenly kicked into a nervous canter by stirrings in Brussels.  'From dear old Porridge (Padraigh) Flynn (the EU commissioner) came this move to bounce everyone into doing something quickly,' declared Mosley.

'Flynn says we’re bluffing about the move to Asia. Absolutely not true. It’s all planned. Formula 1 is willing and able to run substantially outside the EU, and Tony Blair understood that. They can’t black out the TV coverage from outside the EU, where tobacco sponsorship will remain.  If grands prix disappeared from Europe, Europe would just lose all the economic benefits. And, once the centre of gravity moved to Asia, where there are plenty of bright people, we’d lose our silicon valley.

'At the moment, it’s very difficult to make a modern Formula 1 car and engine outside the UK.  We are the leading country by a huge margin.'

Seven of the 11 F1 teams that contested the 1997 series were British-based.  The others – two in Italy and one each in France and Switzerland – also placed heavy reliance on Anglo-Saxon engineers and know-how.  Though how Mosley’s warmly-patriotic remarks went down with his broader world-wide constituency as FIA president remained to be seen.

Disclosures

Soon after Tessa Jowell’s declaration of the government’s changed position on tobacco sponsorship of F1, the first of a series of embarrassing disclosures was made.  Jowell, it emerged, was married to millionaire lawyer David Mills, legal adviser to – and formerly a non-executive director of – Benetton Formula.

Jowell had solicited – and received – clearance for her involvement in the tobacco sponsorship issue from Department of Health permanent secretary, Sir Graham Hart.  She had also sought the advice of Lord Nolan, outgoing chairman of the committee on standards in public life.

A partner in a City legal practice  – Withers – Mills was fluent in Italian, French and Spanish, and this helped him attract a considerable number of Italian clients, whom he advised on 'grey money' – off-shore holdings and tax avoidance.  He had married Jowell in 1979, and the couple enjoyed homes in London and the Cotswolds, where they entertained such luminaries as Peter Mandelson, Labour’s spin-doctor-in-chief.

Mills was a regular golf partner of the Prime Minister’s press secretary, Alastair Campbell. Jowell, a confidante of Tony Blair, was widely tipped for elevation to cabinet office, the more so after she had so gamely fronted the government’s 'contradictory' F1 sponsorship conclusion, apparently subsuming her strongly-held anti-smoking views to party loyalty.

On May 20, soon after the general election, Mills had resigned his Benetton directorship because of a conflict on interest with his wife’s government post.  And, though he remained legal adviser to the Benetton team, he said he had declined to act in any questions concerning tobacco sponsorship.  Thus a Department of Health statement said: 'The secretary of state and the permanent secretary are fully satisfied that no conflict of interest arises for Mr Mills or Ms Jowell and they have fully observed the prime minister’s guidance on conduct and procedures.'

It subsequently became apparent that Italian magistrates had interviewed Mills at the Serious Fraud Office HQ in London with regard to his association with a company suspected of a major fraud in 1985.  This revolved around the supply of hydrofoil ferries to, and construction of luxury hotels in, St Kitts island in the Caribbean.  The Italian government, which guaranteed the plan, was left with an £18 million liability after the hydrofoils and hotels failed to materialise.

It had not been suggested that Mills had acted improperly – he had joined the company as a 'caretaker director' only in 1988.  There were also revelations about others of his clientele, which included Silvio Berlusconi, the Italian media tycoon-turned right-wing prime minister, deposed for alleged corruption.  Mills stated: 'A tiny number of the thousands of clients I have assisted have been subject of allegations – and they are only allegations – but not one of my clients has been convicted of anything.   It is not fair to suggest that, because of this, I am – or still less my wife – tainted in some way.'

Intrusion

Mills complained that his business affairs had been subjected to unjustified intrusion to create embarrassment for his wife. 'I resent intensely my reputation being made the plaything of people with a political axe to grind.'   Alastair Campbell was fully supportive, declaring it was 'offensive to say…(Tessa Jowell)…was incapable of exercising her judgement as a minister properly' as a result of her husband’s work for Benetton Formula.   How cosy.

By the weekend after Jowell’s announcement all this had come under increasing media scrutiny.  So, too, did Westminster rumours of links between certain motor sport figures and the Labour Party – to the extent of financial contributions to a 'blind trust', sustaining Tony Blair’s office while in opposition and which would not show up in the party’s accounts.  This became the focus of confusing party-political tit-for-tat, during which the Tories shadow health minister John Maples demanded: 'Mr Blair should tell us whether people involved in the lobbying gave money to Labour.'

'Tory sources' asserted that Ecclestone had in the past been 'extremely generous' to their party, one suggesting a figure of £10 million over time.  There was also word that Ecclestone had cautioned Tory fund-raiser Lord Harris that he was now minded to volunteer money to Labour.

The Labour Party declined to deny or confirm receipt of said money, relying on the notion that no-one would ever know about money given to the blind trust but that large donations – of more than £5,000 – to the party itself would be disclosed at party conference time – 11 months down the road, in October, 1998.  Labour quickly followed up with a 'spoiler' of its own – it knew of Ecclestone’s contributions to the Tories, of which £4 million was a soft loan that had not been repaid. It also suggested that he had been promised a knighthood by John Major.

Ecclestone’s own solicitors, Herbert Smith, at first denied he had handed money to Labour.  When pressed on whether this denial also covered payments to blind trusts, the firm responded loftily that Ecclestone was 'not prepared to enter into a dialogue.'  The cock-up department was working overtime, and another Herbert Smith lawyer later admitted that the first denial should not have been made.

During this episode, Labour admitted to Max Mosley’s membership of its '1000 Club' for six years – to be eligible members contributed at least £1,000 a year to the party, the implication being that Mosley had personally handed thousands of pounds to the cause.  Furthermore, Mosley had been amidst the merry throng at a £500-a-plate dinner, with Tony Blair as guest of honour, at London’s Park Lane Hilton shortly before the election.

Hype

Of these revelations a Labour spokesman later said: 'It is utterly unacceptable to suggest that there is any link between any money that anyone may have given the Labour party and any decision that the government has taken in the national interest.'

The FIA’s David Ward chimed in: 'The idea that Mr Blair suddenly decided to see us because we are members of the Thousand Club is laughable.'

Then up popped Tory trade spokesman and practised shin-kicker, John Redwood: 'We want to know whether all sports had equal access to the Prime Minister, to the health minister and sports minister to make their cases for exemption.'

And, on television, Liberal Democrat leader, Paddy Ashdown, demanded an investigation into the way the government had changed its mind on tobacco sponsorship.  'This is a serious issue,' he said.  'It’s an issue in which there are questions to be asked in a proper and reasonable fashion.'

The spin-doctors did their stuff again by wheeling in support in the unlikely form of South African dissident Peter Hain, Labour MP for Neath and Welsh Office minister, who penned – or had ghosted for him – a glowing 'Personal View' for the Financial Times on November 10. Boldly head-lined 'There is no Labour U-turn', the piece claimed 'the government deserves praise for trying to break tobacco’s hold on Formula One.'

After alluding to 'the past week’s hype' the Hain piece contended: 'Far from performing a U-turn, or threatening a proposed European Union draft directive banning cigarette advertising, the government is in pole position in the global race to ban tobacco advertising.'  This hyperbole concluded rather smugly: 'Like millions of fans, I love motor racing and hate smoking.  Having opened the door for an agreement, Labour is poised to help break the stranglehold of tobacco on motor sport.  For that the government should be praised, not attacked.'

Hain was fingered two weeks later by the News of the World – 'My car race freebies' – for being a guest at the 1997 British and Belgium grands prix.  Saying he had listed his pit pass in the House of Commons gifts register, he pleaded: 'I’ve done nothing wrong – I’m simply a motor racing fan.  I’ve been invited to Silverstone over the last couple of years.  I’m not trying to hide the facts, and they are within Commons rules.'

Amazing what one can do with mirrors.

Caveat

The spin-doctoring became apparent elsewhere as a Downing Street 'source' sought to imply that Formula 1 might after all be included in the Europe-wide prohibition, with the caveat that it had 10 years to drum up alternatives to tobacco sponsorship.  The source said: 'One thing we’ve failed to get across in the last few days is that the policy is unchanged – it depends how we get there. It may be that we give more time to Formula 1 to wean itself off tobacco.  The industry is saying it will actively seek other sponsors.'

Pressure continued on Downing Street to divulge whether Ecclestone had in fact contributed the fund behind the Labour leader’s opposition establishment, but it stuck to the line that only the trustees knew who had contributed to the blind trust.  A 'senior Labour Party source' was in a more aggressive mood, saying: 'It is disgraceful and unacceptable to suggest there is a link between party support and the decision on tobacco sponsorship.'

This bluff defence soon seemed pretty pointless in face of revelations the following day.  Though these were overshadowed – and forced to the bottom of front-pages – by news of the release of Louise Woodward, the British au pair tried in Massachusetts for the murder of the infant Matthew Eappen.

After six days of intense pressure on the government, Bernie Ecclestone finally broke his silence about the affair: 'There has been speculation over the past few days that I have made a donation to the Labour Party. I met Mr Blair in July, 1996, and was very impressed with him and his plans for our country.  In January, 1997, I was asked by a colleague to make a contribution to new Labour, which I did.  I have never sought any favour from new Labour or any member of the government, nor has any been given.'

These remarks had been precipitated by advice from incoming chairman of the committee on standards in public life, Sir Patrick Neill, QC, that the Ecclestone donation be returned. Labour Party general secretary Tom Sawyer had sought Sir Patrick’s counsel in a letter faxed at 7pm on the Friday evening, and his reply arrived also by fax on the Monday afternoon.

At 5pm, minutes after receipt of the fax, the decision to hand back Ecclestone’s contribution was announced. Sir Patrick said: 'I am delighted that the Labour Party has acted on my advice and decided to return the donation.  My advice was sought by the Labour general secretary in view of the wider implications for matters of party funding which my committee will in due course be investigating.  I make no criticism of the party for originally receiving a donation from Mr Ecclestone, but in the light of the changed circumstances I stressed the importance of those in public life being judged not only by the reality by also by the appearance.'

Hypocrisy

Later, when apprised of the amount in question, Sir Patrick said: 'Every pound makes me think I am more correct.'

Delighted, the Tories rammed home their advantage, stating: 'Labour has been caught on the horns of its own hypocrisy.'

Martin Bell, the white-suited BBC reporter had stood as an 'anti-sleaze' independent and beaten the Tory, Neil Hamilton, hands-down in the Tatton constituency at the general election.  Bell told the House of Commons: 'The perception of wrongdoing can be as damaging as wrongdoing itself.'  And he stung the prime minister by asking: 'Have we slain one dragon only to have another take its place with a red rose in its mouth?'

At this juncture, The Times thundered: 'Tony Blair is now feeling for the first time what it is like to be in the middle of major allegations of sleaze.  Earlier this week the problem was a small patch of mire concerning relations between his public health minister, Tessa Jowell, and the exemption of motor racing from the ban on tobacco sponsorship….The trouble seemed set to pass.

'Now a much larger lump of mud stands in Labour’s way.  It transpires that the Labour Party may have been given £1.5 million for its election campaign by the head of Formula One, Bernie Ecclestone.  Tony Blair’s decision to support the motor racing lobby and its tobacco supporters against the interests of public health and the spirit of his manifesto was always an odd one.  The arguments of Mr Ecclestone about jobs in the racing industry did not seem to have been aggressively tested.  How much did his contribution help his cause?….

'….Labour has now undertaken to pay back Mr Ecclestone’s money…. ‘in order to avoid the appearance of undue influence over policy’….

'….If the Labour Party used to be instinctively anti-business, new Labour is in danger of succumbing to the opposite knee-jerk reaction.  Business will argue for what will maximise its profits; and this does not always equate with the national interest. Mr Ecclestone has both won his way and got his money back.  He must be delighted.'

In a leader head-lined 'Give back the money, and run', The Daily Telegraph chimed in: 'Disraeli once dismissed the Conservative government as an organised hypocrisy.  The new Labour Party should come up with a similar health warning.  First the pious, non-smoking Cabinet climbed on its high horse over tobacco sponsorship, insisting no one should be allowed to advertise the pernicious weed, despite the fact that it is bought legally on every high street.  A month later it decided that Formula One – rather than, say, tennis or synchronised swimming – should be exempted….

Sleaze

'….In the past few weeks, we have seen U-turns on age discrimination in employment, cold-weather payments for pensioners, and homosexuals in the Army.  But this isn’t just another broken promise, and handing back the money isn’t going to help.  When Mr Blair entered Downing Street he insisted he would sweep away the smell of "sleaze" which had clung to politics for too long.  By his standards, this saga stinks.  If this is what Mr Blair means by the giving age – you give us the money, we’ll give you the policy, then we’ll give you the money back – we should reject it wholeheartedly.'

Another day passed before the true magnitude of the Ecclestone contribution was disclosed.  A Labour Party official said: 'We have spoken to Mr Ecclestone’s office and secured his agreement that we can state publicly that he made a donation before the general election of £1 million.'

Ecclestone himself said the money had been paid over in the January, when the tobacco sponsorship issue was not under discussion.  He was adamant that he had expected nothing in return, and he called charges that his contribution had influenced the government’s move to excuse Formula 1 from the sponsorship ban 'completely stupid.'  Later, when asked about the resolution to hand back his money, he declared: 'It has no effect on me. I am just £1 million better off.  But I think it will have a bad effect on Labour.'

How right he was.  For the money had long since been spent.

Donors

Labour’s published accounts put the Ecclestone donation in context.  At £17.1 million, the party’s 1996 net income was 37 per cent up on 1995.  Trade unions contributed £7.7 million – 45 per cent, compared with 76 per cent a decade earlier – while fund-raising attracted £6.2 million – more than half of this from sources formerly branded 'fat-cats' by Labour.  There were 55 named donors of more than £5,000 each, compared with 17 in 1995.

Among those Ecclestone had kept company with as a major donor to Labour were:

Despite all this largesse Labour was broke, borassic, impecunious, not to mention strapped for cash after a financially punishing campaign. In the 24 months up the to the 1997 general election it had spent an estimated £27 million, enough to field a middleweight F1 team for a season.

Banana skins

Half of this had been blown on a big push during the closing weeks, and one of the prices of the party’s desperation to govern after 18 years in opposition was a £4.5 million overdraft.  So there was a bit of a flap on behind the scenes at Labour Party headquarters, no longer in the run-down Walworth Road, south of the Thames, but in a squeaky-new £2 million establishment on Millbank, just a few minutes walk from the Houses of Parliament.  In God’s name, where the hell were they going to find the money?

Stand by for even more banana skins.

A week after the first Jowell announcement, it also emerged that Tony Blair had omitted to enter tickets, used by him and his family for the 1996 British Grand Prix, in the House of Commons register of members’ interests.

Every MP is required to list gifts, benefits or hospitality that he/she or his/her spouse receive 'which in any way relate to membership of the House.'  Exemptions include gifts if less than £125 in value and tickets costing less than £215.  One calculation was that grandstand seats for five – let alone the VIP lunch in a marquee – would have cost £725.  However, since Blair was there in his capacity as leader of the opposition, an aide argued, he was not obliged to comply in this case.

This had not been the line taken by a colleague, the millionaire Labour MP, Geoffrey Robinson, now paymaster general, whose Tuscan villa the Blairs enjoyed during their 1997 summer holiday. Robinson had written in the register: 'Members of my family attended the 1996 Grand Prix at Silverstone as guests of Philip Morris.'  As it turned out, Robinson himself had been unable to join them.

Exasperated, Ecclestone began taking his own public relations initiative.  Concerned at the implications of the tobacco affair for the F1 flotation, he told The Sunday Telegraph business section: 'The last week has been an absolute nonsense with two parties fighting each other and looking for a reason to keep it going.  It is complete rubbish.  I am pissed off that they have been trying to dig up dirt.  But people will be buying shares in a company that makes money and that is what counts.'

No strings

He also wrote at length and with cogent effect to The Times which on November 14 published: 'Sir, Sir Patrick Neill’s recommendation to the Labour Party that it repay my only donation to the party is well-intentioned but wrong unless Conservative and Labour now repay all donations from anyone who might appear to have benefited from government decisions (reports, November 11, 12 and 13).

'When I made my donation, Labour was not in power.  It was their stated intention to ban tobacco advertising, to abolish the pound and to ensure that only criminals possess handguns.  I disagree with all these policies, but it would never have occurred to me to insult Mr Blair by suggesting that he change them in return for my money.

'I made a donation to the Labour Party because I believe Mr Blair to be a person of exceptional ability who, if free to act, would do an outstanding job for our country.  This I thought depended on independence from old-fashioned vested interests in the labour movement.  My gift was intended to contribute to this.  There were no strings attached.  I have just paid an annual personal tax bill of £27 million for the simple privilege of living in England rather than a tax haven.  With so large an investment it is reasonable to pay a million or two extra as a contribution to a free and independent government for my country.

'When Mr Max Mosley and I visited Mr Blair on October 16 to discuss tobacco advertising we had already secured the support of several EU governments.  Our case was overwhelming – a ban in the EU would have undesirable side effects but achieve no reduction in Formula One publicity for tobacco, while on the other hand the Fédération Internationale de l’Automobile could offer a significant compulsory world-wide reduction in return for an EU exemption.  My donation did not come into it – the case made itself, just as it had in the rest of the EU.

'I am all in favour of reform in political funding.  Government should be free from the influence of special interests be they trade unions, business or single-issue pressure groups.

'But until these reforms are in place, I should enjoy the same rights as everyone else.  These include the right to make a donation to any political party I choose.  Anything less implies that I have done something wrong and is a gross, insulting and irrational restriction of my freedom.

'I have written to Sir Patrick asking him to reconsider his decision.
Yours faithfully
B Ecclestone
Formula One Administration Ltd'

The same day, The Times published the full texts of the letter of November 4 from Labour Party general secretary Tom Sawyer requesting guidance and Sir Patrick Neill’s reply.

Falsehoods

It was now apparent that the trigger for stories about a second Ecclestone donation, firmly denied by Ecclestone himself, lay in Sawyer’s sentences: 'Mr Ecclestone has, since the election, offered a further donation.  The Prime Minister has decided that in the light of our approach to the Directive and to avoid any possible appearance of a conflict of interest we should consult you on whether it may properly be accepted.'

It seemed that the notion of such a second donation was wishful thinking that emerged from discussions amongst Labour fund-raisers and from inconclusive overtures they had made to Ecclestone aides.

Ecclestone’s resolve to have his own view heard dominated the front page of that day’s Daily Mirror, which carried a two-page 'world exclusive'.  Of inferences that he offered a second donation to the Labour Party, he said: 'Never.  That’s a million per cent nonsense.  I haven’t offered one single penny more than the donation I made last January.  That was before the Tories lost their very bad campaign.  Before Labour won.  Anybody who claims I have is a liar and is making mischief.'

Clearly disenchanted, Ecclestone continued: 'I am sick and upset about all the falsehoods and rubbish being talked, and innocent parties being brought into play.  I shall get to the bottom of it myself.  If it is illegal, I have done something wrong.  If it is legal, I have not.

'And I don’t see why the Labour Party should give it back.  They can keep it.  It was for the greater good of the country anyhow.  And I would tell the world there is no link in any shape or form to the donation I have made to the Labour Party and any decisions they have made in government.  Right?'

Alluding to stories that he had supported the Conservative Party with £10 million in donations and an as yet un-returned 'soft loan' of £4 million, he said: 'I’d like somebody from the Tory Party to get in touch with me, or come to see me, and confirm that I made any donation – never mind £14 million. I’d be happy to take it back.'

Recalling his first encounter with Tony and Cherie Blair at the 1996 British Grand Prix, Ecclestone said: 'I thought he was an extremely capable young guy who was determined to take Britain in the right direction.  I was only with him and his wife for about half an hour, but it was long enough for me to realise he was a winner.

'When the Tories embarked on that dreadful ‘red-eyes’ campaign, I was disgusted – I thought that was dirty tactics and well below the belt. I had no idea, then, what I could do to help.  And, over dinner, a friend – definitely, categorically not a member of the Labour Party, but a supporter – asked me to make a donation.

'I thought about it for a while – about Blair and New Labour.  I thought I am a big, big taxpayer, and I bring a lot of money into this country. I love the place.  And the last thing I want to see is a government in the hands of the unions.  A fair balance would have to include the business side too.  That’s why – because I didn’t want to see the party dependent on union money – I got my company accountant to draw up a company cheque against my director’s loan account.  And he posted it off – I didn’t even sign it myself.'

Mischief

Emphasising that he had intended no strings to be attached, he declared: 'It was all done before this stupid tobacco row. And I didn’t want anything in return – not a knighthood, the Freedom of Kensington, an OBE or even a bus pass. I’ve been given honours right around the world, of far greater importance than knighthoods.

'For me to make a £1 million contribution to Labour – when they were running for election and might not get in – and still expect guarantees of something in return would be sheer lunacy.  All this talk of sleaze is rubbish, total nonsense, political claptrap set up by somebody – God knows who – trying to make mischief for me and Blair.

'Truth is, before I met him in October to discuss the exemption, I’d had no conversations at all with anybody in the Labour Party about the issue.  Never, never, never, never.'

Ecclestone concluded: 'I don’t need favours.  And, really, I don’t want the money back.  I would do exactly the same again, and I would expect the same return for my money – nothing, no promises or benefits, either for me or Formula One.  Who’s to say that, in three years time, I might think the Tories are running the country better than Labour, and I’ll give them a million or two.  Truth is, I have no allegiances to any party.'

Next from within Formula 1 to break silence was Jackie Stewart who had this to say about the tobacco furore – and also the lenient treatment of Michael Schumacher: 'Everything that has happened has looked very bad for the sport.  It is not healthy.  The government will lose.  The sport loses.  The teams will lose.  We all lose. In the end everyone is hammered by this.  It is a very, very serious situation because the damage done has had a very serious effect for everyone involved.'

From the outset, his Stewart Grand Prix team had been conceived as a smoking-free operation.  'We took a long-term view and – without standing on the moral high ground and taking an anti-tobacco view – we chose to put together sponsors who preferred not to be alongside a tobacco company.  Ford and Hewlett-Packard, for example, are non-smoking companies.

'I felt the long-term way to approach this was the right way.  But the events of past weeks have conspired against this.  The image of motor sport has suffered terribly and, as a result, years of good work are in danger.  I have been working on two deals with multi-national companies in the last week, and now I am not sure that they will go through – this is the sort of thing I am worried about.  And they are not cigarette companies.'

Clash

Of his groundwork to establish the team Stewart recalled: 'Many people told me that it would be impossible to go ahead and run a team without cigarette money.  They warned me I would be penalised by 30-50 per cent, but so far so good.

'I have tried not to be outspoken on all this. I am 58 years of age and, if there is one thing I have learned through any success I may have had, it is to be able to say: ‘Sorry – I was wrong’.  Some people need to admit a few things, and say they have made mistakes.  But this seems to be something many other people cannot do.  People everywhere are saying they are right, and someone else is wrong.  This worries me – it all looks so hopelessly immature.'

The Labour Party had a long week sweating over how on earth it was going to repay Ecclestone’s £1 million.  It had failed to anticipate that Sir Patrick Neill would recommend handing back that first sum of money, though it must have expected him to advise against accepting anything further from Ecclestone.  It was not going to be enough to fall back on Ecclestone’s freely-given declaration that in any event he didn’t want his money back.

In the middle of that week, during prime minister’s questions in the Commons, Tony Blair had his angriest clash thus far with Conservative leader William Hague.  Blair took a fair old drubbing.  While he seemed to be suffering from oiled-up spark plugs, Hague was flat-out in seventh gear.

He declaimed: 'Is it not extraordinary that the government denied receiving money from Mr Ecclestone and then admitted it; denied that it was £1 million and then admitted it; denied that the crucial meeting had been minuted and then published the minutes; denied this House a full account of the matter, which instead has been dragged out piece by piece; denied that you would take further donations and then took advice on accepting them?  Hasn’t your conduct been a shabby tale of evasion which voters in future, when asked to trust you, will not likely forget?'

Hague extracted the declaration from Blair that the Ecclestone million had been 'returned' by the Labour Party.  Hague demanded to know when.  Blair admitted the money would be handed over within days.  Hague chortled that 'returned' had been rephrased as 'will be returned' in only minutes.

Then Philip Hammond, Conservative, weighed in.  He also asked how Blair could claim to have decided to jettison the Ecclestone money, and then ask Sir Patrick Neill to advise on whether to take it.  To derisive opposition laughter, Blair spluttered: 'Having taken the decision, it was important that we got his advice as to whether we got the right decision.'

Overdraft

The following Tuesday, Labour’s general secretary Tom Sawyer and director of finance David Pitt-Watson delivered a cheque in repayment of the £1 million, maintaining they needed know as soon as possible whether or not Ecclestone would bank it.

If not, the money would be assigned to a cancer charity – so at least a sense of irony must still have been twitching in Labour circles.  The parlous state of Labour’s finances meant the party had had to grovel to its bankers, the Co-op Bank, for a £1 million increase in its overdraft.  Then – lo and behold – this was rendered unnecessary when another benefactor materialised, this time in the form of Robert Earl, restaurant tycoon behind the Planet Hollywood and Hard Rock Café businesses.

Said to be worth £800 million, Earl had previously been approached for advice on the Millennium project at Greenwich by minister without portfolio Peter Mandelson.  Of his contribution to party funds, Earl said: 'I am a strong believer in this government and what it is doing for this country. I travel the world, and the perception of Britain now is at one of its highest, certainly in my lifetime.'

The same day that the Labour officials delivered the 'refund' cheque to Ecclestone, Tony Blair held his promised – 45-minute – meeting with representatives of other sports affected by the impending ban on their tobacco sponsorships – these included angling, billiards, cricket, darts, golf, ice hockey, rugby league and snooker.  Their common complaint was that the exemption for Formula 1 left them treated 'completely unfairly.'

Afterwards, some seemed satisfied and others not. Rugby Football League chief executive Maurice Lindsay said: 'We had a very fair hearing.'  However Robert Holmes of the British Darts Council grouched: 'We were only allowed across the threshold because of the revelations over Bernie Ecclestone’s donation.'

The prime minister attempted to mollify the delegation with talk of a 'hands-on approach', including a task force to find alternative sources of sponsorship.  The task force would comprise a 'powerful group of people with contacts and drive.'  Step forward, almost inevitably, R Branson Esquire.  In a pullover adorned with pink sheep?

It was gently explained to Blair that the market place in sponsorship funding was already 'crowded.'

Sports minister Tony Banks handed round further sweeties, pats on heads and reassurance: 'The thing that the government does not want to do is damage sport, and that is why we want to make sure that sports find a replacement for tobacco sponsorship.'

Pressure

Sponsorship professionals out in the real world smiled thinly, and wondered how big a magic wand the government was about to produce.  Hardly was that all squared away than Blair and public health minister Jowell were coshed by two House of Commons committees.  Each, predominantly Labour in its composition, rushed out a report in response to the Formula 1 affair.

The committee on European legislation stated: 'We find that the most difficult question to answer is simply this: Why should Formula One be singled out for exemption?'  The report said the F1 exemption 'deserves closer examination', and it questioned the government’s assertion that, if F1 moved out of Europe, 50,000 jobs would be lost.  It surmised the real figure would more likely be 8,000.

Opposing the decision to make F1 a special case, the health select committee urged that, like other sports, it should have to find other sponsors.  In a terse, one-page report released within hours of Jowell’s appearance before it, the committee said: 'We are particularly concerned at the Government’s proposal to seek an EC directive which contains provision for a permanent exemption for Formula One.  We believe that Formula One should be placed under the same pressure as other sports to seek alternative sponsorship.'

The committee’s chairman, David Hinchliffe, said of Jowell: 'I believe that she’s in a situation she doesn’t believe in herself. I believe that the decision is something that she wouldn’t personally support if she hadn’t been landed in this position.'

13,825 words copyright © by Anthony Howard

Photo: No 10 Downing Street, dubbed the "Bernie Inn". Crown © copyright.

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