Sainsbury in 'sleaze' crossfire

Lord Sainsbury will join Bernie Ecclestone, the Formula One boss, as a target for Tory attacks over Government sleaze this week, with the Opposition determined to raise questions over the supermarket chief's close links with Labour.

Tory fire will highlight the similarity between the Ecclestone case and the position of Lord Sainsbury, chairman of the supermarket chain and, like the F1 chief, one of the richest men in Britain. In particular, the Opposition will point to a meeting between Tony Blair in his rooms at the House of Commons in October 1996 and, as he then was, David Sainsbury, and representatives from Safeway and Tesco. The purpose of the meeting, regarded by the Tories as not much different from Mr Ecclestone's encounter last month with Mr Blair in Downing Street, was to press for a change in government policy beneficial to big business.

At the meeting, the three retail executives argued that once in power, Labour should soften the government's stance on out of town superstores. David Sainsbury has since emerged on the official list of donors to Labour, and this August he was awarded a life peerage by Mr Blair. The exact amount he gave remains secret - all that is known is that he appears on the list as having given over pounds 5,000. Lord Sainsbury and his family are worth an estimated pounds 2.5bn.

Recently, there have been reports that Labour is thinking of relaxing planning rules on out-of-town shopping parks, with much of the running come from Mr Blair. So far, the guidelines have not materially changed but Mr Blair has been quoted as recognising consumers' preference for out-of-town shopping. Sources close to No 10 have cited consumer choice as being the watchwords of Labour development policy.

In one case, viewed as a major rebuff for the strict conditions imposed by John Gummer, the Conservative environment secretary and indicating a change in policy, the Environment Minister, Richard Caborn, has allowed Sainsbury to build a new store in southwest London, despite local opposition.

Tim Yeo, Mr Caborn's shadow, said "there are some signs the Government would like to reverse the toughening-up process that we started. It seems to me this is a similar situation to Bernie Ecclestone. We need a full explanation - if Labour makes policy on the back of its links with business it starts to smack of impropriety."

Mr Yeo said he would be tabling questions on Lord Sainsbury's ties to Labour this week. "What we need is a full declaration of all the substantial donors from business and just how much they have given."

A spokesman for Sainsbury refused to say how much its chairman had donated - it was his own money, not the company's. "It is the company's policy not to make donations to any political party, it is a matter for [Lord Sainsbury] and him alone." Lord Sainsbury, said the spokesman, refused to talk about the matter.

Meanwhile, the row over Mr Ecclestone continues. To Labour embarrassment, Sir Patrick Neil, chairman of the public standards committee is writing a letter to the Prime Minister demanding consultation over the terms of any inquiry into party funding.

Mr Blair announced in the Commons last week that the issue of donations and party funding had been referred to Sir Patrick's committee. But his failure to consult either the Conservatives or the Liberal Demo- crats has provoked Opposition fury while, for his part, Sir Patrick is less than happy about the phrasing of Mr Blair's request to him.

Mr Blair is expected to admit on BBC's On the Record today that the party should have been completely open about the donation from Mr Ecclestone from the moment the new approach to tobacco sponsorship for motor-racing was agreed.

Senior Tories may also be willing to accept some form of state funding for political parties, if it were linked, perhaps on a pound-for-pound, basis to contributions from members. John Maples, shadow health minister said: "It is a possible answer. If someone were to come up with a scheme we would have to look at it. On the whole the Conservative Party does not like the idea of state funding so it would have to be matching funding - for millions raised from members, the government would contribute."

Shops come back to town, page 5

Did Blair lie? Section Two